. v.. .

STATE OF ORISSA & ORS.

April 16/30, 1968*

[J. C. SHAH, V. RAMASWAMI, V. BHARGAVA, G. K. MITTER

AND C. A: VAIDIALINGAM, JJ.] Commission of Inquiries ict (60 of 1952), s. 3--Setting up of Com-· nJission for collection of facts for future action-:-Partly due ta political' rivlllry but dominant purpose bona fide--Va!idityome items in Notification appoinang Commission_ ubject to appeal in civil court-Setting. up of Comn1ission, if-constitutes contemp~ of court.

The appellants were Chief Ministers and Ministers of the respondent- State. Jn Parliament, the State Legislature and from public platforms, it was alleged that during their tenure of office the appellants were guilty of acts of serious misconduct. corrti:ption, abuse of power. misfeasanceand malfeasance. Therefore. the State Government, in exerci!e of its powers under s. 3 of the Commission of Inquiries Act, 1952, issued a notification appointing a Commission of Inquiry to inquire into and report on the matters,· 'so that facts may be found which alone will facilitate rectification and prevention of recurrence of such lapses and securing the ends of justice and establishing a moral public order in futur~ .. The appellants filed writ petitions for setting aside the Notification, but the High Court dismissed them. In appeal to this Court, it was contended that : ( 1) An inquiry for mere collection of facts unrelated to any future course of Government action or legislative policy does not fall within the purview of s. 3 df the Act and it is not a valid exercise of statutory power to appoint such a Commission; (2) the Commission was set up for a purpose alien to the

statute, in that it was set up by the State Government not in the publicrinterest but for the collateral purpose of getting rid of political rivals by character assassination; and

(3) the appointment of the Commission constituted contempt of court in that some of the items referred to in tbeimpugned notification were the subject matter of' a first appeal pending in the High O>urt.

HELD : ( 1) The preamble to the notification shows that the object of setting up the Commission in the present case was to take approprlate- 1egislative or administrative measures 'for maintaining. high standards ofpublic conduct and purity of political administration in the State in future.

Therefore, the notification falls within the ambit of s. 3 of the Act.

[801 A-C .. 803 D-EI

Shri Ram Krishna Da/m; a v. Shri Justice S. R. Tendolkar (1959] S.C.R. 279, explained. . '

(2) It may be that the appointment of the Commission of Inquiry in the present case was partly on account of political rivalry between the party in power and those against _whom the inquiry was ordered but the dominant purpose of setting up the Commission was to promote easures for maintaining p_urity and integrity of the administration in the po!iticar hfe of the State tn future and not the character assassination of rivals.

Therefore, the impugned notification was issued bona fide and is le"ally valid. (805 A-B; 807 R-E] ·

The King v. Minister of Health, [1929] 1 K.B. 619, referred to.

*The order dismissing the appeals was pronounced on April 16, 1968 and the Judgment was delivered On April 30, 1968.

SUPRE11E COURT REPORTS

[1968] 3 S.C.R.

Rex v. Brighton Corporation ex-parte Shoosmith, 96 -L.T. 762, Earl Ei:za•illiani's TVentworth Estate Co. Ltd. v. Minister of To1vn and Country . Planning, [1951] 2 K.B. 284; applied.

(3) To constitute contempt of court there must be involved some .. act done or writing pllblished calculated to bring a court or a judge of the court into contempt or to. lower his authority' or something 'calculated to obstruct or interfere with the due course of justice or the la\vful -process. of the courts.' [808 HJ

In the prfient-c:ise,- the suits 'Were filed 'for damages for defamation -in relation to allegations of corruption.

There was no factual inquiry into the allegations and the suits were decided on the basis of burden of proof:

Therefore, it could not be.Said-that the_inquiry ordered was in relation to the very matters which were the subject matter of the first appeal filed in the High Court again.st the' decision in the suits. [808 ~El . C

Further, the scope of the trial by courts of law and the scope o'f an inquiry by the Comission are altogether different, and _therefore, the in. quiry by the Commission would not amount toan usurpation of the function of courts of law. [808 E]

In any case, it cannot be said that the Commission wOUtd be-liable for -contempt of court, i'f it proceeded to inquire into matters , referred to it by_ the Government notification, because, in appointing the _Commission the 'State Government \Vas exerci'.Sing a statutory power and in making the inquiry the Commission \Vould be performing a statutoryduty. The res. pondents in this case have done nothing to obstruct or interfere v.rith the .la\\ful powers of ihe court by acting bona fide and by discharging statu

tory functions under tho Act. [808 B-G]

Reg. v. Gra.v, [1900] 2 Q.B. 36 and Arthur Reginald Perera v. The King, [1951] A.C. 482, 488, applied.

CIVIL APPELLATE JUR1smcnoN: Civil Appeal Nos. 1148-· 1150 of 1968.

Appeals from the judgment and order dated February . 22, 1967 of the~Orissa High Court in 0.J.C. Nos. 396, 40S and 418 <Jf 1967.

A. K. Sen, Rajendra Mohanty, K. R. Chaudhury and K; Rajendra Chou_dhury, for the appellants.

C. K. Daphtary, Attorney-General, Ashok Das, Advocate- General for the State of Orissa, Santosh Chatterjee, B, B. Ratho and R. N. Sachthey, for respondents Nos. 1, 2 and 4. Lal Narain Singh, Advocate-General for the State of Bihar and R. K. Garg, for interv;:ner No. I.

B. Sen, M. K. Banerjee, s. K. Dholakia and J. B. Dadachanji, for intervener No. 2.

The Judgment of the Court was delivered by Ramaswami, J.

