Shri Vilas Sahebrao Gadakh Vs. the Divisional Joint Registrar, Nasik Division - Court Judgment

D.G. Karnik, J.

Rule. Respondents waives service. By consent, rule made returnable forthwith.

1. Respondent No. 18 Pimpalgaon (B) Agricultural Produce Marketing Committee (hereinafter referred to as the 'market committee') is formal respondent. Fresh service on respondent No. 18 is therefore dispensed with. The petitioner has filed this petition for a writ of mandamus or any other appropriate writ, order or direction for a declaration that respondent Nos. 3 to 13 are disqualified to continue as members of the market committee and are also disqualified for contesting the next elections or any bye elections for a period of six years under Section 38A of the Maharashtra Agriculture Produce Marketing (Regulation) Act, 1963 (hereinafter referred to as the Act).

The facts may be briefly stated as under:

2. Elections to the posts of members of the committee of the respondent No. 18 market committee were held in March, 2000. Respondent Nos. 3 to 13 were declared to be elected, while the petitioner lost the election. Being aggrieved by the election results, the petitioner approached the Collector of Nasik by way of Election Petition No. 1 of 2000 under Rule 88 of the Election Rules. By an order dated 12th February, 2001 the Collector, Nasik dismissed the Election Petition. The petitioners carried an appeal bearing Appeal No. 1 of 2001 to the Additional Commissioner, Nasik Division, Nasik. The Additional Commissioner, Nasik by his judgment and order dated 30th February, 2001 partly allowed the appeal and set aside the elections of respondent Nos. 13 to 15. Being aggrieved by the order of the Additional Commissioner, setting aside the election, the respondent Nos. 3 to 12 approached this court by way of a writ petition bearing Writ Petition No. 3484 of 2001. Respondent No. 13 filed a separate Writ Petition bearing Writ Petition No. 3485 of 2001. Respondent Nos. 14 and 15 also filed separate writ petitions in this court.

3. Petition alleges that the entire expenses for defending the election petition filed by the petitioner against the respondent No. 3 to 13 as also the expenses for defending the appeal before the Additional Commissioner, Nasik and the expenses for filing of writ petitions challenging the order of the Additional Commissioner were incurred by respondent Nos. 3 to 13 not from their own pocket but out of the funds of the market committee. Petitioner alleges that vehicles belonging to the market committee bearing registration No. MH-15-1355, MH-15-1755 and MH-15-3389 were used by respondent Nos. 3 to 13 for the purposes of travel for defending the election petition, election appeal and filing of the writ petitions and even the travel allowances was claimed and recovered by them from the funds of the market committee including the secretary, two drivers and two peons were utilised by respondent Nos. 3 to 13 for defending the election petition, election Appeal as well as filing of the writ petitions namely Writ Petition No. 3484 of 2001 and 3485 of 2001. The market committee was joined as respondent (being respondent No. 5 and respondent No. 7 respectively in the said two writ petitions) filed by respondent No. 3 to 13 and as such, respondent Nos. 3 to 13 could not have the funds and machinery of the market committee for the purposes of prosecuting the said writ petitions filed by them against the petitioner as well as the market committee. In Writ Petition No. 3484 of 2001, there were 74 respondents and in Writ Petition No. 3485 of 2001 there were 84 respondents. Several copies of the writ petitions were therefore required to be made. Xerox copies of the original Writ Petition were made on the xerox machine of the Market committee by Mr. Londhe, clerk employed in the market committee in the presence of the secretary of the market committee Mr. Sanjay Patil, using stationery of the market committee. Expenses for making copies of the aforesaid two writ petitions were incurred from the funds of the market committee. Services of the secretary of the market committee were availed for serving copies of the writ petitions through Pimpalgaon Baswant court and writs of service were produced before this court by the secretary. According to the petitioner, an amount of Rs. 79,137/- in all was spent by the respondent Nos. 3 to 13 out of the funds of the market committee for defending the election petitions, appeal and filing of two writs filed in their personal capacity by the respondent Nos. 3 to 13. According to the petitioner, incurring of the said expenses from the funds of the market committee was contrary to the provisions of Sub-section (1) of Section 38A of the Act and the market committee was required to recover the said amount from respondent Nos. 2 to 13 under Sub-section 2 of Section 38A of the Act. On learning that the funds of the market committee, were illegally used, by respondent Nos. 3 to 13 for defending personal proceedings against them, the petitioner approached a member of Legislative Assembly (for short M.L.A.) of Taluka Niphad, who wrote a letter dated 12 October, 2002 to the District Deputy Registrar pointing out the irregularities committed by respondent Nos. 3 to 13 and requesting him to take necessary action. It appears that on the application of the representations made by the M.L.A. Niphad, the District Deputy Registrar made an inquiry and came to the conclusion that an amount of Rs. 70,592.52 was spent out of the funds of the market committee by respondent Nos. 3 to 13 for defraying the costs of the proceedings of the election appeal, and filing of writ petitions and sent a report to the Divisional Joint Registrar. The Divisional Joint Registrar to whom the powers of the Director under Section 38A of the Act, are delegated issued notices to the respondent Nos. 3 to 13 to attend the office for hearing before issuing necessary directions for the recovery under Sub-section (2) of Section 38A of the Act. The petitioner also alleges that the Divisional Joint Registrar orally directed the respondent Nos. 3 to 13 to pay the said amount before he passes a written order. It is not disputed before us that the amount of Rs. 70,592.20 was deposited by respondent Nos. 3 to 13 in the market committee. However, the respondent Nos. 3 to 13 deny that any oral direction was issued by the Divisional Joint Registrar and submit that the amount was deposited by them by way of abundant caution.

