judgement:
Appeal No. 2210 of 1966.
Appeal by special leave from the judgment and order dated January 20, 1966 of the Assam and Nagaland High Court in Civil Rule No. 184 of 1964.
Naunit Lal, for the appellants.
D. N. Mukherjee, for respondent No. 1.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by special leave, is directed against the judgment, dated January 20, 1966 of the High Court of Assam and Nagaland, in Civil Rule No. 184 of 1964 by which the High Court quashed the inquiry proceedings conducted by the 4th respondent therein and the order, dated December 3, 1958 passed by the 3rd respondent dismissing the first respondent (hereinafter shortly referred to as the respondent) from service and the orders of the appellate authorities confirming the same.
89 The respondent joined the Assam Police Service as a constable in 1933 and was promoted to the post of Assistant Sub Inspector of Police in 1936.
He was then promoted as Sub Inspector of Police in 1944.
He was made permanent as Sub Inspector of .police in 1952.
In 1955, when the respondent was the Officer incharge of the Sorbhog Police Station, certain allegations appear to have been made against him in consequence of which a confidential enquiry was conducted by the Superintendent of Police, Anti Corruption Branch, who submitted a report to the Government on December 21, 1957.
In view of the complaints received against him, the respondent had already been placed under suspension with effect from July 24, 1957.
The Sub Divisional Police Officer, Barpeta, having been authorised under section 7 of the framed charges against the respondent on March 22, 1958.
It is not really necessary to enumerate the various items of charges, but they can be grouped under three broad heads.
Under charge No. 1, the respondent was alleged not to have taken cognisance of the items of cognizable offences reported to him and enumerated under that charge and, as such, he had neglected to perform his duty as a police officer in charge of a Police Station.
The second charge related to his having accumulated assets in his name as well as in .the name of his wife, far beyond his known sources of income.
Items of assets purchased by the respondent were again given in detail.
The third charge related to the respondent having concealed the items, enumerated therein, and given false statements regarding his assets in the declaration of assets submitted to the authorities on July 22, 1957.
The respondent submitted his explanation contravening the allegations made against him.
The enquiry was conducted by the Sub Divisional Police Officer, Barpeta (shortly referred to as the Enquiry Officer) and,.
as many as 14 witnesses were examined on the side of the prosecution.
The respondent cross examined those witnesses and he also examined four witnesses on his side.
The Enquiry Officer, by his report dated September 11, 1958 found the respondent guilty of the various charges, excepting regarding one item under the first charge.
He declined to place any reliance on the evidence adduced by the respondent and rejected the explanation furnished by him.
Ultimately, the Enquiry Officer, after finding the respondent guilty, submitted his report to the Superintendent of Police, Kamrup.
The Superintendent of Police, after referring to the charges framed against the respondent, the nature of the evidence adduced before the Enquiry Officer as well as the finding recorded by the said Officer, issued a memo, dated October 18, 1958 asking the respondent to submit his explanation.
A copy of the report of the Enquiry L 11 SupCI/70 7 90 Officer had already been given to the respondent.
Still the Superintendent of Police also sent a copy along with his memo.
On receipt of this memo, the respondent requested the Super intendent of Police, by his letter dated October 29, 1958 for being furnished with copies of the depositions of the prosecution and defence witnesses recorded by the Enquiry Officer to enable him to submit his explanation.
But this request was rejected by the Superintendent of Police stating that there was no rule for giving copies of statements.
The respondent submitted a fairly long explanation, dated November 21, 1958.
He disputed the correctness of the findings recorded against him by the Enquiry Officer and, ultimately stated that he was innocent and was not guilty of any offence.
He prayed that if in case he was found guilty, he should not be awarded the extreme punishment of dismissal from service.
But he ,added a request to the effect that he should be allowed to examine witnesses and submit documents and he should be exonerated by the Superintendent of Police after a perusal and consideration of the same.
On receipt of the explanation, the Superintendent of Police, by his order dated December 3, 1958 rejected the explanation of the respondent, accepted the findings of the Enquiry Officer and holding that the charges had been proved beyond all reasonable doubt, dismissed the respondent from service with immediate effect.
In the said order, the Superintendent of Police had referred to the charges framed against the respondent, the explanation furnished by him as well as the evidence recorded during the enquiry and the findings recorded by the Officer and the explanation sent by the respondent to the show cause notice and ultimately held that the charges had all been proved established and that the findings recorded by the Enquiry Officer were correct.
With regard to the request made by the respondent in his explanation dated November 21, 1958 the disciplinary authority stated that the respondent was afforded a full and fair opportunity to adduce all evidence that he desired to be placed before the Enquiry Officer and that opportunity had also been fully utilised by the respondent.
Therefore there was no further necessity for giving the respondent an opportunity to furnish documentary or oral evidence.
Regarding the punishment to be awarded, the Superintendent of Police stated that the charges proved against the respondent, who was a member of the Police force, were very serious and hence no leniency could be shown.
The respondent filed an appeal.
before the Deputy Inspector General of Police, Range, Assam, who, by his order dated May 11, 1960 dismissed the same.
91 The respondent thereupon filed a revision before the Inspector General of Police, Assam, which, again, was rejected on June 30, 1961.
A further revision, filed before the State Government was also dismissed on January 21, 1964.
On August 17, 1964 the respondent filed the writ petition in question, challenging the disciplinary proceedings initiated against him and the orders of dismissal passed on the basis of the enquiry conducted by the Enquiry Officer.
He had taken several grounds of attack as against the disciplinary proceedings.
He alleged that no reasonable opportunity was afforded to him during the enquiry proceedings.
During the enquiry, the Enquiry Officer was in frequent consultation and contact with the Deputy Superintendent of Police of the Anti Corruption Branch, regarding the charges which were being tried by him.
In particular, he referred to the record made by the Enquiry Officer in his proceedings that on July 14 and 15, 1958 he consulted the Deputy Superintendent of Police, Anti Corruption Branch about the proceedings and went through his records relating to the charges.
He averred that the nature of the consolation and the materials collected by the Enquiry Officer from the Deputy Superintendent, Anti Corruption Branch, were not made known to him and those materials had been taken into account in recording the findings against him.
He also alleged that copies of the report of the Anti Corruption Department, on the basis of which disciplinary proceedings had been initiated, had not been furnished to him nor were the copies of the evidence recorded during the enquiry given to him, though a specific request was made in that behalf.
On all these grounds, he sought to have all the orders quashed on the ground that there had been a gross violation of the principles of natural justice.
He took a further ground of attack that he had been appointed by the Inspector General of Police and the order of dismissal by a subordinate authority, viz., the Superintendent of Police, was illegal and void.
The allegations made by the respondent in the writ petition were controverted by the appellants.
They averred that the respondent was not entitled to a copy of the report of the Anti Corruption Branch, which was only in the nature of a preliminary investigation into the complaints received against the respondent to enable the disciplinary authority to consider whether disciplinary action against the respondent should be initiated or not.
It was further stated that the respondent was given a full and fair opportunity to participate in the enquiry and the witnesses were all examined in his presence and, apart from cross examining the prosecution witnesses, he had also adduced defence evidence on his behalf.
The State further averred that the mere circumstance that the Enquiry Officer consulted the Deputy Superintendent of 92 Police, Anti Corruption Branch, did not vitiate the enquiry proceedings as no information or material gathered therein had been used by the Enquiry Officer when he recorded findings against the respondent.
According to the State, the findings had been recorded on the basis of the evidence adduced during the actual enquiry.
It was also pointed out that the disciplinary authority, viz., the Superintendent of Police, after receipt of the report of the Enquiry Officer, had himself gone into the various items of evidence and, after a due consideration of the explanation submitted by the respondent, had agreed with the findings recorded by the Enquiry Officer and, after further consideration of the explanation submitted by the respondent to the show cause notice, ultimately passed the order of dismissal.