These appeals were heard on April 15 and April 16, 1968 and at the close of the hearing we ordered that the appeals should be dismissed with costs and indicated that our reasons .would be pronounced later. Accordingly our present judgment gives our reasons for the order which has already been passed.

These appeals are brought against the commo.n judgment of the Orissa High Cqurt dated February 22 •. 19.68 m O.J.<;._ Nos. 396, 408 and 418 1967. By these applications the pelltmners therein prayed for an appropriate .direction or. order. under. Art. 226 of the Constitution for quashing and settmg aside notification No. 813-EC dated October 26, 1967, issued by the Government of Orissa in exercise:· of the powers conferred on it by s. 3 of the Commissions of Enquiry Act (LX of 1952) and for othe1 reliefs. The Schedule to the Notification gives the names of 15 persons against whom inquiry is to be made. The petitioners in the three O.J.C.s have respectivelv been referred to in Items 6, 2 and 12 of the Schedule. In O.J.C. 418, Shri Harekrushna Mahtab, Shri Nabakrushna Choudhury, Shri Pabitra Mohan Pradhan, Shri Santanu Kumar Das and Shri Surendranath Patnaik were originally impleaded as opposite parties Nos. 5 to 9. Shri Biju Patnaik filed an application in this case to be impleaded as an opposite party. As the other parties had no objection he was also imp leaded as opposite party No. 10. Rules were issued and except opposite parties Nos. 3 and 6 the other opposite parties showed cause.

By its judgment dated February 22, 1968 the High Court dismissed the applications, holding that the notification of the State Government dated October 26, 1967 appointing the Commission of Inquiry was legal • and valid.

Against this judgment the petitioners in all the three O.J .C.s have preferred the present appeals by certificate of the Orissa High Court.

Shri Harekrushna Mahtab was the Chief Minister of Orissa from 1947 to 1949. Shri Nabakmshna Choudhury wits the Chief Minister from 1950 to 1956. In the 1957 General Election to the Orissa Legislative Assembly (hereinafter referred to as the 'Assembly'), out of 140 seats the Congress Party got only 56 seats.

Sri Harekrushna Mahtab formed the Ministry with the

spport of other members but he had to resign in 1959 due to withdrawal of support by some of the groups in the Assembly.

In May, 1959, he formed a coalition ministry with the help of Ganatantra _Parishad of which Sri R. N. Singh Deo was the leader.

Sri Singh Deo became the Finance Minister and the Deputy Leader in the Coalition Government. During the coalition Ministry there developed acute difference of opinion in the Orissa Congres~ . Legislt!ve party over the condut and programme of the

oahtion Mm1stry.

The Congress Legislative party was divided mto two groups, one under the leadership of Sri Harekmshna M!111tab and the other under the leadership of Sri Biju Patnaik.

Sn Harekrushna Mahtab had to resign in February, 1961 as he lost the support of the majority of the Congress Legislative party. 8 Sup. CJ/68-11

792 SUPREME COURT RBPOllTS

(1968) 3 S.C.R.

The Assembly was dissolved and there was President's rule for sometime._ During the President's rule, a mid-term election was held in May, 1961. The Congress Party succeeded in capturing

80 seats out of 140 under the leadership of Sri Biju Patnaik. At that time the Ganatantra Parishad had joined the Swatantra Party' of India. The dissident group of members under the leadership of Sri Harekrushna Mahtab defected from the Congress Party and formed a separate political party under the name of "Jana Con~ gress''. The case of the appellants is that from 1961 till the end o( 1966 this group bad its secret alliance with the Swatantra Party and went on creating obstruction from within to the smooth administration by the Congress Party which had a superior numerical strength. Sri Biju Patnaik was the Chief Minister, Shri Biren Mitra was the Deputy Chief Minister.

There was a firm called "Orissa Agents" in the name of Mrs. Mitra which made supplies to some of the departments of the Orissa Government. A campaign was carried on by Sri Mahtab and Sri Pabitra Mohan Pradhan attacking the honesty of Sri Biren Mitra. There was a debate in the Assembly in which a direct attack was made on the honesty and integrity of Sri Mitra and there was a demand for appointment of a Commission of Inquiry. The Government of Orissa did not agree to the appointment of a Commission of Inquiry but Sri Biju Patnaik referred the matter to Sri Singh Deo, leader of the Opposition and Chairman of the Public Accounts Committee. Sri

Singh Deo initially accepted the responsibility, but later on expressed his unwillingness. The Orissa Government had a special audit of the allegations and sent the report to the Public Accounts Committee in the year 1964. While the matter was pending with the Public Accounts Committee, Sri Biju Patnaik resigned the Chief Ministership of Orissa on October l, 1963. He, however, continued to be the chairman .of the State Planning Board till January 29, 1965 when Sri Biren Mitra was the Chief Minister.

Sri Mitra dropped out Sri Pabitra Mohan Pradhan from the cabinet.

During the tenure of the office of Sri Mitra as the Chief Minister of ()rjssa, some members of the Opposition in the Assembly, which included all the members of the Swatantra Party, filed a. memorandum before the President of India alleging misappropriation, misconduct and fraud against Sri Patnaik, Sri Mitra. and ain other Ministers and requested the President of India to appoint a Commission of Inquiry to inqUire into these allegations.

