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PETITIONER: STATE OF ASSAM & ANR.

       Vs.

RESPONDENT: GAUHATI MUNICIPAL, BOARD

DATE OF JUDGMENT: 24/02/1967

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. BACHAWAT, R.S. BHARGAVA, VISHISHTHA

CITATION:  1967 AIR 1398            1967 SCR  (2) 732

ACT: Assam  Municipal Act (15 of 1957) s.  298-State   Government issuing   notification  superseding  Municipal   Board   for incompetence etc.-Notification after considering explanation to  show cause notice-Whether opportunity for  oral  hearing also  to  be  given-Whether principles  of  natural  justice violated-Indication  of  tentative conclusion  to  supersede Board  given in show cause notice-Whether amounted  to  pre- judging before considering explanation.

HEADNOTE: The  appellant issued a notice to the  respondent  Municipal Board  on June 9, 1964, under s. 298 of the Assam  Municipal Act  (XV  of 1957) which stated, inter alia that  the  State Government was of opinion that the Board was incompetent  to perform  its  duties  and  it  had  come  to  the  tentative conclusion that the Board should be superseded.  The charges which  were the basis of the tenatative conclusion were  set out  in  the  notice  and the Board was  asked  to  give  an explanation  in  reply  to  these.   After  considering  the explanation given by the Board, the State Government  issued a  notification on her 9, 1964-, superseding the  Board  for one  year  with effect from December 14,  1964  for  reasons which were stated in the notification. The  Board thereupon filed a writ petition  challenging  the notification  on the grounds, inter alia, (i) that   passing the  order of auction the State Government had violated  the principles  of natural justice inasmuch as  the  proceedings resulting in supersession being quasi-judicial  proceedings, the  Board  had been denied the opportunity  of  being  per- sonally  heard  and  of producing evidence;  (ii)  that  the charges  which  were  found proved in  the  notification  of December  9, 1964 were not the same which were  the  subject matter  of  the notice of June 9, 1964; and (iii)  that  the State Government had already come to the conclusion that the Board  should be superseded when it gave notice on  June  9, 1964  and  had  thus pre-judged the issue  even  before  the explanation of the Board had been received.  The High  Court accepted all these contentions and allowed the petition. On appeal to this Court, HELD : allowing the appeal

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(i)Even  assuming  that the proceedings in  question  were quasi-judicial  proceedings, there was no violation  of  the principles  of  natural  justice in  this  case.   What  the section  provides  is that a notice should be given  to  the Board  by  the State Government and  its  explanation  taken before an order under s. 298 is passed.  When the provisions of s. 298 are fully complied with, is in this case, and  the Board  does  not  ask  for an  opportunity  for  a  personal hearing,  principles of natural justice do not require  that the  State Government should ask the Board to appear  for  a hearing   and  to  produce  materials  in  support  of   the explanation. [735 D-F-, 736 C] (ii)A   careful   examination  of  the   notice   and   the notification  showed  that  the charges  found  proved  were substantially the same as the charge levelled. [736 F]                             733 (iii)     The  High  Court had wrongly used the  analogy  of Art.  311  for the purpose of s. 2,98 in  holding  that  the appellant should not have indicated its tentative conclusion in  the notice because s. 298 provides for two courses  ie., superssion  or  dissolution,  and the  appellant  could  not decide between the two alternatives even tentatively  before taking  into  consideration the explanation  of  the  Board. There  was  no  reason why, when giving  notice,  the  State Govermment  should  not indicate to  the  Board  tentatively which  of the two alternatives it iuntends to pursue.   Such tentative conclusion communicated to the Board does not mean that  the State Government is not open to conviction at  all and  whatever  the  explanation it would pass  an  order  in accordance with its tentativ conclusion [737 E-G]

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1268  of 1966. Appeal  by special leave from the judgment and  order  dated May 21, 1965 of the Assam and Nagaland High Court in’  Civil Rule No. 306 of 1964. S.   V. Gupte, Solicitor-General and Naunit Lai, for the ap- pellants. K. R. Chaudhuri and B. P.  Singh, for the respondent. The Judgment of the Court was delivered by Wanchoo,  J. This is an appeal by special leave against  the judgment  of  the Assam High Court.  The  appellant  is  the State  of Assam and the respondent is the Gauhati  Municipal Board,  (hereinafter referred to as the Board).   After  the municipal  election,  new  members of  the  Board  began  to function from July 7, 1962.  The term of the members is four years and would in the normal course have expired on July 6, 1966.   On June 9, 1964, the appellant issued notice to  the Board  under  s. 298 of the Assam Municipal Act, No.  XV  of 1957  (hereinafter  referred to as the Act).   That  section gives power to the State Government, if it is of the opinion that  a  Board  is incompetent to  perform  or  persistently makes.  default in the performance of the duties imposed  on it  by or under the Act or otherwise by law, or  exceeds  or abuses  its  powers,  eitherto  dissolve  the  Board  or  to supersede it for a period not exceeding one year at a  time, and  where dissolution is ordered to order a fresh  election as soon as possible.  The section further provides that this power can be exercised by the State Government after  giving the  Board an opportunity for submitting its explanation  in regard  to  the  matter in question.   On  receipt  of  such explanation,  ,the State Government has to consider  it  and

