Satish Chandra Khandelwal Petitioenrs v. Union Of India S

Avadh Behari Rohatagi, J.:— The facts. This is a case of considerable civil importance. It raises qustions of some nicety regarding the municipal government of Delhi

2. By an order of the Central Government dated 11-4-1980, made under S. 490(i) of the Delhi Municipal Corporation Act, 1957 (the Act) the Municipal Corporation of Delhi (the Corporation) was superseded. As a result all the 100 councillors and aldermen of the Corporation vacated their offices. They became functus officio. During the period of supersession all powers and duties of the Corporation were directed to be exercised and performed by the Commissioner of the Municipal Corporation under sub-section (2) of S. 490. All properties of the Corporation at once vested in the Central Government. The petitioner, Satish Chander Khandelwal, was elected as a councillor in the general elections tot he Corporation on 15-6-1977, for a period of four years. He too had to vacate his office. He has brought this writ petition challenging the order of supersession by the Goernment.

3. The Corporation was constituted under the Act as the municipal authority for Delhi and was entrusted with all the powers and duties of a local authority. To it is entrusted the ‘municipal government of Delhi’. S. 3 of the Act establishes the Municipal Corporation of Delhi. The Corporation is a body corporate having perpetual succession and a common seal with power to acquire, hold and dispose of property. S. 490 of the Act provides for superssion of the Corporation. It says:

“(1) If, in the opinion of the Central Government, the Corporation is not competent to perform, or persistently makes default in the performance of, the duties imposed on it by or under this Act or any other law or exceeds or abuses its powers the Central Government may by an order published, togehter with a statement of the reasons therefore, in the Official Gazette, declare the Corporation to be incompletent or in default or to have exceeded or abused its powers, as the case may be, and supersede it for such period as may be specified in the order:

Provided that before making an order of supersession as aforesaid reasonable opportunity shall be given to the Corporation to show cause why such order of supersession should not be made.

(2) When the corporation is superseded by an order under sub-section (1),—

(a) all councillors and aldermen shall, on such date as may be specified in the order, vacate their offices as such councillors and aldermen without prejudice to their eligibility of election under clause (d);

(b) during the period of supersession of the Corporation, all powers and duties conferred and imposed upon the Corporation by or under this Act or any other law shall be exercised and performed by such officer or authority as the Central Government may appoint in that behalf;

(c) all property vested in the Corporation shall, until it is reconstituted, vest in the Central Government;

(d) before the expiry of the period of supersession, election shall he held for the purpose of reconstituting the Corporation.

(3) An order of supersession made under this Section together with a staement of the reasons therefore shall be laid before each House of Parliament as soon as may be after it has been made.”

On 1-4-1980, the Central Government issued a notice to the Corporation to show cause within 7 days why on the stated grounds it should not be superseded. The show cause notice contained the following statement of charges:

NOTICE

Whereas it has come to the notice of Central Government that the Municipal Corporation of Delhi (hereinafter referred to as the Corporation)—

(i) has persistently made defaults in the peformance of the duties imposed on it by or uner the Delhi Municipal Corporation Act, 1957 (hereinafter referred to as the Act) as detailed in the accompanying Annexure-I;

(ii) has abused its powers as detailed in the accompanying Annexure-II, and

(iii) has shown incompetency in the performance of its duties under the Act as detailed in the accompanying in Annexure-III.

Now, therefore, in pursuance of proviso to sub-section (I) of S. 490 of the Act, the Central Government hereby calls upon the Corporation to show cause within a period of seven days from the date of receipt of this notice why an order superseding the Corporation under the said sub-section (I) should not be made.

Dated 1-4-1980

New Delhi.

By order and in the name of

The President of India

Sd/-

S.V SHARAN,

Joint Secy. to the Govt. of India

Ministry of Home Affairs.

ANNEXURE-I

The Corporation failed to repay timely the principal and interest on the amounts granted to it by the Central Government as detailed below, thereby violating mandatory provision of S. 194 of the Act.

(i) Over due instalment of principal and interest towards repayments of loans and advances to the (plus) Corporation (General Wing) Rs 87,52,806.18 Rs 415,44,000.00 Total: Rs 502,96,806.18 (ii) Overdue instalments of principal and interest on a Government loans payable by the Delhi Water Supply & Sewage Disposal Undertaking. Rs 16,91,355.00 (iii) Overdue instalment of principal and interest on Government loans payable by the Delhi Electric Supply Undertaking. Rs 57,72,24,355.00

2. The Corporation failed to contribute its share to the extent of Rs 2.25 crores towards the Employees Provident Fund, thereby violating Regulations 33 of Delhi Municipal Corporation Provident Fund Regulations Act, 1962.

3. The Corporation defaulted in deducting/remitting the amounts payable by the Corporation to employees under the Additional Emoluments (Compulsory Deposit) Act, 1974 thereby violating S. 6 read with S. 3(b) of the said Act.

4. The Corporation failed to fulfil its duties and prudently managing its finances, including those of its Undertakings by incurring heavy deficits as indicated below:—

General wing of the Corporation (Rs in lakhs) Year Revenue Expenditure Deficit 1977-78 4921.24 4992.52 71.29 1978-79 5604.53 6377.49 772.96 1979-80(RE) 7725.07 7096.60 628.47@ @This is a manipulated surplus. Water supply and Sewage Disposal Undertaking (Rs in lakhs) 1977-78 1149.89 1530.47 330.58 1978-79 1410.42 2071.97 661.55 1979-80(RE) 1584.93 2571.43 986.50 Delhi Electric Supply Undertaking (Rs in lakhs). 1977-78 1276.79 2473.03 1196.24 1978-79 1379.22 2967.61 1588.39 1979-80 8782.33 9751.17 968.84

The Corporation has been trying to disguise this dismil state of its finances by exhibiting unrealistic and exaggerated estimates to its revenue receipts while adopting the budget estimates.

ANNEXURE-II

1. The Corporation abused its powers in that, notwithstanding the financial constraints, it created a large number of posts without making any efforts to lay down any yard-stick/norms for creation of such posts or corresponding provision for raising resources. The Corporation also made ad-hoc appointments, as reported by P.N Jain Committee, of 833 category ‘A’ posts. 20 category ‘B’ posts and 9010 category ‘C’ posts, besides several other Class IV posts. These ad-hoc appointments are continuing even beyond permissible period in violation of the instructions of the Government of India.

2. The Corporation abused its powers in deciding to permit the use of Municipal Vehicles by Councillors and Aldermen for non-duty purposes ignoring the advice of the Solicitor General of India and also sought to regularise the misuse of vehicles by Chairman of the Committee.

3. In violation of provision of S. 105 of the Act, the Corporation placed a sum of Rs 20,000 per annum as discretionary funds at the disposal of the Chairman, Standing Committee and Rs 1800 per annum at the disposal of the Chairman of each of the other Committees.

4. The Corporation made several irregular appointments against the recommendations of the U.P.S.C and without obtaining prior approva1.confirmation from the Administrator (Lt. Governor) thereby violating S. 89, 96, and 97 of the D.M.C Act, 1957.

5. The Corporation, contrary to the recommendations of the Morarka Commission in Para 4.10(d) of volume-6 of its report that the practice of contingency fund should be discontinued and that instead the Councillors should draw up proposals for improvements and new works in their respective constituencies in advance and within the financial limits, not only continue this practice in the General Wing but extended it to the Delhi Electric Supply Undertaking and Delhi Water Supply and Sewage Disposal Undertaking also thereby abusing its powers.

6. The Corpration permitted reconstruction without submission of building plans in respect of premises demolished and ignoring the provisions of law and against the advice of the Commissioner passed a resolution causing deviation in the prescribed procedure for proceeding against unauthorised constructions by providing that notices shall carry certain details about the compoundability of the unauthorised constructions and charges therefor etc.

7. The Corporation abused its powers by approving the placement of order of about Rs 1.30 cores on M/s Trading Engineers against the advice of the Commissioner and against normal purchase procedre.

8. The Corporation pasesd a resolution to sel the staff quarters in Nimri Colony to the occupants/allottees ignoring the fact that the quarters were mean to serve as an amenity to serving staff.

ANNEXURE-III

1. In the wake of such a poor resource position, grant of conveyance allowance to as many as 170 categories of employees, irrespective of their job requirements, is an indication of incompetency of Corporation of manage its financial resources.

2. The Corporation has been incompetent in that it failed to discharge the liabilities of private contractors amounting to over Rs 4 crores and thereby shaking the creditworthines of the Corporation in the minds of the public.

3. The Coporation has been incompetent in that it diverted the plan allocations to non-plan expenditure.”.

4. The Commissioner of the Corporation received this notice. He delivered it to the Mayour of the Corporation. On 3-4-1980, the Mayor made a request to the Central Government to extend the time for reply by 10 days more. The Governmentby their letter dated 6-4-1980, declined to extend the time. In the meanwhile the Mayor required the Commissioner to furnish detailed information on the charges levelled in the show cause notice.

5. An urgent meeting of the Corporation was summoned for 7-4-1980 and an ‘interim’ reply was sent to the Goverment. In the reply a request for personal hearing, disclosure of documents, and extension of time to file a further defence statement, was also made. The Central Government after considering the reply of the Corporation formed the opinion the Corporation was not competent to perform its functions and had persistently made defaults in the performance of its duties and had abused its powers. So the Central Government by order dated 11-4-1980, superseded the Corporation for a period of one year. It is the validity of this order which is in question in this petition.

6. We have heard from both sides lengthy arguments and an elaborate citation of authorities. This petition was heard for some time by two learned judges of this court (Prithvi Raj and H.L Anand, JJ.). They differed on most matters argued before them. They referred the case to a larger bench. This is how this full bench of three judges was constituted to hear and decide this writ petition.

7. The empowering enactment defines the grounds on which Corporation can be superseded. They are three: (1) persistent default, (2) abuse of powers, and (3) incompetency. Though they are distinct these grounds overlap to a great extent and run into one another. All three are addressed to a common subject, namely, the statutory duties of the Corporation and their proper performance. The section deals with the use, misuse and non-use of the powers of the Corporation. They are three closely allied failures. The highest common factor is incompetence. It is the broadest of all three. A Corporation which abused its power might also have been reasonably regarded as incompetent to perform the duties imposed upon it. (Radheshyam Khara v. State of M.P, AIR 1959 SC 107 (114)(1). For the sake of convenience they will be considered separately. We shall see in each case whether there is supporting evidence, slight or substantial, for reaching the conclusion that the Corporation must be superseded.

8. Before I do this let me examine the three preliminary points raised by the petitioner. He attacked the order of supersession on three grounds, namely, that (i) no reasonable opportunity was given to the Corporation to show cause against the proposed action, (ii) that supporting documents were not supplied to enable the Corporation to make an effective representation, and (iii) that the impugned order does not state the reasons why the explanation offered by the Corporation was not acceptable to the Central Government.

9. Reasonable opportunity:

S. 490 says that before making an order of supersession reasonable opportunity shall be given to the Corporation to show cause why the order of supersession should not be made. The statute is specific. It uses the expression “reasonable opportunity”. This is the principal of natural justice. The term denotes the minimum standards of fairness in the adjudicatory process embodying the specific requirements that the party affected must be heard and no man can be condemned unheard—audi alteram partam.

10. “Whatever standard of natural justice is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case.” (Russel v. Duke of Norfolk, (1949) 1 All. ER 109(118)(2). What is a reasonable opportunity must depend on the circumstances of each case. There is no cut and dried formula. There are no hard and fast rules. There are no prescriptions which will lay down exactly what must, in various divergent situations, be done. The principles and procedures are to be applied which, in any particular situation or set of circumstances, are right and just and fair. Natural justice has been defined as ‘fair play in action’. It has been called as the ‘residual duty of fairness’.

11. The petitioner complaints that the time of seven days to show cause against the proposed supersession was too short. He says that only an interim reply could be sent which was prepared in post haste in two days because time was expiring on 8-4-1980. It is argued that many things remained unsaid and unshown. It was submitted that the request for extension of time by ten days was reasonable in the facts and circumstances of the case and that its refusal was unreasonable.

12. I approach the present case by considering whether in all the circumstances the Central Government acted unfairly in refusing to extend the time. In my opinion there was no unfairness. Seven days' time to make a reply was enough. A meeting for 5-4-1980 had already been summoned, by notice dated 28-3-1980. This was the first meeting. It was convened for the election of the Mayor and the Deputy Mayor. The question of drafting a reply could also be considered on that date. There was no bar in doing so. The Mayor had already asked the Commissioner to supply the requisite information. An urgent meeting of the Corporation was summoned for 7-4-1980 to consider the notice. On 7-4-1980 the Corporation met. It was resolved that an interim reply be sent and that a sub-committee could draft the reply the Central Government made the order of supersession on 11-4-1980.

13. The substance of the thing is that a reply was actually sent. There was no substantial prejudice of which the petitioner can justly complain. A fair opportunity was given to the Corporation to answer the charges. They did answer them in a 22 pages written statement. Point by point charges were replied. Everything was answered in substance. The substantial requirements of justice were all observed. A reasonable opportunity was given. This is the essence of justice. All that was required is that the Corporation should have an opportunity of submitting to the authority by whose decision they are to be bound, such considerations and views as in their judgment ought to be brought before it. The Central Government, in my opinion, satisfied the essential requirements of justice and fair play. The Corporation had a fair opportunity for correcting and contradicting the relevant statements prejudicial to their view.

14. A balance has to be maintained between the need for expedition and the need to give reasonable opportunity to a party to see the material against him. The opportunity need not be an elaborate ritual. In situation of quick dispatch it may be minimal. A fair abridgment of opportunity is permissible [Mahinder Singh Gill v. Chief Election Commission, AIR 1978 SC 851 (881)] (3). It has been well said:

“Fairness, however, does not necessarily require a plurality of hearings or represnetations and counter-representations. If there were too much elaboration of procedural safeguards, nothing could be done simply, quickly and cheeply. Administrative or executive efficiency and economy should not be too readily sacrificed. The disadvantage of a plurality of hearings was cogently pointed out in the majority judgments in Cozens V. North Devon Hospital Management Committee (1966) 2 QD(4) 330, 343, 346-347.'

[Pearlberg v. Varty, (1972) 1 WLR 534 (547) (5) per Lord Pearson].

15. The aim of the rule of natural justice is to secure justice or, to put negatively, to prevent miscarriage of justice. The single question which arises is that: Was there miscarriage of justice in this case? I think not, Borad grounds of complaint were supplied. Broad lines of defence were submitted with sufficient clarity. There was no prejudice of any kind. The two basic requirements are: (a) notice of the case to be met; and (b) opportunity to explain. These were fulfilled. The doctrine has to be tailored to the needs of the situation. In some cases the opportunity may be the ‘littlest’. In others it may be a full trial type. In still others it may be postdecisional. The authority is the master of its own procedure. It need not hold a hearing. It can do everything in writing. It need not put every details of the case against the man. Suffice it if the broad ground are given. Similarly the party affected can stated the defence in substance. It is not necessary to quote chapter and verse. But in the end, the authority itself must come to its own decision after hearing the man.

16. Fairness itself is a flexible, pragmatic and relative concept, not a rigid, ritualistic or sophisticated abstraction. It is not a bull in a china shop, nor a bee in one's bonnet. Its essence is good conscience in a given situation; nothing more.

(Mahinder Singh, supra p. 872).

17. In Malloch v. Aberdeen Corporation, (1971) I WLR 1578 (1595)(6) Lord Wilberforce said:

“A breach of procedure whether called a failure of natural justice or an essential administrative fault, cannot give him a remedy in the courts, unless behind it there is something of substance which has been lost by the failure.”

18. If there is no surprise, if ample opportunity has been given, if the party affected has made all the representations that it could have been possibly made against the proposed order, nothing more is required. “The rules of natural justice must not be stretched too far. Only too often the people who have done wrong seek to invoke the rules of natural justice so as to avoid the consequences.”

(R. v. Secy. of State for Home Deptt. (1974) QB 313 (325) (7) per Lord Denning MR).

19. It was said that a large number of documents had to be consulted before preparing the reply to show why the defaults mentioned in the notice were not attributable solely to the present Corporation but were largely the legacy of the past. All the documents were available in the municipal archives. No one expects that details should be stored in the archives of one's memory. The minutes, correspondence, reports, resolutions were ready at hand in the institutional records. It was the Commissioner's duty to supply the required information. S. 36(3) of the Act says:

“36.

(3) The Mayor shall have full access to all the records of the Corporation and may obtain reports—

(a) from the Commissioner or any matter connected with the municipal government of Delhi;

20. And he did supply in a 50 page careful note to the Mayor within a record time of three days. Between 5-4-1980 and 8-4-1980 there was sufficient time to prepare the reply. There was time to collect, catalogue and digest the information. It is true that 72 hours notice is required for convening a meeting of the Corporation under S. 74. But on 28-3-1980 the Municipal Secretary had convened a meeting for 5-4-1980. On receipt of the notice on 1-4-1980 this matter too could have been put on the agenda for consideration on 5-4-1980. In any event the matter was considered at the meeting of 7-4-1980 and a reply was sent.

21. To an oral hearing clearly the Corporation were not entitled. They could only make a written representation. They did so. The requirement of reasonable opportunity means that the person affected should have a right to make a representation against the action proposed. For this reasonable time was to be allowed. What is reasonable depends on the nature, purpose and circumstances of each case. The term is essentially relative. No universal generalisation can be made. No rigid rule can possibly be laid down. Everything depends on the subject-matter.

22. The Central Government, in my opinion, gave them a reasonable opportunity of being heard. There is nothing of substance which may have been lost by refusing the extension. A court would be slow to stigmatise as contrary to natural justice proceedings which substantially comply with the requirement of reasonable opportunity.

Disclosure of documents:

23. Closely connected with the complaint of shortness of time is the complaint that relevant documents were not supplied to the Corporation with the notice dated 1-4-1980. The statute does not require the Central Government to supply all the documents and materials on which it forms the opinion. They are all in the possession of the Corporation. They can be had at moment's notice from the Commissioner. In fact the Central Government obtains documents and records from the Commissioner (S. 485). S. 87 requires the municipal secretary to forward minutes and reports of proceedings to the Administrator of the Union Territory. To ask the Central Government to supply them to the Corporation is to carry coals to New Castle. It was said that the note of the financial adviser dated 19-1-1980 opposing the grant of loan of four crores of rupees ought to have shown to the Corporation. This was internal advice which the Government took. No one disclose what his subordinates have advised him.

24. A short answer to the objection is that documents could have been obtained from the Commissioner. He is the head of all paid staff. His main fuction is to provide necessary information and advice to the Corporation and to head a team of senior officials. The councillors and aldermen represent the amateur control Commissioner's relationship with the councillors and aldermen is similar to that generally prevailing between the directors of a firm nad its managers. He informs them on the work of the Corporation, points out matters requiring their attention or decision, and makes suggestions and recommedations. Like a civil servant he must be able to assest them with all the information required on a matter calling for their decision.

25. That a large number of documents were referred to in the course of the hearing is not a ground as could invalidate the order of supersession. The question is: Did the Corporation understand the charges brought against it? In my opinion, they are set out with sufficient particularity in the notice. All the relevant documents, resolutions, proceedings, minutes were referred to by the Commissioner in his note which the Corporation had before it at the meeting of 7-4-1980. A copy of this note was placed on record during arguments. That the sub-committee appointed to draft a further reply required more information on 8-4-1980 which the Commissioner was unable to supply earlier than three days does not mean that the opportunity given by the Central Government was not reasonable.

26. I am of opinion that there was nothing further to say and show in reply to the show cause notice. All that was necessary had been said and done. What we have to see is whether the way in which the minister proposed to act, in the light of the circumstances as they existed on 11-4-1980, was such that no sensible authority acting with due appreciation of its responsibilities under the Act could have decided to adopt. The argument of non-disclosure of documents also fails.

Statutory duty to give reasons:

27. In administrative law civil servants have stubbornly resisted any idea of giving reasons for decisions, though statutes have increasingly imposed a duty to give reasons for certain types of decisions, usually those made after a formal hearing or inquiry.

28. S. 490 insists a statement of reasons for the order of supersession. The order of supersession together with the statement of reasons has to be published in the Official Gazette. They have to be laid before the Houses of Parliament.

29. The first question is what is meant by reasons. Reason is an elusive concept. It was argued on the basis of certain decisions that reasons ought to include not only the grounds for decision but should also show why the explanationoffered by the Corporation has been rejected. It must, it is said, include the decision on the explanation and reasons for its rejection. In my opinion, and I say so with respect, judges in this regard have gone too far. It think all that is required of the authority is to point to the factors which in its view justify the actual decision. It is not expected to give reasons for its verdict in the same manner as does a court of law. Judges are agreed that the authority has not to write a judgment. Why should we then insist on legal reasoning? It ought to be enough if the authority has given the grounds of action. The legislature does not require it to deal with the explanation of the Corporation, point by point as it were, to satisfy the electorate of the democratically elected councillors. This will be too onerous a duty. But the legislature does require the authority to articulate reasons which operated on its mind to take the drastic step. The authority owes it to the Parliament and the people to inform why it formed the opinion it did. What is the good justification for its action. These reasons may be stated in a general way without any legal reasoning, without any discussion of what was argued for or against the major premises which is the foundation of the decision. It is not necessary that the public authority should make an elaborate order discussing the arguments in the manner of a court of law [Seimens Engg. v. Union of India, AIR 1976 SC 1785 (1789)](8).

30. Legal reasoning which a discussion of the explanation will necessarily involve is a procedure appropriate to the trial of a law suit. But we here are dealing essentially with an administrative act.

31. In Suresh Seth v. State, AIR 1970 MP 154(9) (A.P Sen and G.P Singh, JJ.) the view was taken that reasons for rejection of the explanation of the Corporation must also be stated. This was based on Re Poyser and Mills Arbitration (1963) 1 All ER 612(10) and Iveagh v. Minister of Housing (1964) 1 QB 395(11) and Collector of Monghyr v. Keshav Prasad, AIR 1962 SC 1694(12). English cases were concerned with S. 12 of the Tribunal and Enquiries Act, 1958. In both these cases Hegaw J. said that proper, adequate reasons must be given. He added that reasons must deal with the substantial points that have been raised before the Tribunal. The object is that the reasons must from part of the order, so that the order will be a ‘speaking order” for the purposes of certiorari. In my view the present order is “speaking order” because it gives us the grounds on which Central Government decided to dissolve the Corporation. The court can quash the decision if it comes to the conclusion that reasons given are bad because they have no relation to the statutory heads of incompetence, persistent default or abuse of power. The outworn distinction between judicial, quasi-judicial and purely administrative power will not prevent the courts from reviewing the decision of the minister on the courts from reviewing the decision of the minister on the reasons stated by him and from setting it aside where they feel strong repugnance to the decision on the material before them.

32. In Collector of Monghyr the Supreme Court had said that the statutory requirement is not satisfied by merely recording conclusions. But it does not lay down that reasons must deal with the points of fact and law raised in the representation as was said in Suresh v. State. I think the observation in Suresh should be read as confined to the facts of that case whereon two charges nothing was said by the State on the representation made and on which points the State was factually wrong.

33. Suresh Seth was followed in Kharsia Municipality v. State, AIR 1972 MP 34(13) and Malkapur Municipality v. State, AIR 1977 Bom. 244(14). In the Bombay case some new and grave charges were introduced at the time of the hearing and these wqeighed with the Government in making the order of supersession. (P. 266)

34. An anlaysis of the cases shows that no general rule can be laid down as to what will meet the statutory requirement of reasons in all cases. Reasons are not bad because they are brief and not elaborate. Every case has to be judged in the light of its own facts and circumstances. See Tara Chand v. Delhi Municipality, AIR 1977 SC (567) (15).

35. But one thing is certain. Mere reproduction of the words of the section is not enough. Nor a bare conclusion is satisfactory. The requirement must be followed both in letter and spirit. The statement of reasons must inform the public mind and the Parliament as to what are the grounds which impelled the Government to take the drastic action. The statement of reasons is necessary because they are subject to the “surveillance” of the courts as much as to the scrutiny of the Parliament. “Surveillance”, to use a phrase of Lord Pearce (Padfied v. Minister of Agriculture (1968) AC 997 (16) means that the courts exercise the power of overseeing to judge whether the authority has misdirected itself on facts or law. But the “propriety adequacy or satisfactory character of the reasons may not be open to judicial scrutiny.” [Hochtief Gammon v. State of Orissa, AIR 1975 SC 2226 (2234)](17).

36. Applying these principles to this case I find that the Government have stated in great detail the facts and circumstances which in their view are a good justification for the action. The order of supersession sets out all the facts detailed in the show cause notice. On these facts, which they found established on the material on the record before them in spite of the explanation of the Corporation, they made the order. On these facts they formed the opinion that the Corporation was guilty of persistent default, misuse of power and incompetence. They have not merely repeated the words of the section as has been done in some of the decided cases of municipalities. In the present case we find more meat and narrow than in any other case cited to us. There are ‘objective facts’. There is ‘factual material’. on an evalutaion of these facts the Government came to the conclusion as a matter of opinion that the Corporation ought to be superseded. Reasons, as Dua J. aptly put it, are those necessary facts which may have weighed with the Government in arriving at the conclusion that the Corporation is incompetent and a persistent defaulter in the performance of statutory duties. Karar Municipality v. State, AIR 1967 Pun. 430 (441) (18). To ask for more will be making unreasonable requirements and imposing undue burdens [Mc Innes v. Inslow Fane (1978) 3 All ER 211 (223) (19) per Meggary VC]. This will be to allow the concept of reasons “to run wild”.

37. I agree that the duty to give reasons under S. 490 is a reasponsible one and cannot be discharged by the use of vague general words. That the requirement is mandatory is shown by the fact that these reasons are to be published and laid before Parliament.

38. Reasons are the bases of the action. The courts and know what it is that an authority has determined in order that they may know what to review. Unexplained decisions leave the public in the dark on the reasons which led to them. More important, permitting them is an open invitation to arbitrary action. The statutory obligation to give reasons is a substantial check upon misuse of power.

39. The requirement of reasons meets the elementary demand of those injured by the authority's decision to be told ‘the reason why’. The role of the reason requirement is to facilitate judicial review; without them a court cannot adequately perform its reviewing functions. We must know what the decision is before the duty becomes ours to say whether it is right or wrong. This is the pragmatic test. It is impossible for the court to perform its function of review on the facts stated in the order? Plainly the answer is ‘no’.

40. The requirement of reasons is mandatory. So is publication. So laying before Parliament. This will show that the reasons must be self-contained. To search for reasons we cannot be asked to dig into the Government files. The statement of reasons has to be tabled in Parliament. The Parliament will not be shown the files. Similarly people have no access to Government records. Where a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. Public orders made by public authorities are meant to have public effect. Public orders publicly made in exercise of statutory authority cannot be construed in the light of explanation subsequently given. (Mohinder Singh Gill p. 858)

41. As the consequences of supersession are quite serious it is not only desirable but also essential that the Government should indicate the reasons for forming the opinion. When such an order is challenged on the ground of non-application of mind the Government must place before the court all the necessary materials which were available before it and which were taken into consideration for forming the opinion it actually formed. In this case the Government produced the file of notings and jottings when the case was being heard by the division bench and the question of non-application of mind was raised. But this plea was abandoned before us. The file shows that the representation of the Corporation was considered before the impugned order was made. The Government files can be seen by the court for satisfying itself that the Government applied its mind and that conditions precedent to the applicability of S. 490 existed. (See Bhagat Ram Patanga v. State Of Punjab , AIR 1972 SC 1571 (1578)(20). The court's conscience must be satisfied that on the material on which the allegations are based and the reply given to them the Government could entertain the opinion it did. But it is well to remember that the issue of supersession is not to be tried as a law suit with a right of appeal to the High Court. (Ram Lal Lahoti v. Government of A.P, ILR 1979 AP 1 (10)(21).

