Khargram Panchayat Samiti and Another Versus State of West Bengal and Others[SC 1987]

Keywords: Ancillary  power-Incidental power-Doctrine of Ultra vires

• when a power is conferred on a statutory authority such power will also include other incidental or ancillary powers without the exercise of which the main power cannot be exercised.
• a power to do a thing necessarily carries with it the power to regulate the manner in which the thing may be done.
• the doctrine of ultra vires in relation to the powers of a statutory corporationCorporation A legally established entity that can enter into contracts, own assets and incur debt, as well as sue and be sued—all separately from its owner(s). The term covers both for-profit and nonprofit corporations and includes nonstock corporations, incorporated membership organizations, incorporated cooperatives, incorporated trade associations, professional corporations and, under certain circumstances, limited liability companies. have to be understood reasonable and so understood, whatever may fairly be regarded as incidental to, or consequential upon, those things which the legislature has authorised ought not (unless expressly prohibited) to be held by judicial construction, to be ultra vires.

West Bengal Panchayat Act, 1973—Section 117—West Bengal Panchayat (Samiti Administration) Rules, 1984—Rules 7, 8 and 9.

JT 1987 (2) SC 266 : (1987) 1 SCALE 1142 : (1987) 3 SCC 82 : (1987) 2 SCR 1207

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Khargram Panchayat Samiti and Another
Appellant

Versus

State of West Bengal and Others
Respondent

(Before : A.P. Sen and V. Balakrishnan Eradi, JJ.)

Civil Appeal No. 5675 of 1985, Decided On: 23-04-1987

Counsels: for Parties:

S.N. Kaicker, Girish Chandra and Sarala Chandra, Advs

Tapas Roy, Parijat Sinha, D.N. Mukherjee, Dalip Sinha, Advs.

JUDGMENTJudgment The statement given by the Judge on the grounds of a decree or order - CPC 2(9). It contains a concise statement of the case, points for determination, the decision thereon, and the reasons for such decision - Order 20 Rule 4(2).  Section 354 of CrPC requires that every judgment shall contain points for determination, the decision thereon and the reasons for the decision. Indian Supreme Court Decisions > Law declared by Supreme Court to be binding on all courts (Art 141 Indian Constitution) Civil and judicial authorities to act in aid of the Supreme Court (Art 144) Supreme Court Network On Judiciary – Portal > Denning: “Judges do not speak, as do actors, to please. They do not speak, as do advocates, to persuade. They do not speak, as do historians, to recount the past. They speak to give Judgment. And in their judgments, you will find passages, which are worthy to rank with the greatest literature….” Law Points on Judgment Writing > The judge must write to provide an easy-to-understand analysis of the issues of law and fact which arise for decision. Judgments are primarily meant for those whose cases are decided by judges (State Bank of India and Another Vs Ajay Kumar Sood SC 2022)

A.P. Sen, J.—This appeal by special leave is directed against the judgment and order of the Calcutta High Court dated August 2, 1985 quashing a resolution passed by the Khargram Panchayat Samiti dated April 12, 1985 specifying that the cattle fairs run by two rival organisations i.e. Nagar Cattle Hat run by Nagar Ouorania Junior High Madrassah would be held on Saturday every week and Sherpur Cattle Hat run by Prabartak Parishad on Friday. By the judgment under appeal, a Division Bench of the High Court has held that even though the Panchayat Samiti was vested with the power to grant licence for holding of a hat or fair under Section 117 of the West Bengal Panchayat Act, 1973, still in the absence of a rule framed under the Act it had no power to specify a day on which such hat or fair shall be held. The issue involved is whether the Panchayat Samiti being vested with the authority to grant a licence for the holding of a hat or fair under Section 117 of the Act within the limits of its territorial jurisdictionJurisdiction Authority by which courts receive and decide cases. Limited Jurisdiction: the authority over only particular types of cases, or cases under a prescribed amount in controversy, or seeking only certain types of relief, the District Court is a court of limited jurisdiction. Original Jurisdiction: Jurisdiction of the first court to hear a case., must necessarily be held to have the consequential or incidental power to specify a day for the holding of such hat or fair.

