Punjab-Haryana High Court
Edward Ganj Public Welfare Association vs State Of Punjab And Ors. on 4 July, 2000
Author: Nirmal Singh
Bench: Nirmal Singh
JUDGMENT G.S. Singhvi, J.
1. The question that arises for determination in this petition is whether respondent No. 2--Shri Kripa Shankar Saroj, the then Deputy Commissioner, Muktsar, could order an enquiry into the working/affairs of petitioner No. 1--Edward Ganj Public Welfare Association, which is a public limited company.
2. A perusal of the record shows that petitioner No. 1 was registered as a company in 1920-21 for development of the colony/city near the then town of Malout Mandi (now District Amritsar). Petitioner No. 2 is its elected President. For achieving the objects set out in its memorandum of association, petitioner No. 1 acquired land and developed it into a township having hostels/ guest houses, schools, colleges, residential buildings, etc. Later on, some of the buildings were given to the administration for being used as residence of the officers of different categories. After extension of municipal limits of Malout Mandi, the roads, drainage and electric supply were transferred from petitioner No. 1 to the Municipal Committee. In respect of the houses and properties constructed by petitioner No. 1, which are situated within the municipal limits of Malout Mandi, it has been paying house and property taxes.
3. The grievance of the petitioners is that even though respondent No. 2 has nothing to do with its activities and he does not have any power under the Companies Act, 1956, to intermeddle in its affairs, he has ordered an enquiry into the so-called irregularities in its functioning. They have averred that after taking over as Deputy Commissioner of Muktsar, respondent No. 2--Shri Kripa Shankar Saroj started pressurising functionaries of petitioner No. 1 and petitioner No. 2 to grant leases for the parks, etc., to different persons and when they refused to follow his dictates, the said respondent passed the impugned order for an enquiry into the allegations of irregularities in the functioning of petitioner No. 1.
4. In the written statement filed by respondent No. 2 on behalf of respondents Nos. 1 and 2, it has been averred that the petitioners have not been doing their duties in public interest and grave financial irregularities have been committed by them. He has further averred that petitioner No. 1 has not discharged its responsibility for providing basic amenities to the residents of the area falling within its jurisdiction and, therefore, an enquiry was ordered into its affairs. Later on, respondent No. 2 filed an additional affidavit to justify his order on the premise that the proposed enquiry is in the larger public interest.
5. In their replication, the petitioners have not only reiterated their plea that the order passed by respondent No. 2 is vitiated by lack of jurisdiction but have also denied the allegation of irregularities levelled by respondents Nos. 1 and 2.
6. We have heard learned counsel for the parties.
7. The main issue which merits consideration by the court is whether respondent No. 2 had the jurisdiction to order an enquiry into the affairs/ working of petitioner No. 1. The petitioners, as already mentioned above, have challenged the order passed by respondent No. 2 on the premise that the memorandum of association/articles of association of petitioner No. 1 does not empower the Deputy Commissioner to get an enquiry conducted into its working. According to them, the order passed by respondent No. 2 has no legal sanctity. The learned Deputy Advocate-General candidly conceded that respondent No. 2 did not have the authority to order an enquiry into the alleged irregularities committed by petitioner No. 1 but he tried to justify the action of respondent No. 2 by arguing that he could pass such an order in his capacity as head of the District Administration.
8. We have given serious thought to the submission of the learned Deputy Advocate-General but have not, at all, felt impressed. In our opinion, the impugned order is liable to be declared as void because respondent No. 2 did not have the power to order a probe into the working of petitioner No. 1. The memorandum and articles of association of petitioner No. 1 do not envisage interference of a third agency like respondent No. 2 into its affairs and being a company registered under the Indian Companies Act, 1913 (which was subsequently replaced by the Companies Act, 1956), any enquiry or probe into its affairs can be made only in accordance with the provisions of that Act and not otherwise. The argument of Shri Khosla that respondent No. 2 could, in his capacity as head of the District Administration, order a probe into the affairs of petitioner No. 1 appears to be founded on a misconceived assumption that being Deputy Commissioner of the District, respondent No. 2 was omni-powerful and he could pass any order as per his whims and caprice. An argument of this type may have found its acceptability in the by-gone days when the country was ruled by kings and monarchs but cannot be accepted in a system governed by rule of law. The principle that rex is lex has no place in our constitutional set up and no one, howsoever high he may be, can claim to be above the rule of law and no public servant entrusted with certain powers and duties under the law of the land can exercise such power transgressing the limits of statutory authority.
9. In view of the above, we have no hesitation to hold that the order passed by respondent No. 2 for conducting an enquiry into the functioning and affairs of petitioner No. 1 is void ab initio and it is liable to be invalidated.
10. In the result, the writ petition is allowed. The petitioners shall get costs of Rs. 5,000 from respondent No. 2.
11. We, further direct that within one month of the submission of certified copy of this order, the Deputy Chief Executive Officer, Zila Parishad, Muktsar shall return the documents to the authorised representative of petitioner No. 1.