# Smt. Shyam Wati v. State of U.P. & Others

- **Citation:** High Court of Judicature at Allahabad #42942
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2013-04-23
- **Bench:** Ritu Raj Awasthi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/smt-shyam-wati-v-state-of-u-p-others-42942
- **Pages:** 24

## Headnote

(A) U.P. Panchayat Raj Rules 1997-
Chapter XIII Rule 256 and 257-readwith
U.P. Panchayat Raj Act 1947-Section
27(2)-Surcharge of Rs. 2,99,461/- upon
village Pradhan-on random checking of
three member committee appointed by
DPRO-members
of
committee
below
than Distt. Level officer-held-procedure
prescribed under Rule not followed at
all-order in itself illegal.

Held: Para-23
In view of this and in view of the
undisputed position that the surcharge is
to be levied in accordance with the
procedure prescribed under Section 27
(2) of the Act and the procedure has
been prescribed under Chapter-XIII of
1947 Rules which contained Rules 256
and 257 and there being no other set of
rules
and
the
power
having
been
exercised under the impugned order in
regard to levying of surcharge and its
recovery
and
the
recovery
of
the
surcharge amount having been exercised
under Section 27 (1) of the Act, there is
no
escape
from
the
irresistible
conclusion that the impugned order
passed by the District Magistrate, Unnao
in that regard is per se illegal.
(B) U.P. Panchayat Raj (Removal of
Pradhans, U.P. Pradhans & Member)-
Enquiry Rules 1997- Rule 2(c)-Enquiry
Committee-appointed by DPRO and not
by Distt. Magistrate-two member of
committee being below to Distt. level
officer-could
not
be
nominated
as
enquiry officer-held-committee neither
appointed by competent authority-nor
constituted
by
competent
personfinancial and administrative power of
pradhan could not be ceased.

Held: Para-43
It is to be noted that the decision making
exercise
on
the
part
of
enquiry
committee
while
submitting
the
preliminary
enquiry
report
should
constitute
of
persons
statutorily
competent
to
apply
mind
and
the
decision making process of participation
of some persons who are not statutorily
competent cannot legally be made a
basis for an action contemplated under
the statute. The preliminary enquiry
report submitted by the three member
committee cannot be treated to be the
enquiry report of the District Panchayat
Raj Officer alone, as such, it can safely
be concluded that the enquiry report
submitted by the enquiry committee
which
neither
appointed
by
the
competent authority nor constituted of
competent persons to hold the enquiry
could be valid report for the purpose of
taking a decision to cease the financial
and
administrative
powers
of
the
petitioner.

Case Law discussed:
2006 (3) AWC 2787; [2011 (29) LCD 221];
1969 (1) SCC 825; 1969 (1) SCC 308; (1984) 2
SCC 41; (2001) 6 SCC 260; (2008) 7 SCC 117;
(2010) 11 SCC 557; (2011) 5 SCC 435; AIR
1936 Privy Council 253; AIR 1964 SC 358;
(2004) 2 SCC; (2003) 2 SCC 111; 2013 (1)
ADJ 228; 1998 (89) Revenue Digest 771; 2008
(1) CRC 714

## Text

_Characters 0–39,916 of 77,335. This is a partial read: ask again with offset=39916 for what follows._

522 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
consider the meaning of word 'habitually'
in para 8 as under:-

"
The
expression
'habit'
or
'habitual'
has
however,
not
been
defined under the Act. According to
The Law Lexicon by P.Ramanatha
Aiyar, Reprint Edn. (1987), p. 499,
'habitually' means constant, customary
and addicted to specified habit and the
term habitual criminal may be applied
to anyone who has been previously
convicted of a crime to the sentences
and committed to prison more than
twice. The word 'habitually' means
'usually'
and
'generally'.
Almost
similar meaning is assigned to the
words
'habit'
in
Aiyar's
Judicial
Dictionary, 10th Edn. p. 485. It does
not refer to the frequency of the
occasions but to the invariability of
practice and the habit has to be proved
by totality of facts. It, therefore, follows
that the complicity of a person in an
isolated offence is neither evidence nor
a material of any help to conclude that
a particular person is a "dangerous
person"
unless
there
is
material
suggesting his complicity in such cases
which lead to a reasonable conclusion
that the person is a habitual criminal."

15. In the case law relied upon by
the learned Counsel for the applicant, i.e.
Shanker
Ji
Shukla
Vs.
Ayukt,
Allahabad
Mandal,
Allahabad
&
Others 2005 (52) ACC 638, wherein this
court has held in para 5, as under:-

"The emphasis is on the word
habitual and a single or two acts after a
long gap does not amount to the term '
Habitually'. The expression 'habitually'
means 'repeatedly' or 'persistently'. It
implies a thread of continuity stringing
together similar repetitive acts. Repeated,
persistent and similar, but not isolated,
individual
and
dissimilar
acts
are
necessary to justify any inference of
habit."

