STATE OF ORIS SA AND ORS.versusMD. ILLIYAS

                     STATE OF ORIS SA AND ORS.                                A
                                 v.
                            MD. ILLIYAS

                         NOVEMBER 22, 2005

             [ARIJIT PASAYAT AND ARUN KUMAR, JJ.]                             B


     Orissa Gram Panchayat Act, 1964; Section 115:

      Allegation of abuse ofpowers, rights and privileges against Sarpanch-
Suspensiorr-Challenge to-Quashed by High Court holding that pre-requisite C
conditions for suspension not satisfied-On appeal, Held: Collector as
empowered to suspend Sarpanch on the basis ofan inquiry report and satisfying
that his continuance would be detrimental to the interest of Gram Panchayat-
A reasonable opportunity to show cause could be granted only at the stage of      ,.
his removal-Since Collector on the basis of enquiry report satisfied that the D
Sarpanch had willfully abused the powers vested in him, High Court erred in
quashing the order of his suspension relying on an earlier decision of the
Supreme Court without looking into the facts and circumstances of that case-
Hence, judgment of the High Court indefensible.

     Words and Phrases:                                                       E
     'wilful '-Meaning of in the context of Section I 15 of the Orissa Gram
Panchayat Act, I 964.

      Respondent, Sarpanch of Gram Panchayat, allegedly collected illegal
gratification from the poor villagers by giving them false assurance to F
provide houses under the Indira Avas Vojna. The Collector directed the '
Sub-Collector to inquire into the matter. After conducting inquiry, the sub-
collector submitted his report concluding that the Sarpanch had misused
his powers. On the basis of the report, the Collector suspended the
respondent-Sarpanch in purported exercise of the powers conferred on G
him under Section 115(1) of the Orissa Gram Panchayat Act. The order
was challenged by the respondent by filing a writ petition. High Court
quashed the order on the ground that pre-requisite conditions before
suspension as stipulated under Section 115(1) of the Act were not satisfied.
Hence the present appeal.
                                   395                                        H
    396                     SUPREME COURT REPORTS [2005) SUPP. 5 S.C.R.

A         It was contended by the appellant-State that the High Court is clearly
    in error in its analysis of Section 115(1) of the Act; that the Sub Collector's
    report is clearly indicative of the manner in which there was abuse of
    powers, rights and privileges vested in respondent, Sarpanch and as to
    how these acts were prejudicial to the interest of the Grama Panchayat
B   and inhabitants of the Grama; and that the Collector had categorically
    stated in his order that the acts were wilful in nature.

          Respondent submitted that by merely referring to the language of
    Section 115(1) of the Act the Collect~ould not have concluded that acts
    of the respondent were prejudicial act_s or amounted to abuse of powers
C   and rights and privileges vested in hifu; and that before the inquiry was
    conducted by the Sub-Collector the respondent was not granted any
    opportunity.

          Allowing the appeal, the Court

D         HELD: 1. The Collector, on the basis of an inquiry or inspection or
    report of Sub~Divisional Officer, as the case may be, has to form opiniOn
    whether circumstances exist to show that the Sarpanch has wilfully omitted
    or refused to carry out or has violated the provisions of the Orissa Gram
    Panchanyat Act or the rules or orders made thereunder or 'has abused
    the powers, rights and privileges vested in him or has acted in a manner
E   prejudicial to the interest of the inhabitants of the Grama, and that further
    continuance of such person in office would be detrimental to the interest
    of the Grama Panchayat or inhabitants of the Grama. On formation of
    such opinion he may by order suspend the Sarpanch or Naib-Sarpanch,
    as the case may be, from office and report the matter to the State
F   Government. It is only at the stage of removal, a reasonable opportunity
    to show cause is to be granted to the concerned Sarpanch or Naib-
    Sarpanch, as the case may be. [402-8-EJ

          2.1. For bringing in application of Section 115(1), the acts complained
    of must have been done wilfully by the Sarpanch or Naib-Sarpanch, as
G   the case may be. Order of the Collector after referring to the acts
    purportedly done by the respondent/Sarpanch categorically stated that he
    was satisfied that the Sarpanch had wilfully abused the p~wers, rights and
    privileges vested in him and had acted in the manner prejudicial to the
    interest of the inhabitants of the Grama. [402-G, H)

