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  • provisions of Sections 40 and 41 of the U.P Municipalities Act, 1916,
  • sub-s. (3) of Section 40 of the U.P Municipalities Act, 1916 (2
  • (4) of Section 40 of the U.P Municipalities Act, 1916,
  • Section 40(3) of the U.P Municipalities Act, 1916,
  • Section 9 of the Town Improvement Act
  • Provincial Government.9. Section 41
  • S. 40 incurs. Sub-section (3) of S. 41
  • Sub-section-(1) of S. 40
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • provisions of Sections 40 and 41 of the U.P Municipalities Act, 1916,
  • sub-s. (3) of Section 40 of the U.P Municipalities Act, 1916 (2
  • (4) of Section 40 of the U.P Municipalities Act, 1916,
  • Section 40(3) of the U.P Municipalities Act, 1916,
  • Section 9 of the Town Improvement Act
  • Provincial Government.9. Section 41
  • S. 40 incurs. Sub-section (3) of S. 41
  • Sub-section-(1) of S. 40
Smart Summary

Structured Summary of the Opinion (Bind Basni Prasad, J.; Malik, J.; Per Curiam)

Factual and Procedural Background

Lala Radhey Lal had been a member of the Mussorie City Board since 1929 and continued as a sitting member until 1941. Following certain matters brought to the attention of the Provincial Government, a Committee of Inquiry into the City's Board affairs was appointed. The Committee's report led the Provincial Government to contend that four members (including Radhey Lal) had "so flagrantly abused their position" as to render their continuation detrimental to the public interest. The Government, invoking Section 40(3) of the U.P. Municipalities Act, 1916, called for explanations from the four members under the procedure prescribed by Section 40(4).

Radhey Lal submitted a written explanation admitting various borrowings from municipal employees and contractors but denying that these transactions amounted to corrupt or improper support for jobs or appointments. After considering the explanations, the Provincial Government removed Radhey Lal (and one other member) by order dated 8-2-1941, and published a notification in the U.P. Gazette. Two members' explanations were accepted and no action was taken against them.

Radhey Lal served notice under Section 80 CPC on 6-5-1941 and filed suit on 11-7-1941 seeking (a) a declaration that his removal was illegal and that he was not disqualified under Section 41(3), (b) nominal damages of Rs. 1, and (c) other relief as the Court deemed appropriate.

The Civil Judge dismissed the suit as not maintainable. The District Judge heard an appeal ex parte and held that while the civil Court could not retry the factual findings, it could examine whether the Provincial Government had exercised its mind or had acted capriciously or arbitrarily; he remanded the case for further proceedings. The Provincial Government then sought to set aside the ex parte decree; the District Judge refused. Two First Appeals followed: F.A. No. 288 of 1945 (against the remand order) and F.A. No. 10 of 1945 (against refusal to set aside the ex parte decree).

Legal Issues Presented

  1. Whether a suit challenging the Provincial Government's removal of a City Board member under Section 40(3) of the U.P. Municipalities Act, 1916 is maintainable in a civil Court when the statute uses the phrase "in its opinion".
  2. Whether the civil Court can inquire into the Provincial Government's decision to remove a member on grounds that it acted capriciously, arbitrarily, or without applying its mind despite the statutory language and procedure.
  3. Whether, on the facts and materials on record, the Provincial Government's action in removing the respondent was arbitrary or capricious (and therefore subject to judicial review by the civil Court).

Arguments of the Parties

Appellant (Provincial Government) — Main Contentions

  • The civil Court's jurisdiction is impliedly barred under Section 9 of the Civil Procedure Code (CPC).
  • The Provincial Government's discretion to remove a member under Section 40(3) is final and not open to challenge in a civil Court.
  • Having followed the procedure in Section 40(4) (calling for explanation and placing reasons on record), there is no cause of action for the plaintiff to bring the suit.
  • The Government acted in the exercise of sovereign powers, in good faith, and in the public interest.

