Government Is Responsible To Look Into Financial Crises Of Municipal Councils: Punjab & Haryana High Court

The Punjab & Haryana High Court has set aside the order removing the President of a Municipal Council for allowing loan to a Nagar Panchayat in need of funds to pay its employees and sanitation workers.

The President of Municipal Council Barnala was removed for allegedly "misusing power" by granting a loan to the Nagar Panchayat by not following the procedure, which was later rectified in a meeting.

Justice Sureshwar Thakur and Justice Sudeepti Sharma said, "The government is overall head of all the Municipal Councils/Nagar Panchayats and it is the responsibility of the Government to look into the financial crises in any of the council and Nagar Panchayat. The salaries of Class IV workers were not paid since last 05 months."

"The Government rather than appreciating the conduct of the petitioner in granting loan to the Nagar Panchayat, Handiyaya, which is again duty of the State, dismissed the petitioner for this noble act of helping the Nagar Panchayat, Handiyaya by way of issuing an amount of Rs.10 lacs as loan vide cheque No.261372 dated 09.12.2021 whereby the salary of the Class IV employees was to be paid, which was not paid since last 05 months. Rather it was the responsibility of the Government to take initiative, in this regard," added the bench.

Gurjit Singh Aulakh, filed the writ petition challenging the order whereby he was removed from the post of President in the Municipal Council, Barnala.

A letter from the Executive Officer, Nagar Panchayat, Handiyaya was received by him wherein it was stated that the employees and sanitation workers have not been paid their salaries since the last 05 months due to which there is unrest and protests. Therefore, a loan of Rs.10 lacs was sought.

It was submitted that in view of the bonafide need and emergency situation in Nagar Panchayat Handiyaya, the said loan was extended with a noting that the Resolution in this regard shall be put up before the Council.

Funds were released by cheque and later utilized by the Nagar Panchayat Handiyaya to disburse the salaries of their employees. A letter was sent by the petitioner to Nagar Panchayat, Handiyaya to return the said amount with interest.

A general house meeting was called regarding extending the loan to Nagar Panchayat, Handiyaya without any single dissenting vote.

Therefore, a show cause notice was issued to the petitioner under Section 22 of the Punjab Municipal Act, 1911 and after the hearing Aulakh was removed from the post.

After hearing the submissions, the Court noted that "There is nothing on record to show that the petitioner has embezzled or misappropriated the amount of Rs.10 lacs. Rather the payment of Rs.10 lacs to the Nagar Panchayat, Handiyaya was made through cheque..."

The Court highlighted that the reason for which the loan was granted, is that the salary of the staff was not paid since last five months, even the requirement of getting the approval from house was satisfied.

"The respondents failed to appreciate the very fact that the petitioner rather tried to help the Class IV workers, who were not getting their salaries since last 05 months by giving the loan to Nagar Panchayat, Handiyaya," the bench added further.

The bench also considered that it is not the case of the respondents that the amount paid to Nagar Panchayat, Handiyaya from the funds of Municipal Council, Barnala was not paid as a loan.

"Rather a perusal of the record shows that a letter dated 06.12.2021 from the Executive Officer, Nagar Panchayat, Handiyaya which was addressed to Executive Officer, Municipal Council, Barnala was received stating therein that the employees and sanitation workers were not paid their salaries since last 05 months, due to which, unrest and protest ('dharna') are being carried out," said the bench.

In light of the above, the Court held that Aulakh did not misuse his power and that granting of the loan would not amount to financial loss to the Municipal Council, Barnala since the same was a loan given by the Municipal Council, Barnala to Nagar Panchayat, Handiyaya.

In the light of the above, the appeal was allowed.

Mr. Pawan Kumar, Senior Advocate with Ms. Vidushi Kumar, Advocate for the petitioner.

Mr. Anurag Chopra, Addl. AG, Punjab.

Ms. Jasleen Kaur, Advocate for

Mr. Rajesh Sehgal, Advocate for respondent No.2.

Title: GURJIT SINGH AULAKH v. STATE OF PUNJAB AND OTHERS

Citation: 2024 LiveLaw (PH) 262

Click here to read/download the order