Resident Of House No.e-236, Corte De Oiteiro, Behind Old Income Tax Office, Panaji Goa 403 001 v. State Of Goa

Amrut IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO.415 OF 2016 1 Mr Raul Aires Fernandes, Aged 83 years, married, Indian National, Resident of House No.E-236, Corte De Oiteiro, Behind Old Income Tax Office, Panaji Goa 403 001 2 Mr John Aires Fernandes, Aged 42 years, married, Indian National, Resident of House No.E-236, Corte De Oiteiro, Behind Old Income Tax Office, Panaji Goa 403 001 Versus 1 State of Goa, through its Chief Secretary, having office at Secretariat, Alto Porvorim, Bardez Goa. … Petitioners 2 North Goa Planning and Development Authority, Through its Member Secretary, having office at Mala link Road, Panaji Goa. 3 Office of the Chief Town Planner & Member Secretary of Conservation Committee, Through its Chief Town Planner & Member Secretary, having Office at Dempo Tower, Panaji Goa. Page 1 of 187th June 2023 4 Mr Ketak S. P. Nachinolkar, Architect 209, Govinda Building, M. G. Road, Panaji Goa 403 001 …Respondents Mr Rohit Bras De Sa and Mr P. Naik, Advocates for the Petitioners. Mr D. Pangam, Advocate General with Mr Manish Salkar,Government Advocate for Respondent Nos. 1 to 3. Mr Nigel Da Costa Frias and Ms Bavina Kukalekar, Advocates forRespondent No.4. CORAM:M. S. SONAK &BHARAT P. DESHPANDE,JJ DATED : 7th JUNE 2023 ORAL JUDGMENT ( Per M. S. Sonak, J) 1. Heard Mr Rohit Bras De Sa, learned counsel for thePetitioners, Mr D. Pangam, learned Advocate General along with MrManish Salkar, learned Government Advocate for Respondent Nos. 1to 3 and Mr Nigel Da Costa Frias, learned counsel for RespondentNo.4. 2.The Petitioners, by instituting this petition, had sought a writof quo warranto or, in any case, a declaration that Respondent No.4stood disqualified to continue as a member of the ConservationCommittee constituted under the Goa (Regulation of LandDevelopment and Building Construction) Act, 2008 ( the said Act )and the Regulations made thereunder ( the said Regulations). 3.The Goa (Regulation of Land Development and BuildingConstruction ) Act, 2008, was enacted to provide for the regulationand control on building construction and land development in theState of Goa and other incidental and ancillary matters connectedtherewith. Section 4 of the said Act provides that the Governmentmay by notification in the Official Gazette frame regulations notinconsistent with the provisions of the said Act, for carrying out theprovisions of the said Act by following the procedure specified underSections 5, 6, and 7 of the said Act. 4.In the exercise of powers conferred by Section 4 of the said Act,and all other powers enabling it on this behalf, the Government ofGoa has made the Goa Land Development and Building ConstructionRegulations, 2010, and published the same in the Official Gazette. 5.Annexure -IX appended to and forming part of the saidRegulations is concerned with the Regulation for Conservation.Detailed provisions have been made to regulate the construction anddevelopment in the conservation zone. This Annexure, inter aliaprovides the constitution and composition of the ConservationCommittee. 6.The Regulations also provide for the conduct of the proceedingsof the Conservation Committee. Clause (5) inter alia provides forspecial powers vested in this Committee, term of office and tenure of members, and several other aspects relating to the conduct ofproceedings of the Conservation Committee. 7.Sub-clause (n) of clause (5) referred to above is concerned withthe disqualification of Member/Barring of Member from proceedings.Since the same is relevant to the issue raised in this petition, the same is transcribed below for the convenience of reference. “(n) Disqualification of Member/Barring of memberfrom proceedings: —A member shall cease to bemember of the Committee if he— i) is declared to be of unsound mind by a competentCourt; or ii) is adjudged insolvent; or iii) has been convicted by any Court in India of anyoffence, and sentenced to imprisonment for not less than two years; or members, and several other aspects relating to the conduct ofproceedings of the Conservation Committee. 