Jamnadas Modi Charity Trust vs Tinsukia Municipal Board and Others

Srivastava, J.—The Petitioner Jamnadas Modi charity Trust bas by this petition under Article 226 of the Constitution, challenged resolution No. 9 dated 1.4.69 and resolution dated 26.6.74. (sic) by the Tinsukia Municipal Board, for short ''the Board'' Respondent No. 1 in this petition. There are 25 other Respondents, of which Respondents 4 to 12 are the members of the Board, and 13 to 26 are concerned with the holdings which were the subject matter of the said resolution of the Board.

The Petitioner''s case, briefly, is that Petitioner Trust as the owner of the holding which comprised of land and (sic) thereon, which were occupied by Respondents 13 to 26 as (sic) Hiralal Chakrabarty (Respondent No. 3) was also a tenant one of the shops doing business as proprietor of M/s Ananda (sic)ndar. The Petitioner trust had been constituted by late Jamnadas Modi. It was however registered on 29.9.58 with the three trustees, who have, on behalf of the trust, filed this petition. The Petitioner''s contention is that the resolution No. 9 of 1.4.69 adopted in the Board, jeopardised the rights and interest of the Petitioner in that she ownership of the holding had been transferred to the tenants Respondents, in the Municipal records. On appeal, the said resolution had been suspended by the Additional Deputy Commissioner, Dibrugarh by order dated 6.12.71 holding that the Municipal Board had acted in excess of its jurisdiction in following the transfer of the holdings in the name of the tenants. The Government by order dated18.7.72 had directed the Board to correct its records after ascertaining the actual and ownership of the holdings. The Petitioner had submitted application before the Board stating all relevant facts in respect of the aforesaid holdings. The Petitioner farther alleged that the brief of the case for consideration of the committee of the Board was prepared end distributed by H.L. Chakravarty, proprietors of M/s Ananda Bhandar about the claim of ownership of the accommodation in their occupation among the members of the committee of the Board appointed to look into the matter. Meanwhile, the Petitioner had filed a Civil Suit regarding the said properties, and this fact was brought to the notice of the Board, that in view of the Civil Suit regarding the ownership and title in respect of the holdings in question, it would be prejudicial to the Petitioner, if the verdict of the board was given. I was prayed that the enquiry be postponed pending disposal of the suit, However, the Board passed the resolution dated 26.6.74 directing that separate holding of the houses in occupation of the 15 persons named in the resolution were to be made and their names mutated. Aggrieved, the Petitioner filed this petition.

The Respondent Board has resisted the petition stating that the action taken by the Board was correct, and that the Petitioner''s grievance was not justified. Meanwhile, the board had been superseded and three is now an Administrator appointed by the Government.

Some of the other Respondents have also filed counter affidavit and have stated that the Petitioner has no locus standi to file the petition, that the Respondents earlier were tenants, but in 1956 the shops were gutted by fire, that Smt. Noji Agarwallani who was the land lady agreed to the re-construction of the shop premises by them and the Respondents had constructed their shop houses. They were the owners of the shop building which had been constructed by them and, therefore, the Petitioner could not be the owner of the building. It is denied that the Respondent No. 3 Hiralal Chakrabarty bad anything to do with the resolution adopted by the Board, which was correct.

We have Sri J.P. Bhattacharjee, learned Counsel for the Petitioner, Sri S.C. Das, learned Counsel for the Respondent board and Sri N.M. Lahiri, learned Counsel for the other Respondents. Sri J.P. Bhattacharjee, learned Counsel for the Petitioner, has submitted that the Petitioner trust has locus standi to maintain the petition, that Hiralal Chakraborty being a tenant in one of the shope premises was a highly interested person and his preparation of the brief for the committee appointed by the Board to look into the matter and participation as Vice Chairman, only on this ground, vitiated the Board''s decision and consequently the impugned resolution must be quashed. Sri Bhattacharjee has also invited our attention to the definition of holding and land and provisions relating to property valuation records for the purposes of Municipal taxation in the Assam Municipal Act and has contended that the Petitioner was the owner of the holding, that the Respondents tenants could never be the owners of the holding and, at best could only be occupants of respective holding and consequently the decision of the Board as contained in, impugned resolution was beyond the authority of the Board, Sri N.M. Lahiri, learned Counsel for the Respondents, has strenuousely urged that there was no trust and in any case no validly constituted trust, that the trustees who have filed the petition were not the trustees, the Petitioner has nothing to do with the property in question, that the Petitioner trust was registered in 1985 whereas the shop house, which are the main bone of contention between the parties were made in 1956 and therefore the trust could not be the owner of the shop building, that the impugned resolution of 1974 was correct.