42. We were also referred to two single bench cases: Lila Kishan v. State of Haryana, 1971 PLR 289(22) and Town Municipality Council Coondapur v. State of Karnataka, (1977) 2 Karnataka Law Journal 114(23).

43. In my opinion, the grounds for supersession are more than a mere statement of conclusion; they do state the salient reasons why it was necessary to supersede the Corporation. In the circumstances of this case I do not think it was necessary in the statement, to make a reference to the pleas raised by the Corporation and the reason for their rejection. A general reference to the reply to show cause notice does appear in the reasons. There certainly was no need to refer to the various matters of detail which must assume, in the absence of evidence to the contrary, had been taken into account when considering whether the Corporation ought to be superseded. It should be understood that this present case does not govern what may be different circumstances in other cases. The grounds stated in the statemnet of reasons in this case pass the test: the same grounds in another case may fail to do so. In my opinion, the grounds given bring to the midn of the reader a clear understanding of why the Corporation has been supersede [Mount View Court Properties Ltd. v. Dalvin, 1970 P&CR 689(24). Lord Parker C.J has said:

“What reasons are sufficient in any particular case must, of course, depend upon facts of the case. I approach the matter in this way: that reasons are not deficient merely because every process of reasoning is not set out. I further think that reasons are not insufficient merely because they fail to deal with every point raised before the committee at the hearing.”

[Elliot v. London Borough of Southwark (1976) 2 All ER 781 (25)].

44. The argument that the order is invalid because it does not discuss the explanation offered by the Corporation is rejected.

S. 490 and the limits of reviewability

45. Now the law, S. 490 which provides for supersession of the Corporation appears in Ch. XXIV which is headed ‘Control’. All told, central control is both wide and deep. Behind the corporate facade stands the Central Government with wide powers to issue directions, order inspection, and compel obedience to its commands. The Central Government exercises a considerable degree of adminstrative control over the Corporation in the interests of the community as a whole, for what is administered locally is often a national policy. The most effective single agency is the control over finances and borrowings. Some watch must be kept to ensure that spending is economic, for there always exists the possibility that the Corporation may carry its permissive powers too far.

46. In construing S. 490 we have to remember three things. First. We are dealing not with a judicial act but an executive act. This is essentially an administrative power which the legislature has entrusted to the executive branch of the Government. Generally speaking, a quasi-judicial decision is only an administrative decision, some stage or element of which possesses the judicial characteristics. An offer making a quasi-judicial decision has, after ascertaining the facts and applying the law to them, to use his discretion whether he will or will not take administrative action and if so, what action.

47. Second. The power of supersession is hedged with conditions and restrictions, both procedural and substantive. The procedural conditions are that before making an order of supersession reasonable opportunity has to be afforded to the Corporation. In the order of supersession the Central Government has to state reasons which are published and laid before Parliament. The substantive grounds on which an order of supersession can be made are three: (i) persistent default in the performance of duties by the Corporation, (ii) excess and abuse of power, (iii) incompetence. All the three expressions have definite legal cannotation. Before judgment is reached on these grounds there must be existence of some facts. As a necessary condition precedent to the exercise of a power by the Minister, there must exist, if I may use a phrase, the necessary substratum of fact. The exercise of powers is preconditioned by the existence of a substratum of fact. It is open to the court in this case to consider upon what evidence the minister has acted. It has always been review the matter and to consider on what material the decision has been reached. I have no doubt that this is what is called a ‘substratum of fact’ class of case. The decision is of the Central Government. It is taken in the name of the President by a minister responsible to Parliament. Although the evaluation of the facts if for the minister, the court must inquire whether those facts exist and have been made upon a proper self-direction as to those facts, whether the judgment has not been reached upon other facts which ought not to have been taken into account. If conditions precedent to the exercise of power do not exist then the administrative decision, however, bona fide it may be, become capable of challenge.

48. Under the section the court's power to review the exercise of the discretion, though still real, is limited. In these cases it is said that the courts cannot substitute their opinion for that of the minister; they can interfere on such grounds as that the minister has acted right outside his powers or outside the purposes of the Act, unfairly, or upon an incorrect view of the law. As Lord Denning, MR said:

“The court can interfere with the minister's decision if he has acted on no evidence; or if he has come to a conclusion to which on the evidence he could not reasonably come, or if he has given a wrong interpretation to the words of the statute; or if he has taken into consideration matters which he ought not to have taken into account; vice versa; or has otherwise gone wrong in law.”

[Ashbridge Investments Limited v. Minister of Housing and Local Government, 1965 (3) All ER 371 (26)].

The requirement that a person exercising quasi-judicial functions must base his decision on evidence means no more than that it must be based upon material which tends logically to show the existence or non-existence of facts relevant to the issues to be determined. It means that he must not spin a coin or consult an astrologer. But he will take into account any material which, as a matter of reason, has some probative value, in the sense mentioned above. If it is capable of having any probative value, the weight to be attached to it is a matter for person to whom Parliament has entrusted the responsibility of deciding the issues. The supervisory jurisdiction of the High Court does not entitle it to usurp this responsibility and to substitute its own views for his. [See R. v. Deputy Industrial Injuries Commissioner; Ex. Parte Moore, 1965, 1965 (2) WLR 89(116) (27) per Diplock LJ].

49. The ultimate question is: Was the Minister acting unreasonably in ordering supersession of the Corporation? In Public law—and this is a case of public law and not of private rights—“ ‘unreasonable’ as descriptive of the way in which a public authority has purported to exercise a discretion vested in it by statute has become a term of legal art.” To fall within the expression ‘unreasonable’, as Lord Diplock has said,

“It must be conduct which no sensible authority acting with due appreciation of its responsibilities would have decided to adopt.” [Secretary of State for Exuation and Science v. Tameside Metropolictan Borough Council, (1977) AC 1014 (1064) (28)].

This is the test, Our Supreme Court has adopted the same appraoch. In State of Maharashtra v. B.K Takkamore, AIR 1967 SC 1353 (29) Bachawat J. said:

“The court will not review the facts as an appellate body. But the order is liable to be set aside if no reasonable person on a proper consideration of the materials before the State Government could from the opinion that the Corporation is not competent to perform or persistently makes default in the performance of the duties imposed on it by or under this Act or any other law for the time being in force or exceeds or abuses its powers.”

50. It means this. The statute confers jurisdiction on the administrative body in certain defined factual situations. If the primary or jurisdiction facts are absent in a particular case, the body will be without jurisdiction. So the opinion formed by the Central Government is subject to objective test. It is not purely subjective and unreviewable by courts. This hands off approach is out of date. Recent cases have heralded new vistas of judicial control. There is a decided change in approach. In Laker Airways v. Deptt. of Trade (1977) QB 643 (CA) (30) Lord Denning MR asserted that the statutory administrative power was to be exercised for the public good and the court was entitled to see that the power was “used properly and not improperly or mistakenly.” Padfield, Tameside and Laker have already passed into the folklore of administrative law.

51. Third. The statute provides no appeal from the decision of the Central Government. The Central Government under S. 490 is not merely exercising a discretion: it is reviewing the action of another public body which itself has statutory powers, duties and functions. The Corporation is itself elected and is given specific powers by an Act of the central legislature. Judicial control cannot be a substitute for administrative or political control of the merits or expediency of official decisions. Nor are the judges responsible for the efficiency of the administration. But the courts ensure that the decisions made on political or other grounds conform to the law and that certain basic standards of fair procedure are obesrved. In many fields parliament has provided no right of appeal against administrative decisions. Nevertheless the superior courts exercise residual controlling power on such matters as vires, which are relevant to the legality of official decisions. (Wade and Phillips: Constitutional and Administrative Law 9th Ed. p. 580). Therefore, with the merits of the governmental action under review we are not concerned. We are concerned only with its legality. It is expressed sometimes by saying that the courts will not substitute their opinion for that of the authority entrusted with discretion. Prof. De Smith told us that Judicial review of administrative action is inevitably sporadic and peripheral. He said:

“The administrative process is not, and cannot be, a succession of justiciable controversies. The public authorities are set up to govern and administer, and if their every act or decision were to be reviewable on unrestricted grounds by an independent judicial body the business of administration could be brought to standstill.

(Judicial Review of Administrative Action, 4th Ed. p. 3).

The adequacy of the material provided that it is relevant and the wisdom and unwisdom of the actual exercise of powers do not concern the court. [See State of Madras v. Tirunelveli Municipal Council, ILR 1967 (1) Madras 492 (514) (31)].

52. The complainer has petitioned for a mandate in the nature of certiorari to quash the order of the Central Government. But certiorari is not an appellate power. It goes to jurisdiction. Certainly the courts will be vigilant to see that such overreaching powers (as of supersession) are kept within the four corners of the statute granting them [Municipal Committee Kareli v. State of H.P, AIR 1958 MP 323 (32) per Hidyatullah CJ].

Parliamentary Control

53. An order of supersession together with the reasons has to be laid before each House of Parliament as soon as may be after it has been made. This shows the importance of the matter. It emphasises that the decision must be reached with a sense of responsibility. The Central Government is responsible to Parliament. Parliament is the supreme source of local authority. Though the order is made in the name of the President, the decision is of the minister. The minister is responsible. It is he who must answer before Parliament. Parliament is the place where complaint can be made against the order of supersession. This is not to say that it cannot be challenged in courts. What is meant is that not only is the order subject to ‘surveillance of the courts’, it is also subject to the scrutiny of Parliament. This is how the processes of democratic consultation, scrutinty and control have been introduced in the Act.

54. But how effective is this control? A measure of general control is provided by the political responsibility of a minister to Parliament for his department. This responsibility for the order of supersession made may be raised through questions to the minister, and during debates relating to his department, Laying before Parliament is the effective control, unless it is argued that ministerial responsibility as a delusive doctrine and affords no protection to the electorate from the arbitrary action of the executive. Apart from this, publicity is secured by the publication of the order together with reasons in the official gazette. So the people are informed of it.

Grounds of Supersession

55. Now I come to the heart of the matter.

Annexure I

In Annuexure I there are four complaints. The first is that the Corporation has failed to repay timely principal and interest on the amounts borrowed by it from the Central Government. The amounts due to the Government are not disputed. S. 194 of the Act says: “All payments due from the Corporation for interest on and repayment of loans shall be made in priority to all others payments due from the Corporation.” As a statutory creditor the Central Govenrment is entitled to prior payment of its dues. The corporation was incurring huge deficits year after year. Its indebtedness was mounting. It did not pay interest and principal after 1973-74. The elected representatives in their reply pleaded that they had inherited the liabilty from the past and though their performance was “commendable” they were unable to pay because the Government did not agree to their request to convert the huge liability into a grant-in-aid or ‘loan in perpetuity’. It was said that the deficits are not a new thing and that this was a universal feature of all State Governments and the Government of India undertakings. It was added that 35 crores of rupees were due from the Goverment which it did not pay and this was one of the causes of their failure to pay loans and interest. A statutory creditor, as is the Central Government, is entitled to demand payment in accordance with the terms of the loan and if no payment is made it will amount to persistent default. The underlying idea of S. 194 is to secure to the Central Government the repayment of loans and interest.

56. The second and third complaints are that the Corporation has failed to deposit employees provident fund and the additional emoluments under the Act of 1974. This is also a persistent default because Provident fund has to be deposited at the beginning of each month. The default is not disputed by the Corporation. But it is said that its responsibility rested entirely with the Commissioner. In my opinion, the Commissioner cannot be held responsible.

57. It is necessary to say a few words about the role of the Commissioner in the civic set-up. Under S. 54 he is appointed by the Central Government and is removable by the Central Government if a resolution for such removal is passed by a majority of not less than 3/5th of the total number of members. By S. 59 the entire executive power for the purpose of carrying out the provisions of the Act or any other Act which confers any power or imposes any duty on the Corporation is vested in the Commissioner. The Commissioner is the chief executive of the Corporation. It is true that he is the keystone of the municipal arch. But the primary responsibility for payment of employees' provident fund and additional emoluments is on the Corporation. The Corporation is distinct from the Commissioner, S. 3 of the Act says that “the Corporation shall be composed of councillors and aldermen constitute the deliberative wing of the Corporation. They take decisions on matters of principle and policy. Commissioner is the authority to execute their orders in the same manner as the executive enforces the legislative commands. The Commissioner is one of the municipal authorities under the Corporation (S. 44). His primary loyalty and duty lie to the Corporation. It is to the Corporation that he is answerable for his actions. In the course of advising the Corporation there is clearly no objection to the Commissioner telling that he considers their proposals to be wrong and, if he thinks fit, submitting his views to them in writing. Once his view is known to the Corporation, he should leave them to come to their own decision. It is the duty of the councillors and the aldermen to formulate the policy for the Corporation and they are primarily answerable for their actions to the people at the polls and in a way to the Central Government also. The Commissioner has plainly said that he could not deposit provident fund or additional emolouments because of the non-availability of funds. It is unjust to throw blame on the Commissioner.

58. The fourth complaint is that the Corporation failed to manage its finances prudently and its style of functioning has resulted in heavy deficit. The Commissioner wrote that “the Corporation is in the throes of a financial crisis of an unprecedented magnitude.” The Corporation framed unrealistic budgets. There ar detailed provisions in the Act on budget making (S. 109 to 112). The budget is to be framed having regard to all the requirements of the Act in such a way that the estimated cash balance at the close of the year shall not be reduced below the sum of Rs 1 lakh atleast (S. 110). If the cash balance cannot be left at the close of the year, the, it shall be incumbent on the Corporation to sanction forthwith any measures which it may consider necessary for adjusting the year's income to the expenditure. The Corporation has never been able to adjust its income to the expenditure. This is the gravamen of the charge. The budget it adopted was based on an expected increase in the realisation of property taxes, expected rural areas grant from the Central Government, and expected rural areas grant from the Central Government, and expected permission from the Government to raise terminal tax by about 66 per cent. The Commissioner pointed out that such a budget was unrealistic because unless and until the Parliament amends the Act its expectations cannot be realised. His advice was disregarded. He suggested that utmost economy must be effected in the expenditure in order to balance the budget. He recommended that no development work should be undertaken from the municipal revenues. His advice was rejected. Even his competence to make a porposal of this nature was questioend. He was ordered to see that the development work was not stopped under any circumstances.

59. That the Corporation did not cut the municipal coat according to the cloth is evidenced by a request which it made for a ways and means loan of Rs 4 crores during the current fianncial year of 1979-80 to tide over the financial crisis. Though the joint secretary Mr S.V Sharan recommended that the loan be granted the matter was referred to the financial adviser to the Government of India who declined to recommended the loand and opined that it was not proper for the Government to “bail out the Corporation”. He pointed out that the non-realistic appraisal of receipts and faulty budgeting were the main causes for the Corporation's financial plight. The Corporation, he said, has been sending money without raising the financial resources. It had taken into account a large amount of revenue which it should have known that it could not realise unless the Act is amended and the Government made a Rural Areas Grant. This was the state of things in January 1980. As there was no hope of improving the finncial position the Government decided to supersede it soon after in April.

Annexure II

60. Now I come to Annexure II. The charge is that the Corporation abused its powers, which have been instanced in this annexure. The concept of abuse of power has various properties in the legal universe. Thus, where the enabling statute expresses a purpose that should be achieved in exercising of discretion, and some other purpose is in fact achieved (or wought to be achieved) the abuse of power may be described as “wrong motive”. In some instances the abuse is categorised as amounting to taking improper considerations into account or failing to take proper consideration into account. In yet other cases the decding authority may be said to have acted “unreasonably” (Garner—Administrative Law 6th Ed. p. 157).

61. As Lord maonaghten said in Westminister Corporation v. London and North Western Railway (1905) AC 426 (430) (33):

“It is well settled that a public body invested with statutory powers such as those conferred upon the corporation must take care not to exceed or abuse its powers. It must keep within the limits of the authority committed to it. It must act in good faith and it must act reasonably. The last proposition is involved in the second, if not in the first.”

I will refer to two cases illustrative of abuse of power. In Attorney General v. Fulham Corporation, (1921) 1 Ch. 440(34), the Fulham Council arranged to benefit housewives of the borough by installing a municipal laundry with the latest contrivances worked by corporation officials. Under the Baths and Wash-houses Act, 1847, the council had power to establish a wash-house where people could wash their own clothes. A ratepayer sought by an injunction to restrain the corporation from conducting the laundry as a business. It was held that the statutory power was confined to the establishment of a wash-house and that it was ultra vires for the council to establish something different. Thus, were the women of Fulham deprived of the benefit of an uptodate municipal laundry.

62. The other example is the classic decision of Roberts v. Hopwood, 1925 AC 578(35). The Council was empowered by a statute to pay to their employees “such salaries and wages as they may think fit.” The Council paid to certain workmen rates of wages considerably in excess of the general level of wages prevalent in the district because they considered that the general level did not amount to a reasonable living wage. The district auditor disallowed these payments and surcharged the consequent deficiencies in the rate fund on those coucillors who had voted for this decision. They appealed to the courts, and the Hosue of Lords upheld the district auditor, because in fixing this high rate of wages the councillors had done so by reference to something which they ought not to have entertained and to the exclusion of those elements which they ought to have taken into consideration in fixing a sum which could fairly be called a wage.

63. These cases shwo that where a power vested in a public authority is exceeded acts done in excess of the power are invalid as being ultra vires. The ultra vires doctrine serves to control those who exceed the administrative discretion which an Act has given. (Wade and Phillips—Constitutional and Administrative Law, 9th Edn., page 587).

64. A power that is discretionary is abused or misused if it is exercised for an unauthorised purpose, if relevant considerations are disregarded or irrelevant considerations taken into account. Even where a discretion seems unfettered the courts will interfere where it has been exercised in a way which thwarts or frustrates the objects of the Act conferring the power. See Bedfield v. Minister of Agriculture, 1968 AC 997. An abuse of power may be either in good faith or in bad faith. An authority acts in bad faith if it acts dishonestly, in order to achieve an object other than that for which it believes the power has been given; or malaciously, if acts out personal animosity. (O. Hood Phillips—Constitutional and Administrative Law, 6th Edn., page 599).

65. It is not suggested that the councillors and adlermen were corrupt or dishonest. As Scrutton LJ said, “some of the most honest people are the most unreasonable; and some excesses may be sincerely believed in but yet quite beyond the limits of reasonableness” (R. v. Roberts (1924) 2 KB 692 (719)(36). But conduct that is unreasonable as to be arbitrary or capricious can well be mistaken for or assimilated to acts done in bad faith. (Smith—Administrative Action—(4th edition) p. 347). There are examples of discretionary powers having been unlawfully exercised on irrelevant grounds. There are decisions of improper expenditure of public funds by local authorities (Smith p. 342).

66. It is in the light of these prinicples that we have to see whether the acts enumerated in Annexure II are instances of abuse of power. The best illustration of abuse of power seems to me the sale of staff quarters. The Corporation sold quarters in Nimri Colony to the occupants ignoring the fact that the quarters were meant to serve as an amenity to the staff. S. 43(a) says that one of the discretionary functions of the Corporation is to provide “dwelling houses for municipal officers and other municipal employees”. It will be an unauthorised use of its powe to transfer the quarters to the occupants, even though it be at market rate.

67. It is true that the Corporation has the power to transfer a property (S. 200). But in the present case it will be an improper exercise of power for three reasons. Firstly, the stipulation of the Government loan was that 50 per cent of the quarters will be sold and 50 per cent will be retained for the employees. In the second place, the employees had brought a writ petition which is even now pending. Without waiting for the decision of the court the Corporation passed a resolution that the quarters be sold at market rate. Thirdly, there was an acute shortage of accommodation. The Commissioner was against the transfer. But his advice was not heeded. The reply of the Corporation that there was no impropriety in disposing of the quarters at market rates cannot be accepted because that is not the purpose for which they were built. Power to transfer property exists but its scope has been exceeded.

68. In the reply it was asserted that the Government of India and the Delhi Administration have themselves sold their own buildings at reduced prices to their employees. This is not a justification for a corporate body, because one of its functions is to provide houses to the employees aqnd not to sell them. it is a service corporation and not a sales corporation. A local authority is a public body discharging functions under statute; its powers and duties are defineable in terms of public, not private law.

89. If we keep the above principles in view it will be quite clear that the acts enumerated in Annexure II are clear instances of abuse of power.

Items 1 and 4:

70. Nearly a thousand ad hoc appointments have been continuing in the Corporation. No temporary appointment can continue beyond one year without the sanction of the UPSC. Appointments made without consulting the Commission, unless the post itself is excluded, should be terminated automatically at the end of the year. P.N Jain Committee observed in its report in 1967 that “the personnel policy of the Corporation should be reviewed to reduce the number of ad hoc appointments.” This shows that the Corporation had no recruitment philosophy and ad hocism was the style of its functioning. The same is true of the appointments of S/Shri J.D Goel, B. Dayal and S.P Kapil in the posts of municipal engineer, deputy municipal engineer and superintending engineer respectively. These appointments were made against the recommendations of the UPSC and without obtaining prior approval or confirmation from the Lt. Governor. This was in plain violation of Ss. 89, 96, and 97 of the Act. That J.D Goel was a hard case is not a justification for acting contrary to the provisions of the Act.

Item No. 2:

71. The Deputy Mayor and the Chairman of the Committees were using motor vehicles. The opinion of the Solicitor General of India was taken twice. He opined tha the use was contrary to the Act. Inspite of his opinion it was resolved that the members desirous of using vehicles for non-duty purposes shall be permitted by the Corporation to do so on payment of charge as fixed by Government of India for use of cars by their officers when on private duty. Secondly, the previous unauthorised use of the cars was condoned without surcharing those who had misused the cars. It is said that the Chairman of the Water, Sewage and Disposals Committee was using the official car contrary to legal advice till the date of supersession.

Items 3 and 5:

72. There is no provision for a ‘discretionary fund’ in the Act. Placing Rs 20,000 at the disposal of the Chairman Standing Committee and Rs 1,800 at the disposal of the Chairman of other committees is not sanctioned by S. 105 of the Act. Similarly, there is no provision in the Act for a ‘contingency fund’. The Murarka Commission recommended its disconstinuance. It is true that the report of the Murarka Commission (1968) was not accepted by the Government. But if the Act makes no provision for a contingency fund the councillors cannot use the money by having a fixed sum set apart for their constituency, irrespective of the needs of development of a particular constituency. In one constituency more money may be required, in another little may be enough.

Item 6:

73. This complaint relates to reconstruction of demolished buildings which were described as emergency excesses. The Corporation permitted re-erection of building demolished during emergency in plain disregard of building bye-laws. A whole string of sections beginning from Ss. 331 to 335 and 343 to 344 deal with building bye-laws which are required to be observed whenever a building is to be built or reconstructed. The resolutions passed by the Corporation permitted a departure from the building bye-laws if the building to be rebuilt had been demolished during emergency and was on private land.

Item 7:

74. The Corporation awarded a contract of Rs 1.30 crores to M/s Trading Engineers against the advice of the Commissioner and against normal purchase procedure. Tenders were invited for supply and installation of water pump and other equipments at water pumping stations. Crompton Greaves Ltd. gave an offer of Rs 1,15,64,690.00. Trading Engineers Private Ltd.'s tender was for Rs 1,25,19,607.00. Apparently Crompton Greaves' tender was lower. But it was not accepted because Trading Engineers gave an improved design of the motor. The higher efficiency of the product of Trading Engineers was found to be more economical. Trading Engineers improved their product and demonstrated higher efficiency after giving the tender. Business methods required that similar opportunity should have been given to Crompton and Greaves, and they should have been asked if they can also supply an improved motor of higher efficiency.

Annexure III:

Item No. 1

75. The Corporation was giving conveyance allowances even to officers who had not field duty to perform. P.N Jain Committee reported that the grant of conveyance allowance to the officers and staff of the M.C.D “should be reviewed urgently”. Nothing was done.

Item No. 2

76. Its is not disputed that the Corporation owes over four crores rupees to private contractors and has not been able to discharge this liability. This is another instance of financial mass. Apart from the fact that this shows that there is no financial stability in the Corporation it shakes its credit worthiness in the mind of the public.

Item No. 3

77. The Government makes grants or advances loans for the execution of specific plans. These amounts have to be spent on the execution of those schemes only. What the Corporation did was that it diverted plan funds to non-plan expenditure. This is borne out from the printed budget estimates. The Corporation did not deny in the reply the diversion of plan funds to non-plan expenditure. Their case was that plan funds could not be spent on the the scheme for one reason or another. This is no justification for using plan funds for non-plan expenditure. The Corporation was trying to meet its huge deficit by diverting the plan funds to other expenditure.

Summary and conclusion:

78. How do we sum up? The position that emerges is this. On an examination of the material and the grounds stated in the show cause notice a body of sensible persons will come to the conclusion that the Corporation is incompetent and in persistent default and has abused its powers. Some of the grounds on which this opinion was entertained cannot be contested. Failure to pay the provident fund and additional emoluments required to be paid under the statutory provisions and regulations is not disputed. It is said that the responsibility for payment rested entirely on the Commissioner. This is not correct. Failure to deposit provident fund is clearly indicative of mismanagement of municipal finances. The commissioner bluntly said that he can make payments and discharge the obligations of the Corporation only when funds are available. But if wherewithal is not available he cannot be held responsible.

79. Take the charge of deficit financing. The Corporation failed to pay the instalments of loan and interest it had borrowed from the Central Government. Though it provided for its payment in the budget the hard fact remains that no instalment was paid to the Government since 1974, and none in any case during 1977—80, the years in question. The budget prepared by the Corporation was unreaslistic. The responsibility of adopting an annual budget rests on the elected body. (S. 109). Hoping and expecting that the Central Government will amend the Act and increase the taxes the Corporation thought that its receipts will exceed the expenditure. This was a hope and expectation on which the budget was passed. The Commissioner advised hard headed realism. He suggested that the Corporation must keep expenditure within bounds. The elected representatives rejected his advice out of hand, holding that it was none of his business to tell them how they should budget the proposals. The Central Government in pursuance of S. 194, was entitled to be paid loan and interest first before any other payment was made by the Corporation. As this was not done, the Central Government, as a powerful statutory creditor, decide to dissolve the Corporation, a body which over the years had failed to perform its statutory duty of payment of loans and interest. The creditor was not prepared to wait because financial indebtedness was increasing to astronomical figures. Huge burden of indebtedness was pilling up. The Central Government decided to dismantle the corporate apparatus. They took over municipal administration in their hands.

