ORDER

1. The petitioner in this Writ Petition questions the order of the 2nd respondent i.e., Government of Andhra Pradesh in G.O. Rt. No. 1263 dated 26-10-1991 confirming the order of the 1st respondent herein i.e., the District Collector, Guntur in his Roc. No. 4071/90-G1 dated 26-2-1991 and the notification appended thereto issued by him removing the petitioner from the office of the Sarpanch, Ilavaram Gram Panchayat of Bhattiprolu Mandal in Guntur district with effect from 4-4-1991 under sub-sec. (1) of S. 50 of the Andhra Pradesh Gram Panchayats Act, 1964 (hereinafter referred to as 'the Act').

2. The petitioner states that he was elected as Sarpanch of the Ilavaram Gram Panchayat for a period of five years in the elections for the said office held in the month of March, 1988. The State Government allotted a sum of Rs. 1,58,200/- to the said Gram Panchayat under Jawahar Rozagar Yojana Scheme (hereinafter referred as 'J.R.Y. Scheme') for the year 1989-90 and the said Gram Panchayat passed resolutions for execution of eleven works, with the said J.R.Y. funds. As the said works could not be done through contractors the petitioner had to execute the same personally, and he executed the said works from January, 1990 to July, 1990. He states that though the cost of the said works was estimated on the basis of Standard Scheduled Rates (hereinafter referred to as 'the S.S. Rates') the prevailing market rates for the material and labour involved in the said works was 30% over the relevant S.S. Rates. According to him, he filed a petition dated 10-2-1990 requesting the Deputy Executive Engineer, Repalle to allow 30% over and above the S.S. Rates as the rates of material and wages had gone up and the Deputy Executive Engineer informed him that the Government passed orders in its Memo No. 2759/NREP/III/90-2 dated 20-3-1990 permitting the Chief Engineer, Panchayat Raj Department, to allow up to 10% over and above the S.S. Rates. He represented through petition dated 7-8-1990 to the Chief Engineer, Hyderabad requesting him to allow at least 10% over and above the S.S. Rates. The Chief Engineer directed the Executive Engineer, Tenali to send a detailed report of the estimate of works executed along with a comparative statement of S.S. Rates and market rates duly considering the load involved in the said works. The Deputy Executive Engineer sent a detailed report to the Executive Engineer, Tenali on 27-12-1990 stating that the market rates were in excess of S.S. Rates ranging from 6.7% to 148.96% for the various material and recommending 10% over S.S. Rates. The said report was approved and forwarded by the Executive Engineer, Tenali to the Chief Engineer through the Superintending Engineer, Guntur. Thereafter, the Chief Engineer by letter dated 17-1-1991 informed the petitioner that the Government empowered the Executive Engineer to allow 10% on J.R.Y. Scheme works over the S.S. Rates and that the Superintending Engineer, Guntur was informed to take necessary action in the matter. The petitioner states that though the Executive Engineer, Tenali was required to pass orders formally allowing 10% over and above the S.S. Rates in respect of the works completed by him under the J.R.Y. Scheme, he had not done so.

3. The petitioner states that on certain complaints filed by the group opposite to him in the village a show cause notice dated 7-10-1990 was issued to him by the 1st respondent herein stating that he misappropriated J.R.Y. funds. The value of the works done by the petitioner was arrived at as Rs. 1,24,174/- on the basis of the S.S. Rates and it was alleged that the excess expenditure incurred by him was unaccounted and misappropriated by him. He gave a detailed explanation stating that there would be no excess expenditure or deficit if 10% excess was allowed over and above the S.S. Rates. He states that he remitted a sum of Rs. 24,000/- on 4-7-1990 after calculating the value of the works done by him to the basis of S.S. Rates plus 10%, even though he incurred an expenditure much than the amount arrived at on that basis. The 1st respondent passed the said order dated 26-2-1991 under S. 50(2) of the Act, holding that he did not file any proof to show that he incurred excess expenditure over and above the S.S. Rates and that he was not entitled for 10% excess rates and that he did not file any petition to allow 10% excess rates over the estimated cost based on S.S. Rates. His appeal to the 2nd respondent was also dismissed. The appellate order of the 2nd respondent dated 26-10-1991 was also mainly based on the ground that he was not entitled for 10% over and above the S.S. Rates as per the said Government memo dated 20-3-1990 as the said Memo was only prospective and on the further ground that he did not produce any order from the Executive Engineer allowing 10% over and above the S.S. Rates.

