Indian Kanoon - Search engine for Indian Law

Submissions of Sri S. Ravi, counsel for the writ petitioners :

2. Sri S. Ravi, learned counsel representing the writ petitioners would maintain that the first petitioner is a registered association who would be ventilating the common cause and the common grievances of the members of the Association and the second petitioner is an unregistered association whereas petitioners Nos. 3 and 4 are persons concerned with this wine business or trade. Learned counsel mainly concentrated his submissions on the aspect of the power, authority or jurisdiction of the first respondent in issuing the impugned proceeding calling upon different Excise and Prohibition Superintendents to submit the demand drafts aforesaid. Learned counsel while making elaborate submissions had drawn the attention of this court to the language employed in Section 131 of the Act and had compared the language of Section 131 of the Act with the language employed in Section 132 of the Act and had explained the scope and ambit of both the provisions and would contend that in the light of the stand taken by the Income-tax Department that these powers had been exercised by the first respondent under Section 131(1) and (1A) of the Act it can be safely concluded that this action would not be protected falling under the issuance of summons for the purpose of Section 131 of the Act. Counsel would submit that the investigative agency is definitely at liberty to take action following the procedure as specified by different provisions of the Act and not beyond it and at any rate omnibus summons or directives to all the Excise and Prohibition Superintendents of the State calling upon them for the production of the original demand drafts and the applications exercising powers under Section 131 of the Act is impermissible under law. Learned counsel also explained the different expressions and the words and the language employed in the provisions in this regard. Learned counsel also would comment that even otherwise the powers specified under Section 131(1) of the Act can be exercised only for the limited purpose as specified under the Act as such and not otherwise. It is no doubt true that each applicant has a right to get his demand draft back but on that ground distinct court fee need not be paid by each of such applicants, since a common cause or common grievance of the participants is being ventilated by the first petitioner. The mere fact that the first petitioner was unable to furnish the names as required by the Income-tax Department would not alter the situation in any way. At any rate, counsel would contend that in the light of Rule 4A of the Writ Rules, inasmuch as the writ petition is based on the common cause of action questioning the impugned proceeding, separate court fee need not be paid. Learned counsel also further contended that the decisions dealing with this aspect and on which strong reliance is being placed, had never considered Rule 4A of the Writ Rules and hence the said decisions may not be applicable in the light of the specific rule referred to supra. Learned counsel also while further elaborating his submissions would contend that the demand draft is virtually money and at any rate it would not fall under the expression "document" and even in this view of the matter Section 131 of the Act is not applicable at all. On the aspect of locus standi counsel would maintain that the traditional view of locus standi had undergone a change and on that technical plea the rights of the parties cannot be defeated. Counsel also in elaboration explained the meaning of "document" and the meaning of "negotiable instrument" and the procedure of the banking institutions and the procedure which would be adopted by the Excise Department and the powers of the Income-tax Department in relation to the procedure of unearthing and detecting the real persons and the procedure to be followed in this regard under the provisions of the Act. When the power is non-existent under Section 131 of the Act, the power which may be available under Section 132 of the Act cannot be invoked for justifying the action initiated since it is a non-existent power. Learned counsel also placed strong reliance on the definition of "money" and the definition of "document" in Random's Dictionary. Learned counsel also would maintain that a "demand draft" is just akin to a "bank note" except for some slight difference and counsel also made elaborate submissions on the aspect of the meaning of "cheque" and the meaning of "demand draft" in the context of the banking law. Ultimately, learned counsel would conclude that at any rate under the guise of protecting the public exchequer or under the guise that a larger public interest is involved, when an action initiated by an authority like the first respondent is totally without jurisdiction, such action may have to be held to be bad for lack of power and authority to exercise such power and hence the legal rights of the writ petitioners and the applicants cannot be defeated on such technical grounds of the plea of locus standi and the plea of non-furnishing of the details and other like reasons. Counsel also would maintain that when a prejudicial action is taken, the professional bodies representing the trade quite often would be espousing the cause and would be protecting the interests of the members of such society or association and hence the writ petition cannot be thrown out on the ground of locus standi. Learned counsel also placed reliance on certain decisions to substantiate his submissions in this regard.