Respondent (Lala Radhey Lal) — Main Contentions

  • The civil Court should be permitted to inquire whether the Provincial Government acted in a capricious or arbitrary manner when removing him.
  • He provided explanations to each of the specific charges: he admitted borrowings but characterized them as ordinary business transactions, loans on security, or deposits/investments, and denied any improper support or influence in Board matters.
  • Implicitly, the respondent relied on precedent authority to contend that a Court can interfere where a local authority's discretion has been exercised wantonly, arbitrarily, or unreasonably.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
7 Mad. 4661 (referred to as "leading case in 7 Mad. 4661") Illustrates that by suitable statutory language a legislature can make an authority the sole judge of a factual question (example: whether acts justified removal); contrasted with a statute where "in its opinion" is absent. The Court relied on this to support the proposition that the phrase "in its opinion" in Section 40(3) makes the Provincial Government the sole judge of whether a member has flagrantly abused his position.
A.I.R. 1943 F.C. 362 Holds that the question whether an emergency existed when an Ordinance was promulgated is a matter of which the Governor-General is the sole judge and that courts cannot inquire into that question. The Court cited this authority by analogy to reinforce that where statute makes an authority the exclusive judge of a question, courts should not substitute their own opinion for that authority's bona fide determination.
A.I.R. 1938 All. 1103 Authority relied upon for the proposition that civil Courts can interfere if a local authority exercises discretion in a capricious, wanton, or arbitrary manner. The Court acknowledged the principle but held it inapplicable on the facts because the Provincial Government had acted bona fide after due deliberation.
33 Bom. 3344 Same principle: judicial interference permissible where discretion is exercised arbitrarily or unreasonably. Cited by the respondent; Court noted the principle but concluded the Government's conduct did not meet that threshold.
12 Bom. 4905 Same proposition regarding interference where discretion is abused. Referred to in argument; Court found the precedent not engaged because the Provincial Government had applied its mind.
19 W.R. 3096 Same proposition: supports judicial review where discretion is exercised capriciously. Cited but held not to require interference on the present facts.
A.I.R. 1937 Lah. 2527 Another authority cited for the proposition that Courts may interfere when discretion is exercised arbitrarily Cited by respondent; Court observed the principle but did not find it satisfied here.

Court's Reasoning and Analysis

The Court proceeded in a structured manner:

  1. Statutory interpretation: The Court examined Sections 40 and 41 of the U.P. Municipalities Act, 1916. It noted Section 40(3) empowers the Provincial Government to remove a member "who in its opinion has so flagrantly abused in any manner his position...". The Court emphasized the significance of the words "in its opinion", concluding they make the Provincial Government the sole judge of the factual question of abuse and detrimental continuance.
  2. Procedural safeguards: The Court observed that Section 40(4) requires that the member be given an opportunity of explanation and that reasons for any action be placed on record. The opinion records that the Government did follow the procedure: a Committee of Inquiry was appointed, specific charges were framed, explanations were called for and received, and reasons were recorded. The Government accepted the explanations of two members and removed two (including the respondent).
  3. Applicability of judicial review: The Court acknowledged established authorities that permit civil Courts to interfere when a local authority's discretion is exercised capriciously, wantonly, or arbitrarily. However, the Court assessed the materials on record and concluded that the Provincial Government had acted after due consideration, not capriciously or arbitrarily. In short, the Government had applied its mind and acted bona fide.
  4. Evaluation of respondent's explanations: The Court noted that the respondent did not categorically deny the specific charges (he admitted borrowings) but offered explanations characterizing those transactions as ordinary business dealings or loans on mortgage/security. The Court found these were explanations rather than direct denials and were considered by the Government.
  5. Precedential support for exclusivity: The Court relied on prior authorities (including the Madras case and A.I.R. 1943 F.C. 362) to show that where a statute makes an authority the exclusive judge on a question by appropriate language, the courts should ordinarily not attempt to re-evaluate the underlying factual conclusion, provided the authority has acted bona fide and within the procedure.
  6. Conclusion as to remand: Given that the Government's action was bona fide and not arbitrary, the District Judge's remand (which implied the civil Court could conduct further inquiry into the truth of the charges) was held to be incorrect. The appeal was allowed to restore the trial Court's dismissal of the suit.