4. The petitioner contends that neither the 2nd respondent nor the 1st respondent took into consideration the fact that he in fact represented to the Chief Engineer for allowing the additional 10% over the S.S. Rates and that the Chief Engineer initiated action by calling for the particulars regarding variations between the market rates and the S.S. Rates and gave instructions to his subordinates in that regard. The petitioner further contends that there is no basis for holding that the Memo of the Government dated 20-3-1990 was to be given effect prospectively from the date of its issue and that it had no application to the works done by him. He also contends that the observation of the 2nd respondent in the impugned order dated 26-10-1991 that he had to account for a sum of Rs. 16,928-53 ps. and that it must be taken that he misappropriated the said amount is without any basis and not borne out by the facts and not tenable in law. He states that he actually spent a sum of Rs. 1,76;730/- for the execution of the eleven works as per the accounts maintained by him which is supported by the prevailing market rates reflected in the report of the Deputy Executive Engineer, Repalle. He disputes the conclusion of the 1st and 2nd respondents that the said amount of Rs. 16,928-53 ps. was misappropriated by him solely on the ground that there were no formal orders of the Executive Engineer allowing 10% in excess of the S.S. Rates in respect of the said works, and contends that the said conclusion is not based on any material on record and does not logically follows. The petitioner submits that, if at all, he may be asked to remit the excess expenditure actually incurred by him over and above the value arrived at on the basis of S.S. Rates, but that is not the same thing as concluding that he misappropriated the funds merely because the expenditure actually incurred by him was more than the value of the works theoretically arrived at on the basis of S.S. Rates.

5. In the counter affidavit filed by the Executive Engineer, the 3rd respondent herein, it is stated that estimates for the works would be prepared based on the P.W.D. S.S. Rates pertaining to the district for the concerned year and that J. R, Y. works were to be executed based on the said S.S. Rates and not as per local market rates. The 3rd respondent disputes the statement of the petitioner that he filed a petition dated 10-2-1990 before the Deputy Executive Engineer, Panchayat Raj, Repalle requesting him to allow 30% over and above the S.S. Rates since the prices had gone up, and he states that on his verification of the records of the Deputy Executive Engineer, Repalle, he did not find any such petition and that the said statement is only an afterthought on the part of the petitioner 'to cover up his illegal expenditure'. But the fact that the petitioner represented to the Chief Engineer, Panchayat Raj, Hyderabad by a petition dated 7-8-1990 is not disputed though it is stated that the said petition was made after the enquiry against the petitioner was already initiated. Memo No. 2759/NREP/90-2 dated 20-3-1990 was not disputed -- in fact a true copy of the same has been filed along with the counter affidavit. But it is stated that in Memo No. 77615/NREP/III-90-I dated 7-1-1991 the Government empowered the Executive Engineer to allow upto 10% excess over and above S.S. Rates 'for quick implementation of J.R.Y. Programme'. From that it is sought to be deduced by the 3rd respondent as follows:--

".....It is very clear from the above directions, that the above powers were given to the Executive Engineers to apply only for quick implementation of J.R.Y. programme, which means for the on going works the instructions are to be applied. Further the Chief Engineer (Design) Memo No. JRY/ (T)(I)/16728/90 dated 12-11-1991 has clarified the above instructions are not retrospective but only prospective. The contention of the petitioner that the Executive Engineer, is bound to allow 10% in excess of S.S. Rates is not true, as he had already completed the works by that time, the Memo No. 77615/ NREP/III/90-1 dated 7-1-91 empowering the Executive Engineer to allow 10% in excess over and above S.S. Rates, is issued.....".

