Devi Parasuraman v. The Manager Central Bank of India Marakkanam Branch Villupuram District

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 19.08.2009CORAMTHE HONOURABLE MR. JUSTICE S.J.MUKHOPADHAYATHE HONOURABLE MR. JUSTICE P.JYOTHIMANIANDTHE HONOURABLE MR. JUSTICE V.DHANAPALANW.A. NOS.1257 & 1258 OF 2008ANDM.P. NOS. 1 & 2 OF 2008W.A. No. 1257 of 2008 :1. The District Collector and Inspector of District Panchayat Villupuram District.2. The District Development Officer Marakkanam Taluk Villupuram District.. Appellants- Vs -1. Devi Parasuraman2. The Manager Central Bank of India Marakkanam Branch Villupuram District. .. RespondentsW.A. No. 1258 of 2008 :1. The District Collector and Inspector of District Panchayat Villupuram District.2. The Assistant Director Rural Development and Land Administration Villupuram District.3. The Tahsildar Tindivanam Taluk Villupuram District.. Appellants- Vs -1. Devi Parasuraman https://hcservices.ecourts.gov.in/hcservices/

2. The Block Development Officer Marakkanam Taluk Villupuram District. .. RespondentsWrit Appeals filed against the order dated 25th Sept., 2008,passed by learned single Judge in W.P. Nos. 9438 and 17091 of 2008.WP.No.9438/08:- This Writ Petition Presented under Article 226 ofthe Constitution of India to issue a Writ of Certiorari to callfor the records of the 1st Respondent dated 1.4.2008 in ref.No.Na.Ka.A6 6769/2007/1303 freezing the accounts bearing Nos.5672,5673, 5674 and 7958 standing with the 3rd respondent bank and quashthe same.W.P.No.17091 of 2008To issue a writ of certiorarified mandamus calling for therespondents especially the order of the 1st Respondent dt.10.6.2008 vide ref. Na.Ka.A6/6769/2007/Asst. Director, LocalAdministration published in Government Gazette dt. 2.7.2008, partIV section 2 and quash the same and directing the respondents tothe enable the petitioner to continue as president of Kanthaduvillage.For Appellants: Mr.P.Wilson, Addl. Advocate General assisted by Mr.D.Sreenivasan, AGPFor Respondents: Mr. V.Ramesh & T.ThiagarajanCOMMON JUDGMENTS.J.MUKHOPADHAYA, J.In exercise of power conferred by sub-section (11) of Section205 of the Tamil Nadu Panchayats Act, 1994 (hereinafter referred toas the 'Panchayats Act'), the District Collector – cum – Inspector,District Panchayat, Villupuram District, ordered freezing ofaccounts of the Panchayat standing with the Bank and removed thePresident of the Panchayat. Learned single Judge set aside thesaid order as the District Collector-cum-Inspector has not shownany reasons whatsoever for passing the order removing therespondent-petitioner from the post of President.2. Section 149-A (2) of the then Tamil Nadu Panchayats Act,1958 (XXXV of 1958) was parimateria similar to Section 205 of thePanchayats Act, 1994. Section 149-A of the Tamil Nadu PanchayatsAct, 1958 fell for consideration before a Division Bench inN.P.Guruswamy – Vs – The Collector & Inspector of Panchayat, 1997(2) MLJ 326, wherein this Court held that exercise of discretionunder Section 149-A (2) is neither judicial nor quasi-judicial and,therefore, the Collector-cum-Inspector is not bound to give reasonsfor his accepting the views of the Panchayat. https://hcservices.ecourts.gov.in/hcservices/ The judgment in N.P.Guruswamy's case (supra) having doubted,the case has been referred to this Larger Bench.3. We have heard the parties and perused the record. 4. U/s 149-A of the Panchayats Act, 1958 (Old Act), theCollector-cum-Inspector of Panchayat was empowered to remove thePanchayat President following the prescribed procedure. InN.P.Guruswamy's case, on behalf of the appellant it was argued thatremoval u/s 149-A was quasi-judicial in nature and in absence ofreasons whatsoever given by the Inspector, the order was not valid.Rejecting such contention, learned Judge, while observed that powerexercised by the Collector was not quasi-judicial, also held thatit was not necessary to give reasons in accepting the report forremoval of the President. Section 149-A (1) provides that onrepresentation in writing signed by not less than two-thirds of thesanctioned strength of the Panchayat containing the statement ofcharges against the President and presented in person to theInspector by any two of the members of the Panchayat, only when theInspector is satisfied that the President wilfully omits or refuseto carry out or disobeys any provisions of the Act, he shall, bynotice in writing, require the President to offer his explanationand only, thereafter, if not satisfied, forward the copy of thenotice and explanation to the Tahsildar for convening a meeting forconsidering the proposal for removal of President and on conveningsuch meeting, if majority of the Panchayat expresses its view thatthe President should