Holding and Implications

Holding: First Appeal from order No. 288 of 1945 is allowed; the plaintiff's suit is dismissed.

Implications and direct effects:

  • The Court held that where a statute makes an authority the sole judge of a factual question by using language such as "in its opinion" (Section 40(3)), and where the authority has followed the statutory procedure and acted bona fide, civil Courts will not substitute their own opinion for that of the authority.
  • On the facts, the Provincial Government had appointed an inquiry, specified charges, called for explanations, considered those explanations, accepted two and rejected two, and recorded reasons — therefore its removal order could not be questioned in the civil Court.
  • The District Judge's remand for further proceedings was set aside and the trial Court's dismissal was restored.
  • As a consequential procedural point, F.A.F.O. No. 10 of 1945 (the appeal against refusal to set aside the ex parte decree) was held to be infructuous and rejected; the parties were directed to bear the costs in that case. The principal appeal was allowed with costs against the respondent.
  • No broader or novel legal precedent was announced beyond the application of established principles: the Court applied prior authorities on exclusivity of statutory decision-making and on judicial interference when discretion is abused, and concluded the latter did not arise on the facts before it.

Note: This summary is strictly confined to the material and conclusions contained in the provided opinion. No information has been added or inferred beyond the text of the opinion.

    U.P. Government v. Radhey Lal

    Bind Basni Prasad, J.:— This judgment will govern First Appeals Nos. 10 and 288 of 1945. Both the appeals have been filed by the Provincial Government against Lala Radhey Lal who was a member of the City Board, Mussorie, from the year 1929. By the order, dated 8-2-1941, the Provincial Government acting under sub-s. (3) of Section 40 of the U.P Municipalities Act, 1916 (2 [II] of 1916) removed him from the membership of the Board. The reliefs claimed by the plaintiff respondent in the plaint were: (a) A declaration that his removal from the membership of the City Board, Mussorie, was illegal, misconceived and inoperative and that the plaintiff was not subject to the disability of non-eligibility for election in accordance with the provisions of sub-s. (3) of Section 41 of the said Act; (b) an award of a sum of rupee one as damages; (c) any other relief which under the circumstances the Court deemed the plaintiff to be entitled.

    2. The learned Civil Judge held that on a true construction of the provisions of sub-s. (3) of S. 40 the suit was not maintainable in the civil Court. In the result he dismissed the suit with costs. The plaintiff preferred an appeal before the learned District Judge. The appeal was heard ex parte. The learned District Judge held that the civil Court was barred from forming its own opinion about the truth or otherwise of the allegations which were made against the plaintiff and which were considered by the Provincial Government to justify the inference that he so flagrantly abused his position as a member of the Board as to render his continuance detrimental to public interest, but the civil Court was not barred from considering whether the Provincial Government did exercise its mind about those allegations and the explanation and whether it acted after due consideration or it acted in a capricious or arbitrary manner. In the result he held that the suit was not absolutely barred from the jurisdiction of the civil Court. He accordingly allowed the appeal and remanded the case for further proceedings according to law. From this order, F.A.V.O No. 288 of 1945 has been preferred against the plaintiff-respondent. Subsequent to the decision of the case by the District Judge, the Provincial Government applied for the setting aside of the ex parte decree. By the order, dated 11-11-1944, the District Judge rejected that application. F.A.F.O No. 10 of 1945 is an appeal against that order.

    3. Briefly the facts are as follows: Lala Radhey Lal was a member of the City Board, Mussorie, from 1929, and he continued as a sitting member upto 1941, because from time to time the Government extended the term of the Board. Certain facts having been brought to the notice of the Provincial Government, against the City Board, an inquiry committee was set up by the Government to investigate into the affairs of the Board. The Committee submitted its report which was considered by the Provincial Government. On a consideration of the report, the Provincial Government acting under subs. (4) of Section 40 of the U.P Municipalities Act, 1916, called for an explanation from the respondent and three other members of the Board to show cause why they should not be removed from the membership of the Board under sub-s. (3) of S. 40. The specific charges against each of the four members were mentioned by the Government in its letter, dated 22-11-1940, to the Commissioner Meerut Division. It will be proper to quote here the relevant portion of that letter from the Government. It runs as follows:

    “I am directed to refer to Government Resolution No. 5821.XI-859, dated 17-11-1938, appointing the Mussorie City Board Inquiry Committee to inquire into the affairs, of the Board. The report of the said Committee has been considered by His Excellency the Governor, and, it appears therefrom that Messrs Johnson, Darshan Lal, Mohd. Siddiq and Radhey Lal members of the City Board, have so flagrantly abused their position as members of the Board as to render their continuation as members detrimental to the public interest.