On careful consideration, we think that two main questions arise for consideration, firstly whether the Petitioner has locus stand to maintain the petition, and secondly whether the resolution dated 26.6.74 of the Board was vitiated because of participation of Respondent, No. 3 Hiralal Chakrabarty in the proceedings of the board and it may not be necessary for us to enter into the merits of the dispute relating to validity or otherwise of the trust or of the dispute between the parties regarding ownership of the holding of shop building.

In so far the first question is concerned, on consideration of the materials on record and the submissions for the parties, we are unable to accept the contention of the Respondents The Respondent Board itself has rightly or wrongly accepted the Petitioner trust''s existence in its own resolution dated 26.6.74 impugned in this petition. The said resolution (Annexure-XXIV) in its relevant portion reads:

It is directed that the records of the Municipality will be corrected by recording the name of Jamnadas Modi Charity Trust as the owner of the land.

The Respondents have not challenged the impugned order. In the impugned order, the right of the Petitioner as owner of the Board has been recognised. The case of the Petitioner before the Board was that the Petitioner was not only the owner of the land but also of the holdings. The Petitioner was party in the proceeding. In these view of the matter, it cannot be said that the Petitioner has no locus standi to maintain the petition. However, it is made clear that, as already stated, we are not entering into the merits of the dispute relating to validity or otherwise of the trust or of the dispute between the parties regarding ownership of the holding of shop building, and we have made the above observation for the limited purpose, namely, whether, the Petitioner has locus standi to maintain the petition.

So far as the next question is concerned, it is an admitted fact that Sri Hiralal Chakrabarty was a partner and had proprietory interest, in M/s. Ananda Bhandar and originally was the tenant. According to the Respondents, he had ceased to be a partner in the aforesaid shop, which according to Sri Lahiri" after 1970 belonged to his other brothers. It is also an admitted fact that Hiralal Chakrabarty had been a member of the Board at the time the earlier impugned resolution dated 1.4.69 had been adopted and also when the impugned resolution dated 26.6.74 was adopted. The latter resolution shows that he was present at the meeting as Vice Chairman. While, in view of the order made by the Additional Deputy Commissioner and the State Government, the impugned resolution dated 1.4.69 was suspended and the impugned subsequent resolution dated 26.6.74 bad, in fact, superseded the aforesaid earlier resolution, it is clear that Sri Hiralal Chakrabarty had also participated in the meeting of the board when the resolution dated 1.4.69 was adopted while he had interest in the shop in which the business in the name and style of M/s. Ananda Bhandar was done. It is also an admitted fact that Hiralal Chakrabarty had been member of the committee appointed to consider the matter. It is also on record that a brief for the committee had been prepared and circulated by Hiralal Chakrabarty. Even though he withdrew from the meeting of the said committee when it considered the matter, its report was later considered by the Board and accepted in the impugned resolution dated 26.6.74, when Hiralal Chakrabarty then Vice Chairman of the Board, was present.

