Allahabad High Court
Nand Kumar Maurya vs State Of U.P. And 4 Others on 16 February, 2022
Author: Anjani Kumar Mishra
Bench: Anjani Kumar Mishra
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Reserved In Chamber Case :- WRIT - C No. - 31925 of 2021 Petitioner :- Nand Kumar Maurya Respondent :- State Of U.P. And 4 Others Counsel for Petitioner :- Udayan Nandan,Sr. Advocate Counsel for Respondent :- C.S.C.,Akhilesh Kumar,Narendra Kumar Hon'ble Anjani Kumar Mishra, J.
Hon'ble Vikram D. Chauhan, J.
(Per Hon. Vikram D. Chauhan, J.)
1. The present writ petition is preferred by the petitioner challenging the show cause notice dated 11th November, 2021 issued by the Additional Chief Secretary, Nagar Vikas, U.P. at Lucknow, whereby the petitioner has been show caused as to why he may not be removed from the office of the President, Nagar Panchayat, Khamariya, District Bhadohi and further by the impugned order dated 11th November, 2021 the financial and administrative powers of the petitioner has been ceased.
2. The brief facts of the case is that the petitioner is the President, Nagar Panchayat, Khamariya, District Bhadohi. In respect of the alleged irregularities in purchase of dustbins in Nagar Panchayat, Khamariya, District Bhadohi, an enquiry was conducted by the Sub Divisional Magistrate, Aurai, District Bhadohi and a report was submitted on 24th June, 2019. The aforesaid enquiry was conducted on the basis of the complaint made by one Sri Mainuddin Ansari, Sabhasad, Ward No. 12, Akbarpur and other Sabhasad, Nagar Panchayat, Khameriya, District Bhadohi. The Sub Divisional Magistrate by report dated 24th June, 2019 did not find any irregularity in the purchase of the dustbins and as such, the complaint against the petitioner was shelved. The aforesaid report dated 24th June, 2019 was forwarded by the Additional District Magistrate to the Commissioner, Vindhyanchal Mandal, Mirzapur by his communication dated 15th July, 2019. Thereafter, another enquiry was ordered by the Additional Commissioner, Mirzapur on two issues, one relating to the allegations with regard to purchase of dustbins without following the relevant provisions of law and second that the dustbins were purchased from a firm owned by the daughter in law of the brother of the President-petitioner. The aforesaid enquiry was conducted by the Sub Divisional Magistrate, Gyanpur and the enquiry report was submitted on 19th October, 2019. On the basis of the aforesaid, the notice was issued by the respondents to the petitioner on 3rd September, 2020 calling upon the petitioner to give explanation with respect to the allegations pursuant to the abovementioned enquiry report. In pursuance thereof, the petitioner has submitted his written explanation before the respondent authorities on 13th October, 2020. The District Magistrate on 21st November, 2020 has submitted his reply to the explanation submitted by the petitioner on 13th October, 2020 and thereafter the personal hearing was also accorded to the petitioner on 17th March, 2021 wherein also the petitioner submitted his explanation dated 16th March, 2021 before the Additional Chief Secretary, Nagar Vikas-respondent no. 2.
3. It further transpires that after the hearing and the presentation of the submission by the petitioner on 17.03.2021, the explanation/written submissions of the petitioner were sent to the District Magistrate concerned on 13th April, 2021 and thereafter the District Magistrate has submitted report dated 7th June, 2021 of Committee. The aforesaid report dated 7th June, 2021 was against the petitioner and on the aforesaid basis, the impugned show cause notice dated 11th November, 2021 has been issued by the Additional Chief Secretary, Nagar Vikas-respondent no. 2 and further the financial and administrative powers of the petitioner has been ceased.
4. Heard Sri Shashi Nandan, learned Senior Counsel assisted by Sri Udayan Nandan, Advocate, learned counsel for the petitioner, learned Standing Counsel for the State-respondents and Sri Veer Singh, learned counsel for the complainant-respondent no. 6.