    I am to request you therefore to ask the said members to explain and show cause why they should not be removed from the membership of the Board under Section 40(3) of the U.P Municipalities Act, 1916, on the charges shown against them below:……

    4. Mr. Radhey Lal. That from time to time he borrowed money from Municipal employees and Municipal contractors, namely (i) Ashoor and Murad contractors: Rs. 250 on 16-12-1933, Rupees 200 on 18-7-1934, a cheque of Rs. 1452 endorsed in favour of Mr. Lal and collected by him. (ii) Rajab Ali Contractor, Rs. 9000. (iii) B. Jagannath Assistant Secretary of the Board Rs. 1000. (iv) B. Bankey Lal, clerk of the Municipal Engineer Rs. 6000. (v) Shiv Das, contractor, Rs. 2000 in circumstances which raise the presumption that these transactions were more in the nature of a price for his support of the “Lender” in securing jobs and appointments in the Board.

    2. All the four members mentioned above should be directed to submit their explanations to you within fifteen days of the receipt of this order by them. The explanations together with your comments and recommendations thereon should be forwarded to Government as early as possible.”

    4. The Commissioner forwarded this letter to the Superintendent Dehra Dun, for compliance and the latter sent a copy of it to the respondent asking him to furnish the explanation by 13-12-1940. On 11-12-1940, the respondent submitted the explanation to the District Magistrate. It runs into five typed pages. The respondent admitted his indebtedness to all the five persons mentioned above. The explanation which he gave is succinctly expressed in para. 8 of the plaint which runs as follows:

    “8. That with regard to (a) Ashoor and Murad—the plaintiff and his firm had business dealings with these contractors since long. The balances mutually due are duly entered in the plaintiff's account books which are regularly kept and the transactions are not any new loans contracted for the purpose or on the understanding of helping the aforesaid contractors for securing any job in the Board.

    (b) With regard to Rajab Ali—a sum of Rs. 9000 was borrowed in May 1939, (during the siting of the Enquiry Committee) in ordinary course of business on the security of mortgage. During the plaintiff's tenure of office no matter of any kind whatsoever concerning this gentleman ever came before the board. The plaintiff seriously denies any support to this man at any time.

    (c) With regard to B. Jaggan Nath the aforesaid loan was a paying proposition for him. His deposit in bank which carried no interest was invested with the plaintiff on a very fair rate of interest.

    Far from ever helping this man, the plaintiff gave his casting vote against him when the question of his retirement came up before the board and it was on account of the plaintiff's just action that he had to lose his job.

    (d) With regard to B. Bankey Lal he had dealings with the plaintiff's firm since about 1920 and during the plaintiff's tenure of office there was not even one occasion when any matter concerning this gentleman ever came before the board.

    Out of the Rs. 6000 borrowed, a sum of Rs. 4500 has already been paid up.

    (e) With regard to Shiv Das, this gentleman is a petty contractor and out of the Rs. 2000 borrowed a sum of Rs. 1800 has already been paid up. Matters concerning petty contractors do not come before the board. The plaintiff emphatically denies any support of whatsoever kind to this man as well.”

