Member Of The Zilla Parishad Disqualified By The Commissioner For Assigning E-tender To His Son Under Section 16(1)(i) Of The Maharashtra Zilla Parishads And Panchayat Samitis Act, 1961.

Case title:

Virendrasing Vs The Additional Commissioner & Ors

Date of Order:

April 17, 2023.

Bench:

Hon’ble Justice Sanjay Kishan Kaul

Parties:

Appellant: Virendrasing

Respondents: The Additional Commissioner & Ors

IMPORTANT PROVISIONS:

The Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961-

Sections 16(1)(i)- A person is disqualified from being a Councilor if they have a direct or indirect interest in any work done by the Zilla Parishad or any contract with them. If a Councilor vacates their position during their term, the Commissioner will decide whether a vacancy has occurred within 90 days of receiving an application. The decision is final, but the Councilor can continue in their role until the decision is made. The Councilor must have a reasonable opportunity to be heard before any decision is made against them.

The Central Provinces and Berar Municipalities Act, 1922,

Section 15(1)- which disqualifies a candidate from standing for election if he had ‘an interest’ in the Municipal Committee

OVERVIEW:

• On January 8, 2020, the appellant was elected as a candidate of a recognized party to the Zilla Parishad, Chimthane Block, District- Dhule.
• However, a decision dated 08.11.2021, made in response to a petition from respondent No. 3, who was defeated in the Zilla Parishad election, prohibited him from holding this office.
• The 3rd Respondent filed a petition under Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961, Sections 40 and 16(1)(i). The petition claimed that the appellant misused their elected position for personal financial gain. 
• This gain resulted from passing a resolution on January 26, 2020, where the Aarave Gram Panchayat approved the repair and tarring of a road. 
• The Zilla Parishad, Dhule then granted administrative sanction to the project on June 5, 2020, costing Rs. 15 lakhs, using their powers under Section 125 of the said Act. 
• The Aarave Gram Panchayat floated an e-tender on June 29, 2020, and the appellant's son was successful in the tender process.
• According to the Divisional Commissioner, Dhule and the appellant may have an influence on the Aarave Gram Panchayat because it was located in the Chimthane Block, which was under the control of the Zilla Parishad. 
• Additionally, there was no evidence that the appellant's son had received work orders from any other blocks under Dhule Zilla Parishad, implying a potential misuse of power by the appellant. Therefore, the Divisional Commissioner concluded that there was enough evidence to disqualify the appellant under Section 16(1)(i) of the said Act.
• In Writ Petition No. 12526 of 2021, the appellant contested his disqualification and put forth several arguments before the High Court. 
• The High Court rejected the appellant's pleas as per a judgment on 17.11.2021. 
• Thus, this appeal is filed in Supreme Court by the appellant in order to squash the High Court judgment allowing the disqualification.

ISSUES RAISED:

• Whether Divisional Commissioner followed natural justice standards in disqualifying the appellant.
• Whether the appellant had any vested interest in assigning the work to his son.

ARGUMENTS ADVANCED BY THE APPELLANT:

• The primary point of contention for the appellant was that his son was assigned labor by Gram Panchayat rather than Zilla Parishad. The allocation was made through an e-tendering process that was made public on the Maharashtra Government's online portal. 
• Although the Zilla Parishad technically sanctioned it, the Gram Panchayat also paid the appellant's son for the work. 
• The work order dated 20.07.2020 was also stamped with the Gram Panchayat's seal, in accordance with the authority granted to them under Article 243(G) read with Entry 13 of the 11th Schedule of the Constitution.
• The appellant contended that the Zilla Parishad had only provided administrative and technical approval for the allotment under Sections 100, 100(2), and 125 of the Act. 
• It is claimed that the Zilla Parishad did not directly pay for the job done by the appellant's son. In this regard, the Zilla Parishad, respondent no. 3 before us, provided a counter-affidavit.
• Second, the appellant claimed that he had no personal interest in his son's firm and that they did not even live together. Gulam Yasin Khan v. Shri Sahebrao Yashwantrao Walaskar & Ors. was cited, in which the Court stated that an electoral candidate's mere contact with an employee of the Municipal Committee would not preclude the candidate from competing in the election.
• Third, it was claimed that the Divisional Commissioner did not follow natural justice standards in disqualifying the applicant. It was argued that an elected representative cannot be dismissed from his position arbitrarily and without an investigation into the alleged misbehavior, as this Court held in Ravi Yashwant Bhoir v. District Collector, Raigad & Ors.
• The appellant requested accommodation on the day of the hearing before the Divisional Commissioner because his lawyer was ill, but the request was unfairly denied.

ARGUMENTS ADVANCED BY THE RESPONDENT:

• The attorney for respondent number three made an effort to highlight Section 16 of the challenged Act's purpose, namely to instill transparency into the Zilla Parishads' operations. 
• In light of this, it was argued that the relevant sub-section (i) of Section 16(1) of the said Act was worded broadly enough to encompass three categories, namely, work done a. by Zilla Parishad directive; b. in any agreement with Zilla Parishad; or c. by or on behalf of Zilla Parishad.
• In this instance, the Zilla Parishad gave the instructions, and the Zilla Parishad also handled the payment.
• As a result, it was argued that the facts fit fully within the scope of Section 16(1)(i) of the aforementioned Act, and the disqualification was obvious.
• It was further argued in the stated factual circumstance that the appellant was elected in January 2020, although his son was registered as a contractor with the Zilla Parishad, Dhule on 20.02.2020. 
• The contract awarded to the appellant's son was essentially a proxy benefit. It is also worth noting that there is significant debate concerning the translated wording of the Gram Panchayat's resolution dated 26.01.2020.
• The Gram Panchayat is ready and willing to pay the costs associated with overseeing and repairing the aforementioned work when it is approved and completed, the appellant's version claims. Such a decision was overwhelmingly adopted.
• Respondent no. 3 argued that this section was missing from the original resolution. In any case, the money were directed to the Gram Panchayat via the Zilla Parishad, which received them from the State Government. This was also the Zilla Parishad's position in their counter-affidavit.
• Respondent number three relied on the decision in Zelia M. Xavier Fernandes E. Gonsalves v. Joana Rodrigues & Ors. This Court separated Gulam Yasin's case because it did not involve a local self-government member being disqualified due to a direct or indirect economic advantage. 
• It was argued that Zelia M. Xavier's case was more relevant because it included Section 10 of the Goa Panchayat Raj Act, 1994, which was equivalent to Section 16(1)(i) of the same Act.

JUDGEMENT ANALYSIS:

• In Writ Petition No. 12526 of 2021, the appellant contested his disqualification and put forth several arguments before the High Court. 
• Firstly, he contended that the Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961 (referred to as 'the said Act') would not apply in this case as the repair work was being carried out by the Gram Panchayat, which is governed by a different act, namely, the Maharashtra Village Panchayats Act, 1959 (referred to as the 'VP Act'). 
• Secondly, he argued that even if the said Act were applicable, Section 16(1)(i) would only lead to disqualification if the work was undertaken by the Zilla Parishad itself, which was not the case here as the Zilla Parishad played a supervisory role. 
• Thirdly, the appellant asserted that he had no interest in his son's financial affairs as his son had an independent business and they did not live together. Finally, he claimed that the order of disqualification violated the principles of natural justice as he was not given an opportunity to be heard by the Divisional Commissioner.
• The High Court rejected the appellant's pleas as per a judgment on 17.11.2021. The court based its decision on the following findings:
• Section (16)(1)(i) of the Act is worded broadly and prohibits councilors from having any interest in any work done by the Zilla Parishad or any work ordered by the Zilla Parishad. In this case, the Zilla Parishad had ordered the Gram Panchayat to carry out road repair work under its supervision, and the funds had been disbursed by the Zilla Parishad. Therefore, the provision applied.
• The Supreme Court in the appeal found the Divisional Commissioner's conclusion plausible that the appellant's son did not live independently. The appellant's evidence of a ration card showing his son living with his grandmother was not conclusive proof of financial independence. Furthermore, the court opined that these facts were not within the purview of its writ jurisdiction.
• Further Supreme Court found that an opportunity of a hearing was not necessary as all relevant facts were already before the Divisional Commissioner. The court relied on the precedent set by Dharampal Satyapal Ltd. v. Deputy Commissioner of Central Excise, Gauhati & Ors. case, where it was held that a hearing was not necessary if it would be a mere formality and not affect the final conclusion of the authority. 
• The Divisional Commissioner had also adjourned the matter on multiple occasions at the appellant's request, and the appellant's written statement was treated as his submission. 
• The Supreme Court's decision on the said Act aims to promote local self-governance and entrust Zilla Parishads with executing works and schemes of the state government. 
• The Act disqualifies elected representatives to maintain a system of checks and balances, preventing undue influence, and ensuring transparency in local contracts. 
• The Supreme Court distinguishes between Gulam Yasin's case and Zelia M. Xavier's case, both concerning disqualification provisions. However, the court notes that both cases caution against interpreting such provisions narrowly. 
• The present case involves an elected representative's son being registered as a contractor soon after the election, and the only contract awarded to him flows funds to the Gram Panchayat from the Zilla Parishad, of which the elected representative is a member. 
• The Supreme court believes that probity in such financial transactions should be the rule rather than the exception, and the elected representative has a greater responsibility as a father to avoid any suspicion

CONCLUSION:

• The Supreme Court concludes that the unifying theme that may be drawn from the aforementioned judgments is that this Court has warned against reading disqualification rules in an unreasonably restrictive or narrow manner. 
• In both decisions, the Court stated that the beneficial objective of such regulations was to maintain the purity of administration in Municipal Committees. Turning to the facts of the current case, it is worth noting that the appellant's son was not even performing any existing contractual work in the past.
• The appellant's son was not registered as a contractor until shortly after his election.
• The sole contract he received was one in which funds were sent to the Gram Panchayat from the Zilla Parishad, of which the appellant was a member.
• This circumstance, in the opinion of the Supreme Court, raises more questions regarding the appellant's involvement in his son's business.The Dhule Zilla Parishad issued a work order to the Aarave Gram Panchayat for road maintenance on June 9, 2020.
• This document, as well as the Zilla Parishad's counter-affidavit, show that funds were transferred from the State Government to the Zilla Parishad, and then to the Gram Panchayat.
• According to the Supreme Court, the Zilla Parishad's issuing of the work order dated 09.06.2020 demonstrates the Zilla Parishad's supervisory and sanctioning role in the contract, which falls within the broad reach of Section 16(1)(i) of the aforementioned Act. 
• SC believes that honesty should be the norm rather than the exception in such financial interactions. As a father, the appellant had a higher responsibility to ensure that his son did not sign into a contract that is sanctioned by the Zilla Parishad itself