7.Sub-clause (n) of clause (5) referred to above is concerned withthe disqualification of Member/Barring of Member from proceedings.Since the same is relevant to the issue raised in this petition, the same is transcribed below for the convenience of reference. “(n) Disqualification of Member/Barring of memberfrom proceedings: —A member shall cease to bemember of the Committee if he— i) is declared to be of unsound mind by a competentCourt; or ii) is adjudged insolvent; or iii) has been convicted by any Court in India of anyoffence, and sentenced to imprisonment for not less than two years; or iv) is absent without the permission of the Committee inwriting from three consecutive meetings thereof or fromall the meetings of the Committee for six consecutivemeetings; v) A member, who is directly or indirectly concerned orinterested in any proposal before the Committee, or isprofessionally interested on behalf of a principal or otherperson in any manner concerning the Committee, or isengaged at the time in any proceedings against theCommittee, shall at the earliest possible opportunity,disclose the nature of his interest to the Committee andthe disclosure shall be recorded in the minutes of theCommittee. The said member shall not be present at anymeeting of the Committee when such a proposal isdiscussed, unless his presence is required by the othermembers for purpose of eliciting information, but nomember so required to be present shall vote on suchproposal.” 8.The Petitioners have alleged that Respondent No.4, being amember of the Conservation Committee, participated in theproceedings of the Conservation Committee held on 26.08.2013,where the proposal of addition/alteration to the existing structure inthe property bearing Chalta No.178 and 179 of P. T. Sheet No.45 atPanaji by Mr Barnabe Sapeco (File No. 27/15-3/728/TCP/2013/4082dated 14.10.2013 ) was taken up for consideration. The Petitionersalleged that the plans for this proposal were prepared by RespondentNo.4, a qualified Architect. The Petitioners have alleged that despiteduty to make full disclosure, Respondent No.4 failed to disclose hisinvolvement and interest in the said subject matter and, further,participated in the meeting of the Conservation Committee held on26.08.2013, in which, the proposal was recommended for approval.Accordingly, relying upon sub-clause (n) of Clause (5) quoted above,the Petitioners urged for a writ of quo warranto or in the alternate, adeclaration that Respondent No.4 stood disqualified as a member ofthe Conservation Committee. 9.None of the Respondents except Respondent No.4 has chosento file an affidavit in this matter. Respondent No.4, in his affidavitdated 26.10.2016, admitted that Mr Barnabe Sapeco had engaged himas an Architect for the project in question sometime in 2009-2010,much before Respondent No.4 was appointed as a member of theConservation Committee. Respondent No.4 also admitted that he hadprepared plans submitted by Mr Barnabe Sapeco for approval. He pointed out that other technical members of the ConservationCommittee considering these plans and site visit suggested somechanges. Accordingly, changes were incorporated in the plans and thesame were resubmitted by Mr Barnabe Sapeco to the ConservationCommittee which then recommended the proposal for approval.Respondent No.4 relied upon and annexed to his affidavit the minutesof the 5th Conservation Committee meeting and pleaded that theminutes show that there was no undue favoritism afforded toMr Barnabe Sapeco by the Conservation Committee. 10.Respondent No.4, in the context of failure to disclose hisinterest to the Conservation Committee or in the context of sub-clause(n) of Clause (5) of the Regulations referred to above, pleaded thefollowing in paragraphs 5 to 9 of his affidavit dated 26.10.2016. pointed out that other technical members of the ConservationCommittee considering these plans and site visit suggested somechanges. Accordingly, changes were incorporated in the plans and thesame were resubmitted by Mr Barnabe Sapeco to the ConservationCommittee which then recommended the proposal for approval.Respondent No.4 relied upon and annexed to his affidavit the minutesof the 5th Conservation Committee meeting and pleaded that theminutes show that there was no undue favoritism afforded toMr Barnabe Sapeco by the Conservation Committee. 10.Respondent No.4, in the context of failure to disclose hisinterest to the Conservation Committee or in the context of sub-clause(n) of Clause (5) of the Regulations referred to above, pleaded thefollowing in paragraphs 5 to 9 of his affidavit dated 26.10.2016. “5. I say that my interest in the approval of the plans ofMr Sapeco were evident with my name being directlymentioned as the Architect and with my signature onthe plans. The presence of any member who isinterested can still be sought for by the ConservationCommittee for eliciting information but the member sopresent and who is interested is not entitled to vote onthe proposal. 