be removed from office, only then thePresident is removed. In the said case, the Court observed asfollows :-“4. The main contention of the learned counselfor the appellant is that the function of theInspector acting under Section 149-A (1) is quasi-judicial in nature and, therefore, the Inspectorwas bound to give reasons. We are unable to acceptthis contention for the rights and privileges ofthe President flow from the statutory provisionsand he cannot claim any right which is not securedto him under the enactment. In the administrationof the Panchayat certain procedure is envisaged.If two-thirds of the members of the Panchayat arenot satisfied with the President, and if theypresent a representation in writing as providedunder section 149-A (1) (b), the Inspector shallact under sub-section (2), i.e., if he considers itnecessary, he has to consider the explanation ofthe President and, if he finds that the explanationis not satisfactory, he shall direct the Tahsildarto convene a meeting. After considering the viewsof the Panchayat the Inspector shall in hisdiscretion, either remove the President from officeby notification or drop further action. Thisexercise of the discretion cannot be said to be https://hcservices.ecourts.gov.in/hcservices/ judicial or quasi-judicial. We see nojustification for the President insisting that theCollector should give reasons for his accepting theviews of the Panchayat. We agree with the learnedJudge and dismiss the writ appeal.”5. The scope and applicability of Section 149-A subsequentlyfell for consideration before a Division Bench of this Court inSubramanian – Vs – Vellaikannu, 1978 (1) MLJ) 550. In the saidcase, this Court noticed that in the case of N.P.Guruswamy -Vs –The Collector & Inspector of Panchayats (supra), the Inspectoragreed with the views of the Panchayats and accepting such report,ordered to remove the President and, therefore, the Court observedthat no reason was required to be recorded. On the other hand, thecase of Subramanian was different. In the case, the Inspectordiffered with the majority decision of the Panchayat and come to aconclusion that except one , rest all the charges framed againstthe President is proved. In this background, the Division Benchheld that it was necessary for the Inspector to give reasons forcoming to a conclusion that the charge has been proved and observedas follows :-“20. In the light of the decisions relied upon bythe learned counsel for the petitioner and referredto above, we are of the opinion that what is doneby the Inspector under Section 149-A (11) of theAct to the prejudice of the President withoutaccepting the view of the Panchayat expressed infavour of the President, is a quasi-judicial act,for which reasons have necessarily to be given andthat even if it is administrative in character,reasons must have been given by the Inspector forcoming to the conclusion that the petitioner wasguilty of 9 out of the 10 charges as had been heldby the first respondent so that the petitioner maybe aware for what reasons or on what grounds hisexplanations had been rejected and he had beenfound guilty of the 9 charges, and that since noreason could be found in the impugned orders, andno materials could be placed before the Court, thisCourt is entitled to interfere by exercising thepowers conferred under Article 226 of theConstitution and set aside the orders. In thisview, we are of the opinion that it is notnecessary to place the additional grounds raised inthe writ petition before a Bench of five Judges.We allow the writ petition and quash the impugnedorders of the respondents with costs.”6. Section 205, which is similar to old Section 149-A, readsas follows :-“205. Removal of President.- (1) The Inspector --(a) of his own motion, or(b) on a representation in writing signed by not https://hcservices.ecourts.gov.in/hcservices/ less than two-thirds of the sanctioned strength ofthe Village Panchayat containing a statement ofcharges against the President and presented inperson to the Inspector by any two of the membersof the Village Panchayat, is satisfied that thePresident wilfully omits or refuses to carry out ordisobeys any provision of this Act, or any Rule,bye-law, Regulation, or lawful order made or issuedunder this Act or abuses any power vested in him,the Inspector shall, by notice in writing, requirethe President to offer within a specified date, hisexplanation with respect to his acts of omission orcommission mentioned in the notice.