*HON’BLE MRS JUSTICE T.MEENA KUMARI AND *HON’BLE MR JUSTICE RAMESH RANGANATHAN +W.A.No.94 of 2008 % 22.07.2008 # K.Ganna Reddy, S/o.K.Ramakrishna Reddy ….. Petitioner and $ The Government of A.P. rep., by its Secretary, Agriculture & Co.Op (Agrl&Mktg) Department and others. .. Respondents ! Counsel for the petitioner: Sri B.Vijaysen Reddy ^ Counsel for the Respondents: G.P. for Agriculture. < Gist: >Head Note ? CITATIONS: 1) (1994) 6 SCC 332 2) (2007)7 SCC 206 3) (2005)7 SCC 627 4) AIR 1967 SC 295 5) (2008)1 SCC 728 6) (1981) 1 SCC 664 IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD TUESDAY, THE TWENTY SECOND DAY OF JULY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI and THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT APPEAL NO : 94 of 2008 (Writ Appeal under Clause 15 of the Letters Patent against the Order dated 06/12/2007 in WP NO : 22038 OF 2007 on the file of the High Court.) Between: K.Ganna Reddy, S/o K.Ramakrishna Reddy, Suryapet, r/o H.No.1-2-151, K.K.Road, Suryapet, Nalgonda District. ..... APPELLANT AND 1 The Government of Andhra Pradesh, represented by its Secretary, Agriculture & Co.op (Agril,Mktg.I) Department, A.P.Secretariat, Hyderabad. 2 The Commissioner and Director of Marketing Committee, Burugula Ramakrishna Bhavan, Tankbund, Hyderabad. 3 The Joint Director of Marketing, Warangal. 4 the Secretary, Agricultural Market Committee, Suryapet, Nalgonda District. 5 Sri P.Ravi Kumar (The Enquiry Officer) Joint Director of Marketing, FAC, Warangal Region. 6 Tandu Srinivas Yadav, S/o Bojjaiah, R/o H.No.2-1-251, Chandranankunta, Suryapet, Nalgonda District. ..RESPONDENTS Counsel for the Appellant:MR.B.VIJAYSEN REDDY Counsel for the Respondent No.: GP FOR AGRICULTURE The Court made the following : HON’BLE MRS JUSTICE T.MEENA KUMARI AND HON’BLE MR JUSTICE RAMESH RANGANATHAN W.A.No.94 of 2008 ORDER: (per HON’BLE SRI JUSTICE RAMESH RANGANATHAN) The Appellant has preferred this appeal aggrieved by the order passed in W.P.No.22038 of 2007 dated 6.12.2007 whereby the petitioner’s request, that the order of the 1st respondent in G.O.Rt.No.1284 dated 6.10.2007 be quashed, was rejected. The appellant herein was appointed as the Chairman of the A.P. Agricultural Market Committee, Suryapet on 18.11.2005. On his being removed from office, by order of the 1st respondent in G.O.Rt.No.1284 dated 6.10.2007, the appellant invoked the jurisdiction of this Court under Article 226 of the Constitution of India. He contended before this Court that the 6th respondent was his political rival, that both of them were in the fray for appointment as Chairman of the Agricultural Market Committee, Surypet, that the 6th respondent bore a grudge against him and lodged a complaint on 4.10.2006 alleging 11 irregularities against him, that the complaint was forwarded to the 2nd respondent for initiation of action, that the 5th respondent, who was appointed as the enquiry officer by the 2nd respondent, conducted an enquiry and submitted his report, that as he was not issued a copy thereof, he submitted a representation on 9.7.2007 requesting that copies of both the complaint and the enquiry report be furnished and he be given an opportunity to submit his explanation thereto, that he filed W.P.No.15623 of 2007 and this Court, by order dated 24.7.2007, dismissed the writ petition as withdrawn giving him the liberty to work out his remedies as and when the cause of action arose, thereafter notice dated 27.7.2007 was issued calling for his explanation and he was asked to show cause why he should not be removed from the office of Chairman, Agricultural Market Committee, Suryapet. W.P.No.15740 of 2007 filed by the appellant, challenging the show cause notice dated 27.7.2007, was dismissed by order dated 10.8.2007 and the appellant was given liberty to submit his explanation to the show cause notice. This Court further held that, if any adverse order was passed, it should not come into force for a period of 10 days from the date of service of the order. The appellant submitted his explanation on 18.8.2007, inter-alia, contending that the four allegations held established related mainly to the revocation of the order suspending the licenses of traders, that the decision to revoke the licences was not his individual but a collective decision taken pursuant to the resolutions of the Market Committee and that, for such collective decisions, he could not be held individually responsible. Thereafter, the impugned order came to be passed. Before the Learned Single Judge, the appellant contended that the impugned order was vague, that it did not specify which statutory rule was violated by the appellant, that Rule 52(2) mandated