SCA/11150/2006 1/36 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 11150 of 2006 with SPECIAL CIVIL APPLICATION No. 11151 of 2006 to SPECIAL CIVIL APPLICATION No. 11156 of 2006 with SPECIAL CIVIL APPLICATION No. 10982 of 2006 with SPECIAL CIVIL APPLICATION No. 11136 of 2006 For Approval and Signature: HONOURABLE MR.JUSTICE JAYANT PATEL ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= VIJAYABEN GANESHBHAI BORSANIYA & 6 - Petitioner(s) Versus STATE OF GUJARAT & 5 - Respondent(s) ========================================================= Appearance : MR PS CHAMPANERI for Petitioner(s) : 1 - 7. GOVERNMENT PLEADER for Respondent(s) : 1, NOTICE SERVED for Respondent(s) : 1 - 2,4 - 5. MR HS MUNSHAW for Respondent(s) : 3, 6, ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL SCA/11150/2006 2/36 JUDGMENT Date : 13/07/2006 COMMON ORAL JUDGMENT 1. Heard Mr. Champaneri and Mr. Mangukiya for the concerned petitioners, Mr. Mengdey, learned AGP for the Development Commissioner and the State Authorities and Mr. Munshaw for District Development Officer and Taluka Development Officer in all the matters for final disposal. 2. It may be recorded that under the direction of the Court, Mr. Mengdey, learned AGP made original files available of the Development Commissioner. 3. After the voters elected through the representatives in a Local Self Government due to a self created situation by the elected representatives for fulfilling their desire to get more power by strangulating the situation, what could be the possible consequences leading not only the dissolution of a Local Self Government, but, dragging the residents of the area to bear with the expenses of the fresh election could arise and in such situation, what would be the positive role of the State Government and consequently, the approach of the Court are the questions, which arise for consideration of this Court in the present group of petitions. 4. It is no doubt true that in the democratic SCA/11150/2006 3/36 JUDGMENT system the local self Government is to be run through its elected representatives. It is also true that the voter reposes faith upon the elected representative while electing them with the expectation that pious obligation will be discharged by them in the larger public interest when they are ultimately elected and resume the office. However, when tug-of-war starts for power amongst the elected representative themselves, the interest of the voters or the citizens are if not ignored, but, hardly taken care of. Such situation leads to the voter to remain a silent spectator who is ultimately to bear the burden of consequences by the conduct, which may be performed by the elected representative after the election. Is the law remediless in such circumstances? Is the approach of the State Government called for to ensure that the voters/citizens may not be saddled with additional burden of election? Is it required for the State Government to take more stringent action or not? Above all, the approach of the Court in such matters are incidental questions which also arise for consideration of this Court in the present group of petitions. 5. Certain facts leading to the present group of petitions can be summarised as under: 6. One group of petitions pertain to the dissolution of the Lathi Taluka Panchayat being Special Civil Application Nos. 11150 of 2006 SCA/11150/2006 4/36 JUDGMENT with Special Civil Application No. 11151 of 2006 to 11156 of 2006 with Special Civil Application No. 10982 of 2006(hereinafter for short shall be referred as 'the petitions pertaining to Lathi Taluka Panchayat'). The other petition pertains to dissolution of Kukavav Taluka Panchayat being Special Civil Application No. 11136 of 2006(hereinafter for short shall be referred as 'petition pertaining to Kukavav Taluka Panchayat'). 7. In the petitions pertaining to Lathi Taluka Panchayat, it appears that the election of Lathi Taluka Panchayat was held in the month of October-November 2005 and as per the constitution read with the provisions of the Gujarat Panchayat Act (hereinafter referred to as the 'Act'), the statutory term is upto November 2010. After the election, the first meeting of Lathi Taluka Panchayat was held on or about 9.11.2005, the Budget estimate was prepared and sent for approval of the District Panchayat, Amreli on or about 02.01.2006. The budget estimate of Taluka Panchayat was approved by the District Panchayat and the same was communicated to Lathi Taluka Panchayat by District Development Officer, Amreli, vide communication dated 16.02.2006. The meeting of Lathi Taluka Panchayat was held on 20.03.2006 for considering the budget and at the said meeting, 17 members of Taluka Panchayat remained present out of which 8 members of Taluka Panchayat voted in favour of approving the SCA/11150/2006 5/36 JUDGMENT budget whereas, 9 members voted against the