SHRI Radeshyam Khare & Another v. The State Of Madhya Pradesh & Others (1958) — Supreme Court judgment

e te e ¢ eo

1958 business by Messrs. Army and Navy Stores still remains Ghaic unfilled. The applications of the appellants and other

Mall & Sons @PpPplicants were for a grant of L-2 license for 1954/ ve 955. That year has gone past and accordingly in the The State of changed circumstances we direct the Chief Commis- Delhi & Others sioner 40 fill up the vacancy caused by the closure of be CJ the business by Messrs. Army and Navy Stores by ‘inviting applications from intending licensees including the appellants and Messrs. Gainda Mall Hem Raj and granting the same tothe most suitable party. , We, therefore, accept this appeal, reverse the order of the High Court and issue a mandamus to the effect. aforesaid and also direct the respondents Nos. 1 to 4 to pay the appellants’ costs of this appeal and of the proceedings inthe High Court out of which this appeal hag arisen. Messrs. Gainda Mall Hem Raj are to bear their own costs throughout.

Appeal allowed.

1958 SHRI RADESHYAM “KHARE & ANOTHER « . v. THE STATE OF MADHYA PRADESH & OTHERS e (S. R. Das C.J., Buaawati, 8. K. Das, J. 1. Karur and SctsnBa Rao JJ.)

Seplember 30.

Municipality -- Appointment of Executive Officer *by State Government-—If an administrative act—C. P. and Berar Municipali- “ fies “Act, 1922 (Act II of 1922), ss. 53A and 57.

The main point for decision in this appeal by the Municipal Committee of Dhamtari and its President was, whether in appointing an Executive Officer in exercise of its powers under s. 53A of the C. P. and Bexar Municipalities Acf, 1922, the State Govern-

° ment acted ina judicial capacity or in an administrateve one. e Complair ing been made against the appellants, the additiona ollector was directed to hold an enquiry and on his 4 report the State Government, by a notification under that section, appointed arr Executive Officer of the Municipal Committce for £8 months with specified powers and dugies. The s, “appellants were given notice of the said enquiry, filed objections

® ‘ s

S.C.R. , SUPREME COURT REPORTS 1441 and the President was pessonally present on some occasions during the enquiry. The notification charged the appellants

—— with incompetency as well as abuse of power. Against that Shri Radeshyam notification the appellants moved the High Court under Art. 226 Khare & Another of the Constitution for a writ of certiorari quashing the same, but their application was rejected by the Judge sitting singly. An appeal under the Letters Patent against his decision was summarily dismissed. It was contended before this Court on behalf of the appellants that, (1) although the notification purported to be one under s. 53A of the Act, it was in effect and’ reality one under s. 57 of the Act, that (2) it was, therefore, incumbent on the Government under s. 57(5) of the Act to afford the appellants an opportunity to furnish explanation and that (3) even if the notification was one under s. 53A of the Act, the Government was bound by the rules of natural justice to give the appellants an opportunity to defend themselves.

Held (per curiam), that ss. 53A and 57 of the C. P. and Berar Municipalities Act, 1922, differed materially in their scope and effect, but it was not obligatory under either of them for the Government to take any action at all. Although a finding of incompetency of the Municipal Committee was a condition precedent to action under both the sections, the Government was free to choose its remedy as the occasion demanded and it could

«not be contended that because a notification made under s. 53A of the Act, along with a finding of incompetency, contained some instances of abuse of power‘as well, it must be held to have been made under s, 57 of the Act. ¢ « Nor could the vesting of power in the Executive Officer by the notification, however substantial in character, be said, in effect and reality, to amount to a dissolution of the Municipal Committee under s. 57 of the Act. .

Per Das C.J. and Kapur J.—The real test whether the State Government functioned in a quasi-judicial capacity or inan administrative capacity in exercising its powers under s.53A of the Act was whether the statute required it to act judicially either expressly or by implication. The Act contained no express provision to that effect, nor could the determination of the fact ofeincompetency as a condition precedent to any action under that séction, by itself, carry such an implication. In making the notification under s. 53A of the Act, therefore, the Government functioned in an administrative capacity and not in a quasi-judicial one. Even so, by the enquiry held, the State Government afforded thg appellants ample opportunity to defend themselves and there could hardly be ahy ground for complaint.

Province of Bombay v. Kusaldas S. Advani, [1950] S.C.R. 621, Rex v. Electricity Commissioners, [1924] 1 K.B. 171, Rex v. London County Council, [1913] 2 K. B. 215, R. v. Ttegislative,Commitice of he ChurcheAssembly, (1928) 1 K.B. 411 and .Nakkudd Ali’s Case, 1951) A.C. 66, referred to. ee id e . ° ve The State of Madhya Pradesh

& Others s e e e a e e oe

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1442 SUPREME COURT REPORTS, , [1959]

1958 Per Bhagwati J.—Since the enquiry held'in,this case fully _— satisfied the requirements of ndtural justice, it was unnecessary Shri Radeshyam to determine for the purpose of this case whether the State Khave & AnotherGovernment in acting under s. 53A of the Act did so in a v. quasi-judicial capacity or in an administrative one. The State of Per S. K. Das J.—If the question was one of compliance Madhya Pradesh with the rules of natural justice, the enquiry held in the pfesent & Others case could hardly be said to have complied with such rules; but e since the State Government in acting under s. 53A of the Act . had only to consider policy and expediency and did at no stage have any form of its before it, its action thereunder was purley of an administrative character not amenable to a writ of certiorari,

R. v. Manchester Legal Ard Committee, (1952) 2 Q. B. 413, applied.

Per Subba Rao J.—On a proper appreciation of the criteria laid down by s. 53A of the Act itself, there conld be no doubé that it imposed a duty on the State Government to act judicially in ascertaining the fact of the incompetency of the Municipal Committee to perform its duties. Itis clear that the determination of such a jurisdictional fact could not have been left to the subjective satisfaction of the Government but was intended to be arrived at objectively and, therefore, it was ¢ncumbent up-« on the Government to give a reasonable opportunity to the ¢ appellants to explain the charge levelled against them. Such enquiry as was held in the instant case could hardly take the place of reasonable opportunityeto be given by the Governmgné for the proposed action under s. 53A of the Act. .

Rex v. The Electricity Commissioners, (1924) 1 K. B. 171, Province of Bombay v. Kusaldas S. Advani, [1950] S.C.R. 621 and R. v. Manchester Legal Aid Committee, (1952) 2 Q.B. 413, referred to.

Crvit APPELLATE JuRispicrion: Civil Appeal No. 301 of 1958. °

Appeal by special leave from the judgment ayd order dated February 21, 1958, of the Madhya Pradesh

High Court at Jabalpur in Letters Patent Appeal No.

. 22 of 1958, against the order dated February 20, 1958, of the said High Court in Misc. Petition No. 266 of

. 1957. _ ° ° e M.K. Nambiyar, S.N. Andley, J. B. Dadachanjt and Rameshwur Nath, for the appellants.

. M. Adhikgri, Atlvocate-General, Madhya Pradesh and . ey N. Shroff, for the respondents. ° ° e e > . . ee .

mm et © . AY

S.C.R. , SUPREME COURT REPORTS 1443

K &

1958. September 30. The following Judgments 1958 were delivered : Shri Radeshyam

Das C.J.—There’ are two appellants in this appeal. Krave & Another The second appellant is the Municipal Committee of v. Dhamtari constituted -under the C. P. and Berar The State of Municipalities Act, 1922 (Act II of 1922) and the first Madhya © radesh

4 appellant is its President having been elected as such oes on July 10,1956. He assumed charge of his office as pgs ¢. j, President on July 27, 1956. It may be mentioned thatthe was returned as a Congress candidate but has since been expelled from that party for having contested the last general election as an independent candidate against the Congress candidate.

It appears that there are two factions in the Municipal Committee. The first appellant alleges that one Dhurmal Daga, a member of the committee belonging to the Congress party was on August 7, 1956, detected importing within the municipal limits certain cloth without paying the octroi duty. Dhurmal Daga, on the other , * hand, alleged that the first appellant was guilty of grave mismanagement of the affairs of the Municipal Committea and went on hunger strike for securing the appointment of a committee to enquire into the misconduct of the first appellant. Copies of the leaflets containing the demands and charges which are said to have been widely distributed are annexures I and II to the present petition. It appears that several persons and firms also preferred charges against the first appel- ° lant, the President of the Municipal Committee. The Collector, Raipur, personally intervened and persuaded the said Dhurmal Daga to abandon the fast on an ° a$surance that he would look into the matter. The Collector deputed one Shri N. R. Rana the Additional Deputy Collector to enquire into the complaints of mal-administration of the affairs of the Municipal Committee. By a Memorandum No. K/J N. P. Dhamfari dated August 24, 1956, the said N. R. Rana ° Ps called upon the first appellant as the President of the second appellant to give detailed explanation of each complaint, a list of which was enclosed therewith. A copy ofthat memorandum along with its 22 enclosures ry ° . . “

° aad e

© ¢e ° 4 e e . 1958 is annexed to the petition and marked 1d. Annexures Shri Radeshyam 1V and V to the petition are copies of the detailed Khare 6 Another t@port on the objectiorfs and the reply to the charges v. made against the Municipal Committee submitted from The state of the office of the Municipal Committee by the first Madhya Pradesh appellant. as the President of the Municipal Committee. © Others The Additional Deputy Collector thereafter held the pac.j. enquiry. The High Court states that it had “gone through the materials on which the State Government based its action on enquiry into the charges levelled against the Municipal Committee” and that the records of the enquiry showed that. “on some occasions the petitioner was present during the enquiry ”. There is no suggestion that the appellants wanted an opportunity to adduce any evidence or were prevented from doing so or that they were in any way hampered in their defence. Presumably the Additional Deputy Collector had made a report which in due course must have been forwarded to the State Government. ‘ On November 18, 1957, a notification was published. * in the Official Gazette whereby,the State Government, ¢ in exercise of the powers conferred on it by 8. 53-A_ of the C. P. & Berar Municipalities Act, 1922, appointed one Shri B. P. Jain, the second respondent. before us}, as the Executive Officer of the Municipal Committee, Dhamtari, fer’a period of 18 months with certain powers as therein mentioned. A copy of that notilication has been annexed to the petition and marked VIII but as the major part of the arguments canvassed before us turns on the contents of that notification the same is reproduced below in extenso: i -“ Dated, Bhopal, the 18th November, 1957, ~ No. 9262/11538-U-X VII [—Whereas it appears to the State Government that the Municipal Committee, . Dhamtari, has proved itself incompetent to perform the duties imposed on it by or under the Central Pro- ° vinces and Berar Municipalities Act, 1922 (11 of 1922), e inasmuch as it—

(a) granted grain and building advances to the . employees without prior sanction and no efforts were made for their recovery, . “ ° ** (b) showed carelessness in cases of embezzlement f . e . e %e . s - . a e e e@e¢

8.C.R. . SUPREME COURT REPORTS 1445

° o of the empleyees and+did, not report such cases to 1958 Government, oa

(d) spent thousands of rupees ‘on sanitation and — The State of other works although there was no provision ,in the Madhya Pradesh budget, & Others

(e) allowed unconcerned persons to interfere in its __ working,

(f) showed partiality in the appointments and dismissals of the employees, further such appointments and dismissals were made against rules,

(g) delayed the constitution of the committee and the framing of budget,

_(h) misused the trucks of the municipality,

(i) failed to recover the lease money,

(j) shown partiality in the issue of transit passes to certain traders, further excess octroi duty was charged on certain articles and in certain cases where octroi duty is not Jeviable it was levied just to harass the people,

(k) distributed municipal manure to certain persorfs without any charge, similarly distributed the tnanure free of cost and used the truck of the munici- ‘pality for this purpose,

(1) failed to control its president.who spent the money of the Municipal Committee without any authority,

(m) spent huge amount on the maintenance of the roads and drainage but their condition has remain-. ed unsatisfactory,

(n) failed to give copies of the documents. as . allowed under rules, also failed to allow its members to inspect the records as is permissible under rules,

(o) failed to invite tenders of purchase of articles, .

and whereas, the State Government considers that a general improvemerit in the administration of the Municipality is likely to be secured by the appointwent of a servant of the Government as Executive Officer of the Committee.

Now, therefore, in exercise of the powers conferred by section 53-A’ of the Central Provinces and Berars

. . * . .

o ° °° .

e te 1446 SPPREME COURT REPORTS, , [1959] ~ ° , 1958 Municipalities Act, 1922 (LI of«1922), the State Govern- ° Sirs Radishyam ment are pleased to appoint Shri B. P. Jain, Deputy Khare & Another Collector, as executive Officer of the Municipal Comy. mittee, Dhamtari, for a period of eighteen months The State of from the date of his taking over charge and with Madhya Pradesh reference to sub-section (3) thereof are further pleased & Others to direct that the Executive Officer shall exercise and Das Cc. J. perform the following powers and duties of the Com. inittee to the exclusion of the Committee, President, Vice-President or Secretary, under the provisions of the Central Provinces and Berar Municipalities Act, 1922 (LI of 1922), namely :— Chapter III. Appointment of Officers and servants—Sections 25, 26 and 28. Chapter TV. Procedure in Committee meeting Section 31. Chapter V. Property, contract and liabilities— Sections 37 to 45, Chapter V1. Duties of Committee—Sections 50 and 51. . Chapter VIIL. The municipal fund—whole. Chapter LX. Imposition, assessment and collection of taxes—whole. ° Chapter X. Municipal Budgets and accounts whole. Chapter, Xf. Powers to regulate streets and buildings—Sections 90 to 94, 96, 98, 99, 103 and 104. Chapter XII. Powers to prevent disease and public nuisance—Sections 117, 118(1), 119 and 132. Chapter XVIII. Offences, practice and, procedure—Sections 218-223. - Chapter XIX. Special provisions for recovery pf taxes—w hole. ° The Executive officer shall exercise general super- : vising powers in respect of all matters covered by the Central Provinecs and Berar Mynicipalities Act, 1922 e (II of 1922Y. ° e In Hindi (By order of the Governor of Madhya Pradesh) , . . oo . §.$. Joshi, . -° Deputy Secretary.” ra . e ° ° ° .

