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PETITIONER: RUSTAMJI NASARVANJI DANGER

       Vs.

RESPONDENT: JORAM KUNVERJI GANATRA AND ORS.

DATE OF JUDGMENT20/10/1976

BENCH: GUPTA, A.C. BENCH: GUPTA, A.C. CHANDRACHUD, Y.V.

CITATION:  1977 AIR   82            1977 SCR  (1) 884  1976 SCC  (4) 500

ACT:         Gujarat Municipalities Act, 1963--S. 38(1)(b)(i) "acts as  a         councillor"--Scope of --President of the Municipality apply-         ing  for  lease  of land--If debarred from  taking  land  on         lease---General  power of  supervision  conferred   on   the         President--If  President  should  be deemed  to  have  acted         within the meaning of S. 38(1)(b)(i) when lease was  granted         to him by the Chief Officer.

HEADNOTE:                 Under  s. 38(1)(b)(i) of the Gujarat  Municipalities         Act, 1963, if a councillor. during the term for which he has         been  elected  or  nominated, acts as a  councillor  in  any         matter  in which he has directly or  indirectly  any   share         or  interest, he shall, subject to the provisions of  sub-s.         2,  be disabled from continuing to be a councillor  and  his         office shall become vacant.While functioning as President of         a municipality the  appellant obtained a plot of land within         the municipality for running a mill.  The Chief Officer  who         was  the  authority to grant such permission  permitted  the         appellant to hold the plot on certain conditions.  The  High         Court  in  writ  petition by the respondent  held  that  the         appellant was disqualified from continuing President of  the         municipality.         Allowing the appeal to this Court,                 HELD: (1) Section 38(1)(b)(i) disables a  councillor         from continuing as such if he, "acts as a councillor" in the         matter of allotment of any land to himself; there is no  bar         in the Act to a councillor getting a lease of the land  from         the municipality as would appear from s. 11(3)(A)(i). It  is         only in a case where he acts as a councillor in getting  the         lease  that  he is disqualified.  There is  nothing  on  the         record to show that the appellant had acted as a  councillor         to have the plot allotted to himself. [887 H]              (2) Whether or not the Chief Officer was influenced  by         the fact that the applicant before him was President of  the         municipality,  was not relevant to the question  whether  s.         38(1)(b)(i) was attracted. [888 A]         (3) The general power of supervision conferred on the Presi-         dent does not imply that in every case where he applied  for         a lease, which he is entitled to do as s. 11(3)(A)(i)  indi-         cates, he should be deemed to have ’acted’ within the  mean-

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       ing of s. 38(1)(b)(i); otherwise the President of a  munici-         pality  under  the  Act, by virtue of his  office  would  be         disentitled  altogether from applying for permission to  use         any  land  of the municipality.  If this  were  the  correct         position then there was no point in limiting the disqualifi-         cation  contemplated  in s. 38(1)(b)(i) to cases  where  the         councillor  acts  as  a councillor.  The words  ’acts  as  a         councillor’ cannot be treated as redundant.  The  councillor         acts  as a councillor within the meaning of  s.  38(1)(b)(i)         when he performs any of the functions, which, under the Act,         he  is required to perform.  An allegation of misuse of  his         position against a councillor would not attract the disabil-         ity unders. 38(1)(b)(i) unless it was shown further that  he         has acted as a councillor in the matter. [888 B-D]

JUDGMENT:               CIVIL APPELLATE JURISDICTION: Civil Appeal No. 974  of         1975.                 (Appeal by Special Leave from the Judgment and Order         dated  25-6-1975  of the Gujarat High Court  in  Spl.  Civil         Appln. No. 1223/74).         D.V. Patel and S.S. Khanduja, for the Appellant.         885             U.R.  Lalit,  P.H.  Parekh and Miss  Manju  jatley,  for         Respondent No. 1.         M.N. Shroff, for Respondent No. 2.         The Judgment of the Court was delivered by         GUPTA,  J.   The  appellant was elected  a   councillor   of         Anjar  municipality in Kutch District sometime in 1972,  and         later,  President  of the municipality.  On June  30,  1973,         after he had been  elected President, the appellant  applied         to  the chief officer of the municipality for  allotting  to         him a ’plot  of  land  admeasuring 18 feet x 16 feet situate         in  the  town of Anjar.  In his  application  the  appellant         stated  that  he wanted the plot for running  a  flour  mill         temporarily   until he got a suitable plot from the  Govern-         ment.   By  his order dated July 5, 1973 the  chief  officer         granted  the  request permitting the appellant to  hold  the         land  on payment of rent on condition, inter alia, that  the         land  should  be vacated whenever ’the municipality  so  or-         dered.   The  first respondent who is a  resident  of  Anjar         applied to the  Collector  of Kutch under section 38 of  the         Gujarat  Municipalities  Act,  1963 (referred to as the  Act         hereinafter)  for  declaring  that  appellant’s  office  has         "become  vacant" as he has disabled himself from  continuing         as a councillor by taking lease of the land from the munici-         pality.   The Collector having heard the parties  held  that         the  appellant had got the land by misusing his position  as         President of the municipality incurring thereby the disqual-         ification  referred  to in section 38(1)(b)(i)  of  the  Act         which  disabled him from continuing to be a  councillor  and         declared  that his office had become vacant.  The  appellant         before us preferred an appeal under section 38(4) of the Act         to   the   State Government against the  Collector’s  order.         The  State  Government allowed the appeal and dismissed  the         application  of the first respondent.  It was held that  the         land  was allotted to the appellant in accordance  with  the         by-laws of the municipality and that there  was  no evidence         of  the appellant exerting any influence on the chief  offi-         cer. The first respondent challenged the order of the  State         Government  by  filing a writ petition in the  Gujarat  High         Court.   The learned Judge of the High Court who  heard  the         petition  allowed the same, quashed the order of  the  State

