JUDGMENT
R.K. Abichandani, J.
1. The petitioners who were the members of Malia Gram Panchayat from 1968-73 have challenged the order of the learned District Judge, Junagadh dated 17-2-1984 passed in Civil Miscellaneous Application No. 11 of 1983 and the order of the Mamlatdar, Malia-Hatina dated 11-1-1983 holding the petitioners liable for loss of tax on buildings and lands for the period from 1-4-1971 upto 30th April, 1973 under Section 317 of the Gujarat Panchayats Act, 1961.
2. The petitioners were elected as members of the said Panchayat in 1968, the term of which came to an end on 31st April, 1973. The petitioner No. 2 was elected as Sarpanch and the petitioner No. 1 as Upa-Sarpanch. A Gram Panchayat is empowered to levy the taxes and fees at such rates as may be decided by it and in such manner and subject to exemptions as may be prescribed, under Section 178(1) of the said Act, subject to any general or special order of the State Government. Under Clause (i) of Section 178(1), a Gram Panchayat can levy a tax on buildings and lands. By Amendment Act 1 of 1968, Sub-section (1 A) was added to Section 178 where under it was provided that it shall be compulsory for a Gram Panchayat to levy a tax on buildings and lands referred to in Clause (ii) of Sub-section (1) and at least any two of the other taxes or fees referred to in that sub-section after the expiry of a period of two years from 1st April, 1968. Accordingly, from 1st April, 1970 it became compulsory for a Gram Panchayat to levy a tax on buildings and lands besides any other two items from Section 178(1). However, it was only on 3rd July, 1973 that resolution No. 28 was passed by the said Panchayat deciding to impose such tax from 1st January, 1974. Before the formalities could be completed and the tax finally imposed, the term of the Panchayat came to an end on 31 st December, 1973 when the petitioners ceased to be the members of the Panchayat. The newly elected Body of the said Panchayat, to which none of the petitioners were members, continued the work of assessment. In the meantime, the District Development Officer, Junagadh by his order dated 14-1-1975 directed the Gram Panchayat to impose and collect tax from 1st April, 1970 and in default of such levy, he recommended to supersede the Gram Panchayat under Section 297 of the Act. Therefore, the new elected Body of the Panchayat imposed the tax retrospectively from 1st April, 1970 on lands and buildings. The inhabitants of the Gram Panchayat feeling aggrieved by the levy with retrospective effect, filed Civil Suit No. 231 of 1975 in the Court of Civil Judge (J.D.). In the said suit, the petitioners were co-plaintiff. The suit was decreed on 20th October, 1976 and the house tax as imposed by the Panchayat retrospectively was held to be illegal and without jurisdiction. The trial Court found that it was decided on 5th February, 1975 to levy the said tax from 1st April, 1970 instead of 1st April, 1974 but there was nothing to show that objections were invited before deciding to levy taxed from 1st April, 1970. This was considered to be a material defect. The Court held that the Panchayat had failed to observe the procedure prescribed under Rules 3 and 4 of the Gujarat Gram and Nagar Panchayats Taxes and Fees Rules, 1964. As provided by Rule 4, the tax or fee could be levied from the date specified in the notice which shall not be earlier than one month after the date of the publication of the notice. Accordingly, the house tax imposed by the Panchayat was declared as null and void. In the process of that decision, the learned Civil Judge (J.D.) made certain observations against some of the plaintiffs, i.e., the petitioners herein, who were former members of the Panchayat. The trial Judge had observed that in his opinion there was gross misconduct on the part of the Sarpanch and the members of the Panchayat to perform the duties of the Panchayat and that the mandatory requirement of Section 178(1A) of the said Act was violated by not imposing the house tax from 1-4-1970. The learned trial Judge lamented “reasons are best known to them and to God”. He observed that in this case the former Sarpanch and member had come to the Court to get benefit of their own wrong and that they were the real wrong-doers. He then though it proper to send copy of the judgment to the competent authority to take necessary action against the petitioners who were co-plaintiffs in the suit. The District Development Officer was asked to take necessary action against them if he can. The seed of the said direction given on 20th October, 1976 sprouted into proceedings against the petitioners by