approval of the budget and consequently, the budget was not passed in the meeting dated 20.03.2006 of Lathi Taluka Panchayat. It appears that thereafter, once again, the meeting of Lathi Taluka Panchayat was held for considering the approval of the budget on 27.03.2006 and at that meeting, 15 members of the Taluka Panchayat attended the meeting out of which, 6 members supported the approval of the budget whereas, 9 members voted against the approval of the budget and consequently, again at the meeting dated 27.03.2006 of Lathi Taluka Panchayat, the budget was not passed. As the budget was not passed, the District Development Officer, Amreli, submitted a proposal on or about 15.04.2006 for dissolution of Lathi Taluka Panchayat under Section 253 of the Act. 8. It appears that on 15.04.2006, a show-cause notice was issued by the Development Commissioner of the Gujarat State, respondent No. 2 herein, in exercise of powers under Section 253 of the Act to show cause as to why Taluka Panchayt should not be dissolved and the notice was issued to the President of Lathi Taluka Panchayat itself. It was mentioned in the show-cause notice that it was required for the Lathi Taluka Panchayat to approve the budget on or before 31st March, which has not bee done and therefore, Lathi Taluka Panchayat has failed in discharging its statutory obligation and therefore, it has become incompetent to perform SCA/11150/2006 6/36 JUDGMENT its statutory duty as required under the Act and therefore, why Lathi Taluka Panchayat should not be dissolved. The copy of the said notice was forwarded to the District Development Officer, Lathi with the direction that the matter should be placed before the Taluka Panchayat and the necessary action may be taken immediately and the person concerned may remain present with record on the date fixed. 9. It appears that on 29.04.2006, probably in view of the aforesaid show-cause notice issued by the Development Commissioner for dissolution of the Taluka Panchayat, a Special General Meeting of Taluka Panchayat was held vide agenda dated 20.04.2006 and in the said meeting, 15 members out of total 17 members of Taluka Panchayat remained present and at the said meeting, one of the business transacted was the notice of dissolution at which, 7 members of Taluka Panchayat voted for supporting the dissolution of Taluka Panchayat whereas, 8 members of Taluka Panchayat voted against the dissolution of Taluka Panchayat. The second business transacted at the said meeting was for approval of budget of 2006-2007 and the budget was passed with the majority of 8 members as against 7 members and therefore, accordingly on 29.04.2006, the said budget was passed by Lathi Taluka Panchayat. As per the petitioners, the factum of passing the budget on 29.04.2006 was brought to the notice of the Development Commissioner. It appears that the Development Commissioner proceeded SCA/11150/2006 7/36 JUDGMENT further with the matter and in view of the decision of this Court in the case of Rakeshkumar Somabhai Rathod Vs. the State of Gujarat, reported at 2006(1) GLH 551, proceeded to examine as to whether there was any reasonable cause for delay caused in passing the budget or not. Ultimately, for the reasons recorded in the said order, the Development Commissioner found that earlier, in the meeting dated 20.03.2006 of Lathi Taluka Panchayat, the budget was not approved on the ground that the same is not prepared keeping in view the progressive approach and thereafter, in the subsequent meeting dated 27.06.2006, the budget was not passed event though second opportunity was available. However, after the show-cause notice without there being any change in the budget, the same is passed on 29.04.2006 and this shows, that there is self-contradictory and arbitrary approach of Taluka Panchayat and the Development Commissioner also recorded that the opinion can be formed that the Panchayat has become incompetent to perform its duties under the Act and even the Executive Committee of the District Panchayat has also recommended for dissolution of the Lathi Taluka Panchayat and therefore, ultimately, the order was passed for dissolution of Lathi Taluka Panchayat. It is under these circumstances, the elected members of the Lathi Taluka Panchayat have approached to this Court by preferring the present group of petitions. SCA/11150/2006 8/36 JUDGMENT 10.It may be recorded that Special Civil Application No. 10982 of 2006 is preferred by two petitioners; one has described himself as Vice President of Lathi Taluka Panchayat and another is the member of the Executive Committee of the Lathi Taluka Panchayat, whereas, Special Civil Application Nos. 11150 of 2006 and others are preferred by 7 members of Lathi Taluka Panchayat. Therefore, in all, 9 elected members of Lathi Taluka Panchayat out of total 17 members of Lathi Taluka Panchayat have