The appellate authority, the.
Deputy Inspector General of Police had also considered the matter in great detail and had upheld the order of the Superintendent of Police.
The State further averred that the appointing authority of persons like the respondent, was the Superintendent of Police and not the Inspector General of Police, and, as such, the order of dismissal passed by the former was perfectly legal.
On these grounds the State maintained that the enquiry proceedings were valid and legal and did not suffer from any infirmity.
Though, as pointed out above, several grounds of attack against the disciplinary proceedings initiated against the respondent were taken in the writ petition, it is seen from the judgment of the High Court under appeal that the order of dismissal was ultimately assailed only on two grounds : (1) The request of the respondent, made on October 29, 1958 after receipt of the second show cause notice dated October 18, 1958 issued by the Superintendent of Police, for supply of copies of the statements of the witnesses recorded at the enquiry, was arbitrarily rejected on the ground that there was no rule under which copies could be given and hence the respondent did not have any reasonable opportunity to show cause against the action proposed against him.
(2) The Enquiry Officer, during the course of the enquiry was keeping himself in regular contact with the Anti Corruption Branch and had utilised the material so gathered by him, behind the back of the respondent, against the respondent in the enquiry proceedings.
The respondent 's request for being furnished with a copy of the report of the Anti Corruption Branch had also been refused and therefore there had been a violation of the principles of natural justice in the conduct of the enquiry.
So far as the first ground of objection is concerned, the High Court did not accept the same as it was satisfied that the witnesses were all examined in the enquiry in the presence of the respondent 93 and that he had a full and fair opportunity of cross examining the prosecution witnesses and also of examining witnesses on his behalf.
Though the request of the respondent, made on October 29, 1958 for being furnished with copies of the evidence recorded during the enquiry was rejected, the High Court was of the view that as the respondent was fully aware of the nature of the evidence adduced in his presence during the enquiry, his grievance that he had no reasonable opportunity to show cause to the notice issued by the Superintendent of Police was unfounded.
So far as the second ground of objection was concerned, the High Court was impressed by the fact that the Enquiry proceedings showed that on July 14, 1958 and July 15, 1958 the Enquiry Officer consulted the Deputy Superintendent of Police of the Anti Corruption Branch about the proceedings and went through his records relating to those charges.
Based upon those entries found in the record of the enquiry proceedings, the High Court came to the conclusion that it was abundantly clear that the Enquiry Officer had discussion with the Anti Corruption Branch, the report of which had not been furnished to the respondent.
The High Court was further of the view that the Enquiry Officer had taken into consideration the materials gathered from the records of the Anti Corruption Branch.
It was the further view of the High Court that inasmuch as a copy of the report of the Anti Corruption Branch as well as the materials that were gathered by the Enquiry Officer during his consultation with that Branch had not been furnished to the respondent, the enquiry held under such circumstances was in clear violation of the principles of 'natural justice and hence the order dismissing the respondent from service was void.
In this view the High Court set aside the order of dismissal and allowed the writ petition, Mr. Naunit Lal, learned counsel for the appellant State, raised two contentions : (1) The report of the Enquiry Officer, dated September 11, 1958 clearly shows that the findings against the respondent have been recorded exclusively on the basis of the evidence adduced before him and there is nothing to show that the Enquiry Proceedings have been influenced by the consultations that the Enquiry Officer had with the Deputy Superintendent of Police, Anti Corruption Branch, on July 14 15, 1958.
(2) In any event, the disciplinary authority, viz., the Superintendent of Police, before accepting the findings recorded by the Enquiry Officer, has himself considered the entire evidence bearing upon the charges and the explanations offered by the respondent and it is after such a consideration that he has agreed with the findings of the Enquiry Officer regarding the guilt of the respondent.
The appellate authority, the Deputy Inspector General of Police, has also made a similar approach when disposing of the appeal 94 filed by the respondent and therefore there has been no violation of the principles of natural justice.
Mr. D. N. Mukherjee, learned counsel for the respondent, has urged that the High Court 's view that the enquiry proceed ings is vitiated inasmuch as the Enquiry Officer has acted upon the information collected from the Anti Corruption Branch is perfectly justified, especially in view of the record made by the Enquiry Officer himself.
Counsel pointed out that the examination of witnesses commenced on June 23, 1958 and concluded only on August 30, 1958.
It was during this period when the.
enquiry was actually going on that the Enquiry Officer, on July 14 and 15, 1958 consulted the Anti Corruption Branch about the matters connected with the enquiry proceedings and had gone through the records available with that Branch relating to the charges levelled against the respondent and which were being tried by the Enquiry Officer.
Counsel further urged that the respondent was not furnished with a copy of the report of the Anti Corruption Branch nor was he furnished with the information and materials that must have been gathered by the Enquiry Officer in his consultation with the Anti Corruption Branch and from their records which he inspected on July 14 and 15, 1958.
All these circumstances would clearly show that there had been a violation of the principles of natural justice in the conduct of the enquiry.
When once the enquiry proceedings were so vitiated,, the order of dismissal based upon the findings recorded at such an enquiry, has been rightly held by the High Court to be illegal and void.
We are of opinion that in the particular circumstances of this case, which will be indicated presently, the High Court has not made a proper approach when it came to the conclusion that there had been a violation of the principles of natural justice in the conduct of the enquiry, on the second ground of objection raised by the respondent.
The principle, in this regard, has been laid down by this Court in State of Mysore vs section section Makapur(1) "For a correct appreciation of the position, it is necessary to repeat what has often been said that tribunals exercising quasi judicial functions are not courts and that therefore they are not bound to follow the procedure prescribed for trial of actions in Courts nor are they bound by strict rules of evidence.
They can, unlike Courts, obtain all information material for the points under enquiry from all sources, and through all channels, without being fettered by rules and procedure, which govern proceedings in Court.
The only obligation which the law casts on them is that they should not (1) ; , 947.
95 act on any information which they may receive unless they put it to the party against whom it is to be used and give him a fair opportunity to explain it.
What is a fair opportunity must depend on the facts and circumstances of each case but where such an opportunity had been given, the proceedings are not open to attack on the ground that the enquiry was not conducted in accordance with the procedure followed in courts.
" It has been further laid down by this Court in The Collector of Central Excise and Land Customs vs Sanawarmal Purohit (1) that: "A quasi judicial authority would be acting contrary to the rules of natural justice if it acts upon information collected by it which has not been disclosed to the party concerned and in respect of which full opportunity of meeting the inferences which arise out of it has not been given.
" The above two extracts, it will be noted, emphasize that rules of natural justice can be considered to have been violated only if the authority concerned acts upon information collected by it and the said information has not been disclosed to the party against whom the material has been used.
In paragraph 10 of his writ petition the respondent had alleged that the Enquiry Officer had, during the course of the enquiry, maintained regular correspondence and contact with the Deputy Superintendent of Police, Anti Corruption Branch, Gauhati.
In para 12 he had further alleged that the Enquiry Officer started recording statements of witnesses on and from July 23, 1958 and after recording the statements of thirteen witnesses, came to Gauhati on July 14, 1958 and had consultation with the Deputy Superintendent, Anti Corruption Branch, about the proceedings against the respondent and also went through the record of the Anti Corruption Branch on July 15, 1958.
The request of the respondent for being furnished with a copy of the report of the Anti Corruption Branch was not complied with.
He further alleged that the enquiry proceedings show that the enquiry officer had taken into consideration, against the respondent, the report of the Anti Corruption Branch.