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thereafter  by notification stating reasons for so doing  it may  declare  that the Board is incompetent  to  perform  or persistently makes default in the performance of its  duties or has exceeded or abused its powers.  The, State Government may  by  such  notification  either  dissolve  the,Board  or supersede it as already indicated. 734 The  State Government issued notice to the Board on June  9, 1964.  In this notice the State Government said that it  was of the opinion that the Board was incompetent to perform  or had  persistently  made default in the  performance  of  the duties imposed on it by or under the Act or otherwise by law and  that the Board had abused its powers.  The notice  went on  to  say  that  the State  Government  had  come  to  the tentative  conclusion  that the Board should  be  superseded under  s. 298 of the Act and asked the Board to  show  cause why  this should not be done.  The notice also stated  eight charges which were the basis of the tentative conclusion  of the  State  Government  and  asked  the  Board  to  give  an explanation  in  full with respect to  these  charges.   The Board  gave  the  explanation  on  August  10,  1964.   That explanation   was   apparently  considered  by   the   State Government  and  on December 9, 1964, the  State  Government issued  the notification superseding the Board for one  year with  effect from December 14, 1964 for reasons  which  were :stated  in the notification.  Thereupon the Board  filed  a writ  petition  in the High Court on December  24,  1964  on various  grounds.   It is however  unnecessary  for  present purposes  to  mention  all the grounds raised  in  the  writ petition.  It is sufficient to say that three of the grounds raised  therein  were  (i)  that in  passing  the  order  of supersession  the  State Government had violated  the  prin- ciples  of  natural justice inasmuch as the Board  had  been denied  the  opportunity of being personally  heard  and  of producing   evidence,  as  the  proceedings   resulting   in supersession  were quasijudicial proceedings, (ii) that  the charges  which  were  found proved in  the  notification  of December  9, 1964 were not the same which were  the  subject matter  of  the notice of June 9, 1964, and (iii)  that  the State Government had already come to the conclusion that the Board  should be superseded when it gave notice of  June  9, 1964  and  had  thus prejudged the  issue  even  before  the explanation of the Board had been received.  The application was opposed by the appellant, and its  case was  that proceedings resulting in an order under s. 298  of the  Act  were  administrative proceedings  and  not  quasi- judicial proceedings.  In any case even if they were  quasi- judicial  proceedings, the appellant contended that  it  had given a hearing to the Board as required by s. 298 and there was no violation of the principles of natural justice.   The appellant  further contended that the charges found.  proved were  the  same as the charges levelled against  the  Board. Finally it was contended that though the action to be  taken was  tentatively indicated in the notice, the State  Govern- ment had not pre-judged the issue and was open to conviction after the receipt of the explanation from the Board. The  High Court held that the proceedings culminating in  an order  under s. 298 of the Act were quasi-judicial and  that there was 735 violation of the principles of natural justice in this case. The  High Court also held that the charges found  proved  in the notification of December 9, 1964 were different from the charges levelled in the notice June 9, 1964.  The High Court finally  held that the State Government had already made  up

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its  mind to supersede the Board when it issued  notice  and therefore  presumably all the proceedings subsequent to  the issue  of  the notice were a farce.  For these  reasons  the High  Court allowed the writ petition and quashed the  order of  December  9, 1964.  It is this order of the  High  Court which is being challenged before us in the present appeal. I We are of opinion that the appeal must succeed.  We  shall take  up three grounds on the basis of which the High  Court has allowed the writ petition in the order indicated above. Re. (i). It is not necessary in the present appeal to decide  whether the  proceedings resulting in an order under s. 298  of  the Act are quasi-judicial proceedings or merely  administrative proceedings.  Assuming that the High Court is right that the proceedings are quasi-judicial proceedings, the question  is whether there was any violation of the principles of natural justice  in this case.  What the section provides is that  a notice should be given to the Board by the State  Government and  its explanation taken before an order under s.  298  is passed.   It  is not disputed that the appellant  had  given notice  to  the Board and had indicated the charges  on  the basis  of which it had formed its tentative  conclusion  and also  had  asked  for an explanation from  the  Board.   The explanation  was received in August 1964 and  considered  by the  appellant  and thereafter the appellant  by  its  order dated December 9, 1964 decided to supersede the Board.   Now it  is  clear from these facts that the appellant  acted  in full  compliance  with  the procedure provided  in  s.  298. Ordinarily  therefore  there is no reason why it  should  be held,  when  the procedure provided in s. 298  was  complied with, that the principles of natural justice were  violated. But the High Court was of the view that the appellant should have  given an oral hearing to the Board which  should  also have  been given an opportunity to produce materials  before the  appellant in support of the explanation.  According  to the  High Court, the right of hearing includes the right  to produce  evidence  in  support of an  explanation  and  this opportunity  was not given to the Board.  Here again  it  is unnecessary to decide whether s. 298 which merely says  that the  State Government should give opportunity to  the  Board for  submitting an explanation in regard to the  matter  en- visages  production of evidence-oral or documentary-at  some later stage by the Board in support of its explanation.  The High  Court  has  conceded that a personal  hearing  of  the nature  indicated above is not always a concommitant of  the principles of natural 736 justice.   But it was of the view that in the  present  case principles of natural justice required that the Board should have  been  given a personal hearing and an  opportunity  to produce materials in support of the explanation.  We  should have  thought  that  when the Board is  given  a  notice  as required by s. 298 it would naturally submit its explanation supported  by facts and figures and an relevant material  in support thereof.  However, we are definitely of opinion that the provisions of s. 298 being fully complied with it cannot be  said that there was violation of principles  of  natural justice  in this case when the Board never demanded what  is called  a  personal  hearing  and  never  intimated  to  the Government  that  it  would like  to  produce  materials  in support  of its explanation at some later stage.   Therefore where  a provision like s. 298 is fully complied with as  in this case and the Board does not ask for an opportunity  for personal  hearing or for production of materials in  support of  its  explanation, principles of natural justice  do  not