80. The sanction which the Central Government can impose and indeed, if it is satisfied of the necessary premises, must impose upon the erring Corporation is as complete as could be imagined; it involves the dissolution and supersession of the Council and therefore, the confiscation of all its properties. This is the power of the Central Government which provides grants-in-aid, block grants, plan funds and other subsidies. It is true that this is a drastic power and can seriously impair Corporation's responsibility to the people and sometimes reduce it to the vanishing point. The Central Government have sput, they have rein, they have pole-axe in their hands. Which one they will use, when and how, is not left to them. The legislature has laid down the statutory criteria in S. 490. This is done to prevent executive onslaught or departmental aggression. When the Corporation is a conspicious faiure indischarging its statutory duties the Government can use the pole-axe to dissolve it.

81. The subject of municipal fiannce is of perennial interest. The Corporation wanted to show that the fianncial defaults mentioned in the notice weres not attributable solely to the present Corporation but were mainly due to what the Corporation had inherited from the past. This is what they wanted to say and show. But this antiquarian research, I think, was not necessary, The section does not limit the power of the Central Government to order supersession to this Corporation or that. It speaks only of the Corporation. Corporation we know has a perpetual succession. It is a flowing stream. In order to facilitate the management of its affairs, the local authority has been made a ‘body corporate’—‘an artificial person having continuity of life, a continuing identify notwithstanding changes in its component personnel, and the power to hold property as though it were an individual.’ It can also sue and be sued in its own name. This shows that even for the faults and defaults of the previous civil administrations the successor bodies of councillors and aldermen can be superseded. Future generations will have their own sufficient burdens but they cannot disown legacies of debt from the past. The Act draws no dividing line between the past and the present. It addresses itself to a given situation. There is nothing in the section to suggest that the sins of the past cannot be visited on the present holders of office. The reason is that councillors and aldermen have been personified and not this man or that. The Act incorporates a body of individuals who may come and go but all will enjoy corporate personality during the period of their incumbancy. Men are mortal but the Corporation enjoys their incumbancy. Men are mortal but the Corporation enjoys the attribute of ‘legal immortality’. And when it is supeseded it remains in a state of suspended animation. Wihtout a habitation and a name.

82. But it is unjust to blame the Commissioner for the defaults of the Corporation or its incompetency or abuse of power. The office of the Commissioner is an important part of the machinery of the local Government. He may be said to stand between the Corporation and the Central Government. He is there to assist by his advice and action in the conduct of public affairs in the Corporation, and if there is a disposition on the part of the Corporation to ride roughshed over his opinion, the question must at once arise whether the deliberative wing of the Corporation is not solely to be blamed for the consequence. If the Commissioner is nto answerable to the Corporation he is answerable to no one. The Act harmonises the two principles of municipal home rule with central control. The municipal government of Delhi vests in the Corporation composed of councillors and aldermen (see S. 3). It does not vest in the Commissioner. The Commissioner is the chief executive. He owes dual responsibility to the Government and the elected representatives. Placed between universal sufferage and the cerntral power, he is between the anvil and the hammer. This has been said of the French Perfect. It is true of the Municipal Commissioner of Delhi.

83. But his opinion is entitled to great weight. He represents the official element in the municipal administration which is a happy combination of the elected amateur and the professional administrator. He advised the Corporation that they should not incur execessive expenditure, that they should stop development work, that they should not accept tender of Trading Engineers, that they should not sell Nimri Staff quarters, that they should not pass any resolutions for the regularisation of demolished buildings contrary to law and in the face of express provisions contained in Chapter XVI on building regulations, whatever be their sympathy for those who suffered in emergency excesses.

84. There was no friendly cooperation between the elected body and the executive. There was little coordination of thought and work between the Commissioner in whom the executive power is concentrated dand the elected representatives who are the guardians of public opinion. The Commissioner was operating in a hostile territory. He knew that the terrain was difficult. He knew that the Corporation was passing through troublous times. The Commissioner is right when he says that “the financial bungling was a result of the Corporation's own defaults and incompetency.” As he put it, the fact of the matter is that the Corporation persistently defaulted in making payments due to ‘unimaginative and defective budgeting’ which resulted in a huge deficit of 70 crores from 1977-78 to 1979-80. Mismanagement of finaces is writ large. The Corporation was like a ship of which fuel was running out; and the fuel which keeps the Corporation going is money raised by taxes or borrowed. Provident Fund etc. had not been paid. Creditors of 4 crores of rupees remained unpaid. The Central Government had not been paid. Judge John F. Dillon, a leading authority on municipal corporations says. “In many of its more important aspects a city is not so much a miniature state as it is a business corporation, its business being to wisely administer the local affairs and economically spend the revenue of an incorporated community. As we learn this lesson and apply business methods to business affairs, we are on the road to better and more satisfactory results.” In awarding the contract to Trading Engineering the Corporation did not act in a businesslike manner. This instance clearly shows that there was neither efficiency nor excellence nor thrift in this and other fields of utilitarian achievement. The Corporation can by no means be described as a shinning example of success.

85. In the field of municipal service a large number of ad hoc appointments were made withotu regard to its resources. The appointment of chief engineer, deputy engineer and superintending engineer from year to year was made against the recommendations of the UPSC and without obtaining any prior approval of the Administrator. The provision of a ‘discretionary fund’ is plainly against the Act. Similarly, the ‘contingency fund’ was created without having regard to the needs of development. All constitutencies are not alike in their size, needs or problems.

86. In my opinion, there was sufficient material before the Central Government on which it could find as it did, that the Corporation is incompetent to manage finances in a prudent fashion, that it has persistently defaulted in the performance of its duties, and it has abused its powers. Of the abuse of powers two glaring instances are, as I have said, the sale of Nimri staff quarters and the regularisation of demolitions. Sale of quarters is against the purpose of the act, even though the Corporation has the power to transfer property. Such a sale cannot be said to be authorised or contemplated by the statute.

87. As regards demolitions styled as ‘emergency excesses’ the law cannot be altered by passing resolutions. So long as building byelaws are in force they have to be obeyed. It is not a sufficient answer to say, as was said in the resolution, that “moral and social duty” required assistance to be given to rehabilitate those who had suffered in an ‘extraordinary situation’ and therefore cases of demolitions were not covered by ‘ordinary procedures’. That the procedure indicated in the resolution was “in the interests of justice and fairness to all concerned” is not enough sanction to depart from the statutory provisions. In fact no resolution can be passed which has the effect of giving a goby to the legislative command.

88. Similarly, the misuse of motor vehicles by the Chairman of the Standing Committee and other statutory committees cannot be condoned in the manner it was done. The councillors and the aldermen stand in a fiduciary obligation to the electors. They are put incharge of public funds with the duty superadded that they will act as trustees or managers of the property which belongs to the whole community they seek to serve.

89. It is true that the opinion of the Central Government is the determining matter. But the opinion is displaced as a relevant opinion if it could not be formed by any sensible person on the material before him. The courts will not readily defer to the conclusiveness of an executive authority's opinion as to the existence of a matter of law or fact upon which the validity of the exercise of the power is predicated. The courts will find out whether conditions precedent to the formation of the opinion have a factual basis [M.A Rashid v. State of Kerala, AIR 1974 SC 2249(37)].

90. If the opinion is “so absurd that no sensible person could even dream that it lay within the powers of the authority” it will be acting “unreasonably” Warrington LJ in Short v. Poole Corporation, (1926) Ch. 66(38) gave the example of the red-haired teacher, dismissed because she had red hair. This is unreasonable in one sense. In another sense it is taking into consideration extraneous matters. In still another sense it is excluding matters which one is bound to consider. Lord Greene M.R quoted this example with great effect in the leading case of Associated Provincial Picture v. Wednesbury Corp. (1948) 1 KB 223(39) and I find it illuminating.

91. The expressions incompetence, persistent default, abuse or excess of power limit the authority of the man who weilds the power. The question what these expression mean is a question of law. I cannot read the section as making the Government the arbiter upon the construction of the section and the limits it imposes on its powers. Doubtless the Government must in expressing an opinion for the purposes of the section also entertain a view as to the question of law. But its view on law is not decisive. If in arriving at a conclusion it appears to the court that the Government had given effect to a wrong apprehension of its powers under the section the result would be that the Government has not expressed such an opinion as is referred to in the section.

92. It is true that on some of the matters which were raised in the show cause notice there can be two opinions. It is true that the present Corporation there can be two opinions. It is true that the present Corporation inherited the goods and evils of the previous administrations and that there were several disputes between the Government and the Corporation on the non-payment of dues which it was claimed the Government and the Government organisations were liable to pay. It is true that the endemic situation was the subject of lament and comment by the Murarka Commission and the Jain Committee. But the view taken by the Government is not uneasonable. He cannot say to the Government “You let the Corporation function. Wipe out old debts. Convert them into a ‘loan in perpetuity’. Advance a fresh loan of Rs 4 crores of rupees. Appoint commissions of inquiry and act on their recommendations.” The Government can well say: “If councillors and aldermen are accountable to the people, the Central Government has also a responsibility to the electorate for national policy.” The truth is that the unsoundness of financial administration is a good ground for supersession. Without sound finance no sound Government is possible. The central-local financial arrangement is a subject of singular importance but of great complexity. ‘He who pays the piper calls the tune’ and Government makes financial help conditional upon minimum standards of performance.

93. As Lord Denning MR pointed out in the Court of Appeal that “two reasonable persons can reasonably come to opposite conclusions” and that “no one can properly be labelled as being unreasonable unless he is not only wrong but unreasonably wrong, so wrong that no reasonable person could sensibly take that view.” [Secretary of State for Education and Science v. Metropolitan Borrough of Tameside, 1977 AC 1014 (1025)]. In my view there was material before the Government for entertainng the opinion they did. Certainly it was not an unreasonable opinion. (I am aware of the warning given by the Supreme Court that every error or lapse on the part of the Corporation is not a disqualification meriting supersession within the language of S. 490. Defaults to be actionable must be persistent.) (See S.L Kapoor v. Jagmohan, 1980 (4) SCC 379)(40).

94. The requirement that the Government must give reasons for the order it makes does not necessarily require it to record a judgement judicially arrived at. All it has to do is to prepare a “catalogue of the Committee's misdeeds” (per Das CJ. P. 114) or enumerate “all the misdeeds and wrongs done by the committee” (per Kapur J. p. 126) (Radhey Shyam Khare, supra). The authority has to make the order after considering all the explanation furnished by the Corporation because its order puts and end to the very existence of the Corporation itself and in view of the grave nature of the consequences that ensue. But the statute nowhere requires that the authority must deal with the explanation in its order.

95. Paradoxically local government in the twentieth century seems to expand the number of functions it performs at the same time that it faces increasing central government supervision and a narrowing of its independence. From local self-government, often described as the best school of democracy, it can, by financial dependence, be reduced to a department of the State. Such are the woes of welfaeism. Such is the great power of the purse. “Who holds the purse holds the power”, wrote James Madison in the Federalist. He was right.

96. To summarise, the power to supersede is essentially an administrative power. The appraoch of the public authority in the exercise of the power has to be quasi-judicial. There is a judicial element involved in the exercise of power. But with the expediency and inexpediency, wisdom and unwisdom, of such a measure the court has nothing to do. Balancing the advantages and disadvantages of one possible course of action against another and making a decision is what ministers have to do; it is the very stuff of government and the courts should not interfere save for goods reason and disagreeing with the decision is not in itself a good reason. (Ashar v. Secy. of State, (1974) 2 All ER 156 (168) (41) per Lawton LJ). In deciding a case a minister works in an environment which is quite different from that of the judge.

97. On the whole case my conclusion is that the minister correctly applied threefold statutory criteria to the facts before him and directed his mind in each case to the right question. I am satisfied that he directed himself properly in law. He has not misapprehended the nature of his power. On the material before him he acted in a way a reasonable authority would have acted. “Disagreeing with his decision is not in itself a good reason” to interfere. In my judgment there are no valid grounds for holding that the Central Government acted unreasonably within the meaning of S. 490.

98. For these reasons I would dismiss the petition but make no order as to costs.

S.S Chadha, J.—I agree.

Petition dismissed.

I. THE QUESTIONS:

H.L ANAND, J.

This petition under Art. 226 of the Constitution by a former Councillor of the Municipal Corporation of Delhi, for short, the Corporation, assails, inter-alia, the validity of the order of the Central Government made on 11-4-1980, in exercise of powers under sub-section (1) of S. 490 of the Delhi Municipal Corporation, Act, 1957, for short, the Act, superseding the Corporation for a period of one year on the ground of persistent default and incompetence in the performance of duties imposed on it by the Act and of abuse of powers and raises substantial questions of law of great public importance, as indeed, of considerable difficulty, with regard to the scheme of Chapter XXIV of the Act dealing with the control of the Corporation by the Central Government, the nature of the power of control conferred on the Central Government, the constraints within which and the conditions, circumstances and the manner in which the power ought to be exercised, and the construction of the provisions of S. 490 and certain other provisions of the Act. Was the Corporation denied a reasonable opportunity of showing cause against the proposed order of supersession? Whether the Corporation was justified in asking for extension of time to submit a reply to the show-cause-notice pending supply of large number of documents and information by the Commissioner and examination of the relevant material to draw up an effective reply? Whether the impugned order was vitiated in that the Central Government did not give reasons why the order was being made in spite of whatever explanation the Corporation was able to give within the limited time at its disposal? What was the correct interpretation and true construction of the expression “persistently makes default”, “abuses its powers” and “duties imposed on it by or under the Act” occurring in S. 490(1) of the Act? If the failure or inability of the Corporation to meet its financial obligations arising out of contracts could be said to be within the terms of S. 490(1) of the Act? Whether the Central Government was acting unreasonably in superseding the Corporation without prior resort to the provisions of S. 487 of the Act to give appropriate directions to the Corporation? What, if any, are the limits of justiciability of an order of supersession in proceeding under Art. 226 of the Constitution and what would be the proper test for the Court to apply in determining the validity of such an order? Whether the order was made in exercise of bona fide executive power or was vitiated because it appeared to have been made for an extraneous purpose even though based on some material, which could not be altogether brushed aside as being irrelevant or extraneous? These are some of the questions that are posed for decision or otherwise arose in the course of the hearing of the petition.

II. The BACKGROUND:

2. The petition, which was filed in the backdrop of rather turbulent circumstances, did not have a smooth course in this Court. The year 1980 marked the end of a phase of unprecedented political changes in India in which the people had voted overwhelmingly to power at the Centre and number of States, a conglomeration of opposition parties. The process, which was described by the Supreme Court 1 in the case of State of Rajasthan, as being indicative of a “critical situations” and representing a “total alienation” between the people and the Government then in power, was reversed in early 1980, when the present government in power at the Centre took over. The new government assumed office on 14-2-1980. Consistently, as it were, with what the previous government ordered on 17-2-1980, the dissolution of nine State Assemblies, which were then under the control of the opposition parties, in exercise of power conferred by Art. 356 of the Constitution of India on the ground that the governments in those States could not be carried on in accordance with the provisions of the Constitution but admittedly for the obvious reasons that in view of the mandate of the people at the Centre, the context in which the Assemblies in these States had been elected had drastically changed so as to justify a fresh poll. There has been considerable controversy whether such a decision was essentially a political decision, with major policy content, and was within the provision of the Article and whether it was justiciable and inconsistent with the principles and requirement of Federalism has been subject-matter of considerable debate and has been subjected to harsh criticism at the hands of an eminent author on the Constitutional Law of India, (2) but it is sufficient for our present purpose to say that the validity of the order dissolving the Assemblies in that situation would be beyond constitutional doubt in view of the way in which the Supreme Court considered the question, when the previous government had similarly dissolved State Assemblies following its assumption of power at the Centre. What was then sanctified by the Supreme Court could not possibly be open to challenge, even though the roles of parties were reversed. The fate of the dissolved Assemblies also overtook the Metropolitan Council of Delhi on 21-3-1980, and rightly so, because if the drastic change in the context justified the dissolution of nine State Assemblies, the Metropolitan Council of Delhi could not be treated differently, for, it was after all a mini legislature for the Union Territory of Delhi and its dissolution was governed by the conditions which governed the dissolution of the State Assemblies. This decision was, therefore, to an extent, consistent with the law laid down by the Supreme Court in the case of State Rajasthan (supra). Before the dissolution of the Delhi Metropolitan Council, the Lt. Governor of Delhi superseded the New Delhi Municipal Committee, a municipal body nominated under the Punjab Municipal Act, by an order of supersession made on 27-2-1980, in exercise of powers conferred by S. 238(1) of the Punjab Municipal Act, as extended to Delhi, on the ground that the Committee was guilty of persistent default and incompetence in the performance of duties imposed on it under the law and had abused its powers. The Committee was however, not given any opportunity whatever of showing cause against the proposed order of supersession. Soon thereafter, by a show-cause notice of 1-4-1980, the Central Government called upon the Corporation pursuant to the proviso to sub-section (1) of S. 490 of the Act, to show cause within a period of 7 days from the date of receipt of the notice, why an order superseding it should not be made on the ground that it had persistently made default in the performance of duties imposed on it by or under the Act, had abused its powers, and had been incompetent in the performance of its duties. The Corporation submitted an interim reply and sought 10 days extension to submit a proper reply. The extension was refused and by an order made on 11-4-1980, the Corporation was superseded for a period of one year. The present petition was filed on 19-4-1980. While issuing rule nisi, this Court, Prithvi Raj and Anand JJ. however, declined to grant a stay of the operation of the order but directed that the matter be heard and disposed of at an early date. This, however, did not happen partly because, meanwhile, the order of supersession of the New Delhi Municipal Committee had been upheld by a Full Bench of this Court, consisting of five Hon'ble Judges, by an order made on 9-5-1980. At the final hearing of the present petition before a Division Bench of this Court, Prithvi Raj and Anand JJ. the principal contention of the petitioner that the Corporation had been denied a reasonable opportunity of being heard was sought to be dispelled by the way in which the Full Bench had looked at the scope and content of reasonable opportunity of being heard. The Division Bench, however, felt impelled to refer the petition to a larger Bench, which would be entitled to reconsider the Full Bench decision, as the Division Bench felt that the decision deserved reconsideration. Before the larger Bench could be constituted, the order superseding the New Delhi Municipal Committee was voided by the Supreme Court on 18-9-1980, (3) in appeal even though it did not give the relief as the term of the Committees was due to expire on 3-10-1980 but the principle was vindicated when the Supreme Court laid down that the Committee had been denied a reasonable opportunity of being heard. The present petition was accordingly heard afresh by a Full Bench of three Judges, the reference to a larger Bench having become unnecessary in view of the decision of the Supreme Court.

3. We heard learned counsel for the parties at considerable length on the various questions in controversy but our close and anxious consideration of the matter failed to produce a unanimous opinion as to the validity of the order, as indeed, on most of the questions debated before us. My learned brother Avadh Behari, J. is satisfied with regard to the validity of the order and turned down the various contentions urged on behalf of the petitioner and proposes to dismiss the petition. My brother Chadha, J. proposes to concur in the conclusions as well as the reasons therefore. I have had the benefit of perusing the well-reasoned Judgment prepared by Avadh Behari, J., for whom I have great regards. I, however regret my inability to either concur in the conclusion or subscribe to any of the reasons on which the conclusion purports to be based and propose to accept the petition, to the extent it challenges the validity of the impugned order, but dismiss it to the extent it assails the validity of the show-cause notice and to direct that, while maintaining the status-quo of the administration of the Corporation, the Central Government would reconsider the matter at an appropriate level, after giving to the Corporation or the Executive Councillors, as may be considered feasible, a full, fair and effective hearing. I also propose to direct that the administration of the Corporation would abide the ultimate decision of the Central Government on such a review.

III. REASONABLE OPPORTUNITY TO SHOW CAUSE

4. The first and the foremost question that is posed for decision is as to whether the Corporation was denied a reasonable opportunity of showing cause against the proposed action.

5. The time-honoured rule of audi alteram partea, an essential component of the principle of natural justice and an integral part of the larger concept of rule of law has been variously described as “substantial Justice”, “the essence of Justice”, “Fundamental Justice”, “universal Justice”, “rational Justice”, “justice without any epithet” or “fairplay in action”. The rule expresses the close relationship between common law and moral principles, has an impressive ancestry and may be legitimately considered as being of Divine origin. That no man is to be judged unheard was a precept known to the Greeks, inscribed in ancient images, where justice was administered, proclaimed in Senoca's Madea, enshrined in the scriptures, traced by the Supreme Court (4) to the Arthshastra in India, mentioned by Saint Augustine, embodied in Germanic as well as African proverbs, ascribed in the year Books to the law of nature, asserted by Coke to be principle of divine justice and traced by an eighteenth Century judge to the events in the Garden of Eden. Where the Lord himself asked of Adam and Eve if they had eaten of the forbidden fruit before their fall from Heavens to earth. (5)

6. The fundamental maxims of natural justice have now become deeply and indelibly engrained in the common consciousness of mankind as pre-eminently necessary to ensure that the law is applied impartially, objectively and fairly. During the last two decades, the concept of natural justice has made great strides in the field of administrative law. The law in India has kept pace with the development of law in England. The epoch making decision of the House of Lords in Ridge v. Baldwin (6) had it parallel in India in the case of Kariapak (7) where the Supreme Court laid down that if the purpose of rules of natural justice was to prevent miscarriage of justice, one failed to see why these rules should be made inapplicable to administrative enquiries, and observed that arriving at a just decision is the aim of both the quasi-judicial enquiries as well as the administrative enquiries and an unjust decision in an administrative enquiry may have more far-reaching effect than a decision in a quasi-judicial enquiry. It is now well-established that the rule cannot be sacrificed at the altar of administrative convenience or celerity for, convenience and justice as Lord Atking(8) felicitously put it “are often not on speaking terms”. More recent judicial thinking tends to the application of the rule and to the preservation of its solemnity and core even where there is no express legislative recognition of it or a possible inference of its exclusion, as also in extraordinary and emergent situations even though such extraordinary situation may justify situational modification, timeously or otherwise, of its application. It has also been recognised that like the doctrines of ultra vires and public policy, natural justice is a branch of public law and is a formidable weapon which can be wielded to secure justice to the citizen and a distinction has been drawn between its application to situations involving more right to property and those involving fundamental liberties, civil and political rights and judicial thinking favours the further extension of its frontiers in cases involving fundamental liberties and civil and political rights, including the right to self-government. The decision of the Full Bench of this Court in the case of supersession of the New Delhi Municipal Committee (supra) and the majority opinion of this Court in the case of Swadeshi Cotton Mills (9) had raised some doubts about the scope, content and limits of the rule but the recent decision of the Supreme Court in the cases of New Delhi Municipal Committee (supra) and Swadeshi Cotton Mills (10) have not only reinforced the rule but also added new dimensions to it.

7. There has been considerable debate with regard to the scope and content of the requirement of a reasonable opportunity of showing cause and the judicial annals are replete with precedents and principles which have determined the evolution of this requirement. It is, however unnecessary for us in the present case to have recourse to these worries of wisdom because Parliament thought it necessary to make the requirement a statutory obligation u/s 490 of the Act. It is an ample measure of the importance that Parliament attached to an order of supersession and the concern it had for a reasonable opportunity of showing cause that the requirement was not left to the general application of the principle of audialterem partem but was made a statutory obligation and a condition precedent for the making of such an order. It was built into the Section by the proviso to it which runs thus:—

“Provided that before making an order of supersession as aforesaid, reasonable opportunity shall be given to the Corporation to show cause why such order of supersession should not be made.”

Parliamentary concern for an order of supersession and the impeartive of a reasonable opportunity of showing cause and of due and proper consideration of such cause by the authority making in the Section. Sub-section (1) of that Section, which empowers the authority to supercede the Corporation, provides that the order must be “published, together with a statement of the reasons therefor, in the Official Gazette.” sub-section (3) of the section reinforces this concern when it provides that “an order of supersession made under this Section together with a statement of the reasons therefor shall be laid before each House of Parliament as soon as may be after it has been made.”

8. The statutory requirement, as indeed, the requirement of the principle of audialterem partem is not a mere opportunity to show cause for a mere opportunity could degenerate into a convenient facade, a mere public relations exercise, or a mere matter of from shorn of substance. An opportunity must, therefore, be an effective and meaningful opportunity. It is for the reason that the statutory requirement, as indeed, the principle of natural justice insist that the opportunity must be a “reasonable opportunity”. The concept of reasonable opportunity is essentially objective in the sense that the opportunity must be reasonable in the context of the totality of the circumstances in which the person required to show cause is placed. It must be reasonable having regards to the nature of the change he is called upon to meet, the magnitude of the work involved in understanding the charge, having access to the record or material on which it is based, collecting and collating information, data and material, which would justify a defence to the charge, adequate time to examine the material, apply mind to the material, seek advice, articulate his explanation and put it across to the authority for its consideration, if the charge is based on oral testimony of any person or the opinion of another person, an opportunity to cross-examine such a person and in a fit case to produce both oral and documentary evidence and, if such a course is justified an opportunity of an oral hearing to persuade the authority to his point of view. Whether an opportunity is reasonable or not would also, to an extent, depend on the nature of the charge, the nature of the power which is sought to be exercised, the ramification of the order, that is sought to be made, the rights and interests that are sought to be protected. Finally, the opportunity to show cause must not only be reasonable by all the objective criteria but must also appear to a reasonable person to be so. The appearance facet of the concept of reasonable important than the actual opportunity. At one time the requirement of appearance was thought of as being peculiar to the judicial process and it is axiomatic that justice must not only be done but must also manifestly appear to be done and considered to be its crowing glory. Recent juristic thinking has sought to introduce that facet of appearance even in the administrative process when it is commended that the reasonable opportunity to show cause even in exercise of executive power must also appear to be reasonable and it is heartening to note that this thinking was judicially recognised in the latest decision of the Supreme Court in the case of New Delhi Municipal Committee (supra) when the Supreme Court quoted with approval the observation of Jackson (11) thereby making it a mandatory requirement of law that the person affected must not only be given a reasonable opportunity to show-cause but it must also manifestly appear that a reasonable opportunity had been given before an adverse order was made. The reasonable opportunity satisfies the requirement of law but the manifest appearance of such an opportunity satisfies the bar of public opinion and raises executive action to a judicial pedestal. The requirement, both of the reality and the appearance becomes more imperative where the matter is not confined to individual rights, interest or property but extends to political and civil rights and have impact on the right of a mass of people to administer their civic affairs.

9. Let us examine the totality of the circumstances in this case and see if one week's time granted to the Corporation to show cause satisfied the requirement of law or, to put it differently, if the requested for an extension of 10 days sought by the Corporation was so unreasonable as to justify its rejection without assigning any reason whatsoever.