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       Government,  and restored the order made by  the  Collector.         This appeal by special leave is directed against  the  judg-         ment of the High Court allowing the writ petition.             The appeal turns on section 38(1)(b)(i) of the Act which         reads as follows:                             "38.  Disablilties from continuing as  a                       councillor.  (1) If any councillor during  the                       term  for  which he has been elected or  nomi-                       nated -                       (a)    x    x    x                       (b) acts as a councillor in any matter -                                (i)  in  which  he  has  directly  or                       indirectly,  by  himself or his  partner,  any                       such  share  or interest as is  de:scribed  in                       clause (i), (ii), (iii), (v) or (vii) of  sub-                       section                       886                       (3)  of section 11, whatever may be the  value                       of      such      share      or      interest,                       or  ...........................                       he  shall  subject to the provisions  of  sub-                       section (2) be disabled from continuing to  be                       a  councillor  and ’his  office  shall  become                       vacant."                       The  provisions  of sub-section  (2)  are  not                       relevant  for the present purpose. Section  11                       of the Act enumerates, inter alia, the "gener-                       al  disqualifications for becoming a  council-                       lor" and specifies the cases to be treated  as                       exceptions.   Section 11(2)(c) disqualifies  a                       person  from being a councillor "who, save  as                       hereinafter  provided, has directly, or  indi-                       rectly, by himself or his partner any share or                       interest in any work done by order of a munic-                       ipality or in any contract or employment  with                       or  under  or on behalf  of  a  municipality’.                       Sub-section  3(A)(i) of section 11 which  con-                       tains an exception to this rule provides:                                "(3) A person shall not be deemed  to                       have incurred disqualification -                       (A)  under  clause (c) of sub-section  (2)  by                       reason of his                                (i)  having any share or interest  in                       any lease, sale or purchase ;of any  immovable                       property or in any agreement for the same."         Thus a person is disqualified from becoming a councillor  if         he.  has a direct or indirect interest in any contract  with         the  municipality, but having any share or interest  in  any         lease of immovable property or in any agreement for the same         is  not  a disqualification.   Section  38(1)(b)  (1),quoted         above however provides that if     any councillor during the         term for which he has been elected "acts as a councillor" in         acquiring  a  direct or indirect share or  interest  in  any         lease, he shall be disabled from continuing to be a council-         lor.   We have noted earlier that section 11(3)(A)(i) is  an         exception to. the general   disquali-fication under  section         11(2) (c), section 38(1) (b) (i) appears to be an  exception         to that exception.  This means that though having an  inter-         est in any lease from municipality is not a disqualification         for becoming or continuing as a councillor, if the  council-         lor  "acts as a councillor" in getting such lease  from  the         municipality, he shall be ’disabled from continuing to be  a         councillor.   The  president  of the  municipality  being  a         council, lot, this provision also applies to him. The  ques-         tion  therefore is whether the appellant in this case  acted