5. It is submitted by learned counsel for the petitioner that the petitioner is the President of the Nagar Panchayat, Khamariya, District Bhadohi and he has been issued show cause notice in terms of Section 48 (2) of the U.P. Municipalities Act, 1916 and also by the impugned notice dated 11th November, 2021 his administrative and financial powers have been ceased by respondent authority. It is also submitted on behalf of petitioner that while passing the impugned notice and ceasing of the administrative and financial powers of the petitioner, the reply submitted by the petitioner has not been considered by the Additional Chief Secretary, Nagar Vikas - respondent no. 2 and further the respondent authority while passing the impugned order has also failed to take into consideration earlier report dated 24th June, 2019 which was in favour of the petitioner. It is also the case of the petitioner that after the arguments were heard on 17th March, 2021 and the written explanation dated 16th March, 2021 was submitted by the petitioner, the respondent authorities has invited a report from the District Magistrate concerned in respect of the explanation and argument of the petitioner and the District Magistrate in pursuance thereof had formed a four member committee comprising of Additional District Magistrate, District Information Officer-NIC, Finance and Audit Officer, Bhadohi and EDM, Bhadohi. On the basis of the aforesaid, the District Magistrate by his letter dated 7th June, 2021 has submitted a enquiry report before the Principal Secretary, Nagar Vikas. It is submitted by the learned counsel for the petitioner that prior to submission of the report dated 7th June, 2021, no opportunity of hearing was granted by the aforesaid committee nor any opportunity of hearing was granted at the level of the District Magistrate. It is also submitted that prior to passing of the impugned order, the copy of the aforesaid report dated 7th June, 2021 has also not been served on the petitioner nor the petitioner has been granted opportunity to file any objection to the aforesaid report dated 7th June, 2021. It is also urged that while passing the impugned order, the respondent authorities has relied upon the report dated 7th June, 2021 against the petitioner without considering the explanation submitted by the petitioner in response to the allegations against the petitioner. It is urged on behalf of the petitioner that the impugned order is arbitrary, without application of mind and without giving any reasons has ceased the financial and administrative powers of the petitioner.
6. Learned Standing Counsel appearing for the State-respondents and Sri Veer Singh, learned counsel appearing on behalf of the respondent no. 6 has submitted that the petitioner is the Chairman of Nagar Panchayat, Khameriya, District Bhadohi and allegations with respect to misappropriation of funds of Nagar Panchayat for purchase of articles without following proper procedure prescribed is levelled against the petitioner. In this respect, the Sub Divisional Magistrate, Gyanpur has submitted an enquiry report dated 19th October, 2019 indicting the petitioner in respect of the allegations of misappropriation of funds. The aforesaid report dated 19th October, 2019 was forwarded by the Additional District Magistrate to the Commissioner and the same has thereafter being forwarded to the State Government. The State Government consequently has issued letter dated 3rd September, 2020 to the petitioner calling for an explanation. The petitioner submitted his reply on 13th October, 2020 and the District Magistrate has thereafter submitted the explanation on 21st November, 2020. It is also submitted that the petitioner has also submitted his reply on 16th March, 2021 before the State Government and the petitioner was granted opportunity of hearing by the State Government on 17th March, 2021. Thereafter show cause notice dated 11th November, 2021 has been issued to the petitioner and the financial and administrative powers of the petitioner has been ceased under Section 48 (2) of the U.P. Municipalities Act, 1916. The petitioner was given full opportunity of hearing and thereafter the impugned order has been passed by the State Government. It is also urged on behalf of the respondents that while passing impugned order, the reply of the petitioner has been considered and the authority concerned has prima facie found a case against the petitioner and as such, the financial and administrative powers of the petitioner has been ceased. A notice has been issued to the petitioner in terms of Section 48 (2) of the U.P. Municipalities Act, 1916. On the aforesaid basis, it is submitted that the present writ petition has no force and as such liable to be dismissed.
7. The controversy involved in the present writ petition revolves around Section 48 (2) of the U.P. Municipalities Act, 1916 and the same is quoted hereunder:-
"48. Removal of President. - (1) [Omitted] (2) Where the State Government has, at any time, reason to believe that, -
(a) there has been a failure on the part of the President in performing his duties; or
(b) the President has -
(i) incurred any of the disqualifications mentioned in Sections 12-D and 43-AA; or
(ii) within the meaning of Section 82 knowingly acquired or continued to have, directly or indirectly or by a partner, any share or interest, whether pecuniary or of any other nature, in any contract or employment with by or on behalf of the [Municipality]; or
(iii) knowingly acted as a President or as a member in a matter other than a matter referred to in clauses (a) to (g) of subsection (2) of Section 32, in which he has, directly or indirectly or by a partner, any share or interest whether pecuniary or of any other nature, or in which he was professionally interested on behalf of a client, principal or other person; or
(iv) being a legal practitioner acted or appeared in any suit or other proceeding on behalf of any person against the [Municipality] or against the State Government in respect of nazul land entrusted to the management of the [Municipality] or against the State Government in respect of nazul land entrusted to the management of the [Municipality], or acted or appeared for or on behalf of any person against whom a criminal proceeding has been instituted by or on behalf of the [Municipality]; or
(v) abandoned his ordinary place of residence in the municipal area concerned; or
(vi) been guilty of misconduct in the discharge of his duties; or
(vii) during the current or the last preceding term of the] [Municipality], acting as President or [* * *], or as Chairman of a Committee, or as member or in any other capacity whatsoever, whether before or after the commencement of the Uttar Pradesh Urban Local Self-Government Laws (Amendment) Act, 1976, so flagrantly abused his position, or so wilfully contravened any of the provisions of this Act or any rule, regulation or bye-law, or caused such loss of damage to fund or property of the [Municipality] as to render him unfit to continue to be President; or
(viii) been guilty of any other misconduct whether committed before or after the commencement of the Uttar Pradesh Urban Local Self-Government Laws (Amendment) Act, 1976 whether as President or as [* * *], exercising the powers of President, or as [* * *], or as member; or
(ix) caused loss or damage to any property of the municipality; or
(x) misappropriated or misused of Municipal found; or
(xi) acted against the interest of the municipality; or
(xii) contravened the provisions of this Act or the rules made thereunder; or
(xiii) created an obstacle in a meeting of the municipality in such manner that it becomes impossible for the municipality to conduct its business in the meeting or instigated someone to do so; or
(xiv) wilfully contravened any order or direction of the State Government given under this Act; or
(xv) misbehaved without any lawful justification with the officers or employees of the municipality; or (xvi) disposed of any property belonging to the municipality at a price less than its market value; or (xvii) encroached, or assisted or instigated any other person to encroach upon the land, building or any other immovable property of the municipality;] it may call upon him to show cause within the time to be specified in the notice why he should not be removed from office.