issuance of a show cause notice to the licensee before the licence was cancelled or suspended and it was evident therefrom that, if a reply was submitted by the licensee and the market committee was satisfied with the reply, it was bound to revoke the order of suspension. The appellant contended that it was the duty of the 4th respondent to enter the resolutions by circulation in the next meeting agenda and, for the lapse on the part of the 4th respondent, he could not be held responsible. The appellant pointed out that, even otherwise, the allegations regarding the effect of the market committee passing the resolutions by circulation, was not mentioned in the show cause notice, but was reflected only in the final order. The appellant also contended that the Government did not form the requisite opinion regarding the allegation of violation of statutory rules, that the opinion as required under Section 5(5) of the Act was lacking and the impugned order was, therefore, liable to be quashed. The learned Single Judge, in the order under appeal, held that the mere fact that, in the impugned order, the opinion of the 2nd respondent had been referred to would not by itself mean that there was no independent application of mind by the Government, that the term “wilful” would have to be appreciated in the context of the background of a given case and the charges relating to the abuse of office while exercising the power, that it may have to be taken that the action of the appellant was deliberate and that it should be taken as “nothing short of wilful”. The Learned Single Judge observed that, when certain reasons had been recorded by the Government and in the light of the limitations placed on the Court as a writ court while exercising certiorari jurisdiction, he was satisfied that the writ petition was devoid of merits. Before us, Sri B.Vijaysen Reddy, learned counsel for the appellant, would contend that, under Section 5(5) of the Andhra Pradesh (Agricultural Produce & Livestock) Markets Act, 1966 (hereinafter referred to as “the Act”), the Chairman of the market committee can be removed only on the Government forming the opinion that the circumstances mentioned therein had been satisfied, that such formation of opinion had to be preceded by giving the person concerned an opportunity to submit his explanation and, thereafter, the Government is required to issue a notification containing the statement of reasons for the action taken by it. According to the Learned Counsel, not every omission or refusal or disobedience attracts the ingredients of Sub-Section(5) of Section 5 and it is only in cases where the government forms the opinion that the act or omission or refusal to act or act of disobedience was “wilful”, would it have the power to remove the Chairman from office. Learned Counsel would further contend that, in the present case, the government had not formed its opinion in accordance with Section 5(5) of the Act, that, in the absence of the impugned order specifying which of the ingredients of sub-section (5) of Section 5 the appellant was guilty of, the Government could not have taken action to remove him from office, that the allegations leveled against the appellant related not to his individual decision but to the collective decision of the market committee and that he could not be held responsible for the collective decision of the Market Committee. Learned counsel would refer to Rule 28 of the Andhra Pradesh (Agricultural Produce & Livestock) Market Rules, 1969, (hereinafter referred to as ‘the Rules’), on which reliance was placed by the 2nd respondent, to contend that the mere fact that the Chairman of the Committee was the Chief Controlling and supervising authority of the market committee, and all officers and servants of the market committee were subject to his control, did not mean that even for the collective decision of the Market Committee, he should be held individually responsible. Learned counsel would point out that, under sub-rule (2)(a) of Rule 28, the Chairman was only required to preside over the meeting of the market committee, that under Section 4(1) of the Act the market committee was a body corporate and that neither the Act nor the rules made the members of the market committee subject to the control of the Chairman. Learned counsel would further contend that, in any event, revocation of the licence can neither be said to be an abuse of power nor as disobedience of the Act or the rules and, since the Act and the Rules did not prohibit revocation of the order of suspension of the license, the power to revoke such an order would, under the General Clauses Act, inhere in the authority