The President referred the Memorandum to his Council of Ministers. It is said the Central Government did not favour the appointment of a Commission of Inquiry but decided to have the allegations enquired into by the Central Bureau of Intelligence (hereinafter referred to as the C.B.I.). After receiving the preliminary report of the C.B.I. the Central Government rejected the demand for appointment of a Commission of Inquiry. A statement was

made in Parliament that certain improprieties were committed but the examination did not reveal any misconduct, misappropriation or fraud or abuse of power for personal gain. As a result of the statement in the Parliament Sri Biren Mitra who was then the Chief Minister submitted his resignation and Sri Sadasiv Tripathy was elected as the leader of the Congress Legislative Party and carried on administration as the Chief Minister of Orissa till the last General Election. Soon after the formation of the present Ministry, the Governor of the State announced in his address to the Legislature the decision to set u'p a Commission of Inquiry to enquire into the charges of corruption and improprieties alleged to have been committed by the Ministers who were in office from 1961 to 1967.

The present. Commission was appointed in pursuance of the policy laid down in the address of the Governor.

The main ground of attack on behalf of the appellants was that the notification was illegal because the Government exercised the statutory power ma/a fide and for collateral purpose and that the object of appointing the Commission of Inquiry was to get rid of

Sri Biju Patnaik and Sri Biren Mitra and to drive thenf out of the political life of Orissa. The High Court held that the allegation of the appellants was not made out and upheld the legal validity ui the notiiicaiion dated October 26, 1967 issued by the Orissa Government.

Sub-s. (1) of s. 3 of the Commissions of Inquiry Act, 1952 (No. LX of 1952), hereinafter referred to as the 'Act', provides as follows:

"3. Appointment of COmmission.--{l) The appropriate Government may, if it is of opinion that it is necessary so to do, and shall, if a resolution in this behalf is passed by the House of the People or, as the case may be, the Legislative Assembly of the State, by notification in die Official Gazette, appoint a Commission of Inquiry for the purpose of making an inquiry into any definite matter <Of public importance and performing such functions and within such time as may be specified in the notification, and the Commission so appointed shall make the inquiry and perform the functions accordingly : • ........................................ "

Setion 4 vests in the COmmission the powers of a civil court while trying a suit under the Code of Civil Procedure and reads as f~!!ow&;

"4. Powers of Commission.-The Commissionshall have the powers of a civil court, while trying a suit under the Code of Civil Procedure, 1908 (Act V of 1908}. in respect of the following matters, namely :- ·

SUPREME COURT .REPORTS . , . . (1968] 3 s.c.R.

(a) summoning and enforcing.the-attendance of any . person and _examining him 011 oath; . • A

(b) requiring the discovery and production of any document; ·

_ (c) receiving evidence on affidavits;

. B

(d) requisitioning any public record or_ copy thereof Jrom any cou, rt _ or_ofli:e; ·

(e) issuing commissions for the examination of witnesses or documents; ·

(f) any other matter which may be prescribed." .

Section 5 empowers the appropriate Government, by a notification . in the Official Gazette, to confer on the Commission additional powers as provided ill all or any of the sub-ss. (2), (3), (4) and -

(5) of that section. S_ection 6 states :

, "6. Statements made by persons to the Commission.-No statement made by a person in the course of giving evidence before the Commission shall subject him . to, or be used against hini in, any civil or criminal proceeding except a prosecution for giving false evidence by such statement :

Provided that the statement-

(a) is made in reply to a question which he is required by the Commission to answer, or

(b) is relevant to the subject matter of the inquiry."

By s. 8 the Commission is empowered to regulate its own procedure including the time and place of its sittings and may act notwithstanding the. temporary absence of any member or the existence of any vacancy among its members. ·

The notification of the Orissa Government dated October 26, G 1967 is to the following ef!'ect: -

"HOME DEPARTMENT .

NOTIFICATION . ' The 26th October, 1967.

No. 813-· EC.-WHEREAS pursuant to the midterm general election of the State Legislative Assembly. in 1961, Councils of Ministers headed by Shri Biju

I ---

JAGANNATH RAO v. ~TATF (Rama.swami, /.) 795

Patnaik, Shri Biren Mitra and Shri Sadasiva Tripathy \VCJ:e fonned in the State during different times during the period from the 23rd 1 une 1961 till the 8th March 1967 and Shri Biju Patnaik, after laying down his office as Chief Minister, declared himself to be the Chairman, Planning Board and continued to function as Chainnan, Planning Board during the period from the 4th October, 1963 to the 29th January 1965, during the Chief Ministership of Shri Biren Mitra;

AND WHEREAS during the tenure of office of the aforesaid persons as Chief Ministers there were various allegations against the conduct of the aforesaid persons and some of the Ministers and Deputy Ministers of the State of Orissa, as specified in the Schedule hereto, by politicians, the general public and others, and the allegations apart from being put forward from public platfonns by private persons and otherwise, have been the subjectmatter of active agitation all through in the State Legislature and in the Parliament and some of such allegations were of such a i:iature that an enquiry was conducted thereon by the Central Bureau of Investigation and the Ceptral Cabinet also held deliberations over the same ;

AND WHEREAS on an active and careful consideration of all such allegations by the Government of Orissa, it appears to them :-·

TIIAT DURING

THE AFORESAID PERIOD, i.e., FROM THE 23RD JUNE 1961 TO THE 8111 MARCH 1967, THE SAID PERSON As NAMED

IN THE SCHEDULE:

(1) committed various acts of misconduct, misappropriation, fraud, negligence, favouritism, nepotism illegalities, irregularities, improprieties and abuse of their power in the matters of administration of the State:

(2) abused their official positions for securing pecuniary and other benefits for themselves, members of their families, their relations, their friends, . their partymen

(Congressmen) and others in whom they were interested, .from out of e funds of the State exchequer and otherwise to the detriment of the interests of the State ' . (3) c:ommitted breach of trust and acts of impropnety with respect to the properties and assets of the State yn~ a view to further the interests of their party organiSll'tion, i.e., the Congress;

796 SUP.RElll:B COU&T IU!POU'S

£1968] 3 S.C.R.