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       as  a councillor in the matter of allotment of the  land  to         him.             Section  275 of the Act authorises the  municipality  to         make  bylaws  not  inconsistent with  the  Act.   The  Anjar         municipality   has framed by-laws regulating the  conditions         on  which permission may be given for the temporary  occupa-         tion  of public streets or land.  An English translation  of         by-law 4 of these by-laws which are in Gujarati reads:                             "Permission  will be given for the,  use                       of  public road or land within  the  municipal                       limits  but not of private land for  temporary                       period for the matters mentioned in Schedule 1                       hereto on advance payment of fee as stated  in                       the Schedule.                       887                       Any  person  who intends to occupy  such  land                       shall  have to make a written  application  to                       the  chief officer.  But to give such  permis-                       sion  or  not  shall be  within  the  absolute                       discretion of the chief officer."         Schedule 1 mentioned here prescribes the fees payable by the         applicant  on  such  permission being  granted.   The  chief         officer  in this case permitted the appellant to occupy  the         land  in question in exercise of the power given to  him  by         this by-law.  The High Court found that the appellant  acted         as a councillor and President of the municipality in  having         the  plot  allotted to him mainly upon  the   provisions  of         sections 49 and 45 of the Act.  Section 49 defines the power         and duties of the chief officer.  Sub-section (1)(a) of’sec-         tion 49 which is relevant in this context is as follows:                             "49. Power and duties of chief officer.-                       (1) The chief officer shall -                             (a) subject to the general  control   of                       the   president watch over the  financial  and                       executive  administration of the  municipality                       and  perform all the duties and  exercise  all                       the  powers specifically imposed or  conferred                       upon  him by, or delegated to him under,  this                       Act."         Section  45 enumerates the functions of the President;   one         of the functions is to exercise supervision and control over         the acts and proceedings of all officers and servants of the         municipality  in matters of executive  administration.   The         High Court after referring to these provisions observed that         the  chief  officer being under the general control  of  the         president in all matters of executive ,administration,  must         have felt himself bound to grant the  appellant s   applica-         tion. The High Court referred to an earlier application  for         the plot made by one Karan Kanji which the chief officer had         rejected.   There  is also a finding that by-law 4  did  not         permit  the  use of the plot for the purpose for  which  the         appellant had applied and that the chief officer went out of         his  way  to help his president.  The High  Court  concluded         that  if  the  appellant had not been a  councillor  of  the         municipality  and its president, his application would  have         met with the same fate as Karan Kanji’s.             The legality of the chief officer’s order is not however         an  issue in this case, and the question whether or not  the         intended  use  of the plot by the appellant was  beyond  the         scope  of  by-law 4  need not detain us.  According  to  the         High  Court  it was  only  because the  appellant  held  the         office  of  president ’of the municipality  that  the  chief         officer  allowed  his application.  This may or may  not  be         true, but it is not a matter relevant to the real   question         that   arises  for  consideration  in  this  case.   Section

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       38(1)(b)(i)  disables a  councillor from continuing as  such         if  he "acts as a councillor" in the matter of allotment  of         any  land to himself, there is no bar in the Act to a  coun-         cillor getting a lease of the land from the municipality  as         would  appear from section 11(3)(A)(i).  It is only   in   a         case  where he acts as a councillor  in getting  the   lease         that  he  is  disqualified.  There is nothing in the  record         of  this  case  to show that the appellant had  acted  as  a         councillor to have the plot allotted to him-         888         self. ’Even if the chief officer was influenced by the  fact         that  the applicant before him was president of the  munici-         pality,  that would not attract section 38(1)(b)(i).  It  is         true that section 45 confers a general power of  supervision         and  control on the president over the acts of all  officers         of  the  municipality and section 49, which  enumerates  the         power and duties of chief officer, also makes him subject to         the  general control of the president  in the  discharge  of         these  powers.  But the general power of  supervision   con-         ferred  on  the  president does not,  in  our  opinion,imply         that in every case where he applies for a lease, which he is         entitled to do as section 11(3)(A) (i) indicates, he  should         be  deemed  to have "acted" within the  meaning  of  section         38(1)(b),  otherwise, the president of a municipality  under         this  Act,  by  virtue of his office  would  be  disentitled         altogether  from applying for permission to use any land  of         the  municipality.  If this were the correct  position  then         there  was  no   point in   limiting   the  disqualification         contemplated  in  section 38(1) (b) (i) to cases  where  the         councillor  acts  as  a councillor.  The words  "acts  as  a         councillor" cannot be treated as redundant.  In our view the         councillor  acts  as  a councillor within  the  ’meaning  of         section 38(1)(b) when he performs any of the functions which         under  the Act he is required to perform.  An allegation  of         misuse  of his position against a councillor would  not  at-         tract the disability under section  38(1) (b)(i)  unless  it         was  shown furher that he has acted as a councillor  in  the         matter.   In  view  of  the  clear  provision   of   section         38(1)(b)(i)  we do not find it possible to support  the  im-         pugned judgment.             The appeal is therefore allowed and the judgment of  the         High Court reversing the decision of the State Government is         set  aside.   In the circumstances of the case  we  make  no         order as to costs.         P.B.R.                                                Appeal         allowed.         889