H         2.2. An act is said to be 'wilful' if it is intentional, conscious and
                     ST ATE OF ORIS SA v. MD. ILLIY AS                  397
deliberate. The expression 'Wilful' excludes casual, accidental, bona fide      A
or unintentional acts or genuine inability. A wilful act qoes not encompass
accidental, involuntary, or negligence. It must be intentional, deliberate,
calculated and conscious with full knowledge of legal consequences flowing
therefrom. The expression 'wilful' means an act done with a bad purpose,
with an evil motive. "Wilful" is a word of familiar use in every branch of      B
law, and although in some branches of law it may have a special meaning,
it generally, as used in courts of law, implies nothing blameable, but merely
that the person of whose action or default the expression is used is a free
agent, and that what has been done arises from the spontaneous action of
his will. It amounts to nothing more than this, that he knows what he is
doing, and intends to do what he is doing, and is a free agent. [403-C-E)       C
     Rakapalli Raja Rama Gopala Rao v. Naragani Govinda Sehararao,
[1989) 4 sec 255, relied on.

     Re Young and Harston by Bowen L.J. 31 Ch. D. 174; Wheeler v. New
Merion Board Mills, (1933) 2 K.B. 669; Gayfordv. Chou/er by DayJ., (1898)
1 Q.B. 316 and R. v. Senior by Russel C.J., (1899) 1 Q.B. 283, referred to.
                                                                                D
     2.3. When the allegation is of cheating or deceiving, whether the
alleged act is wilful or not depends upon the circumstances of the
concerned case and there cannot be any strait jacket formula. The High
Court did not discuss the factual aspects and by merely placing reliance
on earlier decision of the Court held that pre-requisite conditions were        E
absent. Reliance on the decision without looking into the factual
background of the case before it is clearly impermissible. What is of the
essence in a decision. is its ratio and not every observation found therein
nor what logically flows from the various observations made in the
judgment. The enunciation of the reason or principle on which a question        F
be~ore a Court has been decided is alone binding as a precedent. A case is
a precedent and binding for what it explicitly decides and no more.
                                                       [403-G, H; 404-C-E)

      State o/Orissa v. Sudhansu Sekhar Misra and Ors .. AIR (1968) SC 647
and Union of India and Ors. v. Dhanwanti Devi and Ors., [ 1996) 6 SCC 44,       G
relied on.

      3.1. The High Court in its judgment has not indicated as to why
according to it the pre-requisite conditions stipulated were not satisfied.
In the instant case various acts of the respondent/Sarpanch are prima facie
indicative of abuse of powers, rights and privileges vested on him. The         H
     398                     SUPREME COURT REPORTS (2005) SUPP. 5 S.C.R.

A Collector, on the basis of materials contained in the report of the Sub-
     Collector has opined that these are wilful acts. The High Court has
     completely lost sight of these relevant facts. The Collector's opinion at the
     stage of consideration is really a primafacie view on the basis of materials
     before him. Unless there is total absence of material and/or non-application
     of mind the Courts should not interfere. The case at hand does not belong
B    to that category. Looking from any angle, the High Court's judgment is
     indefensible, hence set aside. 1404-F-H; 405-A, Cl

           3.2. It is clarified that no opinion is expressed on the merits of the
     case, so far as action under sub-section (2) of Section 115 of the Act is
C:   concerned. (405-C(

           CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6980 of2003.

          From the Judgment and Order dated 15.3.2004 of the Orissa High
     Court in W.P.(C) No. 5725 of 2003.
D          Janaranjan Das and Swetaketu Mishra for the Appellants.

           Ms. Promila for the Respondent.

           The Judgment of the Court was delivered by

E          ARIJIT PASAYAT, J. Leave granted.

           Challenge in this appeal is to the judgment of a Division Bench of the
     Orissa High Court. By the impugned judgment the High Court held that the
     pre-requisites for taking such action under Section 115( l) of the Orissa Gram
F    Panchayat Act, 1964 (in short the 'Act') were not satisfied and, therefore, the
     order of Collector, Jajpur, dated 3.6.2003 directing suspension of the
     respondent was illegal.