Submissions of Sri S. R. Ashok, senior counsel appearing on behalf of the Income-tax Department :

3. Sri S.R. Ashok, learned senior counsel representing the Income-tax Department raised a preliminary objection relating to the locus standi of the writ petitioners to maintain the writ petition and the maintainability of the writ petition and also the objection relating to the payment of court fee. Learned counsel would maintain that in the light of the relief prayed for in the writ petition, the affected applicants are unknown and it is not known whether any members of the first petitioner-association had participated by making applications and by depositing the demand drafts and whether their legal rights are infringed at all. Learned counsel would maintain that though specific request had been made, counsel representing the writ petitioners had not furnished the particulars of the members of the first petitioner-association and in the light of the same, the association cannot espouse the cause of such persons, the unknown applicants. Learned counsel also would submit that at the best, the membership of the first petitioner-association may be 5000 or 6000 and when 1,43,000 applicants made applications and deposited the demand drafts, this writ petition in the light of the same, definitely is not maintainable. Inasmuch as the particulars had not been furnished, adverse inference may have to be drawn. Counsel would submit that it is not a common cause and separate court fee needs to be paid and counsel placed reliance on certain decisions to substantiate these contentions. Learned counsel also would further submit that the State Government cannot take any unreasonable stand in the light of Article 256 of the Constitution of India. Learned counsel would submit that this is a mode adopted by the investigative agency of the Income-tax Department to unearth the real persons since the applicants prima fake on the material which had been placed on record would be just name lenders or benami. In the light of the same, in the interest of protecting the public exchequer, the Department had taken up this exercise and had issued the impugned proceeding for the purpose of unearthing and detecting the real persons in relation to the enormous monetary dealings involved in the form of demand drafts in the names of just several name lenders. Learned counsel had demonstrated by producing ample material to substantiate his stand in this regard to justify the stand of the Income-tax Department in initiating such action. Learned counsel made elaborate submissions on the aspect of locus standi and would submit that this is not a common cause of action and the applicants, as aggrieved parties, having individual causes of action, may have to approach the court ventilating their individual grievances. Learned counsel also would maintain that this is not a public interest litigation and inasmuch as the writ petitioners approached the court with oblique motive for extraneous considerations to lend a helping hand to dishonest persons who are concealing their wealth, this court cannot definitely extend its helping hand. Counsel also made elaborate submissions relating to the scope and ambit of Sections 131 and 132 of the Act. Counsel would maintain that too numerous persons are involved and in order to protect the exchequer which is needed since large scale fraud is involved in the monetary transactions only for the limited purpose, these documents, demand drafts, were called upon and even by furnishing photostat copies of the demand drafts, the same cannot be worked out and learned counsel explained the difficulties involved in relation to the same. Learned counsel also had drawn the attention of this court to several definitions of "document" and would contend that at the best this may fall under the "escrow arrangement" and made elaborate submissions in this regard. Counsel made it very clear that this is not a case of seizure falling under Section 132 and the Department is interested in setting the investigative agency into motion while taking these documents and looking into these documents for the purpose of unearthing the real persons for the purpose of reaching at the real persons dealing with the monetary transactions. Counsel would maintain that if the crucial material is returned to the applicants, the investigation cannot be completed by the Income-tax Department. Learned counsel had made elaborate submissions on the aspect of "negotiable instrument", the procedure involved in the banking transactions and also would maintain that the writ petitioners are not clear whether they had approached this court by way of public interest litigation or adversary litigation or whether it is benami litigation or private litigation. When the writ petitioners are not clear on their stand, the cause on behalf of 1,43,000 applicants who are non-parties and who are not oppressed or depressed classes, the present relief cannot be granted. Learned counsel made elaborate submissions relating to the criminal investigation and how the State machinery would be acting in this regard and the tax investigation and the role of the State Government and the role of the Central Government to be played while enforcing the relevant statutory provisions in this field. Counsel ultimately would conclude that the protection of the public exchequer is of paramount importance and the non-production of the demand drafts as directed by the first respondent at this stage would definitely jeopardize the interest of the public exchequer and hence the larger public interest may have to be taken into consideration and especially in the light of the fact that the writ petitioners had not approached this court with clean hands by concealing the facts and by suppressing the facts and not furnishing all the particulars in the case, the relief prayed for definitely cannot be granted. Several decisions had been relied upon to substantiate his contentions.

