1 wp355-11.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.355 OF 2011 Babasaheb Devram Sathe ..Petitioner versus Daga Mahadu Gavande & Ors ..Respondents ALONGWITH CIVIL APPLICATION NO.257 OF 2011 Daga Mahadu Gavande ..Petitioner versus Babasaheb Devram Sathe & Ors ..Respondents Mr.P.N.Joshi with Mr.R.A.Haridas for the petitioner. Mr.P.B.Shah with Mr.Vivek Salunkhe for respondent No.1. Ms.P.S.Cardozo, A.G.P for respondent Nos.3 to 5. CORAM : S.C.DHARMADHIKARI, J. 22nd July 2011. JUDGMENT: . Rule. Respondents waive service. By consent Rule made returnable forthwith. 2 wp355-11.doc 2 By this petition under Article 226 and Article 227 of the Constitution of India, the petitioner is challenging the order dated 21st December 2010 passed by the Additional Commissioner, Nasik Division, Nasik in Gram Panchayat Appeal No.97 of 2010. 3 By this order, the Additional Commissioner, Nasik Division, Nasik has proceeded to dismiss petitioner’s appeal and confirmed the order of the Additional Collector, Malegaon dated 7th October 2010 in Dispute Application No.17 of 2010. 4 The proceedings are under the Bombay Village Panchayat Act, 1958 (for short “the Village Panchayat Act”). It is held that the petitioner is disqualified from continuing as a member of the Gram Panchayat, Jalgaon Budruk, Taluka Nandgaon, District Nasik, because he is a servant of Agricultural Produce Market Committee, Nandgaon. 3 wp355-11.doc 5 The petitioner has been elected as a member of the said Village Panchayat in an election which was held in the year 2010. There are total 9 elected members. The petitioner was elected from Ward No.3. After the petitioner was elected as a member, he also functioned as a Sarpanch. He has a tenure of five years. 6 The petitioner states that his election was not challenged by filing an election petition. The 1st respondent lost the election, so also his wife but they preferred an Application under section 16 of the Village Panchayat Act, alleging therein that the petitioner was working as a clerk in the Nandgaon Agricultural Produce Market Committee. Thus, as a servant of the said Market Committee, he incurs a disqualification under section 14(1)(i) of the Village Panchayat Act. He, therefore, cannot continue as such. 7 The petitioner filed a reply and contended that he cannot be disqualified because Nandgaon Agricultural 4 wp355-11.doc Produce Market Committee is not controlled by the State Government and he cannot be said to be a servant of local authority. In these circumstances, there is no merit in the application and it should be dismissed. The petitioner pointed out as to how the Market Committee functions and what are its powers under the Agricultural Produce Market Committee Act, 1963. 8 The application, however, has been allowed by the Collector and the said order has been confirmed by the Commissioner. 9 The Collector, so also the Commissioner have held that the petitioner could not point out anything which would enable them to hold that Agricultural Produce Market Committee is not a local authority. Further, he was unable to point out anything from the terms and conditions of service or any applicable law, wherein a servant of the Agricultural Produce Market Committee is permitted to contest the 5 wp355-11.doc elections of the Panchayat. In the light of the fact that the Agricultural Produce Market Committee is a “local authority” within the meaning of the said term, as defined in section 3(31) of the General Clauses Act, 1897, that the petitioner incurs disqualification. Holding thus, the petitioner was disqualified. It is also held that the officers and servants of the Agricultural Produce Market Committee are public servants within the meaning of section 21 of the Indian Penal Code and, therefore, the petitioner stands disqualified. 10 It is this conclusion which is assailed in this writ petition. 11 Mr.Joshi, learned counsel appearing on behalf of the petitioner submits that the Collector as also the Commissioner were in error in allowing the application filed by the 1st respondent and holding that the petitioner is disqualified under section 14(1)(i) of the Village Panchayat Act. Mr.Joshi submits that the finding overlooks the fact that 6 wp355-11.doc section 14 is attracted only when a person is Government servant or servant of any local authority. Therefore, the term “local authority” should take its colour from the earlier part of section, namely, servant of the Government. It is in such circumstances, it is not as if every local authority is discharging governmental functions or exercising identical powers. Its constitution, its functioning and its duties in all cases cannot be said to be governmental in nature. It is not as if every authority which is functioning at a local level can be said to be a local authority. Before that concept can be applied, the Collector should be satisfied that the local authority is either a Municipal