Provided that where the State Government has reason to believe that the allegations do not appear to be groundless and the President is prima facie guilty on any of the grounds of this sub-section resulting in the issuance of the show-cause notice and proceedings under this sub-section he shall, from the date of issuance of the show-cause notice containing charges, cease to exercise, perform and discharge the financial and administrative powers, functions and duties of the President until he is exonerated of the charges mentioned in the show-cause notice issued to him under this sub-section and finalization of the proceedings under sub-section (2-A) and the said powers, functions and duties of the President during the period of such ceasing, shall be exercised, performed and discharged by the District Magistrate or an officer nominated by him not below the rank of Deputy Collector."
8. In order to appreciate the contentions urged on behalf of the parties, it would be appropriate to examine the charges levelled against the petitioner and the response submitted by the petitioner in respect of the charges levelled against the petitioner.
9. The first charge against the petitioner is that in the process of purchase of dustbins the comparison was not made between the dustbin of same capacity but the comparison was made with dustbin of higher capacity. It is also alleged that in case the dustbin with regard to sanction capacity was not available on the GEM portal then in accordance with the order dated 12th September, 2018 of the Additional District Magistrate, the dustbin ought to have been purchased by way of e-tender.
10. The petitioner in respect of the first charge submitted his reply to the effect that after the selection of the capacity of the dustbin on the GEM portal, the other capacity of dustbin was being shown in the category of the sanctioned capacity of dustbin, was not reflected on the buyer's portal. The process of comparison of the dustbin of various capacity is the sole prerogative of the GEM portal and the GEM portal after completion of the comparison publishes the final list. It is not possible for the buyer to find out the capacity of dustbin which were being compared. In the GEM portal it is not possible to purchase unless the comparison process and the L1 process is completed on the aforesaid portal. The GEM portal further prepared the contract, sanction order and other documents on automation basis and the President/petitioner has no role in the aforesaid process. The purchases have been made from the GEM portal and as such there are no irregularities in the purchase of the dustbin and no financial loss has been made to the Nagar Panchayat.
11. The second charge against the petitioner is to the effect that the Government Order No. G.F.R./2017 provided that purchases to an amount of Rs. 30 Lacs can be made directly from the GEM portal. The purchases made by the Nagar Panchayat in respect of various categories of dustbins were within the limit of Rs.30 Lacs individually however, if the amount of all the categories of dustbins are added together the same would be more than Rs. 30 Lacs limit fixed by the aforesaid Government Order. One firm was given order for various categories of dustbin and the aforesaid order in total amounted to more than Rs. 30 Lacs. No information in this respect was given to the District Magistrate nor any sanction was taken by the Nagar Panchayat in this respect and as such irregularities have been committed by the petitioner.
12. The petitioner in response to the second charge submitted that in the Government Order dated 23rd August, 2017 it is provided that for an amount from Rs.50,000/- to Rs.30,00,000/- the purchases can be made from the GEM portal on the basis of the lowest price offered. The purchases have been made after obtaining necessary sanction from the District Magistrate and in accordance with the abovementioned Government Order. It was also the defence of the petitioner that the work pertaining to upload of purchase order on the GEM portal and acceptance of the work order is within the domain of the Executive Officer, Nagar Panchayat. The concerned authority in respect of the alleged purchase is the Executive Officer, Nagar Panchayat. It was also the defence of the petitioner that the Government Order did not provide that the value of all the purchases of various categories were required to be added and thereafter the purchases are to be affected. In the present case, the purchases have been made in respect of various categories by means of different contract proposal and the sanction also is also made separately and the payments have been made against the various categories separately by the authorised officer being the Executive Officer, Nagar Panchayat. The petitioner had no role in the purchase of the aforesaid dustbin. The purchase of various capacity of dustbin which have been purchased by separate order on the GEM portal could not have been clubbed together.