16. The aforesaid view of this Court
was expressed with reference to the Goonda
Act in which the word habitual is used with
regard to an individual and not with
reference to a gang. But in view of the
provisions of Section 401 I.P.C., word
habitual has been used with reference to a
gang who habitually deals in theft or roberry.
This fact has not been challenged by any
other accused who was in the company of
gang alongwith present applicant at the
relevant time. Hence there was sufficient
evidence that the applicant was associated
with a gang who habitually committed
offence of theft by administering narcotic
substance on the passenger of the train.

17. In view of the above discussion,
this application under Section 482 Cr.P.C.
is devoid of merits and deserves to be
dismissed and it is hereby dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 23.04.2013

BEFORE
THE HON'BLE RITU RAJ AWASTHI, J.

Writ Petition No. 1784 (M/S) Of 2013

Smt. Shyam Wati ...Petitioner
Versus
State of U.P. & Others ...Respondents

Counsel for the Petitioner:
Dr. L.P. Mishra;Sri R.N.S. Chauhan

Counsel for the Respondents:
C.S.C.; Mrs. Arti Ganguli
Sri Heman Kumar Mishra
1 All Abdul Vs. The State of U.P. And Another
523

(A) U.P. Panchayat Raj Rules 1997-
Chapter XIII Rule 256 and 257-readwith
U.P. Panchayat Raj Act 1947-Section
27(2)-Surcharge of Rs. 2,99,461/- upon
village Pradhan-on random checking of
three member committee appointed by
DPRO-members
of
committee
below
than Distt. Level officer-held-procedure
prescribed under Rule not followed at
all-order in itself illegal.

Held: Para-23
In view of this and in view of the
undisputed position that the surcharge is
to be levied in accordance with the
procedure prescribed under Section 27
(2) of the Act and the procedure has
been prescribed under Chapter-XIII of
1947 Rules which contained Rules 256
and 257 and there being no other set of
rules
and
the
power
having
been
exercised under the impugned order in
regard to levying of surcharge and its
recovery
and
the
recovery
of
the
surcharge amount having been exercised
under Section 27 (1) of the Act, there is
no
escape
from
the
irresistible
conclusion that the impugned order
passed by the District Magistrate, Unnao
in that regard is per se illegal.
(B) U.P. Panchayat Raj (Removal of
Pradhans, U.P. Pradhans & Member)-
Enquiry Rules 1997- Rule 2(c)-Enquiry
Committee-appointed by DPRO and not
by Distt. Magistrate-two member of
committee being below to Distt. level
officer-could
not
be
nominated
as
enquiry officer-held-committee neither
appointed by competent authority-nor
constituted
by
competent
personfinancial and administrative power of
pradhan could not be ceased.

Held: Para-43
It is to be noted that the decision making
exercise
on
the
part
of
enquiry
committee
while
submitting
the
preliminary
enquiry
report
should
constitute
of
persons
statutorily
competent
to
apply
mind
and
the
decision making process of participation
of some persons who are not statutorily
competent cannot legally be made a
basis for an action contemplated under
the statute. The preliminary enquiry
report submitted by the three member
committee cannot be treated to be the
enquiry report of the District Panchayat
Raj Officer alone, as such, it can safely
be concluded that the enquiry report
submitted by the enquiry committee
which
neither
appointed
by
the
competent authority nor constituted of
competent persons to hold the enquiry
could be valid report for the purpose of
taking a decision to cease the financial
and
administrative
powers
of
the
petitioner.

Case Law discussed:
2006 (3) AWC 2787; [2011 (29) LCD 221];
1969 (1) SCC 825; 1969 (1) SCC 308; (1984) 2
SCC 41; (2001) 6 SCC 260; (2008) 7 SCC 117;
(2010) 11 SCC 557; (2011) 5 SCC 435; AIR
1936 Privy Council 253; AIR 1964 SC 358;
(2004) 2 SCC; (2003) 2 SCC 111; 2013 (1)
ADJ 228; 1998 (89) Revenue Digest 771; 2008
(1) CRC 714

(Delivered by Hon'ble Ritu Raj Awasthi,J.)

1. Learned counsel for petitioner
informs that he does not want to to file
rejoinder
affidavit
as
purely
legal
questions are involved in the writ petition
which can be decided even in absence of
the same, learned Standing Counsel also
agrees, as such, with the consent of
parties' counsel, the writ petition has been
heard finally.

2. Heard Dr. L.P. Mishra, learned
counsel for petitioner, Mr. Sanjay Sareen,
learned Standing Counsel for the State as
well as Mr. Hemant Kumar Mishra,
learned counsel for opposite party no. 7
and perused the record.
524 INDIAN LAW REPORTS ALLAHABAD SERIES [2013

3. The writ petition has been filed by
an elected Pradhan of Gram Panchayat
Tar Gaon, Development Block Bichchiya,
District Unnao challenging the order
dated 04.03.2013 of District Magistrate,
Unnao levying a sum of Rs. 2,99,461/- as
surcharge and directing for recovery of
the said amount and further ceasing of the
financial and administrative powers of
petitioner as Pradhan in exercise of
powers under Section 95 (1) (g) of Uttar
Pradesh
Panchayat
Raj
Act,
1947
(hereinafter referred to as 'the Act').