approached to this Court by preferring the petition for challenging the order passed by the Development Commissioner for dissolution of the Panchayat in purported exercise of power under Section 253 of the Act. 11.Special Civil Application No. 11136 of 2006 pertains to Kukavav Taluka Panchayat. It appears that the last election of the Kukavav Taluka Panchayat was held in April 2005 and therefore, the statutory term read with the provisions of the constitution would be upto 2010. It is alleged in the petition that in all, there were 15 elected representatives, out of which, 8 were elected candidates were sponsored by the opposition party. After the election, one Jayaben Movaliya was elected as President of the Kukavav Taluka Panchayat and Bhikhabhai Vora as Vice President of Kukavav Taluka Panchayat. It is stated in the petition that a motion of no confidence was moved against the President and Vice President of SCA/11150/2006 9/36 JUDGMENT Taluka Panchayat, which was signed by 11 members of Kukavav Taluka Panchayat and the said motion of no confidence was considered by the General Body of Taluka Panchayat. On 22.03.2006, the meeting of Taluka Panchayat was held for considering the budget. At the said meeting, as per the petitioners, since the other members had no confidence over the President of Taluka Panchayat, the Budget was not approved and Taluka Development Officer was requested to convene another meeting for consideration of the budget. Therefore, in the meeting dated 22.03.2006, it appears that the budget was not passed. As per the petitioners, vide letter dated 23.03.2006, the Taluka Development Officer requested the President of Taluka Panchayat to convene the meeting for considering the budget once again. However, as the President of Taluka Panchayat was facing the motion of no confidence, he did not convene the meeting of Taluka Panchayat. It appears that in any case, before 31.03.2006, the budget was not passed by the Taluka Panchayat. 12.It appears that as the budget was not passed before 31.03.2006, the District Development Officer forwarded the proposal to the Development Commissioner for initiation of the action under Section 253 of the Act for dissolution of Taluka Panchayat and in the said proposal dated 3/4.04.2006, it was also mentioned that the motion of no confidence is also moved against the President and Vice SCA/11150/2006 10/36 JUDGMENT President for which, separate proceedings are going on. It appears that the President and the Vice President of the Taluka Panchayat did not convene the meeting for considering the motion of no confidence against them and therefore the report was submitted by Taluka Development Officer to District Development Officer for such purpose on 04.04.2006. 13.Thereafter, on 10.04.2006, the District Development Officer passed the order for convening the meeting of Special General Body of Taluka Panchayat for considering the motion of no confidence against the President and Vice President on 25.04.2006. The agenda for such purpose was issued on 12.04.2006 by Taluka Development Officer. 14.On 17.04.2006, a show-cause notice was issued by the Development Commissioner on the ground that in the meeting dated 22.03.2006 of Taluka Panchayat, the budget was not approved and therefore Kukavav Taluka Panchayat was required to approve the budget, which is not approved prior to 31.03.2006 and therefore, the Panchayat has become incompetent to perform its statutory obligation and therefore, the President and the Taluka Panchayat were called upon to show cause as to why, the Kukavav Taluka Panchayat should not be dissolved. The copy of the same was forwarded to District Development Officer as well as the Taluka Development Officer for placing the matter before the Taluka Panchayat SCA/11150/2006 11/36 JUDGMENT and to take necessary steps immediately and to remain present on the date of hearing fixed. It appears that thereafter, the meeting of Taluka Panchayat was not held nor convened by the Taluka Development Officer or the President of the Taluka Panchayat. A statement is made in the affidavit-in-reply of Taluka Development Officer that the President of Taluka Panchayat was asked to convene the meeting of General Body of Taluka Panchayat on or before 02.05.2006 to file the reply before the Development Commissioner, but, no meeting was convened by him and therefore, no reply was filed by the General Body. The record of the report dated 29.04.2006 submitted by the Taluka Development Officer to the Development Commissioner after the show-cause notice does not show that he had intimated to the President to convene the meeting but, it appears that vide item No. 16 of the said report of Taluka Development Officer it was stated that on 21.04.2006, when the motion of no confidence was passed, at that time, 11 members had requested for holding of another meeting but, since the motion of no confidence was passed against the President, the meeting was not convened. 