(4) entered into contracts and other monetary transactions for the supply of machinery, tools, equipmenis and execution of works, themselves, or permitted their family members, relittions, friends, partymen and others to enter into such contracts and transactions with the Government of Orissa, with different Departments of the Government of Orissa, with Corporations, Local Bodies, Statutory Bodies and with other Bodies with which Government of Orissa have or had interest, control or concern in utter disregard of the interests of the State in breach of the trust imposed on them by virtue of their Constitutional positions;

(5) resorted to misuse of power, interfered in the processes of elections and administration of Local Bodies not only to help their friends, favourites and partymen but also at times for their own personal benefits;

(6) acquired directly properties of the State either for themselves or for the benefit of the members of their families or relations or others in whom they were interested;

(7) advanced money and Joans by way of favouritism out of the Statci exchequer in favour of themselves, members of their families, their relations and other persons in whom they were interested;

(8) permitted wastage, misuse, misutilisation and misappropriation of the funds of the State in several ways to the detriment of the interests of the State in utter disregard of the canons of financial propriety and established rules and procedure from which a presumption of personal gains for themselves or for persons as aforesaid directly or indirectly arises; ·

(9) caused wastage, misuse, misutilisation, misappropriation, illegal or irregular use of the funds of !he State through contracts or other monetary transactions entered into by the Government without following the rules of Jaw or the established procedure;

(10) by way of favouritism and nepotism caused maladministration in matters of public services, namely, in the matter of appointments, transfers, promotions and dealing with corrupt officers;

(11) interfered with the administration of Jaw and tried to pervert the course of justice by helping offenders to escape law;

(12) caused to the State Government huge financial loss which has given rise to a great economic crisis, serious retardation in the progress of trade, industry and commerce, agricultural output, serious problems of unemployment and has also vitiated the moral and general character of the people;

(13) acted in several cases against constitutional proprieties, public policies and proper social and political conduct;

(14) amassed wealth themselves, through members of their family, relations and other persons or permitted the members of their family, relati9ns and other persons to amass wealth and their assets during the aforesaid period have increased disproportionate to the known sources of their income, by abuse of their constitutional positions.

Under such circumstances the people in general and the Government have expressed a desire that the matters aforesaid regarding the aforesaid persons should be enquired into through a Commission of Inquiry so that facts may be found which alone will facilitate rectification and prevention of recurrence of such lapses and securing the ends of justice and establishing a moral public order in future.

Under such circumstances, the Government of the State of Orissa are of the opinion that it is necessary to appoint a Commission of Inquiry for the purpose of making a full inquiry into the aforesaid matters which are of definite public importance.

NOW, THEREFORE,· the State Government, in exercise of the powers conferred by section 3 of the Commission of Inquiries Act, 1952 (Act 60 of 1952), hereby appoint a Commission of Inquiry consisting of Shri Justice H. R. Khanna of the Delhi High Court to inquire into and report on and in respect of :-

WHETHER THE PERSONS

MENTIONED IN

THE SCHEDULE, DURING THE

AFORESAID

PERIOD:

(I) committed various acts of malfeasance, misfeasance, misappropriation, fraud, negligence, favouritism, nepotism, illegalities, irregillarities, improprieties and abuse of their power in matters of administration of the Stat11 in different cases ?

798 SuPRl!MB COU.T Ul'Ol.TS

[1968) 3 S.C.R.

(2) abused their official positions for securing A pecuniary and other benefits for themselves, the members of their families, their relations, their friends and their partymen (Congressmen) and others in whom they were interested, from out of the funds of the State exchequer and otherwise to the detriment of the interests of the State ?

JI;

(3) committed breach of trust and act~ of impropriety with respect to the properties and assets of the State with a view to further the interests of their party organisation, i.e. the Congress ?

( 4) entered i!l'!o contracts and other monetary transactions for the supply of machinery, stores, equipment and execution of works or permitted their family members, relations, friends and others in whom they were interested, with the Government of Orissa, in utter disregard of the law, rules and administrative procedure relating thereto and in breach of the confidence reposed on them, by virtue of their constitutional position?

(5) resorted to. misuse of power' interfered in the process cif election and administration of local bodillS not only to help their friends, favourites and partymen, but also at times for their own personal benefit?

(6) acquired directly properties of the State either for themselves pr for the benefit of members of their families, relations or other persons in whom and organisations in which they were interested ?

(7) advanced money and loans in favour cif themselves, members of their families, their relations and other persons in whom they were interested, out of the State Excheciuer ?

(8) permitted wastage, misuse and expenditure in various ways to the detriment . of the interests of the State without following the established rules of procedure from which the presumption of personal gains for themselves directly or indirectly would arise?

(9) by way of favouritism and nepotism have caused maladministration in matters of public services, namely, appointments, transfers, promotions and dealing with con11pt officers ?

(10) interfered in the administration of law and tried to pervert the course of justice by helping offenders to escape law?

(11) by their aforesaid conduct have put the 'State • Government to huge financial loss which has resulted in

B a financial crisis for the State ?

(12) by their aforesaid conduct have hampered the entire industrial development in the State ?

(13) by iheir aforesaid conduct have given rise to serious problems of unemployment? c

(14) by their aforesaid conduct have spread corruption in the Government machinery and have polluted the general public morale in the State and have also brought about a general demoralisation of the political, social, economic and moral aspects of the Society ?

(15) by their aforesaid conduct have put the State to D financial loss which has developed into a great economic crisis and has resulted in rapid retardation of the progress of trade, industry and commerce, a deplorable fall in the agricultural output, spread of 9orruption in all wings of administration and a general breakdown in the morale and character of the people of the State ?