Sri J.P. Bhattacharjee, the learned Counsel for the Petitioner, has submitted that the aforesaid impugned resolution was vitiated because of the participation of Hiralal Chakrabarty, and the impugned resolution was also factually incorrect inasmuch as the tenants could not have become owners of the holding, and consequently they could not have, been recorded as such in the Municipal Valuation Register. On the other hand, the learned Counsel for the Respondent has submitted that the fact was not disputed that in 1956 reconstruction of the shops had been made by the tenants, who were, therefore owner of the property so constructed even though they were not the owners of the land as said earlier, we do not consider it necessary to eater into the disputed facts, but so far as the contention of the Petitioner on the basis of participation of Hiralal Chakrabarty in the deliberations of the board is concerned, we are inclined to take the view that Hiralal Chakrabarty had very clearly personal interest in the property, even though it was only a part of the entire property, in which other persons Respondent too were similarly interested in its other parts.

Respondent No. 3 Hiralal Chakrabarty had prepared the brief for the meeting and even though he did not participate in the meeting of the meeting of the committee, when it considered the matter the fact remains that he had prepared the brief and further that when the impugned resolution was adopted on consideration of the report of the said committee by the Board on 26.6.74. He was present at the meeting.

According to the Petitioner he was the proprietor of M/S. Ananda Bhandar, whereas according to the Respondent he was earlier only a partner with his brother and had ceased to be even that, much before the subsequent impugned resolution was considered. There is no cogent material to substantiate the Respondents'' version for there is only the statement in the affidavit and nothing more. However, be that as it may, we are inclined to think that Hiralal Chakrabarty was personally interested in the matter either as proprietor of M/s. Ananda Bhandar (as the Petitioner says) or as partner with his brothers or even as a person interested in his owe brothers. The fact that there were other persons too, to our mind does not make any difference at all because their contention and interest was almost identical i.e. if the contention of one was accepted it was to be accepted for all others who were similarly placed vis-a-vis the Petitioner and the property.

In A.K. Kraipak and Others Vs. Union of India (UOI) and Others, participation, by a person who was himself a candidate and had interest in the deliberations of the selection committee as its member, even though he had withdrawn when his own case was considered, the Supreme Court held had vitiated the entire selection. It was laid down, that where there was conflict between interest and duty of such a member, there was reasonable likelihood of bias and the selection was vitiated.

In the aforesaid case, the selection so made bud been considered by the Home Ministry, and thereafter by the Union Public Service Commission, but the Court observed:

It was next urged by the learned Attorney-General that after all the selection board was only a recommendatory body. Its recommendations had first to be considered by the Home Ministry and thereafter by the U.P.S.C. The final recommendations were made by the U.P.S.C. Hence grievance of the Petitioners have no real basis, According to him while considering the validity of administrative actions taken, all that we have to see is whether the ultimate decision is just or not. We are unable to agree with the learned Attorney General that the recommendations made by the selection board were of little consequence. Looking at the composition of the board and the nature of the duties entrusted to it we have no doubt that its recommendations should have carried considerable weight with the U.P.S.C. If the decision of the selection board is held to have been vitiated, it is clear to our mind that the final recommendations made by the Commission must also be held to have vitiated. The recommendations made by the Union Public Service Commission cannot be disassociated from the selections made by the selection board which is the foundation for recommendations of the Union Public Service Commission. In this connection reference may be usefully made to the decision in 1967 2 QB 864 (Supra)

It was next urged by the learned Attorney General that the mere fact that one of the members of the Board was biased against some of the Petitioners cannot vitiate the entire proceedings. In this connection he invited our attention to the decision of this Court in Summer Chand Jain v. Union of India. Writ petn, No. 237 of 1966 Dt-4.5.1967 (SC). Therein the Court repelled the contention that the proceedings of a departmental promotion committee were vitiated as one of the members of that committee was favourably disposed towards one of the selected candidates. The question before the Court was whether the plea of mala, fides was established. The Court came to the conclusion that on the material on record it was unable to uphold that plea. In that case there was no question of any conflict between duty and interest nor any member of the departmental promotion committee was a judge in his own case. The only thing complained of was that one of the members of the promotion committee was favourably disposed towards one of the competitors. As mentioned earlier in this case we are essentially concerned with the question whether the decision taken by the board can be considered as having been taken fairly and justly.