(2) If the Explanation is received within thespecified date and the Inspector considers that theexplanation is satisfactory, he may drop furtheraction with respect to the notice. If noexplanation is received within the specified dateor if the explanation received is in his opinionnot satisfactory, he shall forward to the Tahsildarof the taluk a copy of the notice referred to insub-section (1) and the explanation of thePresident if received within the specified datewith a proposal for the removal of the Presidentfor ascertaining the views of the VillagePanchayat.(3) The Tahsildar shall then convene a meetingfor the consideration of the notice and theexplanation, if any and the proposal for removal ofthe President, at the office of the VillagePanchayat at a time appointed by the Tahsildar.(4) A copy of the notice of the meeting shall becaused to be delivered to the President and to allthe members of the Village Panchayat by theTahsildar at least seven days before the date ofthe meeting.(5) The Tahsildar shall preside at the meetingconvened under this section and no other personshall preside threat. If, within half an hourappointed for the meeting, the Tahsildar is notpresent to preside at the meeting, the meetingshall stand adjourned to a time to be appointed andnotified to the members and the President by theTahsildar under sub-section (6).(6) If the Tahsildar is unable to preside at themeeting, he may, after recording his reasons inwriting, adjourn the meeting to such other time ashe may appoint. The date so appointed shall be notlater than thirty days from the date so appointedfor the meeting under sub-section (3). Notice ofnot less than seven clear days shall be given tothe members and the President of the time appointedfor the adjourned meeting. https://hcservices.ecourts.gov.in/hcservices/ (7) Save as provided in sub-sections (5) and (6),a meeting convened for the purpose of consideringthe notice and the explanation, if any and theproposal for the removal of the President underthis section shall not for any reason, beadjourned.(8) As soon as the meeting convened under thissection is commenced, the Tahsildar, shall read tothe Village Panchayat the notice of the Inspectorand the explanation if any, of the President [andthe proposal for the removal of the President] forthe consideration of which it has been convened.[(8A) There shall be no debate in any meetingunder this section.](9) The Tahsildar shall not speak on the meritsof the notice or explanation nor shall he beentitled to vote at the meeting.(10) The views of the Village Panchayat shall beduly recorded in the minutes of the meeting and acopy of the minutes shall forthwith on thetermination of the meeting be forwarded by theTahsildar to the Inspector.(11) The Inspector may, after considering theviews of the Village Panchayat in this regard, inhis discretion either remove the President fromoffice by notification with effect from a date tobe specified therein or drop further action.(12) The Government shall have power to cancelany notification issued under sub-section (11) andmay, pending a decision on such cancellation,postpone the date specified in such notification.[(13) Any person in respect of whom anotification has been issued under sub-section (11)removing him from the office of President shall,unless the notification is cancelled under sub-section (12), be ineligible for election asPresident until the expiry of three years from thedate specified in such notification as postponed bythe order, if any, issued under sub-section (12)].”7. From the aforesaid provision, the following fact emerges :-As per sub-section (1), the Inspector is to give anotice in writing to the President to offer hisexplanation in respect of his acts of omission andcommission.Under sub-section (2), if explanation is satisfactory,the Inspector should drop the proceeding, but in case ofnon-satisfactory explanation or no explanation, thematter to be forwarded to the Tahsildar alongwith noticeunder sub-section (1) for ascertaining the views of thePanchayat.Under sub-sections (3) to (9), the Tahsildar is toconvene a meeting of the village panchayat for https://hcservices.ecourts.gov.in/hcservices/ consideration of the notice, explanation and theproposal, if any, for removal of the President. Forthat, the President is also to be noticed and afterreading the notice and the explanation, all the membersof the village panchayat have to be heard.Under sub-section (10) the village panchayat will dulyrecord the minutes of its meeting and copy of the minutesshall be forwarded by the Tahsildar to the Inspector.Under sub-section (11), the Inspector, afterconsidering the views of the village panchayat in thisregard, either remove the President from office or dropfurther proceeding.Under sub-section (12), the Government have power to cancelthe notification issued under sub-section (11).8. Now the question arises :-a) Whether action u/s 205 for removal of the President ofPanchayat is quasi-judicial ; andb) Whether