18 Jun 2010

Higher authority cannot exercise sub-ordinate's power: Supreme Court

In a recent decision the Supreme Court was inter alia called upon to decide whether it is possible for a higher authority to exercise the powers which have been vested in an authority subordinate to it. The Court was examining the correctness of the approach in which the State Government of Uttar Pradesh (Revisional Authority under the Land Acquisition Act) had directly exercised the power of the Ghaziabad Development Authority (the original authority required to take action under the Act). Holding that such a course of action was not permissible under law, the Supreme Court examined the position of law to hold against the Government.

The Bench explained the legal position in the following terms;
11. In Rakesh Ranjan Verma & Ors. Vs. State of Bihar & Ors., AIR 1992 SC 1348, the question arose as to whether the State Government, in exercise of its statutory powers could issue any direction to the Electricity Board in respect of appointment of its officers and employees. After examining the statutory provisions, the Court came to the conclusion that the State Government could only take the policy decisions as how the Board will carry out its functions under the Act. So far as the directions issued in respect of appointment of its officers was concerned, it fell within the exclusive domain of the Board and the State Government had no competence to issue any such direction. The said judgment has been approved and followed by this Court in U.P. State Electricity Board Vs. Ram Autar and Anr. (1996) 8 SCC 506.
12. In Bangalore Development Authority and Ors. Vs. R. Hanumaiah and Ors. (2005) 12 SCC 508, this Court held that the power of the Government under Section 65 of the Bangalore Development Authority Act, 1976 was not unrestricted and the directions which could be issued were those which were to carry out the objective of the Act and not those which are contrary to the Act and further held that the directions issued by the Chief Minister to release the lands were destructive of the purposes of the Act and the purposes for which the BDA was created.
13. In Bangalore Medical Trust Vs. B.S. Muddappa & Ors. AIR 1991 SC 1902, this Court considered the provisions of a similar Act, namely, Bangalore Development Authority Act, 1976 containing a similar provision and held that Government was competent only to give such directions to the authority as were in its opinion necessary or expedient and for carrying out the purposes of the Act. The Government could not have issued any other direction for the reason that Government had not been conferred upon unfettered powers in this regard. The object of the direction must be only to carry out the object of the Act and only such directions as were reasonably necessary or expedient for carrying out the object of the enactment were contemplated under the Act. Any other direction not covered by such powers was illegal.
14. In Poonam Verma & Ors. Vs. Delhi Development Authority, AIR 2008 SC 870, a similar view has been re-iterated by this Court dealing with the provisions of Delhi Development Authority Act, 1957. In the said case, the Central Government had issued a direction to make allotment of flat out of turn. The Court held as under:
“......Section 41 of the Act, only envisages that the respondent would carry out such directions that may be issued by the Central Government from time to time for the efficient administration of the Act. The same does not take within its fold an order which can be passed by the Central Government in the matter of allotment of flats by the Authority. Section 41 speaks about policy decision. Any direction issued must have a nexus with the efficient administration of the Act. It has nothing to do with carrying out of the plans of the authority in respect of a particular scheme……….Evidently, the Central Government had no say in the matter either on its own or under the Act. In terms of the brochure, Section 41 of the Act does not clothe any jurisdiction upon the Central Government to issue such a direction.”
15. In State of U.P. Vs. Neeraj Awasthi and Ors. (2006) 1 SCC 667, this Court held as follows in context of Government directions: 
“36. Such a decision on the part of the State Government must be taken in terms of the constitutional scheme, i.e., upon compliance of the requirement of Article 162 read with Article 166 of the Constitution of India. In the instant case, the directions were purported to have been issued by an officer of the State. Such directions were not shown to have been issued pursuant to any decision taken by a competent authority in terms of the Rules of Executive Business of the State framed under Article 166 of the Constitution of India.”
16. In The Purtabpore Co., Ltd. Vs. Cane Commissioner of Bihar and Ors. AIR 1970 SC 1896, this Court has observed :
“The power exercisable by the Cane Commissioner under Clause 6(1) is a statutory power. He alone could have exercised that power. While exercising that power he cannot abdicate his responsibility in favour of anyone - not even in favour of the State Government or the Chief Minister. It was not proper for the Chief Minister to have interfered with the functions of the Cane Commissioner. In this case what has happened is that the power of the Cane Commissioner has been exercised by the Chief Minister, an authority not recognised by Clause (6) read with Clause (11) but the responsibility for making those orders was asked to be taken by the Cane Commissioner. The executive officers entrusted with statutory discretions may in some cases be obliged to take into account considerations of public policy and in some context the policy of a Minister or the Government as a whole when it is a relevant factor in weighing the policy but this will not absolve them from their duty to exercise their personal judgment in individual cases unless explicit statutory provision has been made for them to be given binding instructions by a superior.”
17. In Chandrika Jha Vs. State of Bihar and Ors. AIR 1984 SC 322, this Court while dealing with the provisions of Bihar and Orissa Co-operative Societies Act, 1935, held as under:
“The action of the then Chief Minister cannot also be supported by the terms of Section 65A of the Act which essentially confers revisional power on the State Government. There was no proceeding pending before the Registrar in relation to any of the matters specified in Section 65A of the Act nor had the Registrar passed any order in respect thereto. In the absence of any such proceeding or such order, there was no occasion for the State Government to invoke its powers under Section 65A of the Act. In our opinion, the State Government cannot for itself exercise the statutory functions of the Registrar under the Act or the Rules.”
18. In Anirudhsinhji Karansinghji Jadeja & Anr. Vs. State of Gujarat AIR 1995 SC 2390, it was observed : 
“This is a case of power conferred upon one authority being really exercised by another. If a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If the discretion is exercised under the direction or in compliance with some higher authority's instruction, then it will be a case of failure to exercise discretion altogether.”
19. In K.K. Bhalla Vs. State of M.P. & Ors. AIR 2006 SC 898, this Court has de-lineated the functions of the State Government and the Development Authority, observing that :
“59. Both the State and the JDA have been assigned specific functions under the statute. The JDA was constituted for a specific purpose. It could not take action contrary to the scheme framed by it nor take any action which could defeat such purpose. The State could not have interfered with the day-to-day functioning of a statutory authority. Section 72 of the 1973 Act authorizes the State to exercise superintendence and control over the acts and proceedings of the officers appointed under Section 3 and the authorities constituted under the Act but thereby the State cannot usurp the jurisdiction of the Board itself. The Act does not contemplate any independent function by the State except as specifically provided therein…. the State in exercise of its executive power could not have directed that lands meant for use for commercial purposes may be used for industrial purposes….. the power of the State Government to issue direction to the officers appended under Section 3 and the authorities constituted under the Act is confined only to matters of policy and not any other. Such matters of policy yet again must be in relation to discharge of duties by the officers of the authority and not in derogation thereof…. The direction of the Chief Minister being de'hors the provisions of the Act is void and of no effect.”
20. In Indore Municipality Vs. Niyamatulla (Dead through L.Rs.) AIR 1971 SC 97, this Court considered a case of dismissal of an employee by an authority other than the authority competent to pass such an order i.e. the Municipal Commissioner, the order was held to be without jurisdiction and thus could be termed to have been passed under the relevant Act. This Court held that “to such a case the Statute under which action was purported to be taken could afford no protection”.
21. In Tarlochan Dev Sharma Vs. State of Punjab & Ors. (2001) 6 SCC 260, this Court, after placing reliance upon a large number of its earlier judgments, observed as under:
“In the system of Indian democratic governance as contemplated by the Constitution, senior officers occupying key positions such as Secretaries are not supposed to mortgage their own discretion, volition and decision-making authority and be prepared to give way or being pushed back or pressed ahead at the behest of politicians for carrying out commands having no sanctity in law. The Conduct Rules of Central Government Services command the civil servants to maintain at all times absolute integrity and devotion to duty and do nothing which is unbecoming of a government servant. No government servant shall in the performance of his official duties, or in the exercise of power conferred on him, act otherwise than in his best judgment except when he is acting under the direction of his official superior.”
22. Therefore, the law on the question can be summarised to the effect that no higher authority in the hierarchy or an appellate or revisional authority can exercise the power of the statutory authority nor the superior authority can mortgage its wisdom and direct the statutory authority to act in a particular manner. If the appellate or revisional Authority takes upon itself the task of the statutory authority and passes an order, it remains unenforceable for the reason that it cannot be termed to be an order passed under the Act.
The Supreme Court went on to pass scathing remarks on the manner in which the power had been exercised by the State Government of Uttar Pradesh in the following terms;