2. The facts of the case are as follows. Ever since 1933, a cattle fair called Nagar Cattle Hat is being held on Saturday every week by the Nagar Quorania Junior High Madrassah, a charitable educational institution which runs a school and is also engaged in other social activities, which attracts a large gathering of buyers and sellers of cattle dealers within the district of Murshidabad and even beyond the district. Since 1974, respondent No. 6 a club called Prabartak Parishad, set up a parallel cattle fair at a place called Sherpur, about two kilometres away (as the crow flies) from the site of Nagar Cattle Hat on every Saturday, known as Sherpur Cattle Hat. The holding of two rival cattle fairs on the same day gave rise to a feeling of rivalry couple with tension amongst the local population as also the large number of cattle dealers and peasantry attending the cattle fairs and this frequently led to violent conflicts and skirmishes between the two rival groups. Upon a representation made to him in 1980, the District Magistrate, Kurshidabad caused an inquiry to be held and by his order dated April 2, 1980 held that holding of the two cattle fairs on the same day created serious law and order problem and accordingly directed holding of the hats on two different days for preservation of public peace and tranquility. On a writ petition filed by respondent No. 6 Prabartak Parishad, a Division Bench of the High Court by its order dated June 2, 1982 struck down the impugned order of the District Magistrate on the ground that no such direction could be issued by him as the competent authority was the Khargram Panchayat Samiti. It was observed:

The only authority which is competent to give any direction in this regard is the authority under the West Bengal Panchayat Act, 1973. No such direction has been given by the authority under the said Act. In the circumstances, we set aside the impugned order of the District Magistrate and the judgment of the learned Judge. Appeal is allowed. There will be no order as to costsCosts Subject to any written law, costs are at the discretion of the Court, and the Court has the power to determine all issues relating to the costs of or incidental to all proceedings, including by whom and to what extent the costs are to be paid, at any stage of the proceedings or after the conclusion of the proceedings. Generally “Costs” includes charges, disbursements, expenses, fees, and remuneration. Costs in any matter are payable from the date of the order of the Court unless the parties otherwise agree. The costs of a third-party funding contract are not recoverable as part of the costs of, or costs.. It is made clear that this order is without prejudice to any steps that may be taken in accordance with law by the authority under the said Act.

3. In compliance with the direction made by the High Court, the District Magistrate obviously actuated by consideration of maintenance of law and order requested the Chairman of the Khargram Panchayat Samiti to take necessary steps as the holding of rival hats in contiguous areas could not be allowed to continue as it gave rise to serious law and order problem. A meeting of the Panchayat Samiti was accordingly held on June 20, 1984 and a resolution was passed by a majority of the members that the Nagar Cattle Hat run by Nagar Quorania Junior High Madrassah would be held on Saturday as before and the Sherpur Cattle Hat run by Prabartak Parishad being of recent origin would be held on Friday. Thereupon, respondent No. 6 filed another writ petition in the High Court challenged the impugned resolution of the Panchayat Samiti. A learned Single Judge by his judgment and order dated January 14, 1985 quashed the impugned resolution of the Panchayat Samiti on the ground that it acted in breach of the rules of natural justice while reserving liberty to the Panchayat Samiti to come to a decision afresh after affording an opportunity to respondent No. 6 Prabartak Parishad to have its say before it. Aggrieved, the appellant preferred an appeal and applied for stay. A Division Bench of the High Court by its order dated March 19, 1985 admitted the appeal but declined to grant stay and directed that the Panchayat Samiti should in the meanwhile comply with the order of the learned Single Judge. As a consequence, Khargram Panchayat Samiti was constrained to give effect to the direction made by the learned Single Judge. It accordingly issued notices to the contending parties i.e. both Nagar Quorania Junior High Madrassah and Prabartak Parishad requiring them to submit their claims for consideration, and also fixed a date being April 12, 1985 for hearing. On that date, the Panchayat Samiti at its open meeting heard the representatives of the parties and scrutinised the documents placed before it. After considering the claims of both the parties and the material record, it passed a resolution that the Nagar Cattle Hat would be held as before on Saturday every week and the Sherpur Cattle Hat would be held on Friday, and directed the Executive Officer to incorporate such a condition in the licence granted to the two organisations for holding the cattle fairs on these days. Again, respondent No. 6 filed a writ petition before the High Court challenging the aforesaid resolution dated April 12, 1985. A learned Single Judge by his judgment dated June 19, 1985 dismissed the writ petition in view of the pendency of the appeal before the Division Bench, pursuant to whose direction the aforesaid resolution had been passed. Respondent No. 5 then moved the Division Bench for restraining Khargram Panchayat Samiti from giving effect to the said resolution. The Division Bench by its judgment under appeal quashed the impugned resolution dated April 12, 1985 of Khargram Panchayat Samiti. It held that although in terms of Section 117 of the Act the Panchayat Samiti was vested with the power of granting a licence for the holding of a hat or fair, by the framing of Rules 7, 8 and 9 of the West Bengal Panchayat (Samiti Administration) Rules, 1984 the power of the Panchayat Samiti is confined to making provision for maintenance of sanitation, health and hygiene in the market area which is the essence of the power under Section 117, and further that in the absence of a provision in the rules in that behalf it had no power to specify a day on which such hat or fair should be held. It accepts that when a power is conferred on a statutory authority, it necessarily carries with the other incidental or ancillary powers and holds that the Panchayat Samiti being vested with the power to grant a licence under Section 117 of the Act had been conferred the power under Rules 7, 8 and 9 to making provision for sanitation, health and hygiene in the market area which is the essence of the power and therefore the Panchayat Samiti had the power to see that sanitation, health and hygiene are properly maintained and looked after, and nothing more. In repelling the contention that the specification of a day for the holding of a hat or fair was consequential to the power to grant a licence under Section 117 of the Act, it observed:

there can be no doubt that when a power is conferred on a statutory authority such power will also include other incidental or ancillary powers without the exercise of which the main power cannot be exercised. In the instant case however, Panchayat Samiti has been conferred with a power to see that sanitation, health and hygiene are properly maintained and looked after. The provisions of Rule 9 of the Rules, as stated already, imposed certain terms and conditions on the grant of license for holding a market or hat, but all these terms and conditions relate to maintenance or sanitation, health and hygiene or supply of water or making proper lighting arrangement. The essence of power is, therefore, the maintenance of sanitation, health and hygiene. Many incidental powers may be exercised by the Panchayat Samiti which are directly related to the exercise of the maintenance of, sanitation, health and hygiene. Such powers are not provided for under Rule 9, yet they could be exercised by the Panchayat Samiti in exercise of its power under Rule 9 incidentally. But, in our opinionOpinion A judge's written explanation of a decision of the court. In an appeal, multiple opinions may be written. The court’s ruling comes from a majority of judges and forms the majority opinion. A dissenting opinion disagrees with the majority because of the reasoning and/or the principles of law on which the decision is based. A concurring opinion agrees with the end result of the court but offers further comment possibly because they disagree with how the court reached its conclusion. the Panchayat Samiti cannot exercise a power which has no connection whatsoever with sanitation, health and hygiene. The reason for fixing different days, viz., Fridays and Saturdays for the holding of the two hats, viz., apprehended breach of peace, has no connection whatsoever with the question of sanitation, health and hygiene. Exercise of such assumed power cannot be said to be incidental or ancillary to the main power for the imposition of terms and conditions of a licence. In case, any broach of peace takes place, it will be a concern of the District Magistrate to take steps for the same.