6. I say that so far as the plans of Mr Sapeco wereconcerned, the Agenda itself mentioned that therequired changes had been effected and that theTechnical members had recommended the proposal forapproval and hence for the approval of the proposal the Conservation Committee did not require the need forany voting. 7. I say that at the meeting of the ConservationCommittee on 13/8/2013 I had disclosed before thecommittee that I had prepared the plans submitted byMr Sapeco and this is apparent from the plans whichwere before the committee which bear my name andsignature. 8. I say that it is not recorded in the minutes of themeetings of the conservation committee that I haddisclosed my involvement in the preparation of theplans submitted for approval by Mr Sapeco, howeverthis may have been due to oversight by the membersecretary of the committee. I say that there are othersuch instances where the involvement of a member ofthe committee in the case discussed/placed before thecommittee was brought to the notice of the committeebut was not minuted. 9. I deny the contents of paragraph 7 of the petition toextent it is alleged that I had not disclosed my interestin the matter to the committee and I had voted on theproposal. As a matter of fact the proposal of MrBarnabe Sapeco was not put to vote as he had compliedwith the requisitions of the committee. I therefore denythat I am liable to be disqualified as a member of theconservation committee.” 11.The minutes of the 5th Conservation Committee meeting heldon 26.08.2013 concerning the Item No.4 are relevant and the sameread as follows:- “Item No.4: Proposed addition/alteration to theExisting structure in the property bearing chaltano.178 and 179 of P.T. Sheet No.45 at Panaji by Page 7 of 187th June 2023 Shri Barnabe Sapeco (file No.27/15-3/728/TCP/2013). The Member Secretary of North Goa Planning& Development Authority vide letter no.NGPDA/1751/3187/2013 dated 13/03/2013 hasforwarded the proposal. It is informed that the casewas placed before the 47th Authority Meeting held on08/03/2013 and the Authority approved theproposal subject to the clearance from ConservationCommittee. Technical members inspected the site and certainmodifications were suggested to the applicant.Accordingly, the applicant has submitted the revisedplans vide letter dated 21/08/2013 as advised. Since the required changes have been affected,the Technical Members have recommended theproposal for approval.” Page 7 of 187th June 2023 Shri Barnabe Sapeco (file No.27/15-3/728/TCP/2013). The Member Secretary of North Goa Planning& Development Authority vide letter no.NGPDA/1751/3187/2013 dated 13/03/2013 hasforwarded the proposal. It is informed that the casewas placed before the 47th Authority Meeting held on08/03/2013 and the Authority approved theproposal subject to the clearance from ConservationCommittee. Technical members inspected the site and certainmodifications were suggested to the applicant.Accordingly, the applicant has submitted the revisedplans vide letter dated 21/08/2013 as advised. Since the required changes have been affected,the Technical Members have recommended theproposal for approval.” 12.Based upon the above material, mainly emanating fromRespondent No.4 himself, it is evident that Respondent No.4 wasdirectly or in any case, indirectly or in any case professionallyinterested in Mr Sapeco's proposal, which was prepared by him for theapproval of the Conservation Committee. This much is admitted byRespondent No.4 in his affidavit. Respondent No.4 admitted that MrSapeco had engaged him as his Architect. Under such professionalengagement, Respondent No.4 had prepared the plans, which MrSapeco then submitted for approval to the Conservation Committee.He also admitted that he revised the plans based on the suggestions ofthe technical members of the Conservation Committee and that theserevised plans were considered by the Conservation Committee in its5th meeting. 13.In the above circumstances, it was incumbent upon RespondentNo.4 to disclose the nature of his interest to the committee, andfurther such disclosure was required to be recorded in the minutes ofthe Committee. Even further, Clause (5)(n)(v) required thatRespondent No.4 should not have been present at any meeting of theCommittee when such proposal was to be discussed unless hispresence was required by the other members for the purpose ofeliciting information, but no member so required to be present couldvote on such proposal. 