10. The show cause notice was received by the Commissioner of the Municipal Corporation of Delhi on 1-4-1980, the very day on which it was sent by the Government and the Commissioner forwarded it to the Municipal Secretary the same day and was received by the Mayor at 8 p.m on that day itself. On 2-4-1980, the Mayor asked the Commissioner of the Municipal Corporation for a parawise reply to the show-cause notice based on facts and figures in respect of the contents of Annexures I to III to the notice being furnished to him at the earliest opportunity “on top priority basis.” By the letter of 3-4-1980, the Commissioner, however, informed the Mayor that the reply was required to be framed by the Corporation and that he and his office would, however, be ready and willing to furnish any data, information or assistance that may be required to them. The Mayor informed the Commissioner the same day by his detailed letter of 3-4-1980 that although the reply to the notice was to be formulated by the Corporation, yet the members may be requiring precise authenticated details pertaining to various aspects forming subject-matter of the show cause notice and, therefore, requested the Commissioner to furnish in detail latest by the 5-4-1980, the information relating to the various matters forming subject-matter of the three annexures. The Mayor set out the detailed information and material required with reference to each of these allegations in the course of this 11-page reference to the Commissioner. Similarly, on the same day, the Mayor issued instructions that an urgent meeting of the Corporation be convened for 7-4-1980 to consider the notice, since 72 hours notice for convening a meeting of the Corporation was necessary under the Act. the Commissioner of the Corporation had apparently already deputed the staff to collect the necessary information and date required in connection with the various allegations and sent a 50-page detailed note to the Mayor on 5-4-1980. Similarly, the Mayor sent a letter to the Central Government on 3-4-1980 informing it that an urgent meeting of the Corporation was being convened for 7-4-1980 and pointed out that one week's time for a reply to the notice was insufficient and an extension for at least 10 days upto 18-4-1980 was sought, inter alia on the ground that in order to deal with and rebut each of the several allegations, documents and records would have to be referred to and that the Municipal Commissioner had already been asked to collect the necessary information and data for the purpose. The Meeting had already been convened for 5-4-1980 to elect the Mayor and the Dy. Mayor but this Meeting had apparently to be devoted to the election and the show-cause notice could not have been considered by this meeting in the absence of proper notice of the item for consideration and the material required for a proper consideration of the matter. The Corporation considered the notice in its meeting of 7-4-1980, and decided to send an interim reply to the Government denying the allegations generally and expressing its determination to establish that there was no ground for supersession but praying that 10 days' time already sought be allowed to enable the Corporation to submit a meaningful and effective reply to the allegations. The Corporation also resolved to set up a Sub-Committee to consider the notice in depth and the material information and data relating to the various matters in controversy and prepare a detailed and effective reply in consultation with Legal Adviser who was also appointed for the purpose. Meanwhile, by its letter of 6-4-1980, Central Government informed the Mayor that the Central Government after considering the request, regrets “its inability to grant any extension in this regard”. The communication did not indicate reasons for the rejection of request for extension. The sub-committee appointed by the Corporation meanwhile held its meeting on the 8th, 9th and 10th, when it considered the various matters and, inter alia sought additional information, data and material from the Commissioner. In its meeting held on 10-4-1980, it adjourned to meet again on 11-4-1980 at 4 p.m to continue its deliberations after further material and information had been received from the Commissioner but the impugned order superseding the Corporation on the grounds on which the show-cause-notice was based was received at 2.45 p.m on 11-4-1980 rendering any further consideration of the matter by the Corporation infructuous.

11. The order of supersession was a drastic order. It would be tantamount to the removal of a duly constituted municipal government. It would put an end to the tenure of over 100 elected representatives of the people, who had been given a mandate for the civic administration of the city. It would deprive each one of them of their status as Municipal Councillors. It, therefore, divested them of their powers, functions and rights and indirectly deprived a mass people for a limited period to govern themselves at the civic level. The order would interfere in the normal functioning of democratic decentralisation and was tantamount to suppression of democratic rights for a specified period. It had the effect of declaring that the chosen representatives of the people had made persistent default in the performance of their duties, were incompetent and had abused their powers. It therefore, not only stimatised the Corporation as a collective corporate entity but also condemned the individuals, who constituted it under the Act. It was, therefore, both condemnatory and deprivatory in its wide impact. An analysis of the three Annexures to the show cause notice would show that there were about 20 allegations of default, incompetence and abuse of power, which had relation to the functioning of the successive Corporation in Delhi over the years based on accounts, facts, figures, data resolutions, minutes, notes, extending to thousands of pages and relating to almost a decade of the functioning of the Corporation. Most of the allegation extended beyond the life of the present Corporation and had their genesis in the finances of the body during the last more than a decade of its functioning. If the note prepared by the Commissioner of the Corporation to assist the Corporation to prepare a reply was any index, it would be useful to remember that after many days of strenuous work, the staff of the Corporation dug up records and prepared a note running into 50 pages dealing with the various allegations involving considerable figure work apart from collection and collation of material. If the material placed before this Court in the present proceedings could be a reasonable index of the magnitude of the work involved in understanding the charges examining the material and preparing a reply, it would be useful to remember that the allegations and counter-allegations in the present proceedings, including the material considered relevant by both parties with reference to the charges and counter-charges, ran into nearly a thousand pages. Eminent counsel, who appeared before this Court for both sides required weeks and months to put on paper what in their wisdom appeared to them to be contention of their respective clients in relation to the various questions of law that arose, the questions of fact that required decision, as indeed, the question as to the nature of the power, the interpretation of the law, the proper approach to the problem and an assessment of the material to determine if suppression of an elected body was justified or not. Eminent counsel on both sides, who had undisputed claim to competence, ability and brevity, took weeks to prepare themselves and weeks to place their respective cases before the Court with a view to satisfy the Court with regard to the validity or otherwise of the order of supersession. One may concede in all fairness to the Government that the environment in which the Government makes a decision or devotes consideration to a matter calling for decision is not necessarily the same as in a Court, even though the actual process is not different, Courts are called upon to judge a cause without “fear or favour”, “ill-will or affection” on a bone fide application of judicial mind to the material placed before it by both the parties in an impartial and detached manner. The duty of Government is in no way different. The process in a Court is time-consuming essentially because of the Courts' anxiety to ensure that both side are fully heard and nobody turns his back to the Court with grouse that he was not heard. It is also born of a judicial anxiety that the decision of the Court is just and fair, that law and justice prevail, that injustice is prevented and that the truth trumphs in the maise of half-truth and lies. The process in Government is not different. The ultimate object of both proceedings, at the judicial and executive level, is the same. One may, nevertheless, concede that the process need not be all that eleborate on a Government consideration as in a Court of law and that the person aggrieved need not therefore, be given all that latitude that he gets when in a Court of law, but nevertheless, there is a minimum requirement of time that must be satisfied in the context of the totality of the surrounding circumstances.

12. In considering the reasonableness of the request for extension of time, it is not possible to ignore that the Corporation was not an individual, who had to act on its own and, therefore, involving a simple process of application of mind. It was a corporate body, composed of more than 100 persons. The law lays down the manner in which it could meet. 72 hours' notice is essential for its meetings. The process of application of mind by a group of persons or a corporate entity to the material as indeed, the various questions introduces an unusual comuplexity in their task and called for discussion between them, consultations at different levels in depth study of the problems in the sub-committee. The duty of the Corporation and of the Councillors, etc. who constituted it transcended the duty to defend the Corporate body or the individuals, who constituted it. They had a more fundamental and deeper duty to perform. Whatever also may be said of the various allegations, one thing is obvious that most of the allegations had their genesis in genuine difficulties in the administration of municipal government. All these raised and involved larger questions of pattern of the various facets of municipal government—financial as well as administrative. The proposed supersession was, therefore, in any event, a very important occasion, for the body to deliberate as to where the municipal government in power had failed or if the system of municipal government incorporated in the Act required a second look in matters of powers, financial resources, functions and duties. Some of these matter has been examined in the past by a member of high-powered committee. They could not have, therefore, taken the allegations lightly even if one were to concede, as was suggested in a lighter vain on behalf of counsel for the Commissioner, that in any event. Councillors knew very well that the order of supersession “was coming” even before the notice was issued. All this obviously would justify sufficient and at least breathing time, which could be reasonably limited only if any emergency or other compulsions pointed to the contrary.

13. One test of reasonableness would be see how an ordinary civil servant, when called upon to show cause, deals with the matter and the reaction of Government if he made, in somewhat similar circumstances, a request for a few days' extension. We have enough experience of disciplinary proceedings to be able to say without any fear of contradiction that even if the tenure of a temporary government servant was sought to be affected, by an order involving allegations of misconduct on even minor charges, he would not be given less than couple of weeks to submit a reply if the charges related to a prior period or involved documents or records which he would need to examine or inspect or the charge involved a question of law or fact in which he would need the assistance of a lawyer, he would invariably ask for a week or so more and we know such time would be ungrudgingly allowed to him for, how does he deal with an allegation having some historical background unless he has had time to examine the material, to seek advice and submit a reply. It is well-known that even if he sought legal opinion, any lawyer would be bound to ask for a few days' time to study the material and tender his advice or to prepare a draft of a reply. Government is ordinarily considerate while dealing with civil servants. Such cases rarely came to Court. One did. The refusal of J&K Government to give 2 weeks' extension of time to submit a reply to Des Raj 12, a Civil Servant, was held by the High Court to be unreasonable. If that be so, were not the chosen representatives of the people entitled to that consideration where they were not being merely deprived of a minor right or of a tenure in service but were being condemned as incompetent and guilty of default and abuse of power. The order had much wider ramifications and more extensive impact. If they were not given the ordinary consideration that would be given to a public servant, this Court got the impression: that they were being shabily treated. Whatever be the level of their competence or the Government assessment of their work and conduct, they deserved a better treatment in the process of this assessment.

14. An important aspect of reasonable opportunity in the present context would be if government had any compulsion to turn down a reasonable request for extension of time. True, the requirement of a reasonable opportunity is of universal application but what would be reasonable opportunity in different sets, or circumstances is a flexible concept. While the person affected must be heard, the scope and content of the hearing could be, suitably moderated or tailored to the peculiar requirement of a situation. Thus, a situational modification modification of the opportunity has been recognised in law. Ordinarily, a reasonable opportunity must mean the fullest possible opportunity having regard to the totality of circumstances. In emergency conditions, or where there are other compulsions, the scope of the opportunity could reasonably restricted. It is necessary in all such situations that the government acts in a manner which would strike a reasonable balance between the requirement of a reasonable opportunity and the compulsions of a given situation. Was there any emergency or other urgency in the present case which could have justified rejection of a reasonable request for extension? We looked in vain for any such factor. Eminent counsel, who sought to justify the government order, were unable to give any satisfactory explanation. Neither the counsel nor the government records provide an answer if there were any compulsions justifying an unsual attitude or any possible reason could be attributed to the rejection. There was obviously no emergency. If the allegations on which the show cause notice was based would have justified supersession, the situation was not of any one's immediate making. It has been there over the years. It has perhaps been their spite of the elected representatives. There was no danger of any precipitate action which could not be adequately dealt with by government either in exercise of its directional powers or otherwise even after the supersession. The reasons attributed to the refusal was a purile excuse that the earlier Corporation had also been given one weeks's time to submit a reply. This was hardly any reason to reject a reasonable request. The request for extension was based on good reasons, the magnitude of the work involved, the time required for the purpose and the nature of the order sought to be made. Government did not squarely meet any of these reasons either in the order or at any earlier stage. Acrypric reply turning down the request was wholly arbitrary.

15. An attempt was made to justify the rejection of the request for extension on the ground that in such matters expedition was called for. Expedition is a laudable object. Developing societies in democratic functioning are essentially slow. It is, therefore, good that development work in such societies picks up speed. But when nothing else seems to be moving, where was the question of expedition in demolishing an elected body, particularly, where the day-to-day functioning of the Corporation was in the safe hand of the Commissioner, who was an appointee of the Central Government itself, and the Central Government had wide powers of superintendence over the affairs of the Corporation, including the ultimate power to unseat the elected body and to take over the administration in its hands. We were not pointed to any particular danger or any apprehension of any risk or injury if immediate action was not taken but even if there was some, it has not been shown that it could not be adequately dealt with under the existing powers of the Central Government. I am, therefore, unable to see any reason why the Corporation was rushed through. If the only reason was that the Assemblies and the Metropolitan Council had been dissolved and the Corporation must, therefore, also be superseded, it was not a Legitimate reason. In any event, if it had to be superseded eventually a few day's would not have made any difference to any one. It is interesting to notice in this context that the request for extension of 10 days was turned down on the 6th April, even though the earliest note of the Deputy Secretary is of the 9th of April and the eventual order was made only on the 11th of April, Government was obviously ill-advised in rushing with the rejection. If the process of consideration was yet to be initiated on the 6th, where was the unholy haste to reject a reasonable request. Government would perhaps have been properly advised to allow extension, at least a few days extension, and nothing would have been lost. It appears that in considering the matter, it was ignored that in the way in which government was dealing with the Corporation, its own image was at stake and the Central Government itself was on trial, as it were. It was performing solemn statutory duty of interfering in the normal functioning of democratic institution being run by an opposition party. It had to justify not only the ultimate order but also the manner in which it made the order. If there was something in the manner which could give the impression that those who are sought to be thrown out of authority were being unfairly dealt with, it would obviously constitute a Legal infirmity and sully its own image, as an executive authority under a duty to act in a just and fair manner.

16. Judicial anxiety to find a justification or at Least a mitigation for the action of a responsible person or body of persons in rejecting a reasonable request of a person sought to be proceeded against often leads to a quest to know why after all the person or the authority acted in the manner it did when there was no reasonable compulsions or reasons for such conduct. When repeated questions on the subject drew a blank or brought out an explanation which was flimsy and, therefore, not acceptable to judicial mind, the mind tends to travel to the realm of conjecture and guess work, an obvious difficulty terrain to land. The attempt to find possible reasons took one to completely bind alleys. A possible reason may be someone's thinking in the seat of power that the order of supersession was as good as made irrespective of what the explanation of the Corporation may be and that, therefore, nothing was to be gained by any extension that the Corporation may be given. Such an attitude would, however, involve a clear vitiating element in the process would, however, involve a clear vitiating element in the process of consideration and has been, with respect, rightly scotched by the Supreme Court in the case of supersession of the New Delhi Municipal Committee (supra). Even otherwise, such an attitude would fallacious even from government's own point of view. If the supersession order was as good as made and any amount of extension would not have made any difference, what is it that was lost if an extension was given? If anything, something substantial was to be gained by it because the order would then not suffer from at least the infirmity of denial of opportunity. Government would be in a better position in any challenge to the validity of the order to justify judicial conscience, that it gave all the time that was necessary to show cause. Fear of judicial interference at the show cause stage could not have been the motivation for rejection either. In any event such a reason would have been improper. Judicial process is known to have into it a built-in safeguard because of the successive reviewability of judicial orders. On the existing material, however, the question as to why government rejected the reasonable request for extension must remain unanswered.

17. It could not, therefore, be said that the Corporation had been given a reasonable opportunity of being heard and, in any event, in view of the rejection of its reasonable request for extension, it could not be said by any process of reasoning that it appeared that the opportunity was reasonable. In any event, even if one had any reasonable doubt, if reasonable opportunity had been denied or reasonable request for extension was turned down, or whether reasonable opportunity had been given or would appear to have been given, one would rather resolve the doubt in favour of the person affected rather than in favour of the authority which exercised the power, more particularly in a case like this with unusual features.

18. It is, however, not possible to accept the further contention of the petitioner that reasonable opportunity of showing case was denied because of non-disclosure of part of the material that was considered by government in making the order. This plea was raised particularly in the context of the admitted fact that in considering the question, the government note referred to above relied on an earlier note of the Financial Adviser to the Central Government of 19-1-1980 in which the request for grant of a loan of Rs 4 crores by the Corporation was opposed. This was a more expression of opinion by a government functionary which the Government was certainly entitled to consider and there was no duty to disclose this opinion to the Corporation. The decision of government was essentially based on the material which formed part of the records of the Corporation and which were available to the Corporation and, subject to the availability of time, were open to examination by the Corporation. Government note merely sought reinforcement from the way the Financial Adviser of Government had looked at the request for a grant and the desirability of accepting the request. The failure of government' to disclose the contents of this note was, therefore, of no consequence.

IV. Duty to Give Reasons, if satisfied

19. Whether the order of supersession gives reasons therefor and if the requirement of law that the order of supersession and the reasons therefor shall be published in a Gazette and a copy of the order alongwith reasons therefor should be placed before both Houses of Parliament, has been satisfied or not, is the further question that calls for decision.

20. The requirement that any order whether judicial, quasi-judicial or executive, which affects rights, interests and freedoms, must give reasons on which it is based, is a salutary requirement, judicially and juristically evolved in the anxiety to do justice and to prevent injustice and is a requirement that is insisted upon, whether or not there is a corresponding statutory requirement. The principle is, however, legislatively recognised in numerous statutes, which confer power of the executive authority to make adverse orders. S. 490 of the Act legislatively recognises the principle when sub-section (1) provides that the order of supersession must be published “together with a statement of reasons therefor” in the Official Gazette. sub-section (3) of that section further enjoins that the order “together with a statement of reasons therefor” shall be laid before each House of Parliament as soon as may be after it has been made.

21. How is the expression “reasons” to be construed? Is it to be narrowly construed to be confined to the grounds on which the order is based, such as persistent default in the performance of duties, abuse of power and incompetence in the performance of duties, and to the allegations or instances constituting such default, incompetence or abuse? Should it be widely construed so as to include not only the grounds and the allegations and the conclusions arrived at by Government but also the explanation of the Corporation why it should not be superseded and the reason why Government considered the explanation to be satisfactory and made the order is spite of the explanation. That is the first question that falls for determination.

22. Let us first approach the question from the point of view of principle. What is the genesis of the requirement that order must give reasons on which it is based. This is not a requirement which is germane to the form of the order. It has relation to the substance to it. It is a requirement which is based on sound principles. The requirement is intended to achieve manifold objects and laudable purposes. In the first instance, the requirement to give reasons ensures application of mind to the material, for, how does one give reasons for an order unless one applies one's mind to the material which it is called upon to consider. Secondly, it incorporates a built-in safeguard against arbitrariness in the exercise of power. It immediately introduces an element of rationally into an executive decision-making process. The requirement makes the authority pause for a moment and articulate for itself why it was making the order. It feels that it is answerable for its order and the validity of the order would be tested at the touch-stone or reasoning, rationality and logic. Thirdly, it makes any further examination or review in appeal or in other proceedings before Court whether under Art. 226/32/136 of the Constitution more meaningful and effective. It enables all subsequent authorities dealing with the matter to know how the mind of the authority, which made the order, was functioning, what is it that appealed to it when it made the order and how it dealt with the objections as to why the order should or should not be made. Lastly, it is intended to inform the person aggrieved, if an individual or if it involves wider rights, interests, freedoms, the public in general, as to why the action had been taken. The requirement would be particularly important where there is a super-added requirement of publication in Gazette. Such an order has to meet the larger public gaze. It is not merely confined to the Government file or to the person directly or indirectly involved. The authority in such cases is answerable to the people in general because the nature of the order is such that all of them must be informed as to what order has been made and why it has been made.

23. Now, if that be the rationale for the salutary requirement that the order must give reasons, could it, on principle, be confined merely to the grounds or the allegations are part of the initial material that the authority has when it decides to take up a matter. If the person aggrieved has a right of making a representation against the proposed order, the original material is supplemented by what may be described as his explanation, his point of view, of what he has to say with regard to the allegations and why he thinks, adverse order ought not to be made. That is his part of the case and his defence to the charge. If, therefore, the reasons must include what the allegations and the grounds are, it obviously follows, they must also recite if he gave an explanation and if so, what that explanation was. Now, if the Government did not consider the explanation, at all, or none was offered, there would obviously be no further requirement. But if the Government considered the explanation, as indeed, it was bound to where the law required that an opportunity be given and it is availed of, then, obviously, the Government is bound to consider the explanation, either accept it or reject it; and if it rejects it, it would naturally have its reasons why it considers that the explanation was not satisfactory and would not justify a different course than what the Government proposes to do. In such a case, the reasons that must be set out, as indeed, meet the public gaze or be available to the superior authorities or courts, could not possibly be confined to the grounds or the allegations or the mere explanation but also the further reason why the explanation was turned down by the Government. It follows, therefore, on principle to be sound to insist that in such a case, the expression “reasons” must be widely construed so that the order contains its justification as also the justification for the rejection of the explanation and if these requirements are not satisfied, the order does not meet the legal requirement.

24. Legal precedents are after all a small change of the law. Yet, in precedent-oriented legal system like ours, it has considerable value and gives good guidance even where not binding. All precedents are entitled to greatest respect, whether binding or not. Their importance lies in the logic on which they are based. But where they are binding, there can be no dissent unless one can successfully distinguish them. Fortunately or unfortunately, there had been a number of cases of supersession of the local bodies in India and a judicial consensus has emerged over the years with regard to the manner in which the expression “reasons” ought to be construed in the context of the requirement that an order of supersession must give reasons. High Courts dealing with cases of supersession have clearly distinguished the grounds and allegation, on which the order of supersession is based, from the conclusions of the authority making the order and the reasons why the explanation of the superseded body was not considered satisfactory. There has fortunately not been a single voice of dissent among the High Courts which construed the expression. Some of the High Courts which considered the expression were not called upon to widely construe it and that question therefore, did not fall for decision in those cases. The High Courts which considered the question if a wider construction should be placed on the expression “reasons”, are unanimous in their view that the order must contain reasons for the rejection of the explanation of the Corporation. The decision of the Madhya Pradesh High Court in the case of Suresh Sethi 13, where this view was expressed, was followed in the later decision of that very High Court in the case of Kharsia Municipality 14 and still later by the Bombay High Court in the case of Malkapur Municipality 15. The distinction between the conclusion and the reason why the explanation is turned down has been clearly brought out in more than one judgments of the Supreme Court and it is enough to refer to the case of Siemen's Engineering 16. This case is a clear authority for the proposition that the requirement of giving reasons in an order was not satisfied unless it contains the reasons why the explanation was not considered satisfactory. It is futile to confuse this requirement with the further requirement as to how elaborately the reasons are set out or various questions are discussed or as to the form that it should take. That is an entirely different aspect of the matter. Once reasons are given, why the explanation was not considered satisfactory, how those reasons are set out is an entirely different matter and no exception could be taken to the order merely because it does not extensively deal with the explanation or the reasons why the explanation was considered unsatisfactory or was rejected.

25. In the present case, the order of supersession reproduces in extenso the show cause notice and, therefore, sets out not only the grounds on which the action is based but also the various instances which are said to constitute defaults, incompetence or abuse of power. There is, however, no reference in the order of what the explanation of the Corporation was and why the explanation was not considered satisfactory. The only reference to the explanation is that it was received. The published order as also the order placed before both Houses of Parliament obviously follows the same pattern and does not refer to what the explanation was and why the explanation was not acceptable. If, therefore, the requirement of law was that the order must meet the public gaze and must inform not only the Municipal Councillors but public in general, as to why an order had been made, they were not told that the explanation of the Corporation was and why it was not acceptable, the legal requirement was, therefore, not satisfied.

26. It is, however, not possible to void the order of supersession merely on the ground that the order does not incorporate what the explanation of the Corporation was and why it was not considered satisfactory. The reasons on which the order is based need not be incorporated in the order itself. The requirement is two-fold. Firstly, order must be based on reasons, even though not set out in the order itself. This is made amply clear by the provision of Section which refers to the order and the accompanying reasons. It has already been pointed out that substantial reasons for the order are part of the order itself, in that, it reproduces in extenso the charges and the various instances on which they are based. What remained was the explanation of the Corporation and the reason why the explanation was not considered satisfactory. When the matter was being heard in the Division Bench, we allowed the Union to place on record the notings reflecting the entire process of decision making and we find on a reference to the note of the Deputy Secretary of 9-4-1980 that the explanation of the Corporation was dealt with seriatim and while I am not satisfied if it could be termed and explanation at all nor am I happy in the manner in which the explanations were dealt with; it cannot be denied that the Deputy Secretary concerned did take notice of the various explanations and did indicate that they were not acceptable for whatever good, bad or indifferent reasons. It is not for us to indicate whether the reasons for the rejection of the explanation were satisfactory or left quite a lot to be desired. This note was admittedly prior in point of time to the ultimate order made by the Minister when he concurred with the proposal for the supersession of the Corporation. The reasons in the note could not, therefore, be confused with or be treated as being any supplementary attempt to justify the order or a subsequent justification for an order, a hint of which is to be found in the case of Mahinder Singh Gill 17. That rule would exclude the material if it was is subsequent affidavit seeking to justify an order. The note in the present case is prior to the order and it is open to this Court, while considering the validity of an executive order, to examine the contemporaneous records or records relating to the period immediately prior to the making of the order in the process of decision making to find if the requirements of a valid order were satisfied with reference to such material. On an examination of the order, as published in the light of the noting on the file which led to the making of the order, it cannot be said that the requirement of giving reasons for the order, even if the expression “reasons” was to be widely construed, was not satisfied, in the present case even though one may be reluctant to subscribe to the manner in which the explanations were dealt with.

27. There was, however, the additional requirement that the order and the reasons therefor must not only be published in the Gazette but must also be placed before both Houses of Parliament. This requirement obviously was not fully satisfied because the note does not form and could not have formed part of the published order nor was the file or part of the file containing reasons placed along with the order before either House of Parliament. The question that, therefore, arises is whether in the totality of these circumstances, where all the requirement is satisfied on the government record. It is not possible reasons envisaged by law were set out either in the order or in the contemporanious government records, the requirement was still not satisfied merely because there was failure to publish part of the reasons constituting the government treatment of the explanation. This poses the question if the requirement that the published order must contain the reasons, was a mandatory or a directory requirement?

28. When is a legal requirement mandatory or merely directory? What is the distinction between the two and the effect of their non-compliance on the validity of the action which is sought to be regulated by the requirement? When can these requirements be said to have been satisfied? These questions have been subject-matter of judicial controversy. A mandatory requirement or an imperative requirement is a requirement that must be strictly complied with both in letter and spirit. The substance and the form of it are equally important. In such a case, if a manner is laid down for the exercise of the power, or for any act or thing to be done, it has to be done only in that manner or not at all. The directory requirement, though equally important and nevertheless a requirement that must be satisfied may, however, be substantially complied with and if substantially complied with, does not vitiate the action. Such requirement is a requirement of substance but not necessarily of form and the manner of the exercise of the power or of taking the action or thing is important but a deviation would not vitiate the action, the order or the thing sought to be regulated. These principles owe their origin to the need to ensure that the legal requirements are satisfied but at the time, to introduce an element of judicial modernisation in determining the consequences if the requirement is not satisfied at all or though satisfied, it falls short of the ideal requirement. One test to determine if a requirement is mandatory or directory as if there is a provision in the statute which lays down the requirement as to the consequence of non-compliance. Whether a requirement is mandatory or directory depends on a variety of factors. The nature of the power, the purpose sought to be achieved by it, the presence or absence of a provision in the statute laying down the consequence of non-compliance, are some of these factors. In determining the impact of non-compliance of a directory requirement or substantially compliance or total non-compliance of a mandatory requirement, to an extent, depends on the circumstance if the requirement is an antecedent requirement, a condition precedent for the making of the order or of taking of a valid action, non-compliance may void the order for, power conferred has not been exercised as required by law. Where, however, the requirement is a requirement of a step to be taken subsequent to the making of the order, it would not necessarily void the order or the decision or the action already taken even though in a fit case, it may have the effect of keeping the order in a state of suspended animation. Now, this is correct that the further requirement is that such an order accompanied by the reasons for it must then not only be published in a Gazette but the same must also be placed before both the Houses of Parliament. This is a requirement which is subsequent to the making of the order and any non-compliance would be incapable of vitiating the order even though it may be said with some claim of legitimacy that until the further requirement are satisfied, the order does not come into effect and remains incohate, as it were, incapable of affecting status or legal rights. That was, however, not the argument before us. The non-compliance of these requirements, if any, had, therefore, no impact on the validity of the order.

