2011 (4) TMI 1534 - SC - Companies Law

Summary

Issues Involved:
1. Continuation or vacation of office by members of the Empowered Standing Committee upon the election of a new Mayor/Chief Councilor.
2. Interpretation of Section 27 of the Bihar Municipal Act, 2007 in relation to other connected sections.
3. Constitutional validity of Section 27 of the Bihar Municipal Act, 2007.
4. Authority of a newly elected Mayor/Chief Councilor to nominate members to the Empowered Standing Committee.
5. Harmonious construction of statutory provisions to avoid conflict and ensure democratic governance.

Detailed Analysis:

1. Continuation or Vacation of Office by Members of the Empowered Standing Committee:
The Bihar Municipal Act, 2007, provides for the election of the Mayor/Chief Councilor and the Deputy Mayor/Deputy Chief Councilor, as well as the formation of an Empowered Standing Committee. This committee consists of the Mayor, the Deputy Mayor, and seven other councillors nominated by the Mayor under Section 21(3). The term of office for these members is supposed to be co-terminus with the duration of the Municipality as per Section 27. However, the Act does not explicitly state whether the members of the Empowered Standing Committee should vacate their office when a new Mayor/Chief Councilor is elected. This leads to an anomalous situation where the new Mayor, who has the confidence of the house, might have to work with committee members nominated by the previous Mayor, who has lost the house's confidence.

2. Interpretation of Section 27 of the Bihar Municipal Act, 2007:
The primary question is whether Section 27 should be read in isolation, meaning the members of the Empowered Standing Committee continue for the entire period of the municipal body, or whether it should be read in conjunction with Sections 25(4), 23(3), and 21(3). The latter sections provide for the removal and election of a new Mayor and the nomination of committee members. The court considered whether a literal reading of Section 27 would result in treating the newly elected Mayor dissimilarly, thereby making Section 27 ultra vires the Constitution of India. The court decided that Section 27 should be harmoniously read with the other sections to ensure that the term of the nominated members is co-terminus with the nominating Mayor, and they automatically vacate their office when the Mayor nominating them is no longer in office.

3. Constitutional Validity of Section 27:
The court examined whether Section 27, as interpreted by the respondents, would violate Article 14 of the Constitution of India by treating the newly elected Mayor differently from the earlier Mayor. The court found that such an interpretation would indeed lead to an unreasonable and discriminatory situation. Therefore, to save Section 27 from being ultra vires, it must be read down harmoniously with other relevant sections, ensuring that the new Mayor has the authority to nominate new members to the Empowered Standing Committee.

4. Authority of a Newly Elected Mayor/Chief Councilor:
The court concluded that the newly elected Mayor/Chief Councilor should have the authority to nominate members to the Empowered Standing Committee. This is necessary for the effective exercise of executive power and to maintain the principle of collective responsibility in municipal governance. The court emphasized that the new Mayor should not be at the mercy of the committee members nominated by the previous Mayor, as this would hinder the functioning of the municipal body.

5. Harmonious Construction of Statutory Provisions:
The court highlighted the importance of interpreting statutory provisions in a manner that avoids conflict and ensures the smooth functioning of democratic governance. The court referred to principles of statutory interpretation, emphasizing that when two interpretations are possible, the one that avoids anomalies and promotes harmonious functioning should be preferred. The court decided to read Section 27 subject to Sections 25(4), 23(3), 21(3), and 21(4), thereby ensuring that the newly elected Mayor can nominate his nominees to the Empowered Standing Committee.

Conclusion:
The court allowed the appeal, setting aside the impugned judgment of the Patna High Court. Section 27 of the Bihar Municipal Act, 2007, is to be read down harmoniously with Sections 25(4), 23(3), 21(3), and 21(4). The District Magistrate, Patna, was directed to administer the oath of secrecy to the seven Municipal councillors nominated by the appellant to the Empowered Standing Committee. The appellant and the committee members are entitled to exercise their powers in accordance with the Bihar Municipal Act, 2007. The parties will bear their own costs of the proceedings.