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~ ‘ \ §..R. SUPREME COURT REPORTS = 1447 e° . . @ On December*21, 195% the two appellants before us 1958 presented before the Madhya Pradesh High Court the ,, Radeshwam writ petition out of which the present appeal has x4. 6 Another arisen and on January 11, 1958, obtained an order v. staying the operation of the order of appointment of — 7#e State of the Executive Officer. The writ petition was dismissed “adlye Pradesh on February ‘20, 1958. There was a Letters Patent ° 9S ~ Appeal which was dismissed in limine on February 21, p,. ¢, 1958. The application for certificate under Arts. 132 and 133 was refused on March 21, 1958. ‘The present appellants applied for and on April 1, 1958, obtained from this Court special leave to appeal from the judgmeut of the Madhya Pradesh High Court. The interim stay order made by this Court was eventually vacated on May 13, 1958. The appeal has now come up before us for final disposal. Shri M. K. Nambiar, appearing in support of this appeal, urged three points, namely : (i) that though the Notification purports to have been made in exercise of the powers conferred on the , State Government by s. 58-A, in substance and in reality it has been made*’under s. 57 of the Act; (ii) that if the Notification is held to be one made wngler s. 57 it is ultra vires And bad since the statutory requirements of affording reasonable opportunity to explain has not been complied with ;, (iii) that even if the impugned Notification be held to come within s. 53-A it is still ultra vires since before promulgating it the State Government has com- ° mitted a breach of the rules of natural justice in not giving ény opportunity to the appellants to defend themselves. . . ° There’ was a charge of mala fide made against the State Government founded on the fact that the first appellant’s leaving the Congress party had resulted in ‘ ill-will towards the first appellant of that party which was the ruling party inf the State Government, but as that charge has not been pressed before us nothing - ‘ further need be said about it. I now proceed to deal with the three points formulated above by leayned counsel for the appellants. oan 184 bd ° ee e . . . » e o.

1448 SUPREME COURT REPORTS , [1959] “

1558 Re. (i) and (vi): These two points are correlated and Sins Leadesh avi may be conveniently deaft with together. The argu- Khue & anethe, Ment in support of them is deve ‘loped i in two ways. Jn v. the first place it is said that the grounds set forth in

The State of the impugned notification clearly indicate that in

Madhya Prades substance and in reality it has been issued rather

* Others under s. 57 of the Act than under s, 53-A. In order

10 appreciate this argument. it is necessary to set out:

the two sections uf the (. P. and Berar Municipalities Act, 1922 in extenso: .

“53-A. (1) If a committee is not competent to perform the duties imposed on it or undertaken by it by or under this Act or any other enactment for the time being in force and the State Government considers that a general improvement in the administration of the municipality is likely to be secured by tle appointment of a servant of the Government as the executive officer of the committee, the State CGovernment may, by an order stating the reasons therefor published in the Gazette, appoint such servant as the executive officer of the committee for such period not . exceeding eighteen months as may be specified | in such order.

(2) Any executive officer appointed under sul. section (L) shall he deemed to be an officer lent to th? committee bye Government under sub-section (3) of section 25.

(3) When under sub-section (1) an executive officer is appointed for any committee, the State Government shall determine from time to time which powers, duties and functions of the committde, president, vice-president or secretary under this Act or any rule or byelaw made thereunder shall be exercised and performed by such officer, in addition to, or to the : exclusion of, their exercise and performance by the said committee, president, vice-president or secretary.

(4) The sécretary of the committee shall pe sub- e Das &. J.

e ° ordinate to the executive officer. (5) The executive officer shall have the right to . atteyid all meetings of the committee and any joint committes er sub-committee and to take part in the , ¢discnasion so as fo make an explanation in regard to o . . . . ° . ° « e

@”

S.C.R. . SUPREME CORT REPOR'ES 1449 the subject wander discussien, but shall not move, 1958 4, second, or vote on any resolution or other motion. ” Shri Radesi

“57. (1) Ifa committee is not competent to per- gg reney form, or persistently makes default in the performance v. of, the duties imposed on it or undertaken by it under rhe state of this Act or any other enactment for the time being in Madhya Pradesh force, or exceeds or abuses its powers to a grave & Others extent, the State Government may, by an _ order D Se. ° stating the reasons therefor published in the Official asc. J. Gazette, dissolve such committee and may order a fresh election to take place.

(2) If after fresh election the new committee continues to be incompetent to perform, or to make default in the performance of, such duties or exceeds aq abuses its powers to a grave extent, the State Government may, by an order stating the reasons therefor published in the Official Gazette, declare the committee to be incompetent or in default, or to have exceeded or abused its powers, as the case may be, and supersede itefor a period to be specified in the order.

(3) If a committee is so dissolved or superseded, the following consequences shall ensue :

(af all members of the ,committee shall, as from the date of the order, vacate their offices as such memhers;

(b) all powers and duties of the committee may, until the committee is reconstituted, be exercised and performed by such person or persons as the State Government may appoint in that behalf;

e (4) On the expiration of the period of supersession specified in the order, the committee shall be reconstituted, and the persons who vacated their offices under sub-section (3), clause (a), shall not, by reason solely of ‘ such supersession be deemed disqualified for being membeys, . °

(5) No order under sub-section (1) or sub-section e ¢ (2) shall be passed until reasonable opportunity has been given to the committee to furnish an explanation. ° 4

(6) Any person or persons appointed by the Staté*

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1450 SUPREME COURT REPORTS . [1959]

e Government to exercise and perform the powers and (luties of a dissolved or superseded committee may

Khare G Another Tecelve payment, if the “State Government so directs, v

The State of Madhya Pradesh

¢ for his or their services from the municipal fund.” Learned counsel for the appellants points out that action*may be taken under s. 53-A “if a committee is not competent to perform the duties imposed on it beet cece ee eeees andthe State Government considers that a general improvement in the administration of the municipality is likely to be secured............. wee Whereas under s. 57 action can be taken not only “ if a committee is not competent to perform or persistently makes default in the performance of the duties imposedon it or........ vecceee’y but also if the committee ‘exceeds or abuses its powers to a grave extent...... e. It is pointed out that in case of imcompetency action can be taken either under s, 58-A or 3s. 57 but in case of abuse of power action can be taken only under s. 57. Reference is then made to the grounds enumerated in the notification itself and it is sargued that except perhaps grounds a, b,@ and g which may be indicative of incompetency, the other grounds, which are, by far, greater in number, obviously constitute abuse of powers and from this circumstance the c&n, clusion is songht to be drawn that in substance and in reality the énfpugned notification must have been made under s. 57 and that that being so the notification cannot be sustained because of the non-compliance with the provisions of sub-s. (5) of s. 57 which expressly lay down that no order under sub-s, (1) or (2),shall be passed until reasonable opportunity has been given to the committee to furnish an explanation. J am wot persuaded to uphold this argument.

In the first place it has to be remembered that the sections under consideration only confer certain powers on the State Government buf that the latter is not bound to take any action under either of them. Jn the next place it should be noted that the two sections differ materially in their scope and effect. Under g. 53-A the State Government may only appoint a servant of the Gavernment as the Executive Officer of

*the committee and may determine, from time to time, ee . ° ° . e . °

® o . $.C.R.. «SUPREME COURT REPORdS 1451 . which powers and duttes and functions of the com- 1958 mittee, its president, vice-president or secretary shall Shri. Radeshyam be exercised and performetl by such officer and gaye & Another indicate whether they should be exercised and per- v. formed in addition to, or to the exclusion of, their The State of exetcise and performance by the said committee, Madhya Pradesh x president, vice-president or secretary. The wording _— of s.53-A makes it quite clear that the action that pg, cy, may be taken thereunder is to be effective for a temporary duration not exceeding 18 months and the purpose of taking such action is to ensure the proper performance and discharge of only certain powers, duties and functions under the Act. The section does not, in terms, affect, either legally or factually, the eexistence of the committee, its president, vice-president or the secretary. Section 57, however, authorises the State Government, in the circumstances mentioned in the opening part of that section, to dissolve the committee itself and order a fresh election to take place so - that the committee as a legal entity ceases to exist and all the sitting members of the committee become functs officio. If after such fresh election the same situation prevails, then that section further authorises . the State Government to declare the committee to be incompetent or in default or to have exceeded or abused its power as the case may be and to supersede it for such period (not limited by the section) as may be specified in the order. The effect of an order made under s. 57 is, therefore, extremely drastic and puts an ‘end tathe very existence of the committee itself and, a in view of the grave nature of the consequences that will ensue, the legislature presumably thought> that some protection should be given to the committee before such a drastic action was taken and accordingly it provided, by sub-s. (5) of that section, that no order ° should be passed uptil reasonable gpportunity had been viven to the committee to furnish an explanation —a provision which clearly indicates that action under .- id s. 57 can only be taken after hearing and considering all the explanations furnished by oy on, behalf of the commiftee. The legislature did not think fit to provide a similar safeguard in s. 53A presumably becafige e . e . e. . ¥

° td

= e Shri Radeshyam Khare & Another v. The State cj Madhya Pradesh & Others

— Das. J.

° ° . e se e e ge e .

the order under the last. mehtioned seetion was of temporary duration, was not very drastic and did not threaten the very existence of the committee. A cursory reading of the two sections will also indicate that the conditions precedent to the exercise of the powers under both sections oterlap to some cxtent, namely, that action can be taken under both if the committee “is not competent. to perform the duties imposed on it......... ”*. To the extent that the requirements of the two sections overlap the State Government has the option of taking steps under one section or the other according to its own assessment of the exigencies of the situation. The position, therefore, is that if a committee is not competent to perform the duties imposed on it the State Govern-. ment has to make up its mind as to whether it’ should take any action at all and, if it thinks that action should be taken, then it has further to decide for itself as to which of the two sections it would act under.

Ifthe State Governmeut considers that the incompe- .

tency does not run to a grave extent. and the exigencies of the situation may be adequately met by appointing an Executive Officer for a short period not exceeding

18 months with certain powers to be exercised by hint,’

either in addition to or in exclusion of their exercise by the committer, the president, vice-president or the secretary, the State Government may properly take action under s. 53-A. On the other hand if the State Government considers, having regard to all the circumstances of the case, that the incompetgney ts much too grave to permit the committee, its president, vice-president or the secretary to function at all, ié may take action under s. 57 and dissolve the comunittee and direct fresh election to take place. In other words incompetency on the part of the committee gives to the State Government an option to apply one of two remedies under tle Act, if, that is to say, it considers it necessary to take action at all.

What, then, is the position here? Certain charges had been made in writing against the committee and its presidené which were forwarded to the president With a request to submit explanations if detail. The

. . ° ° a.

‘

“ S.C.R.. , SUPREME COURT REPORTS 1453 rd president, agting i in his official capacity, gave detailed 1958 explanations in writing and sent the same officially Shri. Radeshya from the office of the municipal committee to the ji. 6. anomer Additional Deputy Collector who was deputed by the ¥. Collector to hold the enquir y. The Additional Deputy rie state of Collector held the enquiry during which the president Madhya Pradesh appeared in person on several day s aud came to cer- & Others A tain findings and presumably made his report which in due course must have reached the State Government. The State Government apparently accepted such of those findings as have been set out in the notification itself. Even according to learned counsel for the appellants some of those findings amount only to incompetency and the rest, he contends, amount to abuse of power. I need not pause to consider whether *the abuse of power thus found was of a grave nature so as to fall within s. 57 as such or was of a minor character so as to be evidence of mere. incompetency. Taking the position to be as contended by learned « , counsel for,the appellants the position was that, as a .” result of the enquiry, the State Government ‘found two things against thé appellant committee, namely, (i) that it was guilty of incompetency and (ii) that it *was also guilty of certain’ abuses of power. I have “already stated that the State Government was not obliged to take any action at all either under s, 53-A or under.s. 57. Ifthe State Government considered that it was necessary to take action, it was entirely for the State Government to consider whether it | would take action for incompetency or for abuse of power.” In the present case the State Government might have thought that the abuse of power so found was not of avery grave nature but evidenced only incompetency. Surely a committee which abused its power might also have been reasonably regarded as . “incompetent to perform the duties imposed on it”. That part, suppositig the committeé was guilty of incompetency as well as of some abuses, what was there to prevent the State Government, as a matter of policy, to take action .for incompetency under a s. 53-A? The mere inclusion of tHe findinys of abuse of power in* the catalogue of ‘the Committees . . - oN

Shri Radeshyam Khare & Ancther ; v The State of Madhya Pradesh & Others

° Das Cy }.

1454 SYPREME COURT REPORTS, _ [1959]

misdeeds does nvt obliterate the finding§ on incompetency. I see nothing wrong in the State Government telling the committee : You have been guilty of incompetency as well as of abuse of power; but | shall not, just at this mument, take drastic action of dissolving \ you outright, but shall be content to take action and appoint an Executive officer for L8 months and confer some power on him under s. 43-A7. In my judgment the State Government was well within its rights, in exercise of its option, to take action, under s. 53-A as it has in terms purported to do.° Tio say that because some of the findings amount to abuse of power the State Government must act under s. 57 is to deprive it of its discretion which the Act undoubtedly confers on it. In my view the tact that the impugned notification records, apart from the® findings of incompetency, certain findings of abuse of power, does not lead to the conclusion, as contended for the appellants, that the State Government had taken action under s. 57 and not under s. 53-A although, in terms, it says it acted under the last ° mentioned section. °

Learned counsel for the appellants in support «f his contention that the impugfied notification was really. made under s. 57 of the Act, refers us to the powers ° and duties conferred on the executive Officer thereby appuinted to’ be exercised and performed by him to the exclusion of the committee, its president, vicepresident, or the secretary. His argument is that although the municipal committee is not ostensibly dissolved, it is in effect and in reality so dissolved, for the .substance of the powers of the committee, its president, vice-president or the secretary has deeh taken awav from them leaving only a semblance of power which is nothing but mere husk and the conclusion urged by learned counsel is that the impugned notification «must be regarded as having been , made under s. 57. In the first place, s. 57 does not contemplate the appointment of any executive Officer or the conferment of any power on him, while such appoint. ment’ and scohferment of power is directly contemphated by s, 53-A. In the second place the legal

S.C.R. , SUPREME COPRT REPORTS 1455 . existence of ethe municfpal committee and the status 1958 of its members and its president, vice-president or the g, : . A ivi Radeshyant secretary have not been impaired at all. In the eye y, 0, 6. another of the law the municipal committee still exists and v. along with it the members of the committee, the presi- The State of dent, vice-president and the secretary still hokd their Madhya Pradesh respective offices. These features clearly militate © ers against the suggestion that action has been taken bas. | under s. 57. Learned counsel says that we must look “ beyond mere form and get to the substance of the matter. There can be no doubt that most of the important powers have been taken away from the committee, its president, vice-president and the secretary, but that may well be due to the degree of gravity of the incompetency found or inferred from the other findings. Further, a cursory perusal of the Act and of the notification will show that various other powers and duties have not been taken away from the committee or conferred on the Executive * Officer. Thus the powers of the committee under « * ss. 128, 130, 131, 133 tp 141 and 144, 145 and 147 to 149 are still vested in and are exercisable by the committeé. Likewise the poweys under ss. 120, 121, 122, 23 to 127, 129, 150, 152 to 160 to 162, 163, 163A and 168 are still vested in and exercisable by the president. These powers that are still left with the committee or the president can hardly or with propriety be described as mere husks. It should not be overlooked that the suggestion that the real power has been taken away leaving only a semblance of it, is really an . argument in aid of a charge of mala fides, but, as here-in-before stated, the charge of mala fides- or fraud on the part of the State Government has not been persisted in or pressed before us. In my judgment, therefore, there is no warrant for contending ° that the impugued notification, judged by its effect, must be regarded as having been made urlder s. 57 of ° the Act. In this view of the matter the argument of ° od invalidity of the action founded on non-compliance with the requirements of sub-s. (5),of s, 57 does not . .% arise for consideration at all. - oot