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require  that the State Government should ask the  Board  to appear  for a personal hearing and to produce  materials  in support of the explanation.  In the absence of any demand by the  Board  of the nature indicated above, we  cannot  agree with the High Court that merely because the State Government did not call upon the Board to appear for a personal hearing and  to  produce material in support of its  explanation  it violated the principles of natural justice.  This ground  in support of the order of the High Court therefore fails. Re; (ii) Then  we  come  to the finding of the High  Court  that  the charges found proved in the notification were different from the  charges levelled in the notice.  We regret to say  that the  High Court did not carefully look into the matter.   If it  had,  done  so, it would have found that  there  was  no difference  in substance between what was charged  and  what was  found  proved.   Eight charges were  indicated  in  the notice  of  June 9, 1964.  Six of them related  to  acts  of omission and commission by the Board; the seventh and eighth charges  were mere matters of inference from the  first  six charges and were not strictly speaking charges of which  any explanation was necessary.  In the notification  superseding the  Board the appellant found six charges proved.  We  have compared  the  notification  of December 9,  1964  with  the notice of June 9, 1964. and find that the first charge found proved  in  the  notification is the  third  charge  in  the notice;  the second charge found proved in the  notification is  the fifth charge in the notice; the third  charge  found proved  in  the  notification is the fourth  charge  in  the notice;  the fourth charge found proved in the  notification is the second charge in  the  notice;  the  fifth  charge  found  proved  in  the notification is the sixth charge in the notice and the sixth charge found proved in the notification is the first  charge in the notice. it will thus be 737 seen  that though there was a change in the order  in  which charges  were  enumerated,  the charges  found  proved  were substantially  the  same as the charges levelled.   We  have already indicated that the seventh and eighth charges in the notice were really not charges and were mere inferences  and that is why we find no mention of them in the  notification. The  view  of the High Court that the  charges  proved  were different from the charges levelled therefore also fails. Re. (iii) Finally  the High Court found that in the notice  the  State Government indicated its tentative conclusion to the  effect that the Board should be superseded and thus it had made  up its mind already even before considering the explanation  of the Board that it should be superseded, and that the rest of the  proceedings were a farce.  The High Court thought  that the  appellant  should  not  have  indicated  its  tentative conclusion  because s. 298 provides for two  courses,  i.e., supersession  or  dissolution, and the appellant  could  not decide between the two alternatives even tentatively  before taking into consideration the explanation of the Board.   In this  connection  the High Court relied on  decisions  under Art. 311 of the Constitution relating to removal,  dismissal and reduction in rank of public servants and was  apparently of  the  view that the State Government  should  first  have considered  the explanation and then made up its mind as  to which one of the two alternatives provided in s. 298  should be  used  and then presumably given a second notice  to  the Board to show cause why one of the alternatives  tentatively decided upon should not be pursued.  We are of opinion  that

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it  is  not correct to use the analogy of Art. 311  for  the purpose  of  s. 298 of the Act.  The issue  of  two  notices under  Art. 311 is a very special procedure  depending  upon the  language of that Article.  We find no comparable  words in s. 298.  We also see no reason why when giving notice the State   Government   should  not  indicate  to   the   Board tentatively  which  of the two alternatives  it  intends  to pursue.  Such tentative conclusion communicated to the Board does  not  mean  that the State Government is  not  open  to conviction at all and whatever the explanation it would pass an order in accordance with its tentative conclusion.  There is  therefore  no  reason  to  think  that  all  proceedings subsequent to the issue of notice dated June 9, 1964 were in this case a farce.  The third ground on which the High Court decided in favour of the respondent must fail. It appears that the respondent had secured a stay order  and practically  continued  to function for the full  period  of four  years under the cover of the stay order.   Before  us, though  the  respondent has appeared, it did  not  seriously contest the appeal, for, the 738 period  of all members who took office on July 7, 1962  came to an end on July 6, 1966. We  therefore allow the appeal, set aside the order  of  the High   Court  and  dismiss  the  writ  petition.    In   the circumstances we pass no orders as to costs. R.K.P.S.                            Appeal allowed. 739