In the counter affidavit on behalf of the State, filed in the writ petition, it was contended in para 10 that the report of the Anti Corruption Branch being a confidential document and not having been used as an Exhibit in the disciplinary proceedings, the respondent was not entitled to a copy of the same.
It was further averred in para 11 that the findings of the Enquiry Officer, (1) Civil Appeals Nos.
1362 1363/1967 decided on 16 2 1968.
96 Barpeta, recorded against the respondent were based on the evidence recorded during the enquiry and not on any consultation with the Anti Corruption Branch officers.
It was further averred in Para 13 that as the report of the Anti Corruption Branch was not exhibited in the disciplinary proceedings, there was no question of the Enquiry Officer taking the said report into consideration and, as a matter of fact also the report was not taken into consideration by the Enquiry Officer and the findings against the respondent had been recorded on the basis of the evidence recorded by the Enquiry Officer and no part of it is based on the report of the Anti Corruption Branch.
From the above averments it will be noted that the respon dent no doubt made a grievance of the consultation stated to have taken place during the midst of the enquiry between the Enquiry Officer and the Anti Corruption Branch.
But his specific averment was that the findings against him recorded in the enquiry were based upon the report of the Anti Corruption Branch the copy of which was not furnished to him.
The State, on the other hand, did not controvert the fact that the Enquiry Officer did have consultation with the Anti Corruption Branch on the dates mentioned in the record of proceedings.
But, according to the State, no part of any information contained in that report had been taken into account in the enquiry proceedings and that on the other hand the report of the Enquiry Officer was exclusively based on the evidence adduced during the enquiry.
A perusal of the report of the Enquiry Officer, in the pro ceedings before us, shows that there is absolutely no reference to any data or material, if any, collected by him when he consulted the Deputy Superintendent of Police, Anti Corruption Branch on July 14 and 15, 1958.
But, we have to state that it is highly improper for an Enquiry Officer during the conduct of an enquiry to attempt to collect any materials from outside sources and not make that information, so collected, available to the delinquent officer and further make use of.
the same in the enquiry proceedings.
There may also be cases where a very clever and astute enquiry officer may collect outside information behind the back of the delinquent officer and, without any apparent reference to the information so collected, may have been influenced in the conclusion recorded by him against the delinquent officer concerned.
, If it is established that the material behind the back of the delinquent officer has been collected during the enquiry and such material has been relied on by the enquiry officer, without its having been disclosed to the delinquent officer, it can be stated that the enquiry proceedings are vitiated.
It was, under such circumstances, that this Court, in Executive Committee of U.P. State 97 Warehousing Corporation vs Chandra Kiran Tyagi(1) accepted the view of the High Court that the enquiry proceedings were vitiated by the enquiry officer collecting information from outside sources and utilising the same in his findings recorded against the delinquent officer without disclosing that information to the accused officer.
It was again, under similar circumstances that this Court in Sanawarmal Purohit 's Case (2 ) upheld the order of the High Court holding the enquiry proceedings to be contrary to the principles of natural justice when the enquiry officer had collected information from third parties and acted upon the information so collected, without disclosing the same to the accused.
If the disciplinary authority himself had been also the enquiry officer and, during the course of the enquiry he had collected materials behind the back of the accused and used such materials without disclosing the same to the officer concerned, the position will be still worse and the mere fact that such an order passed by the disciplinary authority had even been confirmed by an appel late authority without anything more, will not alter the position in favour of the department.
But, in the case before us, it is no doubt true that the enquiry officer has made a note that he consulted the Deputy Superintendent of Police, Anti Corruption Branch on July 14 and 15, 1958 and perused the records relating to the charges.
But the enquiry report does not show that materials, if any, collected by the Enquiry Officer on those two days, have been utilised against the respondent.
We do not find any warrant for the High Court 's view that : "there is no doubt that the S.D.P.O. took into consideration the materials found by the Anti Corruption Branch.
" On the other hand, a perusal of the report shows that each and every item of charge had been discussed with reference to the evidence bearing on the same and findings recorded on the basis of such evidence.
Therefore, it cannot be stated that the Enquiry Officer in this case has taken into account materials if any that he may have collected from the Anti Corruption Branch.
Nor is there anything to show that, in the discussion contained in his report, the Enquiry Officer was in any way influenced by the consultation that he had with the Anti Corruption Branch.
If so, it cannot be held that the enquiry proceedings are violative of the principles of natural justice.
The fact that a copy of the report of the Superintendent of Police, Anti Corruption Branch, dated December 21, 1957 was (1) C. A. No. 559 of 1967, decided on 8 9 1969.
(2) Civil Appeals Nos.
1362 1363/67 decided on 16 2 1968.
98 not furnished to the respondent is, in our opinion,, of no consequence in relation to the actual enquiry conducted against the respondent.
That report was necessitated in view of the complaints received against the respondent and the enquiry made by the Anti Corruption Branch was only for the purpose of enabling the Government to consider whether disciplinary proceedings should be initiated against the respondent.
On receipt of the report, the Government felt that disciplinary proceedings will have to be initiated against the respondent and that is how the enquiry proceedings were commenced.
The validity of the enquiry will have to be decided only by the manner in which it has been conducted.
So far as that is concerned, it is clear from the record that the respondent had a full opportunity of participating in the enquiry and adducing evidence on behalf of himself and of cross examining the witnesses for the prosecution and the entire evidence was recorded in his presence.
The non furnishing of the copy of the report of the Superintendent of Police, Anti Corruption Branch, does not vitiate the enquiry proceedings.
Over and above these circumstances, it is also to be seen that the enquiry officer was not the disciplinary authority competent to impose the punishment against the respondent.
The competent authority is the Superintendent of Police.
The show cause notice, issued on October 18, 1958 as well as the order of dismissal passed by the Superintendent of Police, dated December 3, 1958 clearly show that the said officer has independently gone into the evidence on record in respect of the charges for which the respondent was tried and has, after taking into account the explanations furnished by him, independently come to the conclusion that the respondent is guilty.
Similarly, the Deputy Inspector General of Police, Range Assam, before whom the respondent filed an appeal has also very elaborately and in considerable detail discussed the entire evidence on record and has agreed with the conclusions regarding the guilt of the respondent.
We have already held that there is no violation of the rules of natural justice in the enquiry proceedings.
Even assuming that there was any defect in the said enquiry proceedings, inasmuch as the punishing authority and the appellate authority, the Superintendent of Police and the Deputy Inspector General of Police, respectively, have independently considered the matter and found the respondent guilty on the evidence on record, it must be held that in the circumstances of this case there has been no violation of the principles of natural justice when the order of dismissal was passed.
We may state that the respondent, when he sent his explanation on November 21, 1958 to the show cause notice issued by the Superintendent of Police on October 18, 1958 did not make any 99 grievance regarding the consultation by the Enquiry Officer with the Anti Corruption Branch on July 14 and 15, 1958.
For the first time the respondent took this ground of objection to the enquiry proceedings only when he filed the appeal before the Deputy Inspector General of Police and the latter has quite rightly rejected this objection holding that any consultation that the Enquiry Officer had with the Anti Corruption Branch has not affected the case in any way since the findings had been recorded against the respondent entirely on the evidence adduced during the enquiry.
The High Court has not considered the various aspects, referred to above.
Both the contentions of the learned counsel for the appellant, in the circumstances, will have to be accepted and, in consequence, it must be held that the view of the High Court that the order of dismissal is illegal and void is erroneous.
Mr. Mukherjee, learned counsel for the respondent, raised the contention that the materials on record disclose that the respondent was appointed permanent Sub Inspector by the Inspector General of Police whereas the order of dismissal has been passed by a subordinate authority, the Superintendent of Police and therefore the order of dismissal is illegal and void.
