Decided on December 06,1978

Ramkumar Gupta And Anr. Appellant
State of Orissa and Ors. Respondents


R.N.Misra, J. - (1.) PETITIONERS reside within the jurisdiction of the Rourkela Notified Area Council Civil Township, and are rate payers thereof. Before 1948, the tract which is now covered by the present Notified Area Council was a part of the ex -State of Gangapur and was known by the name of Raghunathpalli. There has been rapid growth of urban population soon after the location of the steel plant and the district of Sundergarh has at present three municipalities namely, Rajgangpur. Sundergarh and Biramitrapur and two notified area councils being the Civil Township and the other the Steel Town of Rourkela. The Notified Area Council of Sundergarh was constituted on 1st November, 1951 and was converted into a municipality in 1953 ; the Notified Area Council of Rajgangpur was constituted on 10th October, 1957 and was converted into a municipality in 1969, the Notified Area Council of Biramitrapur was constituted in 1960 and by 1969 it was converted into a municipality. According to the Petitioners though the Steel City of Rourkela is bigger in size, more in population, busier in urban activity and the like, it has been divided into two Notified Area Councils and without justification these two still continued to be Notified Areas. There used to be only one Notified Area Council from 1955 for the entire Steel City, but in 1963, Government bifurcated it into two. Petitioners allege that simultaneously in 1963, the State Government extended the provisions of the Municipal Act to both the councils and decided to appoint a council to carry on the purposes of the Act. The nominated council has been reconstituted from time to time. In 1977, for the first time, Government took not of the strong popular opinion that there should be an elected council and, therefore, on 14th of October, 1977, in modification of the earlier notification of 1963. Government extended under Section 417 -B(a) of the Act, the provisions of the Municipal Act and the Rules framed thereunder relating to constitution of an elected council. Rate payers living within the area were happy that ultimately their wishes were going to be fulfilled and many including the Petitioners started preparations for participation in the elective process for the constitution of the council. Suddenly on the 11th of January, 1978. Government decided to recall the notification and it was stated: x x x And whereas, after further consideration, the said Government are satisfied that situation conducive for having an elected Council; x x x Petitioners contend that once the power under Section 417B had been exercised, it was no more open to Government to recall the notification resulting from exercise of such power and the provisions of the General Clauses Act have no application to a matter of this type. It is pleaded that the Act contemplates of democratic local bodies and provision has been made for nominated councils by way of exception. There would be no justification for a nominated Notified Area Council to be in office for decades. Petitioners have, therefore, prayed for a writ to quash the notification of 11th January, 1978, recalling the earlier notification and for a direction to the opposite parties to held the election and constitute an elected council for the Notified Area Council.
(2.) OPPOSITE parties 1 and 2 have filed a common counter affidavit through the Under Secretary of the Department of Urban Development and have contended that the Petitioners have no cause of action for filing the writ application. It has been further averred that under Section 417 -B of the Orissa Municipal Act, Government has the power to issue notification applying or adopting to a notified area any of the provisions of the Act applicable to a Municipality and it has also jurisdiction to appoint a Council for carrying out the purposes of the Act. Once the State Government derives such a power under the Act to issue modification, it has also the power to exercise in the like manner to add, amend, vary or rescind any such notification. Reliance has been placed on Section 22 of the Orissa General Clauses Act. The allegation of mala fide raised in the writ application has been denied. Opposite party No. 3 has not filed any counter affidavit. Mr. Mohanty for the Petitioners has contended that the power under Section 417B of the Act is essentially quasi judicial and once the power has been exercised, the State Government becomes functus officio and is not entitled to can in aid the provision in Section 22 of the Orissa General Clauses Act for rescinding the notification. Reliance has been placed on four decisions in support of the aforesaid contention. In the case of Kanta Devi and Anr. v. State of Rajasthan and Ors. : A.I.R. 1957 Raj. 134, the question for consideration was as to whether Government who had nominated certain persons as members of a municipal board would be entitled to change their mind and nominate certain other persons in place of the already nominated persons without following the procedure laid down in Section 14 of the Municipal Act. Government had placed reliance in support of the action on corresponding provision of the General Clauses Act of 1897. In exercise of powers under Section 9 of the Rajasthan Town Municipalities Act (23 of 1951), Government nominated two persons. Before the terms was