which has been conferred the power to pass the order of suspension. Learned counsel would place reliance on Niaz Mohammad v. State of Haryana[1]; Bongaigaon Refinery & Petrochemicals Ltd v. Girish Chandra Sarma[2]; Hindustan Petroleum Corporation Ltd v. Darius Shapur Chenai[3] and Barium Chemicals Ltd v. Company Law Board[4]. On the other hand, Learned Government Pleader for Agriculture would contend that, while the impugned order may not be elaborate, the 1st respondent had, earlier in its show cause notice dated 27.7.2007, agreed with the findings in the enquiry report. Learned Government Pleader would submit that the Government had examined the appellant’s representation in the light of the report of the Commissioner and Director of Marketing who had recommended that action be taken against the appellant and, therefore, the reasons mentioned by the Commissioner must be held to be the reasons for the Government forming its opinion that the circumstances mentioned in Section 5(5) of the Act were satisfied. Learned Government Pleader would contend that since the enquiry officer had held that four of the twenty one charges had been established, and as his report was accepted by the Government albeit in the show-cause notice, this Court would neither sit in judgment, nor substitute its opinion for the one formed by the Government. The power to remove from office the Chairman of Agricultural Market Committee is conferred on the Government under Section 5(5) of the Act. The pre-requisites for exercise of such power is the formation of opinion by the Government that the Chairman has (a) willfully committed, or (b) refused to carry out or (c) disobeyed; (i) the provisions of the Andhra Pradesh (Agricultural Produce & Livestock) Markets Act, 1966 or (ii) the rules or bye-laws or lawful orders issued thereunder or (d) abused his position or the powers vested in him. An opportunity is required to be given to the Chairman to submit his explanation and, thereafter, the Government is empowered to issue a notification removing the Chairman from office for reasons to be mentioned in the said notification. It is well settled that though an order passed in exercise of the power under a statute cannot be challenged on the ground of propriety or sufficiency, it is liable to be quashed on the ground of malafides, dishonesty or corrupt purposes. Even if it is passed in good faith, and with the best of intentions, to further the purpose of the legislation which confers the power, since the Authority has to act in accordance with, and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extraneous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation. In any one of these situations it can well be said that the authority did not honestly form its opinion or that in forming it, it did not apply its mind to the relevant facts. (Barium Chemicals Ltd.4). The question which, therefore, necessitates examination is whether the ingredients of Section 5(5) of the Act are satisfied. As noted above, Section 5(5) enables the Government to remove a Chairman from office on the formation of the opinion that the circumstances mentioned therein are satisfied. Formation of opinion must be preceded by application of mind as regards consideration of relevant factors and rejection of irrelevant ones. The Government, in its decision-making process, must not commit any misdirection in law. (Darius Shapur Chenai3). Formation of opinion must be preceded by application of mind. Such application of mind must be on the material brought on record. The material should be such which are required to be collected by the authorities entitled therefor. The authorities must act within the four corners of the statute. An opinion formed even on the basis of an advice by an authority which is not contemplated under the statute renders the decision bad in law. A statutory authority is bound by the procedure laid down in the statute and must act within the four corners thereof. (Devinder Singh v. State of Punjab[5]). The Authority is required to arrive at such an opinion from circumstances suggesting what is set out in Section 5(5) of the Act. If these circumstances do not exist, the government cannot say that in its opinion they exist nor can it say the same thing where the circumstances relevant to the clause do not exist. There must, therefore, exist circumstances which in the opinion of the Authority suggest what has been set out in Section 5(5) of the Act. If it is shown that circumstances do not exist or that they are such that it is impossible for any one to form an opinion therefrom suggestive of the aforesaid things, the opinion is challengeable on the ground