Holding

The councillor's fair criticism of the house‑tax assessment list does not constitute misconduct under Section 16(1)(e) of the Punjab Municipal Act, 1911, there is no causal nexus with any loss of revenue, and the removal order is illegal.

Summary

Baldev Singh Gandhi, an elected municipal councillor, publicly criticised the house‑tax assessment list prepared by the Municipal Council of Jandiala Guru, using pamphlets, loud‑speakers and inviting taxpayers to discuss grievances. The Punjab State Government claimed his actions caused difficulty in tax collection and a loss of revenue, and removed him from office under Section 16(1)(e) of the Punjab Municipal Act, 1911 on the ground of misconduct. The High Court dismissed his writ petition and the matter reached the Supreme Court. The Court examined whether the charge of misconduct fell within the statutory provision, whether there was a real and proximate nexus between his criticism and any loss of revenue, and whether the State’s findings were within the scope of the charge. It held that fair criticism of a tax assessment is a protected exercise of the right to freedom of speech under Article 19(1)(a) and does not constitute misconduct under the Act; there was no direct causal link between his actions and any loss of revenue; and the State’s findings were outside the charge. Consequently, the removal order was set aside and the appellant’s writ petition was allowed.

Issues considered

Whether the charges of misconduct levelled against the municipal councillor fall within the ambit of Section 16(1)(e) of the Punjab Municipal Act, 1911.
Whether the councillor's criticism of the house‑tax assessment list has a rational nexus with the alleged loss of revenue suffered by the municipal council.
Whether the findings recorded by the State Government in the removal order are outside the scope of the charge of misconduct.

Legislation cited

Constitution of Indias. Article 19(1)(a)
Punjab Municipal Act, 1911s. 16(1)(e)

Subjects

freedom of speechmunicipal councilmisconductremoval of elected representativePunjab Municipal ActArticle 19(1)(a)house tax assessmentpublic interestrational nexuslocal self‑government

Judgment

BALDEV SINGH GANDHI A
v.
... . STATE OF PUNJAB AND ORS .

FEBRUARY 14, 2002

[V.N. KHARE AND ASHOK BHAN, JJ.] B

Punjab Municipal Act, 1911 :

~
Section /6{/}(e)--Removal of member on ground of 'Misconduct'-
Interpretaiion of-Elected Councillor criticised house tax assessment list c
• prepared by the Municipal Council-State Government alleged that his acts
caused loss of revenue and removed him from office-Held, since freedom of
speech and expression includes fair criticism of law or any executive action,
charges of misconduct levelled against him does not fall within the ambit of
Section 16(/)(e)-Constitution of India, 1950, Article 19(/)(a). D
~
Words and Phrases :

• 'Misconduct'. -Meaning of in the context of the Punjab Municipal Act,
1911.

Respondent-Municipal Council prepared and finalised the house tax
E
assessment list for all buildings within its limit. Appellant-elected Municipal
Councillor criticised the house tax assessment list and asked the tax payer to
come to him for sorting out the grievances. He filed a petition before the High
Court and protested the house tax assessment list through pamphlets and
loudspeakers. State Government alleged that due to the acts attributed to the F
r appellant there was difficulty in realisation of house tax which caused loss in
the revenue to the Council an~ removed appellant from the office of the
Council under Section 16(l)(e) of the Punjab Municipal Act, 1911. Aggrieved,
appellant filed a writ petition which was dismissed. Hence the present appeal.

The questions involved in this appeal are whether the charges levelled G
against the appellant fall within the ambit of Section 16(1)(e) of the Act; acts
attributed to him have any nexus with the financial loss alleged to be suffered
-,
... by the Council; and also whether the findings recorded by the State
Governme;1t while removing the appellant from the office of the Council are
outside the scope of the charges levelled against the appellant.
1021
H
1022 SUPREME CUI ;RT REPORTS ~2002] I S.C.R.