Normally, this contention should not be entertained, because it is stated by the High Court that apart from the two points considered by it, no other grounds of objection were raised by the respondent against the order of dismissal.
But, if really the records support this contention of Mr. Mukherjee, that will make the order of dismissal illegal and so we permitted the counsel to raise this contention.
But, after a reference to the material on record, we are satisfied that this contention is devoid of merit.
The respondent, no doubt, averred in his writ petition that he, was appointed to the substanive post of Sub Inspector of Police by order of the Inspector General of Police, Assam, and therefore the order of dismissal passed by a subordinate authority, viz., the: Superintendent of Police, is illegal and ultra vires.
In the counter affidavit filed before the High Court, the State maintained that the Superintendent of Police was the appointing authority of a Sub Inspector of Police and it placed reliance upon rule 66, as corrected by the Correction Slip No. 150, dated June 1, 1938 of the Assam Police Manual, The State further categorically stated that the Superintendent of Police is the appointing and punishing authority of the Sub Inspector of Police and the respondent has been properly and validly dismissed by the competent authority.
Rule 66, referred to above, clearly supports the '.
contention of the State in this regard.
Annexure X to the counter affidavit of the State in the High Court is the order of the Inspector General of Police, Assam,, 100 dated December 16, 1952.
That refers to the selection for confirmation as Sub Inspectors of.
Police of the persons mentioned therein.
The respondent is serial number 5 in the said order.
Note No. 2 to this order specifically directs the Superintendents of Police to send to the Inspector General of Police, Assam, copies of confirmation orders issued by them in respect of the officers.
In accordance with the orders of the, Inspector General of Police dated December 16, 1952 the Superintendent of Police passed an order D.O. No. 3777 dated December 31, 1952 that among other officers, the respondent, who was officiating as Sub Inspector, has been selected for confirmation as Sub Inspector of Police (Unarmed Branch) with effect from September 1, 1951 and that he has been confirmed as Sub Inspector of Police (Unarmed Branch) from the same date and absorbed against an existing substantive vacancy in the district.
These orders clearly show that the respondent was appointed permanent Sub Inspector of Police not by the Inspector General of Police but by the Superintendent of Police.
Obviously because of these records, such a contention, as is now taken on behalf of the respondent, was not raised before the High Court.
The appeal is accordingly allowed and the judgment of the High Court set aside.
The first respondent will pay the costs of the appeal to the appellants.
G.C. Appeal allowed.

summary/full:
The first respondent was at the relevant time a Sub Inspector in the service of the State of Assam.
In regard to certain allegations a confidential enquiry was held against him by the Superintendent of Police Anti Corruption Branch who submitted his report to the Government in 1957.
A departmental enquiry was thereafter held.
On receipt of the enquiry officer 's report, the Superintendent of Police asked for the respondent 's explanation and thereafter in December 1958 ordered his dismissal.
The respondent 's appeal before the Deputy Inspector General of Police and his revisions before the Inspector General and the State Government failed.
Thereupon the respondent filed a writ petition before the High Court challenging the validity of the departmental enquiry and the order of dismissal.
The High Court allowed the petition on the ground that the enquiry officer had during the course of the enquiry consulted the Superintendent of Police Anti Corruption Branch and had taken into consideration the materials gathered from the records of the Anti Corruption Branch without making the report of that Branch and the said material available to the respondent.
The State appealed to this Court by special leave contending that : (i) the enquiry officer was not influenced by his consultations with the Superintendent of Police Anti Corruption Branch and (ii) in any event the Superintendent of Police before ordering the respondent 's dismissal had himself considered the entire evidence.
It was submitted that the appellate authority, i.e., the Deputy Inspector General of Police had also made a similar approach while considering the respondent 's appeal and therefore there had been no denial of natural justice.
On behalf of the respondent it was urged that the orders relating to the appointment of the respondent as permanent Sub Inspector had been passed by the Inspector General of Police and therefore the Superintendent of Police was not competent to order his dismissal.
HELD : (i) It is highly improper for an enquiry officer during the conduct of an enquiry to attempt to collect any materials from outside sources and not make that information so collected, available to the delinquent officer and further make use of the same in the enquiry proceedings.
There may also be cases where a very clever and astute enquiry officer may collect outside information behind the back of the delinquent officer and, without any apparent reference to the information so collected, may have been influenced in the conclusions recorded by him against the delinquent officer concerned.
If it is established that any material had been collected during the enquiry behind the back of the delinquent officer and such material had been relied on by the enquiry officer, without being disclosed to the delinquent officer, it can be stated that the enquiry proceedings are vitiated.
[96 F H] 88 In the present case however there was no warrant for the High Court 's view that the enquiry officer took into consideration the materials found by the Anti Corruption Branch.
On the other hand, a perusal of the report showed that each and every item of charge had been discussed with reference to the evidence bearing on the same and findings recorded on the basis of such evidence.
Therefore it could not be stated that the enquiry officer in this case had taken into account the materials if any that he may have collected from the Anti Corruption Branch.
Nor was there anything to show, in the discussion contained in his report that the enquiry officer was in any way influenced by the consultations that he had with the Anti Corruption Branch.
If so, it could not be held that the enquiry proceedings were violative of the principles of natural justice.[97 E G] The fact that a copy of the report, of the Anti Corruption Branch was not furnished to the respondent was of no consequence in relation to the actual enquiry conducted against the respondent inasmuch as he had a full opportunity to cross examine the witnesses for the prosecution and of adducing evidence in his favour.
Even assuming that there was some defect in the enquiry proceedings, there was no violation of principles of natural justice in the present case because the punishing authority, the Superintendent of Police, and the appellate authority, the Deputy Inspector General of Police had independently considered the matter and found the respondent guilty on the evidence on record.
[98 A E] State of Mysore vs section section Makapur, ; , The Collector of Central Excise and Land Customs vs Sanawarmal Purhoit, Civil Appeals Nos. 1362 1363 of 1967 decided on 16 2 1968, applied.
Executive Committee of U.P. State Warehousing Corporation vs Chandra Kiran Tyagi, Civil Appeal No. 559 of 1967, decided on 8 9 1969, distinguished.
(iii) In view of Rule 66 of Part 11 of the Assam Police Manual and in view of the evidence on record the contention of the respondent that the Superintendent of Police is not the appointing authority for a Sub Inspector, could not be accepted.
[99 F H; 100 C D]


judgement:
Appeals Nos.
664 to 669 of 1967.
Appeals from the judgment and order dated March 22, 1962, July 23, 1962, July 24, 1962, July 12, 1963 and August 14, 1963 in Writ Petitions Nos.
1077 of 1959, 19 and 739 of 1960, 157 of 1961, 970 of 1962 and 594 of 1963.
Jagadish Swarup, Solicitor General, section K. Aiyar and R. N. Sachthey, for the appellants (in all the appeals).
section V. Gupte, A. K. Varma, J. B. Dadachanji, 0.
C. Mathur and Ravinder Narain, for the respondent.
(in C. A. Nos. 664 and 668 of 1967).
O. P. Rana, for the intervener for the State of U.P. M. R. K. Pillai, for the intervener for the State of Kerala.
B. Sen, Santosh Chatterjee and G. section Chatterjee for Sukumar Bose, for the State of West Bengal.
section Govind Swaminathan, Advocate General, Tamil Nadu, A. V. Rangam and M. Subramaniam, for the State of Tamil Nadu.
Lal Narayan Sinha, Advocate General, Bihar, D. P. Singh nad V. J. Francis, for the intervener for the State of Bihar.
K. A. Chitaley, Advocate General, State of Madhya Pradesh, M.N. Shroff and I. N. Shroff, for the intervener for the State of Madhya Pradesh.