4. Learned counsel for petitioner
submits that the impugned order reveals
that the same has been passed taking note
of inspection report dated 13.8.2012
submitted by the District Development
Officer, District Unnao with regard to
works undertaken under the Scheme
known as Mahatma Gandhi National
Rural
Employment
Guarantee
Act
(MGNREGA)
and
other
works
undertaken during the tenure of petitioner
as Pradhan and on the basis of enquiry
report
submitted
by
the
committee
comprising of (i) District Panchayat Raj
Officer, Unnao, (ii) Blcok Development
Officer, Development Block, Bichchiya,
Unnao and (iii) Assistant Engineer,
District Rural Development Agency,
Unnao
appointed
by
the
Chief
Development Officer, Unnao. The said
report is said to be based on random
checking undertaken by the said three
member committee on 20.12.2012 and
was
communicated
to
the
District
Magistrate, Unnao under the covering
letter dated 24.1.2013. As per the said
report,
it
prima
facie
reveals
misuse/wrong expenditure done by the
petitioner
and the
Secretary,
Gram
Panchayat, Tar Gaon, Bichchiya, Unnao
and, as such, the same amounts to misuse
of
funds
together
with
misuse
of
authority.

5. It is submitted that in furtherance
of the inspection report dated 13.8.2012
and the complaint made by Member of
Legislative
Assembly,
the
Chief
Development Officer, Unnao vide letter
dated 25.5.2012 had appointed a three
member committee comprising of (i)
District Panchyat Raj Officer, Unnao, (ii)
Block
Development
Officer,
Development Block Bichchiya, Unnao
and (iii) Assistant Engineer, District Rural
Development Agency, Unnao for holding
preliminary
enquiry.
The
aforesaid
enquiry committee undertook the spot
inspection on 20.12.2012 making the
random
checking
of
work
under
MGNREGA scheme. It was on the basis
of said enquiry report that a show cause
notice dated 02.02.2013 along with copy
of the enquiry report was issued to
petitioner to show cause. The petitioner
had submitted an explanation dated
20.2.2013 denying the allegations. It was
thereafter that the impugned order levying
surcharge and ceasing financial and
administrative powers was passed.

6. Submission of learned counsel for
petitioner is that so far as the impugned
order as it relates to levying of surcharge
and direction for recovery from the
petitioner is concerned, it has been passed
in exercise of powers under Section 27 (1)
of the Act. The Uttar Panchayat Raj
Rules, 1947 (hereinafter referred to as
'1947 Rules'), particularly Rule 256
provides that the Chief Audit Officer shall
submit
the
report
relating
to
the
allegations of misuse of funds and
consequence negligence or misconduct of
Pradhan after calling an explanation from
the Pradhan, Up Pradhan, Member,
1 All Smt. Shyam Wati Vs. State of U.P. And Others
525
Officer or Servant of the Gram Panchayat
and it is only on the basis of report of the
Chief
Audit
Officer,
Cooperative
Societies and Panchayats that a surcharge
can be levied.

7. The contention is that in the
present case since there has been no
report made by the Chief Audit Officer,
Cooperative Societies and Panchayatas as
required under the Rule 256 (1) or the
Rules contained in Chapter XIII of U.P.
Panchayat Raj Rules, 1947 and no
procedure as prescribed under Rules 256
and 257 has been followed, as such, no
surcharge can legally be levied against the
Pradhan without adopting the procedure
prescribed under the said Chapter.

8. Mr. Hemant Kumar Mishra,
learned counsel for opposite party no. 7
has submitted that the surcharge rules as
relied upon by the petitioner are of no
help to petitioner as perusal of Rule 256
(1) makes a mention of a loss, waste or
misuse of any money or other property
belonging to a Gram Sabha as a direct
consequence of negligence of Pradhan or
any other person concerned and as evident
from perusal of impugned order, the
allegations related to misuse of funds of
MGNREGA, as such, Rules 256 and 257
are of no avail.

9. Section 27 of the Act on
reproduction reads as under:

"27. Surcharge (1) Every Pradhan
or of a (Gram Panchayat) every member
of a (Gram Panchayat) or of a Joint
Committee or any other committee
constituted under this Act and every
Sarpanch, Sahayak Sarpanch or Panch of
a Nyaya Panchayat shall be liable to
surcharge
for
the
loss,
waste
or
misapplication of money or property
[belonging to the Gram Panchayat or
Nyaya Panchayat] as the case may be, if
such loss, waste or misapplication is
direct consequence of his neglect or
misconduct while he was such Pradhan,
member, Sarpanch, Sahyak Sarpanch or
Panch;

Provided that such liability shall
cease to exist after the expiration of ten
years from the occurrence of such loss,
waste or misapplication, or five years
from the date on which the person liable
ceases to hold his office, whichever is
later.

(2) The prescribed authority shall fix
the amount of the surcharge according to
the procedure that may be prescribed and
shall certify the amount to the Collector
who shall, on being satisfied that the
amount is due, realize it as if it were an
arrear of land revenue.