29. If the non-compliance with the requirement of publication and of placing the order, accompanied by reasons before both Houses of Parliament is incapable of vitiating the order prima facie it follows that the requirement, though salutary and to be complied with, is not mandatory but is directory, and a substantial compliance would meet the legal requirement. Even otherwise, the Court would not void an order where all the other requirements are strictly satisfied and the only non-compliance is that the reasons for the rejection of the explanation do not form part of the published order, even though this requirement is satisfied on the government record. It is not possible to ignore in this context that even though the expression “reasons” has been widely construed by the High Courts and in a slightly different context by the Supreme Court, the expression “reasons” is ordinarily understood as meaning the grounds or allegations and this is how at least two High Courts understood the expression because in those cases, they were not called upon to give a wider construction. Government could have, in the circumstances, legitimately understood the requirement as requiring no more than what was published. The impugned order could not, therefore, be faulted on this ground.

30. Moreover, in determining the effect of failure to give in the published order, the reasons for the rejection of the explanations, it is not irrelevant to take into account the fact that the interim reply of the Corporation could hardly be described as an “explanation” for, it was no more than the expression of a willingness and ability to establish, if and when an opportunity was given for the purpose, that the supersession would not be justified.

V. Resort to drastic remedy if unreasonable.

30. Whether on a true construction of the scheme of Chapter 24 and the nature of the power of supersession, the Central Government was acting unreasonably in resorting to the drastic statutory power of supersession without exhausting other remedial measures to set matters right, is the next question that calls for decision.

31. The constitutional genesis of the Act is to be found in entry (5) of the State List to the Seventh Schedule of the Constitution of India which runs thus:

“5. Local government, that is to say, the constitution and powers of municipal corporation, improvement trusts, district boards, mining settlement authorities and other local authorities for the purposes of local self-government of village administration.”

The Act, according to its Preamble, was intended to consolidate and amend the law relating to the Municipal Government of Delhi, S. 3 of the Act provides for Constitution of the Corporation and, inter-alia, envisages that the Corporation “shall be composed of Councillors and Aldermen”. S. 4 lays down the term of office of Councillors and Alermen, Chapter III deals with functions of the Corporation which are broadly classified as general, obligatory functions and discretionary functions. S. 41 enumerates the general powers of the Corporation which, inter-alia, provides that the Municipal Government of Delhi shall vest in the Corporation. S. 42 enumerates obligatory functions of the Corporation and enjoins that it shall be incumbent on the Corporation to make adequate provision by any means or measures which it may lawfully use or take for each of the various matters wet ut in the Section. S. 43 enumerates the discretionary functions of the Corporation and provides that the Corporation may, in its discretion, provide for all or any of the matters enumerated in the Section. Chapter IV deals with the Municipal Authorities and the Municipal Authorities include the Commissioner of the Municipal Corporation. S. 54 obliges the Central Government to appoint a suitable person as the Commissioner of the Corporation. The power to remove the Commissioner is retained by the Central Government under sub-section (3) of that section, although the Central Government is bound to remove him if the Corporation so resolves by a majority of not less than 3/4th of the total number of members. S. 55 enumerates the functions of the Commissioner and provides that the entire executive power for the purpose of carrying out the provisions of the Act other than those pertaining to the Delhi Electric Supply Undertaking shall vest in the Commissioner and enjoins that he shall also exercise all the powers and perform all the duties specifically conferred or imposed on him by the Act or any other law for the time being in force. Chapter V deals with the procedure for the transaction of business by the Corporation. Chapter VI deals with the Municipal Officers and other municipal employees. Chapter VII deals with revenue and expenditure. Chapter VIII deals with taxation, and matters relating thereto. Chapter IX deals with borrowings. S. 194 in this Chapter provides that all payments due from the Corporation or interest on or repayment of loans to the Central Government shall be made in priority to all other payments due from the Corporation. S. 195 provides for attachment of Municipal fund for recovery of money borrowed from Government. Chapter 23 deals with rules, regulations and bye-laws and, inter-alia provides that every rule made under the Act shall be laid as soon as may be, before each House of Parliament and any regulation that may be made by the Central Government within one year of the establishment of the Corporation and any regulation so made may be altered or rescinded but no such regulation would have effect unless it has been approved by the Central Government and published in the Official Gazette. U/s 483, any power to take bye-laws being made would not take effect until they have been approved by the Central Government and the Central Government has been empowered in approving a bye-law to make any change therein. Central Government is also empowered to cancel and bye-law which it may have approved. Chapter 24, with which we are directly concerned, deals with control of the Corporation by the Central Government. S. 485 in this Chapter empowers the Central Government to require the Commissioner to produce any record, correspondence, plan or other documents in his possession or under his control, to furnish any return, plan estimates, statement, account or statistics relating to the procedures, duties or works of the Corporation or any of the municipal authorities and to furnish or obtain and furnish any report. S. 486 empowers the Central Government to depute any person in the service of Government to inspect or examine any municipal or office or any service or work undertaken by the Corporation and to report thereon and provides that the Corporation and other municipal authority and all municipal officers shall be bound to afford the person so deputed access at all reasonable times to the premises and properties of corporation and to all accounts, records and other documents, the inspection of which he may consider necessary to enable him to discharge his duties. S. 487 empowers the Central Government to issue directions to the Corporation or the municipal authorities concerned to make arrangements to its satisfaction for the proper performance of the duty or to make financial provision to its satisfaction for the performance of the duty and the Corporation or municipal authority concerned is bound to comply with such direction. The Central Government is empowered to issue these directions, whether on receipts of any information or report obtained u/ss 485 or 486 or otherwise, if it is of opinion that any “duty” imposed on the Corporation or any municipal authority by or under this Act had not been “performed” or has been “performed in the imperfect, insufficient or unsuitable manner” or that “adequate financial provision has not been made for the performance of any such duty”. The Section further provides that unless in the opinion of the Central Government, the immediate execution of such order is necessary, it shall before making any direction under the section give the Corporation or the municipal authority concerned, an opportunity of showing cause why such direction should not be made. The Section further empowers the Central Government to issue directions in relation to the management of Delhi Electric Supply Undertaking or Delhi Water Supply and Sewage Disposal Undertaking or in relation to any question of policy concerning any such undertaking and the municipal authorities are made bound to comply with such directions. sub-section (3) of that section further provides that in case of difference of opinion as to what is a question of policy, the decision of the Central Government shall be final. S. 488 provides and confers power for the enforcement of directions u/s 487 and empowers the Central Government to make arrangements for the taking of such action if within a period fixed by a direction made u/s 487 the action has not been duly taken. It further provides that Central Government may direct that all expenses connected therewith shall be defrayed out of the municipal funds. S. 490 is the last Section in this Chapter, which deals with supersession and empowers the Central Government to supersede the Corporation for such period as may be specified in the order if in the opinion of the Central Government, the Corporation was not competent to perform, or persistently made default in the performance of duties imposed on it by or under the Act or any other law or exceeds or abuses its powers. As a result of the order of supersession all Councillors and Aldermen vacate their offices and all property vested in the Corporation until it is reconstituted vests in the Central Government. The Section further provides that before the expiry of the period of supersession, election shall be held for the purpose of reconstituting the Corporation. The Section does not specify the period for which the Corporation may be superseded but there can be little doubt that the supersession may cover the entire unexpired term of the Corporation. On one possible interpretation supersession may extend beyond the term of the Corporation.

32. On a review of the constitutional genesis of the Corporation, the broad scheme of the Act and, in particular, the scheme relating to control of the Corporation by the Central Government, it becomes abundantly clear that the Corporation is a mini-Government within the Government which in the present case, combines both the Central Government and the State Governments, and functions under the close control and supervision of the Central Government and the administrator appointed by the Central Government for the Union Territory. The Central Government has a say in the framing of its rules and regulations and has to be constantly kept informed of the conduct of its business. The king pin in the Executive Wing of the Corporation is the Commissioner who is no other than the appointee of the Central Government and whom the Central Government alone has the power to remove whether on its own or on a motion carried by 2/5ths majority in the Corporation. In addition to the variety of matters in which the prior approval of the Central Government is necessary for the Corporation to take action, the Central Government has been given overriding powers to obtain information, inspect records, ask for reports, order inspection or any work, service or office and give directions with regard to any matter, work or action including matters of policy. It its directions are not carried out, the Central Government has the power to enforce its directions and debit the cost of work concerned to the municipal funds. In addition to the internal resources of the Corporation, the responsibility for the funding of the deficits of the Corporation or the sole responsibility of the Central Government as a parent governmental organisation. The scheme of the control, therefore, clearly visualises that the function of the Central Government is primarily to monitor the conduct of the business of the Corporation, provide to it assistance, advice, guidance, give direction to it to enable it to carry out and, if necessary, to bring to pressure on it by compelling it to act in a manner considered proper by the Central Government, and finally, should all these methods fail, in the last resort, when it feels that the matters complained or cannot be mended but must be ended, to take the drastic measure of its supersession, which has the effect of the Councillors and Aldermen vacating their offices leaving it exclusively to the Central Government and its functionaries to administer the municipal government until it is reconstituted by a fresh poll. Even in service under the State, removal of a civil servant is considered an extreme penalty and is ordinarily resorted to either in extreme cases where any other penalty or punishment would be inadequate or because the other methods including minor penalties are incapable of dealing with the situation, or have failed to bring about the desired result. The supersession of the Corporation involves special features because it deprives the people to carry out their municipal government through their chosen representatives do not respond to the word of caution, wisdom and fail to carry out the directions that may be given by the Central Government. It is true that there is nothing in the provision of S. 490 which may justify the conclusion that Central Government has no power to supersede the body unless the provisions relating to inspection, directions, etc. have been invoked, and such an extreme argument was not even urged on behalf of the petitioner, and rightly so, because there may be something in an extreme situation, something unprecedented in any action or in the manner in which an action has been carried out which would not brook any delay. There may also be something in the nature of the conduct of the Corporation which may dispense with the need to invoke the other provisions or to take the other advisory, directional or remedial measures, but, nevertheless, whatever be the extent of its powers, there can be little doubt that the drastic measure of supersession which would have the effect of depriving the people of the right to run their municipal government through their chosen representatives would not be resorted to in the absence of an extraordinary situation unless the course of events preceding the supersession would appear to lead to the conclusion that supersession was the only possible way to deal with the matter. To put it differently, the scheme of the Chapter clearly points to the need to ensure that the antecedent circumstances would naturally lead to the extreme measure of supersession.

33. This test is clearly not satisfied. The present Corporation was reconstituted after the last municipal poll in June 1977, when the conglomeration of opposition parties having control of the Corporation at the time of supersession received a massive mandate of the people not only for the municipal government but also for government at the Centre and following that in a number of States in India. The Corporation functioned under the supervision of the then Central Government in power between June, 1977 until January, 1980 when the present Government at the Centre was returned to power. There is nothing on the record to indicate that the previous Central Government, which dealt with the Corporation for a period of almost 2 years, was in any manner dissatisfied with the functioning of the Corporation or with the competence and conduct of the Corporation or of the Councillors and Aldermen who constituted it, whether in the matter of discharge of any duty, exercise of any power or performance of any function, whether under the Act or under any other Act or otherwise with regard to the exercise of any power. The earliest suggestion with regard to the heavy deficit of the Corporation is oddly enough to be found in the note of the Financial Adviser which is of 18-1-1980, incidently within 4 days of the installation of the new government at the Centre. The present government took over in January, 1980 and could not have possibly dealt with this Corporation for more than a few months because the show cause notice was issued in April and the order of supersession was made in that month itself. True, the allegations of incompetence, persistent defaults and abuse of power relate to matters stretching over for a long period of time including the period prior to the tenure of this Corporation. Equally true, that the Central Government purports to have applied its mind to the material received in the usual course from the Corporation or its executive wing from time to time or otherwise available in the records of the Delhi Administration, as indeed, the Central Government but that would not be enough in construing if in ordering supersession and invoking the extreme penalty, it was acting reasonably. If on the basis of that material, Central Government finds that there has been defaults, shortcomings, failures on the part of the Corporation to carry out its duties, it could have surely issued the appropriate directions to the Corporation, particularly, where the previous government had failed in its duty to do so. It is true that if the previous government did not take any step even though it watched the performance of the Corporation for almost 2 years, it may as well have been influenced by the ulterior political purpose in keeping a friendly political group in power at the municipal level. But, if the present Central Government made a precipitate move to demolish the elected body without giving it the opportunity to carry out the direction, won't it be subjected to the same criticism? Why did the Central Government assume that the Corporation would not be responsive to any useful suggestions or directions that the Central Government may make after it had had enough time to study the material and make up its mind as to what is required to be done but has not been carried out.

34. Now, this is true that the Central Government could not be said to be acting unreasonably merely because the Corporation was composed of political elements hostile to the party in power at the Centre. There is not enough material to hold that the statutory executive action taken by the Central Government is politically motivated and, therefore, mala fide, and this extreme contention was not even canvassed on behalf of the petitioner. The totality of circumstances and the special features of the Corporation, however, do raise doubts in one's mind if the Central Government would have taken this extreme step if with the same mess that is attributed to the Corporation, it was controlled by the same or a friendly political party. The timing of the order, the attitude of the previous Central Government, the fact that the extreme measure has been adopted without resort to less drastic measure do raise these doubt and they are satisfied that the Central Government was not only not acting unreasonably but was fully justified in the way in which it made the order of supersession as also in superseding the body. I have had the benefit of not only hearing eminent counsel who sought to justify the action as also the reasons why this Court proposed to uphold the order, it has not been possible to clear my doubts in the totality of the circumstances and if I have doubt in such a matter, I would much rather resolve it in favour of the Corporation which has been bundled out of the office, than against it. I have, therefore, no hesitation in holding that invoking an extreme penalty of supersession in the totality of circumstances of this case, without earlier resort to any of the less harsh measures, the Central Government did appear to me to be acting unreasonably. My conclusion of the same political government were under the control of the same political party or political parties which were sympathetic to each other. My conclusion would have also been different if prior to the order of supersession, this government or the predecessor government in power at the Centre have had occasion to consider the performance of the Corporation and give it advice, suggestions or directions which had not been carried out by the Corporation. In arriving at this conclusion, I have also been influenced by the important circumstances of parliamentary concern for undue interference in the course of municipal government when it made a salutary provision by proviso to S. 487(1) that unless the Central Government thought, immediate execution of a direction was necessary, it would give to the Corporation or the municipal authority, concerned, an opportunity of showing cause why such direction should not be made. It is a measure of Parliamentary concern for undue interference in the municipal government that a provision has been made that unless immediate execution was necessary, even a direction would not be issued unless the chosen representatives have had an opportunity of showing cause why such direction should not be issued. In this context, to permit the Central Government to take the extreme step without a normal and natural move into that direction, either by it, or by its predecessor government, would be defeating the very purpose of introducing safeguard into the Chapter relating to control. This would also render nugatory the provisions of Section that precedes S. 490 and constitute what may be described as a built in safeguard against excessive use of power or an abuse of power u/s 490. It is not sheer coincidence that large number of Corporations, municipal committees and other local bodies which have been lying superseded over the years were under the control of political groups hostile to the parties controlling the governments in the States and it is, therefore, not without reason that words of caution were uttered by courts from time to time while dealing with these provisions and it would be sufficient to recall to one's mind the observations made by Chief Justice Hidaytulla, as he then was, while presiding over a Bench of Madhya Pradesh High Court (18) as indeed, by the High Courts of Andhra Pradesh (19) Punjab (20) and Madras (21). The government may come and go, a political party may be at the control at the Centre and another party may be in control of the affairs of the government of the State and different political parties may control different Centres of municipal government but the safeguard built into the Constitution, as indeed, statutes like the Act, should be vindicated so that the possibility of abuse of power for purely political purpose, whether in fact or in its outward appearance can be minimised, if not altogether eliminated.

VI. Limits of Judicial Control, Approach and Attitude

35. Before considering the last question as to the reasonableness of the order in the totality of the circumstances in which it was made, it would be proper to recount the limits of judicial control, correct judicial approach and attitude in proceedings on a challenge to the validity of an order of supersession of an elected body.

36. Our system incorporates the concept of Rule of Law, which upholds the supremacy of law over the man who wields it. In this system, it is the law that ultimately prevails, and every executive action and decision must conform to a variety of constraints, built into the system. There are constitutional constraints incorporating limitations on the exercise of power. There are statutory requirements laying down the conditions for the exercise of a power or the manner in which it is to be exercised. There are, above all, judicially evolved and legislatively recognised sound principles of law intended to regulate exercise of authority with a view to ensure against any excess or abuse of power. There is above all, the duty of the State to be “just and fair” in dealing with the rights and interests of a subject. The duty to be just and fair has two facets to it. One is that the State must be just and fair in the content of the order or the decision that it makes, second is the duty to be just and fair in the manner in which it arrives at the decision. While the first ensures that the State strikes a reasonable balance between the requirement of the individual, whose interests are sought to be affected, and larger public interest, the other incorporates procedural safeguards so as to associate the person, sought to be affected by any executive action, in the decision making process itself. The concept of judicial control of administrative action is intended to ensure that executive action conforms to the various constitutional, statutory and other contraints. If the executive action conforms to the legal norms and satisfies the various requirements, it is vindicated by judicial control, but to the extent it falls short of the requirement, it is rectified and to that extent, therefore, purifies the stream of executive action. Either way, it inspires confidences in the purity of administration and in the system as a just and fair instrument to subserve public good. Judicial control of administrative action is, however, not a static concept but is a dynamic one, intended to deal with varying situations as they arose from time to time. New situations gave rise to newly-evolved principles to ensure against any arbitrary exercise of executive power. Ordinarily, all executive action is presumed to be just and fair for, it is taken without “fear or favour” in larger public interest. In actual practice, however, the stream of executive action may, at times, be sullied by extraneous influences, vitiating factors, irrelevant considerations having their genesis in caste, creed, region, race, political ideologies or affinities and the like. When an executive action is under challenge in a court of law, it is for the Court to determine what were the valid conditions for the exercise of the power; what was the legitimate purpose for which the power had been conferred; what was the motivation or foundation for the exercise of the power; how far the power had been exceeded or abused; whether the administrative action was in exercise of bona fide executive power or politically motivated or had other extraneous genesis; what was the material which was relevant or germane for the consideration before the Government and whether in arriving at its decision, Government had taken into account any factor, material or consideration which was irrelevant or has failed to taken into account any material consideration which was relevant? Would a reasonable person, duly instructed in the law arrive at the decision in question? In other words, is the decision a reasonable one? Were there any other vitiating elements either in the decision or in the manner in which it had been arrived at? This is the function of the Court in the exercise of judicial control even though once the Court came to the conclusion that Government decision was reasonable on a proper and rational approach to the problem and on a bona fide exercise of mind on the relevant material and consideration, it is not for the Court then to substitute its own conclusion for, that of the authority charged with the duty to arrive at the decision. This, in short, is the acid test at which executive action must be judged on a challenge to its validity. The test of reasonableness of executive action or of the acceptance of such action by a reasonable person or a sensible person duly instructed in the law as a measure of its validity is, indeed, not of easy application. The test judicially evolved as its genesis in an anxiety to ensure against executive arbitrariness and exercise of executive power for political or other ulterior purposes. The difficulty often arises because two equally reasonable and sensible persons may not always agree. They invariably do not. It has happened before. It has happened in this case. In such a situation, it is not that one or the other is not reasonable or sensible or not as well instructed in the law as the other. It is also not because one or the other is not sensitive or is insensitive to the problem that a legal question poses. They may be equally sensitive and sensible and yet they may differ. The test, however, does not necessarily fall because the difference often arises because of differences of approach, attitude, adherence to principles and values. The material may be same, the degree of reasonableness and sensitivity may be the same, the conclusions may still differ because of difference of approach and attitude which has its genesis in numerous factors, comulsions, backgrounds which are difficult of determination and even articulation. Some these ultimately become the single inarticulate determinant justifying a difference conclusion. There may also be differences in the degree of sensitivity to a problem as distinct from a pure legal formulation. It may be attributable to a lesser sensitivity or to a hyper-sensitivity. The test of reasonableness is, nevertheless; the best so far evolved in judicial anals and represents the highest evolution so far of a satisfactory test is judicial control of administrative action.

37. The scope and the content for the concept of judicial control has over the years has been enlarged depending on the nature of the power, the consequences of the action, the nature of the rights sought to be affected and of other relevant factors. In the earlier cases of Barium (22) and Rohtas (23), the challenge was to the initiation of proceedings at the threshhold and the test evolved was of subjective satisfaction on objective material. That test satisfied the requirement in those cases. As early as 1958, Chief Justice Hidaytullah presiding over a Bench of the Madhya Pradesh High Court (24), spelt out the test of reasonableness and, therefore, an objective test. That was the case of exercise of power of supersession of a municipal body. That decision had its echo in some of the later decisions of the Supreme Court. The case of B.K Takamore (25) is one of such cases. Later decisions of the Supreme Court (26), affecting valuable rights have galvanized this test. This test had its genesis in the near effacement of the traditional dividing line between administration and quasi-judicial enquiries, a result brought about in England by Ridge v. Baldwin (supra) and in India by A.K Kariapak (supra). In the case of Tirunelvelli Municipal Council, Kailasam J. (27), had applied the test of reasonableness and quashed the order. Katlasam J. was, however, overruled by the Division Bench (28) which maintained the order, but, nevertheless, recommended that Government may reconsider the matter as the decision appeared to the Division Bench to be unreasonable. The Division Bench, however, applied the traditional test of subjective satisfaction and maintained the dividing line between administration and quasi-judicial proceedings, in spite of the decision in the case Ridge v. Baldwin (supra). This case was, however, decided before the decision of the case of A.K Kariapak (supra). Katlasam J. had, however, applied the test of reasonableness, as if the line of demarcation between administration and quasi-judicial proceedings had been blurred, if not altogether effaced. The test was applied by Chief Justice Hidaytullah in the Madhya Pradesh case (supra) and was approved by the Supreme Court in the case of Takamore (supra) and other decisions. The test applied by Kailasam J., with respect, was a correct test and has since been amply vindicated by the Supreme Court.

38. There are, however, areas of executive action presenting unusual features which would justify a little more circumspection both for the authority, which was called upon to take a decision or an action as also for the Court which is called upon to test its validity. These areas which involve more than a mere right to property or interest of an individual or a specified group and executive decision may, for example, not merely affect the rights, interest or status of an individual but of large body of persons. Such areas would encompass cases involving certain fundamental civil liberties, civil and political rights. It may involve, as in the present case, the right of the electorate to administer their civil affairs by their chosen representatives. Government decision in such a case not only affects the rights of individuals, who are bundled out of office, to which they were elected but which also interfere in the democratic right of the people to entrust their Government at one level or the other to the care of their chosen representatives. Such cases may involve the virtual suppression of the democratic right to govern at the grass-roots level and may threaten the normal functioning of democratic decentralisation. Where such action is taken against elected representatives, who belong to a political persuasion other than the political persuasion to which the authority at the State or the Centre belongs, it would lend a further dimensions to the problem, and call for greater vigilance both by the authority, which takes the decision, as indeed, the Court which is called upon to rule on its validity.

39. This case presented another rather unusual feature which provided the backdrop for the impugned action. The chronology of events leading to the order was rather vocal. The Central Government was installed on 14-1-1980 on the basis of a massive mandate which rejected the legitimacy of the previous government. Soon after taking over, the Central Government addressed itself to the task of dissolving nine State Assemblies in States in which the previous party in power held the sway in different permutations and combinations. The Metropolitan Council of Delhi went the way the Assemblies did and ten came the supersession of the New Delhi Municipal Committee and the Corporation, both of which were predominantly controlled by opposition groups or parties. Added to this is the patent fact that since the last supersession of the Corporation in 1975, when the present Government was in power, there was not flutter at any level in the executive either at the Centre or in the Delhi Administration that the civic administration of the city was not being carried on in accordance with law and there was no occasion for the Central Government to make any direction under Chapter 24 of the Act with a view to compel the civil body to either act in a manner it should have or not to act in a manner it should have or not to act in a manner it should not have. In this scenario, which is undisputed, an obvious question arises in the mind of the Courts if the supersession of the Corporation was part of the political strategy to enable the people to vote afresh on the right of the present municipal councillors to administer their civic affairs? if the answer to the question is in the affirmative there had obviously been an abuse of power because there is no provision in the Act which may enable the Central Government to supersede a body merely to be able to order fresh election. Such a course would have been possible if the Act had been suitably amended so as to incorporate in it the conditions which would justify the proclamation under Art. 356 of the Constitution of India, a provision which forms part of the maharashtra municipalities act and provides for a situation “in which the administration of the Council cannot be carried out in accordance with the provisions of the Act.” If the intention of Government was to compel the Municipal Executive Councillors to seek a fresh mandate, it could not have been a legitimate purpose. But, nevertheless, the present Act did not sanctify it. There has been considerable controversy both in and outside the Courts as to the propriety of dissolution of Assemblies by the previous government when it was returned to power and although the action was sanctified by the Supreme Court, the debate is still on as to its political propriety apart from legality. Whatever may be one's views with regard to dissolution of a duty elected Assembly, one thing is obvious that there is very little vice in the dissolution in that it takes the matter back to the people who are, in the ultimate analysis, the sole arbiters of who would wield the power on their behalf. In that sense, supersession, by itself, does not take the matter to the people because of the scheme of the Act, which enables a fresh poll only at any time before the end of the period of which the Corporation is superseded, and in a fit case, it may mean that the supersession may continue for a long as the full terms of the Corporation without an opportunity to the people to vote on it. It is not without significance that large number of municipal corporations and other local bodies have remained superseded for a number of years without recourse to the electors. When the matter was heard initially by the Division Bench and again by the Full Bench, an indication was sought if the Government was willing or ready for a fresh poll but for their own reasons, they were not. This naturally was a matter for concern for the Court. In dealing with the matter, therefore, Court was bound to be concerned with the question if the supersession was resorted to not because the conditions of the Statutes were satisfied, but because there was no other way to dissolve the Corporation and compel a fresh poll and Government had it own reasons for the timing of the fresh poll. The approach, therefore, has been to test the validity of the Government order in the context of these doubts, which reasonably arose in the mind of the Court. The doubt in the judicial mind was naturally accentuated because of the well-known fact that large number of municipal corporations, municipalities and other elected local bodies have remained under supersession for years without recourse to the electors and a feeling that it may perhaps be not a sheer coincidence that the elected bodies, which were subjected to the exercise of the drastic power of supersession, invariably happened to be under the control of a political party, parties or groups, other than the political party, which held power in the State or the Centre, as the case may be. I had the benefit of hearing eminent counsel seeking to justify the Government order both when the matter was heard at length in the Division Bench and later again, when it was heard at great length by the Full Bench of this Court and I regret to say that their very persuasive arguments could not disabuse my mind of that impression. It still persists. Two my worthy colleagues are satisfied. They are equally sensible and sensitive. I can only take comfort in the belief that they may perhaps be right and I want wrong probably because I was not only sensitive but perhaps hypersensitive in view of the unusual features of the case.