E The Commission of Inquiry may also perform such

?the~ functions as are necessary or incidental to the mqurry.

The Commission shall inquire into the detailed particulars pertaining to the aforesaid matters along with

F such other incidental and ancillary matters thereto that shall be placed before them by the State Government.

The Commission shall inquire into the financial implications of the aforesaid matters. "' The Commission shall make its report to the State '

G Government on or before 30th Apvil, 1968.

AND WHEREAS the State Government are of opinion that having regard to the nature of the inquiry to be made and other circumstances of the case all the provisions of sub-section (2), sub-section (3), sub-section (4), sub-section (5) and sub-section (6) of section 5 of

H the Commission of Inquiry Act, 1952 shall be made applicable to the said Commission, the State Government hereby directs that all the said provisions shall apply to the said Commission.

800.

SUPllDIE COUllT UPOl.TS [1968] 3 s.c.R.

The Commission shall have its headquarters at A J Bhubaneswar and may also visit such places as may be necessary in furtherance of the inquiry.

By order of the Governor B. B. Rath r Additional Secretary to Govt.

SCHEDULE

From To

1. Sbri Biju Patnaik Chief Minister Planning Bd. 23-6-1961 1-1().1963 Chairman, State 4-1().1963 29-1-1965

2. Shri Biren Mitra Minister 23-6-1961 1-1().1963 c

Chief Minister 2-1().1963 2().2-1965

3. Sbri S . Tripathy Minister 23-6-1961 2().2-1965 Chief Minit11ter 21-2-1965 8-3-1967

4. Sbri Hilamoni Routray Minister 23-6-1961 25-2-1967

5. Sbri Satyapriya Mohanty Minister 2-1().1963 24-2-1967 D

6. Sbri P. V. Jagannath Rao Minister 23-6-1961 8-3-1967

7. Shri H.B. Singh Mardaraj Minister 23-6-1961 2().2-1965

8. Shri R. P. Misra Minister 21·2-1965 25-2-1967

9. Sbri Brundaban Nayak Deputy Minister 29-7-1962 1-1().1963 Minister 2-1().1963 28-6-1965

10. Shri T. Sanganna Dy. Minister 29-7-1962 1-1().1963 E Minister 2-1().1963 27-2·1967

11. Shri Prahallad Mallik Dy. Minister 29-7-1962 28-2-1967

J 2. Sbri S. K. Sahu Dy. Minister 29-7-1962 28-2-1967

13. Shri Anup Singh Deo Dy. Minister 21-2-1965 8-2-1967

14. Sbri Chittaranjan Naik Dy. Minister 21-2-1965 26-2-1967 F

15. Shri Chandramohan Singh Dy. Minister 29-7-1962 24-2-1967 B.B. Rath Additional Secretary to Govt.

On behalf of the appellants Mr. Asoke Sen put forward the argument that the appointment of the Commission is not valid as the notification does not state what is the purpqse for which the enquiry was to be made. To put it differently, the argument of G the appellants was that the notification is not related to any future Government action or legislative policy and hence the notification was bad.

The contention of Mr. Asoke Sen was that an inquiry for mere collection of facts unrelated to any future course of Government action or legislative policy does not fall within the purview of s. 3 of the Act and it is not a valid exercise of H statutory power to appoint such a Commission. We are unable to accept the argument put forward on behalf of the appellants .as correct. The purpose of the enquiry is stated in the preamble

JAGANNATH lAO v. STATB (Ramaswami, /,) 801

to the notification wJµch, states that "the matters aforesaid regardinJ the afore.said persons should be enquired into through a Commission of Inquiry so that facts may be found which alone will facilitate rectification and prevention of recummce of such la~ and securing the ends of justice and establishing a moral public order in future".

In other words, the object of the enquiry to be made by the Commission appointed under s. 3 of the Act was to take appropriate !eslative or administrative measures to maintain the purity and mtegrity of political administration in the State. In our opinion, the appointment of the Commission of Inquiry in the present case was in valid exercise of the statutory power by the State Government under s. 3 of the Act. Mr. Asoke Sen referred in this connection. to the decision of this Court in Shri Ram Krishna Dalmia v. Shri Justice S. R. Tendolkar(' ), in which the appellant challenged the validity of the notification of the Central Government dated December 11, 1956 appointing a Commission of Inquiry to inquire into and report . in respect of certain companies mentioned in the Schedule attached to the notification and in respect of the nature and extent of the control and interest which certain persons named in the notification ex, ercised over these companies.. It was held by this, Court, in agreement with the Bombay High Court, that the notification was legal and valid except as to the last part of cl. 10 thereof which empowered the Commission to recommend the action which should be taken as and by way of securing redress or punishment or to act as a preventive in future cases. Clause 10 of the notification in that case stated :

"Any irregularities, frauds or breaches of trust or action in disregard of honest commercial practices or contravention of any law (except contraventions in respect of which .criminal proceedings are pending in a Gourt of Law) in respect of the companies and firms whose afiairs are investigated by the Commission which may come to the knowledge of the Commission and the action which in the opinion of the Commission should be taken as and by way of securing redress or punishment or to act as a preventive in future cases."

The portion of Cl. 1 O of the notification which was held i0 be ultra vires by this Court was the portion beginning with the words "and the action" and ending with the words "in future cases".

It was argued on behalf of the appellant in that case that While the Commission may find facts on which the Government may take action, legislative or executive, the Commission cannot be asked to suggest any measure, legislative or executive, to be taken by the appropriate Government. The argument was rejected by

(!) [19591 S. C. R. 279.