(3) Any person aggrieved by the
order of the prescribed authority fixing
the amount of surcharge may, within
thirty days of such order, appeal against
the order to the State Government or such
other appellate authority as may be
prescribed.

(4)Where no proceeding for fixation
and realization of surcharge as specified
in sub-section (2) is taken the State
Government may institute a suit for
compensation for such loss, waste or
misapplication, against the person liable
for the same."

10. A perusal of sub-Section (2) of
Section 27 of the Act makes it clear that
amount of surcharge is to be fixed by the
prescribed authority, it shall be certified
by the prescribed authority and sent to the
Collector who on being satisfied that the
amount is due shall get it realized as
arrears of land revenue from the Pradhan
526 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
or any other person mentioned under
Section 27 (1) of the Act so made liable
for surcharge. The procedure for levying
of surcharge, determination of amount of
surcharge and its recovery has been
prescribed under the Rules popularly
known as "Surcharge Rules" contained
under Chapter XIII of 1947 Rules. Rules
256 and 257 of the said Chapter deal with
surcharge which on reproduction read as
under:

"Rule 256(1) In any case where the
Chief
Audit
Officer,
Co-operative
Societies and Panchayats, considers that
there has been a loss, waste or misuse of
any money or other property belonging to
a Gaon Sabha as a direct consequence of
the negligence or misconduct of a
Pradhan, he may call upon the Pradhan,
Up-Prahdan, Member, Officer or servant,
as the case may be, to explain in writing
why
such
Pradhan,
Up-Pradhan,
Member, Officer, or servant should not be
required to pay the amount misused or the
amount which represents the loss or waste
caused to the Gaon Sabha or to its
property and such explanation shall be
furnished within a period not exceeding
two months from the date such requisition
is communicated to the person concerned:

Provided that an explanation from
the Pradhan, Up-Pradhan or member of
the Gaon Panchayat shall be called for
through the District Magistrate and from
the officer or servant through the
Panchayat Raj Officer.

Provided also that no explanation
shall be called for from any member who
is recorded in the minutes of the Gaon
Panchayats or any of its committee as
having been absent from the meeting at
which the expenditure objected to was
sanctioned or who voted against such
expenditure.

Note- Any information required by
the Chief Audit Officer, Cooperative
Societies and Panchayats or any officer
subordinate to him not below the rank of
Auditor,
Panchayats for
preliminary
enquiry, shall be furnished and all
connected papers and records shall be
shown to him by the Pradhan immediately
on demand.

(2)
Without
prejudice
to
the
generality of the provisions contained in
sub-rule (1) the Chief Audit Officer,
Cooperative Societies and Panchayts,
may call for the explanation in the
following cases:

(a) where expenditure has been
incurred
in
contravention
of
the
provisions of the Act or of the rules or
regulations made thereunder;

(b)Where loss has been caused to the
Gaon Sabha by acceptance of a higher
tender without sufficient reasons in
writing.

(b) where loss has been caused to the
Gaon sabha by acceptance of a higher
tender without sufficient reasons in
writing.

(c) where any sum due to the Gaon
Sabha has been remitted in contravention
of the provisions of the Act or the rules or
regulations made thereunder;

(d) where the loss has been caused to
the Gaon sabha by neglect in realizing its
dues; or

(e) where loss has been caused to the
founds or other property of the Gaon
Sabha on account of want of reasonable
care for the custody of such money or
property.

(3) On the written request of the
Pradhan, Up-Pradhan, Member, Officer
or servant from whom an explanation has
been called for, the Gaon Panchayat shall
give his necessary facilities for inspection
of
the
record
connected
with
the
1 All Smt. Shyam Wati Vs. State of U.P. And Others
527
requisition for surcharge. The Chief Audit
Officer may, on application from the
person surcharged, allow a reasonable
extension of time for submission of his
explanation if he is satisfied that the
person charged has been unable, for
reasons beyond his control, to consult the
record for the purpose of furnishing his
explanation.

"257. (1). After expiry of the period
prescribed in sub-rule (1) or (3) of Rule
256, as the case may be, and after
examining
the
explanation,
if
any,
received within time, the Chief Audit
Officer shall submit the papers along with
his recommendations to the District
Magistrate of the district in which the
Gram Sabha is situated in case of
Pradhan, Up-Pradhan and Members and
to the District Panchayat Raj Officer of
the district in which the Gram Sabha is
situated in case of Officers and servants.

(2) The District Magistrate or the
District Panchayat Raj Officer, as the
case may be, after examining and after
considering the explanation, if any, shall
require
the
Pradhan,
Up-Pradhan,
Member, Officer or servant of the Gram
Panchayat to pay the whole or part of the
sum to which such Pradhan, Up-pradhan,
Member, Officer or servant is found
liable:

PROVIDED,
firstly,
that
no
Pradhan, Up-Pradhan, Member, Officer
or servant of the Gram Panchayat would
be required to make good the loss, if from
the explanation of the Pradhan, UpPradhan, Member, Officer or servant
concerned or otherwise the District
Magistrate or the District Panchayat Raj
Officer, as the case may be, is satisfied
that the loss was caused by an act of the
Pradhan, Up-pradhan, Member, Officer
or servant in the bonafide discharge of his
duties:

PROVIDED secondly, that in the
case of loss, waste or misuse occurring as
a result of a resolution of the Gram
Panchayat or any of its committees the
amount of loss to be recovered shall be
divided equally among all the members
including Pradhan and Up-pradhan, who
are reported in the minutes of the Gram
Panchayat or any of its Committee as
having voted for or who remained neutral
in respect of such resolution:

PROVIDED
thirdly,
that
no
Pradhan, Up-Pradhan, Member, Officer
or servant shall be liable for any loss,
waste or misuse after the expiry of four
years from the occurrence of such loss,
waste or misuse or after the expiry of
three years from the date of his ceasing to
be a Pradhan, Up-Pradhan, Member,
Officer
or
servant
of
the
Gram
Panchayat, which ever is later."

11.

In
the
case
in
hand,
undisputedly, there has been no notice to
petitioner from the Chief Audit Officer,
Cooperative Societies and Panchayats,
there has been no report of the Chief
Audit Officer to District Magistrate rather
on the other hand there is no material on
record to indicate that at any point of time
petitioner was called upon by the Chief
Audit Officer to submit her explanation
nor there is any material on record to
indicate that on receipt of any report
along with relevant papers from the Chief
Audit Officer, the District Magistrate had
called upon the petitioner to submit her
explanation.

12. It is also to be noted that there is
nothing on record nor has been submitted
by the parties' counsel to indicate that
there are any other set of rules prescribed
528 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
in exercise of powers under Section 27 of
the Act for levying surcharge, as such, I
am of the considered view that the
impugned order as it relates to levying of
surcharge and direction for recovery from
petitioner for the surcharge amount is thus
not permissible in law for the reason that
the procedure as prescribed under Section
27 (2) of the Act i.e. under Chapter XIII
of 1997 Rules, Rules 256 and 257 in
particular, have not been followed at all as
no proceedings as prescribed under the
said Rules have been undertaken.

13. Mr. Hemant Kumar Mishra,
learned counsel for opposite party no. 7
tried to carve out a distinction between
the words 'Gram Panchayat' and 'Gram
Sabha' in order to submit that Rule 256 of
U.P. Surcharge Rules would not be
applicable in the present facts and
circumstances of the case.

14. It is submitted that under Rule
256
(1)
the
Chief
Audit
Officer,
Cooperative Societies and Panchayats is
required to submit the report with respect
to any loss, waste or misuse of any money
or other property belonging to Gram
Sabha as a direct consequence of
negligence of Pradhan or other authorities
of Gram Panchyat whereas in the present
case the matter relates to misuse of funds
and power by the Pradhan of Gram
Panchayat. The perusal of the Gram
Panchayat Act indicates that 'Gram Sabha'
is a name of village or cluster of villages
having 'Panchayat Area' notified as such
by the State Government and 'Gram
Panchayat' is a body notified as such by
the State Government. In fact, 'Gram
Panchayat' is a body entrusted with
management of such 'Gram Sabha'
comprising of a 'Panchyat Area'. In this
regard it is necessary to go through the
provisions under the Act which on
reproduction read as under:

"2. Definitions. - In this Act, unless
there is anything repugnant in the subject
or context :-

(g) "Gram Sabha" means a body
established under Section 3, consisting of
persons registered in the electoral rolls
relating to a village comprised within the
area of a Gram Panchayat"

15. The term "Panchayat area" has
been defined under Section 2(kkk) (ii)
which reads as under:-

2 (kkk) (ii). "Panchayat area" means
the territorial area of a Gram Panchayat
declared as such under sub-section (1) of
Section 11-F."

16.

The
composition
and
constitution of the Gram Panchayat is
contemplated under Section 12 reference
of which has been made in Section 2(h)
and Section 12(1) dealing with the
composition of Gram Panchayat reads as
under:-

"12. Gram Panchayat. - (1) (a) There
shall be constituted for every Panchayat
area, a Gram Panchayat bearing the
name of the Panchayat area.

(b) Every Geam Panchayat shall be a
body corporate.

(c) A Gram Panchayat shall consist
of a Pradhan and, in the case of a
Panchayat area having a population of

[i]
(upto
one
thousand)
nine
members;

[ii] more than one thousand but not
more than two thousand, eleven members;

[iii] more than two thousands but not
more than three thousands, thirteen
members, or
1 All Smt. Shyam Wati Vs. State of U.P. And Others
529

[iv] more than three thousand, fifteen
members.

(d) For the purpose of election of
members of Gram Panchayat every
Panchayat area shall be divided into
territorial constituencies in such manner
that the ratio between the population of
each constituency and the number of seats
allotted to it shall, so far as practicable,
be the same throughout the Panchayat
area.

(e) Each territorial constituency of a
Gram Panchayat shall be represented by
one member in the Gram Panchayat.

(f) The territorial constituencies of a
Gram Panchayat may be delimited in the
prescribed manner and, if necessary,
rules in this regard may be made with
retrospective effect from a date not earlier
than the date of commencement of the
Uttar
Pradesh
Panchayat
Laws
(Amendment) Act, 1994."