4. Learned counsel for the petitioner submits that the deposit of the exact amount of Rs. 70,592.12 which was found to be due from them amounts to an admission by the respondent Nos. 3 to 13 that the funds of the market committee were used by them for defending the costs of private litigation. The funds of the market committee used by the respondent Nos. 3 to 13 was thus illegally and contrary to the provisions of Sub-section (1) of Section 38A of the Act and therefore respondent Nos. 3 to 13 be disqualified under Sub-section (3) of Section 38A of the Act. Section 38A of the Act reads as under:

38A(1) 'No expenditure from the funds of a Market Committee shall be incurred for the purpose of defraying the cost of any proceeding filed or taken by or against any member, Chairman or Vice Chairman of the Market Committee in his personal capacity. If any question arises whether any expenditure can be so incurred or not, such question shall be referred to and decided by the Director, and his decision shall be final.

(2) If any person incurs expenditure in violation of Sub-section (1), the Director shall direct the person to repay the amount to the Market Committee within one month and where such person fails to repay the amount as directed, such amount shall, on the certificate issued by the Director, be recoverable as arrears of land revenue.

(3) The person against whom action is taken by the Director under Sub-section (2) shall be disqualified to continue to be a member of the Market Committee for remainder of his term of office and shall also be disqualified for contesting for the next election including any next by-election of the Market Committee held immediately after the expiration of a period of one month during which such person has failed to pay the amount referred to in Sub-section (2).'

5. Mr. Joshi, submits that respondent Nos. 3 to 13 had not used the funds of the market committee for the purpose of defraying costs of legal proceedings filed against them in their personal capacity. The finding of the District Deputy Registrar that respondent Nos. 3 to 13 had spent Rs. 70,592.22 out of the funds of the market committee for defraying costs of their private litigation was reached without giving them an opportunity of being heard and was contrary to law. Respondent Nos. 2 to 13 had deposited the amount of Rs. 70,592.22 Abundans Cautela by way of an abundant caution and that cannot be construed as an admission of liability of admission that they used the funds of the market committee for defraying the cost of private proceedings filed against them. He further submitted that in any event, the money was deposited by the respondent Nos. 3 to 13 before any written order was passed by the Divisional Joint Registrar in exercise of the powers of the Director. As no written order under Sub-section 2 of Section 38A was passed, petitioner shall not be deemed to have not incurred any disqualification under Sub-section (3) of Section 38A.