802 SUPUMB COUJ.T UPOaTS

(11168) 3 S.C.ll,

this Court. n this oonnection, S. R. Das, C.J. speaking for tho Court. obServed at page 294 of the Report as follows : -

"We are unable to accept the proposition so widely enunciated. An inquiry necessarily involves investi~· tion into facts and necessitates the collection of material facts from the evidence adduced. before or brought to the notice of the person or body conducting the inquiry

and the recording of its findings on those facts in its report cannot but be regarded as ancillary to the inquiry itself, for the inq_uiry becomes useless unless the findings of the inquiring body are made available to the Gov ernment which set up the inquiry. It is, in our judg ment, equally ancillary that the person or body conduct ing the inquiry should express its own view on the facts found by it for the consideration of the appropriate Government in order to enable it to take such measure as it .may think fit to do. The whole purpose of setting up of a CommiSsion of Inquiry consisting of experts will be frustrated and the elaborate process of inquiry will be deprived of its utility it-the opinion and the advice of the expert body as to the. measures the situation disclosed calls for cannot be placed before the Government for consideration notwithstanding that doing so cannot be to the prejudice of anybody because it has no force of its own. In our view the recommendations of a Com mission of Inquiry are of great importance to the Gov ernment in order to enable it to make up its mind as to what legislative or administrative measures should be adopted to eradicate the evil found or to implement the beneficial objeets it has in view. From this point of view, there can be no objection even to the Commis sion of . Inquiry recommending the. imposition of some form of punishment which will, in its opinion, be suffi ciently deterrent to delinquents in future.

But seeing that the Commission of Inquiry has no judicial powers and its report will purely be recommendatory and not effective proprlo vlgore and the statement made by any person before the Commission of Inquiry is, under s. 6 of the Act, wholly inadmissible in evidence in any future proceedings, civil or criminal, there can be no point in the Commission of Inquiry making rer.ommendations for taking any action 'as and by way of securing redress or punishment' which, in agreement with the High Court, we think, refers, in the context, to wrongs already done or committed, for redress or punishment for such wrongs, if any, has to be imposed by a court of. law properly constituted exercising 'its own discretion on the

JAGANNATH .RAO V, STATB (Rama.swami, /,) 803

facts and circumstances of the case and without being in any way influenced by !he view of any person or body, howsover august or high powered it may be. Having regard to all these considerations it appears to us that only that portion of the last part of cl. (10) which calls upon the Commission of Inquiry to make recommendations about the action to be taken 'as and by way of securing redress or punishment', cannot be said to be at all necessary for or ancillary to the purposes of the Commission. In our view the words in the latter part of the section, namely, 'as and by way of securing redress or punishment', clearly go outside the scope of the Act."

In our opinion, the ratio of this case has no application in the present case, because there is nothing corresponding to the im pugned part of cl. 10, in the notification of the Orissa Government dated October 26, 1967. On the contrary, we have already pointed out that the object to set up the Commission of Inquiry D in the present case was to take appropriate legislative or adminis

trative measures for maintaining h1~ standards of public conduct and purity of political administration in the State. It follows therefore that the notification of the Orissa Government falls within the ambit of s. 3 of the Act and must be held to be legally valid and intra virts.

We pass on to col!Sider the next question arising in these ap peals, namely, whether the power was exercised by the State Government for a purposo alien to the statute. It was contended by Mr. Asoke Sen that there was a bitter political rivalry between the

appellants on the one hand and Shri Pabitra Mohan Pradhan, Shri Harckrushna Mehtab, Shri Singh Deo and the other persons who F are at present in-charge of the Orissa administration. Reference was made by Mr. Asoke Sen to the political history of the State of Orissa from 1947 up to the General Elections, 1967 and in particular to the rivalry between Sri Biju Patnaik and Sri Singh Deo who was the leader ofOpposition in the previous Government and a1sO to the internal rivalry between the two political groups G in the Congress Legislative, party, one led by Shri Harekrushna ' Mahtab and the other led by Shri Biju Patnaik and Shri Biren Mitra; It was urged that the Commission was set up by the pre sent Orissa Government not in the public interest but for a .cc>llateral purpose, namely, for getting rid of Shri Biju Patnaik and Shri Biren Mitra and driving them out of the political life of Orissa.

H Mr. Asoke Sen .said that the object of the enquiry was charaoter

ass•ssination of Slµi Patnaik and Shri Biren Mitra and so the Com missiQn was set up for a collateral purpose and the notification must bo struck down as illegal and llltra Vina. It is not poaalble,

804 SUPIBMB COUl.T UJIO&TI

[1968) 3 S.C.R.