VII. Reasonableness of the Decision

40. The last question that may now be considered is as to whether on a true construction and correct interpretation of the three grounds that could justify supersession in exercise of power u/s 490 of the Act, a reasonable person, duly instructed in the law on a bona fide application of mind to the material which is germane and relevant and on a proper and legitimate approach to a local Government institution in the totality of the circumstances, could come to the conclusion that the Corporation was liable to be superseded.

41. In the way I have looked at the two important preliminary questions with regard to an opportunity to show cause and if invoking the power of supersession without resort to other remedial measures, government was acting unreasonably, this question really does not survive. But, in view of the way my learned colleagues have looked at the various questions, my decision on these questions is not determinative of the validity of the order of supersession and in the way the majority decision has looked at the problem, the last question requires to be dealt with and answered moreover, there was considerable argument before us both on the question of interpretation of the Section as also if on the material, the decision to supersede could be reasonably taken by government, it would be reasonable and proper that I deal with these matters.

42. On the question of interpretation, it is useful to bear in mind that while judicial control of executive action is to be exercised within judicially-defined limits and must, therefore, remain within the correct side of what may be described as substitution by the Court of its own assessment of the material for the assessment of it by government, there are no limitations on the power on the Court with regard to either the interpretation of the statute, which is to be applied to the material or the correct criteria, approach or attitude which the government must apply to the material before it as these are primarily matters of construction, which are within the legitimate exclusive jurisdiction of the Court, even though one may concede the prorogative of the government to rule on them for the purpose of their understanding and determination. The decision in these matters is ultimately with the Court and not the Government. When once the Court has laid down the way government should look at a matter and lay down the conditions in terms of the statute which must be satisfied before the exercise of power supersession and it is held if a decision would in the totality of circumstances be reasonable or to put it differently, just and fair, it is entirely for government to take or not to take that decision and it is then not for the Court to say that even though the decision could have reasonably been taken, the government should nevertheless have not taken that decision for what may appear to the court to be requirements of ethics, political or otherwise, propriety or in the interest of healthy conventions in matters involving government to government dealings i.e dealings with the Central or the State Government on the one hand as the case may be, or the municipal government on the other. If in such a case, the government decision could be reasonably arrived at, this Court would also not interfere if the Court was of the view that even so government ought not to have taken even such a reasonable decision to avoid the appearance of unreasonableness because of the different shades of the two governments. The Court would be justified in such a case to perhaps express its feeling of unhappiness or because the appearance of the decision as distinct from its reality did not inspire the confidence of the Court.

43. The basic question in interpretation is the approach to the statue concerned or the principle of interpretation that ought to apply, having regard to the purpose and object of the legislation, and the provision in question. What is basic in such a case is if the provision should be strictly construed or widely construed. S. 490, as indeed, the Chapter relating to control in which it occurs is certainly intended to subserve a larger public purpose of ensuring the purity, the competence and propriety of municipal government which by itself would have justified a liberal construction of the provision but there is an important aspect of the power of supersession and of the power to exercise control over municipal government by a superior government, whether State or Central which would justify a strict construction. The power of control involves an interference, due or undue, depending on the circumstances in which the power is exercised, in the functioning of the democratic decentralisation at the grass-roots level and, to that extent, of the right of the people to conduct their municipal government with the guidance, assistance, advice and support of a superior governments but without unnecessary interference by any of these in the process of self-government. Power of superession is, therefore, of a drastic nature and the exercise of power has the effect of not only depriving the people of government through their chosen representatives but also negatives the choice already made by them. It is also both deprivatory and stignatic in that it affects the status of elected representatives and condemns them collectively as persons, who are either incompetent or are guilty of persistent default in the performance of duties enjoined on them by law or are persons who have been guilty of excess or abuse of power in the discharge of duties. The order of supersession also does not immediately lead to a fresh poll for then its mischief would be contained within reasonable limits as when a legislature is dissolved under the Constitution. The dissolution of an elected body consequent upon superession may mean disenfrenchisemnet of people for a much longer period. While it may depend on the way one interprets the statute, it is, in any event, beyond controversy that it may span the entire unexpired period of the normal life of the body which is sought to be superseded. The only safeguard is that a fresh poll must be ordered before the expiry of the period for which the body has been superseded. For all these reasons, it would be legitimate to hold that the statute must, therefore, be strictly construed.

44. S. 490 empowers the Government to supersede the Corporation if in the opinion of Government, the Corporation is “not competent to perform or persistently makes default in the performance of the duties imposed on it by or under this Act or any other law or exceeds or abuses its powers.”

45. The first question that arises is as to how the expression “Corporation” is to be construed. Does it refer to the Corporation for the present constituted and which is sought to be superseded or does it mean that Corporation as a continuing entity which is a corporate body and has perpetual succession or does it mean the deliberative wing of the Corporation, which is in a sense the government that runs the Corporation, the elected representatives, who are charged with the duty to administer the civic affairs, for, as a result of supersession it is they who go out of office, lose their status, as indeed, their privileges, rights and disentitled to perform functions as such? Is the supersession based on an assessment of their work and conduct in relation to the various duties imposed on the Corporation and the powers conferred on it under the Act or any other enactment for the time being or does it mean that the assessment as a preliminary to supersession is a censure of the Commissioner, who is the kingpin and the Chief Executive of the Corporation. It is necessary to understand this concept because on this would, to a large extent, depend what acts or omissions could be legitimately considered in assessing the work and conduct of a Corporation in relation to a particular term. This aspect is important because leaving aside one or two allegations out of almost two dozen allegations on which the supersession is grounded, the other allegations do not pertain to acts or omissions which can be traced to the present Corporation but have their genesis in the acts and omissions of the various Corporations extending to a period over a decade and even beyond the life of the Act. It is also important to keep in mind that, by and larger, these very allegations formed part of the show cause notice on the basis of which the predecessor of the present body was superseded in the year 1975.

46. The expression “Corporation” is fortunately not left altogether undefined because sub-section (3) of section (3) provides that the Corporation “shall be composed of Councillors and Aldermen”. True, sub-section (2) visualises that Corporation is a body corporate with the name aforesaid and having perpetual succession capable of holding and disposing of property and of suing and being sued in the name of the Corporation but if it is to be composed of Councillors and Aldermen and the fall out of the supersession order is primarily on the Councillors and the Aldermen, there would be good reason to construe the expression “Corporation” in S. 490 as referring to the collective work and conduct of the Councillors and Aldermen, who in a sense represent a body of persons and to whom the administration of the civic affairs was entrusted. True, by virtue of S. 59 of the Act, “Save as otherwise provided in the Act, the entire executive power for the purpose of carrying out the provision of the Act” other than certain matters, and of any other Act, “shall vest in the Commissioner”, who is also to exercise all the powers and perform all the duties specifically conferred or imposed upon him by the Act or any other law for the time being in force. He is, nevertheless, the appointee and the nominee of the Central Government, holding office subject to its pleasure, whose suitability is to be determined by the Central Government and who is removable solely by the Central Government under S. 54 of the Act. In theory, no doubt the Commissioner is also divested of his powers and functions as Commissioner because by virtue of sub-section 2(b) of S. 490 on supersession all powers and duties of the Corporation under the Act or any other law are to be exercised and performed “by such Officer or authority as the Central Government may appoint in that behalf”, but where the Commissioner is the person, who is so authorised on supersession to carry on all the duties and exercise all the powers of the Corporation, it follows that the supersession was no censure of the commissioner and this stands to reason. Even though the Commissioner is the Chief Executive, he has to carry out the decision of the Corporation, composed of elected representatives of the people. If his work and conduct is to be assessed, the invocation of S. 490 or the Chapter 24 generally is unnecessary because in any event, he is in the service of and a nominee of the Central Government. His work and conduct can also be assessed by the elected representatives themselves when the statute clearly empowers them to recommend his removal. His work and conduct can also be assessed in exercise of powers u/s 54 by the Central Government independently of Chapter 24. It is also reasonable to infer that if the Councillors and Aldermen are to lose their status and be divested of their power, even though holding a valid mandate from the people, it must be for acts and omissions, which are attributable to them individually or collectively or of those constituting a majority in a position to have control over the body, rather than be liable to be condemned as incompetent or in default or guilty of abuse of power for the acts and omissions of which their predecessors or the predecessors of their predecessors in many degrees away from them may have been guilty. It would, therefore, be reasonable to read into S. 490 an assessment of the work of the elected representatives individually and collectively and that too of those constituting a majority group in considering if the Corporation has become liable to be superseded. It is significant to remember in this context that even though the decision of a majority binds the whole body whether in a Corporation, in a joint stock company or otherwise and in theory that decision is the decision of the body and not of the majority, the responsibility for the decision obviously cannot be of the minority, particularly where the minority enters its dissent to the decision of the majority. It follows, therefore that even though the fall out of supersession is not necessarily confined to the majority party in the Corporation, it is nevertheless a censure of that group, which holds control and the greater fall out of it is, in any event, on such majority because they are divested of their control giving a fresh opportunity to minority group to improve its position at the fresh poll, either on account of what the majority has or has not done in the past or what the majority or the minority may be able to promise to do in the future. When the statute talks of Corporation being not competent or being guilty of default or being guilty of abuse of power, it must, therefore, be read as meaning the Councillors having control of the Corporation for the time being in a particular term, or the Corporation as constituted at the relevant time and has nothing to do with the work or the conduct either of the Commissioner or of the work and conduct of the predecessors of the Councillors and Aldermen or the body as constituted in the past from to time. Once one accepts this concept as being embodied in S. 490, the rest of the problem as to whether it was reasonable to supersede the Corporation resolves itself because neither the show-cause-notice nor the order of supersession appears to have posed this problem before the authorities. The numerous allegations made in the show-cause-notice merely referred to what may be described as the existence of certain objective conditions or a certain state of affairs that appears to exist in relation to various matters. The existence of this state of affairs or of these conditions or of a certain precipitate situation, financial, administrative, policy or otherwise, is distinct from the reason for such a situation, state of affairs or policy, etc. and what was required of those in the control of the Corporation in the totality of that situation, circumstances or conditions having regard to the duties imposed on the Corporation by the Act or any other Act or the functions entrusted to the body by the Act or other enactments. If the situation is admittedly relatable to not only near but distant past of the present body, the only question for the Central Government to consider was as to what was the correct role of the present body in that situation, how the present body should have conducted its affairs in that situation and where and how it has failed in carrying out that duty. Such a question was never posed by the Central Government and it contended itself by merely serialising what appeared to it to be a precipitate situation, albeit a situation which admittedly existed even when the earlier Corporation was superseded, though in a slightly different degree, and to an extent, existed throughout the Life of the Corporation from time to time, as indeed, of numerous other Corporations, municipalities and other local bodies in this Country by the very nature of the limitations on the powers of these bodies, the financial and administrative limitations from which it suffered and the obvious constraints under which they were required to function. These situations and circumstances basically have their genesis in a gap between the expectations of the people from the local government, as indeed, the aspirations of the chosen representatives on the one hand, and the limited finances of the body on the other. It is common knowledge that the gap has been increasingly getting wider and wider not only at the local but even at the State and the Central levels. There are compulsions such as population explosion, increasing pressure in the urban areas, adverse effect of run away inflation, growing awareness of the people of the needs of welfarism, cry for relief from growing economic and social hardships, persistent demand for social and economic justice which are increasing the burdens of government at all levels, in all developing societies and governments are faced with almost irretrievable situations where there are more and more financial constraints making it almost impossible to bridge the gap. One way, of course, is greater awareness of people of their obligations rather than rights, simplification of the process of life, lesser dependence on governments and willingness to forego luxuries, conforts and even some of the bare necessities. Another way is unpopular measures to deal with the situation which the chosen representatives of the people at all levels are reluctant obviously because then they would attract the odium of the people, which could justifiable or unjustifiably be exploited by the opposition groups at the polls even though when returned to government they would not be in a position to do any better. The only other way for governments at all levels is to look to superior governments or authorities for financial aid, assistance, subsidies, loans, aids, grants and the like, to be able to manage their affairs. Local governments have looked to the State Governments, State Governments have looked to the Central Government and the Central Government is in no better position because it has to make up the deficit from a variety of other sources including the World Bank the International Monetary Fund, subsidies and aids, as indeed, friendly loans from various governments, to be able to bridge the gap between its income and expenditure. With all these, the problems are not solved and governments in all developing societies are on the horns of a dilemma, which threatens to perpetuate itself. Now, nobody in his senses would recommend that all these governments have failed. It that were so, all governments everywhere could be adjudged as failures because the socio-economic problems survive the best efforts of all governments. In such a situation, the only question that poses itself to the people is whether in this difficult situation, a government for time being at different levels has done all that it could within those limitations, constraints and compulsions, which are inherent and beyond their control. The mere existence, therefore, of the conditions circumstances or a situation could not constitute a valid charge. What was necessary was a specific charge of what the Government was required to do but has failed to do or has done but was required not to do. The failure to pose such a question vitiate the entire process and relieves the Court of any obligation to analyse the allegations and to see if the Corporation was or was not guilty of the charges levelled against it.

47. Be that as it may, question was debated before us in the context of the existing charges with a view to determine if the supersession could be reasonably justified on the material. In the way they looked at the preliminary questions, my learned colleagues have to examine these charges to satisfy themselves if the government decision was reasonable. It is, therefore, necessary for me to analyse these allegations and to decide for myself as to their reasonableness, even though on account of a wholly wrong test and approach, the whole process appears to me to be vitiated.

48. In determining the validity of the order of supersession or to put it differently in answering the question if a reasonable person with the requisite ability, understanding and correct approach would supersede the body on the material on which government consideration purported to be based, any classification of the various allegations into three different heads, in terms of the three grounds envisaged by the Section, is neither necessary nor desirable because it is not possible to pin down government to a particular pigeon-hole for one allegation or the other so that if an allegation would justify action, it is irrelevant it if has been correctly pigevn-holed or not. It is, therefore, necessary to clear the ground with regard to the concepts incorporated in the grounds which may justify action in terms of the statutory requirements.

49. S. 490 refers to the “duties” imposed by the Act or any other Act and the “powers” of the Corporation. The order of supersession has relevance to the Corporation being “not competent to perform” or to the Corporation persistently “making default” in the performance of duties imposed by or under the Act or any other law. In relation to powers, the relevant consideration is if the Corporation “exceeds or abuses its powers”. It is, therefore, necessary to construe the concepts of “duties” and “powers” before adverting to the expressions “not competent to perform” or “persistently making default in the performance” of duties. In a sense, the expression “duties” may be of a generic nature, wide enough to cover all duties, irrespective of their foundation. There are duties and duties, there are moral duties arising out of ethical values. There are duties having their origin in the legal obligations, statutory or contractual. There may be duties that a person owes because of his particular position or status, statutory or otherwise. In this wide sense, every obligation, irrespective of its nature would from part of the concept of “duties”. It is, however, not possible to construe the expression “duties” in S. 490 in such a wide manner because the expression “duties” is followed by words of limitation i.e “imposed on it by or under this Act or any other law”. This must, therefore, mean duties which are not of a general but a specific nature relatable to some statutory provision. What would point to a still narrower construction is the provisions in Chapter III of the Act, which is entitled “Functions of the Corporation” and these are classified into general powers of the Corporation, obligatory functions of the Corporation. S. 41 deals with the general powers of the Corporation and while sub-section (1) of it vests the municipal government in the Corporation, sub-section (2) talks of duty of the Corporation to consider all statements of receipts and disbursements etc., S. 42 deals with the obligatory functions which can be safely considered to be the functions and duties for which one would need a municipal body. That is the primary justification of a local body. This is the true measure of its duty i.e the duty to make adequate provisions by any means or measures for each of the matters referred to in the various clauses of the Section and these are in their nature the essential civil amenities which it must provide. S. 43 deals with the discretionary functions of the Corporation and provides that the Corporation “may in its discretion” provide for all or any of the matters that are referred to and advisedly in the very nature of things, avoids the use of the expression “duties” or obligations, which is specifically employed both in sub-section (2) of S. 41, S. 42 including the residuary Cl. (x) of S. 42, when it says “the fulfilment of any other obligation imposed by or under this Act or any other law for the time being in forces”. The expression “duties” must, therefore, be construed to have relevance to the obligatory functions of the Corporation u/s 42 or any other provisions of the Act but these are not exhaustive because additional civic duties may be imposed on the Corporation by other statutes. In any event, the expression “duties” does not appear, from the context in which the expression is used, to include any contractual obligations with regard to payment to its creditors unless these are made statutory obligations. This meaning appears to be reinforced when one refers to the directional power of the Central Government u/s 487 of the Act, where Cls. (a) and (b) of sub-section (1) separately deal with “performance of duty” and “adequate financial provision for the purpose”. It is further reinforced by the provision of S. 488, which provides that if a direction is not carried out, Central Government may make arrangement for the action and direct that expenses connected therewith be defrayed out of the municipal fund. In the same way, other obligations would be within the expression if having their foundation in the Act or any other law.

50. The concept of “abuse of power” in relation to power generally and executive power, in particular, is too well-known. Abuse of power is the misuse of power. Power is conferred for a public purpose. There are conditions laid down for the exercise of power. There is a manner laid down for the exercise of power. There are limits of the power beyond which it cannot be exercised. Where power is exceeded or is used for a purpose other than that for which it is intended, it is essentially in excess of power. Where the manner of the exercise of power is not followed, it is not an abuse of power although the expression has been used interchangeably, in the exercise of discretion of Courts. But that has no relevance to the concept of power by the executive. Exercise of power for a private purpose of benefit or to harm another or for corrupt purposes is abuse of power. Conceptually where the limits of power are exceeded, it may also be classified as an abuse but in the context in which the exession is used in S. 490, abuse would not include this facet of the power because it is preceded by the word “exceeds”. Some controversy is, however, possible if exercise of power for an ulterior purpose to gain advantage or to cause loss and which definitely would be an example of excess of power may also partake the character of abuse of power. This is so because where the purpose of the power is perverted, it may not be a mere instance of excess of power and may also be an abuse of power. In any event, the expression “abuse” must be confined to either an element of benefit or undue injury to another or use of power for an ulterior object or purpose i.e other than the purpose for which the power was intended. It would, however, exclude mere irregularity in the manner of exercise of power.

51. That leaves for consideration the expression “not competent to perform” and “persistently makes default in the performance of duties”. Competence is the capacity or ability to perform an act. It has something to do with the qualification to perform an act, the expertise to carry out an assignment and to have the necessary physical and mental equipment to carry out an assigned duty. When one talks of not competent to perform, one only calls to mind the physical or mental capabilities of a person. The interpretation of the expression does create considerable difficulty because what is the assessment of competence made against. What is the qualification, the standard, the criteria or model at the touch-tone of which the competence in to be judged. If the Corporation is to be construed to mean the Councillors and Aldermen, one would not know how to make an assessment because there is no qualification, educational and otherwise, to be a candidate at an election either for a Councillor or for Alderman. Competence also has a relation to what is expected of a person. That may provide a rough and ready standard or criterion but there again, much will depend on the class of people one would deal with. The Councillors and Aldermen are not necessarily drawn from financial wizards, administrators of proven ability, men of tested integrity, technocrafts, chartered accountants, cost accountants, lawyers, academicians or astute businessmen, well-versed in the art of managing affairs of an organisation employing men and materials, involving income and expenditure. They need have no experience, either of any branch of knowledge or of life generally. They may be drawn from different stratas of society with different backgrounds. For most of them, the election is a mere measure of their popularity with the electorate for which their record of social service would perhaps be sufficient. How is one, therefore, to determine their competence to perform difficult duties of managing the affairs of the civic government? It is a pity that while qualifications, both academic and otherwise, as well as wide experience, is insisted upon for practically all professions, callings, trades, none is required for a politician or a legislator. One thing, however, seems to be clear that not competent to perform assumes that there is deficiency in the capacity or ability but no dearth of wherewithal or material with which to perform. There may also be no lack of willingness to perform, but what must be lacking is the ability.

52. The word persistent denotes making default obstinately and persevering in its defaults. The Chambers Dictionary (Twentieth Century) gives meaning of the word persistent as to continue steadfastly or obstinately especially against opposition (often within): to persevere; to insist. Stroud's Judicial Dictionary, (third edition) states that the epithet persistent necessarily implies some degree of repetition. The word persistent would, therefore, implies to continue in the default obstinately against opposition. Persistent default must mean contumacious continuance in some course and neglect or breach of duty against opposition or remonstrance. The expression “persistently makes default” assumes the attitude of defiance, an element of abduracy and of a consistent course of conduct in spite of opposition, remonstrance, direction, guidance to the contrary. This is abundantly made clear by S. 487 which visualises mere “failure to perform” a duty or the performance of a duty but in an imperfect, insufficient or unsuitable manner” as a condition for the exercise of power to give direction. If such a direction is given, and the Corporation still makes default, it would obviously be an act of abduracy, of defiance. It, nevertheless, clearly keeps out of consideration, the constraints the compulsions, the limitations and the difficulties in a satisfactory performance of the duties because if a person is unable to perform, not because of incompetence nor because of abduracy but because of compulsions or circumstances beyond his control, he may have failed in his duty to provide the material or to have made adequate arrangements but it cannot be said that he is persistently making default in the performance of duties. Default is not interchangeable with inability. Default is failure to do in spite of ability and capacity to do.

53. In determining the reasonableness of the decision of the Government to supersede the Corporation in the context of the conditions for the exercise of the power, the proper approach and attitude of government to municipal government, the material on which the decision is based and the totality of the surrounding circumstances, the reality of reasonableness is, however, equally important. The decision may in reality be reasonable but may not appear to be so although if it is in reality unreasonable, it bound to appear unreasonable. What is reasonable depends on what would appeal to a reasonable mind. But two equally reasonable minds may not agree on a decision. Even the appearance of reasonableness can be illusory because two equally reasonable persons may disagree an they may reasonably disagree. The test of reasonableness and that of decision of a reasonable or sensible man is, therefore, a very difficult one but two equally reasonable and sensible persons would ordinarily disagree not because of the material that is available but of their divergent approach, attitude to the problem or because of their opinion of what the law means and requires. The test, therefore, is of a reasonable man or a sensible man who applies his mind to the material with the correct approach and perspective and on a clear understanding of the legal requirements. If two apparently reasonable persons give two different conclusions, one would have to find the erroneous approach or attitude or understanding of law or of facts led to the decision to determine the validity.

54. On a broad analysis of the allegations or instances classified into three heads of incompetence, default and abuse in the three annexures to the impugned order, it would be reasonable to inter that, whether or not they would fall in one pigeon-hole or the other of the three grounds envisaged by the Section, they can be classified as (1) Financial difficulties and defaults in meeting contractual or statutory obligations arising therefrom; (2) Administrative problems; (3) Matters of policy; (4) Improprieties in the conduct of affairs.

55. I have already held above that in invoking the extreme remedy of supersession without taking resort to lesser remedial measures, the Central Government acted unreasonably. For somewhat similar reasons, it would be reasonable to hold that the Government decision to supersede the body or any of the three grounds, and on any of the allegations forming part of the three annexures, could not possibly be reasonable or be arrived at by a reasonable person unless the government have had occasions to deal with this Corporation with regard to each of these matters and found as a matter of fact, rather than as a matter of pure conjecture, that the Corporation is a body of persons who are not able to perform the duties imposed on it by law or have persisted in making defaults in the performance of such duties or have exceeded or abused its powers. The present Central Government came into power only in January, 1980. The earliest it considered the matter, was when the show cause notice was issued in April, 1980. There was, therefore, no occasion for any dealings between this Corporation and the Central Government. If the Central Government has on an earlier occasion, pointed attention to all or any of these matters which are complained of and the Corporation had failed to provide a satisfactory explanation as to why a particular measure was or was not taken. It would then have been possible for government to reasonably come to the conclusion that the Corporation appeared to be incompetent. If the Central Government have had occasion in the past to advise the Corporation to deal with matters in a particular manner, and not in the manner sought to be done by the Corporation and the Corporation did not need the advice or direction with out sufficient cause, there would be a reasonable basis for an inference that the Corporation had been conducting itself or its affairs in a manner which may attract the supersession provision. There also could have been occasions when it could have been questioned with regard to the exercise of any power which appeared to the Central Government to involve an excessor misuse or improper use and the explanation of the Corporation did not appear to satisfy the Central Government. There would then be a basis for the Central Government to form an opinion on the basis of such dealing or dialogue with the Corporation that such a Corporation could not be allowed to function and the Councillors and Aldermen of such a body must make place for more competent and better discipline representatives who would be aware of their duties and responsive to advice, suggestions and would heed to the directions that may be made by Government with regard to the conduct of its affairs but all this has no meaning where the Corporation have ad no dealing with this government at all. The Corporation dealt with the predecessor government and there was nothing on record to show that the previous government which held office between 1977 and 1980, was in any manner dissatisfied either with the competence or with the conduct of the affairs of the Corporation or with regard to the exercise of its powers. The opinion of the Central Government with regard to the liability of the Corporation to be superseded must, inter alia, flow from the course of conduct of the Corporation as reflected in the records of the Central Government and in the course of the dealings between the Central Government and the Corporation and of periodic assessment of its work and conduct by the Central Government at different levels during the tenure of the Corporation, which is sought to be superseded. A sudden formation of opinion by the Central Government with regard to the competence or conduct of the Corporation or with regard to the manner of the exercise by it of any of its powers on the basis of past performances of the Corporation over the years during the tenure of the predecessors of the present Councillors and Aldermen is clearly outside the reach of S. 490. If the past performance of the Corporation is to form basis for adverse action against the present incumbents, it could only be on the short ground as to whether the Corporation has failed to do what was expected of it in the totality of the circumstances to which it was an inheritor or did something in that background, which is ought not have done. Such a question was never posed by government to itself nor to the Corporation even though when asking for time to submit an explanation, an attempt was made by the Corporation to explain to government that it would seek to show that it was being accused of doing or not doing what was done or not done by its predecessors in a long chain of succession and that it would establish by material from the records of the Corporation itself that in the difficult situation with which the Corporation was faced, when it was constitute in 1977, its performance was either better than or compared favourably with the performance of the Corporation under previous regimes as well as under the administrator when the Corporation was superseded on an earlier occasion in the year 1975 when the present government at the Centre was itself in power. In spite of this the Government note dealing with the question of supersession is totally obvious of this vital aspect of the matter.

56. In considering the financial aspect, it is necessary to begin with the admitted hypothesis that the successive Corporation that the successive Corporations during more than two decades, as indeed, most Corporations, municipalities and local bodies in the country are unable to meet their financial commitments either in the repayment of loans to the governments, Central or State, or in the matter of regular payment of debt servicing on these loans or of the salaries to the staff or to meet their financial commitments without resort to heavy lending, subsidies, grants, ways and means, loans from appropriate government and have, therefore, always had a deficit budget. It must also be accepted as a common hypothesis that what is true of local government has always been true to practically all State Governments and to an extent even of the Central Government, if not of all governments everywhere. State Governments have often looked to the Centres for more and more to meet their financial obligations and there is a continuing dialogue between the State Governments and the Central Government has its own problems which transcends the limits of the State and the local governments, faced with acute financial pressures from the local governments and the State Governments, as indeed, from different sectors of the economy, Central Government has to resort to borrowings, loans, aids and other forms of subsidies from international financial institutions, as indeed, the various friendly governments. Governments are accused at all levels of resorting to deficits even though because of factors beyond their control. There is universal concern about this tendency but no solution seems to be in sight.