13. The third charge against the petitioner pertains to the allegation that the purchase of dustbins was made by the Nagar Panchayat from the firm of which the proprietor was the daughter-in-law of the brother of the petitioner and as such is in violation of Section 82 of the Uttar Pradesh Municipalities Act, 1916 as the petitioner has interest in the contract awarded for purchase of dustbin to the above-mentioned firm.
14. The explanation given by the petitioner in respect of the third charge is to the effect that the firm Shree Hari Impex is already registered on the GEM portal and the purchases have been made in accordance with the Government Order dated 23rd August, 2017 after approval of the District Magistrate from the GEM portal. It was also submitted that the aforesaid firm is a proprietorship firm and the petitioner has no interest or connection with the aforesaid firm and the payments were made to the aforesaid firm after the scrutiny by the committee constituted by the District Magistrate. It was also stated that at the level of the petitioner, no proceedings were undertaken for selection of the aforesaid firm for purchase of the dustbin and the aforesaid selection was made from the GEM portal on which the petitioner has no control. The selection of the aforesaid firm was made by the GEM portal on automation basis to the lowest bid.
15. The Nagar Panchayat in question is a unit of local self-government. The concept of a local self-government paves the way for a proper delineation of functions and powers of the latter, for the smooth flow of funds from State Governments and also ensure community involvement in activities. The Nagar Panchayat is constituted under the Uttar Pradesh Municipalities Act, 1916. The aforesaid Act further provides that the members of the Nagar Panchayat shall be on the basis of electoral representative. The aforesaid Act under Section 43 also provides that the President of the Nagar Panchayat shall be elected on the basis of adult suffrage by the electors of the Nagar Panchayat. By means of 73rd Constitutional Amendment the Municipalities have been accorded the constitutional status.
16. The section 48 of the Uttar Pradesh Municipalities Act, 1916 provides for the removal of the President. The grounds on which the President can be removed has been envisaged under Section 48 (2) of the Uttar Pradesh Municipalities Act, 1916. It provides that where the State Government has reason to believe that there has been failure on the part of the President in performing his duties or the President has committed any misconduct provided under Section 48(2)(b), then he can be called upon to show cause as to why he should not be removed from the office of the President.
17. The proviso to Section 48(2) of the Uttar Pradesh Municipalities Act, 1916 provides for cessation of financial and administrative powers under the specified conditions. The aforesaid provision does not envisage cessation of financial and administrative powers on merely issuance of notice under Section 48(2) of the aforesaid Act. The provision requires that where the State Government has reason to believe that the allegations do not appear to be groundless and the President is prima facie guilty on any of the grounds of sub-section 2 of Section 48 resulting in issuance of show cause notice containing charges, the State Government can cease the financial and administrative powers of the President unless he is exonerated of the charges mentioned in the show cause notice and finalisation of proceedings.
18. It is further to be noted that during the cessation of the financial and administrative powers of the President, the proviso to Section 48(2) of the Act further provides that the aforesaid powers would be performed and discharged by the District Magistrate or an officer nominated by him not below the rank of a Deputy Collector. It is to be seen that the powers under the proviso to Section 48(2) of the Uttar Pradesh Municipalities Act, 1916 will result in transfer of the powers of the President from an elected representative to an executive authority, who is not elected by the electoral College of the Nagar panchayat. In this manner, the cessation of the administrative and financial powers of the President have grave consequences as the elected representative power are ceased and handed over to an executive authority who is not directly answerable to the electoral College.