in our opinion, to accept this argnment as correct, It is admitted

A that there is political rivalry in Orissa between the apants and the present Chief Minister of Orissa, Shri R. ~' Sing . and also as between the appellants and the group of \,; O!lgress idents' led by Shri Harekrushna Mahtab, Shri Nabakrusbha Ch<>udilury, Shri Pabitra Mohan Pradhan, Shri Santanu Kumar Das and Shri Surendranath Patnaik. But we do not think that the existence of a political rivalry is in itself sufficient. to hold that the appointment of the Commission of Inquiry is illegal. Having perused the affi davits of the appellants and also those filed by the respondents in this case we are of opinion that the appointment of the Commission of Inquiry was not due merely to the existence of political rivalry of the parties but was impelled by the desire to set up and c maintain high standards of moral conduct in the political ad ministration of the State. As we have already pointed out, the object of appointing the Commission is stated in the notification itself as "the rectification and prevention of recurrence of such lapses ll!id securing the ends of justice and establishing a moral public order in future". In the affidavit of Shti Pabitra Mohan D Pradhan it is stated that the appointment of the Commission of Inquiry was one of the items of the common programme on which the 1ana Congress and the Swatantra Party contested the General Elections of 1967. As a result of the popular mandate the Swatantra Party and the 1 ana Congress coalition took charge of the reins of Government and in accordance with the solemn promise made by those parties to the people of Orissa the Government decided' It to appoint a Commission of Inquiry in order to investigate the widespread corruption practised by the persons named in 'the Schedule to the impugned notification. The decision to appoint a Commission was also announced in the first address of the Governor to the Otissa Legislative Assembly after the 1967 General Elec tions. In paragraph 17 of the affidavit, Shri Pabitra Mohan P Pradhan has further said that the object of the Jana Congress and the Swatantra Party was "to et up a clean administration, so that the State's resources should not go into the pockets of the corrupt group led by Shri Biju Patnaik and Shri Biren Mitra but should be used for giving a better life to the people of the State". In para 6 of the affidavit Shri Pabitra Mohan Pradhan further states : G "I have always believed and still believe that politics is not for the purp0se of serving the selfish ends and to satisfy the greed of any politician or any person or any group of persons. Politics is for the service of the people and involves sacrificing one's life and comforts for raising the living stsndard of the overwhelming poverty-stricken people of our State and our country so that they K may enjoy a good life and hold up their heads with pride." In para S he has denied that there was any intention on his part to carry on character assassination of Shri Biju Patnaik, Shri Birea

JAGANNATH RAO v. STATB (Ramaswami, J.) 80$

A Mitra and their group. It is true that the appointment of the Com~

mission of Inquiry may have been made partly on account of the: political rivalry between the parties but having perused the aflb davits filed by the appellants and the respondents in this case,. we are satisfied that the main object of the appointment of the Com, mission of Inquiry was not to satisfy the political rivaJrY of the: B politicians at present in power in Orissa but to promote measures. for maintaining purity and integrity of the administration in future in the Orissa State. We are accordingly of the opinion that Mr.

Asoke. sen is unable to make good his argument that the impugned notification is a ma/a fide exercise of the statutory power and it. should be struck down as illegal. c

It is well-settled that if a statutory authority exercises its power for a purpose not authorised by the law the action of the stanitory authority is ultra vires and without jurisdiction. In other words it is a mala fide exercise of power in the eye of law; i.e., an exercise of power by a statutory authority for a purpose other than that. which the Legislature intended (See The King v. Minister of Health) (1). But the question arises as to what is the legal position if an administrative authority acts both for an authorised purpose and for an unauthorised purpose. In .uch a case where there is a mixture of authorised and unauthorised purpose, what should be the test to be applied to determine the legal validity of the administrative act ? The proper le.st to be applied in such a case is as. to what is the dominant purpose for which the administrative power is exercised. To put it differently, if the administrative authority pursues two or more purposes of which one is authorised and the other unauthorised, the legality of the administrative act should be determined by reference to the dominant purpose. This principle was applied in Rex v. Brighton Corporation ex parte Shoosmith(2) A Borough Corporation expended a large sum of money upon al, F tering and paving a road, which was thereby permanently improved, but they decided to do the work at the particular time when it was done in order to induce the Automobile Club to hold motor trials and motor races upan it. The Court of Appeal (reversing the decision of the Divis10nal Court), refused to intervene, and it was observed by Fletcher Moulton, L.J. at page 764 as follows : G

"It cannot be denied that the physical act of chang, ing the surface of a road when the corporation thought fit and proper so to do was within their statutory powm and there is no case proved by the evidence which shows either that they wastefully used the public money or that they did so with improper motives. The case would be quite different if one came to the conclusion that under the guise of improvement of a road, certain moneys bad

(I) [19291 I K. B. 619.

(2) 96 Law Times 762 ..

806 [1968] 3 s.c.R.

been used really for diminishing the experu; es of the Automobile Club or anything of that sort and that there had been a turning aside of public moneys to illicit pur

J>05CS" The principle 'was applied by Denning, 'L.J. in Earl Fitzwilliam's Wentworth Etate Cc. Ltd. v. Minister 91 Town and Country Plan ing(1). It was a case concerning the validity o.f a compulsory purchase made by the Central Land Board, and confirmed by the Minister, under the provisions of the Town and Country Planning Act, 1947, in respect of a plot of land, ripe for development, which the owner was not prepared to sell at the existing use value. The landowner applied to have the order quashed, as not having been made for any purpose connected with the Board's function under the Act, but for the purpose of enforcing the Board's policy of sales at existing use values. The majority (consisting of Somer well and Singleton, L.J.) held that, though the main purpose of the Board may well have been to induce landowners in general and the company, in particular, to adopt one of the methods of sale favoured by the Board, it was nevertheless in connection with their function as the authority operating the development charge scheme, and at any rate, "the case was not one in which it could be said that powers were exercised for a purpose different from those spe cified in the statute." Denning, L.J. disagreed with the majority and held that the dominant purpose of the Board was not to assist in their proper function of collecting the development charge, but to enforce their policy of sales at existing use value only. '.J'he dominant purpose being unlawful, the order was invalid, and could not be cured by saying that there was also some other purpose which was lawful. The Board and the Minister had misunderstood the extent of their compulsory powers, and their affidavits showed that they had overlooked that their ultimate purpose in exercising their powers .should be connected with the performance of the Board's functions under the Act. At page 307 of the Report Denning, L.J. observed as follows :

"What is the legal position when the board have more than one purpose in mind? In the ordinary way, of course, the courts do not have regard to the 'pwpose' or 'motive' or 'reason' of an act but only to its mtrinsic validity. For instance, an employer who dismisses a servant for a bad reason may justify it for a good one, so long as he finds it at any time before the trial. But sometimes the validity of an act does depend on the purpose with which it is do~ in the case of a conspiracy--and in .such a case, when there is more than one pUrpo6e, the law always has. regard to the dominant

(I) (1951) 2 K. B. 284.

purpose. If the dominant purpose of those concerned is unlawful, then the act done is invalid, and it is not to be cured by saying that they had some other. purpose in mind which was lawful : see what Lord S11Don, Lord Maugham and Lord Wright said in Crofter Hand Woven Hattis Tweed Co. v. Veitch (1942 A.C. 445. 452-3, 469, 475).