4. In our judgment, the view taken by the High Court that although the Panchayat Samiti was vested with the power to grant a licence for the holding of a hat or fair under Section 117 of the Act, yet it had no consequential or incidental power to specify a day for holding of such hat or fair, is manifestly erroneous and cannot be supported. It failed to appreciate that under the Act the power of general administration of the local area vests in the Panchayat Samiti only to grant a licence to hold a hat or fair under Section 117 of the Act, but such power of general administration necessarily carries with it the power to supervise, control and manage such hat or fair within its territorial jurisdiction. The conferment of the power to grant a licence for the holding of a hat or fair under Section 117 of the Act includes the power to make incidental or consequential orders for specification of a day on which such hat or fair shall be held. The decision of the High Court runs counter to the well-accepted principles. It overlooks that the statutory bodies like the Panchayat Samiti enjoy a wide ‘incidental power’ i.e. they may do every thing which is ‘calculated to facilitate, or is conductive or incidental to, the discharge of any of their functions’ and the doctrine of ultra vires is not to be applied narrowly. It is well-accepted that the conferral of statutory powers on these local authorities must be construed as impliedly authorising everything which could fairly and reasonably be regarded as incidental or consequential to the power itself. See: de Smith’s Judicial Review of Administrative Action, 4th edn., p. 95, HWR Wade’s Administrative LawLaw Positive command of sovereign or divine. One can be ruled either by a Statute, a Statue, or a Statement. Legislation is the rule-making process by a political or religious organisation. Physics governs natural law. Logical thinking is a sign of a healthy brain function. Dharma is eternal for Sanatanis., 5th edn., p. 217. Craies on Statute Law. 6th edn., p. 276. Attorney General v. Great Eastern Railway LR (1880) 5 AC 473; Baroness Wenlock v. River Dee Co. LR (1885) 10 AC 354. De Smith in his celebrated work Judicial Review of Administrative Action, 5th edn. at p. 95 puts the law tersely in these words:

The House of Lords has laid down the principle that “whatever may fairly be regarded as incidental to, or consequent upon, those things which the Legislature has authorised, ought not (unless expressly prohibited) to be held, by judicial construction, to be ultra vires.”

This principle was enunciated by Lord Selborne in Attorney General v. Great Eastern Railway, supra, in these words: “The doctrine of ultra vires ought to be reasonably, and not unreasonably, understood and applied and whatever may be fairly regarded as incidental to, or consequential upon, those things which the legislature has authorised ought not (unless expressly prohibited) to be held, by judicial construction, to be ultra vires.” These words have been quoted by Professor Wade in his monumental work Administrative Law, 5th edn. at p. 217 and also by Craies on Statute Law, 6th edn. p. 276. Craies also refers to the observations of Lord Watson in Baroness Wenlock v. River Lee Co., supra, to the effect:

Whenever a corporation is created by Act of Parliament with reference to the purposes of the Act, and solely with a view to carrying these purposes into execution, I am of opinion not only that the objects which the corporation may legitimately pursue must be ascertained from the Act itself, but that the powers which the corporation may lawfully use in furtherance of these objects must either be expressly conferred or derived by reasonable implication from its porvisions.

5. This Court in V.T. Khanzode and Ors. v. Reserve Bank of India, (1982) I LLJ 465 SC has followed the dictum of Lord Selborne in Great Eastern Railway’s case and reaffirmed the principle that the doctrine of ultra vires in relation to the powers of a statutory corporation have to be understood reasonable and so understood, whatever may fairly be regarded as incidental to, or consequential upon, those things which the legislature has authorised ought not (unless expressly prohibited) to be held by judicial construction, to be ultra vires. It had earlier been laid down by a Constitution Bench of the case of State of Uttar Pradesh v. Batuk Deo Pati Tripathi and Anr. (1973) 2 SCC 102 that a power to do a thing necessarily carries with it the power to regulate the manner in which the thing may be done. The High Court failed to appreciate that the power to grant a licence for the holding of a hat or fair under Section 117 of the Act necessarily carries with it the power to specify a day on which such hat or fair shall be held. Such power to specify a day must be held to be a power incidental to or consequential upon the principal power of issuing a licence under Section 117 of the Act for holding of a hat or fair. The rules or the absence of it do not detract from the substantive power conferred by a statute. The essence and content of the power of a Panchayat Samiti under Section 117 of the Act is issuance of a licence for the holding of a hat or fair and not mere maintenance of sanitation, health and hygiene as held by the High Court.

6. For these reasons, we have no hesitation in reversing the judgment of the High Court. The appeal must accordingly succeed and is allowed. The judgment and order passed by the High Court are set aside and the writ petition is dismissed. No costs.