19. Under the present constitutional framework, the emphasis has been to set up democratic institutions for governance of the people of the country and all decisions are rooted through democratic elected representatives. The executive authority has been imparted with the duty to implement the decisionsand policy framed by the elected representatives. Further, the elected representatives (in higher hierarchy) under the Constitution can be removed by a special process either by way of no confidence motion or by way of impeachment and in this manner a protection is provided to the elected representative so that the executive may not usurp the office of the elected representative by removing him except by way of no confidence motion or by way of impeachment. It is to be seen that under the constitutional scheme, the elected representatives have been insulated from being removed from the office by the executive. However, in the case of the President of the Nagar Panchayat under the Uttar Pradesh Municipalities Act, 1916, the power to remove the President of the Nagar Panchayat is vested with the State Government in exercise of powers under Section 48 of the Uttar Pradesh Municipalities Act, 1916. Once the power has been vested with the executive for removing an elected representative from the post of the President of Nagar panchayat, it emphasises a greater responsibility of the State Government that the power is exercised within the four corners of the Uttar Pradesh Municipalities Act, 1916 and further keeping into consideration the constitutional scheme. While exercising the powers under Section 48(2) of the Uttar Pradesh Municipalities Act, 1916, the State Government by ceasing the financial and administrative powers of the President is taking upon a drastic step of precluding an elected representative who is President of the Nagar panchayat from exercising his powers as provided under law. The institution of local self government including the Nagar Panchayat have been specifically constituted for the purpose of giving powers of governance in the hand of the citizens of the area through their elected representatives and once the powers under the proviso to Section 48 (2) of the Uttar Pradesh Municipalities Act, 1960 is exercised by the State Government, the governance comes into the hands of the executive authority. The aforesaid power under Section 48 of the Act including the cessation of administrative and financial powers of the President are to be exercised by the State Government fairly and in a responsible manner so that the democratic institutions are strengthened. The five Judges Bench of this Court in Paras Jain Vs State of U.P. and others, reported in 2016 (1) ADJ 1 (FB) in paragraph 14 has emphasised on the institution of local self-government and decentralisation of democratic governance and the same is quoted hereinbelow :-
"14. Part IX-A of the Constitution contains provisions in relation to the panchayats. Part IX-A provides for the municipalities. These provisions were introduced by the Seventy-third and Seventy-fourth amendments to the Constitution. Municipalities and panchayats as institutions of local self-Government have a constitutional status. Their role and position are defined by the Constitution as are their powers, duties and responsibilities. They are not mere administrative agencies of the State but, as institutions of self-governance, have been conferred with a degree of autonomy to ensure that democracy finds expression at the grassroots of Indian society. The Constitution seeks to attain a decentralisation of democratic governance through these institutions."
20. It however goes without saying that the elected representatives has greater responsibility to exercise the powers under the Act for the benefit of the public at large and in accordance with sound administrative and financial principles within the corners of statute. It is the duty of the elected representative that the public money is not wasted and that the public money is expended for the benefit of the citizens of the municipal area/nagar panchyat. The electoral college of the area concerned has elected its representative to the Nagar Panchayat so that they will exercise, the power for benefiting the public at large and will not involve in any activity which is detrimental to the society and not involve in misappropriation of funds and abuse of the office, which the electoral representative is holding. It is true that the electoral representative cannot hide behind his position of being an electoral representative and in the garb of the aforesaid conduct himself in a manner which is detrimental to the society at large and to the objectives of the Nagar Panchayat. The aforesaid misconduct has further been envisaged under Section 48(2) of the Uttar Pradesh Municipalities Act, 1916.
21. The removal of the President of Nagar Panchayat under Section 48 of the Uttar Pradesh Municipalities Act, 1916 and cessation of the administrative and financial powers of the President is a drastic step. The aforesaid powers, in fact, takes away the powers of the elected representative and confers the said power on the District Magistrate or other officer who are the executive officers of the State. In such circumstances, the interpretation to the aforesaid provision is to be in accordance with scheme under the constitution and the Government is require to follow the provisions and the condition precedent prior to exercise of the power of cessation of financial and administrative powers of the President. It is to be borne in mind that the Nagar Panchayat is a local self government and it is to be run in conformity with the constitutional standards and in this respect, the statute/legislation, which is in the nature of regulatory framework, must be interpreted in a manner that fulfils the constitutional goals and objectives and as such, the State Government while passing any order under Section 48 of the Act, is required to pass such order in conformity with the constitutional scheme and should not dilute the autonomy of the institution. It is also to be seen that the cessation of the financial and administrative powers of the President while holding an enquiry for removal of the President under Section 48 of the Act is detrimental to the public interest in the sense that an elected representative while continuing on the post would not be able to exercise his powers and functions under the Uttar Pradesh Municipalities Act, 1916 and such a drastic measure should only to be adopted where there are serious material against the President. It is also the duty of the State Government while exercising such drastic powers which are having civil consequences that the procedure adopted is just, fair and reasonable and in consonance with Article 14 of the Constitution. In this reference the five Judges Bench of this Court in Paras Jain (supra) in paragraph 15 has elucidated the interpretation to be accorded to such a provision and the same is quoted hereinbelow:
"15. The extent of control which the agencies of the State exercise over these institutions of local self-government must necessarily conform to constitutional standards. State legislation of a regulatory nature must be interpreted in a manner that fosters the attainment of constitutional objectives. The Court, consistent with the high constitutional purpose underlying Parts IX and IXA of the Constitution, must give expression to the autonomy expected to be wielded by the constitutionally recognized levels of local self-government. Hence, while interpreting state legislation, the need to conform to constitutional parameters must be borne in mind. An interpretation of state legislation which will dilute the autonomy of institutions of local self-government must, to the extent possible, be avoided. Similarly, an interpretation which would result in reducing the panchayats and municipalities to a role of administrative subordination must be eschewed. Consequently, where an issue arises in regard to the removal of an elected head of a municipality, as in the present case, the procedure prescribed by the law must be followed. The law itself must be interpreted in a manner that would render it fair, just and reasonable in its operation and effect. Moreover, in areas where the law is silent, an effort must be made by the Court in the process of interpretation to ensure that the procedure for removal is just, fair and reasonable to be consistent with the mandate of Article 14."