notice dated 14-9-1982 issued under Section 317(1) of the said Act by the Mamlatdar and the said case No. 1 of 1982 culminated in order dated 11-1-1983 directing recoveries to be made from the petitioners of the estimated loss of tax for the period from 1970-71 to 1976-77 and the recovery was directed to be effected under Sections 149 and 150 of the said Act. Accordingly, each of the petitioners were required to pay Rs. 18,395.65. It was held that the Panchayat of which the petitioners were members at the relevant time failed in its duty by not imposing the prescribed tax from 1-4-1970 as required by Section 178(1A) of the said Act. The petitioners aggrieved by the said decision applied to the District Court to set aside the order of the Mamlatdar. The learned District Judge referred to the provisions of Sub-section (1) of Section 317 and observed that the other sub-sections of Section 317 were not relevant. The learned District Judge found that the misconduct or gross neglect of duty attributed to the petitioners related to non-imposition of taxes which were required to be imposed under Section 178(1 A). The learned District Judge construing the provisions of Section 317(1), more particularly the expression “loss… of any money or other property of Panchayat…” and referring to the dictionary meaning of “of and “to” negatived the contentions of the petitioners that so long as the tax had not accrued there could be no loss of money or property of the Panchayat. It was held that if something which under the statute the members of the Panchayat were required to bring to the coffers of the Panchayat and if in that regard they did not fulfil their obligation or discharge their duty prescribed under the statute, there would be loss caused to the Panchayat of its property. Accordingly, the petitioners were held liable to pay only for the period till the Panchayat in which they were the members had initiated the process on 1-5-1973. It was held that the loss occasioned to the Panchayat related to its prospective income and the petitioners were, therefore, liable for the period from 1-4-1971 upto 30th April, 1973. The individual liability of the petitioners was, therefore, scaled down from Rs. 18,395.16 to Rs. 5,495.75 by order dated 17-2-1984 passed under Section 317(4) of the said Act.
3. It was contended on behalf of the petitioners that on a proper reading of Section 317, the enquiry initiated against the petitioners was unwarranted. It was argued that the inaction of the petitioners did not result in any loss of property to the Panchayat since no money or property of the Panchayat had come into existence which could be the subject-matter of loss. It was also argued that there were 15 members in the Panchayat and the petitioners alone could not be held responsible for the inaction of the Panchayat. It was on the other hand contended by the learned Assistant Government Pleader appearing for the authorities that the petitioners who were members of the Panchayat at the relevant time were guilty of inaction and violations of the statutory duty cast under Section 178(1 A) of the said Act on the Panchayat requiring it to impose tax on lands and buildings. It was also argued that these petitioners had challenged the action of the subsequent Panchayat which had resolved to impose tax with effect from 1-4-1970 and such action betrayed their intention not to impose taxes when they were members and therefore, they became individually liable under the provisions of Section 317(1) of the said Act.
4. Under Section 317 of the said Act, liability of members of the Panchayat for loss, waste or mis-application is dealt with. The provisions of Section 317 read as under:
317. (1) Every member of a Panchayat or its Committee shall be personally liable for the loss, waste, or misapplication of any money or other property of Panchayat to which he has been party, or which has been caused or facilitated by his misconduct or gross neglect of his duty as a member.
(2) If after giving the member concerned a reasonable opportunity for showing cause to the contrary, an officer authorised by the State Government is satisfied that the loss, waste or misapplication of any money or other property of the Panchayat is a direct consequence of misconduct or gross negligence on his part of the officer so authorised shall by an order in writing, direct such member to pay to the Panchayat before a fixed date, the amount required to be reimbursed to it for such loss, waste or misapplication.
(3) If the amount is not so paid, it shall be recovered as an arrear of land revenue and credited to the fund of the relevant Panchayat.