           The factual background needs to be noted in brief:

           The respondent was elected as Sarpanch of Neulapur Gram Panchayat
G in March, 2002, Purportedly acting on the basis of the allegations made by
     several villagers of that gram panchayat inquiry was conducted by the Sub-
     Collector, Jajpur. Several allegations were received by the Sub-Collector from    ,.
     the villagers as well as the member of the Legislative Assembly. By Order
     dated 17.5.2003 the Collector directed Sub-Collector to inquire into the
H    allegations made against the respondent-Sarpanch. On 23.5.2003 the Sub-
             STATEOFORISSAv. MD. ILLIYAS [PASAYAT, J.]                    399
Collector conducted inquiry and recorded statements of the complainants and A
thereafter the respondent. On 27.5.2003 Sub Collector submitted his report
concluding that the respondent had misused his power as Sarpanch and had
failed to discharge his duties. Considering the report of the Sub-Collector, by
order dated 3.6.2003 the Collector suspended the respondent from the office
of Sarpanch in purported exercise of powers conferred under Section II S(l) B
of the Act. The order was challenged by the respondent by filing a writ
petition before the High Court. It was submitted that there was no material
to show that alleged acts of the respondent were wilful. The State Government
filed its counter pointing out that serious allegations were made which were
inquired into by the Sub-Collector, who had categorically reported that there
was truth in the allegations clearly indicating causes of powers, rights and C
privileges vested in him (the respondent) and the acts were prejudicial to the
interest of inhabitants of Grama, and his further continuance would be
detrimental to the interest of the Grama Panchayat and inhabitants of the
Grama. High Court referred to an earlier decision in Sanatan Jena v. Collector,
Balasore and Anr., (2001) I OLR 206 where reference was made to two
earlier decisions i.e. Pradeep Kumar Karji v. Collector, Rayagada and Ors., D
(1998) II OLR 348 and Tarini Tripathy v. Collector, Koraput and Ors.,
( l 986) III OLR 497. On the basis of the said judgment in Sanatan 's case
(supra) the High Court held as follows :-

       "This being the settled position of law and bare perusal of the report E
       of the Sub Collector, we are of the opinion that the same do not
       satisfy the pre-requisite conditions stipulated under Section l l 5( l) of
       the Orissa Gram Panchayat Act. For the aforesaid reasons, the order
       of suspension fails to withstand the judicial scrutiny which is in our
       considered opinion liable to be quashed. Accordingly, we quash the
       impugned order passed in Annexure-1."                                      F
      Portion of the judgment in Sanatan 's case (supra), which was quoted
by the High Court to conclude as above reads as follows :

       "Suspension of an elected representative is indeed a drastic action
       and should not be taken recourse to cursorily and in a mechanical G
       manner. This view was adopted in an earlier decision of this Court
       reported in (1998) II OLR 348 (Pradeep Kumar Karji v. Collector,
       Rayagada and Ors.). Further while vesting the power upon the
       Executive to suspend an elected representative, the Legislature thought
       it just and prudent to provide certain safeguards against the arbitrary
       exercise of such power. As has been held in the decision of the Court H
    400                      SUPREME COURT REPORTS [2005) SUPP. 5 S.C.R.

A           reported in (1986) II OLR 497 (Tarini Tripathy v. Collector, Koraput
            and Ors.), all the ingredients stipulated under Section 115( 1) of the
            Act are cumulative. Absence of any of one of the said ingredients
            would make the order of suspension vulnerable. In consonance with
            Section 115(1) of the Act, the Collector must have to form an opinion
            that the omissions or commissions found against a Sarpanch were
B           wilful. While bringing the tenure of an elected representative to a
            premature end, either temporarily or permanently, utmost care and
            circumspection ought to be exercised. In other words, the right of an
            elected representative to continue in office for the full tenure should
            not be lightly tinkered with by the Executive."
c          In support of the appeal, learned counsel for the appellants submitted
    that the High Court is «I early in error in its analysis of Section 115( 1) of the
    Act. The Sub Collector's report clearly indicates the manner in which there
    was abuse of powers, rights and privileges vested in respondent no. I and as
    to how the acts were prejudicial to the interest of the Grama Panchayat and
D   inhabitants of the Grama. The Collector had categorically stated in his order
    that the acts were wilful in nature.