22. In the present case, the question of interpretation of Section 48(2) of the Act including the proviso is involved. The aforesaid Section 48(2) empowers the State Government to issue show cause notice to the President as to why he may not be removed from his office if the State Government has reason to believe that there is failure on the part of the President in performing his duties or has misconducted in accordance with the provisions of Section 48(2)(b) of the Act. Further, the State Government under proviso to Section 48 sub-clause (2) is further empowered to cease the financial and administrative powers, functions and duties of the President, where the State Government has the reason to believe that the allegation do not appear to be groundless and the President is prima facie guilty on any of the grounds of said section resulting in issuance of show cause notice. The aforesaid proceedings for cessation of financial and administrative powers during the pendency of the proceedings for removal of the President under the aforesaid proviso require to fulfill twin conditions.
23. The first condition for exercise of the powers for cessation of administrative and financial powers of the President is that the State Government has reason to believe that the allegations do not appear to be groundless. It is to be seen that the aforesaid action of the State Government should be based on the material before it and must reflect the application of mind by the State Government. The cessation of administrative and financial powers should be on objective assessment of the authority concerned based on the material on record and is distinguishable from the purely subjective satisfaction. It is also to be seen that the aforesaid reasonable belief is to be formed on the basis of relevant facts available on record. The aforesaid provision casts a duty on the State Government to lay down the factual foundation and circumstances for coming to the conclusion that there exist a reasonable belief that allegations do not appear to be groundless. In this reference, the five Judges Bench of this Court in Paras Jain (supra) in paragraph 27 has interpreted the expression "reason to believe" and the same is quoted hereinbelow :-
"27. The formation of a reason to believe within the meaning of the proviso must be on objective considerations which have a rational connection or link to the material before the State Government. Fairness requires that this be disclosed to the President of the municipality before the consequences in the proviso ensue. The President must have an opportunity to explain."
24. The objective consideration which has rational connection to the material before the State Government is essential for fair and just exercise of the power by the State Government. The State Government while exercising the power cannot loose sight of the fact that an elected representative is being denuded of his powers under the Municipalities Act, 1916. The objective assessment/consideration to the material before the State Government would ensure that the reasons are disclosed to the President of the municipality before the consequences under the proviso ensue.
25. The second condition for exercise of power under Section 48(2) of the Uttar Pradesh Municipalities Act, 1916 is that the President is prima facie guilty on the grounds of this section and it is thereafter that the show cause notice can be issued to the President and the financial and administrative powers can be ceased. The prime facie satisfaction of the guilt under the aforesaid provision postulates application of mind to the material available on record before the State Government as well as the explanation/reply submitted by the petitioner. The formation of a prime facie opinion by the State Government must be consistent with the principles of natural justice. The objective assessment of the material on record including the reply of the petitioner will ensure fair and just exercise of the powers by the State Government.
26. In this reference, the five Judges Bench of this Court in Paras Jain (supra) in paragraph 28 has interpreted the expression "prima facie" and the same is quoted hereinbelow :-
"28. The State Government is also required by the proviso to be of the view that the President is prima facie guilty on any of the grounds contained in the sub-section which have resulted in the issuance of the notice to show cause. The formulation of a reason to believe that the allegations do not appear to be groundless and that the President is prima facie guilty on any of the grounds mentioned in the sub-section would postulate that before these statutory requirements are found to exist, a fair opportunity of being heard must be granted to the President of the municipality. A finding of prima facie guilt must, in our view, be consistent with a prior fulfillment of the norms of natural justice, consistent with the stage of enquiry. There is intrinsic evidence in the statutory provision which leads to the inference that the mere issuance of the notice to show-cause does not a fortiori result in the cessation of the financial and administrative powers, functions and duties but it is only when the conditions which are spelt out in the proviso exist, that such a consequence will follow. If a mere issuance of a notice to show-cause was intended to necessarily result in the consequence of the cessation of financial and administrative powers as envisaged in the proviso, the legislature would have made a provision to that effect. On the contrary, the legislature has carefully crafted a statutory provision, in the form of a proviso which ensures that it is only upon the State Government having a reason to believe that the allegations do not appear to be groundless and that the President is prima facie guilty on any of the grounds contained in the sub-section, that the cessation of the financial and administrative powers would follow from the date of the issuance of the notice to show-cause containing the charges."
27. The cessation of financial and administrative powers of an elected representative is a matter of great significance and has serious consequences. The aforesaid action erodes the authority of the elected head to effectively discharge the functions of the office. An action which has civil consequences is to be in consonance with the principles of natural justice. In the present case, the cessation of financial and administrative powers of the President of the Nagar Panchayat has civil consequences and as such the principles of natural justice are required to be followed in consonance with the law laid down by the five Judges Bench of this Court in Paras Jain (supra).