for such removal of the President of Panchayat, theInspector is bound to record reasons.9. In Province of Bombay – Vs – Khushaldas S.Advani, AIR 1950SC 222, the Supreme Court held as follows :-“i) that if a state empowers an authority, notbeing a Court in the ordinary sense, to decidedisputes arising out of a claim made by one partyunder the statute which claim is opposed by anotherparty and to determine the respective rights of thecontesting parties who are opposed to each other,there is a lis, and prima facie and in the absenceof anything in the statute to the contrary it isthe duty of the authority to act judicially and thedecision of the authority is a quasi-judicial act;andii) that if a statutory authority has power to doany act which will prejudicially affect thesubject, then, although there are not two partiesapart from the authority and the contest is betweenthe authority proposing to do the act and thesubject opposing it, the final determination of theauthority will yet be a quasi-judicial act providedthe authority is required by the statute to actjudicially.”10. In A.K.Kraipak – Vs – Union of India, AIR 1970 SC 150, theSupreme Court while held that aim of the rules of natural justiceis to secure justice or to put it negatively to prevent miscarriageof justice, further held that the rules could operate only in areasnot covered by any law validly made. The Apex Court held asfollows :-“20. ...... The concept of natural justice hasundergone a great deal of change in recent years.In the past it was thought that it included just https://hcservices.ecourts.gov.in/hcservices/ two rules, namely (1) no one shall be a judge inhis own cause (Nemo debet esse judex propriacausa), and (2) no decision shall be given againsta party without affording him a reasonable hearing(audi alteram partem). Very soon thereafter athird rule was envisaged and that it that quasi-judicial enquiries must be held in good faith,without bias and not arbitrarily or unreasonably.But in the course of years, many more subsidiaryrules came to be added to the rules of naturaljustice. Till very recently it was the opinion ofthe courts that unless the authority concerned wasrequired by the law under which it functioned toact judicially there was no room for theapplication of the rules of natural justice. Thevalidity of that limitation is not questioned. Ifthe purpose of the rules of natural justice is toprevent miscarriage of justice one fails to see whythose rules should be made inapplicable toadministrative enquiries. Often times it is noteasy to draw the line that demarcatesadministrative enquiries from quasi-judicialenquiries. Enquiries which were consideredadministrative at one time are now being consideredas quasi-judicial in character. Arriving at a justdecision is the aim of both quasi-judicialenquiries as well as administrative enquiries. Anunjust decision in an administrative enquiry mayhave more far reaching effect than a decision in aquasi-judicial enquiry.”11. In Union of India – Vs – E.G.Nambudri, 1991 (3) SCC 38,the question fell for consideration whether for an administrativedecision reason should be stated. In the said case, the SupremeCourt held “Order of an administrative authority, which has nostatutory or implied duty to state reasons or the grounds of itsdecision is not rendered illegal merely on account of absence ofreasons. It has never been a principle of natural justice thatreasons should be given for decisions”. However, the Supreme Courtobserved that the competent authority has no licence to bearbitrary; he must act in a fair and just manner; he is required toconsider the question raised and examine the same in the light ofthe objections raised. If such an order is challenged in a courtof law, it is always open to the competent authority to place thereasons before the Court, which may have led to the rejection ofthe explanation.12. In Consumer Action Group – Vs – State of T.N., 2000 (7)SCC 425, Supreme Court held that application of mind of anauthority at a particular point of time could only be revealed whenthe order records its reasons. Even if the section is silent aboutrecording reasons, it is obligatory on the authority, while passingorder, to record the reasons. https://hcservices.ecourts.gov.in/hcservices/ In Rajesh Kumar - Vs – Dy. C.I.T. (2007 (2) SCC 181), theSupreme Court held as follows :-“48. In any event, when civil consequences ensue,there is hardly any distinction between anadministrative order and a quasi-judicial order.There might have been difference of opinions at onepoint of time, but it is now well settled that athin demarcated line between an administrativeorder and quasi-judicial order now standsobliterated (see A.K.Kraipak v. Union of India andChandra Bhavan