So also the validity of government action often depends on the purpose with which it is done. There, too, the same principle applies. If Parliament grants a power to a government department to be used for an authorized pwj>ose, then the power is only vali<!Jy exercised when it is used by the department genumely for that purpose as its dominant purpose. If that. purpose is not the main purpose; but is subOrdinated to some other purpose which is not authorised by Jaw, then the department exceeds its powers and the action is invalid."

Applying the test to the present. case, we are; of opinion that the dominant purpose of setting up the Commissloriof Inquiry was . to promote measures for maintaining purity an<l integrity of the administration in the political life of the State and not "the char; icter assassination" of Shri Biju Patnaik and Shri Biren Mitra and their gioup.

E It follows therefore that the impugned notifiqation of the Orissa Government, dated October 26, 1967 is legally valid.

We proceed to consider the next argument put forward on behalf.of the appellants, namely, that the appointment of the Commission of Inquiry was illegal because it constituted contempt of Court. It was pointed out tliat items with regard to Shri Biren Mitra referred to in the impugned notification were the subjectmatter of civil litigation and there was a First Appeal pending in the High Court. It appears that all the items of charges regarding Shr! Bi.ren Mia we~ included in the ¥emorandum submitted by Shn N1samon1 Khuntia, Secretary, San1ulcta Socialist Party to the President of India. The memorandum was published in the Daily newspaper "The Eastern Times" on its front page on August 2,

19~4 with bald headlines ."Money amassed through corruption".

Shn Harendra Chandra Pradhan was the Printer .and publisher of that paper. Shri Birn. Mitra filed two suits-0.S. No. 266 and 267 of 1964 against the Prajatantra Prachar Samiti (defendruit No. 1), Shri Janaki Ballav Patnaik (Defendant No. 2 j, Shri Narendra Chandra Pradhan (Defendant No. 3) and Shri Nisairioni Khuntia (.Defendant No. 4). It was alleged that there was eollusion .between defendants 1 to 4 and other political opponents of LS sup. C. 1./68-12

sos

SUPRBMB COURT REPORTS


Shri Biren Mitra. Defendants 1 to 3 filed a common Written Statement saying that the assertions in the memorandum were true.

The 4th defendant filed a separate written statement to the same .effect. The suits were heard by the Subordinate Judges, Cuttack.

He held that the publication was on the face of it defamatory and libellous. No evidence was given on either side regaraing the truth -0f the imputations in the publications. Holding that the burden -Of proof reste<\ on the defendants the subordinate Judge decreed the suit for damages for Rs. 200. It was contended by Mr. Asoke Sen that the decision of the Sabordinate Judge was pending in the First Appeal in th_e High Court and so no Coriunisison of Inquiry could be appointed with regard to the same matters. In our opinion, there is no substance in this argument. It should be noticed, in the first place, that none of the parties in the civil suit has adduced any evidence. Shri Biren Mifra did not choose to appear as a witness and present himself for cross-examination. The suits were decided purely on the basis of burden of proof. We do not wish to express any view as to whether these two suits were decided rightly or wrongly, but the fact remains that there was no factual enquiry into the allegations. It is also not possible to accept the argument that the present inquiry is in-relation to the

very matters which were the subject-matter of the civil suits and of the first appeal. It was pointed out by this Court in Shri Ram Krishna Dalmia v. Shri Justice S. R. J:endolkar( 1 ) that the inquiry cannot be looked upon as a judicial inquiry and the order ul'i mately passed cannot be enforced proprio vigore.

The inquiry and the investigation by the Commission do not therefore amount to usurpation of the function of the courts of law. The scope of the trial by the Courts of law and the Commission of Inquiry is altogether different. In any case, ft cannot be said that the Commission of Inquiry would be liable for contempt of Court if it proceeded to enquire into matters referred to if by the Government Notification. In appointing a Commission of Inquiry under s. 3 of the Act the Orissa Government is exercising a statutory power and in making the inquiry contemplated by the notification, the Commission is performing its statutory duty.

We have already held that in the appointment of the Commission of Inquitjr the Government was acting bona fide. It is, therefore, not possible to accept the argument of the appellants that the setting up of the Commission of Inquiry by the State Government or the continuance of the inquiry by the Commission so constituted would be tantamount to contempt of Court. To constitute contempt of court, there must be involved some "act done or writing published calculated to bring a court or a judge of the court into contempt or to lower his authority" or something "calculated to obstruct or interfere with the due course of justice or the lawful process of the

(I) [1959] S. C.R. 279.

, A courts" see Reg. v. Gray('), Arthur Reginald Perara v.

The King('). The respondents in this case have done nothing to obstruct or interfere with the lawful powers of the Court by acting bona fide and discharging statutory functions under the Commission of Inquiry Act. We therefore, see no justification for holding that the issue of the noiification under s. 3 of the Act or the conduct B of the Inquiry by respondents amount to contempt of Court. We accordingly reject the argument of Mr. Asoke Sen on this aspect of the case.

It is for these reasons that we have <; lismissed these Civil Appeals by our order, dated April 16, 1908. One set of hearing fee.

V.P.S.

Appeals dismissed.

(I) [1900] 2 Q. B. 36.

(2) [1951] A. C; 482, 488.