As regards the instructions of the Chief Engineer, Panchayat Raj, Hyderabad, based on the petition of the petitioner, it is stated by the 3rd respondent in his counter affidavit as follows:--

"......as per the instructions of the Chief, Engineer, P.R. Hyderabad, based on the representation it is a fact, that the comparative statement were prepared by the Dy. Executive Engineer and submitted through the Executive Engineer, and Superintending Engineer, to the Chief Engineer, P.R., Hyderabad for consideration of excess percentage. This docs not mean that the authority who have submitted proposals to the Chief Engineer, allowed the excess percentage. It is for the approving authority to decide. These are all routine matters to submit proposals to higher authorities for consideration and it is for the approving authority to decide. The Sarpanch has not putforth any claim during execution of works in question and only represented to the Chief Engineer after enquiring regarding misappropriation of J.R.Y. funds has taken place. The Govt. Memo 2759/NREP/90-2 dt. 20-3-90 is applicable only for ongoing works for which claims are to be preferred by the respective Sarpanches from the date onwards and aiso it is not a blank dated order for allowing all Panchayat in general. Subsequently this contention was also clarified by the Chief Engineer (Design) in Memo dt. 12-11-91. This being the tact this Sarpanch has never represented for enhancement of rates upto 10% excess over and above the S.S. Rates during execution and only represented after completion of work and after an enquiry was ordered against him. The Dy. Executive Engineer, has recommended on 27-12-90 based on the representation petition made to the Chief Engineer, P.R., Hyderabad, and not the so-called petition dt. 10-2-90 which he never submitted to the Dy. Executive Engineer....."

6. The counter affidavit filed on behalf of the 2nd respondent by the Assistant Secretary to Government, Panchayat Raj and Rural Development Department, merely repeats what is stated in the impugned order of the Government dated 26-10-1991. Both in the said impugned order and in the counter affidavit it is stated as follows :--

"From the connected records made available by the Collector (P.W.) Guntur, Government find that the appellant has drawn a total amount of Rs. 1,58,000/- from J.R.Y. funds 1989-90. As per the guidelines, the works were to be completed before 31-3-1990. According to the details shown in the Annexure to the Collector's notification dated 26-2-1991, the value of (10) ten works recorded and measured in the M. Books is Rs. 1,24,174/-.....Thus as against Rs. 1,58,200/- drawn by the Sarpanch, the expenditure on ten works was Rs. 1,26,874/- and thereby the Sarpanch incurred excess expenditure of Rs. 31,326/-. It is further noticed that the Sarpanch did not pay the P.S. Charges of Rs. 3,376/- to the Mandal Praja Parishad nor did he pay the amount of Rs. 8,722/- towards seignorage fee to the Zilla Praja Parishad. Therefore the Sarpanch was held responsible for the amount of Rs. 43,424/- (-) (31,326 + 3,376 + 8,722). The Sarpanch remitted back Rs. 24.000/- on 23-7-1990 after the enquiry was initiated against him. This proves the guilt of sarpanch in drawing the amounts indiscriminately and it is a clear misappropriation of the funds. The Sarpanch contended that the eleventh work executed by him as evaluated for Rs. 2,495-47 Ps. but he did not produce any valuation certificate before the Collector. However, after deducting the amount of Rs. 24,000/- remitted by him on 23-7-1990 and also the amount of Rs. 2,495-47 for the eleventh work out of the total amount of Rs. 43,424-00 the Sarpanch still has to account for the balance amount of Rupees 16,928.53. The contention of the Sarpanch that the Collector did not allow 10% over and above the S.S. Rates over cost of works in pursuance of the orders issued by Government in Memo No. 2759/NREP. III/ 90.2, Dated 20-3-1990 is not tenable, since the said orders are effective from the datet of the issue. Moreover, the Sarpanch did not produce any order from the Executive Engineer" (Panchayat Raj) concerned allowing 10% extra over the estimates rates in respect of the JRY works executed by him during 1989-90....."