° ry . . “

1456 SUPREME COPRT-REPORTS , [1959]

e ~ 95 Re. (it): In the writ. application, eut of which Sini Radeshyan tS appeal arises, the principal prayer of the appeldEsSuyVanl * +. . . Khare G& dnotier Nts is for a writ in thetnature of certiorari for quash- ¥. ing the order passed by the State Government. on The State of November 18, 1957. The next prayer which is for a Madhya Pradesh writ of mandamus restraining the respondents ‘from & Others giving eltect to the impugned order is clearly conse- Das C. yj. quential on or ancillary to the main prayer. The last prayer is in tbe nature of the usual prayer for further or other reliefs. Therefore the present petition is essentially one for the issue of a writ of certiorari. The writ of certiorari is a well-known ancient high prerogative writ that used to be issued by the Courts of the King’s Bench to correct the errors of the inferior Courts strictly so called. Gradually the scope of these writs came to be enlarged so as to enable the Superior Courts to exercise control over various bodies which were not, stricthy speaking, Courts at al] but which were, by statute, vested with powers and duties that resembled those that were vested in the ordinary. = * inferior Courts. The law is now well-settled that a = writ. of certiorari will lie to control such a statutory body if it purports to act without jurisdiction or in excess of it or in violation of the principles of natufa] justice, or Commits any error apparent on the face of the records, provided that, ona true construction of the statute creating such body, it canbe said to be a quasi-judicial body entrusted with quasi-judicial functions. It is equally well-settled that certiorari will not lie to correct the errors of a statutory body which is entrusted with purely administrative functions. Itis, . thereturc, necessary to ascertain the true nature of the * functions entrusted to and exercised by the State Government under s. 53-A of the Act. . In Province of Bombay v. Kusaldas S. Advani (*) this Court has discussed at considerable length the ° nature of the two kinds of act, judicial and @dnini- ° strative, and has laid down certain tests for ascertaining whether the act of a statutory body is a quasi- . judieial act ov an administrative act. It will, therefore,

. ®e (1) [ag501 SCR. Gan, af

S.C.R. , SUPREME COURT REPORTS — 1487 suffice to refer to the cé@lebrated definition of a quasi- 1958 y judicial body given by Atkin L. J. as he then was, imo, tn

Rex v. Electricity Commissioners (') and which now xia). 6, dhother holds the field. It runs as follows: ve “Whenever any body of persons having legal — The State of autltority to determine questions affecting rights of Medhya Pradesh subjects, and having the duty to act judicially actin © rs excess of their legal.authority they are subject to the po ¢. sod.

controlling jurisdiction of the King’s Bench Division exerqised in these writs.”

This definition was accepted as correct in Rex v.

London County Council (*?) and many subsequent cases both in England and in this country. It will be noticed that this definition insists on three requisites each of which must be fulfilled in order that the act of the body may be said to be quasi-judicial act, namely, that the body of persons (1) must have legal authority, (2) to determine questions affecting the tights of parties, and (3) must have the duty to act judicially. Since a writ of certiorari can be issued only to correct the errorg of a court or a quasi-judicial body, it would follow ‘that the real and determining test fot ascertaining whether an act authorised by a gtatute is a quasi-judicial act or an administrative act is whether the statute has expressly or impliedly imposed upon the statutory body the duty to act

' judicially as required by the third condition in the definition given by Atkin L. J. Therefore in considering whether in taking action under s. 53-A the State Government is to be regarded as functioning as a quasi-judicial body or a mere administrative body it hag to be ascertained whether the statute has expressly or impliedly imposed upon the State Government a duty to act judicially.

Relying on paragraphs 114 and 115 of Halsbury’s . Laws of England, 3rd Hdition, Volume 11, at pages 55- 58 ande citing the case’ of R, v. ManchéSter Legal Aid Committee (°), learned counsel for the appellants con- e tends that where a statute requires a decision to be arrived at purely from the point of view of policy or

(1) [1924] 1 K.B. 171. (2) ‘trost] ‘s KB, 215. * (3) [1952] 2 QB. 413. ee . . oy o@° ¢ ® e 1958 expediency the authority, is under no eduty to act Shei Radesh judicially. He urges that where, on the other hand, Shri Radesiyam . : Khare & Another vOe Order has to he passed on evidence either under an ¥. express provision of the statute or by implication and The State of determination of particular facts on which its jurisdic- Madhya Pradesh tion toe exercise its power depends or if there is a? pro- & Otners — yosal and an opposition the authority is under a duty Das C. yj to act judicially. As stated in paragraph 115 of Halsbury’s Laws of England, Volume 11, at page 57, the duty to act judicially may arise in widely differing circumstances which it would be impossible to attempt to define exhaustively. The question whether or not there is a duty to act judicially must be decided in each casein the light of the circumstances of the particular case and the construction of the particulay statute with the assistance of the general principles laid down in the judicial decisions. The principles deducible from the various judicial decisions considered by this Court. in the Province of Bombay v. K. S. Advani (’ at page 725 were thus formulated, namely :

“(i) that if a statute empowers an authority , not being a Court in the ordinary sense, to decide disputes arising out of aclaim made by one party” under the statute which claim is opposed by another part’: and to determine the respective rights of the contesting parties who are opposed to cach other, there is a lis aud prima facie and in the absence of anything in the e statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi-judicial act ; and

{ii) that ifa ‘statutory authority has power to do any act which will prejudicially affect the subjest,

\ then, although there are not two parties apart’ from the authority and the contest is between the authority . proposing to do the act and the subject opposing it, the final determination of the authority will yet be a e quasi-judicial act provided the authority is reqwired by e the statute to act judicially.”

It is clear that in the present case there is no question of any contest bef{ween tivo contending parties which the State-Government is, under s. 53- A, to degide and, °° {1} [1950] S.C.R. 621. ya . . e e

eee e x

S.C.R., « SUPREME COURT REPORTS 1459 therefore, there is no “lis 2 in the sense in which that word is understood generally, and the principle referred to under the first heading has no application. We have, therefore, to consider whether the case comes within the principle enunciated under the second head, nafnely, whether the C. P. and Berar Municipalities Act, 1922, requires the State Government to act judicially when taking action under s. 53-A.

Learned counsel for the appellant draws our attention to the language in which s. 53-A is couched. He concedes that the ultimate order under that section is purely discretionary, that is-to say, the State Government isnot obliged to take any action under the section. It may make an order under the section or ejt may not according as it thinks fit. But. in case the State Government chooses to act under the section, it can only do so if the conditions therein laid down are fulfilled. A cursory reading ofs. 53-A will show that there are two pre-requisites to be satisfied before the - State Government can take action under s. 53-A, namely, (1) that the municipal committee is not competent to perform the duties imposed on it and (2) that .the State Government .considers that a general « improvement in the administration of the municipality is likely to be secured by the appointment of a servant of the Government as the Executive Officer of the committee. When both these conditions are fulfilled, then and then only may the State Government take action and make an order under s. 53-A. Of the two conditions the second one, by the very language in which it is expressed, is left entirely a matter for the ®tate Government to consider, for it depends entirely on the view of its own duty and responsibility that the State Government may take on a consideration of the situation arising before it. In other words, the statute has left that matter td the subjective determination of the State Government. The first requisite, however, is an objective fact, namely, whether the committee is or is not competent to perform the duties imposed on it. The determination of that faet, it ds pointed out, has not been left to the subjective .deterntination by

1955 gf .

Khare & Another

The Siate of Madhya Pradesh & Others

. _—t

. 1460 SUPREME COURT REPORTS . , [1959] o © Qss5 the State Government. Learned counsel fer the appel- Shri Radehvom, ents urges that if it were intended to leave the deter. Khare & dvothey ination of this fact of incompetency also to tho oy. subjective opinion of the State Government, the section The state of — would have been framed otherwise. It would have Madkya Pradesh said something like this: “Jf the State Governntent © Otes considers that a committee is not competent to perform the duties...... and thatthe general improvement in the administration of the municipalities is likely to be secured by......". This the Legislature has not done and has, thus, clearly evinced an intention not to leave it to the ipse dizit of State Government. Section 53-A, it is pointed out, differs materially in this respect from s. 3of the Bombay Land Requisition Ordinance (V of 1947) which was considered by this Court in Ausaldas, Advani’s case('). That section of the Bombay Ordinance opened with the words: “ Ifin the opinion of the Provincial Government....... wees Which were taken as indicative of the Legislature’s intention to leave the determination of the existence of all the con- , ditions precedent entirely to thg subjective opinion of the Provincial Government so as to make the action a purely administrative one. , The argument is thaf the first requirement is the finding of a fact which may be* called a jurisdictional fact, so thatthe power under s. 538-A can onl be exercised when that Jurisdictional fact is established to exist. The determination of the e existence of that jurisdictional fact, it is contended, is not left to the subjective opinion of the State Government and that although the ultimate act isan administrative one the State Government must at the preliminary stage of determining the jurisdictional fact act \ judicially and determine it objectively, that is to ‘say, i @ quasi-judicial way. It is assumed that whenever ° there has to be a determination of a fact which alfects the rights of the.parties, the decigion must be a quasie- judicial decision, so as to be liable to be corrected by a . ° writ of certiorari. In Advani’s case('!) Kania C. J. with whom Patanjali Sastri J. agreed, said at page ° 632: + . : ; “The respondegni’s argument that whenever there (1) [1950} S.C.R. 62r. °

Das €. f.

Oo eae? . *

S.C.R., « SUPREME CQURT REPORTS 1461

@ is a determination of a' fact which affects the rights of 1955 fo parties, the decision is quasi-judicial, does not appear , . Rede shyam to be sound.” ° Khare & Another Further down the learned Chief Justice said : v.

fo eeeeaes It is broadly stated that when the fact has | T State of to Be determined by an objective test and whtn that Madly Oe decision affects rights of someone, the decision or act —.

is quasi-judicial. This last statement overlooks the das c. J.

aspect that every decision of the executive generally is a-decision of fact and in most cases affects the rights of someone or the other. Because an executive authority has to determine certain objective facts asa preliminary step in the discharge of an executive func- tion, it does not follow that it must determine those dacts judicially. When the executive authority has to form an opinion about an objective matter as a preliminary step to the exercise of a certain power conferred on it, the determination of the objective fact and the exercise of the power based thereon are alike 4 . matters ofan administrative character and are not

* amenable to the writ of certiorari.”

To the like effect is the following observation of Fazl

Ali J. in the same case at page 642:

“* <The mere fact that an executive authority has to decide something does not make the decision judicial. It is the manner in which the-decision has to be arrived at which makes the difference, and the real test is: Is there any duty to decide judicially? °

As I have already said, there is nothing in the

Ordinayce to show that the Provincial Government has 1 todecide the existence of a public purpose judicially o& quasi-judicially.” ° Dealing with the essential characteristics of a quasi- ‘ judicial act as opposed to an administrative act, I . said at page 719: .

© eeeceeee the two kands of acts havesmany common featurés. Thus a person entrusted to do an administrative act has often to determine questions of fact to enable him to exercise his power. He has to con. sider facts and circumstances and to weigh pros and cons in his mind before he makes up -his mind to exer. cise his power just as a person exercising a judicial or. - . ° ’ oe

* ge eu ? e

; 1462 SWPREME COURT REPORTS. , [1959] e © 1958 quasi-judicial function has to’do. Bothehave to act Shri Radeskyam (2 Zood faith. A good and valid administrative or eshyam Khare & Another executive act binds the stbject and affects his rights or v. imposes liability on him just as effectively as a quasi- The State of judicial act does. The exercise of an administrative Madhya Pradesh oy executive act may well be and is frequently made © Others dependent by the Legislature upon a condition or con- Disc. } lingeney which may involve a question of fact, but “the question of fulfilment of which may, nevertheless, be left to the subjective opinion or satisfaction af the executive authority, as was done in the several Ordinances, regulations and enactments considered and construed in the several cases referred to above. The first two items of the definition given by Atkin L. J. may be equally applicable to an administrative acl, The real test which distinguishes a quasi-judicial act from an administrative act is the third item in Atkin LL. J.’s definition, namely, the duty to ac! judicially.” J} found support for my opinion on the following passage occurring inthe judgment of Lerd Hewart. ~ CG. J. in R. v. Legislative Cagnmittee of the Church + . Assembly (?): “In order that a body may satisfy the re ‘quired test it is not enough that it should have legal autlto’ rity to determine questions affecting the. rights of subjects; theré must be super-added to that charac: teristic the further characteristic that the body has e the duty to act judicially.” The above passage was quoted with approval by Lord Radcliffe in delivering the judgment of the Privy

Council in Nakkuda Ali's case (). . I now proceed to apply the principles discussed \ above to the facts of the present case. The simple fact that the incompetency of the committee goes to the root of the jurisdiction of the State Government to exercise ,itspower under s. 53-A does not require ° that that fact must be determined judicially. Phe sole ° question is, does the statute require the State Govern. ment to act judicially. There need not be any ex- ° press provision that the,State Government must act eyedicially: “It will be sufficient if this duty may be = * . {1) (1g28) 1 WATS. grr, 415. . (2) frost) A. C, 66.