Corporation or a Municipality or Local Board or Body of Port Trustees or Commissioners or other authority, legally entitled to or entrusted by the Government with the control or management of the municipal or local fund. No where in the impugned orders, it is indicated that this tests is satisfied. Mr.Joshi submits that a question of servant of the Agricultural Produce Market Committee being disqualified to continue as a member of the 7 wp355-11.doc Village Panchayat, cannot be decided unless the authorities are satisfied that there will be conflict between interest and duty and purity of administration demands, that members like petitioners are disqualified. Infact, the trend is that a Village Panchayat should have the benefit of expertise in other fields meaning thereby that all persons with expertise are involved in village management. The trend is also not that merely because a particular statute terms the authority therein as a local authority that it becomes a local authority for the purposes of the Village Panchayat Act. Mr.Joshi submits that it is not a sound rule of interpretation and particularly to import a definition of a term in one Act into another unless the acts are para materia and their object and purpose is similar and identical. For all these reasons, the impugned orders cannot be sustained and should be set aside. 12 On the other hand, Mr.Shah, learned counsel appearing for the 1st respondent supports the impugned orders. He submits that if the orders are tested on the 8 wp355-11.doc touchstone of the object and purpose that is sought to be achieved and that is to avoid conflict between private and public duty, then, serving two public functionaries which may have conflicting, interests would also attract the disqualification. Thus, one is holding a public office as a member of Village Panchayat. Equally, if another public post is held by the member of Village Panchayat that would give rise to conflict between two public and governmental functions. Ultimately, the Village Panchayat is an institution of local self-government at village and local level. Considering the object and purpose that is sought to be achieved by the Village Panchayat Act, 1958, and the intent of establishing an Agricultural Produce Market Committee, a conflict between the two duties that the petitioner is suppose to be discharging, cannot be ruled out. Mr.Shah submits that the term “local authority” is not defined in Village Panchayat Act, 1958, but, an Agricultural Produce Market Committee is a local authority within the meaning of the Maharashtra Agricultural Produce Marketing (Development and 9 wp355-11.doc Regulation) Act, 1963. Thus, if it is a local authority and the word used in section 14(1)(i) of the Bombay Village Panchayats Act, is “any local authority”, then, it is enough to incur the disqualification. There is no necessity of examining as to whether the Agricultural Produce Market Committee is a local authority and for a limited purpose or not. Further, the amendments to the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963, and particularly, with regard to not disqualifying members of Parliament and members of Legislative Assemblies, even if they are associated with the Agricultural Produce Market Committee, must be seen in the context of these elections. The level at which these elections are held, is a distinguishing factor. Ultimately, at local level and village level, a conflict can always arise as pointed out above. For all these reasons, the conclusion drawn is sustainable and in consonance with law. There is no reason to disturb the same. The petition, therefore, be dismissed. 10 wp355-11.doc 13 In view of the rival contentions, the only question that arises for determination is, whether a servant of the Agricultural Produce Market Committee is a servant of any local authority and, therefore, disqualified to contest the elections to a Village Panchayat or to continue as a member thereof. The undisputed factual position is that the petitioner is employed as a clerk in the Nandgaon Agricultural Produce Market Committee. Thus, he is a servant of the Agricultural Produce Market Committee. The argument is that the said Agricultural Produce Market Committee does not fit in or fulfill the requirement of being a local authority. In this behalf, a perusal of section 14(1)(i) shows that no person shall be a member of the panchayat or continue as such, who is a servant of government or servant of any local authority. Explanation 3 below this sub-section states that for the purpose of clause (i), a Police Patil appointed under section 5 of the Maharashtra Police Act, 1967, shall be deemed to be servant of government. However, the explanation does not say anything beyond the same. The term “local authority” is 11 wp355-11.doc not defined in the Bombay Village Panchayat Act, 1958. Therefore, one ought to seek its meaning elsewhere. The Bombay General Clauses Act, 1904 and prior thereto the General Clauses Act, 1897, both define the term “local authority” in identical manner. The said definition reads thus: “ “local authority” shall mean a municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund;” 14 It is not as if the controversy, whether a authority like the Agricultural Produce Market Committee would be a local authority or not, has never fallen for consideration of either this Court or the Hon’ble Supreme Court. 