28. In the present case, prior to passing the order for cessation of financial and administrative powers, the State Government had called for the explanation of the petitioner and the petitioner has submitted his reply/explanation to the State Government in respect of the allegations. The reply of the petitioner was also before the State Government while passing the impugned order. A perusal of the impugned order would disclose that after mentioning the charges against the petitioner in the impugned order, the State Government has relied upon the report of the District Magistrate dated 7th June, 2021 and the report of the committee dated 7th June, 2021 and thereafter has passed the impugned order. The State Government while passing the impugned order has neither objectively considered the material before the State Government nor the reply of the petitioner has been considered. The State Government while passing the impunged order has not even discussed the material which existed in support of the allegations against the petitioner. It is further to be seen that the report dated 7th June, 2021 of the District Magistrate and the report of the committee dated 7th June, 2021 have been submitted after hearing of the petitioner was completed on 17th March, 2021. The State Government has not recorded its reasons for proceeding under Section 48 of the U.P. Municipalities Act, 1916 and also the reasons as to why the financial and administrative powers have been ceased. The impugned order is absolutely silent on the aspect of the application of mind by the authority concerned to the material available on record. The explanations/reply submitted by the petitioner has also not been discussed in the impugned order. It is noted that all the charges have been mentioned in the impugned order however there is no application of mind by the authority concerned on the material available in respect of prime facie guilt of the petitioner as well as the reason to believe that the charges against the petitioner are not groundless. The report of the District Magistrate and the committee dated 7th June, 2021 by itself cannot be ground to proceed under Section 48(2) of the Uttar Pradesh Municipalities Act, 1916. The authority concerned is obliged under law to independently consider all the material available before it including the report of the District Magistrate as well as the reply of the petitioner and to come to a conclusion on objective assessment of the facts and material before proceeding to issue show cause notice to the petitioner and cessation of financial and administrative powers of the President/petitioner.
29. The very purpose of calling for the reply of the petitioner prior to issuing the show cause notice was to inform the petitioner about the charges levelled against the petitioner as well as to bring on record the version of the petitioner to the charges levelled against the petitioner. Once the reply has been submitted by the petitioner, the authority concerned while passing the impugned order, ought to have considered the explanation of the petitioner to the charges levelled. The calling of the reply from the petitioner in respect of the charges levelled prior to issuing the show cause notice cannot be an empty formality, it has significance as the same strike at the arbitrary exercise of the power and bring fairness in the procedure and also the compliance of the principles of natural justice. In this reference, the Full Bench of this Court in Hafiz Ataullah Ansari Vs. State of U.P. and others, reported in 2011 (3) ADJ 502 (FB) and paragraphs 124 to 126 have considered the importance of principle of natural justice and consideration of the explanation and the same is quoted hereinbelow:-
"124. Considering the object and reason, there is no justification to involve the heads of the local bodies at every step of collection of material or in the preliminary enquiry. The principles of natural justice or the yardstick of fairness would be met if the explanation of the effected head of the local body or his point of view or version is considered before recording the satisfaction or finding of prima facie guilt before issuing notice and passing order for ceasing financial and administrative powers.
125. Affording opportunity to submit explanation of the head or considering it, is not to be as detailed as in the regular inquiry or to the extent of permitting cross-examination of any witness, who might be examined in the preliminary enquiry. It is in the sense of getting his point of view or version to the charges before being so satisfied. But what is the point in affording the opportunity if the explanation is not considered. It has to be considered too: there has to be application of mind.
126. In our opinion, getting explanation or point of view or version of a head of a local body regarding charges and considering them before issuing show-cause notice under relevant provisos, not only strikes at the arbitrary exercise of power but brings about fairness in the procedure; in the circumstances, it is also sufficient compliance of the principles of natural justice."
30. The petitioner in his reply has given explanation in respect of the charges levelled against him. However, we find the non-consideration of the reply in the impugned order by the respondent authorities. The specific reply submitted by the petitioner to the allegations made against him has neither been adverted to nor there is any application of mind on the part of the State Government while passing the impugned order.
31. From the material placed before this Court we find substance in the argument advanced on behalf of the petitioner that the decision to proceed under Section 48 (2) of the Uttar Pradesh Municipalities Act, 1916 is not preceded by proper application of mind to the material placed by the petitioner and the impugned order has blindly relied upon the report of the District Magistrate dated 7th June, 2021 and the Committee Report dated 7th June, 2021, which were not furnished to the petitioner and was further submitted after the conclusion of the hearing by the State Government on 17th March, 2021. The State Government while passing the impugned order has neither considered the reply/explanation submitted by the petitioner in respect of the allegations levelled against the petitioner nor the State Government while passing the impugned order has neither recorded any prime facie finding with regard to guilt of the petitioner nor any objective satisfaction has been recorded by the State Government that the allegations against the petitioner do not appear to be groundless. The impugned order has been passed in mechanical manner without application of mind to the material available on record including the reply/explanation of the petitioner. The State government is enjoined with the duty to act in Just, fair and reasonable manner and to record reasons for proceeding under section 48(2) of the Uttar Pradesh Municipalities Act, 1916 and the order passed by the authority concerned should not reflect arbitrariness. The order under the aforesaid provision should be on the basis of the application of mind and within the ambit of the constitutional framework and principles.