15.It appears that prior to the date of hearing, which was fixed of 02.05.2006, 11 members of Taluka Panchayat submitted representation before Development Commissioner on 29.04.2006 that they have learnt about the proceedings of supersession from the newspaper and the SCA/11150/2006 12/36 JUDGMENT President has failed to convene the meeting for considering the budget prior to 31.03.2006. It was also stated that on 22.04.2006, 2/3rd member of Taluka Panchayat had requested Taluka Development Officer to convene the meeting and it was represented by the members in the said representation that the President is personally responsible for not giving opportunity to Taluka Panchayat to consider the budget once again and therefore, the President should be removed from the membership and the whole body may not be superseded. It appears that thereafter on 10.05.2006, the Development Commissioner intimated to the District Development Officer that, the reply of the Panchayat by Resolution is not presented and therefore, the hearing could not be made on 02.05.2006 and therefore, the intimation be given to all members of Taluka Panchayat for fixing the hearing on 18.05.2006. It appears that on 18.05.2006, 11 members remained present through their advocate and requested for supplying the copy of the show- cause notice and such request was granted. Simultaneously, on 18.05.2006, one Rathod Balubhai Lakhubhai representing himself as the Chairman of Social Justice Committee submitted in writing that he is desirous to see that the Taluka Panchayat is dissolved since the budget was not passed. Even Jayaben Movaliya who was formerly President of Taluka Panchayat against whom, the motion of no confidence was passed also declared in writing before the Development Commissioner that she is also desirous to see SCA/11150/2006 13/36 JUDGMENT that the Taluka Panchayat is dissolved. One another member of Taluka Panchayat Vora Bhikbhubhai Karamsibhai, who was formerly Vice President of the Taluka Panchayat also declared before the Development Commissioner on 19.05.2006 that he is desirous that the Panchayat be dissolved and the fresh mandate be obtained from the voters. The similar was also the representation made on 18.05.2006 by one Chaganlal Shamjibhai Dholaria, who was the member of Taluka Panchayat. It appears from the original file of the Development Commissioner that the proceedings for submission of the reply was also drawn and it was recorded that due to the motion of no confidence against the President and Vice President, the meeting of the Taluka Panchayat is not held and the election of the President and Vice President is fixed on 23.05.2006. It appears that thereafter, on 19.05.2006, immediately, on the next date, after the copy of the show-cause notice was given, on 18.05.2006, the Development Commissioner has passed the order of dissolving Taluka Panchayat and it is under these circumstances, the 11 members out of the total 15 elected members of the Taluka Panchayat have approached to this Court by preferring the present petitions for challenging the order of dissolution passed by the Development Commissioner. 16.Section 138 of the Act provides for passing of the Annual Budget Estimate. Section 138 of the Act which is relevant, reads as under: SCA/11150/2006 14/36 JUDGMENT “138. Annual Budget estimates: (1)Every taluka panchayat shall have prepared annually on or before the 15th December of the current year or such date not late than 31st December of the current year as may be approved by the District Panchayat, in such form and manner as may be prescribed in this behalf a budget estimate of its income and expenditure for the next year and forward it to the district panchayat on or before- (a) the 31st December of the current year where the budget estimates is prepared on or before the 15th December of the current year, or (b)the 15th January of the current year where the budget estimate is prepared after the 15th December of the current year but on or before the said approved date: Provided that the budget estimate shall be so prepared that at the end of the year the panachayat shall have at its credit a balance of not less than such minimum amount as may be prescribed in that behalf. (2)The district panchayat shall scrutinise the budget estimate and return it to the panchayat within two months of its receipt with such observations and recommendations SCA/11150/2006 15/36 JUDGMENT as it may make in respect of the budget estimate. (3)The taluka panchayat shall thereupon approve the budget estimate on or before the 31st March of the current year with such modifications as it may think fit having regard to the observations and recommendations made by the panchayat under sub-section (2). (4)Where any taluka panchayat has