42. In fact, such exercise by the State amounts to colourable exercise of power. In State of Punjab & Anr. Vs. Gurdial Singh & Ors. AIR 1980 SC 319, this Court dealing with such an issue observed as under:
“Legal malice is gibberish unless juristic clarity keeps it separate from the popular concept of personal vice. Pithily put, bad faith which invalidates the exercise of power - sometimes called colourable exercise or fraud on power and oftentimes overlaps motives, passions and satisfaction - is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal. If the use of the power is for the fulfilment of a legitimate object the actuation or catalysation by malice is not legicidal. The action is bad where the true object is to reach an end different from the one for which the power is entrusted, goaded by extraneous considerations, good or bad, but irrelevant to the entrustment. When the custodian of power is influenced in its exercise by considerations outside those for promotion of which the power is vested the court calls it a colourable exercise and is undeceived by illusion.” 
43. The State Government, being the revisional authority, could not entertain directly the applications by the said applicants, namely, Sh.Ugrasen and Sh. Manohar Lal. The action of the State Government smacks of arbitrariness and is nothing but abuse of power as the State Government deprived GDA to exercise its power under the Act, and deprived the aggrieved party to file appeal against the order of allotment. Thus, orders passed by the State Government stood vitiated. More so, it was a clear cut case of colourable exercise of power.
52. It is a fit case for ordering enquiry or initiating proceedings for committing criminal contempt of the Court as the parties succeeded in misleading the Court by not disclosing the true facts. However, we are not inclined to waste court’s time further in these cases. Our experience has been that the so-called administration is not likely to wake-up from its deep slumber and is never interested to redeem the limping society from such hapless situations. We further apprehend that our pious hope that administration may muster the courage one day to initiate disciplinary/criminal proceedings against such applicants/erring officers/employees of the authority, may not come true. However, we leave the course open for the State Government and GDA to take decision in regard to these issues and as to whether GDA wants to recover the possession of the land already allotted to these applicants in commercial area contrary to the Land Policy or value thereof adjusting the amount of compensation deposited by them, if any.

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