8.C.R. , SUPREMB COURT REPORTS 1463

‘ implied from the provisions of the statute. The mere 1958 ff fact that a question of fact has to be determined as a preliminary condition before action can be taken under the statute by itself does not carry that implica- v.

tion. There must be some indication in the statute The State of as to*the manner or mode in which the prelinzinary Madhya Pradesh fact is to be determined. I find nothing in s.53-A = © Chers which in terms imposes any duty onthe State Govern- = 0 L ment to act judicially. No form of procedure is laid down. or even referred to from which such a duty could be inferred. On the contrary, one finds a significant omission of any provision like that embodied in sub-s. (5) of s.57 which requires that no order under that section shall be passed until reasonable opportunity has been given tothe committee to furnish an explanation. It is also material to note that whereas an order under s. 57 is of a permanent character the one tobe made under s. 53-A is to be of a limited duration, ie., for such period not exceeding 18 months as may be specified in such order. Further, s. 53-A contemplates swift actiqgn and a judicial hearing may easily frustrate the very purpose contemplated by s. 53-A, for a judicial act wil] be subject to the powers gf* superintendence of the superior courts and the operation of the order under s.53-A may be postponed, as it has been done in this very ¢ase, by taking the matter from court to court until it is set at rest by this Court. In this connection reference may also be made to s. 25-A of the Act which authorises the State Government to require the committee to appoint, inter alia, a Chief Executive Officer. If such cammittee fails to comply with the requisition within the périod specified, the State Government may, under { sub-s. (3), if it thinks fit, appoint such officer and fix his pay and allowance. Sub-section (4) authorises the ° State Government to rgquire the committee to delegate to the efficer so appointed such powers, duties and func- e tions of the committee, its president, vice-president or e the secretary under this Act or any rule or bye-law made thereunder as may be specified jn sugh requisition and if the committee fails to comply } with sueh requisi- tion within a reasonable time, the State Governmerft* ° 186 bd

- * ee e ry ee

Shri Radeshyam Khare & Another cd e@°? é e

1464 SUPREME COURT REPORTS , [1959]

e ae rr may determine the powers, duties and fuactions which shaJ] be exercised and pertormed by such officer in addi- Shri Radeshyam |. : . * : Khare & Another tion to or to the exclusi6n of their exercise or perform. v. ance by committee, its president, vice-president or sec- The State of retary. Nobody will say that the State Government Madhya Pradesh must exercise the powers under s. 25-A after hotding © Others any judicial enquiry. The only difference in the lan- ° + - me ! . . Dac. 7, guage of's. 25-A ands. 53-A both of which were inserted in the Act in 1947 is that action can be taken under 3. 53-A only when the committee is incompetent. to perform the duties imposed on it—a fact the determination of which is not in so many words left to the subjective opinion of the State Government, whereas action can be taken under s. 25-A on the satisfaction of the State Government as to certain facts which is, in terms, left to the subjective determination of the State Government. If, as L have said, the determina. tion of a jurisdictional] fact is not by itself sufficient to indicate that, it has to be done judicially, there is nothing else ins. 53-A or in any other section of thee Act which will lead to the coyclusion that the State Government must act judicially. ‘The only other thing strongly relied onby learned counsel for the appellants is that the State Government may exerctsg its power under s. 53-A “ by an order stating reasons therefor published in the Gazette”. The requirement that the State Government must give. reasons for the order it makes does not: necessarily require it to record a judgment judicially arrived at. The legislature might well have thought that public policy yequired that the State Government entrusted with large administrative power should record its reasons tr \ exercising the same so as to allay any misgivings that may arise in the mind of the public. In my judg- ° ment, the action taken by the State Government under s. 53-A is not a judicial or quagi-judicial act but is an e administrative act. Learned counsel for the appele lants relied on the case of Cupel v. Child (‘). That: decision clearly went upon the construction of the . statute that came,up for consideration. The fact that action could’ be taken under that statute on gffidavits ° © (1) 2Cr. & Jr. 558; 37 R. R. 761. °

. . . e 8 .

e .

S.C.R. | SUPREME COURT REPORTS 1465 was construe ‘as a cledr indication that the Bishop 1958 had to arrive at a decision as to the negligence of the Shvi Radesi Vicar on hearing evidence adduced before it by affida- 7.7) 6 a srney vit which led to the next conclusion that the Vicar v. must be given an opportunity of being heard and of rhe State of adducing evidence in hisOwn defence. From this cir- Madhya Pradesh cumstance it was inferred that even when the Bishop & Others acted on his knowledge of fact he must also proceed judicially, for the two modes of procedure were treated oy the same footing by the section itself. As I have said, there is nothing in s. 53-A or any other section which. may lead us to infer a duty to proceed judicially as was done in that case. On the contrary there are indications leading to a different conclusion. To say that action to be taken under s. 53-A is an administrative action is not to say that the State Government has not.to obsérve the ordinary rules of fair play. Reference to the observation made by Fortesque J. in Dr. Bentley’s case about God asking ~ |Adam and Eve whether they had eaten the forbidden . fruit appearing in the judgment of Byles J. in Cooper v. The Wandsworth Bodrd of Works (+) is apposite. The decision in the last mentioned case clearly establishes that in some cases it may be necessary to give an “opportunity to a party to have his say before an administrative action is taken against him. But that is quite different from the well-ordered procedure involving notice and opportunity of hearing necessary ; to be followed before a quasi-judicial action, open to ° correction by a superior court by means of a writ of , certiorari, can be taken. The difference lies in the "manner and mode of the two procedures. For, the breath of the rules of fair play in taking administrative action a writ of certiorari will not lie. f I have already recounted the events and proceedings og that preceded the actual passing of the order under s, 53-4. Ifthe action taken under that section is to be regarded as an administrative action, as I hold it ° should be, then I have no doubt that the appellants ° have had more than fair play. It is said that the State Government did not shold ahy enquiry before (1) 1863] 14 CE (N.S.) 180; 143 E.R. 414.” ee .

Das C. y.

bd «

Ln ied a ° -

1466 SUPREME COURT REPORTS, | [1959]

1958 making the order and ihat, therefore, jt cannot be

Shy hades yarn said that the appellants had an opportunity to defend Khare & Another themselves against an order of this kind. 1 do not v. consider that there is any substance in this contention.

The State of If the State Government wanted to hold any enquiry Madhya Pradesh jf, woyld do so through some of its officers. aV ho & Others would be more appropriate and competent to hold the paisc. jy. enquiry except the officers on the spot? The Additional Deputy Collector is obviously the person to whom the duty of enquiry could properly be entrusted,

All the charges levelled against the appellants were forwarded to them, and they submitted explanation.

The first appellant, who is the President, personally attended many of the sittings. ‘There is no suggestion that they had been prevented from adducing evidence in their own defence, The enquiry was held into what had been alleged against their conduct. It was surely not a purposcless enquiry. As a result of the enquiry certain findings were arrived at which were accepted by the State Government and an order was, - made under s. 58-A. J] do not sce what grievance the . appellants can possibly have. “In my judgment there has been no remissness on the part of the* State

Government. °°. For reasons stated above I would dismiss this® appeal. - . Bhagwati J. Buacwatl J.—I also agree that the appeal should be dismissed with costs but would like to add a few words of my own. Ll have had the benefit of reading the judgments prepared by my Lord the Chief Justice, Kapur J. and Subba Rao J. I agree with the reasoning and the \ conclusions reached in those judgments in regard to points Nos. (i) & (ii), viz., bd (i) that though the Notification purports to have been made in exercise of the ppwers conferred on the e State Government by s. 53-A, in substance and in e reality it has been made under s. 57 of the Act ; and, (ii) that if the Notification is held to be one made . under s. 57 itis wetra vires and bad since the statutory requiremext °of affording reasonable opportynity to . explain has not been complied with. °

° o% ° a e a

S.C.R. . SUPREME COURT REPORTS 1467

In regardeto point Nd. (iji), viz., (iii) that even if the impugned Notification be held to come within s, 53-A it is still ultra vires since gjgye & Another before promulgating it the State Government has committed a breach of the rules of natural justice in notegiving any opportunity to the appellants te defend themselves, however, there is a difference of opinion between my Lord the Chief Justice and Kapur J. on the one hand, and Subba Rao J. on the other, as to the ,character of the act performed by the State Government while arriving at the conclusion that the Committee is not competent to perform the duties imposed on it or undertaken by it. Whereas the former are of the view that in arriving at such conclusion the State Government performs only an ad- “ministrative function, the latter is of the view that the fact whether the committee is not competent to perform the duties imposed on it or undertaken by it is

® jurisdictional fact and in arriving at that conclusion - . the State Government performs a quasi-judicial func- tion. In my opinion, the determination of the question whether the State Government performs an administrative or a quasi-judicial function in the matter ot arriving at such conclusion is immaterial for the * purposes of this appeal, inasmuch as an inquiry had been instituted by the State Government,in the matter of the charges levelled against the appellants and full opportunity had been given to them to defend themselves. I need not add ‘anything in this regard to what has been said by my Lord the Chief Justice in the judgmerit just delivered by him. I only wish to say that the circumstances adverted to therein am ply demonstrate that the appellants had notice of the charges which had been levelled against them and had rendered full explanation in regard to the same, and, in the matter ofthe inquiry in regard to those charges the principlés of natural jMstice had been complied with and the conclusion reached by the State Government in the matter of the incompetence of the committee was unassailable:

That being so, I would pfefer not to> - express any opinion’ on the*vexed question as td whether the act

. ° a « ve v. The State of Madhya Pradesh & Others

' Bha gwati J:

ee? @ e

1468 SUPREME COURT REPORTS, , [1959]

e ww 198 performed by the State Goverfiment is qaasi-judicial Shri R _ or administrative in character. rs Radeshyam rn ° : Khare & Another _ Lhe result, however, iythe same and J agree with v. the order proposed dismissing the appeal with costs.

The State of Sow . DEP owt Mathya Pradesh S. kK. Das J.—I agree generally with the conelu-

& Others sionsrdached by my Lord the Chief Justice and’the _—_ reasons on which those conclusions are founded. But. S.K. Das J. JT wish to add a few words with regard to the third question, namely, if in making the impugned notification, the State Government violated the principles of natural justice. The answer to that question depends on whether on a true construction of the relevant statute, the State Government performed an adminis. trative function or what has been called a quasijudicial function in making the impugned notificay tion. T am of the view that the action taken by the State Government under s. 53-A of the Act isin its true nature an administrative act. It is said that where there is ‘a duty to act judicially’, the function? is quasi- « judicial: that however does not help us very much in understanding the distinction between an administrative function and a quaspjudicial function. Where, the statute clearly indicates that the function is judi. « cial, there is little difficulty. The difficulty arises in cases where the point taken is that by necessary implication the statute requires an administrative e body or executive anthority to act judicially. Lt is indeed generally correct to say that where an administrative body or authority is under a duty to aqt judicially, its function is judicial or quasi-judicial. But it is, tOsome extent, a tautology to say that the fune- \ tion is judicial or quasi-judicial if it is to be done judicially. To get to the bottom of the distinction, we must go a little deeper iato the content of the expression ‘duty * to act judicially’. As has been repeated so *otten, ° the question may arise in widely differing circumstances and a precise, clear-cut or exhaustive defini- ° tion of the.expressjon is not possible. But in decisions dealing withthe question several tests have been laid ‘down ; for example— bd o% e

S.C.R: , “SUPREME COURT REPORTS 1469

@ ® (i) whether there isa lis inter partes ; 1958 gf, (ii) whether there is a claim (or proposition) and 4, p, deshyam an opposition ; Khare & Another (iii) whether the decision is to be founded on the y. taking of evidence or on affidavits ; The State of

Madhya Pradesh

(tv) whether the decision is actuated in whole or in “25,7.

a part by questions of policy or expediency, and if so, __ . whether in arriving at the decision, the statutory ss, x. Das J. body has to consider proposals and objections and evidence ; and (v) whether in arriving at its decision, the statutory body has only to consider policy and expediency and at no stage has before it any form of lis.

The last two tests were discussed and considered in *R. v. Manchester Legal Aid Committee ('). It is fairly clear to me that tests (i) to (iv) are inappropriate in the present case by reason of the provisions in s. 53-A as contrasted with s. 57 and other sections of the Act. The test which is fulfilled in the present case is test

* (v), and that makes the function under s. 53-A a purely administrative function in spite of the requirement of an injtial determination of a jurisdictional fact and .the recording of reasons for the decision.

* [am content to rest my decision on the aforesaid . ground, as 1 am not satisfied that the enquiry held by the Deputy Collector was a proper ‘ertquiry if it be held that s. 53-A entrusts a quasi-judicial function to the State Government and therefore requires compli- ° ance with the principles of natural justice. That enquiry was for a different purpose altogether, the charges were not the same, and in my view the Munigipal Committee had no real opportunity of meéting the charges on which the State Government ultimately took action. I prefer, therefore, to base my decision J on the third question,on the short ground that the function which the State Government~exercised under s. 53-A was administrative in nature and it is settled ° law that such action is not amenable to a writ of bd certiorari. » On the first two questions I am in entjre agreement (x) [1952] 2 Q.Be 433. ee ° o ° ° ° . Pe , * .

bial Shri Radeshyam Khare & Another . The State of Madhya Pradesh & Others

— Kapur J.

1470 SUPREME COURT PEPORTS ¢ , [1959]

¢ with my Lord the Chief Justice and have nothing useful to add.

Kapur J.—This appeal pursuant to special leave of this Court is directed against the judgment and order of the Madhya Pradesh High Court. ‘Phe appellants ate the Municipal Committee of Dhamtari and its President Radheshyam Khare who are challenging the order of the State Government of Madhya Pradesh appointing an Executive Officer of the Municipal Committee under s. 53-A of the C.P. & Berar Munidipalities Act (Act 1] of 1922) to be termed in this judgment, the Act.

The facts leading to this appeal are that one Dhurmal Daga who was amember of the Dhamtari Municipal Committee (appellant No. 2) was found im:® porting cotton into the municipal area without paying octroi duty. He then went on hunger strike and also distributed pamphlets making allegations against both the appellants. At this stage the Collector of Raipur district personally intervened and persuaded Vhurmal * Daga to break his faston an Sssurance that he (the Collector) would look into his allegations. In pursuance of that assurance Me. Rana, Deputy Collectare held an enquiry and ealled the explanation of the ¢ Municipal Conimittee and its President and submitted lis report on November 22, 1956, which was forwarded to the State Government on April 24, 1957. The State Government thereupon took action under s. 53-A_ of the Act and by a notification dated November 18, 1957, appointed a Deputy Collector B. P. Jain respondent No. 3.as Exccutive Officer of the Dhamtari Municipal Cominittee for a period of 18 months on the greunt that the Municipal Committee was iucompetent in the performance of Its duties under the Act. The relevant part of the notification was as follows:

“Whereas it appears to the State Goverpment that the Municipal Committee, Dhamiari, has proved itself incompetent to perform the duties imposed om it by or under the Central Provinces and Berar Municipalities Act, 1922 (21 of 1922), inasmuch as it— ee (a) granted grain and building atlvances to the e% . ‘ ~~

° ry .

8 ee? e .Y ad 8.C.R. SUPREME COURT REPORTS 147]

employees without priot sanction and no efforts were 1958 / . made for their recovery,

Shri Radeshyam (b) showed carelessness in cases of embezzlement

Khave & Another

- of the employees and did not report such cases to y. Government, The State of .(c) failed to control the President who. issued Madhya Pradesh orders in cases in which he had no authority, & Others « (d) spent thousands of rupees onsanitation and pyiiy?y. other works although there was no provision in the * "budget, (ec) allowed unconcerned persons to interfere in its working,

(f) showed partiality in the appointment and dismissals of the employees, further such appointments and dismissals were made against rules,

* (g) delayed the constitution of the committee and the framing of budget,

(h) misused the trucks of the municipality,

(i) failed to recover the lease money,

£ (j) shown partiality in the issue of transit passes

“to certain traders, further excess octroi duty was

* charged on certain artiéles and in certain cases where octroiduty is not leviable it was levied just to harass the people,

* (k) distributed municipal manure to certain persons without any charge, similarly distributed the manure free of cost and used the truck of the municipality for this purpose,

(1) failed to control its president who spent the money of the municipal Committee without any authority,

(m) spent huge amount on the maintenance of the reads and drainage but their condition has remain- J ed unsatisfactory,

(n) failed to give copies of the documents as allowed under rules, also failed to allow its members to inspect, the records as i8 permissible under rules,

(o) failed to invite tenders of purchase of articles.”

e This order of the State Government was challenged under Art. 226 in the Madhya Pradesh High Court on . » the allegation that the order passtd b} the State “ Governntent constituted oe 187 ° ° ee . . .