In J. Mohapatra and Co. and Another Vs. State of Orissa and Another, while dealing with a question of bias in the matter of selection of books for school and College Libraries by the State environment on recommendation of Committees constituted by of which one of the authors who submitted books for selection as a member and was interested in the matter of selection of books, the Supreme Court has held that such person should of be member of committee.

The Court had observed:

no man shall be a Judge in his own cause, is a principle firmly established in law. Justice should not only be done but should manifestly be seen to be done. It is on this principle that the proceedings in Courts of Law are open to the public except in those cases where for special reason the law requires or authorises a bearing in camera. Justice can never be seen to be done if a man acts as a udge in his own cause or himself interested in its outcome.

(emphasis added)

This principle applies not only to judicial proceedings but also to quasi-judicial and administrative proceedings. The position in law has been succinctly stated in Halsbury''s Laws of England, Fourth Edition, Volume 1 para 68, as follows;

Disqualification for financial interest. There is a presumption that any direct financial interest, however small in the matter in Dispute disqualifies a person from adjudicating. Membership of a company, association or other organization which is financially interested may operate as a bar to adjudicating, as may a bare liability to costs where the decision itself will involve no pecuniary loss.

Further the Court observed in para 11:

It can be that the other members may not be influenced by the fact that the book which they are considering for approval was written by one of their members. Whether they were so influenced or not is, however, a matter impossible to determine. It is not. therefore, the actual bias in favour of the author-member that is material but the possibility of such, bias. All these considerations require that an author-member should not be a member of any such committee or sub-committee.

(emphasis added)

In Ashok Kumar Yadav and Others Vs. State of Haryana and Others, which was a case relating to selection for appointment by the Public Service Commission at which close relations of some members of PSC appeared for interview. The Court reiterated the principles earlier laid down after referring to A.K. Kraipak (supra).

This Court emphasised that it was not necessary to establish bias but it was sufficient to invalidate the selection process if it could be shown that there was reasonable likelihood of bias. The likelihood of bias may arise on account of proprietary interest or on account of personal reasons, such as, hostility to one, party or personal friendship or family relationship with the other, where reasonable likelihood of bias is alleged on the ground of relationship the question would always be as to how close is the degree of relationship or in other words, is the nearness of relationship so great as to give rise to reasonable apprehension of bias on the part of the authority making, the selection.

The Supreme Court had further observed:

We must straightaway point out that A.K. Kraipek case is a landmark in the development of administrative law and it has contributed in a large measure to the strengthening of the rule of law in this country. We would not like to whittle down in the slightest measure the vital principle laid down in this decision which has nourished the roots of the rule of law and injected justice and fair play into legality.

The Supreme Court has laid down that the principle (sic) "no man shall be Judge in its own cause" is also applicable to quasi judicial matters. As already stated, the existence reasonable likelihood of bias is sufficient to invalidate the impugned order. In the present case, the essential question is whether the board could be considered as having taken the impugned possession fairly and justly. The brief prepared by Hiralal Chakbrarty was against the Petitioner and even though he did not participate in the meeting of the committee he was very much resent as Vice Chairmen of the board in its meeting on 26.6.74 when the report of the Committee was considered and the impugned resolution was adopted by the Board. The Vice Chairman of the Board occupies a significant status in the meeting of the board. There was in our opinion clear conflict between interest and duty so far as Respondent No. 3 Hiralal Chakrabarty as concerned, and the Petitioner could legitimately entertain a (sic)sonable apprehension or fear that the Vide Chairman would maintain the opinion expressed by him in the brief and would (sic)es for acceptance of the report by the Board.

On careful consideration, we think that in the aforesaid acts and circumstances, there was every likelihood of bias in the adoption of the imugned resolution by the board and on his ground alone it was vitiated and therefore cannot be sustained.

For the aforesaid reasons, the petition succeeds and in allowed. The impugned resolution dated 26.6.74 is quashed. Costs on parties.