“But great as our tax burden is, it has not kept pace with public spending. For decades we have piled deficit upon deficit, mortgaging our future and our children's future for the temporary convenience of the present. To continue this long trend is to guarantee tremendous social, cultural, political and economic upheavals.

You and I, as individuals can, by borrowing live beyond our means, but for only a limited period of time. Why should we think that collectively, as a nation, we are not bound by that same limitation?”

These words may sound very appropriate in any situation. These are the words of the new U.S President about the Government of the richest country of the world. Corporation could not have done worse.

57. If this be the accepted position everywhere, how can an inability to pay back the Central Government or any contractor or any other creditor, including the employees, be a ground for supersession, even though one may concede that the failure to manage its affairs within known constraints could perhaps constitute a valid charge. But that is now how the Governments approached the question.

58. The failure to repay the government or to pay the outstanding interest admittedly due since before the constitution of the present Corporation is, however, sought to justify supersession on the ground that there was a failure to perform a duty imposed on it by S. 194 of the Act. This contention suffers from a variety of serious falacies. In the first instance, S. 194 does not convert the nature of liability from contractual to a statutory one. The liability of the Corporation to the Central Government is essentially contract if it fails to discharge contractual obligations, it may have other repercussions but it cannot attract the punitive provision of S. 490. Repayment to government or to any creditor is not a statutory obligation. It is contractual in nature. Secondly, S. 194 does not provide that the Corporation must first pay the government before it pays to any other creditor. The Section merely incorporates the concept of priority for the debts to government. Priority has relevance either to insolvency or in the process of execution of decrees and is not intended to regulate the financial business of the Corporation. The sole purpose of S. 194 is to ensure that the assets of the Corporation are preserved in case on account of its of the Corporation are preserved in case on account of its insolvency or indebtedness, there is a threat to these assets from the other creditors. It is pursuant to this duty that the Section has been incorporated. It does not enjoin any duty on the Corporation to first pay the Central Government and I would presently demonstrate that such a duty could not be possibly imposed.

59. Lastly, no reasonable person would ignore in considering the supersession of the Corporation on account of its financial difficulties, the compulsions, the circumstances the limitations and the constraints under which the local government is carried on. There is an obvious limitation on its indigenous sources of funds. There have been proposals in the past and suggestions by high-powered committees, including Morarka Commission, with a view to augment the resources of the body. They have all been in cold storage. In spite of these limitations, there is increasing financial burden on account of a variety of factors beyond the control of the body. The increasing population, multiplying cost of public works, increasing awareness of the people of their rights and pressing demand for relief from all quarters, employees, house-owners or citizens, the compulsions of welfarism calling for more and better civil amenities, the obvious reluctance to increase the burden of taxation. The only duty imposed on the body in such a situation was to periodically consider the budgetary position and strike a balance between the requirement and the financial limitations. The scrapping of public welfare activities, however, is no solution of the problem. Firstly, it lead to resentment among the people who are clamouring for any relief may lead to discontentment and unrest. There is no doubt that some of these compulsions may point to the need for unpopular measures in taxation as also in other spheres of society which are incapable of bearing any more burden of taxation. The affluent section which is perhaps able to, is already sufficiently burdened. Some additional burden may be possible but that creates political difficulties. The Councillors have a public duty and a public function but they always have a private purpose, one which is a legitimate one to be popular with the electorate and to be returned at the next poll. This needs not only popularity but also funds. Any measure i.e unpopular with the mass of people would win them the odium of these people and, therefore, he fear of reprisals at the polls. Any measure that affects the affluent clause may perhaps affect the kitty necessary to oil the political machine, such being the pattern of polity in this country. Political machines and elections are a costly affairs. The connection between the money bags and the polity have often been pointed out. If have nots are to be given the much desired relief, it must have a fall-out on those that have. But those that have alone have the funds, even though those who are have-nots have votes. It is not, therefore, without purpose that there is a periodic debate as to the alternative system of polity or of government. It may be that it is not the system that has failed but that every system will fail because the man behind the system has let himself down. That is a larger question and I need not carry it any further. It is sufficient to say that if the financial difficulty of the government persists, it is not because of incompetence or default it is because of a difficult situation that governments have to deal with. If the persistence of financial problems were a criteria, governments everywhere would perhaps be liable to be superseded. No one ever has blamed the Government for the time being because the problems persist. The question always is, what is it that the government could have done in the situation which it has failed to go or what is it that it did which it should not have done. None of the allegations with regard to the financial aspect of the matter poses that problem.

VIII. The Instances of default, incompetence and abuse

60. That leaves for consideration the question if having regard to the statutory requirements, a proper attitude and approach to the exercise of power of control, the totality of the surrounding circumstances and the peculiar features of the Corporation, the various allegations contained in Annexure-I, II and III of the show Cause Notice could jointly or severally irrespective of whether they are relevant to one pigeonhole or the other, reasonably justify an order of supersession of the body.

61. I have already held above that the Corporation was denied a reasonable opportunity of showing cause. It had submitted a kind of an interim reply seeking to justify a favourable order but by no stretch of imagination, it could be described as an elaborate, effective or a reasoned reply setting out either the rationale or the material in support of its several contentions, including the various questions of law and fact that it was entitled to raise in defence. Most of these allegations have a long historical background and some of these involve problems of funding of local government, difficulties in the task of finance and budgeting, matters of policy to be pursued in employees welfare public welfare numerous administrative problems, in the matter of employment and conditions of service of employees which were not necessarily peculiar to this body. The Corporation would have been entitled to bring out material to make a comparative study of what was happening elsewhere and if this material was relevant for consideration of government, such material was still to be placed on record. In the course of the present proceedings some of these questions were debated and further material was placed but this Court was obviously not the proper forum for decision of the correctness of propriety of actions or acts of omissions or commissions of the body sought to be superseded. In the circumstances a determination of the question with regard to the reasonableness of the order of supersession may, therefore, be either unnecessary or unfair to the Corporation. The question has, however, been posed in this form and, I would, therefore, consider it on the assumption that the order is not vitiated on account of absence of opportunity or unreasonableness of the attitude of government and on the assumption that there was nothing further to be said that has been done either in the interim reply or in the course of the present proceedings.

62. Annexure-I contains four allegations in respect of the charge of persistent default in the performance of duties imposed on the Corporation by the Act. Item (i) deals with the failure to repay timely the principal and interest on the outstanding of the Corporation to the Central Government in violation of S. 194 of the Act. Item No. (ii) relates to acts of default in the matter of contribution of the Corporation's share towards the Employees' Provident Fund Act, involving violation of Regulation 33 of the Delhi Municipal Corporation Provident Fund (Regulation) Act, 1962. Item No. (iii) relates to similar default in the deduction and remission of amounts payable by the Corporation to the employees under the Additional Emoluments (Compulsory Deposit) Act, 1974 violating S. 6 read with S. 3-B of the Act. Item No. (iv) relates to failure to manage the finances arising out of deficits. Annexure-II, which deals with abuse of power, lists eight allegations. Item No. (i) relates to creation of large number of posts without making any effort to lay down any yardstick or norms for such posts or provision for resources and of making ad-hoc appointments in violation of the instruction of government. Item (ii) relates to the use of municipal vehicles by Councillors and Alderman for non-duty-purposes in spite of the advice of the Solicitor General of India, Item No. (iii) relates to discretionary funds placed at the disposal of the Chairman, Standing Committee and Chairman of other Committees in violation of provision of S. 105 of the Act. Item (iv) relates to several irregular appointments without obtaining the prior approval from the Delhi Administration and in spite of the recommendations of the U.P.S.C to the contrary involving violation of Ss. 89, 96 and 97 of the Act. Item (v) relates to the practice of Constituency fund in spite of the recommendation of the Morarka Commission to the Contrary. Item (vi) relates to permission to reconstruct in spite of the law to the contrary in dealing with the demolition said to have been carried out by the previous Corporation during the emergency. Item (vii) relates to the irregularity and indiscretion in the acceptance of the tender for work against the advice of the Commissioner and normal purchase procedure. Item (viii) relates to the decision to sell staff quarters to the employees in occupation on market value even though they were meant to serve as an amenity to serving staff. Annexure-III dealing with incompetency in the performance of duties under the Act contains three allegations. Item (i) relates to grant of conveyance allowance to large number of categories of employees irrespective of job requirement and even in the face of poor resource position. Item No. (ii) relates to the outstanding claim of contractors said to involve the creditworthiness of Corporation in the public eye. Item No. (iii) relates to diversion of plan allocation to non-plan expenditure.

63. I would now discuss each of these allegations:—

Annexure-I (i) It was not disputed and has been amply brought out in the reports of various committees and commissions appointed from time to time, including the Morarka Commission and the Jain Committee that the Corporation, as indeed, a majority of local bodies in India, as well as numerous State Government, have over the years been in heavy arrears in payment of interest and repayment of principal amounts of loans received by them from the appropriate Government from time to time with a view to cover their deficit. I have already pointed out above that the widening gap between revenues and expenditure has been a common feature of governments at all levels, particularly, in developing societies for a variety of factors which have had a snow-balling effect, I would, however, ignore all these compulsions with a view to determine of non-payment of interest and instalment of principal could be said to constitute either an act of persistent default in the performance of duties imposed on the Corporation by law, whether this Act or otherwise, or an act of incompetence or abuse of power.

64. A timely payment of the debts that one owes whether a natural person, a juristic person, a Corporation or government, is no doubt not only a pious and moral duty but also a contractual obligation and in that sense, therefore, a legal duty which could also be enforced by proper measure in law. It is, therefore, desirable, as indeed, proper that any person, particularly a public Corporation, must be up-to-date in the discharge of its debts. I am, however, unable to see any statutory duty sought to be spelt from S. 194. This is based on a misconstruction of this provision. S. 194 merely talks of priority of payment over other payments. It does not change the character of the liability. The liability still is contractual. It is well-known that the principle of priority is relevant only to bankruptcy and in execution of decrees. S. 194 extends the principle of priority for crown debts over ordinary debts to the Corporation probably because but for this provision, such priority would be doubtful. The effect of the Section, therefore, is that in any insolvency or execution of decrees against the Corporation, the Government dues would stand apart and would have priority over all others. Its importance lies in the Section that follows and S. 195 provides for attachment of municipal fund and ensures the preservation of the fund and property of the Corporation against any distress pursuant to decrees hold by the creditors of the Corporation. S. 194 cannot be read as laying down, as it were, a fiscal discipline for the Corporation to follow, when it commences its business on a working day and obliges it to first apply all its funds and resources for payment to government. Such a construction would make an utter nonsense of this provision and compel the Corporation to starve even its scavanging staff until up-to-date government dues have been paid. I refuse to make an utter non-sense of this provision. While I have said enough as to the reasonableness of the attitude of government in the matter of its outstandings, and while one may not be happy that on account of numerous compulsions, constraints and limitations, as well as handicaps, Corporation has been in default in the payment of interest and repayment of the principal amounts due to government. I am unable to see any statutory duty imposed on it by the Act or any other act to make these payments, however, sacrosanct, pious and contractual duty to pay its debts may be and whatever may be one's predisposition as to the ideal form of functioning of a statutory body in the matter of its duties and obligations.

65. There is another reason why this default, assuming that it has relation to some duty under the Act, would be outside the Section. The requirement is “persistent” default. This implies a willful act not a mere inability to pay. I have already pointed out above the unreasonableness of the position of the government as a disinterested creditor enforcing its contractual right. It was aware of the compulsions and the handicaps and problem with which the Corporation is faced. It is fully aware of its financial difficulties and the consequential dismal inability to pay. No one justifies such a financial disability of a statutory body but, however, one may look at it, there is no question of non-payment in such admitted context amounting to persistent default. For this purpose, I am also ignoring that the Corporation had large claims against the government, as indeed, various other bodies. Persistent default implies failure to pay which is willful and obstinate in the fact of ability to pay. Where non-payment has it genesis in an admitted financial difficulty not related to an intention to deprive another of his right or entitlement, it could not be an act of incompetence either. Incompetence implies lack of equipment or ability to perform but not the absence of material or wherewithall with which to perform. It may in certain circumstances be an act of incompetence be an act of incompetence if in spite of the availability of all that is required, there is the lack of competence to perform. In certain circumstances, failure to properly balance the budget may amount to an act of incompetence but not the non-payment. The budget aspect I would consider separately in the item that follow. It was noboyd's case that non-payment to given could ever be conceived an act of abuse or excess of power.

I (ii) and (iii)

66. Both these items could be considered together. There has been some controversy as to the quantum of the amount in these instances but there is little doubt that there has been default in complying with the requirement of Regulation 33 of the Delhi Municipal Corporation Provident Fund (Regulation) Act, 1962 and of the Additional Emoluments (Compulsory Deposit) Act, 1974. The default has its obvious genesis in the over all financial difficulties of the Corporation, particularly, the lack of Liquidity at the crucial point of time. Default under the Employees' Provident Fund Act, the Employees' State Insurance Act, the Taxation laws and the like is a common feature of sick industrial units all over the country and Courts are replete with prosecution under these provisions. It is also a frequent occurrence for Courts on the Company side staying these prosecutions because these defaults are a direct consequence of financial difficulty and lack of liquidity. What has happened in the Corporation was no different. Some cases of defaults were carried forward from the previous Corporation. Payments were admittedly made by the present Corporation but further outstandings over-reached the body maintaining the default, though to a lesser extent. Provision is made in the budget but because of the shortfall, funds are not available in time to comply with these requirements. Here again, I am not going into the propriety of additional grants being not made available or the justification or otherwise of large claims of the Corporation being not settled or the failure or otherwise of government to come to the rescue of the Corporation in time so as to prevent these violations. That is another aspect of the matter and I have dealt with it above. The compulsions in which these defaults occur, would still not attract S. 490. I have pointed out above what the nature of the default should be no render it actionable under this Section. What I have said above with regard to competence and abuse of power is equally true with reference to these items. However, unfortunate and improper it may be, that a statutory body makes default in complying with the requirement of law for the non-compliance of which an ordinary citizen is prosecuted, it is not possible to hold that it is a case of persistent default or of incompetence or of abuse of power unless one were to close one's eyes to the willingness of the Corporation to perform and of its serious financial difficulties which the authority seeking to supersede the body could not have ignored and may have relieved.

I. (iv)

67. The allegation of failure to manage its finances and of suffering heavy deficits over the years to my mind, is not a charge but a correct statement of the state of things or the existence of a situation with which the Corporation as indeed, almost all local bodies and governments generally, no less than individuals, juristic bodies, including joint stock companies, are faced on account of large number of contributory factors over almost of which in spite of their ability, prudence and best effort, they have no control. One may enumerate a host of factors, which have accentuated financial difficulties of every one, who has to receive and pay and manage his affairs such as, unprecedented inflation and the vicious circles of pressures that stem from it. The problem of the financing and budgeting on the local bodies generally and of the Corporation, in particular, has been amply brought out by the Morarka Commission in its reports. The Commission had been set up to consider various financial aspects of the functioning of the body. In para 2.09 of its interim report, it has brought out the salient features of the duties and obligations of the Corporation and the factors that have been increasing its financial obligations. I would quote para 2.09 in extenso. This is how it reads:—

“Some of the duties and obligations enjoined on the Delhi Municipal Corporation differ in their scope and magnitude from the functions discharged by other major Municipal Corporations in the country. These peculiar features have had a bearing on its administrative and financial relations with the Government. The Commission gave due weight to them in the course of their deliberations. Some of the salient features accompanying the duties and obligations of the Municipal Corporation of Delhi are enumerated below:—

(a) The jurisdiction of the Corporation is co-extensive with the boundaries of the Union Territory of Delhi, whose growth and development is the constitutional responsibility of the Government of India. Its status as the national Capital and also as a focal point of international activity, make the provision and maintenance of municipal services and public utilities a matter of effect concern to the Government of India. The quick expension of the Central Government structure, the establishment of many new offices and specialised institutions and the construction of new residential colonies for Government servants have added not a little to the strain on municipal services;

(b) Of all the Corporations in the country, the Delhi Municipal Corporation has by far the largest area with diverse problems. It is almost as extensive as that of the Calcutta Metropolitan District which has 36 urban local authorities including the Corporation of Calcutta and Howrah. Even the area of the premier Corporation of Greater Bombay is only 169 sq. miles as compared to Delhi's 512 square miles out of which only about 99 sq. miles is urban with a population of 23.59 lakhs (1961) while a population of about 3.4 lakhs is scattered over 300 rural abadis and township, all around. A major part of this area is not considered urbanisable in the foreseeable future.

(c) From its very inception, the Delhi Municipal Corporation not only inherited the problems of knitting together the scattered and disjoined urban residential colonies in the matter of municipal services and communications, but also took over the functions of the District Boards, as also some of the ‘functions which are normally discharged elsewhere by the State Governments. The fact that the Corporation spends about Rs 150 lakhs per annum in the rural area against a revenue of only about Rs 5 lakhs is indicative of the extent of its liabilities in this regard.

(d) The Master Plan of Delhi has cast certain responsibilities on this Delhi Municipal Corporation. On the one hand it is responsible for the enforcement of the Plan in the Union Territory excepting development areas declared as such which are controlled by the Delhi Development Authority; on the other, it is required to undertake works of development, particularly construction of arterial roads and overbridges, laying of trunk mains for water supply and sewerage, etc. throughout the Union territory. It is also responsible for the provision and extension of these services to areas under the Control of New Delhi Municipal Committee and the Cantonment Board as also to the colonies developed by the Delhi Development Authority, Central Government and private agencies, thus creating problems of finances co-ordination.”

68. The Commission also pointed out elsewhere in the report why and how the Corporation had almost always been in deficit and made its recommendations with a view to enable the Corporation and the government to put the finances of the body “on an even keel”. In this context, it is good to remember that Morarka Commission dealt with the situation in the midsixties and the years that have since rolled out, the contributory factors have been more aggravating population pressure has been increasing, exceptions of the people have been rising and the ravages of inflation have been worst. On one reckoning, the performance of the Corporation may be said to be not so bad, if not commenable, in the situation that it inherited and the increasing problems, that it was faced with.

69. If the heavy deficit and the state of its finances have been a direct consequence of unprecedented pressures and compulsions, it is difficult to blame the Corporation as having been guilty of persistent default in the performance of duties or incompetence in the performance of those duties or of abuse of its powers, unless the charge specified what the Corporation ought to have done but it did not or what it did but ought not to have done in the difficult situation in which it found itself.

70. It may be useful in this context to consider what was the statutory duty of the Corporation in relation to the problem of finance and budgeting to find out if it has failed in that duty as envisaged by S. 490 or has shown itself to be incompetent, and therefore, not upto that task.

71. Chapter VII of the Act deals with Revenue and Expenditure and Ss. 109, 110, 111 and 112 deal with budget estimates. S. 109 enjoins the Corporation to adopt for the ensuing year (a) budget estimate (general) being an estimate of income and expenditure to be received and incurred on account of the municipal government of Delhi; (b) budget estimate; (electric supply) which shall be an estimate of the income and expenditure of the Corporation to be received and incurred on account of the Delhi Electric Supply Undertaking; and (d) budget estimate (water supply and sewage disposal) which shall be an estimate of the income and expenditure of the Corporation to be received and incurred on account of the Delhi Water Supply and Sewage Disposal Undertaking. S. 110 empowers the Corporation to alter budget estimates. S. 111 empowers the Corporation to re-adjust income and expenditure during the year inter-alia, if it finds that income during the year will not suffice to meet the expenditure sanctioned in the budget estimates.

72. It is well-known that the art of budgeting and the management of finances is a delicate and a difficult function and budget estimates at all levels have a tendency to go awry because of a host of unforseen and other circumstances that may overtake a person or a body. It is also well-known that the municipal government, as indeed, any government would like to do maximum for the people in spite of the obvious constraints and difficult resources position. The increasing cost of welfarism in developing societies is a major factor of deficit in budgets. The most developed countries have not fared any better. It is also necessary to bear in mind the liberal and conservative approaches to the budget of welfare bodies. While the political wing of governments have invariably adopted in liberal and progressive approach with an eye on relief to the people, the bureaucracy have always brought to bear a conservative approach so as to keep the budget within the revenue constraints. What has been happening in the Corporation was no different. While the elected representatives of the people were anxious to do their utmost in carrying out welfare measures to give much needed relief to the population and at times were unusually optimistic about either their revenue generation targets or of payments of their outstanding claims or optimistic that in any event, the Central Government would bail them out, the Commissioner, trained in the bureaucratic environment, has been cautious as well as conservative and on occasions made even unpopular suggestions with regard to slashing public works and expressed passimism with regard to the availability of funds from some of the sources, which did not appear to him to hold out a bright prospect. But with all this, where is the question of incompetence or of default? These, if done, in the bona fide belief that it was in public interest and with an eye on the Central Government, would be no different than a mere optimism. I have already pointed out above that in assessing the competence of the elected representatives, it is necessary to bear in mind two important factors. Firstly, the absence of any academic or professional qualification for a person to be a candidate at an election. Secondly, in the ultimate analysis, in a parliamentary democracy the work and conduct of the representative could be legitimately assessed only by the people at the next poll. It is, therefore, not possible to say that mere optimism or liberal or progressive attitude to budgeting in an anxiety to do more for the people, could constitute an act or omission, which would be actionable under the Section.

73. It is significant to point out in this connection that in the difficult financial position, the then Joint Secretary accepted the proposals for ways and means loan of Rs 4 crores during the current financial year of 1979-80 to tide over the financial crisis facing the Corporation and ordinarily this would have been granted thereby relieving the position as had consistently happened in the past during more than a decade. But the Financial Adviser to the Central Government, declined to recommend the loan and expressed the view that it was not proper for government to bail out the Corporation. One looks in vain for the reason why the Financial Adviser adopted a posture which created a precipitate situation for the Corporation. It may possibly have something to do with the change of government at the Centre. The Joint Secretary's note was before the changeover in January, while that of the Financial Adviser is soon after the change-over, within 4 days of it. The attitude of the bureaucratic machine probably undergoes a change with the change in successive governments, an unfortunate but said to be a feature of the administration in this country. What, therefore, led to the precipitate situation is the change in government attitude and not necessarily the objective conditions.

74. The abuse of power in these two items, which could be considered together, consists of creation of large number of posts without laying down any yardstick or norms in spite of financial constraints and continuance, of ad-hoc appointments in violation of instructions of government and of irregular appointments against the recommendation of the U.P.S.C and without obtaining prior approval and confirmation from the Administrator, involving violation of Ss. 89, 96 and 97 of the Act.

75. It is beyond that the Act, the statutory rules and regulations and administrative instructions, issued from time to time, regulate the creation of selection for an appointment to posts to enable the Corporation to discharge its duties and functions. Chapter VI of the Act deals with municipal officers and employees. Some of the appointments require previous approval of the Central Government u/s 89 of the Act. S. 96 enjoins that no appointment to certain posts could be made except after consultation with the Union Public Service Commission and S. 97 confers power on the Commission to make regulations in respect of procedure to be followed by the Commission in making recruitments and selection of candidates and matters incidential thereto.

76. It is well-known that there are similar constitutional as well as statutory constraints in the matter of creation of selection for and appointment to various posts, as well as the conditions of service of employees, in various governments and statutory bodies. It is equally well-known that the provision with regard to prior sanctions of certain authorities and consultation with a specialised body like Union Public Service Commission are intended to ensure propriety in the matter of recruitment in the interest of efficiency of administration. Yet, it is a fact of life that the whole process of formulation of rules and regulations, for the purpose of recruitment, selection and appointment, prior approval, consultation with the Commission, process of selection at the appointment or the promotion level, for which adequate provisions have been made, are time-consuming and more and more posts are created and appointments are made on a purely ad-hoc basis because of increasing pressure of work and the consequential need for immediate recruitment. It is for this reason that large number of posts are created and ad-hoc appointments are made without strictly complying with the norms laid down by the statute in an anxiety to carry on urgent work and in the shape that in course of time the necessary approvals, sanctions and regularisation would be forthcoming expost facto. The case of the Corporation has been no different. This is what has been a feature of the Corporation, over the years and this is an aspect of the administration of the Corporation which has come to the adverse notice not only of Courts, which were called upon to deal with these matters, but also an expert committee like the Jain Committee.

77. The present corporation admittedly continued large number of ad-hoc appointments, created new posts or continued the life the posts created by the earlier Corporations pursuant to an admitted desire that on account to lack of personnel, there should be no let up in the administration. One need not, however, go into the justification for this. But whatever view one takes of this administrative compulsion or of the construction of the expression “abuse of power”, it is not reasonably possible to construe these sets or omissions as constituting an abuse of power. Where the appointment could be made with the prior approval of an authority or where consultation with the authority was necessary to make an appointment, ad-hoc appointments are made or continued pending said approval or concurrence or where rules and regulations are necessary to select personnel and to make appointments stop gap arrangements are made of if made by an earlier body or continued so that the work is carried on pending framing of the rules and regulations, it may be an irregularity. But, it is very difficult to find that it would constitute either a misuse of power or use of power for extraneous purpose whether or not there is improper motivation or not. Power of adjustment is necessary to enable the body to carry on its business. Sanctions, approvals, consultations and rules and regulations are necessary so that the exercise of power is regulated. Ad-hoc or stop gap arrangements are intended to sub-serve the purpose of the power, work cannot be suspended ending involved and elaborate procedure to complete the legal mechanics or infra-structure. It is not possible to hold that such acts or omissions are within the mischief of S. 490.

78. This allegation does not bring out correctly what had really happened. Over the year Deputy Mayor and Chairman of Committees of the Corporation were considered entitled to the benefit of staff cars. Some doubt arose if by virtue of their office, they were so entitled. The Solicitor General's opinion was sought and he ruled that by virtue of their appointments, neither the Deputy Mayor nor the Chairman of any Committee were entitled to the use of the staff car. The use of the staff cars for these offices was, therefore, suspended but it appears that Chairman of one of the Committees continued to use it even after the opinion had been given. There was, therefore, no question of permitting the use of vehicles by Councillors and Aldermen for non-duty-purposes. It, however, appears that consistent with the opinion of the Solicitor General, a pool of cars was created to be used by the officers of the Corporation for duty purposes as distinct from the right to use a vehicle by virtue of an office. It was further resolved that in the matter of use of cars for private duty, the officer concerned be charged in accordance with the government rules. This was also consistent with the opinion of the Solicitor General. The previous practice of use of staff cars by virtue of an office which has continued for years was, however, regularised and the practice was suspended. It is difficult to describe it as a case of abuse of power by any one, much less by Councillors and Aldermen for non-duty-purposes as is sought to be made out in the allegations.