           Learned counsel for the respondent submitted that by merely referring
    to the language of Section the Collector could not have concluded that acts
    of the respondent were prejudicial acts or amounted to abuse of powers and
E   rights and privileges vested in him. It was submitted that before the inquiry
    was conducted by the Sub-Collector the respondent was not granted any
    opportl!nity. On the other hand the statement of the respondent was recorded
    after the statements of the so called complainants were recorded. Even a copy
    of the Sub-Collector's report was not supplied to the respondent.
F        In order to appreciate the rival submissions Section 115 needs to be
    quoted. The same reads as under :

            "115. Suspension and removal of Sarpanch, Naib Sarpanch and
            member - (1) If the Collector, on an inquiry or inspection made by
            him or on the report of the Sub Divisional Officer is of the opinion
G
            that circumstances exist t-0 show that the Sarpanch of Naib-Sarpanch
            of a Gram.. Panchayat Wilfully omits or refuses to carry out or violates
            the provisions of this Act or the rules or orders made thereunder or
            abuses the powers, rights and privileges vested in him or acts in a
            manner prejudicial to the interest of the inhabitants of the Grama and
H           that the further continuance of such person in office would be
      STATEOFORISSAv. MD. ILLIYAS [PASAYAT, J.]                     401
detrimental to the interest of the Gram Panchayat or the inhabitants        A
of the Grama, he may, by order, suspend the Sarpanch or Naib-
Sarpanch, as the case may be, from office and report the matter to the
State Government.

(2) The State Government, on the report or the Collector under sub-
section (l) shall, or if the State Govt. themselves are of the opinion      B
that the circumstance specified in the said sub-section exist in relation
to a Sarpanch or Naib-Sarpanch then on their own motion, may after
giving the person concerned a reasonable opportunity of showing
cause, remove him from the office of Sarpanch or Naib-Sarpanch, as
the case may be.
                                                                            c
(3) In the case of Sarpanch or Naib-Sarpanch, if he is not already
under suspension in pursuance of an order under sub-section (I), the
State Government may, pending the disposal of the proceedings before
them under sub-section (2) su~pend the Sarpanch or Naib-Sarpanch,
as the case may be.                                                         D
(3a) The State Governmeqt, may, at any time during the pendency of
Proceedings before them under sub-section (2), revoke the order of
suspension of a Sarpanch or Naib-Sarpanch passed under sub-section
(l) or under sub-section (3).

(4) A Sarpanch or Naib-Sarpanch, on removal from office under sub-          E
section (2) shall also cease to be a member of the Grama Panchayat
and such person shall not be eligible for election as a member for a
period not exceeding four years as the State Government may specify.

(5) The provisions of this section shall, so far as may be, apply in
respect of any member of the Grama Panchayat not being a Sarpanch           F
ofNaib-Sarpanch, provided that no such member shall be liable to be
placed under suspension under the said provisions.

(6)(a) Whenever the Collector is of the opinion that the Sarpanch of
a Grama Panchayat has failed in convening any meeting of the Grama          G
Panchayat within a period of three continuous months he may, after
making such enquiry as he deems fit, by order, remove the Sarpanch
from office and may also declare him not be eligible for election as
a member for a period not exceeding one year as he may specify in
his order and on such order being made the Sarpanch shall cease to
be a member of the Grama Panchayat.                                         H
    402                       SUPREME COURT REPORTS (2005) SUPP. 5 S.C.R.

A           (b) Nothing contained in the preceding sub-sections shall apply in
            respect of a default as specified above.''