E. section Venkataramiah, Advocate General, Mysore and section P. Nayar, for the intervener for the State of Mysore.
J. C. Medhi, Advocate General, Assam and Naunit Lal, for the intervener for the State of Assam.
The Judgment of the Court was delivered by Hidayatullah, C.J.
These six appeals by certificate under article 132(1) of the Constitution are filed against the decision of the High Court of Mysore, declaring that Parliament had no power to legislate with respect to taxes on gift of lands and buildings.
The High Court passed a detailed judgment on two of the petitions by which the competence of Parliament was challenged and followed its own decision in the other four cases.
It is not necessary to give the facts of the six petitions in the High Court.
As illustrative of the facts involved we may mention on W.P. No. 1077 of 1959.
In that case a certain D. H. Nazareth, owner of a coffee plantation, 197 made a gift by registered deed, January 22, 1958, of a coffee plantation and other properties in favour of his four sons.
The market value of the property was Rs. 3,74,080 and the coffee plantation accounted for Rs. 3,24,700.
Gift tax of Rs. 35,612/ was demanded.
If the coffee _plantation was left out of consideration the tax was liable to be reduced by Rs. 3,4,036.
The authority to charge gift tax on the gift of the coffee plantation was challenged and the right of Parliament to impose a gift tax on lands and buildings questioned.
In some of the other cases agricultural or paddy lands or buildings were the subjects of gifts and they were similarly taxed and the tax questioned.
The High Court held that, entry 49 of the State List read with entry 18 of the same list reserved the power to tax lands and buildings to the Legislature of the States and Parliament could not, therefore, use the residuary power conferred by entry 97 of the Union list.
This decision is challenged before us.
The Gift Tax Act was passed in 1958 and subjected gifts made in the year ending March 31, 1958 to tax.
The Act contained the usual exempted limits and other exemptions.
We need not concern ourselves with them here.
We are only concerned with the validity of parliamentary legislation imposing gift tax at all.
To consider the objection to the Gift Tax Act which was sus tained by the High Court a few general principles may be borne in mind.
Under article 245 Parliament makes laws for the whole or any part of the territory of India and the Legislatures of the States for the whole or part of their respective States.
The subject matter of laws are set out in three lists in the Seventh Schedule.
List I (usually referred to as the Union List) enumerates topics of legislation in respect to which Parliament has exclusive power to make laws and List II (usually referred to as the State List) enumerates topics of legislation in respect to which the State Legislatures have exclusive power to make laws.
List III (usually referred to as the Concurrent List) contains topics in respect to which both Parliament and Legislature of a State have power to make laws.
Inconsistency between laws made by Parliament and those made by the Legislatures of the State, both acting under the Concurrent List, is resolved by making Parliamentary law to prevail over the law made by the State Legislature.
So long as the Parliamentary law continues, the State law remains inoperative but becomes operative once the Parliamentary law, throwing it into shadow, is removed.
Then there is the declaration in article 248 of the residuary powers of legislation.
Parliament has exclusive power to make any law in respect to any matter not enumerated in the Concurrent List or State List and this power includes the power of mak ing any law imposing a tax not mentioned in either of those lists.
198 For this purpose, and to avoid any doubts, an entry has also been included in the Union List to the following effect: "97.
Any other matter not enumerated in List II or List III including any tax not mentioned in either of those lists".
It will, therefore, be seen that the sovereignty of Parliament and the Legislatures is a sovereignty of enumerated entries, but within the ambit of an entry, the exercise of power is as plenary as any legislature can possess, subject, of course, to the limitations arising from the Fundamental Rights.
The entries themselves do not follow any logical classification or dichotomy.
As was said in State of Rajasthan vs section Chawla and another(1) the entries in the list must be regarded as enumeratio simplex of broad categories.
Since they are likely to overlap occasionally, it is usual to examine the pith and substance of legislation with a view to determining to which entry they can be substantially related, a slight connection with another entry in another list notwithstanding.
Therefore, to find out whether a piece of legislation falls within any entry its true nature and character must be in respect to that particular entry.
The entries must of course receive a large and liberal interpretation because the few words of the entry are intended to confer vast and plenary _powers.
If, however, no entry in any of the three lists covers it, then it must be regarded as a matter not enumerated in any of the three lists.
Then it belongs exclusively to Parliament under entry 97 of the Union List as a topic of legislation.
The Gift Tax Act was enacted by Parliament and it is admit ted that no entry in the Union List or the Concurrent List mentions such a tax.
Therefore, Parliament purported to use its powers derived from entry 97 of the Union List read with article 248 of the Constitution.
This power admittedly could not be invoked if the subject of taxes on gifts could be said to be comprehended in any entry in the State List.
The High Court has accepted the contention of the tax payers that it is so comprehended in entries 18 and 49 of the State List.
Those entries read 18.
Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization." "49.
Taxes on lands and buildings.
" The argument is that by entry 18, 'land ' of all description is made subject to legislation in the States and by entry 49 taxes of (1) [1959] Supp. 1 S.C.R. 904.
199 whatever description on lands in that large sense and buildings generally fall also in the jurisdiction of the State.
Reference is made to entries 45, 46, 47 and 48 of the State List in which certain taxes are to be imposed on land and agricultural land or income from agriculture exclusively by the States in contrast with entries 82, 86, 87 and 88 where the taxes are imposed on properties other than agricultural land or income from agriculture.
It is submitted, therefore, that the general scheme of division of taxing and other entries by which land particularly agricultural land and income therefrom is reserved for the States shows that taxes on lands and buildings read liberally must also cover taxes in respect of gifts of land particularly agricultural land and buildings.
If the entry so read can be reasonably said to include the tax, then there can be no question of recourse to the residuary powers of Parliament.
The matter is not res integra and however attractive the argument, it cannot be accepted.
Many High Courts in India have considered this matter before the Supreme Court decided it.
The Mysore view was not followed in section Dhandapani vs Addl.
Gift Tax Officer, Cuddalore(1) (Madras High Court); Shyam Sunder vs Gift Tax Officer(2) (disapproved on another point in the Supreme Court).
A contrary view was earlier also expressed in Jupadi Sesharatnam vs Gift Tax Officer, Palacole(3) (Andhra Pradesh High Court) and Joseph vs Gift Tax Officer (4) (Kerala High Court).
In fact the judgment under appeal stands alone.
The subject of entry 49 of the State List in relation to imposition of Wealth Tax came up for consideration in Sudhir Chandra Nawn vs Wealth Tax Officer, Calcutta & ors.(5) and the view of the High Court on the construction of this entry was affirmed.
Although the judgment ' under appeal was not referred to expressly the result is that it must be taken to be impliedly overruled.
In view of the decision of this Court it is not necessary to deal with the matter except briefly.
The Constitution divides the topics of legislation into three broad categories : (a) entries enabling laws to be made, (b) entries enabling taxes to be imposed, and (c) entries enabling fees and stamp duties to be collected.
It is not intended that every entry gives a right to levy a tax.
The taxes are separately mentioned and in fact contain the whole of the power of taxation.
Unless a tax is specifically mentioned it cannot be imposed except by Parliament in the exercise of its residuary powers already mentioned.
Therefore, entry 18 of the State List does not confer additional power (1) (3) (5) (2) A.I.R. 1967 All. 19.
(4) 200 of taxation.
At the most fees can be levied in respect of the items mentioned in that entry, vide entry 66 of the same list.
Nor ,is it possible to read a clear cut division of agricultural land in favour of the States although the intention is to put land in most of its aspects in the State List But however wide that entry, it cannot still authorise a tax not expressly mentioned.
Therefore, either the pith and substance of the Gift Tax Act falls within entry 49 of State List or it does not.