14.The minutes produced on record by Respondent No.4 showthat Respondent No.4 did not disclose his interest in the proposal.The contention that Respondent No.4's interest was evident becausehis name was directly mentioned as an Architect or because he hadsigned the plans cannot be a substitute for failure to disclose. Theregulations were conscious that not all the members scrutinise thedocuments and plans before them in detail. Mr Costa Frias, however,submitted that Respondent No.4 had disclosed his interest to theConservation Committee though this fact may not have been recordedin the minutes. 15.In the affidavit filed by Respondent No.4, there is a statementabout disclosure in the meeting of the Conservation Committee heldon 13.08.2013. No minutes of this meeting have been produced.However, assuming that the reference to 13.08.2013 is an error and the correct date of the Conservation Committee meeting was26.08.2013, such alleged disclosure should have been reflected in themeeting minutes of the Conservation Committee. 16.As noted earlier, Clause (5)(n)(v) unambiguously provides that amember must disclose his interest to the Committee, and suchdisclosure shall be recorded in the minutes of the Committee. The factthat such disclosure is not recorded in the minutes of the meeting ofthe Conservation Committee is sufficient to hold that there wasindeed a failure to disclose. Even the member secretary did not chooseto file any affidavit to support the plea of disclosure. Therefore, theself-serving plea of disclosure cannot be accepted. the correct date of the Conservation Committee meeting was26.08.2013, such alleged disclosure should have been reflected in themeeting minutes of the Conservation Committee. 16.As noted earlier, Clause (5)(n)(v) unambiguously provides that amember must disclose his interest to the Committee, and suchdisclosure shall be recorded in the minutes of the Committee. The factthat such disclosure is not recorded in the minutes of the meeting ofthe Conservation Committee is sufficient to hold that there wasindeed a failure to disclose. Even the member secretary did not chooseto file any affidavit to support the plea of disclosure. Therefore, theself-serving plea of disclosure cannot be accepted. 17.Mr Costa Frias submitted that Respondent No.4 has no controlover the writing of the minutes of the Conservation Committee. Eventhis contention cannot be accepted. The provisions of Clause (5)(n)(v)are clear and unambiguous. Respondent No.4 was a member of theConservation Committee and, therefore, had complete control overthe writing of the minutes. If any disclosure was indeed made, thenRespondent No.4, for his own protection, should have ensured thatthis disclosure was recorded in the minutes of the Committee giventhe clear and unambiguous provisions of Clause (5)(n)(v). Further,Respondent No.4 should have refrained from attending the committeemeeting when this proposal was considered. Neither the minutes nor the affidavit reflects that Respondent No.4 abstained from attendingthe proceedings when this proposal was taken up. 18.There is no material to suggest that other members of theConservation Committee had required Respondent No.4 to remainpresent to elicit information. There is a statement in the affidavit thatfailure to record the disclosure allegedly made by Respondent No.4was due to an oversight by the Member Secretary of the committee. Inthe affidavit, Respondent No.4 also alleged that there are other suchinstances where the involvement of a committee member in the casediscussed/placed before the committee was brought to the notice ofthe committee, but the same was not minuted. All these contentionsor rather excuses are not sufficient given the clear and unambiguousprovisions of Clause (5)(n)(v) quoted above. 19.Respondent No.4 also contended that the proposal of MrSapeco was not put to the vote as he had complied with therequisitions of the committee. Again, this is not a correctinterpretation of the minutes, which suggest that Mr Sapeco's proposalwas unanimously approved and recommended by the ConservationCommittee. 20.Thus, the material on record establishes that Respondent No.4had direct or at least professional interest in Mr Sapeco's proposal,which was taken up for consideration by the Conservation Committee in the meeting held on 26.08.2013. Further, such interest was notdisclosed by Respondent No.4 to the committee. Respondent No.4did not even abstain from participating in the proceedings when sucha proposal was considered. The proposal was unanimously approvedand recommended by the Conservation Committee. This is sufficientto attract disqualification Clause (5)(n)(v) of the Regulations quotedabove. 