    The scheme of Section 115 shows that the Collector can take action either on
    the basis of an inquiry or inspection made by him or on the report of the Sub-
    Collector. On the basis of such inquiry of inspection or report of Sub-Divisional
B   Officer, as the case may be, he has to form opinion whether circumstances
    exist to show that the Sarpanch has wilfully omitted or refused to carry out
    or has violated the provisions of the Act or the rules or orders made thereunder
    or has abused the powers, rights and privileges vested in him or has acted in
    a manner prejudicial to the interest of the inhabitants of the Grama, and that
C   further continuance of such person in office would be detrimental to the
    interest of the Grama Panchayat or inhabitants of the Grama. On formation
    of such opinion he may by order suspend the Sarpanch or Naib-Sarpanch, as
    the case may be, from office and report the matter to the State Government.
    After the report of the Collector is received by the State Government or if the
    State Government themselves is of the opinion that the circumstances specified
D   in sub-section (I) exist in relation to a Sarpanch or Naib-Sarpanch then on
    their own motion after giving the person concerned reasonable opportunity
    of showing cause remove ltim from the office of Sarpanch or Naib-Sarpanch
    as the case may bY.._ It is only at the stage of re_moval, a reasonable opportunity
    to show cause is to pe granted to the concerned Sarpanch or Naib-Sarpanch,
E   as the case may be.

          When the Collector acts in terms of sub-section (I), there is no question
    of granting an opportunity to the concerned Sarpanch or Naib-Sarpanch, as
    the case may be, to have his say in the matter. Sub-section (3) empowers the
    State Government to suspend the Sarpanch or Naib-Sarpanch, as the case
F   may be, if he is not already suspended in pursuance of order under sub-
    section (I) while the proceedings before them are pending under sub-section
    (2). Further, during pendency of the proceedings under sub-section (2) the
    State Government may under sub-section (3-a) revoke order passed either
    under sub-section (I) or under sub-section (3).

G         For bringing in application of Section 115(1) the acts complained of
    must have been done wilfully by the Sarpanch or Naib-Sarpanch, as the case
    may be. Order of the Collector after referring to the acts purportedly done by
    the respondent categorically stated the he was satisfied that the respondent
    had wilfully abused.the powers, rights and privileges vested in him and had
H   acted in the manner prejudicial to the interest of the inhabitants of the Grama.
               STATEOFORISSAv.MD.ILLIYAS[PASAYAT. J.]                            403

The allegations were to the effect that he had collected illegal gratification           A
from poor beneficiaries of the Indira Avas Yogana by giving false assurance
to provide them India Avas Houses, and also from some people for providing
HUDCO loans. The Sub-Collector had recovered statements of seven of such
beneficiaries and had concluded that by taking advantage of the simplicity of
the poor persons, the respondent had cheated the poor beneficiaries who                  B
relied upon the words of the respondent and were finally deceived.

      At this juncture it is desirable to consider the true, import of the word
'wilful'. An act is said to be 'wilful' ifit is intentional, conscious and deliberate.
(See : Rakapa/li Raja Rama Gopala Rao v. Naragani Govinda Sehararao,
[1989] 4 sec 255).                                                                       c
      The expression. 'wilful' excluded casual, accidental, bona fide or
unintentional acts or genuine inability. It i to be noted that a wilful act does
not encompass accidental, involuntary, or negligence. It must be intentional,
deliberate, calculated and conscious with full knowledge of legal consequences
flowing therefrom. The expression 'wilful' means an act done with a bad                  D
purpose, with an evil motive.

      "Wilful" is a word of familiar use in every branch of law, and although
in some branches of law it may have a special meaning, it generally, as used
in courts of law, implies nothing blameable, but merely that the person of
whose action or default the expression is used is a free agent, and that what            E
has been done arises from the spontaneou's action of his will. It amount to
nothing more than this, that he knows what he is doing, and intends to do
what he is doing, and is a free agent. (Per Bowen L.J. in Re Young and
Harston 31 ch. D. 174). It does not necessarily, connote blame, although the
word is more commonly used of bad conduct than of good. (See Wheeler v.                  F
New Merion Board Mills, (1933) 2 K.B. 669). Whatever is intentional is
wilful. (per Day J in Gayford v. Chou/er, (1898) l Q.B. 316). As observed
by Russel C.J. in R. v. Senior, (1899) 1 Q.B. 283, "wilfully" means
deliberately and intentionally.