If it does, then Parliament will have no power to levy the tax even under the residuary powers.
If it does not, then Parliament must undoubtedly possess that power under article 248 and entry 97 of the Union List.
The pith and 'substance of Gift Tax Act is to place the tax on the gift of property which may include land and buildings.
It is not a tax imposed directly upon lands and buildings but is a tax upon the value of the total gifts made, in a year which is above the exempted limit.
There is no tax upon lands or buildings as units of taxation.
Indeed the lands and buildings are valued to find out the total amount of the gift and what is taxed is the gift.
The value of the lands and buildings is only the measure of the value of the gift.
A gift tax is thus not a tax on lands and buildings as such (which is a tax resting upon general ownership of lands and buildings) but is a levy upon a particular use, which is transmission of title by gift.
The two are not the same thing and the incidence of the tax is not the same.
Since entry 49 of the State List contemplates a tax directly levied by reason of the general ownership of lands and buildings, it cannot include the gift tax as levied by Parliament.
There being no other entry which covers a gift tax, the residuary powers of Parliament could be exercised to enact a law.
The appeals must, therefore, be allowed but there shall be no order about costs throughout.
The appeal 666/67 however abates as the sole respondent died.
V.P.S. Appeals allowed.

dataset_name: IN-Abs

summary/full:
Gift tax was levied under the Gift Tax Act, 1958, on gifts, of coffee plantations, paddy and other agricultural lands and buildings, made by the respondents.
The Gift Tax Act was enacted by Parliament but there is no entry in the Union or Concurrent Lists mentioning such a tax.
The High Court held that Parliament was not competent to enact a law impos ing a gift tax on lands and buildings, because, entries 18 and 49 of the State List reserved the power to State Legislatures.
On appeal to this Court.
HELD : The Constitution divides the topics of legislation into three broad categories : (a) entRies enabling laws to be made, (b) entries enabling taxes to be imposed, and (c) entries enabling fees and stamp duties to be collected.
The taxes are separately mentioned and contain the whole of the power of taxation, except entry 97 of the Union List under which, Parliament ha, , exclusive power to make a law in respect of any matter not enumerated in the Concurrent or State Lists and the power includes the power of making a law imposing a tax not mentioned in either of the Lists.
[199 G H] Entry 18 of the State List dealing with 'land ', though very wide, does not therefore confer any power of taxation and cannot authorise a tax not expressly mentioned.[199 H] Entry 49 of the State List contemplates a tax directly levied bY reason of the general ownership of lands and buildings.
But the pith and substance of the Gift Tax Act,is to place the tax on the gift of property which may include land, and buildings.
It is not a tax imposed directly upon lands and buildings but is a tax upon the value of the total gifts made in a year which is above the exempted limit.
The lands and buildings are valued only as a measure of the value of the gift and what is taxed is the gift.
A gift tax is thus not a tax on lands and buildings as such but is a levy upon a particular use, namely, the transmission of title by gift.
[200 A E] There being no other entry in the State List which might cover a gift tax, the residuary powers of Parliament under article 248, and entry 97 of the Union List, could be exercised by Parliament to enact the law.
[200 E F] Sudhir Chandra Nawn vs Wealth Tax Officer, Calcutta & Ors. followed.
section Dhandapani vs Addl.
Gift Tax Officer, Cuddalore, , Shyam Sunder vs Gift Tax Officer, A.I.R. 1967 All. 19, Jupadi Sesharatnam vs Gift Tax officer, Palacole, and Joseph vs Gift Tax, Officer, , approved.


judgement:
Appeals Nos.
2525 and 2526 of 1969.
Appeals from the judgment and decree dated October 8, 1969 of the Madras High Court in Writ Appeals Nos.
296 and 297 of 1969.
section Govind Swaminathan, Advocate General for the State of Tamil Nadu, section Mohan and A. V. Rangam, for the appellants (in both the appeals).
D. Munikanaiah and G. section Rama Rao, for the respondent (in C. A. No. 2525/1969).
D. Munikanaiah and G. Narasimhulu, for the respondents (in C. A. No. 2526/1969).
The Judgment of the Court was delivered by Grover, J.
These appeals from a judgment of the Madras High Court involve the true ambit, scope and content of Section 72 of the Madras Co operative Societies Act, 1961 (hereinafter called the Act).
229 The facts may be briefly stated.
On 4th January, 1969 the Joint Registrar of Co operative Societies issued a Notice u/s 72 of the Act to the Committee of the North Arcot District Cooperative Supply and Marketing Society Ltd. It was stated in the notice that the Committee had not been functioning properly for sometime past.
Charges were mentioned in detail and the Committee was called upon to make a representation against the proposal to dissolve it in view of the defects and irregularities mentioned in the notice.
After examining the representation 'which was quite lengthy and detailed, the Registrar recorded an Order on 11th April, 1969 dealing with each charge and holding that the Committee had not been functioning properly and had failed to perform its duties and discharge its responsibilities as required under the Act.
The Committee was ordered to be suspended for a period of one year from.
12th April, 1969 to 11th April, 1970.
The Deputy Registrar of Cooperative Societies was appointed to work as a Special Officer and to manage its affairs for that period.
The matter was taken in appeal to the Registrar by the Committee.
The Registrar affirmed the Order of the Joint Registrar.
Thereafter the President and the Director of the Cooperative Society moved the High Court under Article 226 of the Constitution.
A number of points were taken in the writ petition but the main emphasis was laid on the proper procedure not having been followed under sections 64, 65 and 66 of the Act before taking action u/s 72.
The learned single Judge of the High Court allowed the writ petition which had been filed by the President and the Director of the Co operative Society.
The learned Judge was not satisfied that there was any justification for the action taken by the Joint Registrar in the matter of supersession of the Committee.
On appeals having been taken before a Division Bench under clause 15 of the Letters Patent the case was referred to a full Bench.
The full Bench based its decision largely on the view that the procedure laid down, in sections 64, 65 and 66 must be followed before any order could be made by the Joint Registrar or the Registrar u/s 72.
We may refer to the following portion of the judgment; "Sections 64, 65 and 66, which, are the statutory procedural stems which interdict the apparently arbitrary course of action which a Registrar could undertake to interfere with the affairs of a society, its members or officers, provide a sufficient help to tighten up such indiscriminate and unguided exercise of the powers by the Registrar, when it becomes necessary.
In each of those sections it is incumbent on the Registrar to give opportunity to the member concerned officer concerned or the Society to rectify the defects" . 230 "In our view and under the scheme of the Act, the condition precedent to the exercise of jurisdiction by the Registrar under one or the other of the sections considered above and in particular Section 72 is to secure an audit memorandum or a report of inspection or inquiry, so that he may be provided with the necessary material 'to act thereon.
Unless such a fact finding authority has provided the Registrar with the hypothesis to act and , ultimately supersede an elected body, the impugned ,order of supersession will undoubtedly be tainted with the absence of a jurisdictional basis.
Whether such a basis exists, is subject to review by this Court in exercise of its jurisdiction under Article 226 of the Constitution of India".
The full Bench affirmed the decision of the learned single Judge.
The points which have been argued before us and which have to be determined are : (i) Whether the Registrar before taking action u/s 72 must have an audit made u/s 64 and inquiry held u/s 65 and an inspection made u/s 66 of the Act and must also give an opportunity for rectification of the, defects which may come to light as a result of such audit, inquiry or inspection ? (ii) What is the scope of interference by the High Court with the Order of a Registrar made u/s 72 of the Act ? The Act was enacted to amend and consolidate the law relat ing to and to make better provision for the, Organisation of Cooperative Societies in the State of Madras.