7. In the additional counter affidavit dated 23-2-1993 filed on behalf of the 1st respondent by the District Panchayat Officer, Guntur, it is stated that under S. 50(9) of the Act, the petitioner was suspended by the 1st respondent from the office of Sarpanch for a period of three months. That order was passed on 28-7-1990. The petitioner preferred an appeal on 8-8-1990 to the 2nd respondent against the said order of suspension and pending the said appeal also sought stay by an application which was dismissed by the 2nd respondent in its Memo dated 25-8-1990. The petitioner preferred with petition No. 12996 of 1990 before this Court questioning the said order of the 2nd respondent refusing to grant stay pending the appeal, and the said writ petition was dismissed by this Court on 11-9-1990 with a direction to the 2nd respondent to dispose of the petitioner's appeal as expediti-ously as possible, preferably within a period of two weeks. Now in the counter affidavit filed on behalf of the 1st respondent, it is contended that while rejecting the application for stay pending the appeal against the suspension order, the 2nd respondent categorically held 'that the petitioner failed to account for Rs. 55,791/- and that while dismissing writ petition No. 12996 of 1990 by order dated 11-9-1990 this Court held 'that the order passed by the 2nd respondent clearly shows that prima facie the petitioner has not accounted for a sum of Rs. 55,791/-' and that, therefore, the said findings operate as res judicata. I am of the view that this is too farfetched. The order of the Government rejecting the stay in its memo dated 25-8-1990 pending the appeal before it, was only an interim order. The order of suspension under S. 50(9) of the act itself was passed pending final proceedings under S. 50(1) of the Act against the petitioner. While dismissing Writ Petition No. 12996 of 1990, this Court only observed as follows:--

".....Various contentions are raised questioning the said order, but I am not inclined to interfere with that order, firstly as it is merely an interlocutory order pending the appeal, and secondly the order clearly shows that prima facie the petitioner has not accounted for a sum of Rs. 55,791/- .....".

Therefore, the contention raised in the counter affidavit filed on behalf of the 1st respondent that the said order operates as res judicata is misconceived.

8. The record of the respondents produced before me discloses that pursuant to the order of this Court dated 11-9-1990 in Writ Petition No. 12996 of 1990 directing the 2nd respondent to dispose of the appeal preferred against" the suspension order, preferably within a period of two weeks, the Government in fact passed orders rejecting the said appeal in G.O. Rt, No. 1813 dated 27-11-1990 and by then the period of suspension was over i.e., on 28-10-1990. The record discloses that the petitioner was kept under suspension by the 1st respondent on the basis of certain representations and complaints received by him alleging that the petitioner executed works worth only Rs. 88,049/- and collected material worth Rs. 14,000/- and failed to render account for the remaining amount of Rs. 55,791/- out of a total sum of Rs. 1,58,200;- withdrawn by him from the J.R.Y. funds. The record also discloses that the 2nd respondent issued a show cause notice under S. 50(1) of the Act only on 7-10-1990 in his Roc. No.4071/90. Gl. The charge in the said show cause notice is as follows:--

"..... Whereas it has been reported by the D.P.O. Guntur that Sri M. Hemasundara Koteswara Rao, Sarpanch, Ilavaram Gram Pranchayat, Bhattiprolu Mandal had withdrawn a total sum of Rs. 1,58,200/- from the JRY funds lodged in Andhra Bank Branch, Bhattiprotu in account No. 4916 between 15-2-1990 and 28-3-1990 executed works worth Rs. 88,049/- collected material worth Rs. 14,000/- and failed to render account for the remaining amount of Rs. 55,791/-.

Now, therefore, in exercise of powers u/S. 50(1) of the A.P. Gram Panchayats Act, 1964.....".