A Allowing the appeal, the Court

HELD: 1.1. Every citizen, inasmuch as a Municipal Councillor, has a
freedom of speech and expression under Article 19(l)(a) of the Constitution
which includes fair criticism of the law or any executive action. Freedom of
., -
speech and expression is guaranteed m our democratic republic both in
B legislature as well as in local bodies and, therefore, a legislator or a municipal
councillor legitimately can express his views in regard to what he thinks to
be in public interest. A legitimate exercise of right of speech and expression
including a fair criticism is not to be throttled and also such right could not
be infringed on the ground of remote or speculative ground, otherwise all the
""
c guaranteed liberties under the Constitution are liable to be infringed on one
excuse or the other. [1027-C-D; 1028-F-Gj
..
1.2. In the instant case, appellant as an elected representative of the
Ward owned duty not merely to his Municipal Council but held his office in
trust for the public and was expected to exercise his functions in the interest
D of the public. The criticism of the house tax assessment list was in furtherance
of what he believed to be in public interest. Keeping in view the aim, object
.,
and the scheme behind the provisions of the Act and also in the context the
expression 'misconduct' has been used, such a criticism by the appellant of •
the house tax assessment list prepared and finalised by the Council did not
constitute 'misconduct' within the meaning of the expression 'misconduct'
E occurring in Section 16(1)(e) of the Punjab Municipal Act, 1911. [1028-C-E[

Terminiello Chicago (1948) 337 US 1 and American Communications
Association v. Douds, (1949) 339 US 382, referred to.

Hamlyn Lecture on Freedom of Mind and Comcience, Freedom under the
F Law by Sir Alfred Denning L.J at p. 35, referred to.
'
1.3. The connection between the legislation and object of legislation must
be real and proximate and not far-fetched. Thus the act attributed to the
appellant must have direct and real connection with the alleged loss in revenue
suffered by the municipal council. In the instant case, appellant did not incite
G
tax payers not to pay taxes or incited people to resort to violence against house
tax assessment list. A fair criticism of the house tax assessment list by the
appellant has no bearing on the alleged loss in revenue of the Council. What .
is contemplated in Section 16(l)(e) of the Act is that the loss of revenue must
be a direct result of misdemeanour of a municipal councillor. Therefore, there
H is no rational nexus between the act attributed to the appellant and the alleged
B.S.GANDHlv.STATE [V.N.KHARE,J.] 1023
loss in revenue to the Council. (1028-E-F; 1029-A-BJ A
..... 1.4. It is not disputed that house tax assessment list was a new list and
85% of the tax payers paid the house tax and merely an insignificant number
of tax payers did not pay the house tax. It, therefore, does not mean that house
tax dues were lost and became unrecoverable. In fact, there was no loss in
revenue and only recovery of taxes were deferred. It is not disputed that B
arrears of tax can be recovered as arrears of land revenue by the Collector.
In that view of the matter, in fact, there was no loss in revenue to the Council
[1029-C-DJ

1.5. There is no finding recorded by the State Government that because
of the criticism of the house tax assessment list by appellant, the Council has C
suffered any loss in revenue. In absence of such a finding, the finding recorded
in the impugned order of removal passed by the state Government is totally
outside the scope of charge levelled against the appellant, and for that reasons
also, the order of removal of the appellant is not sustainable in law.
[1030-F-GJ D
M H. Devendrappa v. Karanataka State Small Industries Development
Corporation, [1998) 3 SCC 732, distinguished.
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1188 of
2002.

From the Judgment and Order dated 26.5.2000 of the Punjab and E
Haryana High Court in C.W. P. No. 6127 of 2000.

Vipin Gogia and Ms. Jaspreet Gogia for the Appellant.
Lokesh Kumar for Rajeev Sharma for the Respondents.
The Judgment of the Court was delivered by F
V.N. KHARE, J. Leave granted.