15 In one of the earliest decisions reported in AIR 1981 Supreme Court 951 (Union of India & Ors v. R.C.Jain & Ors), 12 wp355-11.doc the Hon’ble Supreme Court had an occasion to consider as to whether the Delhi Development Authority would be a local authority for the purposes of the Payment of Bonus Act, 1965. The Hon’ble Supreme Court while referring to the settled principle that a particular expression being not defined in an Act, but is defined in another Act, cannot be imported in former Act, refused to take assistance of the term “local authority” from any other enactment, such as, the Cattle Trespass Act, 1871. However, it took assistance of the General Clauses Act. It also referred to two earlier decisions rendered in the case of Valjibhai Muljibhai Soneji & Anr Vs. The State of Bombay (now Gujarat) & Ors reported in AIR 1963 Supreme Court 1890) and case of the Municipal Corporation of Delhi v. Birla Cotton, Spinning and Weaving Mills, Delhi reported in AIR 1968 Supreme Court Cases 1232 and proceeded to hold thus: “2. Let us, therefore, concentrate and confine our attention and enquiry to the 13 wp355-11.doc definition of ‘Local Authority’ in section 3(31) of the General Clauses Act. A proper and careful scrutiny of the language of section 3(31) suggests that an authority, in order to be a local Authority, must be of like nature and character as a Municipal Committee, District Board or Body of Port Commissioners, possessing, therefore, many, if not all, of the distinctive attributes and characteristics of a Municipal Committee, District Board, or Body of Port Commissioners, but, possessing one essential feature, namely, that it is legally entitled to or entrusted by the Government with, the control and management of a municipal or local fund. What then are the distinctive attributes and characteristics, all or many of which a Municipal Committee, District Board or Body of Port Commissioners shares with any other local authority? First, the authorities must have separate legal existence as Corporate bodies. They must not be mere Governmental agencies but must be legally independent entities. Next, they must function in a defined area and must ordinarily, wholly or partly, directly or indirectly, be elected by the inhabitants of the area. Next, 14 wp355-11.doc they must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. The autonomy may not be complete and the degree of the dependence may vary considerably but, an appreciable measure of autonomy there must be. Next, they must be entrusted by Statute with such Governmental functions and duties as are usually entrusted to municipal bodies, such as those connected with providing amenities to the inhabitants of the locality, like health and education services, water and sewerage, town planning and development, roads, markets, transportation, social welfare services etc. etc. Broadly we may say that they may be entrusted with the performance of civic duties and functions which would otherwise be Governmental duties and functions. Finally, they must have the power to raise funds for the furtherance of their activities and the fulfilment of their projects by levying taxes, rates, charges, or fees. This may be in addition to moneys provided by Government or obtained by borrowing or otherwise. What is essential is 15 wp355-11.doc that control or management of the fund must vest in the authority. 3. In Municipal Corporation of Delhi v. Birla Cotton Spinning and Weaving Mills Delhi, (1968) 3 SCR 251 at p.228: (AIR 1968 SC 1232), Hidayatullah, J., described some of the attributes of local bodies in this manner: “Local bodies are subordinate branches of Government activity. They are democratic institutions managed by the representatives of the people. They function for public purposes and take away a part of the Government affairs in local areas. They are political sub-divisions and agencies which exercise a part of State functions. As they are intended to carry on local self-government the power of taxation is a necessary adjunct to their other powers. They function under the supervision of the Government”.” 