)

. Ne

1472 SUPREME COURT REPORTS . 11959]

“a flagrant abuse of the powers condéerred under section 53-A of the Municipalities Act. The charges

Khare G Another CMUmerated in the notiti¢ation were never framed. The

The State of Madhya Pradesh

° Kapur

State Government did not serve any notice on the Municipal Committee or its President to show cause against the charges nor were thev afforded any oppor. tunity to have their say in the matter,

The appellants submitted that the finding about the incompetency of the committee was vitiated because no enquiry was held and there was no evidence in support thereof and the order was void and inoperative because

(1) “there is non-observance of the mandatory provisions. The power has not been exercised within the limits prescribed. °

(2) there is no determination of the basic facts.

(3) there is a violation of the rules of natural justice.

(4) the action is mala fide.”

The respondents denied the allegations and submit-- ted that the State Governmentsmade the order under s. 53-A of the Act on the report of Mr. Rana, Deputy

Collector who held an enquiry into the allegations made against the appellant under the orders of the, Collector of Raipur; that proper notice was given to the Secretary Of the Municipal Committee which filed its Written Statement through its President appellant No. | who appeared personally during the proceedings of the enquiry, bunt no opportunity for “leading any evidence” was demanded by the appellant noy was it denied. They also pleaded that no formal enquiry was required under the law and that the Court vould not go into the sufticiency or otherwise of the reasons for taking action “and the same will not be enquired into by the Court objectively.”

A learned Single Judge of the High Court dismissed the petition holding that whatever be the position under s. 57, under s. 53-4 no explanation was required to be called trom the municipal committee and the Staie Goverymeny, was duthorised under the law to act promptlt. The High Court negatived the allega- *tlon that the State Government had proceeded against oS . oa

+ ft

S.C.R. « SUPREME CODRT REPORTS 1473 ° ‘ the Municipsl Committee,s appellant No. 2, at the instance of Dhurmal Daga. The learned Judge said : .

“T have gone through the material on which the State Government based its action on enquiry into the charges levelled against the municipal committee and find that there were several other complaints besides those made by Dhurmal Daga. The record of the enquiry shows that on some occasions the petitioner was present during the enquiry. I am satisfied that the invocation of the power of this Court under Art. 226 of the Constitution is not open to the present petitioner”,

A Letters Patent appeal against this judgment was fismissed on February 21, 1958.

The appellants have come in appeal to this Court by special leave and have raised four points before us:

(1) That the notification thovgh it purports to be . under s. 5%-A of the Actis really unders. 57 which is shown by the grounds given in the notification, the powers vested in the “Executive Officer and by the effect*of the order ; . °(2) and if it is a notification under s. 57 it is ultra vires because the statutory requirements of the section had not been complied with ; -.

(3) even if the notification be held to be under s. 538-A of the Act it was still null and void and inoperative as it violated the principles of natural justice and

(4) that the order made was mala ifide inasmuch as it had been passed with an ulterior object of taking away the control of the municipality from the Independent Party which was in a majority and that this was in accordance with the policy adopted by the State Government of superseding or suspending municipalities which were not controlled by the Congress Party. As further proof of the mala fides of Respondent No. 1, the State Government, it was alleged that Radheshyam Khare appellant No. 1 was expelled from the Congress Party “for sik year in about March .1957 Because he stood as’ an Independent rd ry Pe

1958 o . ——~@~e

Shrt Radeshyam

Khare & Another v. The State of Madhya Pradesh & Others

° Kapur f.

x ~ 1958 e .— Shri Radeshyan: Khare & Another v. The State of Madhya Pradesh & Others

1474 SUPREME COURT REPORTS ° [1959]

candidate for election to the Lower Houke of Pacliament in the 1957 elections.

The allegation of mtla fides was not seriously pressed nor is there any material to sustain it.

Tn order to decide the other questions raised in this appeab it is necessary to examine the scheme of the Act and its provisions relating to the powers of the State Government in regard to municipal committees. Chapter I of the Act makes provisions for the constitution of municipalities. Section 4 empowers the State Government to signify by notification its intention to declare a local area to be a municipality, to alter its limits or to withdraw the whole of it from a municipality. Section 5 gives the right to the inhabitants of such local area to file objections agains anything contained in the notification within a period of 6 weeks and after consideration of such objections ifany, the State Government can confirm, vary or reverse its notification under s. 4. Sections 6 to 8

deal with consequential orders on inclusiontand exclu-* sion of local areas.

Section 9 authorises the State Government tp give such powers to a municipality asin its opinion it ig suited for. It provides : e

“Jf the circumstances of any municipality are such that, ip ‘the opinion of the ‘State Government, any provision of this Act is unsuited thereto, the State Government may, by notification :

(a) withdraw the operation of that provision from the municipality ;

(b) apply that provision to the municipality in & modified form to be specified in such notification, — ¢

(c) make any additional provision for the munielpality in respect of the matter mentioned in the provision which has been wit hdrawn from, or applied in a modified form to, the munidipality.”

Chapter 11 deals with the membership of committees and chapter JI1 with Subordinate Agencies. Under this chapter fall Sub-Committees, Presidents and other officers of Municipal Committees. Section 25-A which deals with’ the appointmant of a Chiet Eyecutive Officer, Health Officer or Supervisor i is “as under :, o% . >

S.C.R. « “SUPREME COURT REPORTS 1475

(1) “ Tie State Goversfinent may, if in its opinion the appointment of—

(a) a Chief Executive Officer is necessary for general improvement in the administration of the municipality.........cesceee and it is satisfied that the state of the municipal fund justifies expenditure on such appointment, require the committee to appoint any such officer.

(2) A requisition under sub-section (1) shall state the period within which the committee shall comply therewith,

(3) If the committee fails to comply with the requisition within the stated period, the State Government may, if it thinks fit, appoint such officer at the eost of the committee and fix his pay and allowances, the rate of his contribution to the provident fund or to his pension and other conditions of service.

(4) The State Government may require the committee to delegate to the Chief Executive Officer wee lessseseseede appointed under this section such powers, duties and functions of*the committee, president, vicepresident, or secretary under this Act or any rule or bye-law made thereunder as may be specified in such erequisition, and if the committee fails to comply with such requisition within a reasonable time, the State Government may determine which powers, duties and functions shall be exercised and performed by such officer in addition to, or to the exclusion of, their exercise and performance by the committee, president, vice-president or secretary.

(5) The secretary of the committee shall be subofdinate to the Chief Executive Officer.

(6) The provisions of sub-section (5) of section 53-A shall apply to the Chief Executive Officer or Health Officer or Supervisor appointed under this section ”

Chabter IV deals with the procedure ‘to be followed in Committee Meetings, chapter V with property, contracts and liabilities and chapter VI with duties of committees. Chapter VIII is headed “ @ontrol’™ Lt prescribes the authorities which have the power to, contrpl the,acts of committees and also lays down the.

=» . és

° .

Shri Radeshyam Khare & Another v.

The Siate of Madhya Prudesh & Others

“ = 1958

Shri Radeshyam Khare & Ancthcy

¥v

The State of Maihya Pradesh

Kaptur

1476 SUPREME COURT REPORTS® ¢ [1959] r e extent of such control and the method of “ts exercise. Section 52 gives to the Deputy Commissioner the power to examine the proceedings of committees or eub-committees. Section 53 empowers a Deputy Com. missioner to suspend the execution of any order, or resolution of a committee or a sub-committee and prescribes the circumstances in which this power can be exercised. Then comes s. 53-A which empowers the appointment of an Executive Officer by the State Government. Section 54 provides that uf the case of emergency the State Government, on the receipt of the repoft under s. 52 or otherwise may require a@ municipality to execute any work or perform any act. which in its opinion is necessary for the service of the public. Under s. 55 the State Government if satisfied after receiving a report under s. 52 or after enquiry if any that a municipal committee has made default in performing its duties may appoint “some person to perform” the duty and can direct the municipal committee to pay *reasonable remuneration to the person sosppointed. Jf default is made in any such payment the State Govergment can under s. 56 direct ae person having custody of municipal funds to make such payment. Section d7e empowers the State Government to dissolve and/or to supersede the municipal committee. Section 58 gives to the State Government the power of revision and an overall control over the actions of officers acting or taking any action under the Act. But it cannot reverse any order unless notice is given to the eparties interested aud they are allowed to appear and be heatd. Section 58-A authorises the State Government to enforce its orders. Section 58-B gives to the State

(iovernment the power of review of orders passed by itself and Commissioners and Deputy Commissioners have similar powers of reviewing their own orders provided that no order shall be varied unless ndtice is given to the partics interested to appear and be heard in support of the order. |

Unider s. 59 cestain officers appointed by general wor special orders of the State Government aresentitled to attend any meeting of the committee and address ht . .

e f °

S.C.R. SUPREME COURT REPORTS 1477 it on any matter affecting ,the work of their deviart- 1958 /.

ments. Section 60 provides for the settlement of «2g yam cispubes between the committees and other local jase & Another odies v.

As ss. 53-A and 57 are the subject matter of contro- The State of versy in this case it is necessary to quote them in Madhya Pradesh full : & Others

Section 53-A “(1) If a committee is not competent to perform the duties imposed on it or undertaken by it by or under this Act or any other enactment for the time being in force and the State Government considers that a general improvement in the . administration of the municipality is likely to be secured by the appointment of a servant of the Government as the executive officer of the Committee, the State Government may, by an order stating the reasons therefor published i in the Gazette, appoint such servant as the executive officer of the committee for such period not exceeding eighteen months as may be

| specified in, such order.

° (2) Any executive officer appointed under subsection (1) shall be deemed to be an officer lent to the comniittee by Government under sub-section (3) of ‘section 25.

(3) When under sub-section (1) an executive officer is appointed for any .committee, the State Government shall determine from time to time which powers, duties and functions of the committee, president, vice-president or secretary under this Act or any rule or byelaw made thereunder shall be exercised and « perforthed by such officer, in addition to, or to the exclusion of, their exercise and performance by the said *committee, president, vice-president or secretary.

(4) The Secretary of the committee shall be subordinate to the executive officer. y

(5) The executive officer shall have the right to attend all meetings of the committee arid any joint committee and to take part in the discussion so as to make an explanation in regard to the subject under discussion, but shall not move, second, or vote on any resolu-

_?” tion or other motion ” _ Section, 57 witich gives power to‘ the "Government

Kapur °y.

e . rd . ° ve .

\ 1958

Shri *Radeskyam Khare & Another v.

Kapur |.

1478 SUPREME COURT REPORTS . _ (1959) ° . e to dissolve or supersede | thé municipality is as follows :

“(1) [fa committee is,not competent to perfor m, or persistently makes default in the performance of, the duties imposed on it or undertaken by it under this Act or any other enactment for the time being in farce, or exceeds or abuses its powers to a grave extent, the State Government may, by an order stating the reasons therefor published in the Official Gazette, dissolve such committee and may order a fresh election to take place.

(2) If after fresh elections the new committee continues to be incompetent to perform, or to make default in the performance of, such duties or exceeds or abuses its powers to a grave extent, the State Government may, by an order stating the reasons there for published in the Official Gazette, declare the committce to be incompetent or in default, or to have excceded or abused its powers, as the case may be, and supersede it for a period to be specified in the order,

(3) if a committee is so dissolved or superseded, the following consequences shall enSue :

(a) all members of the committee shall, as ¢from the date of the order, vacate their offices as suche members ;

(b) all powera and duties of the committee may, until the comfnittee is reconstituted, be exercised and performed by such person or persons as the State Government may appoint in that behalf;

(4), On the expiration of the period of supersession specified in the order, the committee shall be recomstituted, and the persons who vacated their offices under sub-section (3), clause (a), shall not, by reason solely of such supersession be deemed disqualified for being members. . -*

(5) No order under sub-section (1) or sub- section (2) shall be passed until reasonable opportunity has been given to the committee to furnish an explanation, . : ° ‘

. (6) Any person or persons appointed by Ute State

. . . eX . t

: a bs

S.C.R. “SUPREME CQURT REPORTS 1479

Governmentto exercise and perform the powers and 1958 duties of a dissolved or superseded committee may ° receive payment, if the state Gbvernment so directs, for 1046 & Another his or their services from the municipal fund.” v.

A review of all these provisions shows that under The State of the ‘Act the municipalities are not independent *corpo- Madhya Pradesh rations exercising powers unregulated by Governmen- = ® hers tal control. They confer regulatory authority on ,, pur ° I. the State Government to keep control over municipalities, the extent of control and the mode of its exercise being dependent on circumstances and expediency varying with the exigencies of evary case. The Statute leaves the discretion to the State Government to choose the action to be taken and the provision under which it is to be taken. Wherever the legislature intended an enquiry to be held before taking any action provision is made for it and wherever it intended a person to be allowed to appear and be heard it has specifically provided for it. Generally speaking eexcepting where an order is to be reversed qua a ¢ particular person, there is no provision for a hearing. The nature and extent of regulatory powers of the State ‘Government and the mode of their exercise are eitatters of policy and expediency and indicate the “taking of administrative action by the State Government and not the exercise of any juditial power and would therefore be excluded from judicial review.

Counsel for the appellants firstly submitted that although the State Government has purported to act under s, 53-A, in fact and in reality the order falls under s.57 and because the provisions of sub-section P) have not been complied with, the order of- the Staté Government is illegal, null and void. A com- ‘ parison of the two sections 53-A and 57 shows the J} difference in the powers exercisable by the State , Government under thg two sections and the consequences ¢hat result therefrom. Under ‘8. 53-A all that ° the State Government does is to appoint for a period e of not more than eighteen months an Executive Officer who exercises such powers under the Act,ag are .men- . tioned ip the order which may be i in addition to or to

188 . o. e ° ° " . fe . ° .

N\ 1958

Khare & Ancther

Vv. The State of Madhya Pradesh & Others e oe . e r e the exclusion of their exercise hy the munieipality, ete., a power also exercisable under s. 25-A or to a Irmited degree under s. 9. Under s.57 the municipal committee itself is dissolved and may be superseded in which case its members cease to exist and vacate their officeseand the powers and duties of the muni¢ipal committee then become vested in the person or persons appointed for the purpose by the State Government and its property also vests in the State Government. These consequences do not follow an order under s. 538-A. But it is submitted that in reality the result. is the same because of.the powers which under the notitication have been given to the Executive Officer and what is left with the Committee is only “husk”. If this were so then whenever any action is takey whether under s. 9 of the Act or under s. 25-A in con. ceivable cases it would amount to supersession of the municipal committee and would therefore fall under s.57 which argument was neither submitted nor is tenable. According to the language of the two sec-, tions, 53-A and 57 of the Act the two classes of actions + contemplated are quite different and different consequ. ences follow; one should, not be confused with the other. The contention that the action taken undeti, s. 53-A is colourable and the matter really falls under s. 57 is an aYegation of mala fides which has not been made out. If the statute gives to the State Govern. ment powers under its various provisions and the State Government chooses in its discretion to use one rather than the other it is beyond the power ,of any court to contest that discretion unless a case of abuse is made out (per Lord Halsbury L. C. in the Wegminster Corporation v. London and North Western Railway Co, (*)). And it cannot on that ground alone be held to be a mala fide act.