(4) Any person aggrieved by the decision or action of the officer so authorised may apply to the District Court as provided in Sub-section (6) of Section 109, within the like time for redress of his grievance and that Court may pass any order thereon which it can pass under this section.
It will be noticed from the above provisions that every member of Panchayat is held personally liable for any loss of money or other property of Panchayat provided such member has been party to such loss or if the loss is caused or facilitated by his misconduct or gross neglect of his duty as a member. However, the provisions of Sub-section (1) of Section 317 cannot be read in isolation and the further requirements as envisaged under the provisions of Sub-section (2) are to be kept in mind before holding a member personally liable. The concerned member is required to be given an opportunity of being heard and it is only if the competent authority comes to a conclusion that the loss has resulted by way of a direct consequence of the misconduct or gross negligence on the part of such member that such member can be directed to reimburse Panchayat such loss.
5. It is alleged against the petitioners that when they were members of the Panchayat at the relevant time, the Panchayat did not take decision of levying taxes on lands and buildings as was incumbent upon it under the provisions of Section 178(1A) of the said Act to levy from 1st April, 1970. The process of levy was commenced by the Panchayat from 1-5-1973 but before the formalities could be completed and tax finally imposed, the term of the Gram Panchayat expired on 31st December. 1973 as staled in paragraph 5 of the petition. The learned District Judge has held these petitioners to be liable for the period commencing from 1-4-1971 and ending on 30th April, 1973 which included even the period after the term of that Gram Panchayat expired on 31-12-1973. The duty to levy a tax on buildings and lands from 1st April, 1970 was statutorily cast upon a Gram Panchayat by the mandatory provisions of Section 178(1A) of the said Act. A Gram Panchayat is a Body Corporate having perpetual succession and a common seal as provided by Section 7 of the said Act. A Gram Panchayat has to exercise such powers, perform such functions and duties and has such responsibility and authority as are provided by or under the said Act or any other law for the time being in force subject to the control of the State Government and the competent authority, as provided by Section 8(4) of the said Act. Thus, the duty which is cast upon a Gram Panchayat under Section 178(1 A) making it compulsory for the Panchayat to levy a tax on buildings and lands is not on any individual member of the Panchayat but on the Panchayat as a whole which takes a collective decision at its meeting. In the process, it has to follow the provisions of Gujarat Gram and Nagar Panchayat Taxes and Fees Rules, 1984. Part II of the said Rules deals with tax on buildings and lands providing for rate of tax on buildings and lands under Rule 7, date from which tax is to be made effective under Rule 8, preparation of assessment list under Rule 9, liability for tax under Rule 10, publication of notice of time fixed for lodging of objection under Rule 11, inspection of assessment list Rule 12, consideration of objection to assessment list and authentication of list under Rule 13 etc. The liability of a tax-payer arises after the authentication of the assessment list under Sub-rule (2) of Rule 13 as held by this Court in Kalavad Vanik Sangh and Ors. v. Kalavad Nagar Panchayat reported in 1983(1) XXIV(1) GLR 78. The consequence of failure of statutory duty cast upon a Panchayat is provided for in Section 297 of the said Act and may entail dissolution or supersession of a Panchayat, as provided therein. From failure of duty by a Gram Panchayat due to its not levying tax on buildings and lands under Section 178(1 A) of the said Act which may entail action against the Panchayat, it will be a far-fetched conclusion to hold that any loss has been caused of money or other property of the Panchayat as a direct consequence of any misconduct or gross negligence on the part of a member of such Panchayat. Even a suit is barred against a Panchayat or its members for anything done in good faith under the Act as provided by Section 320(1) and even when such action is to be taken, it is required to be commenced within six months after the accrual of cause of action and not afterwards as provided under Sub-section (3) of Section 320. The action is taken against the petitioners in view of strictures passed by the learned Civil Judge (J.D.) while declaring that the action of the Panchayat of levying tax from 1st April, 1970 was void. As held by this Court in Kalavad Vanik Sangh’s case (supra), the liability of the tax-prayer arises only