16 Prior thereto, there is a authoritative 16 wp355-11.doc pronouncement of the Hon’ble Supreme Court in the case of Patel Premji Jive v. State of Gujarat reported in (1971) 3 SCC 815-16. There, the controversy pertained to acquisition of lands for a Agricultural Produce Market Committee in Gujarat and whether it was a local authority for the purpose of that Act. Holding that it is a local authority, the Supreme Court observes thus: “4. The expression “local authority” is not defined in the Land Acquisition Act. But by the General Clauses Act 10 of 1897 the expression “local authority” is defined as meaning “a municipal committee, district board, body of port commissioners or other authority legally entitled to or entrusted by the Government with, the control or management of a municipal or local fund”. By virtue of section 10(2) of the Gujarat Agricultural Produce Markets Act, 1963, the market committee is a local authority within the meaning of the Bombay General Clauses Act. A local authority being by virtue of entrusted by Government with control or management, inter 17 wp355-11.doc alia, of a local fund, there is no scope for the argument that the market committee constituted under Gujarat Agricultural Markets Act, 1963, is not a local authority within the meaning of section 6 of the Land Acquisition Act.” 17. The broad test indicated is that the authority must have separate legal existence as a corporate body. The authority must not be mere governmental agency, but, must be legally independent entity. It must function in defined area and must ordinarily, wholly or partly, directly or indirectly be elected by the inhabitants of the area. It must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. The autonomy may not be complete and the degree of the dependence may vary considerably but, an appreciable measure of autonomy there must be. It must be entrusted by Statute with such governmental functions and duties as are usually entrusted to municipal bodies, such as those connected with providing amenities to the inhabitants of the 18 wp355-11.doc locality, like health and education services, water and sewerage, town planning and development, roads, markets, transportation, social welfare services etc. Broadly it must be entrusted with the performance of civic duties and functions which would otherwise be governmental duties and functions. Finally, it must have power to raise funds for the furtherance of the activities and the fulfilment of the projects by levying taxes, rates, charges or fees. This may be in addition to monies provided by government or obtained by borrowing or otherwise. What is essential is that control or management of the fund must vest in the authority. 18 It is in this back drop that one must consider the situation and the role of the Agricultural Produce Marketing Committee. 19 The Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963 is an Act to develop and regulate marketing of agricultural and certain other 19 wp355-11.doc produce in market areas and markets, including private markets and farmer-consumer markets, to be established therefor in the State, to confer powers upon Market Committees to be constituted in connection with or acting for purposes connected with such markets, to establish Market Fund for purposes of the Market Committees and to provide for purposes connected with the matters aforesaid. This is how the Act came to be enacted and the term “local authority” is defined therein in section 2(g) to include a Panchayat Samiti. The term “Market Committee” or “Committee” is defined thus: “2(j) “Market Committee” or “Committee” means a committee constituted for a market area under section 11 [and includes [The Bombay Agricultural Produce Market Committee established under clause (a) of sub-section (1A) [and the Divisional or Regional Market Committee declared under clause (a) of sub-section (1B)] of section 13 and ] a committee or committees constituted as a result or amalgamation of Market 20 wp355-11.doc Committee or division of a Market Committee under section 44];” 20 The Market Areas and Markets are dealt with by sections 3, 4 and 5 of the said Act. These speak of issuance of notification of intention of regulating marketing of agricultural produce in specified area and declaration of regulation of marketing of specified agricultural produce in market area. Thus, the area specified in the notification published in the Official Gazette by virtue of powers conferred by sub-section 1 of section 4 of the Act, is a market area for the purposes of this Act. Once declaration under sub-section 1 is published, no local authority or any other person shall thereafter notwithstanding anything contained in any law for the time being in force, establish, authorise or continue or allow to be established, authorised or continued any place in the market area for the marketing of that agricultural produce. Thus, the Act enables the Agricultural Produce Market Committee to take over marketing of that 21 wp355-11.doc Agricultural Produce in that market area to the exclusion of any other person. This is the extent of its power. Thereafter, for every market area, there shall be established a principal market, and