Indian Kanoon - Search engine for Indian Law

(Ramana Dayaram Shetty Vs. The International Airport Authority of India & others - A.I.R. 1979 SC 1628). The principle of rule of law provides a safeguard against the arbitrary exercise of power and requires every public functionary and public authority to act fairly, reasonably and prudently in the public interest and for the public good. In the case of Natural Resources Allocation, In Re, Special Reference No.1 of 2012, (2012) 10 SCC 1, the Hon'ble Apex Court has elucidated the scope of Article 14 of the Constitution of India in its applicability to the public authorities engaged in contractual obligations. The Hon'ble Apex Court has held that while exercising the executive powers in the matters of trade or business, public authorities must be mindful of public interest, public purpose and public good. The observations of the Hon'ble Apex Court, as they appear in paragraphs 183 and 184, are reproduced thus :

That is the reason why sub-section (ii) to Section 49A makes exercise of powers in contractual matters dependent upon the directions as may be issued and terms and conditions as may be determined by the State Government from time to time. However, having regard to the fact that local conditions may vary, the proviso to sub-section (ii) of Section 49A gives some liberty to a Municipal Council to prescribe its own terms and conditions not consistent with the terms and conditions laid down by the State Government so as to enable it to satisfy the local needs. But ultimately what matters is regulation of contractual powers of a Council by Government directions or by prescription of certain terms and conditions, whether by the State Government or by the Municipal Council and that is the essence of Section 49A of the Act, 1965. This would only emphasize what is already said and which is to the effect that discharge of duties or performance of functions or implementation of various schemes by the Municipal Council through some agency is something which is not unrestricted, uncanalised and unregulated. This is also consistent with what has been held by the Hon'ble Apex Court in the case of Noida Enterpreneurs Association, supra, wherein the Hon'ble Apex Court has held that the State or public authority holding property for the public or which has been assigned the duty of grant of largesse acts as a trustee and that public trust doctrine is a part of the law of the land and this doctrine has grown from Article 21 of the Constitution of India and ultimately makes accountable the State and all the public functionaries to the people in whom the sovereignty vests. This doctrine makes all the public functionaries to act reasonably and fairly promoting all the while public interest, public purpose and public good. The relevant observations of the Hon'ble Apex Court in this regard are already reproduced in the previous paragraphs.

In this case they required that the safeguard as provided under Standing Order No. 36 was duly respected and followed by the petitioners in discharge of their official duties. This is also a part of public trust doctrine.

If the public functionaries do not adhere to these laid down norms, then who else will? If their such disregard for established norms is viewed leniently or as mere irregularity on the ground that there is no allegation of corruption or no evidence of causing of any loss or in the past it was ignored, it would open flood-gates for further violations by many giving same justification. As a matter of fact, the aspect of obtaining of wrongful gain or causing of wrongful loss is something which could not have been effectively enquired into in an inquiry conducted under Section 311 of the Act, 1965. The reason being that for unearthing evidence in that regard an Inquiry Officer would require much wider powers of inquiry, akin to an Investigating Officer making investigation under the provisions of Code of Criminal Procedure, such as power to visit premises and take search and so on and so forth, which powers are not to be seen under Section 311. Be that as it may, fact remains that public functionaries like the petitioners must discharge their duties in accordance with the established procedures and norms, which is a requirement of doctrine of public trust and principle of rule of law. If they do not do so, their such conduct would turn into a misconduct, it being reflective of violation of the instructions and guidelines issued in accordance with or under the authority of law. When such violation occurs in allotting contracts where spending of public funds is involved, it becomes all the more serious and cannot be treated as a mere irregularity. The question involved here is not of motive or causing of loss, but essentially of the example that it presents to all the subordinate authorities and the public at large whose interest and welfare are expected to be promoted by the public functionaries. If such conduct is not taken as a misconduct and only a financial irregularity on the ground that there has been no wrongful loss or there has been meager loss of just about Rs.38,000/-, as submitted by the learned senior counsel for the petitioners, any officer of the Municipal Council or a public functionary of the Council would be free to do an act the way he thinks fit, may be on his own fancies and yet get away from it saying that no loss has been actually caused or difference in amounts paid and amounts ought to have been paid is marginal. There will not be any respect for rule of law, there will not be any certainty about the decisions taken and there will not be any credibility left in the decisions taken and the public works executed on the basis of such decisions. This would be the birth of arbitrariness, a sworn enemy of principle of rule of law. Therefore, in my view, the violation of the afore-

stated clauses of Standing Order No. 36 by the petitioners is a misconduct which is serious in nature and which is not the commission of mere financial irregularity or error in judgment.

48. Learned senior counsel for the petitioners relying upon the cases of Sharda Kailash Mittal vs. State of Madhya Pradesh & ors. -

(2010) 2 SCC 319 and Baburao Vishwanath Mathpati v. State of Maharashtra & ors. - 1996(1) Mh.L.J. 366, has submitted that a holder of a democratically elected office-bearer can be removed only when there are grave and exceptional circumstances and not when there are only minor irregularities, that the misconduct must be grave or willful or intentional and should not be a wrong behaviour or unlawful behaviour not amounting to mere negligence or error of judgment. He also submits that standard of proof of misconduct is much stricter. There can be no dispute about these principles of law. But, I have already found that the violations committed by the petitioners in this case cannot be dismissed as mere irregularities. I have also found that if public functionaries start justifying violations of established norms and procedures in contractual matters involving distribution or allotment of public money on the ground that no financial loss or a little loss has been caused and that no gain has been proved to have occurred to the petitioners, there would be breach of doctrine of public trust as well as creation of a chaotic and free for all situation allowing the public functionaries or elected representatives to conduct themselves in a capricious manner. The argument that for an act to be adjudged a misconduct stricter proof is required also holds no water as the violations found to have been committed here themselves speak for their seriousness fitting into the latin principle, "res ipsa loquitur".