when the assessment list is authenticated as required by Rule 13(2) and the crucial date for determining the liability of the tax-payer is the date on which the assessment list is so authenticated and the Panchayat cannot claim to levy and recover tax with effect from an earlier date. Admittedly, there were 15 members in the Panchayat and the inaction of these four petitioners, if any, could not be considered to be a determining factor and they cannot be saddled with the liability of making payment of a tax which the Panchayat did not levy and which could not have been retrospectively levied from 1-4-1970. Even if the Panchayat committed breach of its statutory duty in not imposing the tax as per the provisions of Section 178(1A), it could not be said that the petitioners became liable for loss of property to the Panchayat as a direct consequence of any misconduct or gross negligence on their part. Imposing liability on individual members under Sub-section (2) of Section 317 in cases where Panchayat as a whole is guilty of inaction may lead to consequences not intended by the provisions of the said Act qua such members. The Panchayat collectively takes decisions for discharge of its duties and its failure to discharge the duty cannot be attributed to a single member. Moreover, even while taking decisions members of the Panchayat can have their own opinion on the subject. In the event of decision taken by majority, the question may then arise as to who is liable from amongst those who have voted on the decision if it is a wrong decision. In short, the provisions of Section 317 have no application to a case where there is no question of a member being a party to a loss, waste or misapplication of money or other property of a Panchayat which is a direct consequence of any misconduct or gross negligence on his part and the question is only of failure of duty cast upon the Panchayat. The proper course in such cases would be to take action against the Panchayat as contemplated by Section 297 of the said Act. Therefore, the impugned order fixing the liability of the petitioners for the inaction of the Panchayat as a whole was uncalled for and deserve to be set aside.
6. Before parting with the judgment, it is necessary to caution the subordinate Courts against making of indiscriminate adverse comments against officials. The learned Civil Judge (J.D.), Malia in Civil Suit No. 231 of 1973 was concerned only with the question as to whether the Panchayat could impose and collect house tax retrospectively from 1st April, 1970. Holding that it was compulsory for the Panchayat to observe procedure under the relevant Rules, the trial Court held that the violation of the Rules made the decision of the Panchayat taken in March, 1975 null and void, thereby declaring that the house tax imposed by the Panchayat was void. There was no occasion for the trial Court to give an opinion that there was gross misconduct on the part of the Sarpanch and the members of the Panchayat. That was never the issue before the trial Court. The trial Court had found that the action of the petitioners who were earlier members of the Panchayat was wrong in not levying the taxes at the relevant time. It was the duty of the Panchayat to levy taxes and not the duty of any individual member. Moreover, the petitioners had challenged the action of the subsequent Body of the Panchayat as citizens and the challenge was upheld by the Court. Despite that the Court had chosen to castigate the petitioners and send a copy to the concerned authority for necessary action against them. The concerned authority felt obliged to take action against the petitioners because of the remarks made by the trial Court. It is not the function of the subordinate Courts to generate such new proceedings which do not emanate from the case and controversy which the subordinate Court is required to deal with. The duty of the Court is to decide the case and controversy before it and not to issue correctional fiats in the matters which do not arise in its proceedings. Therefore, the subordinate Courts will be well advised not to delve in the fields which do not concern them, having regard to the nature of the proceedings and the case and controversy arising therein before them. The effect of loose comments against officials which have no bearing on the proceedings adjudicated upon by the Court can be to cause undue harassment to them. Moreover, when the point is not at issue regarding the conduct of a person, to castigate such person without hearing him would be unfair.
7. Under the above circumstances, the impugned orders of the District Judge, Junagadh dated 17-2-1984 passed in Civil Misc. Application No. 11 of 1983 and of the Mamlatdar, Malia-Hatina dated 11-1-1983 in case No. 1 of 1982 are hereby set aside and Rule is made absolute with no order as to costs.