21. In the counter affidavit filed by the first respondent, several of the aspects had been specifically denied. No doubt a supplementary affidavit was filed by the first respondent taking a specific stand that in spite of specific request made, the first petitioner had not furnished the relevant information of the first petitioner-Association and had not disclosed the persons on whose behalf the cause is being espoused. The maintainability of the writ petition had been specifically raised denying almost all the allegations in this regard and it was stated that the first petitioner-Association cannot be construed to be a representative body of the applicants who participated in the tender process initiated by the Government in the month of February, 2005, and it is not the case of the first petitioner that 1,43,000 applicants who participated in the special tendering process are members of the first petitioner-Association and in the absence of particulars adverse inference may have to be drawn and hence there is no cause of action to file the writ petition. It was also specifically averred in para. 3 of the counter affidavit that in pursuance of the tendering process initiated by the Government of Andhra Pradesh in February, 2005, it is believed to be true that 1,43,000 applications were submitted by varied persons seeking to participate in the excise auctions proposed to be held by the Government. On initial enquiry in one district information had surfaced that huge amounts were deposited in cash in various banks in the State for the purpose of obtaining demand drafts in the context of the tendering process. The investigation in that district by the Income-tax Department disclosed that prima facie substantial part of the amount so deposited by way of demand drafts represented concealed income or unaccounted income of the applicants or the persons who provided the funds as most of such persons were not on the rolls of income-tax. The very fact that a substantial part of the amount had been deposited in person in cash into the banks over-night is enough ground for further verification and investigation. It was further averred that in a small town from one bank, demand drafts were purchased for more than Rs. 10 crores in four days out of which Rs. 8.04 crores represents cash deposits made in the bank without there being a regular account. Subsequent enquiries in some of the other districts showed that there are many such instances. Since the aggregate amount received by the Government by way of demand drafts is of the order of Rs. 1,900 crores, it was opined by the Directorate of this Department that further investigation into the whole aspect is necessary more so in view of the prima facie information received that substantial part of the amount so utilized for demand drafts represented cash deposits made across the counter in the banks. Demand drafts were also obtained in a sum of Rs. 40,000 and to Rs. 49,000 in most of the cases in order to circumvent the instructions issued by the Reserve Bank of India that demand draft for Rs. 50,000 and above cannot be purchased by a cash deposit. In some cases, even that norm was broken by the bankers in issuing demand drafts for more than Rs. 50,000 against cash deposits. In view of the aforesaid facts and circumstances the Directorate of Income-tax Department called upon the Joint Commissioner and Commissioner of Prohibition & Excise to furnish photostat copies of the applications and/or in the alternative permit the Income-tax Department to peruse the material by letter dated March 11, 2005. The second respondent replied on March 15, 2005, that the issue was sub judice before this court and that the Income-tax Department's request was being referred to the learned Advocate General for opinion. Thereafter nothing was heard from the Excise Department. In spite of the fact that the first respondent renewed his request by personally approaching the authorities in the Excise Department no information was furnished. In these circumstances the Income-tax Department was left with no option except to invoke the jurisdiction vested in it under Section 131(1) read with Section 131(1A) of the Act calling upon the Prohibition & Excise Superintendents of the respective districts, respondents Nos. 3 to 24, to produce the relevant applications and demand drafts for investigation. The imminent reason for issue of such summons was that it would have been wholly impossible for the Income-tax Department to cull out or nab the information if the Excise Department were to return the demand drafts to the applicants concerned soon after completion of the tendering process. Such return of the demand drafts by the Excise Department would have rendered the entire investigation process initiated by the Income-tax Department a futility. It was further stated at para. 5 of the counter affidavit of the first respondent that in deference to the orders of this court pending disposal of the writ petition, the State of Andhra Pradesh furnished a copy of the register of applications in respect of 12 districts and compact disk (CD) containing such information in respect of 11 other districts. It was realized in most of the cases that details of bank and branch from where the demand drafts were obtained was not incorporated in the said computer data. In a few cases the demand draft number was not even noted and in a few cases the details of the bank and the branch were not correctly noted. Therefore, mere furnishing of the register would not be adequate to conduct proper verification. It was also averred that the sequence in which the demand drafts were obtained from each bank is also a relevant factor in the matter of conduct of investigation and this acquires added significance more so in cases where huge cash was deposited in one account and demand drafts were purchased for the benefit of a few hundreds of applicants. As an instance, it was averred that Rs. 52.99 lakhs was deposited in a bank account within two days, i.e., on February 17, 2005 and February 18, 2005, for purchasing demand drafts for the benefit of about 40 applicants and there are many such instances. It was pleaded that it is in this context the pattern of purchasing the demand drafts is also required to be noticed and investigated. In a few cases the demand draft application had been signed by one person while the demand draft had been used for the benefit of another application. In the context of verifying the sources and resources for these demand drafts it is absolutely essential to look at the original demand drafts because there had been a designed process adopted by the applicants or the benamis. It was also further stated that it was understood by the Income-tax Department that quite a good number of applicants are non-existing and their names had been used by vested interests. There is every possibility for existence of quite a good number of benami cases and fictitious persons and it was averred that if the demand drafts are allowed to be returned it would be impossible for the Income-tax Department to unearth the real persons and keeping these aspects in mind the Income-tax Department had invoked the jurisdiction under Section 131 read with Section 131(1A) of the Act for summoning all the applications and the relevant demand drafts for further investigation. It was further averred in para. 8 of the counter affidavit that under Section 131 of the Act, the jurisdiction can be invoked for production of document if the authority "has reason to suspect" that any income had been concealed or is likely to be concealed by any person or class of persons and the reports received from the field officers establish the ingredients required for forming the opinion that there has been concealment or likely concealment of income and hence the jurisdiction under Section 131(1) read with Section 131(1A) of the Act had been invoked. It was also further pleaded in para. 9 that the demand draft is a "document" and it was also stated that merely because demand draft also happens to be a negotiable instrument within the meaning of the Negotiable Instruments Act it cannot lose its basic characteristic feature of being a document. For the purpose of invoking Section 131(1) of the Act it is sufficient if it is a document and merely because it is a valuable document or invaluable document it does not cease to be a document. Therefore, the jurisdiction of the income-tax authority cannot be divested to summon such a document on the ground that it is valuable or invaluable document. Since the inherent features of a document are required to be noticed for the purpose of investigation, the Department was well within its power or jurisdiction to summon the demand drafts under Section 131 read with Section 131(1A) of the Act and impound them if need be for effective investigation of the case. It is specifically averred that in order to establish the designed process of purchase of demand drafts seriatim by cash deposit in violation of the R.B.I. norms also it is necessary to examine the original demand drafts and even on this count the summoning of demand drafts was justified. The definition of "document" also had been averred in elaboration. It was further pleaded in para. 11 that Section 131(1A) of the Income-tax Act has to be understood on the language employed in the said Section. The scope and ambit of the said provision cannot be based on contrastive language employed in Section 132 of the Act. Sections 131(1) and 131(1A) of the Act have been brought on the statute book for a totally different purpose while Section 132 is in a totally different direction. Therefore the comparative and contrastive analysis sought to be made by the petitioners for the purposes of interpreting Section 131(1) of the Act is not correct in law. It is not the case of the Department that the demand draft is being seized much less the funds covered by the demand drafts are being appropriated under the impugned communication. It is only for the limited purpose of investigation and for gathering of evidence for effective investigation the demand drafts had been summoned. It is akin to treating of currency involved in a crime and there is absolutely no infirmity whatsoever in summoning of such demand drafts for conduct of effective investigation of an important issue like tax evasion of a huge order. In any event, having regard to the scheme and background of the tendering process evolved by the Excise Department of the State of Andhra Pradesh, the demand drafts cannot be said to be intended to be used as a negotiable instrument and it is not as if the Prohibition & Excise Superintendent has got unfettered freedom to encash the demand drafts drawn in his favour at any and every stage. Under the scheme of tendering, all the applicants have to furnish demand drafts for an amount equivalent to 1/3rd of the probable licence fees. After drawal of lots, the successful applicant is called upon to obtain licence by depositing the balance 2/3rd and in the eventuality of such applicant not coming forward to take the licence, the deposit amount is forfeited and draw would be conducted amongst the remaining tenderers. The demand drafts belonging to remaining unsuccessful tenderers are eventually liable to be returned by the authorities and therefore the Excise Superintendent has neither power or authority to encash the demand draft in respect of unsuccessful applicants nor could they transfer it in favour of a third party. The only option available for the Excise Superintendents is to return the applications and the demand drafts to unsuccessful bidders. It is only on the happening of the contemplated event of success favouring a particular applicant, the demand draft could be encashed by the Excise Superintendent. Therefore, in this sense it is akin to escrow. It is settled law that escrow is a document and viewed from this angle the respondent is within his jurisdiction to summon the applications as well as the demand drafts under Section 131 read with Section 131(1A) of the Act. It was also further pleaded in para. 13 that the enquiry into the whole gamut could be finished by the Department within a reasonable time from the date of handing over of applications and the demand drafts to the Income-tax Department. Even assuming without conceding that the said marginal delay might cause inconvenience or prejudice in a stray case, it cannot be made the basis to return the demand drafts en masse. It is settled law that between a larger public good and private stray inconvenience it is the former that should be the determining factor. Further in para. 14 it was averred that the petitioners' grievance in the present writ petition appears to be based on an unwarranted assumption that the Department is resorting to seizure of demand drafts which is not correct. For the present, the Department is not desirous nor is it contemplating to seize the demand drafts in pursuance of the impugned communications. It is only on completion of the investigation, the Department could take further action under other provisions of the Act that too in cases where no satisfactory explanation is forthcoming from the applicant concerned as to the sources or resources from which the funds had been procured for purchasing of the demand drafts in question. It is depending on the exigencies and warrant further proceedings would be initiated in identified cases under Section 132 of the Act or any other provisions of the Act. For the present, the Department would rest content collecting the information and other documents for appropriate investigation as to the sources of the unaccounted funds and unearthing the real persons behind untrue, benami or fictitious applicants. It was further pleaded in para. 15 of the counter affidavit that though averments had been made that funds were borrowed by a few applicants for buying demand drafts the petitioners have not given details of those small merchants much less the cases in which borrowed funds were utilized at higher rate of interest. At any rate the same has no relevance in the context of adjudication of the jurisdictional aspect on the relief required to be granted. However, it is surprising that the petitioner, without specifying the details as to the members of the Association, is espousing the cause of third persons without indicating its authority to represent their case and thus the petitioners appear to be interlopers representing the cause of a class of people without any ostensible connection whatsoever. Further, the assertion of the petitioners that demand drafts could not give any information as to the source of funds of a particular applicant or by what process it was purchased is not correct but it is only on the circumstantial evidence the Department would be able to prove as to the real person figuring in each transaction as a group of transactions. The very fact that some of the applicants had been grouped as part of formation of a syndicate are also to be proved from the mode and method adopted by the applicants in the matter of purchase of demand drafts. It is in this context the seriatim of purchase of demand drafts, the bank in which they were purchased and the dates on which they were purchased would throw any amount of circumstantial evidence and this information is not forthcoming from the registers maintained by the Excise Department and therefore the original demand drafts are required for the Department for conducting the investigation. It was also averred that the inherent features of the demand drafts are required to be preserved at least for initial conduct of investigation. It was also further pleaded in para. 17 that as per the information gathered by the Department, benami nature of the transactions are large in number. The ways and means adopted by some of the dealers for concealing the real identity of the applicant also deserves consideration. The Department has reason to believe that some of the applicants have designedly concealed the real persons and the applications had been made in benami names. In some of the cases, it is photo identity sought to be produced on the application need not be real but these aspects can be resolved either way only after investigation of all the aspects concerning the applications. For this reason, the demand drafts of the applicants have to be preserved, at least till the Department is able to form prima facie opinion of the factum of concealment. For the purpose of Section 131(1) of the Act it is sufficient if the authority has suspicion about the possible concealment. The gamut of reports from the field officers is sufficient for the first respondent to lay foundation for suspecting that everything is not well with the purchase of demand drafts submitted in the present tendering process. It was further pleaded in para. 18 that the assertion in paragraph 14 that some of the applicants could have been outside the jurisdiction of this respondent authority is not true and correct. The Directorate of Income-tax has got State wide authority and its jurisdiction extends to the entire State. The Deputy Director draws his power and authority only through the Director. It is only after taking the assent of the Director of Income-tax (Investigation) that the first respondent had issued summons under Section 131 read with Section 131(1A) of the Act. At any rate, at the stage of calling for documents in terms of Section 131 of the Act for the purposes of conducting investigation, it is not necessary that the possible assessee should be within the jurisdiction of the first respondent. It was pleaded in para. 19 that the petitioners have not made out a case for invoking the jurisdiction of this court and the real person who is possibly affected by the impugned action is not before this court. None of the applicants who submitted their applications or demand drafts came forward before this court seeking any relief. It is not the case of the writ petitioners that any of the 1,43,000 applicants are members of the first petitioner-Association. In so far as petitioners Nos. 2, 3 and 4 are concerned, they have absolutely no locus standi to file the present writ petition. It is not the case of the petitioners that 1,43,000 applicants belong to such class of persons in the Association who were unable to espouse their cause. As the applicants have got wherewithal to pursue their legal rights, if any, it is not open to the petitioners to espouse the case of 1,43,000 applicants who participated in the tendering process especially when the petitioners have absolutely no concern with the said applicants. It was pleaded at para. 20 of the counter affidavit that even assuming without conceding that the first petitioner is entitled to represent the cause of 1,43,000 applicants and is espousing their cause, such espousal must be deemed as enforcement of the individual cause of such applicant in which case court fees must be paid on behalf of the applicant and a single set of court fees paid by the writ petitioners-Association is not correct, without prejudice to the contention that writ petitioners Nos. 1 and 2 as associations cannot maintain the writ petition especially when there is no ostensible connection between the petitioners and the 1,43,000 applicants participating in the tendering process much less is there any jural relationship between them. In any event the equity jurisdiction of this court under Article 226 of the Constitution of India cannot be extended to protect the tax evaders and there is substantial material prima facie to show that there had been any amount of concealment of income and the resources had emanated from unaccounted sources and it is not only proper but also legitimate to allow the Income-tax Department to discharge its functions without being stifled by the busybodies like the writ petitioners. The equity jurisdiction of this court shall not be extended in favour of the petitioners as they approached this court with oblique motive of stifling the entire enquiry or investigation initiated by the Income-tax Department.

39. In fact, the learned judge followed the view expressed in Dwijendra Lal Brahmachari v. New Central Jute Mills Co. Ltd. .

40. In the light of the clear language of Sections 131(1) and 131(1A) of the Act, the question whether a demand draft would fall under the definition of "document" may not be such an essential question to be considered. The relevant definitions in this regard and also the contention that it is just an "escrow arrangement" and also the contention that it only represents money, already had been referred to supra. The question whether a demand draft is a "document" within the meaning of Sections 131(1) and 131(1A) of the Act or not would assume importance if these provisions can be otherwise attracted to save the power of the first respondent to issue the impugned proceeding. On a careful scrutiny of the language employed in both the provisions referred to supra and the limited purpose for which the said provisions can be invoked as clearly envisaged and specified in the said provisions, this court is of the considered opinion that only for the purposes specified therein, this power can be exercised by the first respondent and not otherwise. It is no doubt true that the Income-tax Department in the interest of protecting the public exchequer and unearthing the benami monetary transactions and to catch hold of the real persons behind the transactions had commenced this move, but it is unfortunate that it has no legal sanction. When power had been exercised by an authority not conferred by law, such action cannot be upheld on the ground that if otherwise held, it would be detrimental to the public exchequer. Courts of law cannot deviate from the specific statutory provisions unless they are otherwise declared to be either invalid or unconstitutional as such. When the first respondent intends to take shelter under the umbrella of Sub-section (1) and Sub-section (1A) of Section 131 of the Act, it is the bounden duty of the said authority to justify the issuance of the impugned proceeding and to satisfy the court that in law it is permissible for him to do so. In the absence of such justification, on such a ground, the writ court cannot come to the aid of the Income-tax Department in upholding the impugned proceeding under the guise of protecting the public exchequer. Counsel representing the writ petitioners in fact made it clear that the investigative machinery of the Income-tax Department can be well utilized for the purpose of unearthing the real persons behind the monetary transactions by resorting to the procedure as specified by different provisions of the Act but definitely not by issuing the impugned proceeding under the provisions which would not authorize the Department to do so. Be it small or big, true or ostensible, real or benami fish in the applicants pool, the resultant of the excise policy of the State Government, though the object aimed at by the Income-tax Department is appreciable, the mode adopted by the issuance of the impugned proceeding is impermissible in law. Hence, this court is left with no other option except to hold that the impugned proceeding issued by the first respondent is without authority or jurisdiction inasmuch as the first respondent lacks such authority under the provisions specified supra and hence the impugned proceeding definitely cannot be sustained.