there may be established one or more subsidiary markets, which can been done vide section 5. Chapter I-A provides for establishment of National Integrated Produce Market. Chapter I-B provides for direct marketing, establishment of private market and redressal of disputes, whereas, Chapter I-C deals with Contract Farming Agreement. Chapter II deals with Marketing of Agricultural Produce and section 6 therein provides for regulation of marketing of agricultural produce and provision for licence is made so as to undertake marketing of agricultural produce. The grant of licence is provided by section 7. Then, there is power to cancel or suspend licences and further appeal vide section 9. Section 10 provides for settlement of disputes and then comes Chapter III which deals with Constitution of Market Committees. Section 12 therein provides for incorporation of market committees and it reads thus: 22 wp355-11.doc “12. Incorporation of Market Committees. [(1) Every Market Committee shall be a body corporate by the name of “the Agricultural Produce Market Committee” and shall have perpetual succession and a common seal, and may in its corporate name sue and be sued, and shall be competent to contract, acquire and hold property, both movable and immovable, and to do all other things necessary for the purposes for which it is established. [Provided that, no immovable or movable property the value of which exceeds the prescribed limits shall be acquired or disposed of by the Market Committee without the prior permission of the Director.] [(2) Notwithstanding anything contained in any law for the time being in force, every Market Committee shall, for all purposes, be deemed to be a local authority.] [(3) The Market Committees shall be classified by the Director, subject to the guide- lines prescribed, considering the volume and nature of the turnover for the purpose of laying 23 wp355-11.doc down the norms for staff schedule, establishment expenditure, other expenses and allowances.]” 21 Then comes section 13 which provides for constitution of marketing committees and it is clear that persons residing in market area, namely, 15 agriculturalists whose names appear in voter’s list for the concerned constituency would constitute the market committee and their election is provided for, so also other ancillary provisions. The election and term of office of members is an aspect dealt with by section 14. Section 14A deals with election fund. Section 15 provides for commencement of term of office of members and there is also a provision for appointment of administrator in terms of section 15A. All aspects of resignation, removal and casual vacancies of members and nomination in certain circumstances are dealt with including the election of Chairman and Vice-Chairman, their term of office, their honorarium , procedure for election, resignation and motion of no confidence against them. Then, comes 24 wp355-11.doc Chapter IV wherein the powers and duties of the Market Committees are enlisted and section 29 therein reads thus: “29. Powers and duties of Market Committee. (1) It shall be the duty of a Market Committee to implement the provisions of this Act, the rules and bye-laws made thereunder in the market area; to provide such facilities for marketing of agriculture produce therein as the Director [the State Marketing Board or the State Government, as the case may be,] may, from time to time, direct; do such other acts as may be required in relation to the superintendence, direction and control of market or for regulating marketing of agriculture produce in any place in the market area, and for purposes connected with the matters aforesaid, and for that purpose may exercise such powers and perform such duties and discharges such functions as may be provided by or under this Act. [(2) Without prejudice to the generality of 25 wp355-11.doc the foregoing provisions, a Market Committee may- (i) regulate the entry of persons and of vehicular traffic into the market; (ii)supervise the behavior of those who enter the market for transacting business; (iii)grant, renew, refuse, suspend or cancel licence; (iv)maintain and manage the market including admissions to, and conditions for use of, markets within the market area; (v)provide for necessary facilities for the marketing of agriculture produce within the market in the market areas; (vi)regulate and supervise the auctions of notified agricultural produce in accordance with the provisions and procedure laid down under the rules made under this Act or the bye-laws of the Market Committee; (vii)regulate the making, carrying out and enforcement or cancellation of sales, weighment, delivery, payment to be 26 wp355-11.doc made in respect thereof and all other matters relating to the marketing of notified agriculture produce in the prescribed manner; (viii)take all possible steps to prevent adulteration and to promote and organise