failed to comply with the provisions of sub-section(3) it shall be lawful for the State Government to form an opinion that the panchayat is incompetent to perform the duties imposed on it or functions entrusted to it under the provisions of this Act. Explanation :- A taluka panchayat shall not be deemed to have failed to comply with the provisions of sub-section (3) if such failure has resulted on account of non- compliance by the district panchayat of provisions of sub-section(2).” Sub-section (1) of Section 138 provides for various dates for preparation of the budget. Sub-section (2) of Section 138 provides for scrutinising of the said budget by the District Panchayat. Sub-section (3) of Section 138 provides that Taluka Panchayat shall thereupon approve the budget estimate on or before 31st March of the current year with modification as it may think fit. Sub-section (4) of Section 138 SCA/11150/2006 16/36 JUDGMENT provides that where any Taluka Panchayat has failed to comply with the provisions of sub- section (3), it shall be lawful for the State Government to form an opinion that the Panchayat is incompetent to perform the duty imposed on it or functions entrusted to it under the provisions of this Act. The explanation to sub- section (4) of Section 138 provides that Taluka Panchayat shall not be deemed to have failed to comply with the provisions of sub-section (3) if such failure has resulted on account of non- compliance by the district Panchayat of provisions of sub-section (2). Section 253 of the Act provides for the power of dissolution with the State Government if in the opinion of the State Government, if the Panchayat is incompetent in performance of the duties imposed on it or functions entrusted to it. 17.The Division Bench of this Court in the case of Nathalal Manilal Patel & Anr. Vs. A.R. Banerjee, Development Commissioner reported at 1991(2) GLR 811 had an occasion to consider similar provisions under the Gujarat Panchayat Act, 1961 for passing of the budget by the Taluka Panchayat. In the said decision, it was observed by the Division Bench inter alia at para 6 of its decision while interpreting the similar provisions of the Act of 1961 as under: “Rule 161(b) lays down that the Panchayat shall SCA/11150/2006 17/36 JUDGMENT prepare its budget and shall submit it to the District Panchayat on or before March 10 every year. Sub-section (2) of Section 124 allows two two months time to the District Panachayat to scrutinise the budget estimate and return to it to the Panchayat with observations and recommendations as it may make in respect of the budget estimate. However, clause (b) of Rule 161 provides that on return of the budget estimate from the District Panchayat, after scrutiny, the Panchayat shall approve the same before 31st March. Clause (b) of Rule 161 is not consistent with sub-section (2) of Section 124 of the Act. This factor has to be borne in mind while considering the question whether or not the provision contained in Rule 161 to approve the budget estimate on or before March 31st is mandatory or directory.” It was further observed by the Division Bench inter alia at para 8 as under: “The combined reading of Sections 124, 126 and Rule 161 clearly indicates that the provision for approving the budget estimate before March 31 is not mandatory but directory. Ordinarily the Panchayat should approve the budget estimate of the next year before the commencement of that year. But, there may be circumstances under which it may not be possible for the Panchayat to do so and if that happens, such estimate can be approved within reasonable time thereafter, depending upon the facts and circumstances of SCA/11150/2006 18/36 JUDGMENT the case. It would be a hyper technical view to hold that the provisions of approving budget estimate before March 31st every year contained in clause (b) of Rule 161 of the Rules is mandatory so as to require strict compliance. Having regard to the provisions of Sections 124 & 126, the word “shall” should be read as “may”. In other words, the above provisions to approve the budget estimate before 31 st March is directory provision requiring no strict compliance, but substantial compliance.” (Emphasis supplied) The Division Bench of this Court thereafter at para 9 further observed as under: “When the Development Commissioner passed order on May 21, 1990, holding that the Panchayat was incompetent to perform its function, the budget estimate was already approved. Since the budget estimate was approved, we fail to see how it could be held that the Panchayat was incompetent to perform its duties or functions on the date on which the Development Commissioner passed the order, there was nothing to prevent the Panchayat from incurring expenditure which was included in the budget estimate for discharging its duties and functions. Mere fact that the budget estimate