9. The short question that arises in this writ petition is whether the orders of the 1st and 2nd respondents are vitiated by any errors apparent on the face of the record and whether the findings arrived at are without any basis whatsoever so as to render them liable to be set aside. After going through the orders impugned in this Writ Petition and the material placed before me, I am satisfied that there is absolutely no material whatsoever for holding that the petitioner misappropriated the said sum of Rs. 16,928.53 ps. or any part of the said sum of Rs. 1,58,200/- drawn by him for the purpose of the works under the J.R.Y. Scheme. The facts on record only establish almost that the petitioner incurred excess expenditure in the said works whether it be Rs. 16,928-53 Ps. or more or less. That the petitioner had done works and collected the material is not disputed; at any rate, there is no finding to the contra by the 2nd respondent or the 1st respondent. The record does not disclose that there was any factual verification of the works done or the quantity involved. However, admittedly there were measurement books from which the measurements of the works done were taken for finding out the value of the said works. The said value was arrived at on the basis of S.S. Rates, not on the basis of the actual market rates obtained in the village or in the area concerned which alone were relevant for the purpose of verifying whether the expenditure said to have been incurred by the petitioner was true and actually incurred by him. The material in the record also discloses that there was a general demand that 25% over and above the S.S. Rates should be allowed in the case of J.R.Y. works because they are required to be completed expeditiously. In this connection, it is to be noticed that though the works were required to be completed on paper by 30-3-1990, in fact good portion of the funds were withdrawn by the petitioner only in February and March, 1990. The Government permitted 10% over and above the relevant S. S. Rates in its Memo. No. 2759/NREP.III/90-2 dated 20-3-1990. At the end of the said Memo it is noted "this memo issues with the concurrence of Finance and planning (Finance) Department vide their U.O. No. R90/03/72/2027/S.P.-90 dated 12th March 1990". This clearly establishes that the decision by the Government was taken in March, 1990 itself and it cannot be disputed that the works in question were in progress at that time. Therefore, I fail to understand how the decision of the Government in the said Memo dated 20-3-1990 was not attracted to the works in question. That was the reason why the Chief Engineer (P. R.) Hyderabad by his letter No. TI/16728/90 dated 17-1-1991 very fairly informed the Superintending Engineer (P.R.) Guntur to take necessary action in the matter on the representation dated 7-8-1990 made by the petitioner. The respondents have not disputed that the Chief Engineer in his Memo No.Tl/ 16728/90 dated 12-9-1990 reminded the Superintending Engineer "to send a detailed report along with a comparative statement of SSR rates and market rates duly considering the lead involved on the representation 1st cited (of the petitioner dated 7-8-1990)". Subsequently, the said comparative state" ment was in fact sent and the same was referred to by the petitioner in the affidavit filed by him in support of this Writ Petition and the same is not disputed by the respondents. On the other hand, the Executive Engineer in his counter affidavit takes the specious plea "that the comparative statement were prepared by the Dy. Executive Engineer and submitted through the Executive Engineer, and Superintending Engineer, to the Chief Engineer, P.R., Hyderabad for consideration of excess percentage. This does not mean that the authority who have submitted proposals to the Chief Engineer, allowed the excess percentage. It is for the approving authority to decide." There is no explanation forthcoming why a decision was not taken by the approving authority concerned in this regard. If in fact even the said 10% is allowed, then the shortfall to be explained by the petitioner would be negligible, even assuming that there was a shortfall because the petitioner had been contending right through that the actual market rates were much more than 10% above S.S. Rates. Therefore, I am satisfied that on the material in the record, there is absolutely no basis for holding that there was any misappropriation by the petitioner. I am supported in this view by a decision of this Court in Writ Petition No. 10034 of 1991 dated 28-4-1992 wherein a similar question arose and it was held as follows:--

"Charge No. 13 says that the petitioner has spent Rs. 2,26,669/- on Jawahar Rozgar works and produced records for Rupees 1,44,823/- and failed to produce connected records for Rs. 81,846/-. The explanation of the petitioner is that the work was executed but there was gap of 11 months in the valuation of work. There would be some difference due to wear and tear due to passage of time, specially as there was cyclone in the coastal area during that period. The Collector found that an amount of Rs. 43,920/- is not accounted for though in the charge an amount of Rs. 81,846/- is stated."

10. In this connection, it is to be noticed that the record discloses that the Appellate Authority i.e., the Government, the 2nd respondent herein relied on the para-wise remarks sent by the original authority i.e., the 1st respondent herein. A Division Bench of this Court in K.N. Rao v. Collector Pancha-yat Wing Gunlur, held that

the said practice is not permissible and on that ground set aside the orders of the State Government u/S. 50(4) of the Act. The Division Bench observed as follows (at pages 445 & 446) :--