17. Section 11-F of the Act relates to
declaration of Panchayat Area and the
said Section 11-F reads as under:-

"11-F. Declaration of Panchayat
area (1) The State Government may, by
notification, declare any area comprising
a village or group of villages, having , so
far as practicable, a population of one
thousand, to be a Panchayat area for the
purpose of this Act by such name as may
be specified:

PROVIDED that for the purposes of
declaration of a Panchayat area no
revenue village or any hamlet thereof
shall be divided:

PROVIDED further that in the hill
districts of Nainital, Almora, Pithoragarh,
Tehri, Pauri, Dehradun, Chamoli or
Uttarkashi, the State Government may
declare the area of a Gaon Sabha
established under Section 3 of this Act as
it stood before the commencement of the
Uttar
Pradesh
Panchayat
Laws
(Amendment)
Act,
1994,
to
be
a
Panchayat area though such area may
have a population of less than one
thousand.

(2) The State Government may, on
the request of the Gram Panchayat
concerned
or
otherwise,
and
after
previous publication of the proposal, by
notification at any time -

[a] modify the area of any Panchayat
area by including therein or excluding
there from any area of a village or group
of villages;

[b] alter the name of the Panchayat
area; or

[c] declare that any area shall cease
to be a Panchayat area."

18. The formation of a Gram Sabha
is provided under Section 3 of the Act
which reads as under:-

3.Gram
Sabha.
-
The
State
Government shall, by notification in the
Official Gazette, establish a Gram Sabha
for a village or group of villages by such
name as may be specified:

PROVIDED that where a Gram
Sabha is established for a group of
villages, the name of the village having
the largest population shall be specified
as the name of the Gram Sabha."

19. A perusal of the aforesaid
Statutory prescriptions makes it clear that
a Gram Sabha is a body which is notified
by the State Government as a Gram Sabha
by the notification in the Official Gazette
comprising of a village or a group of
villages by giving it the name of the
530 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
village having the largest population
where a Gram Sabha is established for a
group of villages otherwise in the event of
Gram Sabha being constituted for one
village, the name of the Gram Sabha is to
be the name of the village. A Gram
Panchayat is to be a body corporate and
virtually is a body to manage the affairs of
a Gram Sabha having its territorial
jurisdiction over the concerned Panchayat
area as declared under Section 11-F. In
view of the statutory prescriptions in
regard to the formation, declaration or
composition of a Gram Sabha, Panchayat
area and a Gram Panchayat, it is more
than evident that a Gram Panchayat is a
body corporate for managing the affairs of
a Gram Sabha. Further the powers, duties,
functions and administration of Gram
Panchayats is dealt with under Chapter-IV
of the Act and a perusal of Section 15, 15A, 16, 16-A, 17, 18, 19, 20, 21, 22, 23 and
24 contained in this Chapter makes it
abundantly clear that the Gram Panchayat
is to exercise its powers, duties and
functions and has to administer a Gram
Panchayat in regard to the Panchayat area
i.e. the area of a Gaon Sabha and nothing
else and nothing more.

20. In view of the above, the
argument raised on behalf of opposite
party no. 7 on the basis of use of the word
"Gaon Sabha" in rule 256 is of no avail to
him and is not sustainable.

21. Sri Sanjay Sareen, the learned
State Counsel appearing on behalf of
opposite party nos. 1 to 6 has very fairly
brought to the notice of this Court a
Division Bench judgment of this Court in
the case of Indu Devi Vs. District
Magistrate, Chitrakoot and others;
2006
(3)
AWC
2787
wherein
in
paragraph 11 it has been held that prima
facie findings of the competent authority
under the proviso attached to Section 95
(1) (g) of Act in regard to misconduct
could not be a ground for passing an order
levying surcharge under Section 27 of the
Act. Sri Sareen while bringing the
aforesaid case to the notice of the Court
which, though, could go against the order
impugned in the writ petition, has acted
very fairly in discharge of duties of an
officer of the Court as an Advocate while
assisting
this
Court
and
deserves
appreciation from this Court.

22. The relevant paragraphs 11, 12,
13, 14 & 15 of the judgment in the case of
Indu Devi (supra) on reproduction read
as under:

"11. The prima facie finding of the
competent authority under Section 95 (1)
g) proviso is not same as finding of
misconduct
as
contemplated
under
Section 27 of the Act. We are satisfied
that on the basis of mere prima facie
finding of guilt, the order of surcharge
could not have been passed under Section
27 of the Act.

12. However, learned counsel for the
appellant has submitted that the final
inquiry as contemplated in Section 95 (1)
(g) has not yet been concluded and
further submits that no further proceeding
under Section 27 of the Act has been
drawn.

13. In view of the aforesaid, we are
satisfied that without conclusion of final
inquiry under Section 95 (1) (g) of the Act
with regard to finding of misconduct on
the part of the Pradhan, the order of
surcharge could not have been passed.
1 All Smt. Shyam Wati Vs. State of U.P. And Others
531

14. From the material brought on
record, it is clear that it is necessary that
a final inquiry as contemplated in Section
95 (1) (g) and/or under Section 27 of the
Act be concluded by competent authority.
We direct accordingly.