A great. deal of stress was lajd by the appellants’ counsel on the Withdrawal of the powers of the municipality and particularly under s. 31 and it was contended that the Committee would not be able to hold its monthly meetings as required under that section. I is difficult. lorinterpret the notification in this manner, % © (1) (1g5] A.C. 426. .

e . 7 eS . a

S.C.R., «SUPREME COURT REPORTS 1481 because so interpreted it would mean that the Execu- 1958 /. tive Officer alone will meet for the transaction of busi- ¢,,; pag&iyam ness at least once a month which would amount tO an ipaye & Another absurdity. The reference in the notification must be v. to sub-section (2) of s. 31 which deals with the power — The State of of the President, etc., to call a meeting suo moty or on vai i radesh the requisition of a fifth of the members. Similarly the =~ _—"" mention of Chapter Vin the notification cannot vest — Kapur® J. the property of the committee in the Executive Officer. The notification deals with powers and duties and not with the vesting of property. It may however be mentioned that even where no Executjve Officer is appointed by the State Government it can direct that any property vested in the municipality shall cease to be go vested and it can make such orders as it thinks fit regarding the disposal and management of such property (s. 38). No doubt the powers under s. 39, which deals with the management of public institutions, powers and duties of the municipality, are taken .- away and, are vested in the Executive Officer but « these powers in any case are subject to rules made by Government and these rules are always subject to change by the State Government. The -powers of ‘the municipal committee under s..40 to request the State Government for acquisition under the Land Acquisition Act have also been withdrawn. Section 41 deals with transfers of municipal property to the Government and s. 42 with power of the municipality to transfer municipal property but under that section the control of the State is not excluded even when y there is no Executive Officer. Section 44 deals with the making of contracts and the other sections in, that chapter do not deal with the powers and duties . of a municipal committee excepting s, 49. Chapter VI y) prescribes the duties of a municipal committee and . some of those also have been vested in the Executive Offices. There is no doubt that somé very important powers have by the notification been taken away from the municipal committee and have been vested in the Executive Officer but that- is a far step from saying .? that the committee has thereby beén sufpépded. This exercise of its functions by the State Government iseof

° a . ad ° Pe .

1482 SUPREME B COURT REPORTS , , [1959]

DN 1958 no different quality leading, to “different wsults than shri “Rade styam hat would have happened had action been taken Khare & Another DUGEr 8. 25-A or under s.9 of the Act. It cannot there- v. fore be said under the circumstances of this case that

The State of — the action of the State Government is cobweb varnish Madhya Pradesh or that,it is merely a colourable order or a device to

& Others avoid the requirements of sub-s. 5 of s. 57.

Kapur. It was then contended that the notification enumerates acts of the municipality some of which are instances of mismanagement and others of abuse of power. It cannot be said that the allegations in regard to the spending of money without a provision in the budget or showing partiality in the matter of appointment and dismissal or in the matter of issuing of transport passes or distribution of municipal mannre, or the charge of spending huge amounts on mainten” ance of roads and drainage without improving their condition are nothing short. of gross mismanagement or abuse of power and cannot fall under the charge of incompetency in the performance of duties or in the exercise of powers by the municipality. Assuming that they can only be instances “of abuse, there is nothing wrong in the State Government enumerating all the misdeeds and wrongs done by the committee and* then saying that it prefers to take action under s, 53-A as it has done and not under s. 57. If the acts and omissions are instances of abuse the State Government could if it thought fit, take action under s. 57. If having two courses open to it the State Government took the lesser of the two actions, its discretion cannot bo questioned, in the absence of proof of bad faith. It cannpt therefore be said that the State Government has e only pretended to act under s, 53-A but in reality it \ was acting under s. 57 of the Act.

. Tt was lastly contended that the State Government when it acts under s. 53-A has a duty to act judicially and the rules of natural justice required that the - appellants should have been given an opportunity to show cause against action being taken under that section. _As said above under s.9 of the Act the State Gover ‘nment Was, oh the ground of unsuitability, the : pawer to withdraw from the municipality an¥ of the

: . e . e oS . e x °

« x

S.C.R. | SUPREME CQURT REPORTS 1483 powers conferred under the, Act either wholly or partially-and under s. 25-A it has the power of appointing a Chief Executive Officer df it is necessary for the general improvement in the administration of the municipality and exactly the same consequences would follow as they do when an Executive Officer is appointed under s. 53-A. There are also sections 52, 53, 54,55 and 56 which place regulatory control in certain Government agencies. If action taken under those provisions is an exercise of executive functions of the State Government can it be said that the exercise of similar power under s. §3-A and for similar object ie. improving the general administration in case of incompetency of the municipality will change gn administrative decision into a judicial or quasijudicial decision? The real test to distinguish between a quasi-judicial and an administrative act of an authority is based on the duty of that authority having power to determine a question, to act judicially. . Lord Hewart C. J. in R. v. Legislative Committee of the Church Assembly (1) said : ’

“In order that a body may satisfy the required test if is not enough that it,should have legal authority te determine question affecting the rights of subjects; there must be superadded to that characteristic the further characteristic that the body hag the duty to act judicially”. .

And thus the authority taking a decision should not merely determine a question it should also be under a duty tq act judicially. It is that essential characteristic which the State Government lacks in the present case. When it considers something likely to result from’ its action it is merely taking executive action and not determining a question or acting judicially. This dictum of Lord Hewart was quoted with approval by Das J. (as he then wagy}in Kusaldas Advani’s case (’). He saki, “ Therefore, in considering whether a particular statutory authority is a quasi-judicial body ora mere administrative body it has to be ascertained whether the statutory authority has the duty tg. act judicially”. There is no-indication (1) [1928] r KB. 412, 415. (2) [1950] S.C.R. 621, 720, *°

1958 a —e Shri Radeshyam Khare & Another

The State of Madhya Pradesh & Others —

Kapur f.

1484 SUPREME COURT REPORTS , [1959] ~

“ 1958 in the statute itself that the State eGovernment Shri Radeshyam has a duty to act judicially when it appoints au Khare & Anothey @Xecutive Officer under s. 53-A nor has any procedure , r been prescribed as to the manner in which the power The State of under this section is to be exercised by the State Madhya Pradesk (overmment which may give an indication as to & hes nature of the decision taken. The municipal com- Kapur ji mittee is a creation of the Act and therefore it has all the powers and is subject to all the controls under ’ the Act which are to be exercised as provided thercunder. The Act gives dilfgrent modes of regulatory control to the State Government and the powers of the State Government extend from revision of the actions, orders and resolutions of the municipal committee to thg exclusion of local areas from its jurisdiction, taking away powers given under the Act, the appointment of Executive Officers, suspension and supersession of municipalities. In certain sections e. g.s.57 dealing A with this regulatory control the statute requires that, . the explanation of the eommittge be called for before «+ @ particular action is taken by the State Government and in others no such requjrement is prescribed. * That. is a clear indication of the intention of the legislaturé, that an opportunity was to be given in one case am not inthe other. In other words a kind of quasijudicial approach was intended in one case and . administrative in the other. ‘The Privy Council in Nakkuda Ali’s cuse(') (a case under a Ceylon Regulation) said : . “ But, that apart, no procedure is laid down by the =, regidation for securing that the license holder is yo ‘ have notice of the Controller’s intention to revoke the \ license, or that there must. be any enquiry, public or . private, before the Controller acts”. . In Advani's cas¢ (?) Fazl Ali J. @xamining the duty of ° authorities to act judicially said at p. 641; e - “There are no express words in s. 3 or any other : section, to impose such a duty (to determine judicially) ; : nor is therg anythjng to gompel us to hold that such a duty is insplitd”., . e ° © © (rt) £1951) AC. 66, 78. (2) (1950) S.C.R. oat,

S.C.R. | SUPREME CQURT REPORTS 1485

The learned judge todk into consideration the fact 1958 f. that certain sections specifically provided an enquiry ,, . Radethyam and others did not, and obsesved: Khave & Another

66 eceees the fact remains that there is nothing in v. the Ordinance to suggest that the public purpose is to — The State of be determined in a judicial way ”. : Madiye r. vadesh Therefore where in a statute like the present one some meee sections prescribe the calling for the explanation of — Kapur* J. the municipality before any action is taken by the State Government and others do not, it is an indication of the intention of the legislature. to exclude. the application of principles of audi qlteram partem in the latter case.

The section (s. 53-A) has to be read as one whole and got in compartments. The relevant words are:

“Tf the committee is not competent to perform the duties imposed upon it......... and the State considers that a general improvement in the administration of the municipality is likely to be secured by............ ” The latter portion i.e. “the State Government considers...... is likely to be secured” indicates a purely subjective determination and taking a policy decision. The use of the words “ cgnsiders ” and “is likely” ettlate to a subjective and not an objective process.

“ ‘To consider” means to think, to contemplate mentally, to regard and ‘likely ” means probably ; such as might well happen; apparently suitable for. These words cannot have any reference to objectivity but suggest subjectiveness. The opening words of the section, If the committee is not competent...... ” cannot be read separately from the latter part. When under s. 53-A the State Government appoints an Exedéutive Officer which act it considers likely to im- , prove the general administration of the municipality "

it does not take two decisions, one objective as to the ° incompetency of the administration of the municipality and the other subjective as to the action likely to . improve the administration. The decision is only one. e Ad The State Government is the sole judge of both : matters, namely, of the incompetency and the remedy needed., Both are parts of one integrated whole a decision taken * in the exercise of the administrative bd e e . “ee

“X 1958

Khare & Vv

Another

The State of Madhya Prade:h & Others

functions of the State Goverriment and admits of no elemeat of judicial process. (Vide The Province of Bombay v. Kusaldas Advani (') (per Kania C.J. at p. 633-635) and per Das J. (as he then was) at p. 708). The State Government must necessarily be the sole judge of the state of incompetency of the municip:lity otherwise it would not be able to take its administra. tive decision as to the action which it should take and which it considers is likely to improve the administration. Both the decisions as to the incompetency of the municipality and the exercise of the executive function as to the,action to be taken thereon are matters of like character i.e. administrative matters. (Kusaldas Advani's case at: p. 633). If that were not so then on the question of incompetency the Statg Government procedure will be analogous to a judicial process subject to review of Courts and the action it will take will be an administrative decision not subject to judicial review which will not only lead to inconvenience but to confusion, The Prévy Council. pointed out in Venkatarao v. Secretary of State (‘) that “inconvenience is not a final consideration in a matter of construction, but it is atleast worthy of consideration, and it can hardly be donbted that the suggestal, procedure of control by the Courts over Government in the most detailed work of managing its services would canse not merely inconvenience but confusion ”,

The very fact that an order under s, 53-A is in the nature of an emergency action to protect the interests of the rate payer and has a limited duration not exceeding 18 months also negatives the order being founded on an objective determination as to the iycompetency of the committee. Such a construttion will defeat the very purpose of s. 53-A. Further action under s. 57 is of @ permanent nature and has accordingly been expressly made subject. to an explanation by the muntcipal committee. The absence of euch a provision from s, 53-A clearly shows that the legislature did not intend that there should be an elaborate hearing but intended that the State should under s. 53-A tke a swift administrative decision. The (2) (1y36) L.R. 64 1.4. 55:

S.C.R. , "SUPREME COURT REPORTS 1487 correct position, as indicated above, is that the decision Of the State Government as to incompetency and the decision as to the action*to be taken were really one decision, one integrated whole—a subjective decision of the State Government that it considered that by the appointment of an executive officer a feneral improvement in the hitherto general administration was likely to be secured. Merely because the fact of incompetency is a preliminary step to the exercise of an administrative function by the State Government, under s. 53-A it is not necessary that the fact is to be determined judicially. Where the exercise of the administrative functions of an Executive authority like the State Government are subject to a decision as éo the existence of a fact, theré is no duty cast on the State Government to act judicially. Both the decision as to the fact and as to the action to be taken are really one and not two decisions, the determination being for the purpose of taking an appropriate administrative decision. As has been said above it is one integrated whole and cannot be separated into parts with different legal qualities. This was the view of Kania C.J. in the Province of Bombay v. Kusaldas « Advani (') where it was observed at p- 633:

** Because an executive authority has to determine certain objective facts as a preliminary step to the discharge of an executive function, it does not follow that it must determine those facts judicially. When the executive authority has to form an opinion about an objective matter as a preliminary step to the exercise of a power conferred on it, the determination of the objective fact and the exercise of the executive powér based thereon are alike matters of an administrative character ”.

Fazl Ah J. in that case said at p. 642:

“‘ For prompt action-the executive qauthorities have often to take quick decisions and it will be going too far to say that in doing so they are discharging any judicial or quasi-judicial functions. The word ‘ decision’ in common parlance js more or Jess a natural

(3) [4950] S.C.R. Gar, ed

° e 189 ¢ . .

1955, . Shri Radeshyam Khare & Another v. The State of Madhya Pradesh & Others

‘ Kapur j.

eo.

Sint Radesiyam Khare & Another v.

—

Napur J.

1488 SUPREME COURT REPORTS * . [1959]

expression and it can be used with referettte to purely executive as well as judicial orders. The mere fact that an executive authotity has to decide something does not make the decision judicial. It is the manner in which the decision has to be arrived at which makes*the difference, and the real test is: Is there any duty to act judicially %”

The language of sub-section (1) of s.53-A indicates that the question whether the State Government considers that the action taken under the sectioné. e., the appointment of an Executive Officer is likely to secure an improvement in the general administration of the municipality is one of expediency, opinion and policy, matters which are peculiarly for the State Government to decide and of which, always assuming that it is acting bona fide, it is the sole judge. No objective test is possible. Therefore the use of these words “considers” and “is likely” negatives any objective approach or judicial or quasi- judicial process. The State Government is not essentially a judicial or « & quasi-judicial body but its essential function is administrative. The various provisions of the Act, show that it takes its decisions as to the mode and extent of control of municipalities in pursuance of its opinidte and policy and on grounds of expediency. In arriving at. its decision it at no stage has any form of lis or quast-lis before it nor can it be said that there are two parties before ii. The Municipal Committee and itself cannot be termed quasi-litigants or parties to a proposition and opposition. [t is not bound to take action under s. 53-A or any other section of the Act? It has to consider the question from the poiat. of view of policy and expediency and the exigencies of the case which shows that it is not under a duty at any stage to act judicially to determine a question. This further supports the view that a correct interpretation of the words “ considers” and ‘is likely to be secured” indicates a subjective decision and these words make the order of the State Government administrative and not, judicial or quasi-judicial.