21.Given the clear and unambiguous provisions of Clause (5)(n)(v), there was a duty cast upon Respondent No.4 to not only disclosehis interest in Mr Sapeco's proposal but further ensure that suchdisclosure is recorded in the minutes of the Conservation Committee.Additionally, there was a duty cast upon Respondent No.4 not toremain present at the meeting of the Conservation Committee whensuch a proposal was to be discussed unless the other membersspecifically required his presence to elicit information. In any case,Respondent No.4 could not have voted on such a proposal. Anyaction in breach of clear and unambiguous provisions set out in Clause(5)(n)(v) would invite the wrath of disqualification, particularlybecause Clause provides that a member shall cease to be a member ofthe Committee if there is any breach of the conditions prescribed insub-clause (v) of Clause (5)(n). 22. In Nazir Ahmed's case1, the Judicial Committee of the PrivyCouncil had observed the principle applied in Taylor v. Taylor (1875)1 Ch. D. 426, to a Court, namely, that where a power is given to do acertain thing in a certain way, the thing must be done in that way ornot at all and that other methods of performance are necessarilyforbidden. 23.The Hon'ble Supreme Court has followed this principle in thecase of State of Uttar Pradesh Vs Singhara Singh and others2andheld that if a statute has conferred a power to do an act and has laiddown the method in which that power has to be exercised, itnecessarily prohibits the doing of the act in any other manner thanthat which has been prescribed. The principle behind the rule is that ifthis were not so, the statutory provision might as well not have beenenacted. 24.The provisions in Clause (5)(n)(v) embodies the principle thatthere should not be any conflict between the interest and duty of amember of committees like the Conservation Committee. TheConservation Committee discharges a very important public functionof conserving heritage and heritage structures. Therefore, the Membersof the Conservation Committee must be guided solely by theregulations framed for conservation and the matters connected 1 L.R. 63 I.A. 372 2 AIR 1964 SC 358 therewith. Suppose the Members have any personal pecuniary or evenprofessional interest in any proposal before the ConservationCommittee. In that case, it is their duty to not only disclose theprecise nature of their interest but further such Members shouldabstain from taking part in the proceedings. Clause (5)(n)(v), in fact,provides that such Members shall not even remain present in themeeting of the Committee when such proposal in which they mayhave a direct or indirect interest is being discussed unless otherMembers require their presence for eliciting information. In any case,such Members should never vote on such a proposal. 25.These provisions are made to uphold the principle that thereshould not be any conflict between the interest and the duties of theCommittee members. The question in such matters is not whether theinterested member will actually favour the project proponent. Actualfavour would be extremely difficult to establish. Therefore, in clearand unambiguous terms, the provisions provide that the momentthere is any direct or indirect interest, the Member concerned mustdisclose the same and refrain from participating in the proceedingsunless his presence is specifically required to elicit information. 26.The principle of avoidance of conflict of interest does notrequire the actual proof of any pecuniary gain or pecuniary lossbecause this principle is a much wider, equitable, legal and moralprinciple which seeks to prevent even the coming into existence of a future and/or potential situation which would inhibit benefit orpromise through any commercial interest in which the principal actorsare involved. The entire purpose of `conflict of interest' rule is toprevent and not merely to cure situations where the fair and validdischarge of one's duty can be affected by commercial interests whichdo not allow the fair and fearless discharge of such duties. ( Seeopinion of G. S. Misra, J in A. C. Muthiah Vs Board of Controlfor Cricket in India and another, (2011) 6 SCC 617 ). 27.The provisions to prevent the conflict between the interest andduties of the directors had been enacted under the Companies Act,1956. In the context of such provisions, the Hon'ble Supreme Court, future and/or potential situation which would inhibit benefit orpromise through any commercial interest in which the principal actorsare involved. The entire purpose of `conflict of interest' rule is toprevent and not merely to cure situations where the fair and validdischarge of one's duty can be affected by commercial interests whichdo not allow the fair and fearless discharge of such duties. ( Seeopinion of G. S. Misra, J in A. C. Muthiah Vs Board of Controlfor Cricket in India and another, (2011) 6 SCC 617 ). 