over, Government cancelled the nomination and nominated two others. The two persons who had first been nominated' challenged the action of the State Government contending that it was not open to Government to cancel the nomination and in their place nominate two other persons. Section 14 of that Act provided the method of removing the members of the board and reliance was placed on the said provision for the contention that without following the procedure laid down in Section 14, no removal could be made. The Court accepted the contention of the dislodged members holding that there was no power for cancelling the nomination. We do not think, Petitioners before us are entitled to draw support from this decision. If by the notification a notified area council had come into existence and the council had started functioning, we would certainly agree with Mr. Mohanty for the Petitioners, that it would have been no more open to Government to cancel the notification which brought into existence the council. The position here is, however, very different. No rights had been created in favour of any party and we refuse to accept the contention of Mr. Mohanty that the moment the notification was made in October, 1977, certain right was conferred on the Petitioners as rate -payers to have in motion the elective process and derive appropriate advantage out of it. The next case is that of the Supreme Court in the case of Kamla Prasad Khetan and Anr. v. Union of India : A.I.R. 1957 S.C. 676. It is true that the Supreme Court ultimately came to hold on the facts of the case before it that Section 21 of the General Clauses Act had no application and the Central Government were not entitled to rescind the order made in exercise of statutory powers. Das, J. spoke for the Court thus: There is no dispute before us that the amending order was made in the same manner as the original order, that is, by means of a notified order. As no sanction is necessary for an order under Section 18A, the only question before us is whether the amending order complied with the like conditions under which the original order was made. We have already stated what are the two essential requirements of an order under Clause (b) of Sub -section (1) of Section 18A of the Act. The argument of learned Counsel for the Petitioners is that those two essential conditions must be fulfilled again before any amendment of the order can be made; this, he urges, is the true scope and effect of the expression 'subject to the like conditions (if any)' occurring in Section 21 of the General Clauses Act. We agree with learned Counsel for the Petitioners that the power to amend, which is included in the power to make the order, is exercisable in the like manner and subject to the like sanction and conditions (if any) as govern the making of the original order; this is stated by the section itself.... Once the true nature of those conditions is appreciated, there is in our opinion little difficulty left in the application of Section 21 of the General Clauses Act.... We do not think, Petitioners are entitled to any support from the ratio of the Supreme Court decision. The next case relied upon by the Petitioners is that of Bhola Pd. Singh v. Prof, U.A. Goswami and Ors. : A.I.R. 1963 Pat, 437. The question for consideration was whether an order made under Section 8(4) of the Bihar State Universities Patna University of Bihar, Bhagalpur and Ranchi Act, 14 of 1960, by the Chancellor could be rescinded in exercise of power under Section 24 of the Bihar and Orissa General Clauses Act. The Court came to hold that the power was quasi judicial and aid of the General Clauses Act could not be taken to empower rescission. In our opinion, Petitioners are not entitled to any benefit out of this decision because We cannot agree with Mr. Mohanty's contention that the exercise of power in the instant case is indeed quasi judicial in the way the Patna High Court held Chancellor's exercise of power under the University Act to be. The last case relied upon by Mr. Mohanty is of the Andhra Pradesh High Court in the case of V. Ramchandra Reddy and Anr. v. State of Andhra Pradesh represented by the Secretary Panchayat Raj, Hyderabad and Ors : A.I.R. 1965 A.P. 40. The facts of the case show that by exercising power under the Andhra Pradesh Panchayat Samitis and Zilla Parishads Act, Government brought into existence Panchayat Samitis. Dispute arose when by modification they wanted to abolish the same and in support of their powers fell upon the provisions of the General Clauses Act. In our view, the Andhra Pradesh High Court rightly came to hold that the provisions of the General Clauses Act had no application because as a result of the notification, the Samiti had come into existence. Once an elected or nominated body comes into existence or enters upon office to exercise statutory powers conferred on it, the position becomes very different. In the instant case, all that was intended by the notification was that steps for election of a council were intended to be taken.
(3.) WE do not think, Mr. Mohanty is right in his contention that Government were not entitled to fall back upon the provisions contained in Section 22 of the Orissa General Clauses Act. We would, therefore, agree with learned Government Advocate that Government had power to rescind the notification made in October, 1977.;

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