The atyument that the order is quasj-judicial * Because it affects the rights of “the | Municipal x

S.C.R. , SUPREME CQURT REPORTS 1489

Committee # vacuous hecaaise all that the order complained of does is that it restricts the exercise of certain powers by the municipal committee and vests some powers in.another authority contemplated by the statute. Besides every decision of the Executive gentrally affects the rights of one citizen or amother. In Advani’s case (!) Kania C. J. said at page 632:

S oeceeneens it is broadly stated that when the fact has to be determined by an objective test and when that decision affects rights of some one, the decision or act is quasi-judicial. This last statement overlooks the aspect that every decision of the axecutive generally is a decision of fact and in most cases affects the rights of some one or the other.”

-, But it was contended that in its order the State Government has to state reasons for taking action under s. 53-A. In a democratic system of government there is always the other party, the electors and citizens, who must know why the State Government - takes one particular action rather than another. Besides the mere requirement of giving reasons would not change what was an administrative body into a ia

1958 r ——@

Shyi Radeshyam Khare & Another v.

The State of Madhya Pradesh & Others ss Kapur J.

judicial body or an admjnistrative decision into a e}fdicial or quasi-judicial determination.

The following passage from Halsbury’s Laws of England, Vol. II, p. 56 (8rd Edition) aptly states the law and may usefully be quoted :

“ Tf, on the other hand, an administrative body in alriving at its decision has before it at no stage any form gf lis and throughout has to consider the question from the point of view of policy and expediency, it cannot be said that it is under a duty ateany time*o act judicially ”.

See also R. v. Manchester Legal Aid Committee (?).

In B. Johnson & Co. (Builders) Lid. v. Minister of Health (°) it was also héid that the Minister was entitled to infdérm his mind by informal machinery of an enquiry and merely because in order to inform his mind the enquiry had to be held it could not be said that the Minister was not perfoyming is administrative

() [eo50] S.C.R. 621. (2) (1952) 2°Q.Be 413, 431.

. (3) (1947) 2 2 A.E.R. 395. . °°

° ° e ° %.

aN ry 1958

Shri Radeshyam * Khare & Another

Vv.

The State of

1490 SUPREME COURT REPORTS * [1959]

function. At p. 405 Cohen L. J. went further and said : .

“ His duty as regards ifformation received by him in his executive capacity is to use that information fairly and impartially. This may involve that. he

Madhya Pradesh should pive an opportunity tothe authority or to’the & Others oa objector, as the case may be, of dealing with some allegation in a communication he has received before the quasi-lzs started, but, if he fails to do so, he is responsible only to Parliament for the discharge of his executive duties, and cannot be made responsible in these courts.” .

Appellants’ counsel relied on some English cases, the first of which was Cooper v. Wandsworth Board of Works (') where Byles J. said at p. 420: ° eee although there are no positive words in a statute requiring that the party shall be heard, yet the justice of the common law will supply the omission of the legislature.”

This view is not in accord with the modern exposition ” of the law in Nakkuda Ali’ case (*) or Franklin’s case (°). Lord Shaw in Arlidge’s case (*) rejected

_the concept of natural justtce in the following langye age : beneewenees in,so far as it attempts to reflect the old jus naturale {tis a confused and unwarranted trans- fer into the ethical sphere of a term employed for other distinctions; and, in so far it is resorted to for other purposes, it is vacuous.’

In R. v. Manchester Legal Aid Committee (?) the court observed :

“The true view, as it seems to us, is that theglufy to act judicially may arise in widely different circumstances which it would be impossible, and, indeed, inadvisable, to attempt to defing exhaustively. Where the decision is that of a court then, unless, asin the case, for instance, of Justices granting excise licences, it is acting in a purely ministerial capacity, it is clearly under a duty to act judicially. Wheu, on the

(1) [1863]4,@.B. (N.) 180; £43 E.R. 414, 420. (2) (r9s1T AC. 66, 78. (3) [1948] AG 87, ® * (4) [1915] A.Ce 120, 138. , (5) [2952] 2 OB. 413, 43%. 4 ad use

S.C.R.. *SUPREME COURT REPORTS 1491

- other hand®the decision i§ that of an administrative body’ and is actuated in whole or in part by questions of policy, the duty to act judicially may arise in the course of arriving at that decision.”

Buj at page 431 it was said : .

«Tf, on the other hand, an administrative body in arriving at its decision at no stage has before it any form of lis and throughout has to consider the question from the point of view of policy and expediency, it cannot be said that it is under a duty at any stage to act judicially.” .

That was a case of a debtor who applied for and obtained a certificate of legal aid under the Legal.Aid and Advice Act, 1949, in connection with his claim for damages against a company but was thereafter adjudicated bankrupt and at his instance the certificate was cancelled as his claim vested in the trustee in bankruptcy. The trustee then applied for and obtained @ certificate of legal aid. The National Assistance Board and the local Committee considered only the financial circumstances of the bankrupt and not of the trustee whose disposable income was in

. excess of the lowest limit entitling a certificate of legal aid. The debtor company applied for an order of certiorari to quash the certificate alleging that the Committee had exceeded its jurisdiction. Under the Legal Aid (General) Regulation, 1950, reg. 4(1), it was a condition precedent to the grant of a certificate that there should have been a determination by the National

Assistance Board of the disposable income of the trustee who was personally liable vis a vis his oppanent. ft was held that the Board having legal authority to determine questions affecting rights of subjects had a duty to act judicially and that it had exceeded its jurisdiction. The case +has some distinguishing features, wanting in the case before us. The statute there prescribed the limit of income of applicant for a certificate of legal aid and the regulations required the determination by the National Assistance Board of the disposable income and disposable cpitel of such applicant whith was a condition’ precedent to the

° ° . . e ° ° e . e

1958 . —__# ; Shri Radeshyam Khare & Another Vv. The State of Madhya Pradesh ee

. 1958 eq

Shri Radeshyam Khave & Another v

The State of Madhyi Pradesh

grant of the certificate. Charly without #such detcrmination the grant of the certificate was not within the jurisdiction of the Board find therefore the Board had to determine a question and was required to act judicially within the rule laid down in the majority judgment in Kusaldas Advani's case (1). The Board unuer that statute was bound to give aid, if certain conditions were fulfilled and was quite unconcerned with questions of policy. “They have to decide the matter solely on the facts of a particular case, solely onthe evidence before them and apart from any extraneous considerations. Jn other words, they must act judicially, not judiciously.”

In Cabel v. Child (?) the words “ Whenever it shall appear to the satisfaction of the Bishop” were held. toimply aduty to act judicially and therefore the principles of natural justice applied. This rule is inconsistent with the decision of the Privy Council] in Nakkuda Ali’s case (*) or the decision of the House of

Lords in Franklin’s case (*) or the interpretation placed .« upon the word “satisfied” in some of the later English cases, Robinson v. dfinister of Town. and Country Planning (°) and B..Johnson & Co. (Builders)

Lid. v. Minister of Health (°). This Court in Kusaldat*,

Advani’s case (‘) also held this word to indicate a subjective approach. See also Wijeysekra v. Festing (') where the words of the Statute were “ whenever it shall appear to the Governor...... ”. See also &. v. Afetropolitan Police Commissioner (*) where also the words were “oo... if he is so satisfied......... * and jt was held that these words did not imply “a judge ora guasitjudge ”. The decision in these cases laying down the rule of application of natural justice must be confined to their own facts and the language of the particular statute they interpreted. No general rule can be deduced therefrom nor can they be applied to other statutes and other circumstances. ° The case before us is not one where no enquiry has (1) £1950) S-C.R. 621, 720. (2) [4832] 2 Cr. & Jr. 558: 37 RES 761. (3) f195t] ALC. 68, 78. * * (4) [ty48} A.C. 87. e 45) [1947] K.B. 702. * (6) [1947] 2 AWE.R. 395° _ (7) [tgrg] ALC. 546. ; . (8) [1953] 2 A.E.R, 217. * .

8. 0. R. » “SUPREME CQURT REPORT'S 1493 been held. ‘There was. anenquiry against the appellants‘in regard to specific allegations made against them and after hearing them* a report was made by a Deputy Collector which was forwarded to the State Government before it took action. One Dhurmal Daga mate a number of allegations Annexures Ieand IT and those allegations were supported by others like Dear & Co., Poonam Chand Somraj, Dhamtari Traders and Shilaram and the affidavit otf the State Government inthe High Court shows that the notice was issued to both the appellants to reply to the allegations. Radheshyam appellant No. 1 appeared before the Enquiry Officer and gave a long explanation denying the allegations made by Dhurmal Daga and others. at was after this that the Enquiry Officer made his report which was sent to the State Government and it took action which it considered apposite and that is the action complained of.

But it was submitted that no notice was given to the appellants as to the nature of the complaint against them and the various charges which have been enumerated in the notification were never specitically” brought to their notice and they were not called “tpon to show cause why action should not be taken under s. 53-A. In the first place the words of the section as explained above do not contemplate any such notice and the argument based on the opening words of the section that the municipality was guilty of incompetence was an objective fact cannot be accepted. It cannot be said in this case that in point of fact the appellants did not know what the complaint against them was or that they had no opportunity of giving their explanation in regard to the charges. All the acts which are enumerated in the notification are contained in the various allegations which were made agagnst the appellants by Dhurmal and others. The appellants put a long’ explanation giving their version of the facts contained in the complaint and the Enquiry Officer sent his report after hearing the appellants and onthe consideration of this report the State Governmertt passed. its order under s 53- A.° The High Court after going througls a 1958 ° —e Shri Radeshyam Khare & Another Vv.

The State of Madhya Pradesh & Others —_* Kapur: j.

SaAnt Qadeshyam Khare & Another v.

e Kapur J.

Subba Rao f.

the record of the enquiry was satisfied aseto the propriety and legality of the enquiry and that portion of its judgment has been quoted above.

Then it was submitted that the enquiry by Mr. Rana was unauthorised by the State Government and was no substitute for the enquiry required by “the statute. But the statute has prescribed no procedure for enquiries under s. 53-A even if it were to be said that the section contemplates an enquiry. And. it is no defect affecting the final decision of the State Government whether the enquiry originates in the manner it did or the State Government ordered it.

In these circumstances the third point raised by the appellants cannot be sustained and the submission of the appellants is without substance. The appeal theres fore fails and is dismissed with costs throughout,

SusBa Rao J.—l have had the advantage of reading the judgment prepared by my Lord, the Chief Justice and my learned brother, Kapur J. J regret my inability to agree with them in their views on the follwing two questions: (1) Whether under s, 58-A of the C. P. & Berar Municipalities Act (Act 1 of 1922), hereinafter called “the Act, the Governmenm* performs a judicial act; and (2) whether in fact the Government complied with the principles of natural justice in making the Order dated November 8, 1956, under s. 53-A of the Act.

As the facts have been fully narrated by my Lord, the Chief Justice, it would sutfice ifthe facts relevant to the aforesaid questions are briefly stated here. The second appellant is the Municipal Committee, Dhan, tari, and the first appellant isits President. He ‘was elected as President on July 10, 1956, and took charge of his office on July 27, 1956. On August 8, 1956, one Dhurmal Daga went on a hynger strike for the redress of his grievances against the appellants. The Collector, Raipur, intervened and persuaded him to break his fast. and ordered an inquiry into the charge of meladministration. The Deputy Collector, who made theJnquiry,’ gave notice of the said inguiry to the Secretary to the Committee and the’first appellant e e Sd . e

S.C.R. , SUPREME CODRT REPORTS 1495 filed a written reply on " September 7, 1956, and perso- 1958 nally wppeared at the inquiry. Presumably, the result Shri Radesh of the i inquiry was forwarded to the Government. On or November 18, 1957, the Government issued an Order, v. under s. 53-A of the Act, enumerating fifteen charges The State of involving acts of non- feasance, misfeasance,* gross Madhya Pradesh negligence aud fraud, and stating that, by reason of — © Others the said acts, it appeared to the Government that the ¢., n,, A Committee had proved itself incompetent to perform the duties imposed on it by or under the said Act. The order further proceeded to state that the Government considered that a general improvement in the administration of the Municipality was likely to be secured by . appointing a servant of the Government as the Executive Officer of the Committee. The said Order also appointed Shri B. P. Jain as Executive Officer and entrusted to him most of the important powers and duties of the Committee and the President. Before the drastic action was taken, no opportunity was given eeither to the President or to the Committee to explain

* their conduct in regard to any one of the charges. The previous inquiry made by the Deputy Collector was to attempt to persuade Dhurmal Daga to give up his fast eafid that inquiry by the Deputy Collector could not, in any sense of the term, be regarded as an inquiry for taking action under s. 53-A of the Act.* Records also do not disclose whether that inquiry related to the same charges which were the foundation for the Government taking action under the Act. I, therefore, proceed, on the footing that the Government acted under s. 53-A of the Act without giving any opportunity tathe appellants to explain their conduct in regard to the grave charges levelled against them, on the ° basis of which they were held to be incompetent within the meaning of s. 53-A of the Act. °

The material part of. 53-A reads:

“fa committee is not competent’ to perform the duties imposed on it or undertaken by it by or under this Act or any other enactment for the time being in e force and the State Government considers that a general improvement in the administratiqn of the

190 6 . e¢

° Ad . . ° ° %. ry

1496 SUPREME COURT REPORTS , [1959] _ s 1958 municipality is likely to be secured by theappointment

. of a servant of the Government as the executive officer Shyt Radeshyam —, : * .

Khare & Another OL the committee, the State Government may, by an v. rder stating the reasons therefor published in the

The State of Gazette, appoint such servant as the executive officer

Madhya Pradesh of the committee for such period not exceeding eighteen & Others months as may be specified in such order.”

Subba Rao J] The learned Advocate-General, appearing for the

, ’ State, contended broadly that under this section the . Government performs only an administrative aet by appointing an Executive Officer for a short period and therefore no opportanity need be given.to the affected parties before action is taken thereunder. Mr. M.K. Nambiar, counsel for the appellants, argued that under this section the Government is empowered 40 deprive the Municipal Committee, duly elected under the Act, of its powers, though for eighteen months, on the basis of its incompetency and it is against al] principles of natural justice to stigmatize sucha body + as incompetent without giving itan opportunity to * explain its conduct. He would say that whether the ° Committee is competent or not is an objective and jurisdictional fact to be degided judicially by the State Government and, therefore, the act of the Governmdlite isa judicial act, which can only be discharged by following the principles of natural justice.

Before considering the validity of the arguments . based upon the provisions of the section, it would be convenient at this stage to notice briefly the distinction between a judicial and an administrative act gnd the criteria laid down by decisions for ascertaining whether + a particular act is a judicial act or an administrative . one. The said criteria have been laid down with clarity by Lord Justice Atkin in Hex v. The Electricity Com.

. missioners (‘), elaborated by Lord Justice Scrutton in Rex v. London County Council{?) and authoritatively restated in Province of Bombay v. Kusaldas S. Advani (*). The aforesaid decisions lay down the following condie tions to be complied with: (1) The body of persons must, have, legal authority ; (2) the authority should

(t) 1924 iB. i7t. (2) (1931) 2 K. B. 245.

; ad , (3) [1950] $.C.R. 621. . °

S.C.R. » SUPREME COURT REPORTS 1497 be given to determine questions affecting the rights of 1958 subjects; and (3) they should have a duty to act .. 77 ? arto : . : Shri Radeshyam ‘ judicially. So far there is nodispute. The question ,,1,, 6 Another raised in this case is what do the words “a duty to v. act judicially” mean. If the statute in express terms The State of says'that the decision should be arrived at judicially, Madhya Pradesh then it is an obvious case. Ifit does not expressly say = & ers so, can the intention of the Legislature be gathered or <4. n,, J . implied from the terms of the statute? Ifit can be so : gathered, what are the guiding factors for implying such a duty on the part of a tribunal or authority ? In this context a brief discussion of spme of the relevant cases will be helpful. This Court, as I have already stated, restated the law laying down the criteria for ascertaining whether an act is a judicial act or not in Rusaldas’s case (1). There the question was whether the Provincial Government was acting judicially in making the order of requisition under s. 3 of the Bombay Land Requisition Ordinance (Bom. Ordinance ” .V of 1947). ¢ The material part of the section under « —« discussion read as follows : “If in the opinion of the Provincial Government it is necessary or expedienf to doso, the Provincial eaOvernment may, by order i in writing requisition any “land for any public purpose.’

To ascertain the nature of the act of the Government “ under that section, this Court reviewed the law on the subject and held, by a majority, that on a proper con- ee struction of s. 3 of the Ordinance, the decision of the

Bombay Government that the property was required

« fora public purpose was not a judicial ora quasi- judicial decision but an administrative act and-the

Bombay High Court had, therefore, no jurisdiction to issue a writ of Certiorari in respect of the order of 4 requisition. Das J. as he then was, after considering . the law on the subject summarized the principles at page 725 thus: °

“(i) that if a statute empowers an authority, not e being a Court in the ordinary sense, to decide disputes ° arising out ofa claim made ‘by one party ynder. the statute which claim is opposed by another party and (x) [1950] S.C.R° 621. ee

. ° . . e e . . *,

. *,° e e 1498 SUPREME COURT REPORTS. , (1959 , ~ 1958 to determine the respectiye rights of the contesting sini” Radeshyam parties who are opposed to each other, there is a lis Khare & Another ova prima facie and in the absence of anything in the v. statute to the contrary it is the duty of the authority The State of to act judicially andthe decision of the authority is a Madhya Pradesh quasi-judicial act ; and ° & Others

(ii) that if statutory authority has power to do any act which will prejudicially affect the subject, ° then, although there are not two parties apart from the authority and the contest is bet ween the authority, proposing todo the act and the subject opposing it, the final determination of the authority will yet be a quasijudicial act provided the authority is required by the statute to act judicially.”

The propositions so stated appear to me tobe unexcentional. But the further difficulty is whether the duty + to act judicially should be expressly so stated in the statutc or whether it can be gathered or implied from the provisions of the statute. Ido not think that Das J. ‘ as he then was, meant to lay down asa condition, * that the duty to act judicially should be expressly . stated in the statute, for rarely any statute would describe the character of disposal of a particulat proceeding. Jf it was intended to insist upon an express, condition in the statute, the learned Judge would not have scrutinized the provisions of the Ordinance to ascertain whether the order thereunder was intended to be a judicial act or not. A useful discussion bringing out in bold relief the difference between a judicial and an administrative act is found in Rt. v. Manchester Legal Aid Committee (‘). There a debtor applied toa , local aid committec, set up under the Legal Aid apd . Advice Act, 1949, for a certificate for legal aid to pursue a claim for alleged breach of contract against a

. limited company. As he was adjudicated insolvent, the certificate was revoked angdon application made by his trustee, ‘it was granted to him again. One of the questions raised was whether the legal aid com- ° mittee in issuing the certificate was acting judicially and therefore subject toan order of certiorart. The court held téiat tite said body was under a duty to act ¢

— Subba Rao f.

S.C.R.. « SUPREME COURT REPORTS 1499 judicially.- Parker J. delivering the judgment of the Court, summarized the law on the subject at page 428 thus: 4 “The true view, as it seems to us, is that the duty to act judicially may arise in widely different circumstances which it would be impossible, and, . indeed, inadvisable, to attempt to define exhaustively. Where the decision is that of a Court, then, unless, as in the case, for instance, of justices granting excise licences, it js acting in a purely ministerial capacity, it is clearly under a duty to act judicially. When, on the other hand, the decision is that of an administrative body and is actuated in whole or in part by questions of policy, the duty to act judicially may arise in the - course of arriving at that decision. Thus, if, in order “to arrive at the decision, the body concerned had to consider proposals and objections and consider evidence, then there is the duty to act judicially in the course of that inquiry.........

Furthes, an administrative body in ascertaining facts or law may be under a duty to act judicially notwithstanding that its proceedings have none of the forthalities of and are not in accordance with the a epractice of a court of law........ cee

Tf, on the other hand, an administrative body in arriving at its decision at no stage has before it any form of lis and throughout has to consider the question from the point of view of policy and expediency, it cannot be said that it is under a duty at any stage to act judicially.”

On the basis of the aforesaid principles, the learned Judge held that the local committee, though an administrative body, was acting judicially in issuing the certificate, as in ascertaining the facts for issuing the certificate it was quite unconcerned with any question of policy. :I respectfully agree with the prineiples enunciated by the learned Judge and they are not in any way inconsistent with the principles laid down by this Court. The law has been neatly summarised in Halsbury’s Laws of England, . Third Kdition, Volume 11, at pages 55 and’ 56 and it is as follows: ‘ 7 c

Shri Radeshyam Khare & Another Vv.

“sy: Subba Rao J.

—

Shri’ Radeshyam Khare & Another

Vv.

The Siate ‘of Madhya Pradesh on sa Subba Rao J?

1500 SUPREME COURT REPORTS . [1959]

“It is not necessary that it should be ascourt: an administrative body in ascertaining facts or law may be under a duty to act judicially notwithstanding that its proceedings have none of the formalities of, and are not‘in accordance! with the-practice of, a court of law. Ite is enough if it isexercising, after hearing evidence, judicial functions in the sense that it has to decide on evidence between a proposal and an opposition. A body: may be under a duty, however, to act judicially (and subject to’ control by means of these orders) althotfgh there is no form of lis inter partes before it ; it is enough,that it should-have to determine a question solely on the facts of the particular case, solely on the evidence before it, apart from questions of policy or any other extraneous considerations.” e

“‘ Moreover an administrative body, whose decision ” is actuated in whole or in part by questions of policy, may be under a duty to act judicially in the course of arriving at that decision...............:.:.ceee If, on the other hand, an administrative body in arriving at its decision has before it at no stageaany form of lis and throughout has to consider the question from the point of view of policy and expediency, it cannot be said that it is under .a duty at any time to act judi.e*, cially.” It is not necessary to multiply citations.

The concept of a “judicial act”, has been conceived and déveloped by the English Judges with a view to keep the administrative tribunals and authorities within bounds. Unless the said concept is broadly and liberally interpreted, the object itself will be defeated, that is, the power of judicial review will, become innoctoys and ineffective. The comprehensive phraseology of Art: 226 of the Constitutior supports rather than negatives the liberal interpretation of that concept. The argument that the Court shall not obstruct the “smooth working of the administrative machinery does not appeal to me, for the simple reason that the exercise of the power of judicial review or, to be more precise, the ¢xistence of such power in courts—for.hardly one act in thousands come,before courts—eliminates ‘arbitrary action and enables the e * ° e . e

S my

| x° . $.C.R, « SUPREME QOURT REPORTS ‘1501 administrative machinery to function without bias or 1958 8 discrimination. With,this background, the principles, Shri Rote h as I apprehend them, may be concisely stated thus: yy. 6 another Every act of an adminigtrative authority is not an v. administrativé.or.ministerial act. The provisions of a The State of statute may enjoin on an administrative authority to Madiya Pradesh ‘ act administratively or to act judjcially or to act in & Qihors , part administratively and in part judicially. If policy cis, pao 7. -and expediency are the guitling factors in part or in whole throughout the entire process culminating in the final decision, it is an obvious case of administrative act. On the other hand,. if. the statute expressly ’ imposes a duty on the administrative body to act judicially, it is again a clear case of a judicial act. . Between thea two there are many acts, the determina- * ‘tion of whose character creates difficult problems for the court. There may be cases where at one stage of the process the said body may have to act judicially ¥ and at another stage ministerially. The rule can be * , broadly stated thus: The duty to act judicially may 1 =. ~~ not be expressly conferred but may-be inferred from the provisions of the statute. It may be gathered from the cumulative effect of the nature of the rights ~ “affected, the manner of the disposal provided, the objective criterion to be adopted, the phraseology used, the nature of the power conferred or the duty imposed on the authority and other indicia afforded | by the statute. In short, a duty to aot judicially may ee arise in widely different circumstances and it is not possible or advisable to lay down a hard and fast rule x or an inexorable rule of guidance. . in the present case, s. 53-A ofthe Act itself provides the necessary criteria to answer the question. Before the Government can take action under the section, three preliminary conditions for the exercise of the , power are laid down:; (1) The Committee is not competené to perform the duties imposéd dn it; (2) the . State Government considers that a general improve- e : ment in the administration of the municipality ‘is likely ° to be secured by the appoirrtment.of @ servant.of the + Government; (3) an order‘stating the reasons therefor. The first condttion depends upon thé- determinatior of e ' a - e

Shrt Radeshyam Khare & Another v.

The State of Madhya Pradesh & Others ¢

Subba Rao J.

1502 SUPREME COURT REPORTS: [1959]

an objective fact, namely, whether the committee is competent to perform the duties imposed upon it? It is & jurisdictional fact that confers jurisdiction on the Government to take further action. The determination of this fact is not left to the subjective satisfaction of the Government. Indeed, the different phraseology used in regard to the second condition, namely, “the State Government considers ” » brings out in bold relief the distinction between the two ; while in the former an objective fact has to be determined, in the latter the fact is left to the subjective satisfaction of the Government. If the facts covered by both the conditions are left to the subjective satisfaction of the Government, the phraseology would have been different and the clause would have run thus: “If the. Government considers that the committee is not competent to perform the duties imposed on it or undertaken by it by or under this Act or any other enactment for the time being in force and that a general improvement in the administration of the municipality is likely to be secured by the appointment of a servant of the Government as the Executive Otlicer of the Committee...... ” To accept the argument of the Coun. sel for the respondents will be to rewrite the section in” the above manner which is not permissible. There is also a good reason and a justification for the ditlerence in the phraseology used in the section. The municipality isan elected corporate body and is entrusted with responsible statutory functions, While it may be. necessary, in public interest, to deprive the committee of some powers for a short period when it is proved to be demonstrably incompetent, such a body cannot easily be relegated to a subordinate position on ‘the mere will and pleasure of the Government. Yhe scetion reconciles the public good and the committee’s rights and prestige. by condition‘ng the exercise of the power of the Government to depend upon the objective determination of the jurisdictional tact. Whatever ambiguity there may be in the section, it is dispelled by the third cgndition, namely, that which enjoins on the Government to ) Biv e reasons. What is the, object of the Legislature in imposing the said condigion, if

| hp

S.C.R.* “SUPREME COURT REPORTS 1503 the matter is left to thie subjective satisfaction of the Government? The concept of subjective satisfaction of the Government does not involve any attempt to satisfy the mind or appeal to the good sense of anather, .The working of the mind need not be disclosed and the validity of the section need not depend upon any objective standard. The condition to pass a speaking order is destructive of any idea of invulnerability, for the said condition implies that the order should satisfy the mind of a reasonable man.

It is contended that a comparative study of the provisions of ss. 53-A and 57 shows that the Government has to give notice before taking action under 8.57, whereas no such duty is cast upon it under

3. 53-A and that would indicate the intention of the Legislature that the Government is not expected to act judicially under s. 53-A. There is some force in this contention, but that is not decisive of the question to be decided in this case. If the provisions of a

* particular ‘section necessarily imply a duty to act judicially, the mere fact that there is no express provisiow to issue a notice to the affected parties cannot <pnvert a judicial act into &’n administrative one. Nor

* does the argument that the order of appointment of an Executive Officer is only for a temporary period indicate the administrative character of the act. The finding of incompetency carries a stigma with it and what is more derogatory to the reputation of the members of the committee than to be stigmatized as incompetent to discharge their statutory duties ? Would it be reasonable to assume that public men ina demoofatic country are allowed to be condemned unheard ? What is material is not the period of the tenure of the executive officer, but the ground for the appointment of the officer, namely, the . incompetency of the committee. Shortly stated, the pésition is this: The committee is comprised of elected representatives of the respective constituencies ; they are presumably competent men in whom the electorate has confidence. The Government has to arrive at the finding of theix incempetenty on the basis of objective facts to be ascertained and to, e wr. . | * . * e

Shri Radeshyam Khare & Another v.

Subba Rao f,

9 1958 Shri Radeshyam Khare & Another v. The State of Madhya Pradesh Ge Others

Subba Rao f.

1504 SUPREME COURT REPORTS’ * [1959]

give reasons for its finding.” Jt is against all canons of natura] justice that a tribunal should arrive at a finding of far-reaching consequence without giving an opportunity to explain to the persons who would be affected by such a finding. For the aforesaid reasons, Yhave no doubt that the section imposes a duty on the Government to act judicially in ascertaining the objective and jurisdictional fact, namely, whether the committee is incompetent. It is a necessary condition of such a duty to give an opportunity to the committee to explain the grave charges levelled against it. Admittedly, no such opportunity was given to the committee and J] cannot agree with the learned Advocate-General that the inquiry by the Deputy Collector at an earlier stage for a ditferent purpose had in effec¢ given an opportunity to the committee. It is not known what were the charges for which that inquiry was held. The record discloses that the inquiry was held by a subordinate officer—there is nothing on re. cord to show that the Government authorised either the Collector or the Deputy Collector to make the inquiry in connection with the fast of Dhurmal Paga. In my view, the inquiry cafinot presumably take thgplace of reasonable opportunity to be given by the Government for the proposed action under s. 53-A of the Act. In the result, it follows that the Order of the High Court should be set. aside and that of the Govern. ment appointing the Executive Officer quashed. I do it accordingly. . . ~@ y OrpER PER Curtam: This appeal is dismissed with costs, in this court and the courts below. .

Appeal dismissed.

3 e ° ® e ° e e ° ~e e ee ° ° . e ° e

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SHRI Radeshyam Khare & Another v. The State Of Madhya Pradesh & Others

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