Boarding and Lodging v. State ofMysore and S.L.Kapoor v. Jagmohan).49. Recently, in V.C.Banaras Hindu University v.Shrikant this Court stated the law thus :-51. An order passed by a statutory authority,particularly when by reason whereof a citizenof India would be visited with civil or evilconsequences must meet the test ofreasonableness.”13. Admittedly, the Inspector is the statutory authority toremove the President u/s 205 of the Act. He has power to do suchact which will prejudicially affect the subject, i.e., thePresident, although there are not two parties apart from theauthority and the contest is between the authority proposing to dothe act and the subject opposing it and the State Government haspower to alter such decision and notification is issued under sub-section (11) and may, pending decision on such cancellation,postpone the date specified under such notification.14. In view of the aforesaid provision of law and the decisionof the Supreme Court as referred to above, while we uphold thedecision in Subramanian's case (supra) that the act of theInspector u/s 149-A (new Section 205) of the Act is quasi-judicialin nature, further hold that the decision in N.P.Guruswamy's case(supra) does not lay down the correct law.15. An order passed by a statutory authority if visited withcivil or evil consequences must meet the test of reasonableness.If it prejudicially affects the subject, for example, the Presidentin the present case, then the authority should give reasons. Inthe case of Consumer Action Group (supra) the Supreme Court heldthat application of mind of an authority at a particular point oftime could only be revealed when the order records its reasons.Therefore, u/s 205, if the Inspector being satisfied with theexplanation drops the proceeding, he should record it in theproceeding. In case of unsatisfactory explanation or non-explanation, the Inspector cannot take a decision of his own, butrequired to forward the matter to the Tahsildar for the decision ofthe Village Panchayat. It is the Village Panchayat, which recordsreasons in its minutes of the meeting. Normally the Inspector hasto act on such decision. In such case, reason being on record, foracceptance of such report no further reason required to be recorded https://hcservices.ecourts.gov.in/hcservices/ by the Inspector. However, in case the Inspector differs with thedecision of the Village Panchayat, to test the reasonableness ofsuch decision, the Inspector is not only supposed to record thereason, but also required to follow the rules of natural justice bycommunicating the reasons to the President by giving an opportunityto explain before coming to a conclusion.16. In N.P.Guruswamy's case (supra) the Inspector agreed withthe views of the Village Panchayat for removal of the Presidentand, therefore, the Court rightly held that no reasons wererequired to be recorded.In the case of Subramanian (supra), the Inspector havingdiffered with the views expressed by the Village Panchayat and hasordered to remove the President, the Court rightly held that forsuch difference of opinion, reasons were necessarily to be recordedby the Inspector, even if it is administrative in character.17. In the light of the discussions made above, we summariseour views as follows :-i) An act of the Inspector u/s 205 is quasi-judicial in nature;ii) If the Inspector is satisfied with theexplanation submitted by the President u/s 205, heis required to record his satisfaction for droppingthe proceeding; andiii) If the Inspector differs with the viewsexpressed by the Village Panchayat and decides toremove the President or to drop the proceedingagainst the President, he is not only required torecord the reasons for differing with the views ofthe Village Panchayat, but before taking anydecision to remove the President, the Inspector isalso required to provide further notice to thePresident intimating the reasons for difference andcan issue notification only on consideration ofcause, if any, shown by the President.18. Recording our aforesaid view, we refer back the matter tothe Division Bench for consideration of the case on merits.GLNSd/-Asst. Registrar//True Copy//Sub Asst. Registrar https://hcservices.ecourts.gov.in/hcservices/ To1. The District Collector and Inspector of District Panchayat Villupuram District.2. The District Development Officer Marakkanam Taluk Villupuram District3. The Manager Central Bank of India Marakkanam Branch Villupuram District. 4. The Assistant Director Rural Development and Land Administration Marakkanam, Villupuram District.5. The Block Development Officer Marakkanam Taluk Villupuram District. 6. The Tahsildar Tindivanam Taluk Villupuram DistrictMBS(CO)SR/17.9.2009 JUDGMENT IN W.A. NOS.1257 & 1258 OF 2008