"A judicial authority or a quasi-judicial tribunal has to exercise the statutory appellate powers by itself on a consideration of the material before it and on the representations made by the concerned parties without any interference from any outside authority. The District Collector according to the counsel for the respondents is not an outsider but a party to the proceeding. True, .............the District Collector has framed the charges against the appellant herein and passed an order of removal from the office of Sarpanch, finding him guilty of the charges levelled against him for commission of certain irregularities and also misappropriation. However, he is not a party before the appellate authority, the State Government. No provision is made either in the Act or the Rules made thereunder that the District Collector has a right to make representation before the appellate authority to sustain his order. Unless and until such a power or right is given to the District Collector under the Statute or any statutory rule, it is not open to him to make any suo motu representations or any representations > to the effect that the order passed by him was correct and there is no merit in any of the grounds taken by the appellant in his memorandum of grounds and the appeal must be dismissed. Such right is provided only to the parties concerned but not to the authority which passes the order, unless it is provided in the Act itself. Admittedly, no such provision has been made in the present Act or the Rules providing an opportunity to the District Collector to sustain the stand taken by him in his order against which an appeal has been preferred to the State Government. We do not also find any statutory authority or rule enabling the State Government to call for any report from the Collector or any other authority, in this regard. There is no specific provision relating to the procedure. But the State Government must be conscious of the fact that it is exercising its powers as a quasi-judicial appellate authority against the order of the District Collector under a statute. Such a statutory quasi-judicial appellate tribunal or authority should not either consult or consider any other opinion or view of either the District Collector or any other authority while exercising its appellate powers. Any consultation with, or interference by the District Collector or any outside authority would vitiate the functioning of the appellate authority as an independent statutory quasi-judicial tribunal. In administrative matters an appellate authority might exercise its discretion to call for such remarks or reports. But such a procedure is not permissible in the case of exercise of its powers as a quasi-judicial appellate tribunal."

This judgment of the Division Bench was recently followed by a learned single Judge of this Court in G. Israil v. Govt. of A.P., .

11. It is also to be noticed that this Court considered the scope and ambit of S. 50(1) of the Act and the aspects to be kept in view by the authorities concerned in exercising the" power under the said provision. In K. Mohan Rao v. Deputy Secretary of A.P., 1975 (1) APLJ 102 a learned single Judge of this Court held as follows :--

"A reading of the provisions makes it clear that it is not every omission or refusal to carry out or every disobedience of the provisions of the Act, or the rules or the bye-laws, regulations or lawful orders or every abuse of the power that occasions the removal of the Sarpanch. It should be more than mere omission, refusal, disobedience or abuse. It is only wilful omission or refusal or disobedience or abuse of powers on his part that exposes him to such removal. It should be an intentional act of the Sarpanch.

xxxxx

Removal of a person from elective office is an extraordinary power vested in the Commissioner, which in my opinion the Legislature never intended that it shoud be exercised for any omission accidental or otherwise or for every error committed in the discharge of the functions. It has to be exercised not upon the mere omission to do an act but upon a 'wilful Omission' which implies something more than mere inaction. Removal from office is penal in nature therefore as observed in Murray R. Spies v. United States of America 87 Lawyers Edition, 418 at 422 'we would expect wilfulness to include some element of evil motive and want of

justification.......'."

To the same effect is the judgment of this Court in K. L. Narasa Reddy v. Collector, Panchayat Wing, Ongole (1979) 1 An WR 222 and the judgment of this Court dated 11-4-1986 in Writ Petition No. 4016 of 1986. I had occasion to consider these in my judgment dated 3-2-1993 in Writ Petition No. 5047 of 1991 and after referring to the three decisions of this Court, referred to above, I held as follows:--

"That the said provision is penal in nature and visits the Sarpanch or Upa-sarpanch removed thereunder with penal consequences is made clear by sub-sec. (6) of S. 50 which provides that the person so removed 'unless the notification is cancelled under sub-sec. (4) be ineligible for election as Sarpanch or Upa-Sarpanch or for election as member or from holding any of those offices for a period of three years from the date from which his removal from office has taken effect'. It follows therefore that the charges will have to be framed precisely and will have to be proved beyond doubt."

12. I am therefore of the view that there is absolutely no basis for finding that the petitioner herein misappropriated any funds. In fact, in the original charge, the only allegation was that he did not account for certain sums, not that he misappropriated any amounts. The amount said lo have been not accounted for by the petitioner as per the original charge was Rs. 55,791/-. In the orders impugned, the said amount was reduced to Rs. 16,928-53 ps. and that too only on the basis that in evaluating the works done 10% over and above the S.S. Rates is not allowed in spite of the Memo of the Government No. 2759/NREP. 111/90-2 dated 20-3-1990. There is no finding whatsoever as to the actual amount expended by the petitioner for completing the works in question. No wilfulness was found.

13. In the circumstances and for the reasons stated above, the Writ Petition is allowed as prayed for with costs. Advocate's fee Rs. 350/-.

14. Petition allowed.