    5. On 8-2-1941, the Provincial Government informed the Commissioner that after full consideration of the explanation submitted by the respondent, His Excellency the Governor was pleased to remove the respondent from the membership of the Mussorie City Board under Section 40(3) of the U.P Municipalities Act, 1916, for having so flagrantly abused his position as a member of the City Board as to render his continuance detrimental to the public interest A notification to the same effect followed in the U.P Gazette. The Commissioner was asked to communicate this decision of the Government to the member concerned. It is important to note here that of the four members from whom explanation had been originally called by the Government only two were removed. As regards the Other two, the Provincial Government did not take any action. In other words, their explanation was accepted. On 6-5-1941 the respondent sent the notice as required by Section 80 of the CPC to the Provincial Government and on 11-7-1941 he brought the suit. It was alleged in the plaint that there was no misconduct on the part of the plaintiff, that there was no real cause for his removal and that the Provincial Government acted in a capricious and arbitrary manner in the exercise of its discretion in removing him.

    6. The Provincial Government resisted the suit and inter alia it pleaded that the suit was not maintainable because— (a) the jurisdiction of the civil Court was impliedly barred under Section 9 of the CPC; (b) the discretion of the Provincial Government in the matter of removing the plaintiff from the Board was final and could not be questioned in a civil Court; (c) the Government having acted after adopting the procedure as prescribed in sub-s. (4) of S. 40, there was no cause of action for the plaintiff to bring the suit; (d) the Government acted in the exercise of its sovereign powers and (e) the Government acted in good faith and in public interest in removing the plaintiff from the Board.

    7. Before considering the contentions advanced on behalf of the parties, the provisions of Sections 40 and 41 of the U.P Municipalities Act, 1916, may be set out. Sub-section-(1) of S. 40 empowers the Provincial Government in the case of a city, and the Commissioner in any other case to remove from the Board any member for certain causes specified therein. Sub-section (2) empowers the Commissioner and the Provincial Government in certain circumstances to cancel the order of removal and to reinstate the member. Sub-sections (3) and (4) provide as follows:

    “(3) The Provincial Government may remove from the Board a member who in its opinion has so flagrantly abused in any manner his position as a member of the Board as to render his continuance as a member detrimental to the public interest.

    (4) Provided that when either the Provincial Government or the Commissioner, as the case may be, proposes to take action under the foregoing provisions of this section, an opportunity of explanation shall be given to the member concerned, and when such action is taken, the reasons therefor shall be placed on record.”

    8. It will be seen that under sub-s. (3) it is the Provincial Government alone which has the power to remove a member. The words “in its opinion” appearing therein are important and convey the idea that the sole judge of the fact whether or not a member has flagrantly abused in any manner his position is the Provincial Government. The only restriction imposed upon the Provincial Government in the exercise of its powers under sub-s. (3) is that before taking action it must give the member concerned an opportunity of explanation and when such action has been taken, the reasons therefor shall be placed on record. If is not the plaintiff's case before us that the reasons were not placed on record by the Provincial Government.

    9. Section 41 prescribes the disabilities which a member who has been removed under S. 40 incurs. Sub-section (3) of S. 41 prescribes that a member removed under sub-s. (3) of S. 40 shall not be so eligible for a period of three years from the date of his removal.

    10. It is argued for the appellant that having regard to the language of sub-s. (3) of S. 40 and to the consideration which the Provincial Government bestowed upon the matter before removing the respondent he cannot maintain a suit questioning that order of the Provincial Government. On the other hand, learned counsel for the respondent argues that in view of his allegations in the plaint the Court should give him an opportunity to show that the Government acted in a capricious and arbitrary manner. In the present case it cannot be said, having regard to the materials on the record, that the Provincial Government acted in a capricious and arbitrary manner. Prior to the action against the plaintiff it appointed a Committee of Inquiry and on a consideration of the report of that committee it proposed to take action against four members, including the plaintiff. It framed specific charges against all these four members and gave them opportunities of explanation. The explanations were duly considered by the Government. It accepted the explanations of two of the members, but did not consider satisfactory the explanations submitted by the remaining two members, including the plaintiff. It was after so much consideration that the Provincial Government took action against the plaintiff and removed him from membership. It cannot be said that the action was taken against him arbitrarily or without the Government applying its mind to the case. It is true that where by any Act something is left to be done according to the discretion of the authority on whom the power of doing it is conferred, the discretion must be exercised honestly and in the spirit of the statute. In the present case, however, it is abundantly clear that the Provincial Government has properly exercised the powers conferred upon it by the Act.

    11. Counsel for the respondent contends that in S. 40 there is no provision that the order of the Provincial Government shall be final and shall not be questioned in any Court. Hence it is argued that the suit brought by the plaintiff is maintainable. Where the statute provides that the sole judge of a certain fact will be a certain authority, no suit can lie to question the decision of such authority in respect of such matter. The phrase “in its opinion” appearing in sub-s. (3) of S. 40 has the effect of making the Provincial Government the sole judge of the fact whether a member has flagrantly abused his position so as to render his continuance in the Board detrimental to public interest. In this connection it may also be mentioned that out of the five specific charges drawn up by the Provincial Government against the respondent he did not altogether deny any of them. His attempt was only to explain them away. For example, he admitted having borrowed Rs. 1000 from Babu Jagannath, Assistant Secretary of the Board, but contended that it was more to the interest of Jagannath than of him to have lent the money to the plaintiff. Similarly, he admitted having borrowed Rs. 9000 from Rajab Ali, contractor but said that it was in the ordinary course of business. In the leading case in 7 Mad. 4661, it was observed at p. 471 that by the use of appropriate language it was possible for the Legislature to make the Governor in Council the sole judge of the question whether the acts done by a Commissioner justified his removal or not. In Section 9 of the Town Improvement Act which was the subject of interpretation in that case the pharse “in its opinion” did not occur and so their Lordships of the Madras High Court held that it was open to a Municipal Commissioner who had been removed to prove that he was not guilty of misconduct. It was however, not disputed that by the use of a proper language in one enactment it was possible to make an authority an exclusive judge of a certain fact. I may also refer to A.I.R 1943 F.C 362 in which it was held that the question whether or not an emergency existed at the time when an Ordinance is made and promulgated by the Governor-General is a matter of which the Governor. General is the sole judge and where the Governor-General has declared that an emergency has arisen and passes an Ordinance, the question that an emergency did not arise cannot be inquired into by Courts.

    12. A number of authorities have been relied upon by learned counsel for the respondent in support of the proposition that where a local authority exercises the discretionary power in a capricious, wanton and arbitrary manner or in an unreasonable way, a civil Court can interfere. They are A.I.R 1938 ALL. 1103, 33 Bom. 3344, 12 Bom. 4905, 19 W.R 3096 and A.I.R 1937 Lah. 2527. No one disputes this proposition. In the present case the Provincial Government has not acted arbitrarily. It has acted after due deliberation. It is impossible to say that the action of the Provincial Government was capricious, wanton and arbitrary. Once it is held that the action of the Provincial Government was bona fide, the removal of the respondent by it under sub-s. (3) of S. 40 cannot be questioned in the civil Court.

    13. For the reasons given above I am of opinion that the remand of the case to the trial Court by the learned District Judge was not proper. The appeal should be allowed with costs, the order passed by the lower appellate Court should be set aside and that of the trial Court should be restored.

    14. As F.A.F.O No. 288 of 1945 is being allowed, F.A.F.O No. 10 of 1945 becomes in-fructuous and it is rejected, but the parties will bear the costs in that case.

    15. Malik, J.:— I have had the advantage of reading the judgment of my learned brother and I fully agree with his conclusion that First Appeal from order No. 288 of 1945 should be allowed and the plaintiff's suit should be dismissed.

    16. It is not alleged by the plaintiff that the Provincial Government had not followed the procedure laid by the statute, or had not acted strictly within the limits of its authority, nor is there any charge of malice or want of good faith. The Provincial Government having acted in accordance with the procedure laid down and having in good faith considered that the plaintiff had so flagrantly abused his position as a member of the Board as to render his continuance as such detrimental to the public interest, the civil Courts cannot substitute their own opinion for the opinion of the Provincial Government. I, therefore, agree to the order proposed.

    17. Per curium.— First Appeal From order No. 288 of 1945 is allowed with costs and the plaintiff's suit is dismissed with costs.

    18. Appeal allowed.

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    Comments

    U.P. Government v. Radhey Lal
    (Sep 11, 1947)