6. According to Mr. Joshi, only the member against whom an action is taken by the Director under Sub-section (2) of Section 38A would be disqualified to continue as member of the market committee for remainder of the term and he is also disqualified for contesting for the next election including next by election of the market committee. Mr. Joshi submits that taking any action under Sub-section 2 of Section 38 contemplates an inquiry and the director reaching a conclusion that any expenditure prohibited by Sub-section (1) of Section 38A was incurred by a member. He further submits that persons against whom a finding is recorded under Sub-section (1) of Section 38A does not incur disqualification immediately on the said finding being reached but, Sub-section (2) of Section 38A gives an opportunity to the member concerned to repay the amount to the market committee within one month. Only if a member against whom a finding is recorded under Sub-section (1) of having spent funds of the market committee for defraying costs of any legal proceedings against him fails to repay the amount within one month that the director can issue a recovery certificate and thereafter the amount would become recoverable as arrears of land revenue. According to Mr. Joshi, plain meaning must be given to the words used in Sub-section (3) of Section 38A as there is no ambiguity. So construed, it would be clear that issuance of a recovery certificate under Sub-section (2) is a sine qua non for incurring of a disqualification under Sub-section (3) of Section 38A. We are unable to agree for the following reasons:

7. Sub-section (1) of Section 38A prohibits any member of the market committee from using the funds of the market committee for the purposes of defraying costs of any private proceedings filed or taken against him. This prohibition is the object of Section 38A. Sub-section (3) of Section 38A are made in aid of Sub-section (1) which prohibits a member from using the funds of the market committee for defraying cost of litigation filed or taken by or against him. If a question arises whether the expenditure has been so incurred or not, the question is to be referred to the decision of the director and his decision is to be final. Sub-section (2) provides that the director shall direct a person to repay the amount spent unauthorisedly from the funds of the market committee within one month. In case the amount is not so repaid, the director is required to issue a certificate and thereupon the amount can be recovered by conceive methods as arrears of land revenue under Sub-section (2) of Section 38A. Thus, Sub-section (2) of Section 38A provides for adjudication and manner of recover of the amount adjudicated as due. Sub-section (3) of Section 38A in our opinion, is an independent provision for disqualification of a member who spends funds of the market committee for defraying costs of any proceedings filed or taken by or against him. It has nothing to do about the recovery. This interpretation is in consonance with the legislative intent of disqualifying a member who uses the funds of the market committee for his personal purposes for defraying costs of personal litigation. The object of 38A is to present a member from misusing funds of the market committee and disqualifying the member who uses the funds of the market committee for defraying costs of proceedings filed against him.

8. More than a century ago in Heydon's case (1584) 3 C R 7 the court applied a rule of purposive construction which also became known as mischief rule. In Bengal Immunity Co. v. State of Bihar reported in : [1955]2SCR603 , the Supreme Court following the said Rule observed (at page 674 of the report):

'It is a sound rule of construction of a statute firmly established in England, as far back as 1584 when- Heydon's case (1584) 3 C R74 (V) was decided that -

'..... for the sure and true interpretation of all Statutes in general (be they penal or beneficial, restrictive or enlarging of common law four things are to be discerned and considered:

1st: What was the common law before the making of the Act.

2nd: What was the mischief and defect for which the common law did not provide.

3rd: What remedy the Parliament hath resolved and appointed to cure the disease of the Commonwealth, and

4th: The true reason of the remedy; and then the office of all the judges is always to make such construction as shall suppress the mischief and advance the remedy and to suppress subtle inventions and evasions for continuance of the mischief, and 'pro private commodo' and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, 'pro bono publico'.

