W. P. No. 974 of 1986

8th September, 1991.

Petitioner Counsel: P. G. Palshikar
Respondent Counsel: V. V. Naik, Ms. N. S. Jog

JUDGMENT

M. M. QAZI, J. :- The petitioners are residents of village Kakaddati, taluq Pusad, district Yavatmal, and their names are included in the voters' list of Gram Panchayat, Kakaddati. The respondent No. 2 Collector, Yava-tmal, appointed respondent No. 1 V. N. Muley as Returning Officer to hold the election of Gram Panchayat, Kakaddati. The Tahsildar had published the election programme. The last date for filing the nomination papers was 5-5-1986; the date of scrutiny of nomination papers was 6-5-1986 and the date for withdrawal of the nomination papers was 8-5-1986, while 21-5-1986 was the date of polling. In pursuance of the election programme, the petitioners filed their nomination papers. However, certain persons raised objection to the nomination papers filed by the petitioners on the ground that the petitioners were in the service of the Yavatmal Zilla Sahakari Soot Wa Kapad Girni, which is a co-operative society registered under the Maharashtra Cooperative Societies Act, 1960. The respondent No 1 Returning Officer upheld their objection and rejected the nomination papers of all the petitioners under section 14(i) of the Bombay Village Panchayats Act, 1958 (for short 'the Act'). Being aggrieved by this order, the present petition has been filed.

2. There is no dispute that the petitioners are in the service of the Yavatmal Zilla Sahakari Soot Wa Kapad Girni. However, they contended that section 14(i) of the Act is not attracted in their case and, therefore, the rejection of their nomination papers is contrary to the provisions of law and hence cannot be sustained.

3. Section 14(i) reads as under :

"14. No person shall be a member of a panchayat or continue as such, who -

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(i) is a servant of the Government or a servant of any local authority."

In view of this provision, the only question that falls for our consideration is : whether the petitioners can be said to be in the service of any local authority. The expression 'local authority' has not been defined in the Act. However, the same has been defined in the Bombay General Clauses Act, 1904, as under :

"3(26). 'local authority' shall mean a Municipal Corporation, Municipality, Local Board, Body of Port Trustees or Commissioners or other authority, legally entitled to, or entrusted by the Government with the control or management of the municipal or local fund."

4. It has been pointed out by the petitioners in the petition that they are in the service of the co-operative society which is registered under the Maharashtra Co-operative Societies Act, 1960, and that such a society is not a local authority. It is further stated by them that the co-operative societies have neither the control nor the management of any municipal or local funds. They further stated that it is a function on co-operative basis and have their own funds and a separate management not connected with either themanagement or the control over the municipal or local fund. Return has been filed only by respondents Nos. 1 and 2 and they have not controverted this statement in the petition. The Returning Officer has also passed a very brief order without giving any reason as to how the co-operative society can be brought within the definition of 'local authority'. Having regard to these facts, Mr. Palshikar has vehemently contended that the impugned order passed by the returning officer is contrary to law and cannot, therefore, be sustained. He has further submitted that the Returning Officer has misconceived and misinterpreted section 14(i) of the Act and section 3(26) of the Bombay General Clauses Act, 1904. He relied on the decision reported in AIR 1967 Allahabad 121, Sobhnath vs. Raj Kishore and others. The observations made by the Allahabad High Court in paras 9 and 10 of the said judgment completely support the contention of Mr. Palshikar. Para 9 is reproduced below :

"9. In our judgment the authorities included in the expression "local authority" are those authorities which partake in the administration of Local Self Government in a certain local area, and not self-help societies like a society registered under the Co-operative Societies Act. Admittedly the Sadhna Sahkari Samiti Ltd. is not a Municipal Board or a District Board. The only question, therefore, that requires consideration is whether it is "other authority legally entitled to or entrusted by the State Government with the control or management of a municipal or local fund". The words "municipal fund" have not been defined either in the U. P. Panchayat Raj Act or in the U. P. General Clauses Act. However, it is clear that municipal fund is that fund which is contemplated by section 114 of the U. P. Municipalities Act which reads:

"Section 114. Municipal Fund. - There shall be for each municipality a municipal fund and there shall be placed to the credit thereof-

(a) all sums received by or on behalf of the board.

(2) Nothing in this section shall affect any obligations of a board arising from a trust legally imposed upon or accepted by it."