15. The District Magistrate may take
appropriate
steps
for
conclusion/completion of the inquiry
under Section 95 (1) (g) and/or under
Section 27 of the Act, within six months
from today. The appellant writ petitioner
shall communicate this order to the
District Magistrate within two weeks from
today. Till the final order is passed within
six months, no recovery shall be made
from the appellant-writ petitioner, as
directed vide impugned order dated
29.3.2000."

23. In view of this and in view of the
undisputed position that the surcharge is
to be levied in accordance with the
procedure prescribed under Section 27 (2)
of the Act and the procedure has been
prescribed under Chapter-XIII of 1947
Rules which contained Rules 256 and 257
and there being no other set of rules and
the power having been exercised under
the impugned order in regard to levying
of surcharge and its recovery and the
recovery of the surcharge amount having
been exercised under Section 27 (1) of the
Act, there is no escape from the
irresistible conclusion that the impugned
order passed by the District Magistrate,
Unnao in that regard is per se illegal.

24. So far as the seizure of financial
and administrative powers of petitioner by
the impugned order is concerned, Dr. L.P.
Mishra, learned counsel for petitioner
submitted that since the preliminary
enquiry was not held as per the
requirement under Section 95 (1) (g) of
the Act as such the decision taken to cease
the financial and administrate powers on
the basis of said enquiry report is patently
wrong and illegal.

25. It is to be noted that by the
impugned order dated 04.03.2013, the
District Magistrate, Unnao constituted a
three member committee to exercise
financial and administrative powers of
Pradhan till the conclusion of the enquiry
and final decision in this regard.

26. It is submitted that the proviso
attached to Section 95 (1) (g) of the Act
provides that where 'in an enquiry held by
such person and in such manner as may
be prescribed', a Pradhan is prima facie
found to have committed financial and
other irregularities such Pradhan shall
cease to exercise and perform the
financial and administrative powers and
functions, which shall, until he is
exonerated of the charges in the final
enquiry, be exercised and performed by a
Committee consisting of three members
of Gram Panchayat appointed by the State
Government.

27. Submission is that the phrase 'in
an enquiry held by such person and in
such manner as may be prescribed' is
very vital. The person to hold enquiry and
the manner of holding enquiry for prima
facie satisfaction in regard to commission
of financial and other irregularities by a
Pradhan stands prescribed under the Rules
known as U.P. Panchayat Raj (Removal
of Pradhans, Up-Pradhans and Members)
Enquiry Rules, 1997 (hereinafter referred
as the Enquiry Rules). Rule 4 of the
Enquiry Rules deals with the preliminary
enquiry and Rule 5 deals with the
cessation
of
the
financial
and
532 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
administrative powers of a Pradhan
during pendency of the final enquiry.

28. In order to appreciate the
submission made by learned counsel for
petitioner, it is necessary to first go
through the relevant provisions in this
regard.

29. Section 95 (1) (g) of the Act on
reproduction reads as under:

"95. (1) (g) remove a Pradhan, UpPradhan or member of a Gram Pachayat
or
a
Joint
Committee
or
Bhumi
Prabandhak Samiti, or a Panch, Sahayak
Sarpanch or Sarpanch of a Nyaya
Panchayat if he

(i) absents himself without sufficient
cause for more than three consecutive
meetings or sittings;

(ii) refuses to act or becomes
incapable of acting for any reason
whatsoever or if he is accused of or
charged for an offence involving moral
turpitude;

(iii) has abused his position as such
or has persistently failed to perform the
duties imposed by this Act or rules made
thereunder or his continuance as such is
not desirable in public interest;

(iii-a)
has
taken
benefit
of
reservation under sub-section (20 of
Section 11 or sub-section (3) of Section
12, as the case may be, on the basis of a
false declaration subscribed by him
stating that he is a member of Scheduled
Caste, the Scheduled Tribes or the
backward classes, as the case may be;

(iv) being a Sahayak Sarpanch of a
Sahayak
Sarpanch
of
the
Nyaya
Panchayat takes active part in the
politics, or

(v)
suffers
from
any
of
the
disqualifications mentioned in clauses (a
to (m) of Section 5-A:

Provided that where, in an enquiry
held by such person in such manner as
maybe prescribed, a Pradhan or UpPradhan is prima facie found to have
committed
financial
and
other
irregularities such Pradhan or UpPradhan shall cease to exercise and
perform the financial and administrative
powers and functions which shall, until he
is exonerated of the charges in the final
enquiry, be exercised and performed by a
Committee consisting of three members of
Gram Panchayat appointed by the State
Government.."

30. Rules 4 and 5 of the Enquiry
Rules on reproduction read as under:

"4. Preliminary Enquiry.- (1) The
State Government may, on the receipt of
complaint or report referred to in Rule 3
or otherwise order the Enquiry Officer to
conduct a preliminary enquiry with a view
to finding out if there is prima facie case
for a formal inquiry in the matter.