9. In the present case, Section 38A was inserted by amendment effected by Maharashtra Act No. 27 of 1997. Prior to the amendment, it was noticed by the legislature that public funds of the market committee were used by the members of the market committee for defraying cost of private litigation filed or taken by or against them. In order to curtail this mischief and prevent the use of the funds of the market committee for private purposes was sought to be prevented by introducing Section 38A. Sub-section (1) of Section 38A prohibits expenditure from the funds of a market committee by a member for defraying the costs of any proceedings filed or taken defraying the costs of any proceedings filed or taken against him. Sub-section (1) of Section 38A. Mere recovery of the funds of the market committee illegally spent by him from the member may not be enough because only some and not all cases may come to light and only in those cases recovery would be possible. In order to prevent any member from using the public funds for his private purposes the only effective method would for the remainder of the term be to disqualify him and in case of failure to pay the amount referred in Sub-section (2) within one month to prevent him from contesting next election. It is for this purpose that Section 38A was introduced to prevent misuse of the funds of the market committee. In the light of this background, we must interpret Sub-section (3) of Section 38A. So as to discourage any member of a market committee from using the funds of the market committee at the peril of disqualification. We are unable to hold that disqualification under Sub-section (3) of Section 38A would operate only when the director issues a certificate under Sub-section (2) of Section 38A. If the interpretation as sought to be put by Mr. Joshi is accepted, a member of the market committee may use the funds of the market committee for the purposes of defraying the cost of any proceedings filed or taken out against him in court and hope that this is not noticed. If at all this comes to light he would repay the amount before certificate is issued by the Director under Sub-section (2) and save any disqualification. It is surely cannot be the intention of legislature in enacting Sub-section (3) of Section 38A. We therefore, reject the contention of Mr. Joshi that only the member who fails to repay the amount within one month would become disqualified under Section 38A (3). If there is failure to pay, there would be a further bar from contesting election for the next term.

10. Mr. Joshi however, is right in this contention that the mere fact that respondent Nos. 3 to 13 deposited an amount of Rs. 70,592.22 cannot by itself be a conclusive proof that the funds of the market committee were used by them though undoubtedly, the fact that money was deposited would be a relevant circumstance. Further the fact that exact amount to the extent of rupee and paise as was found by the Deputy Registrar in his preliminary enquiry to be illegally spent from the funds of the market committee was deposited by the respondent Nos. 3 to 13 may also be taken into consideration at the time of enquiry which would have to be held by the Director or the Divisional Joint Registrar exercising the powers of the Director. There is some controversy as to the date of deposit of this amount. It is contended that the amount was deposited even before the District Deputy Registrar submitted his report. We fail to appreciate how the exact amount of rupee and paise as was found due in the report of the District Registrar be known to the respondent Nos. 3 to 13 before the report was prepared and how they deposited the exact amount a few days before the report. This question however, can be agitated by the petitioner in the enquiry. Admittedly, the District Deputy Registrar is not authorised for exercising the powers of the Director under Section 38A. The enquiry made by the District Deputy Registrar could only be a preliminary inquiry or investigation. The question whether the respondent Nos. 3 to 13 illegally spent the funds of the market committee would have to be decided under Sub-section (1) of Section 38A by the Director or Divisional Joint Registrar to whom director's powers are delegated.

11. In the circumstances, Divisional Joint Registrar would have to decide the matter in accordance with law after giving hearing to respondent Nos. 3 to 13. We make it clear that if the director or District Joint Registrar exercising powers of the Director after enquiry and after hearing all concerned including the petitioner and the respondent Nos. 3 to 13 comes to the conclusion that the respondent Nos. 3 to 13 or any of them have utilised the funds of the market committee for defraying the costs of any proceedings filed or taken by or against them (including defraying costs of election petition, appeal or writ petitions) contrary to the provisions of Section (1) of section 38A, they would automatically be disqualified to continue as members of the market committee under Sub-section (3) of Section 38A. The petition is allowed. The Director/Divisional Joint Registrar exercising the powers of director is directed to pass appropriate orders in accordance with law as expeditiously as possible and in any event within a period of 4 months from today.

Rule is made absolute accordingly.