The expression "municipal fund" as occurring in section 4(25) of the U. P. General Clauses Act means a municipal fund within the meaning of section 114 of the U. P. Municipalities Act. Admittedly the Sadhana Sahkari Samiti Ltd. has no control over or management of such a fund"

In para 10, the High Court has further observed as under :-

10. The expression "local fund" also has not been defined either in the U. P. Panchayat Raj Act or in the U. P. General Clauses Act. It has, however, been defined in clause (14) or Rule 9 of the U. P. Financial Hand Book Vol. II. This rule finds place in Chapter II which is headed as 'Definitions'. Rule 9(14) reads :

"Local fund means -

(a) revenue administered by bodies which by law or rule having the force of law come under the control of the Government, whether in regard to proceedings generally or to specific matters, such as the sanctioning of their budgets, sanction to the creation or filling up of particular posts, or the enactment of leave, pension or similar rules; and

(b) the revenues of any body which may be specially notified by the Government as such."

The body whose funds can be described as 'local funds' must be a body which by a rule having the force of law come under the control of Government or the revenues of which have been specifica-lly notified by the Government as 'local fund'. Admittedly there is no rule or law which brings a Co-operative Society under the control of the Government....................."

5. We have already pointed out above the statement in the petition that the society is neither under the control nor management of any municipal or local fund. It has been further pointed out that it is a function on co-operative basis and have their own funds and a separate management not connected with either the management or control over the municipal or local funds. This statement made on solemn affirmation has not been controverted by the respondents. Mr. Naik for the respondents has submitted that the preset petition should be disposed of as infructuous without deciding the issue whether the instant co-operative society is a 'local authority'. However, Mr. Palshikar has insisted that the point should be decided as he apprehends that again the nomination papers of the petitioners may be rejected on the same ground and his clients would have to approach this Court over again. Mr. Palshikar has also invited our attention to the Supreme Court decision reported in AIR 1981 SC 951, Union of India vs. R. C. Jain and others, which lays down the test as to what would constitute 'local authority'. The Supreme Court has observed as under-

"2. Let us, therefore, concentrate and confine our attention and enquiry to the definition of 'Local Authority' in section 3(31) of the General Clauses Act. A proper and careful scrutiny of the language of section 3(31 ) suggests that an authority, in order to be a local Authority, must be of like nature and character as a Municipal Committee, District Board or Body of Port Commissio-ners, possessing, therefore, many, if not all, of the distinctive attributes and characteristics of a Municipal Committee, District Board, or Body of Port Commissioners, but, possessing one essential feature, namely, that it is legally entitled to or entrusted by the Government with, the control and management of a municipal or local fund. What then are the distinctive attributes and characteri-stics, all or many of which a Municipal Committee, District Board or Body of Port Commissioners shares with any other local authority? First, the authorities must have separate legal existence as Corpora-te bodies. They must not be mere Governmental agencies but must be legally independent entities. Next, they must function in a defined area and must ordinarily, wholly or partly, directly or indirectly, be elected by the inhabitants of the area. Next, they must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. The autonomy may not be complete and the degree of the dependence may vary considerably but, an appreciable measure of autonomy there must be. Next, they must be entrusted by Statute with such Governmental functions and duties as are usually entrusted to municipal bodies, such as those connected with providing amenities to the inhabitants of the locality, like health and education services, water and sewerage, town planning and development, roads, ma-rkets, transportation, social welfare service etc. etc. Broadly we may say that they may be entrusted with the performance of civic duties and functions which would otherwise be Governmental duties and functions. Finally, they must have the power to raise funds for the furtherance of their activities and the fulfilment of their projects by levying taxes, rates, charges, or fees. This may be in addition to moneys provided by Government or obtained by borrowing or otherwise. What is essential is that control or management of the fund must vest in the authority."

In the light of the above test laid down by the Supreme Court, it is difficult to hold that the present co-operative society is a local authority. Neither the respondents have placed any data before us nor the Returning Officer has given any reason as to how the petitioners could be disqualified merely because they were in the service of the co-operative society. Unless it is shown that the co-operative society is entrusted with the performance of civic duties and functions which would otherwise be Governmental duties and functions, it could not be termed as local authority.

6. In the Maharashtra Municipalities Act, 1965, local authority has been defined as under-

"2(20) 'local authority' means a Council or a Municipal Corporation constituted under the Bombay Municipal Corporations Act, 1949, or the City of Nagpur Corporation Act, 1948, or a Zilla Parishad constituted under the Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961, or a village panchayat constituted under the Bombay Village Panchayats Act, 1958."

Even on the basis of the above definition, co-operative society does not fall within the meaning of 'local authority'. Having regard to all these facts, we hold that the impugned order disqualifying the petitioners under section 14(i) of the Act on the ground that they were in the service of the Soot Girni, cannot be sustained. Consequently, the impugned order dated 6-5-1986 is quashed and set aside. The petition is allowed and the rule made absolute in the above terms.

Petition allowed.