32. While application of mind to the material available to the competent authority is an essential pre-requisite for the making of a valid order, that requirement should not be confused with the sufficiency of such material to support any such order. Whether or not the material placed before the competent authority was sufficient to justify the decision taken by it, may not be of significance at this stage. That aspect may have assumed importance only if the competent authority has shown to have applied its mind to whatever material was available to it. Since application of mind as a thresh-hold requirement for a valid order is conspicuous by its absence the question whether the decision was reasonable having regard to the material before the authority is rendered academic. What is absolutely essential is that the authority making the order is alive to the material on the basis of which it purports to take a decision. The power which is being exercised by the authority is in trust only to be exercised for a legitimate purpose and along settled principles of administrative law and constitutional principles.
33. In this reference, the five Judges Bench of this Court in Paras Jain (supra) in paragraph 35 has interpreted the scope of section 48(2) and the same is quoted hereinbelow :-
"35. We accordingly proceed to answer the reference in the following terms:
(I) Re Question (a): The decision of the Full Bench in Hafiz Ataullah Ansari Vs State of U P (supra) lays down the correct position in law.
(II) Re Questions (b) & (c): The cessation of financial and administrative powers of the President does not necessarily follow merely upon the issuance of a notice to show cause under the substantive part of Section 48(2). The financial and administrative powers of the President shall stand ceased if the State Government has reason to believe that (i) the allegations do not appear to be groundless; and (ii) the President is prima facie guilty on any of the grounds of sub-section (2) resulting in the issuance of the notice to show-cause and proceedings thereunder. The President of the municipality will, in that event, cease to exercise, perform and discharge financial and administrative powers, functions and duties from the date of the issuance of the notice to show-cause containing the charges. For a cessation of financial and administrative powers to take effect, the requirements of the proviso to Section 48(2) must be fulfilled. Hence, proceedings for removal of a President of a municipality under Section 48(2) may take place in a given situation though the financial and administrative powers have not ceased under the terms of the proviso.
(III) Re Question (d): There is no requirement under the statute that a separate order has to be passed under the proviso to Section 48(2) when the financial and administrative powers of the President of a municipality cease. Such a consequence would come into being upon the requirements specified in the proviso to Section 48(2) being fulfilled.
(IV) Re Question (e): An opportunity of being heard, consistent with the principles of natural justice, before there is a cessation of the financial and administrative powers of the President does not stand excluded by the provisions of Section 48(2). As a matter of textual interpretation, the requirement of complying with the principles of natural justice is an integral element of the proviso to Section 48(2). The requirements of natural justice would warrant the grant of an opportunity to the elected head of a municipality to respond to the notice issued by the State indicating the basis for the formation of a reason to believe that the charges do not appear to be groundless and that the President is prima facie guilty on any of the grounds mentioned in sub-section (2) of Section 48. The period of notice can be suitably molded to deal with the exigencies of the situation."
34. In view of the above, it would be expedient in the interest of justice that the matter may be remitted back to the authority concerned for decision afresh in accordance with law and as such we are proceeding at this stage to decide the matter finally without calling for any affidavits in the matter.
35. The power to seize the administrative and financial powers of the President, Nagar Panchyat vest under the statute with the State Government. The State Government is enjoined with the duty to record a prime facie guilt and reason to believe on objective assessment of the material available on record including the reply of the petitioner and the order to be passed under Section 48 (2) of the Act should reflect the application of mind to the material available before the authority concerned. The conclusion that may be drawn by the authority concerned must also reflect due application of mind to the merits of the reply/defence submitted by the petitioner. It is to be clarified that a detailed finding at this stage may not be required however consideration of the material including reply of the petitioner is necessary prior to passing any order ceasing financial and administrative powers.
36. As a result, the impugned order dated 11th November, 2021 is set aside. The writ petition is allowed. Liberty is granted to the State Government to proceed afresh after examining the material on record and the reply submitted by the petitioner in respect of the allegations levelled against the petitioner and pass appropriate order afresh in accordance with law.
37. It is clarified that this court has not considered the merit of the allegations against the petitioner and the same may be considered by the authority concerned independently.
Order date :- 16.02.2022
VMA
(Vikram D. Chauhan, J.) (Anjani Kumar Mishra, J.)