Municipal Council, Jandiala Guru, district Amritsar, Punjab (hereinafter
referred to as 'the Council'), is established and constituted under the provisions
of the Punjab Municipal Act, 1911 (hereinafter referred to as 'the Act'). In G
the last election for constituting the Council, the appellant herein was elected
" . a Municipal Councillor (in short as ·councillor') from Ward No. 3 of the
Council. In the year 1998, the Council prepared and finalised the house tax
a- >essment list for all buildings within its limit indicating therein the value
01 the buildings and the amount of tax assessed thereto. The total revenue
receipt out of the said levy was neaily ten lacs. However, out of the said H
1024 SUPREME COURT REPORTS [2002] I S.C.R.

A gross receipt, a sum of Rs. six lacs was sought to be assessed and recovered
as house tax from the houses falling within Ward No. 3 from where the
appellant was elected. When the said fact came to the notice, the appellant
publicly criticised the house tax assessment list as being illegal and arbitrary.
A writ petition was also filed before the Punjab and Haryana High Court
B challenging the said house tax assessment list as prepared and finalised by
the Council. It is alleged that the then Chainnan of the Assessment Committee
nourished ill-will against the appellant and, therefore, he made a complaint
to the government for his removal from the Council. It is alleged that on the
basis of the said complaint, the State government served a show cause notice
on the appellant calling upon him to show cause as to why he should not be
C removed from the office of the Council under clause {e) of sub-section (1)
of Section 16 of the Act. The charges levelled against the appellant are
extracted below:

"Executive Officer Nagar Council, Jandiala Guru has reported vide
his office letter No. 99/1111 dated 14.9.99 that Nagar Council acting
D as per new directions and after completing the survey for House tax
had decided 90% cases of the House Tax by 30.3.90. Nobody has
opposed the house tax except you from the whole city. You have
also issued a pamphlet in which you have made allegation that the
Nagar Council is collecting the house tax as per its own wish and you
have appealed to the residents that the objections regarding house tax
E be given to you and your M.C. colleagues between 9 AM to IPM on
9.4.99 in the office of the Nagar Council so as appropriate steps can
be taken to stop the arbitrariness of the Nagar Council. You have
also got it announced through speaker in the city and you stayed in
the office of the Nagar Council to hear the objections regarding house
F tax. Only 10-15 persons met you. Due to this the Nagar Council had
suffered great difficulty in collection of house tax from the people.

Due to the facts as mentioned above Nagar Council Jandiala Guru
has suffered difficulty while collecting the·house tax and as a result
of which financial loss has been caused to the Nagar Council.
G Therefore you have violated Punjab Municipal Act, 1911. Therefore,
there is a proposal to remove you from the membership of Nagar
Council, Jandiala Guru u/s. 16 (1) (e) of the Punjab Municipal Act,
1911."
..
On receipt of the said show cause notice, the appellant furnished an
H explanation. fn the said explanation the appellant denied that he had either
B.S. GANDHI v. STATE [V.N. KHARE, J.] 1025

flagrantly abused his position as a member of the Council or committed any A
misconduct as a result of which the Council was put to any financial loss.
It was also alleged therein that the show cause notice was ma/a fide. It was
also stated therein that it was out of sheer ill will that his constituency was
picked up for arbitrary and excessive taxation and, therefore, as a representative
of the said Ward, he protested against the house tax assessment list prepared B
by the Committee. The government of Punjab by an order dated 25.8.1999
removed the appellant from the office of the Council under clause (e) of sub-
section (I) of Section 16 of the Act. Aggrieved, the appellant preferred a writ
petition before the High Court of Punjab and Haryana which was dismissed.
It is against the said judgment and order of the High Court, the appellant has

• preferred this appeal by way of special leave petition. C
On argument of learned counsel for the parties, the questions that arise
for our consideration are these-

(I) whether the charges levelled against the appellant fall within the
ambit of clause (e) of sub-section (I} of Section 16 of the Act; D
(2) whether acts attributed to the appellants has any nexus with the
financial loss alleged to be suffered by the Council ; and
(3) whether the findings recorded by the State government while
removing the appellant from the office of the Council are outside
the scope of the charges levdled against the appellant. E
Since questton nos. l and 2 are overlapping, we proceed to decide both
the questions together.