      When the allegation is of cheating or deceiving, whether the alleged act           G
is wilful or not depends upon the circumstances of the concerned case and
there cannot be any strait jacket formula. The High Court unfortunately did
not discuss the factual aspects and be merely placing reliance on earlier
decision of the Court held that pre-requisite conditions were absent. Reliance
on the decision without looking into the factual background of the case
before it is clearly impermissible. A decision is a precedent on its own facts.          H
    404                     SUPREME COURT REPORTS [2005) SUPP. 5 S.C.R.

A   Each case presents its own features. It is not everything said by a Judge while
    giving judgment that constitutes a precedent. The only thing in a Judge's
    decision binding a party is the principle upon which the case is decided and
    for this reason it is important to analyse a decision and isolate from it the
    ratio decidendi. According to the well-settled theory of precedents, every
B   decision contains three basic postulates - (i) findings of material facts, direct
    and inferential. An inferential finding of facts is the inference which the
    Judge draws from the direct, or perceptible facts: (ii) statements of the
    principles of law applicable to the legal problems disclosed by the facts: and
    (iii) judgment based on the combined effect of the above. A decision is an
    authority for what it actually decides; What is of the essence in. a decision is
C   its ratio and not every observation found therein nor what logically flows
    from the various observations made in the judgment. The enunciation of the
    reason or principle on which a question before a Court has been decided is
    alone binding as a precedent. (See: State of Orissa v. Sudhansu Se/cha Misra
    and Ors., AIR (1968) SC 647 and Union of India and Ors. v. Dhanwanti
    Devi and Ors., [1996] 6 SCC 44. A case is a precedent and binding for what
D   it explicity decides and no more. The words used by Judges in their judgments
    are not to be read as if they are words in Act of Parliament. In Quinn v.
    leathern, (1901) AC 495 H.L., Earl of Halsbury LC observed that every
    judgment must be read as applicable to the particular facts proved or assumed
    to be proved, since the generally of the expressions which are found there are
E   not intended to be exposition of the whole law but governed and qualified by
    the particular facts of the case in which such expressions are found and a
    case is only an authority for what it actually decides.

          The High Court has not indicated as to why according to it the pre-
    requisite conditions stipulated were not satisfied. Vulnerability of the High
F   Court's judgment is also apparent from the fact that it referred to the report
    of the Sub Collector and held that the same did not satisfy the pre-requisite
    conditions stipulated. The Sub-Collector's report indicated circumstances to
    show that Sarpanch had wilfully omitted or refused to carry out or has violated
    the provisions of the Act or the Rules or Orders made thereunder or has
G   abused the powers, rights and privileges vested in him or has acted in the
    manner prejudicial to the interest of the inhabitants of the Grama.

          In the instant case various acts of the respondent are prima facie
    indicativ~ of abuse of powers. rights and privileges vested on the Sarpanch.
    The Collector, on the basis of materials contained in the report of the Sub-
H Collector has opined that these are wilful acts. The High Court has completely
             STATE OF ORISSA v. MD. ILLIY AS [PASA YAT, J.]               405

lost sight of these relevant facts. The Collector's opinion at the stage of       A
consideration is really a prima fqcie view on the basis of materials before
him. Unless there is total absence of material and/or non-application of mind
the Courts should not interfere. The case at hand does not belong to that
category.

      A plea has been advanced by learned counsel for the appellant that the      B
Collector does not have to opine on the wilful aspect when the act impugned
is an abuse of the powers, rights and privileges, there is no need to examine
that aspect as the Collector has himself characterized the act as wilful.

       Looked from any angle, the High Court's judgment is indefensible and       C
is set aside. We make it clear that we have not expressed opinion on the
merits of the case, so far as action under sub-section (2) of Section 115 is
concerned. That is a matter which is to be adjudicated by the State Government.
Learned counsel for the respondent submitted that prayers shall be made
before the State Government to revoke the suspension in terms of sub-section
(3a) of Section 115. If any prayer is made the same shall be considered in        D
accordance with law,' and we express no opinion in that regard.

      The appeal is allowed, with no order as to costs.

S.K.S.                                                       Appeal allowed.