(2)
The
Enquiry
Officer
shall
conduct the preliminary enquiry as
expeditiously as possible and submit his
report to the State Government within
thirty days of his having been so ordered.

5. Enquiry Officer- Where the State
Government is of the opinion , on the
basis of report referred to in sub-rule (2)
of Rule 4 or otherwise that an enquiry
should be held against a Pradhan or UpPradhan or Member under the proviso to
clause (g) of sub-section (1) of Section 95,
it shall forthwith constitute a committee
envisaged by proviso to clause (g) of subsection (1) of Section 95 of the Act and by
an order ask an Enquiry Officer, other
1 All Smt. Shyam Wati Vs. State of U.P. And Others
533
than the Enquiry Officer nominated under
sub-rule (2) of Rule 4, to hold enquiry. "

31. The term 'Enquiry Officer'
stands defined in Rule 2 (c) as amended
vide notification dated 05.10.2001 w.e.f.
05.10.2001
and
the
said
rule
on
reproduction reads as under:

"2 (c) 'Enquiry Officer' means the
District Panchayat Raj Officer or any
other
district
level
officer,
to
be
nominated by the District Magistrate."

32. Dr. L.P. Mishra, learned counsel
for petitioner vehemently submitted that
in the present case there has been no
preliminary enquiry by an Enquiry
Officer mentioned in Rule 2 (c) of the
Enquiry Rules in as much as that the
Enquiry officer was to be appointed by
the District Magistrate concerned and on
the other hand an Enquiry Committee
comprising of three Public Servants was
constituted by the Chief Development
Officer,
Unnao
vide
order
dated
25.05.2012 and not by the District
Magistrate, Unnao.

33. Submission is that the Chief
Development Officer could not step into
the shoes of the District Magistrate for the
purpose of appointing Enquiry Officer
and it shall be the independent satisfaction
of the District Magistrate to appoint the
Enquiry Officer for that purpose. It is
alone the District Magistrate and for that
purpose no other officer to pass the order
appointing the Enquiry Oficer.

34. It is further submitted that no
public servant can be part of preliminary
enquiry envisaged under Rule 4 of the
Enquiry Rules who is not a District level
officer having been nominated by the
District Magistrate for conducting the
preliminary enquiry and no public servant
who is not a District level officer can even
be nominated as Enquiry officer for
conducting preliminary enquiry into the
allegations of the financial loss or
irregularities against a Pradhan.

35. Mr. Hemant Kumar Mishra,
learned counsel for opposite party no. 7,
on the other hand, emphasized that the
Chief Development Officer vide order
dated 25.5.2012 had constituted a three
member committee consisting of public
servant for holding enquiry against the
petitioner. One of the members of the said
committee was District Panchayat Raj
Officer who is also an Officer enumerated
and described as 'Enquiry Officer' under
Rule 2 (c) of the Enquiry Rules. The
eqnuiry report submitted by the enquiry
committee
appointed
by
the
Chief
Development Officer is to be treated as an
enquiry report for the purpose of Rules 4
and 5 of the Enquiry Rules. The argument
is that the Block Development Officer and
Assistant
Engineer,
District
Rural
Development Agency may not be District
level officers but the District Panchayat
Raj Officer who is described as Enquiry
Officer under Rule 2(c) of the Enquiry
Rules was part of the enquiry committee
and, as such, it cannot be said that in
absence of nomination by the District
Magistrate the enquiry conducted by the
committee was bad in the eyes of law as
the District Panchayat Raj Officer is
described as Enquiry Officer under Rule 2
(c) of the Enquiry Rules and he being the
member of the enquiry committee, the
said enquiry shall be treated to be
conducted by him, as such, no exception
can be taken to the impugned order on the
ground that the same is based on the
report not submitted by an Enquiry
534 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
Officer referred to under Rule 4 of the
Enquiry Rules.

36. Learned Counsel for opposite
party no. 7 has also argued that even if the
report
of
the
Enquiry
Committee
constituted by the Chief Development
Officer, Unnao is not taken as the Enquiry
Report for the reason that some of the
members of the Enquiry Committee being
not the district level officers and having
not been nominated as Enquiry Officer by
the District Magistrate then too the report
submitted by such Enquiry Committee
together with Inspection report dated
13.08.2012 submitted by the District
Development
Officer,
Unnao
could
legally have been made basis by the
District
Magistrate
for
ceasing
the
administrative and financial powers of the
petitioner as Pradhan by invoking his
discretion
under
the
Clause
''or
otherwise' occurring under Rule 5 of the
Enquiry Rules.

37. It is relevant to mention here that
both the sides i.e. petitioner and the
opposite parties in support of their
arguments have laid great emphasis on the
decision of the Full Bench of this Court in
the case of Vivekanand Yadav Vs. State
of U.P. and another; [2011 (29) LCD
221]
which
constitutes
a
binding
precedence. Paragraphs 90 and 91 of the
Full Bench judgment deserve to be a
quote and are quoted as under:

"90. Rule 2(c) defines ''Enquiry
Officer'. It means the DPRO or any other
district level officer to be nominated by
the D.M. The following contingencies
may be there: