1989 (7) TMI 346 - SC - Indian Laws

Summary

Issues Involved:
1. Legality of the exclusion of Ulhasnagar from the proposed Kalyan Corporation.
2. Allegation of discrimination under Article 14.
3. Requirement of a fresh draft notification.
4. Application of principles of natural justice.
5. Judicial propriety and decorum in relation to precedent.

Detailed Analysis:

1. Legality of the Exclusion of Ulhasnagar:
The High Court of Bombay's decision to exclude Ulhasnagar from the proposed Kalyan Corporation was challenged. The Government had issued a draft notification under Section 3(3) of the Bombay Provincial Municipal Corporation Act, 1949, proposing the formation of the Kalyan Corporation by merging several municipal areas, including Ulhasnagar. However, following objections and representations, the Government decided to exclude Ulhasnagar from the final notification. The Supreme Court found that the Government's decision was legislative in nature and not subject to judicial review, as long as statutory provisions were complied with.

2. Allegation of Discrimination under Article 14:
The residents of Ambarnath Municipal areas contended that the Government's action of hearing only the Federation and not other objectors was contrary to Article 14, constituting hostile discrimination. The Supreme Court held that the principles of natural justice do not apply to legislative functions, and the Government's decision to exclude Ulhasnagar was not discriminatory as it was based on representations duly considered.

3. Requirement of a Fresh Draft Notification:
The petitioners argued that a fresh draft notification should have been issued after deciding to exclude Ulhasnagar. The Supreme Court disagreed, stating that the variance between the preliminary and final notifications is inherent in the legislative process. The statutory requirements of issuing a preliminary notification and considering objections were met, and no new draft notification was necessary.

4. Application of Principles of Natural Justice:
The High Court directed the Government to reconsider the proposal and hear objections, implying the application of natural justice principles. The Supreme Court clarified that the formation of a Municipal Corporation under Section 3 of the Act is a legislative process, and the rules of natural justice do not apply. The procedural requirement of hearing is not implied unless expressly prescribed by the statute.

5. Judicial Propriety and Decorum in Relation to Precedent:
The High Court's decision was criticized for not following the precedent set by a Division Bench in the Chikalthane case, which held that the power under Section 3(2) of the Act is legislative. The Supreme Court emphasized the importance of judicial propriety, stating that if a Bench disagrees with a precedent, the matter should be referred to a larger Bench. The High Court's failure to do so was seen as a subversion of judicial process.

Conclusion:
The Supreme Court allowed the appeals, setting aside the High Court's judgment. It reiterated that the Government's decision to exclude Ulhasnagar was within its legislative discretion and not subject to judicial review. The principles of natural justice did not apply to the legislative process under Section 3 of the Act. The Court underscored the need for adherence to judicial propriety and consistency in following precedents.