Section 2 (2) defines the expression "Committee " to mean the governing body of a registered society to whom the management of its affairs is entrusted.
By Section 2 (1) the "Registrar" is defined to mean a person appointed to perform the duties of a Registrar of Cooperative Societies under the Act, and includes a person on whom all or any of the powers of a Registrar under the Act have been conferred under section 3.
Section 4 provides for the societies which may be registered.
Chapter III gives the sections relating to the Qualifications of the members and their rights and liabili ties.
Chapter IV contains provisions in respect of management of registered societies.
Under section 26 (1) the ultimate authority of a registered society vests in the general body of its members.
Under section 27 the general body of a registered society 231 has to constitute a Committee in accordance with the bye laws and entrust the management of the affairs of the registered society to such Committee.
The term of office of an elected member of any Committee is 3 years but one third of the members elected to the Committee at the first election have to retire at the end of the first year after such election and the other one third of the members elected have to retire at the end of the second year after such election and so on The members so to retire at the end of the first and second years have to be determined by lot by the Committee.
According to section 28 (4) no member of a Committee against whom an order under sub section (1) of section 71 has been passed, shall be eligible for election or appointment as a member of the Committee for a period of three years.
Sub section 5 of section 28 provides that no member of a Committee which has been superseded shall be eligible for election or appointment to the Committee for a period of three years from the date of expiry of the period of supersession.
Section 28 (A) is in the following terms "(1) Where in the course of an audit under Section 64 or an inquiry under Section 65 or an inspection under section 66 or section 67, it appears that a person who is, or was, a member of a Committee has misappropriated or fraudulently retained any money or other property or been guilty of breach of trust in relation to the society or of gross or persistent negligence in connection with the conduct and management of, or of gross mismanagement of the affairs of the society or of misfeasance or default in carrying out his obligations and functions under the law, the Registrar may, without prejudice to any other action that may be taken against such member, by order in writing, remove such person from the office of member of committee if he holds such office, or disqualify him from holding in future the office of a member of the committee, if he has ceased to hold such office.
(2) No person shall be removed or disqualified under sub section (1) without being given an opportunity of making his representations, A copy of the order removing or disqualifying him shall be communicated to him".
Chapter V relates to the duties and privileges of registered societies.
Chapter VI relates to State aid to registered societies and Chapter VI relates to their property and funds.
We are concerned primarily with the provisions of Chapter VIII which begins with section 64.
Sub section ( 1 ) thereof makes it obligatory on the Registrar to audit or cause to be audited by some person authorised by 232 him in writing the accounts of every registered society once at least in every year.
Under sub section (4) every person who is or has been an officer or employee of the society and every member and past member has to furnish such information in regard to the transactions and working of the society as the Registrar or the person authorised by him may require.
Sub section (5) says that the Registrar may, by order in writing, direct any officer of the society to take such action as may be, specified in the order to remedy within such time as may be specified the defects, if any, disclosed as a result of the audit.
Section 65 authorises the Registrar on his own motion or on the application of a majority of the Committee or on the request of the Collector, to hold an inquiry, or direct some person authorised by him in writing to hold an inquiry into the constitution, working and financial condition of a registered society.
Under Subsection (2) powers have been conferred interalia to have free access to the books of accounts etc., summoning and examination of persons on oath having knowledge of the affairs of the society.
When an inquiry is held u/s 65 the Registrar must communicate its result in the manner and to the persons and institute ions set out in sub section (3).
Sub section (4) lays down that Registrar may, by order in writing, direct any officer of the society or its financing bank to take such action as may be specified in the order to remedy the defects, disclosed as a result of the enquiry.
Section 66 empowers the Registrar on his own motion or on the application of a creditor of a registered society to inspect or direct any person to inspect the books of the society.
After the inspection has been made the Registrar has to communicate the results of the inspection in the manner set out in sub section (2).
Subsection (3) enables the Registrar to direct any officer of the society to take such action as may be specified in the order to remedy the defects, if any, disclosed as a result of the inspection.
Section 67 gives the right to a financing bank to inspect the books of any registered society which is indebted to it.
Section 70 (1) is reproduced below: "70(1) Where in the course of an audit under section 64 or an inquiry under section 65 or an inspection under section 66 or section 67, it is brought to the notice of the Registrar that a paid officer or servant of a registered society has committed or has been otherwise responsible for misappropriation, breach of trust or other offence.
in relation to the society, the Registrar, may, if in his opinion, there is prima facie evidence against such paid officer or servant and the suspension of such paid officer or servant is necessary in the interests of the society, direct the committee of the society pending the investigation and disposal of the matter, to place or cause to be placed such paid officer or servant 233 under suspension from such date and for such period as may be specified by him".
Section 71 contains provisions relating to surcharge and says that where in the course of an audit u/s 64 or an inquiry u/s 65 or an inspection u/s 66 or section 67 or the winding up of a society, it appears that any person who is or was entrusted with the Organisation for management of the society or any past or present officer or servant of the society has misappropriated or fraudulently retained any money or other property or has been guilty of breach of trust in relation to the society or has caused any defi ciency in the assets of the society by breach of trust or wilful negligence. the Registrar may enquire into the conduct of such person, officer or servant and make an order requiring him to repay or restore the money or property or to contribute such sum to the assets of the society by way of compensation.
Under the proviso, such an inquiry must be held within 6 years from the date of any act or omission and an opportunity must be afforded to the person against whom the order is sought to be made.
Section 72 (1) (a) which is material for our purposes reads : "72(1) (a).
If, in the opinion of the Registrar, the committee of any registered society is not functioning properly or wilfully disobeys or wilfully fails to comply with any lawful order or direction issued by the Registrar under this Act or the rules, he may, after giving the committee an opportunity of making its representations, by order in writing, dissolve the committee and appoint either a person (hereinafter referred to as the special officer) or a committee of two or more persons (hereinafter referred to as the managing committee) to manage the affairs of the society for a specified period not ex ceeding two years".
Sub section (6) makes it obligatory on the Registrar to consult the financing bank to which the society is indebted before taking any action under sub section (1).
It will be useful at this stage to reproduce section 8 5 (1) which relates to winding up of registered societies "85(1).
If the Registrar, after an inquiry has been held under section 65 or an inspection has been made under section 66 or section 67, or on receipt of an application made by not less than three fourths of the members of a registered society, is of opinion that the society ought to be wound up, he may, after giving the society an opportunity of making its representations, by order in writing direct it to be wound up.
A copy of the order 234 shall forthwith be communicated to the society by registered post".
It is significant that section 72(1) does not contain any mention of sections 64 to 67 which appear in section 70(1) and of sections 65, 66 and 67 which are expressly mentioned in section 85(1).
If the intention of the Legislature was that the supersession of the Committee under section 72 can be ordered by the Registrar only after recourse to sections 64, 65, and 66, there is no reason why language analogous to section 70(1) or section 85 (1) containing an express mention of the aforesaid sections, should, not have been employed.
An audit under section 64 has to be done every year in view of the mandatory form of the language of that section 64.
But as regards sections 65 and 66 the Registrar has been given discretionary powers to make an inquiry or an inspection in accordance with those sections, there is no duty or obligation cast on him for doing so before he proceeds to take action u/s 72.
All that is required by section 72 (1) (a) is that the Registrar should form an opinion that the Committee of any Registered society is not functioning properly or has wilfully disobeyed or failed to comply with any lawful order or direction issued by him.
So far as the question of the society not functioning properly is concerned, that may depend on what the Registrar discovers after a proper audit, enquiry and inspection.
But he can form that option even on material aliunde and the language of the section does not warrant by necessary implication the taking of the view that he is bound to form that opinion after following the entire procedure prescribed by the other sections under discussion.
At any rate it is not possible to read a requirement while taking action u/s 72 of satisfying the provisions in the aforesaid sections by making a direction in the first instance to remedy the defects disclosed as a result of the audit, inquiry or inspection.
The functioning of the society may be so irregular and the defects disclosed so blatant and prejudicial to the society that no question can arise of any direction being made in the first instance for their being remedied by the persons or officers concerned.
It may 'be that when the Registrar acts under the second limb of section 72 (1) (a) and proposes to supersede the committee for wilful disobedience or wilful failure to comply with any lawful order or direction issued by the Registrar under the Act or the rules that the provisions contained in sections 64, 65 and 66 may become relevant.
But that does not and cannot mean that the Registrar must as a condition precedent give a direction under those sections for the defects or the irregularities to be remedied and should take action only under the second limb i.e. when there is a wilful disobedience or wilful failure to comply with those orders or directions.
It may be that the opinion which the Registrar has to 235 form must be based on some objective facts but those objective.
facts in the absence of any clear indication u/s 72 cannot be confined to what may be disclosed after the Registrar has exercised.
powers in the matter of audit,, inquiry and inspection under the provisions of sections 64, 65 and 66.
Thus even though the opinion. may be a purely subjective process, there must be cogent material on which the Registrar has to form his opinion that the society is not functioning properly in order to sustain the issuance of a notice.
u/s 72 ( 1 ) (a) and subsequent supersession of the Committee after considering its representation, The requisite opinion has indisputably to be formed honestly and after applying his mind by the Registrar to the relevant material before him the only condition precedent for taking action u/s 72(1) is that the Registrar must consult the financing bank to which the society is indebted (vide sub section 6).
There is no other requirement or condition.
precedent laid down by the Legislature which the Registrar must fulfil before he acts in the matter of supersession of the Committee.
We are unable to concur in the view of the High Court that an action taken u/s 72 without giving an opportunity to the member, officer or the society to rectify the defects found after an audit,, inquiry or inspection held under sections 64, 65 and 66 would.
constitute an exercise of power without jurisdiction.
The Single Judge laid a great deal of emphasis on the Com mittee being an elected body and the prejudice that would be caused to its members if they are visited with the consequences of supersession on account of irregularities and improper functioning of the previous members of the Committee.
What was argued before the High Court was that one third members of the Committee have to retire every year and fresh members have to be elected.
If certain grave irregularities are committed say in the year 1964, 1965, it would be unfair to the new members who have been.
elected to supersede the Committee in 1968.
We do not consider that that would be the correct approach in construing section 72 ' which is meant for superseding the Committee as a whole when its working disclose s such irregularities or improprieties as would justify its supersession.
Normally it would be expected that only that Committee would be superseded whose functioning has been found to be highly defective.
The object of supersession apparently is to appoint a Special Officer or a managing committee in order to set the working of the society right.
It is not difficult to envisage a situation where maladministration by a committee has so adversely affected the functioning of the society that it is essential in the interests of the society itself to give temporarily the control of its affairs to a neutral authority.
At any rate if the operation of section 72 in certain circumstances is likely to operate harshly so far as certain members of the committee are concerned, it is not 236 possible to read into it other provisions of the Act which are not incorporated in the section expressly or by necessary implication.
We have been taken through the material parts of the orders of the Registrar and the Joint Registrar and we do not find any such infirmities in them which would justify interference by the High Court under Article 226 of the Constitution.
The High Court could not act as an appellate Court and reappraise and re examine the relevant facts and circumstances which led to the making of the orders of supersession as if the matter before it had been brought by way of appeal.
The limits of the jurisdiction of the High Court under Article 226 when a writ in the nature of cer tiorari is to be issued are well known and well settled by now and it is pointless to re state the grounds on which any such writ or direction can be issued.
We are satisfied that there was no justification whatsoever for quashing the orders of the Joint Registrar and that of the Registrar in appeal.
The appeals are consequently allowed with costs and the judgment of the High Court is set aside.
The writ petitions are ordered to be dismissed One hearing fee.
G.C. Appeals allowed.
L11 SupCI(NP)/70 2500 30 6 71 GIPF.

summary/full:
On 4th January, 1969 the Joint Registrar, Cooperative Societies issued a notice under section 72 of the Madras Cooperative Societies Act, 1961 to the committee of the North Arcot District Cooperative Supply and Marketing Society Ltd.
After examining the representation made by the committee in reply to the notice, the Registrar recorded an order on 11 th April, 1969 holding that the committee had not been functioning properly and had failed to perform its duties and discharge its responsibilities as required under the Act.
The committee was ordered to be suspended for a period of one year and the Deputy Registrar of Cooperative Society ties was appointed to work as Special Officer to manage its affairs.
The matter was taken in appeal to the Registrar, who affirmed the order of the Joint Registrar.
Thereafter the President and Director of the Co operative Society moved the High Court under article 226 of the Constitution.
The writ petition was allowed by a Single Judge on the view that an order under section 72(1) can be passed only after the procedure under sections 64, 65 & 66 of the Act has been followed.
The Full Bench to which the matter was referred in Letters Patent Appeal took the same view.
In appeal before this Court against the judgment of the High Court the questions that fell for consideration were : (1) Whether the Registrar before taking action under section 72 must have an audit made under section 64 and an inquiry held under section 65 and an inspection made under section 66 of the Act and must also give an opportunity for rectification of the defects which may come to light as a result of such audit, inquiry or inspection ? (2) What is the scope of interference by the High Court with the order of a Registrar made under section 72 of the Act ? HELD,:(1) (a) If the intention of the Legislature was that the supersession of the Committee under section 72 can be ordered by the Registrar only after recourse to sections 64, 65 & 66 there is no reason why language analogous to section 70(1) which expressly mentions sections 64 to 67 and section 85(1) which refers to sections 65 to 67 should not have been employed.
[234 B] All that is required by section 72(1) (a) is that the Registrar should form an opinion that the Committee of any Registered Society is not functioning properly or has wilfully disobeyed or 'failed to comply with any lawful order or direction issued by him.
The section cannot be read to mean that before forming an opinion as to the proper functioning of the society the Registrar must in the first instance issue a direction to remedy the defects disclosed as a result of the audit, inquiry or inspection, The functioning of the society may be so irregular and the defects so blatant and prejudicial to the society that no question can arise of any direction 228 being made in the first instance for their being remedied by the persons of officers concerned.
[234 D F] It may be that the opinion which the Registrar has to form must be based on some objective facts but those objective facts in the absence of any clear indication in section 72 cannot be confined to what may be disclosed after the Registrar has exercised his powers in the matter of audit, inquiry and inspection under the provisions of sections 64, 65 & 66.
The requisite opinion has indisputably to be formed honestly and after applying his mind by the Registrar to the relevant material before him.
The only condition precedent for taking action under section 72(1) is that provided in sub section (6), namely, that the Registrar must consult the financing bank to which the society is indebted.
No other requirement or condition precedent is laid down by the legislature,.
it was accordingly not possible to concur with the view taken by the High Court.
[235 A D] (b) The fact that one third of the members of the committee retire every year and new members have to be elected in their place could not lead to a different conclusion.
Section 72 is meant for superseding the committee as a whole.
Even if the operation of section 72 in certain circums tances is likely to operate harshly so far as the newly elected members of the committee are concerned, it is not possible to read into it other provisions of the Act which are not incorporated in the section expressly or by necessary implication.
[235 F H] (ii) There were no infirmities in the orders of the Joint Registrar or Registrar in the present case which could justify the interference by the High Court under article 226 of the Constitution.
The High Court could not act as an appellate court and reappraise and re examine the relevant facts and circumstances which led to the making of the orders of supersession.
[236 B]