II. (iii) and (iv)

79. These allegations could be conveniently dealt with together. A practice has been followed over the years in the Corporation to place a sum of Rs 20,000 per annum as discretionary fund at the disposal of the Chairman Standing Committee and Rs 1800 per annum at the disposal of the Chairmen of each of the other Committees. A practice has also grown in the Corporation over the years to allow the Constituency fund to the Councillors which could be spent on the advice of the Councillors concerned in welfare work in the Constituency. The first of these is said to be contrary to S. 105 of the Act and one has only to read that Section to reject the contention. S. 105 provides that the monies from time to time credited to the Municipal fund shall be applied in payment of all sums, charges and costs necessary for carrying out the provisions of this Act and all the rules, regulations and bye-laws made thereunder or of which payment is duly directed, sanctioned or required by or under any of the provisions of this Act. It is not disputed that the discretionary fund as indeed the Constituency fund always from part of the budget allocations and the expenditure is duly reflected in the records. The expenditure is duly authorised. All that had happened was that Morarka Commission felt that the practice of constituency fund was not proper and suggested that the Councillors should instead draw proposals for improvements for new works in their respective constituencies in advance and within certain financial limits. Interestingly enough this recommendation is still to be accepted by government. It is, however, difficult to read into this practice which has been followed over the years any abuse of power particularly where there was no suggestions that these funds were misused or used for the purposes other than those for which they were meant or on purposes which were contrary to any purpose of the Corporation.

II. (vi)

80. This item relates to the policy adopted by the Corporation with regard to demolitions carried out during the emergency. It appears that during the emergency, when the leaders of the present government were in power at the Centre and the Corporation, was being run by the Central Government, after its supersession, large-scale demolitions of unauthorised constructions or constructions said to be unauthorised, were carried out and there was considerable controversy during as well as after the emergency, when the government at the Centre and the Corporation changed in 1977, whether these demolitions were unjustified, carried out otherwise than in accordance with law, for ulterior purposes, at the instance of authorities or persons who had no constitutional or legal sanction and if these demolitions caused wide-spread hardship to the people. When there was a change of government at the Centre, after the emergency, there was considerable agitation as well as debate as to the need to expose these and other so-called excesses of the previous regime. The matter also became subject-matter of Commission of Enquiry and these demolitions, as indeed, certain other alleged acts of omissions or commission were condemned by the Commission. The present Corporation considered the question as to what should be done with these demolitions and if reconstructions should be allowed freely, whether the injustice said to have been caused should be redressed by permitting fresh construction and as to the policy to be adopted in that behalf. It is obvious that the way those in power in the Corporation looked at the demolitions and the manner in which they were carried out, they were sympathetic to the victims and, therefore, decided that the reconstruction be permitted within certain policy guidelines that were laid. This, inter-alia, envisaged compounding of unauthorised constructions and permitting fresh construction where compounding was allowed by law.

81. Now, it is not possible to ignore that the decision of the groups had violently differed on the propriety and the manner of the demolitions. With the change in government, the new government in power may have been carried away in its resolve to expose the so-called excesses of the previous government or even to take advantage of the political discomfiture of those who were out of power. This is an unfortunate feature of government in this country. One may also have a genuine difference of opinion as to how to deal with an unauthorised act of a statutory body and if in giving relief against injustice, there could be a legitimate deviation from the rule of law.

82. Whichever may, however, one looks at the resolution, it is difficult to describe it, on any possible construction, as an abuse of power. The Corporation certainly has the power to regulate all construction activity. If the construction is unauthorised, it has the power in certain circumstances, to compound it an authorised or unauthorised construction has been demolished otherwise than in accordance with law, it would have the power to deal with the situation. The power to allow reconstruction in specified cases of demolitions was a power to be exercised for a public purpose, there was no private purpose. It is true that where injustice has been done to a person, the process of undoing the injustice and of giving relief to him must also conform to the constitutional, the statutory or the policy constraints. A sympathetic attitude to the person to whom injustice was thought to have been, done may not be strictly legal and be even improper but could not be condemned as an act of abuse of power. It is possible that the present Central Government or those in authority in the Union territory of Delhi treated the decision of the Corporation as an act of affornt but could that attract the drastic measure of supersession?

II. (vii)

83. This item relates to the placement of order of about Rs 1.30 crores on M/s Trading Engineers in preference to an enterprise belonging to a large business house and the allegations is that this was done against the advice of the Commission and against normal purchase procedure. The facts are not disputed. The Trading Engineers is apparently a Delhi firm with which the Corporation has had dealings before. Tenders were invited and the Crompton Greaves Ltd., the competitor was lower of the two. For the purpose of testing the comparative afficiency of the product, matter was referred to an independent government agency, but the performance of the product of Trading Engineers was considered on the basis of an improval design, for which no opportunity was given to Crompton Greaves. It is true that the better performance, efficiency and economy were valid factors to counter a more decrease in the price. But the impropriety lies in the fact that between the two competitors, rules of fair play demanded that the opportunity to submit an improved design was also given to Crompton Greaves. To that extent, Crompton Greaves could, on one reckoning, be said to have been unfairly treated.

84. However, it is quite possible that there was a strong lobby in the Corporation for the Trading Engineers, with which the Corporation has had dealings before. The efficiency and economy test could have been a convenient device to get over the lower offer of the competitor. It could have been a case of oversight either. An impartial government agency has also been involved in making the assessment. There was, however, no material or allegation that anybody in the Corporation was interested in the contract or in the firm to whom it was awarded. While Crompton Greaves certainly had a genuine grievance, it was not a case of misuse of power or of incompetence or of any default even though it was certainly an act of indiscretion and may even be described as an act of impropriety. But the mere commission of an act of impropriety or indiscretion or of an infraction or violation of the law is not sufficient by itself. There is a further requirement if such indiscretion etc. would justify an order of supersession, particularly, where the Corporation could be overruled even in the matter of awarding contract. The motivation for action in such cases is important. It is not every infraction, impropriety or indiscretion that would justify action. The action must also be reasonable.

II. (viii)

85. This allegation relates to the sale of staff quarters in Nimri Colony to the staff of the Corporation, who are its allottees, even though the quarters were meant to serve as an amenity to the staff and that is the condition on which funds had been made available for their construction. Staff quarters were built by the Corporation with the funds made available by the Central Government for its staff. The previous Corporation appears to have taken a decision that these quarters, though intended to be an amenity for the staff, be sold to the staff to whom they were allotted on a “no profit no loss basis”. This was a rather generous measure for any public Corporation to adopt. Apparently, the previous Corporation had succumbed to pressure from the staff or acted out of a desire to adopt a popular measure. The present Corporation reviewed the decision and declined to implement the decision of the earlier Corporation. The aggrieved staff, who wanted sale in terms of the decision of the earlier Corporation, took the matter to this Court and while the proceedings were pending, the present Corporation also opted in favour of a popular pressure and resorted the earlier decision but with the modification that the sale would be on the basis of “the market value” and not on a “no profit no loss basis”. The decision of the Corporation in spite of the modification, introduced by it, would still be open to objection in that the staff quarters were intended to subserve the long term need of the staff, which would be denied, if they were sold to a section of the staff who happened to be in occupation at a given time.

86. But it cannot be ignored that the staff quarters were intended to be an amenity for the staff and if they were sold on the basis of a market value, it would still be subserving that object because the staff to whom it is sold may be in service for many years ranging from 5 to 20 years. It would be the beginning of a very progressive labour policy for a Corporation to adopt. It certainly was a welcome retirement plan for the staff. The staff was obviously happy with it. This also indicated the welcome direction for future policy in housing of employed persons for the various governments and authorities, as indeed, the private and public sector to enumerate. No law was violated either. There is the power to sell property and any sale on the market price for the benefit of staff of a body would be no impropriety either. The term on which funds were made available did not exclude sale to the staff. The compulsion of a progressive decision by the earlier body and the difficulty in altogether reversing it could not be ignored. In any event, it is difficult to think of supersession of a body for adopting such a measure. There was an obvious purpose to be achieved. An amenity to the staff and a progressive housing policy is part of a retirement plan. There was also the object of removing discontent arising out of the reversal of the decision of the earlier body. There may have been a private purpose in the public purpose i.e the satisfaction of having fathered a popular measure and earned the gratitude of the staff. It may also be taken with a view to get credit at the next poll. But these are legitimate political purposes. There was no allegation that it was intended to benefit only a selected few employees or that they were intended to be sold to those just on the eve of retirement.

III (i)

87. This relates to grant of conveyance allowance to large number of employees said to have been continued irrespective of the job requirement and in the face of poor resource position. While it is true that in view of the large deficit, the Corporation could not afford any improvement in the conditions of service of its employees. It is equally true that the conveyance allowance is ordinarily relevant only to the job requirement. But can it be ignored that there is a wide gap in India between living wage and the real wage, which is widening every day in view of the run away inflation leaving the salaried staff worse-off. There is increasing pressure from employees for monetary benefits, even though in driblets, as a wage increase or in the form of allowances, which are given in the garb of attractive and euphemistic phrases, Conveyance allowance is one of those. It is well-known that benefit by way of conveyance allowance is given to staff not because of their job requirement, but because of the obvious anxiety to narrow the gap as far as possible. This has been the practice in the Corporation and was continued and even categories were added to it. It does not involve any act of incompetence and is hardly a matter on which the Corporation could be possibly faulted.

III (ii)

88. This relates to the outstanding of contractors of the Corporation said to be of the order of Rs 4 crores. This is an obvious aftermath of the deficit and lack of liquidity. What has been said about other items relating to financial matters would equally apply to this as well. This would not, on any reckoning, justify supersession. If the local body could be superseded because it has financial difficulties, all bodies and perhaps most governments would be liable to be thrown out of office.

III (iii)

89. This relates to diversion of plan funds to non-plan expenditure and is admittedly a common feature in government spending in the States and the local bodies. The fund is common. Plan and non-plan expenditure has to be carried on. No water-tight compartment are possible and funds for plan purposes may be spent for non-plan purposes and vice versa, whenever there is shortage of funds. What is important in government is that work must go on within the compulsions and constraints. The rigid discipline implied in this allegation could not possibly justify any action, much less an action of a drastic nature.

90. In the course of the discussion of the merits of the various allegations, I have endeavoured to bring out the gravamen of the charges, the infraction, violation, impropriety, indiscretion, etc. involved in the various acts and omissions on which the order of supersession is grounded as also the compulsions behind the act or omission, the circumstances which led to them, the justification or mitigation, if any, and the purpose or the object for which, the acts or omissions were committed. I have also brought out what appears to me to be the true construction of the law relating to supersession, the nature of the power of the Central Government, the attitude and approach that it is required to adopt in such matters and the caution and circumspection necessary in superseding the municipal government. If the Central Government had some compulsions to supersede the body and had, therefore, to make that order of necessity, and seek to justify it with reference to the allegations and the material available, one could piece together the various allegations to create a facade in an attempt to justify the order because of the acts and omissions of the successive municipal governments. But the moment one subjected these allegations to close scrutiny and examined the legal requirement, the compulsions behind the actions and omissions, the justification and mitigation therefor and the totality of circumstances in which they had been committed keeping in view the nature of the power and the sanctity of an elected municipal government, the picture becomes fainter, and when one applies to the allegations the test of reasonableness, the whole thing, including even the frame appears to be crumbling.

91. This case presented two important imperative. One was the desirability of upholding the statutory order of Central authority said to have been made in public interest. Government was under a duty to be just and fair and was presumed to have acted in accordance with law. One would, therefore, be very reluctant to fault its order. The second imperative was the maintenance of the right of municipal government. Within these two parameters, I tried hard to understand the Central Government's point of view. But was unable to justify the order as reasonable and doubts still linger in my mind as to the real motivation for the order. It appears to me that the government was ill-advised to resort to the power of supersession and even the manner in which the process was rushed through for reasons which are not clear appear to lack in finesse and propriety, which one would normally associate with government action, particularly while dealing with another government under the control of an opposition party or a group of opposition parties.

92. But this is not to say that all is and has been well in the conduct of the business of the Corporation. The allegations forming subject matter of the show cause notice could not be brushed aside as being wholly irrelevant or extraneous. They certainly have a bearing on the question as to the liability of the Corporation to be superseded. Two of my worthy colleagues have even found these allegations as reasonably justifying the order of supersession. I have also held that on account of denial of reasonable opportunity of showing cause and for other reasons, the process leading to the order has been vitiated. I have also laid down what appears to me to be the scheme of the Chapter dealing with control, the true meaning and scope of the provisions of S. 490, the correct approach and attitude to be adopted in considering the question of supersession. In this view, Government obviously would be entitled to consider all these matters afresh and arrive at its own conclusion on the various questions that require decision. It would therefore, be neither proper nor necessary to void the show-cause notice or to prevent the Government from considering the matter afresh in accordance with law.

93. I have held above that the reasonable opportunity of showing cause was denied to the Corporation. I have further held that in superseding the body, Central Government did not appear to have acted reasonably and that, in any event, the impugned order could not have been reasonably made on the existing material. I have been overruled on these matters, and the further question as to the relief on my holdings would be at this stage purely academic. I have also expressed the view that the allegations forming subject-matter of the show cause notice could not, however, be said to be irrelevant or extraneous, and if the order of the Central Government was to be voided on the preliminary questions, it would be both necessary and proper for the Central Government to consider the question of supersession in accordance with law after giving to the Corporation or the Executive Councillors, as the case may be, a reasonable opportunity of showing cause. The form of relief in such cases may present some difficulty and raise some interesting questions both with regard to the impact of denial of opportunity on the order and the effectiveness of any post-decisional hearing in such a case, as also the question as to the propriety of maintenance of status-quo until the fresh order has been made in accordance with law. I had considered some of these questions in my minority opinion in the case of Swadeshi Cotton Mills Company Limited (supra). This is what I said them:

“25. If prior hearing was, therefore, the necessary condition for a valid order in breach of it would be void and would ordinarily be quashed in proceedings under Art. 226 of the Constitution of India. In that sense, the vice of the order could be cured only be an efacement of it and there would, therefore, be no question of such a vice being curred by grant of a subsequent hearing. The decision of the Supreme Court in the case of Maneka Gandhi (11), to my mind, does not sanctify the proposition that the vice of an order, which was void for want of a prior hearing, could be cured by a subsequent hearing. In that case, on a construction of the Passport Act, the majority found that there was no right of pre-decisional hearing and the only right that a passport holder had was impriedly the right of post-decisional hearing if the passport was revoked. Even that right was denied in that case because no post-decisional hearing had been given. It was in this context that the Court considered an offer of a post-decisional hearing as capable or removing the vice of the order. Where the right was to a post-decisional hearing, a delayed post-decisional hearing would be capable of curing the vice, but not where the right was to a prior hearing. It is important to bear in mind in this context that even if the revocation order in that case had been quashed, a fresh one could have been made immediately following that without a prior hearing on the low laid down in that behalf of the order to the petitioner and to consider the representation that she may make. The form of the relief was, therefore, irrelevant in that case. Ordinarily, therefore, an order which has been made in denial of the right of prior hearing must be quashed and the aggrieved party restored to its rights. Lord Reid did not doubt that if an office or body realise that it had acted hastily and re-considered the whole matter afresh after affording to the person concerned a proper opportunity to present his case, then its later decision will be valid (12), but nevertheless pointed out while referring to the effect of the subsequent hearing that it was a “very inadequate substitute for a full re-hearing” partly because the Watch Committee “did not annul the decision which they had already published and proceed to make a new decision”. This may be understood as Laying down that in case a predecisional hearing was implied and was denied, the vice could not be removed without removing the order. In spite of this possible understanding of the observation of Lord Reid, Meggary, J., however, expressed the view that it was not essential that there should be any formal annulment of the former decision before starting afresh (13).

26. Whether the vice of a void order made in denial of a right of prior hearing could be removed without removing the order itself raises a number of difficult questions. If a subsequent hearing is capable of removing the vice in every case, would it not stultify the rule and the salutary requirement of prior hearing degenerate into a post-decisional hearing, which in certain circumstances may be no more than a mere ritual, a public relations exercise or a mere exercise in futility. The question whether such subsequent hearing by the authority which has already taken the action would nevertheless be effective and would not degenerate into a mere public relations exercise and whether such a subsequent hearing would be effective and Efficacious only if given either by a higher or a different authority or by a specially constituted authority with certain essential safeguards built into it to ensure a full and free review of the entire circumstances so as to ensure a just and fair order in spite of the fact that action has already been taken and Government may have to an extent committed itself to it, raise difficult questions, answers to which would depend on a variety of factors and circumstances. The nature of the order, the stakes involved, the status of the authority which made it, the extent to which the authority making the order has by its conduct, pronouncement and defences committed itself to it, the political, economic and social compulsions behind the action, the controversial nature of the order and the other circumstances, which may militate against the possibility of an authority retracing its steps, are some of the factors and circumstances which would determine if such a hearing would be effective. In theory, every public functionary is presumed to act in a just and fair manner and perform his official obligations without fear or favour. Unfortunately, however, that may not be always be so in actual practice for a variety of reasons. There is the proverbial gap between plans, policies and their implementation. There are extraneous factors, compulsions, incentive and pressures such as political pressure, executive pressure from higher authorities, ideological, religious, social, economic, communal, case regional, professional and host of other affinities may successfully, consciously or unconsciously, affect the straight flow of the executive mind. Whether subsequent hearing, therefore, could be of any avail belongs to the realm of conjecture a part of the twilight region and one of the many unanswered questions. But does that mean that in every case in which an order has been made in denial of the right, it must first be set aside? Are their no exceptions? It would also involve the question if the Court is bound in every case to quash a void order made in denial of the prior hearing or does this also admit of exceptions. An order may have been made because of certain compulsions. The hearing may not have been given because of a misconception. Any take-over causes considerable dislocation, impedes normal functioning of industry, the process of take-over involves both time and expenditure. If such an order is vacated and then followed by a fresh order, it would cause considerable prejudice to various interests. Government may have invested large funds in reviving or running the industry. The quashing of the order in such a case may involve paramount considerations of public interests. There may be circumstances which may justify even a void order being kept alive, until the conclusion of the subsequent hearing, even though in a modified form, within narrower limits so that a reasonable balance is struck between the larger public the interest and the claims of private interest. What course the Court would adopt while dealing with a void order made in denial of the right of prior hearing would, therefore, depend not only on the power of the Court to modulate relief, but also on a host of other circumstances and while ordinarily the vice of the order could not be cured without removing the order itself, it would be open to the Court in a fit case to moderate the relief in such a way so as to subserve public interest even while ensuring that the subsequent hearing would be a full and complete re-hearing of the matter and the public interest and the interest of the person affected would be fully protected during the interregnum. What order the Court would make in different situations with regard to the various matters such as the modification of the impugned order, the limitations of its scope, the level at which the subsequent hearing would be granted and the manner in which the property is to be dealt with would, therefore, depend upon the facts and circumstances of each case. Any decision on these questions would be outside the reference.”

94. I am still of that view. Fortunately, the view has since prevailed in appeal against the final order in the Supreme Court (supra). As there so here. The relief has to be moderated. Pursuant to the supersession order, the affairs of the Corporation are being continued in accordance with he order. I would, therefore, void the order without quashing it so that the administration is carried on without interruption until a fresh order has been made in accordance with law.

95. I would, therefore, void the order of supersession but maintain the status-quo until the Central Government considers the matter afresh after a full and fair review and after an adequate opportunity to the Corporation and to the Municipal Councillors, as may be considered feasible of showing cause against the proposed order in a manner which would ensure that there has been a full and fair reconsideration of the whole matter in accordance with law. The administration of the Corporation would eventually abide the fresh order that may be made by the Central Government. The petition in so far it assails the validity of the show cause notice, however, fails and is, to that extent, dismissed.

96. Legal questions have tendency to get enmashed with political questions. Legal questions can be given the shape of a legal formulation. Courts are ordinary not he best forum to resolve political questions. Such questions are best left to be debated and decided in more appropriate forums. However, in cases which have necessary political overtones larger questions, which appear to be more political than legal, are thrown up, even though not necessarily posed for judicial decision. Some such questions and some thoughts and ideas pertaining to them arose in our mind and it is but proper that, even though they may, on one reckoning, be beyond the limited canvas of the present proceedings, we share these thoughts and ideas with those concerned and interested in the hope that they are adequately debated and properly dealt with.

97. Firstly, the political propriety of the principle on which the power of supersession is based. The provision embodies a supervisory jurisdiction over the elected representatives of the people who are given a mandate for municipal government. S. 490 incorporates a measure of assessment of their work and conduct, as indeed, of the collective corporate entity i.e the local government. The composition of the local government is the end-product of the exercise of the political will of the electors pursuant to their inalienable right to determine the composition of their government at the local level. The elected representatives are neither students nor civil servants, whose work and conduct could be supervised, to determine if they remain where they are for the term for which they came or they go out of the office making place for others. Not that their work and conduct is beyond scrutiny. It is subject to review. But that is what the people do at the polls. Even the people do not have in the present dispensation the right of recall before the expiry of the term. These is no right of recall today in India of any government or of legislators at any level. It is not that the legislators and those that constitute governments are necessarily competent, have given satisfaction, have not abused their powers or have been of good conduct. They may or may not be but no authority has the right to pass a judgment over them except the people themselves at a fresh poll. Why is it then that the representatives of the people at the grass-root level are subjected to this unusual review of their work and conduct? It is consistent with the known democratic norms? S. 490 is not based on any post-constitutional thinking but is the continuation of the British model of the powers and functions, as needed, the limitations of local government in India. This was obviously based on the political expediency of a very limited democratic decentralisation in the context of the need them of a strong Central authority owing allegiance to a foreign power. Why was this pattern, therefore, carried into the post-constitutional statute? Isn't such a supervisory power derogatory of the right of the people as also anachronistic in the larger constitutional framework of a republic with popularly elected governments at the Central, the State and the local levels? Does the scheme and principle embodied in S. 490 of the Act and of the corresponding provisions in similar statutes in other States in the context of Art. 356 of the Constitution of India deserve to be given a fresh look so that democratic decentralisation is effective and meaningful, and a new system of supervision is introduced, if necessary, so as to ensure that it subserves public interest without leaving scope for undue interference in the affairs of the local government.

98. Secondly, the power of supersession of a local government, in the form in which it exists today, is certainly capable of abuse in spite of the safeguards built into the provision. It has been abused in the past and is likely to be abused in the future in the hands of lesser governments for purely temporary political advantage. There is, therefore, need to regulate this power further so as to provide that where the power of supersession is sought to be exercised by a government, Central Or State, in relation to a local body, under the control of a political party or group which is in opposition at the Centre or in the State, the power is regulated through a high-powered judicial and quasi-federal tribunals constituted for the purpose with a view to ensure that the exercise of power of supersession is not political motivated and what is more, the exercise of power clearly and demonstrably appears to be for a bona fide public purpose of proper local government.

99. Thirdly, it is also necessary for governments, Central as well as States, to lay down conventions and norms, apart from the statutory requirements and the Constitutional constraints to be followed in dealings between the Central and the State Government on the one hand and the local governments on the other, particularly, where the government at the Centre or the State is composed of one political party and the local government concerned is of the other, Governments many come and governments may go but the work must go on. The Constitutional scheme clearly envisages that different political parties individually or in different permutations and combinations may be entrusted with power at different levels of government at different times. That this is not a merely possibility in theory but may also happen in fact has been amply demonstrated in the past. What has happened in the past maybe repeated in the future. If the democratic conventions and norms of dealing between governments with different political textures are recognised and accepted universally inter-governmental problems would be minimised, if not eliminated altogether, making a harmonious continuity of governments possible at all the three levels, irrespective of the political changes that may come about from time to time at one, two or all the levels. Such conventions and norms would then put government to government dealings beyond the pail of constitutional, statutory or political controversy. The need for these conventions and norms is consistent with the political maturity of our people after the near successful functioning of parliamentary democracy for over 30 years.

100. Fourthly, there is imperative need of extending the scope of the finance commissions constituted under the Constitution from time to time or to set up State Finance Commissions with a view to determine the financial needs both present and future or local bodies in the various States, the manner of distribution of revenues between the States and the local bodies and workable financial norms are introduced so as to ensure that the local bodies have the necessary funds required to finance its increasing commitments to the people. There is urgent need for redefining financial relations between the municipal government and the appropriate governments, Central or State.

101. Lastly, there is a need for a high-powered Committee to examine the problem of the finances of local bodies, to consider the desirability of creating sources of additional funds for welfare projects and to consider the desirability of amending the various statutes, inter-alia, with a view to enable the local bodies to generate local funds. A suggestion that such a committee could usefully consider is the propriety of extending the functions of local bodies to limited commercial ventures, within the local area, to provide a means for generation of funds to meet its ever-increasing financial commitments. Some of the commercial activities of the State in areas of public distribution of civil supplies, entertainment, refreshment could, with certain modifications, be entrusted to local government to reduce their near-slavish dependence on the Central and the State Governments.

1. 1977 S.C 1361, State of Rajasthan & Ors. v. U.O.I

2. Seervan ‘Constitutional Law of India’ (Vol. III) 1777.

3. C.A 1516/80 entitled S. L. Kapoor v. Jagmohan and ors. decided on September 18, 1980.

4. AIR (1978) S. C. 851 @ 870, Mahinder Singh Gill and anr. v. The Chief Election Commissioner, New Delhi and Ors.

5. de Smith's Judicial Review of Administrative Action.

6. Ridge v. Baldwin, 1964 A. C. 40.

7. 1970 S. C. 150,. A. K. Kariapak & Ors. v. U.O.I & Ors.

8. 1943 A. C. 627 @ 638, General Medical Council v. Spackman.

9. ILR (1979) II Delhi 387, Swadeshi Cotton Mills Co. Limited v. U.O.I and anr.

10. C.As 1629, 1857 and 2007 of 1979 decided on January 13, 1981, Swadeshi Cotton Mills Co. Ltd. v. U.O.I & anr.

11. Jackson, Natural Justice, 1980 Edn.

12. 1957 J & K 10, Des Raj v. Ralli Ram

13. 1970 M. P. 154, Suresh Sethi v. State and anr.

14. 1972 M.P 34, Municipal Council, Kharsia and anr. v. State of Madhya Pradesh and others.

15. 1977 Bom. 244, Salkapur Municipality and Anr. v. State of Maharashtra and anr.

16. 1976 S.C 1785. @1789, Siemen's Engineering Manufacturing Co. (India) Ltd. v. U.O.I & Anr.

17. AIR 1978 S.C 851 (881), Mahinder Singh Gill and Anr. v. The Chief Election Commissioner, New Delhi and others.

18. 1958 M.P 323, Municipal Committee Kareli and Anr. v. State of Madhya Pradesh.

19. ILR 1972 A.P 1, Rampal Lahoti v. Govt. of Andhra Pradesh

20. 1967 Punjab 430.

21. ILR 1967 Mad. (1) 493, The State of Madras v. Tirunelveli Municipal Council.

22. Barium Chemicals v. The Company Law Board 1967 S. C. 295.

23. Rohtas Industries Ltd. v. S. D. Aggarwal & Ors. AIR 1967 S. C. 707.

24. 1958 M.P 323, Municipal Committee Kareli and Anr. v. State of Madhya Pradesh.

25. 1967 S. C. 1353, State of Maharashtra v. B. K. Takemore and Others.

26. 1974 S. C. 2249 M. A. Rashid v. State of Kerala.

27. ILR 1967 (I) Mad. 558 Tirunelveli Municipal Council v. State of Madras.

28. ILR 1967 (I) Mad. 493 State of Madras v. Tirunelveli Municipal Council.