In order to deal with these questions, it is necessary to split the relevant
portion of the charge levelled against the appellant, which are broadly as F
under :

"Executive officer ......

(a) You are also issued a pamphlet in which you have made allegation
that the Nagar Council is collecting house tax as per its own wish and G
you have appealed to the residents that the objections regarding house
tax be given to you and your M.C. colleagues for taking appropriate
steps to stop the arbitrariness of the Nagar Council" ......... You also
get it announced through loud speaker in the city .................. ..

(b) Due to the aforesaid action, Nagar Council suffered c;reat difficulty H
1026 SUPREME COURT REPORTS [2002] I S C.R.

A in collection of house tax from the people and as a result of which
the Municipal Council was put to financial loss. Therefore, you have
violated the provisions of the Act".

A perusal of the aforesaid charge against the appellant shows that
what was attributed to the appellant was that he through pamphlets
B and also on loudspeaker made a protest against the house tax
assessment list prepared by the Council. The question, therefore, arises
whether such a charge would constitute 'misconduct' within the
meaning of clause (e) of sub-section (1) of Section 16 of the Act.

Section 16 of the Act which empowers the State government to remove
C any member of a committee runs as under: •
"16. Power of the State Government as to removal of members:- (1)
The State Government may, by notification [remove any member of
a committee other than an associate member] ;

D (a) .............. ..

(b) .............. ..

(c) ............... .

{d) .............. ..

E (e) if, in the opinion of the State Government he has flagrantly abused
his position as a member of the committee or has through negligence
or misconduct been responsible for the loss, or misapplication of any
money or property of the committee".

'Misconduct' has not been defined in the Act. The word 'misconduct'
F is antithesis of the word 'conduct'. Thus, ordinarily the expression
'misconduct' means wrong or improper conduct, unlawlful behaviour,
misfeasance, wrong conduct, misdemeanour etc. There being different meaning
of the expression 'misconduct', we, therefore, have to construe the expression
'misconduct' with reference to the subject and the context where;n the said
G expression occurs. Regard being had to the aims and objects of the statute.
The appellant herein is an elected municipal councilor to a democratic
institution i.e. local body. The aim and object of the Act is to make better
provisions for administration of municipalit;es. The municipality is a
democratic institution of self governance consisting of local people and for
the local people and by the local people. The prime object of the local body
H is to serve the local people and to provide amenities and service to the people
B.S. GANDHI v. STATE (V.N. KHARE,J.) 1027
residing within the municipality. As a representative of the public it is the A
duty of an elected representative to see that the public of his constituency are
not burdened with excessive and arbitrary levy. No doubt, a municipal
commissioner holds a statutory office in a municipal council, but no statutory
code of conduct in respect of municipal councillors has been enacted. However,
it is a different question whether such a law could be framed as to restrict the B
freedom of speech and expression of a municipal councilor. However, it must
be borne in mind that the appellant was not an employee or a servant of the
municipal council and also never held any office of profit in the municipal
council. Every citizen, inasmuch as a municipal councilor, has a freedom of
speech and expression under Art.I9(1)(a) of the Constitution which includes
fair criticism of the law or any executive action. Freedom of speech and C
expression is guaranteed in our democratic republic both in legislature as
well as in local bodies and, therefore, a legislator or a municipal councilor
legitimately can express his views in regard to what he thinks to be in public
interest. A legitimate exercise of right of speech and expression including a
fair criticism is not to be throttled.
D
It is no doubt true that a citizen or a municipal councillor must obey
the law duly passed by the legislature or municipal council. The observance
of rule of law by all citizens and municipal councillors is one of the basic
requirements of working of a democracy. The rule of law which is obeyed
not only by the officers and public servant of the State or local bodies, but E
by all the citizens and holders of elected offices, is a pre-condition of a
healthy and successful democracy. No responsible person in a democracy
could incite the people to disobey the rule of law duly enacted. But situations
may arise where responsible persons or those who hold elected offices may
feel that it is their duty to criticise the law either promulgated by the State
or the municipal council as illegal, arbitrary or ultra vires and against the F
public interest and invite the people to come for discussion on the subject.
Can such a conduct be attributed as a 'misconduct' ?

Sir Alfred Denning L. J. in the Hamlyn Lecture on Freedom of Mind
and Conscience, Freedom Under the Law, at p. 35 stated thus: G

"Every one in the land should be free to think his own thoughts to
have his own opinions and to give voice to them, in public or in
private, so long as he does not speak ill of his neighbour, and free
also to criticise the government or any party or group of people, so
long as he does not incite anyone to violence". H
1028 SUPREME COCRT REPORTS [2002] I S.C.R.

A Douglas J. in Terminiello Chicago (1948) 337 US I, stated thus:

"It is only through free debate and free exchange of ideas that ..,. ...
government remains responsive to the will of the people and peaceful
change is effected."

B Holmes and Brandeis JJ. in American Communications Association v.
Douds, (I 949) 339 US 382, stated ''that the greater danger to democracy lies
in the suppress10n of public discussion and that ideas and doctrines thought
harmful or dangerous are best taught with words".

Here, the appellant criticised the house tax assessment list and asked
C the tax payer to come to him for sorting out the grievances. The appellant as •
an elective representative of the Ward held his office in trust for the public
and was expected to exercise his functions in the interest of the public. This
being the case, his criticism of the house tax assessment list was in furtherance
of what he believed to be in public interest. Keeping in view the aim, object
D and the scheme behind the provisions of the Act and also in the context the
expression 'misconduct' has been used, such a criticism by the appellant
against the house tax assessment list cannot be construed as 'misconduct'.
We are, therefore, of the view that the criticism by the appellant of the house
tax assessment list prepared and finalised by the Council did not constitute
'misconduct' within the meaning of the expression 'misconduct' occurring in
E clause (e) -0f suh-section (I) of Section 16 of the Act.

Then again question arises whether is there any rational connection
between the act attributed to the appellant and the alleged loss of revenue
suffered by the municipal council. It may be remembered that the connection
between the legislation and object of legislation rr ust be real and proximate
F and not far-fetched .. The Constitution of India never contemplated that freedom
of speech & expression guaranteed under Art. l 9(l)(a) which includes a fair
criticism of law and executive actions could be infringed on the ground of
remote or speculative ground, otherwise all the guaranteed liberties under the
Constitution are liable to be infringed on one excuse or the other. What is to
G be seen is the act attributed to the appellant must have direct and real
connection with the alleged loss in revenue suffered by the municipal council,
and unless there is such a connection, it cannot be held that loss in revenue
was the result of the act attributed to the appellant. It is not the case of the
State Government that the appellant incited tax payers not to pay taxes or
incited people to resort to violence against house tax assessment list. A fair
H criticism of the l.ouse tax assessment list by the appellant has no bearing on
B.S. GANDHI v. STATE (V.N. KHARE, J.] 1029
the alleged loss in revenue of the Council. According to us, what is A
contemplated in clause (e) of sub-section (I) of Section 16 of the Act is that
the loss of revenue must be a direct result of misdemeanour of a municipal
councillor. We, therefore, find that there is no rational nexus between the act
attributed to the appellant and the alleged loss in revenue to the Council.
Before we part with this question, we are deposed to go into the question B
whether, in real sense, was there any loss in revenue to the Council by the
alleged criticism of house tax assessment list. The charge against the appellant
was that because of his acts, there was difficulty in realisation of house tax
and, therefore, loss in revenue was caused to the Council. It is not disputed
that house tax assessment list was a new list and 85% of the tax payers paid
the house tax and merely an insignificant number of tax payers did not pay C
the house tax. It, therefore, does not mean that house tax dues were lost and
became unrecoverable. In fact, there was no loss in revenue and only recovery
of taxes were deferred. It is not disputed that arrears of tax can be recovered
as arrears of land revenue by the Collector. In that view of the matter, we are
of the view that, in fact, there was no loss in revenue to the Council. The
appellant was exercising only his democratic right of fair criticism of the D
house tax assessment list prepared and finalised by the Council and such an
act had no rational nexus with the alleged loss in revenue suffered by the
Council. We are, therefore, of the view that the charge levelled against the
appellant was totally outside the scope of clause ( e) of sub-section (I) of
S.:ction 16 of the Act. E
Reliance was placed on behalf of the respondents in the case of MH.
Devendrappa v. Karnatuka State Small Industries Development Corporation,
[ 1998) 3 sec 732, for the proposition that even if the appellant while
exercising his fundamental right, as guaranteed under Section 19 (I) (a) of
the Constitution, yet he was supposed to protect the interest of the Council. F
We are of the view that the said decision has no application in the present
case. In the said case, the petitioner was an employc:e of the Kamataka State
Small Industries Development Corporation. Being an employee he sent letters
to the governor and other authorities against the Chairman of the Corporation
attributing serious allegation against him and indulged in party politics. He G
also issued press statements against the Chairman for his illegal activities.
For such an act, the petitioner was dismissed from service. The writ petition
against the order of dismissal from service was dismissed which was upheld
by this Court on the ground that Rule 22 of the Service Rule provided that
any employee who commits a breach of rules or does anything detrimental
to the interest or prestige of the Corporation or guilty of any activity of H
I
~

1030 SUPREME COt:RT REPORTS '.2002] I S.C.R.

A misconduct or misbehaviour, shall be liable to one or more of the penalties.
But that is not the case here. The appellant as a representative of public owed
a duty not merely to the municipal council, but also to the public of his
constituency. He held the office in trust for them. Since as an elected
representative of public he was expected to safeguard the interest of the
B public, and while doing so it cannot be said he committed any misconduct.

Insofar as the third question is concerned, we have already extracted
the charge levelled against the appellant. The State government after receiving
the explanation offered by the appellant removed him from the office of the
municipal council after recording the following finding:
c "It is amply clear from the n:cord that Shri Baldev Singh had almost
invited the people against the house tax assessment. He has gone to
the exter:t of voicing his negative feelings through distribution of
pamphlets. He had called upon the people to lodge their protests
before him vis-a-vis the house tax cases. An elected representative is
D required to be sober and responsible when it comes to public interest.
He is expected to maintain the dignity and decorum and keep the
interest of the municipality above personal consideration. In the instant
case, Shri Ba!dev Singh Gandhi has certainly acted rashly and
irresponstbly". The actions ofShn Baldev Singh Gandhi l'lere clearly
aimed at injuring the financial interests of the municipality. He thus
E renders himself actionable under section 16( I )(c) of the Punjab
Municipal Act, 1911. Accordingly, he is hereby removed from the
membership of the council."

The charge levelled against appellant was that because of his criticism
F of the house tax assessment list, the Council suffered loss in revenue. Whereas,
no finding has been recorded by the State government that because of the act
of the appellant the Council has suffered any loss in revenue. In absence of
such a finding,, the finding recorded in the impugned order of removal passed
by the State Govt. is totally outside the scope of charge 1evelled against the
appellant, and for that reason also, the order of removal of the appellant is
G not sustainable in law.

Jn view of what has been stated above, we are of the view that the order
of removal against the appellant being beyond the scope of clause (e) of sub-
section (I) of Section 16 of the Act was illegal.

H In that view of the matter, the judgment and order under challenge is
\t-
B.S. GANDHI v. STATE [V.N. KHARE, J.) 1031
set aside and the appeal is allowed. Consequently, the writ petition filed by A
the appellant also stands allowed. We direct that the respondent (s) shall pay
- • Rs. 5,000 as costs, to the appellant.

N.J. Appeal allowed.

,

.,