of non-application of mind or perversity or on the ground that it was formed on collateral grounds and was beyond the scope of the statute. (Barium Chemicals Ltd.4). In cases where an issue is raised that the Government’s opinion has been formed in a manifestly arbitrary or perverse fashion without regard to patent, actual and undeniable facts, or that such opinion has been arrived at on the basis of irrelevant considerations or no material at all, or on materials so tenuous, flimsy, slender or dubious that no reasonable man could reasonably reach that conclusion, the court is entitled to examine the validity of the formation of that opinion by the Government in the context and to the extent of that issue. (Swadeshi Cotton Mills v. Union of India[6]). The words, “in the opinion of” in Section 5(5) of the Act does not necessarily mean that the process of entertaining “the opinion” is an altogether subjective process not lending itself even to a limited scrutiny by the court that such “opinion” was not formed on relevant facts or within the limits or the restraints of the statute as an alternative safeguard to rules of natural justice. (Barium Chemicals Ltd.4). The existence of the circumstances from which the inferences constituting the opinion, as the sine qua non for action, are to be drawn must be demonstrable, and the existence of such “circumstances”, if questioned, must be proved at least prima facie. (Swadeshi Cotton Mills6). It is not sufficient to assert that the circumstances exist and give no clue to what they are because the circumstances must be such as to lead to conclusions of certain definiteness. (Barium Chemicals Ltd.4). An action, not based on circumstances suggesting an inference of the enumerated kind, will not be valid. The enumeration of the inferences which may be drawn from the circumstances, postulates the absence of a general discretion to go on a fishing expedition to find evidence. No doubt the formation of opinion is subjective but the existence of circumstances relevant to the inference as the sine qua non for action must be demonstrable. If the action is questioned on the ground that no circumstances leading to an inference of the kind contemplated by the section exists, the action might be exposed to interference unless the existence of the circumstances is made out. (Barium Chemicals Ltd.4). If the satisfaction of the Government, in regard to the existence of any of the conditions, is based on no evidence, or on irrelevant evidence or on an extraneous consideration, it will vitiate the order and the court will be justified in quashing such an illegal order. (Swadeshi Cotton Mills6). As the discretionary power to remove the Chairman is regulated around the formation of opinion by the statutory authority in regard to the existence of the preliminary jurisdictional facts and is hedged with the express checks specified in Section 5 (5) of the Act, the question which arises for consideration is whether formation of opinion by the Government demonstrates the existence of the circumstances mentioned in Section 5(5) of the Act, from which the inferences, constituting the opinion that the appellant should be removed from office, has been drawn. Another question which necessitates examination is whether the statutory requirement under Section 5 (5) of the Act, of the notification being required to contain the statement of reasons for removal of the appellant – chairman from office, is satisfied. The 1st respondent, vide memo dated 27.7.2007, informed the appellant that it was brought to its notice that an enquiry was conducted by the Joint Director of Marketing, Warangal on 21 allegations, that in the enquiry allegation Nos.1, 2, 3 and 17 were proved, that, on receipt of the enquiry report, the Commissioner and Director of Agricultural Marketing, Hyderabad had requested the Government to take necessary action against the appellant under the relevant provisions of the Act, that the Government had carefully examined the matter and agreed with the enquiry report and had decided to proceed further against the appellant under Section 5(5) of the Act. Accordingly, the appellant was directed to explain why he should not be removed from the office of Chairman, Agriculture Market Committee for the irregularities committed by him which were held proved in the enquiry. The appellant submitted his explanation thereto and, thereafter, the impugned order came to be passed. In the impugned order in G.O.Rt.No.184 dated 6.10.2007, reference is made to the proceedings of the Commissioner & Director of Agricultural Marketing dated 29.6.2007, to the representation received from the 6th respondent and the enquiry conducted by the Joint Director of Marketing, Warangal wherein he had held allegations 1,2,3 and 17 to be proved. After referring to the show cause notice dated 27.7.2007, and the detailed reply submitted thereto by the appellant, the 1st respondent, in its order in G.O.Rt.No.184 dated 06.10.2007, observed:- “…….Government have examined the representation of the Chariman, Agricultural Market Committee, Suryapet, Nalgonda District in the light of the above report of the Commissioner & Director of Agricultural Marketing and observes that the Chairman, Agricultural Market Committee, Suryapet violated the statutory rules and as the Chief controlling authority and supervisory authority of the Agricultural Market Committee he cannot escape his responsibility by throwing the issue on others and thereby he became unfit to continue in office. Accordingly Government in exercise of the power under Section 5(5) of the A.P. (AP&LS) Market Act, 1966 hereby remove Sri Ganna Reddy, Chairman, Agricultural Market Committee, Suryapet Nalgonda District from the post of Chairman, Agricultural Market Committee, Suryapet, Nalgonda District with immediate effect……..” In the impugned order, all that the 1st respondent has observed is that the appellant had violated statutory rules and, as the Chief Controlling and Supervisory authority of the Agricultural Market Committee, he could not escape his responsibility by throwing the issue on others and, thereby, he had become unfit to continue in office. The 1st respondent has not considered it necessary to state as to which statutory rule/rules the appellant had violated or in what manner. The impugned order does not reflect examination by the 1st respondent of the appellant’s contention that the allegations held established related to the collective decision of the market committee and not his individual decision. The impugned order does not even record the existence of circumstances suggesting what is set out in Section 5 (5) of the Act. The action of the 1st respondent, in removing the appellant from office, is not based on circumstances suggesting an inference of those conditions enumerated in Section 5 (5) of the Act and is, therefore, not valid. The very formation of opinion by the 1st respondent must be held to be based on grounds which are not germane and to suffer from total non-application of mind. In addition the statutory requirement, under Section 5(5) of the Act, of the notification requiring to contain a statement of reasons for the action taken by the Government, is also not satisfied. While the appellant’s explanation has been extracted in great detail none of the contentions have even been dealt with, let alone reasons being furnished as to why such contentions do not merit acceptance. It must also be borne in mind that the enquiry report submitted by the Joint Director of Marketing, Warangal is merely a fact finding report as the Act neither mandates an enquiry to be held on the allegations nor for the government to act on the basis of such a report. The Act and the Rules do not enable the Government to act on the advise of the Commissioner and Director of Marketing or to be guided by his recommendations in the formation of the opinion stipulated under Section 5 (5) of the Act. As held by the Supreme Court, in Devinder Singh5, the 1st respondent is required to form its opinion on its own, and not on the basis of the advice of any authority not contemplated under the Statute. The contention of the Learned Government Pleader that the very fact that the Government had referred to the recommendations of the Commissioner, and had accepted the enquiry report in the show cause notice dated 27.07.2007, would establish that it had formed the requisite opinion must, therefore, be rejected. As we are satisfied that the order impugned in the writ petition is liable to quashed on the ground that the 1st respondent had formed its opinion in a patently illegal manner and that it does not fulfill the statutory requirement of containing of a statement of reasons of the 1st respondent to remove the appellant, it is wholly unnecessary for us to examine the other contentions urged by Sri B.Vijayasen Reddy, learned Counsel for the appellant. The writ appeal is allowed, the order of the learned Single Judge is set aside and the impugned order in G.O.Rt.No.1284 dated 6.10.2007 is quashed. However, in the circumstances, without costs. _____________________ T.MEENA KUMARI,J Date:22-07-2008 ___________________________ RAMESH RANGANATHAN,J Asp/gs L.R. Copy to be marked. [1] (1994) 6 SCC 332 [2] (2007)7 SCC 206 [3] (2005)7 SCC 627 [4] AIR 1967 SC 295 [5] (2008)1 SCC 728 [6] (1981) 1 SCC 664