27.The provisions to prevent the conflict between the interest andduties of the directors had been enacted under the Companies Act,1956. In the context of such provisions, the Hon'ble Supreme Court, in Ram Parshotam Mittal and others Vs Hotel Queen RoadPrivate Limited and others3referred to Firestone Tyre & RubberCo. Vs Synthetics & Chemicals Ltd.4This decision in turn referred5to Aberdeen Rly. Co. Vs Blaikie Bros., Transvaal Lands Co. vsNew Belgium (Transvaal) Land & Development Co.6and Parker7Vs McKenna. All these decisions hold that the rule to preventconflict between the interest and duties was not a technical orarbitrary rule but a rule founded upon the highest and truest principleof morality. Thus, this rule applies not only where there is a conflict of 3 (2019) 20 SCC 3264 1969 SCC OnLine Bom 495 (1854) 1 Macq 461 (HL)6 (1914) 2 Ch 488 (CA)7 (1874) LR 10 Ch App 96 (DC) Page 15 of 187th June 2023 interest or conflict of interest and duty but also where there is aconflict to two duties. It is immaterial whether the interest is apersonal interest or arises out of a fiduciary capacity or whether theduty which is owed is in a fiduciary capacity. Further, the actualconflict is also not necessary. A possibility of conflict is enough tobring the case within the ambit of this rule. The application of thisrule does not depend upon the extent of the adverse interest.Directors stand towards the company in a fiduciary position. In Indiathis fiduciary character has received statutory recognition in Section88 of the Indian Trusts Act, 1882. The reason underlying this rule isthat the company has a right to the unbiased voice, advice andcollective wisdom of its directors. 28.In Madras Tube Co. Ltd. Vs Hari Kishon Somani8, theMadras High Court held that it is, therefore, of prime importance thatin any transaction in which the directors participate as directors of thecompany they should not only declare their personal interests therein,but they must desist from participation in any decision- making. Thetheory is that the Board acts as a body. How the act of the Board as abody is shaped is a matter left to the interplay of the minds of thedirectors, and the respective strength or weakness of each to carry theothers along with him. If, therefore, a director who could sway thedecision of the Board, one way or the other is a person interested inthe subject -matter of the deliberations and nevertheless participates in 8 (1985) 1 Comp LJ 195 (Mad) the meeting, and the interests of the director are not identical withthose of the company, the ultimate damage to the company and theshareholders could well be imagined. This principle that where adirector has a personal interest, he ought not to participate in theBoard’s deliberation is so sacred that no further inquiry is necessary toset at naught decisions brought about in violation of the principles.No harm might result to the company by allowing participation of aninterested director, and yet the participation, per se, is vicious. Thisdecision was quoted with approval by the Hon'ble Supreme Court inRam Parshotam Mittal (supra). 8 (1985) 1 Comp LJ 195 (Mad) the meeting, and the interests of the director are not identical withthose of the company, the ultimate damage to the company and theshareholders could well be imagined. This principle that where adirector has a personal interest, he ought not to participate in theBoard’s deliberation is so sacred that no further inquiry is necessary toset at naught decisions brought about in violation of the principles.No harm might result to the company by allowing participation of aninterested director, and yet the participation, per se, is vicious. Thisdecision was quoted with approval by the Hon'ble Supreme Court inRam Parshotam Mittal (supra). 29.Accordingly, the Petitioners have made out a case for issuance ofa writ of quo warranto or a declaration for disqualification ofRespondent No.4. However, the record bears out that RespondentNo.4 was a member of the Conservation Committee from 2012 to2015. Respondent No.4 was reappointed as a member of theConservation Committee on 25.05.2017 and again for a further termon 04.05.2022. Therefore, the disqualification incurred byRespondent No.4 was for the term between July 2012 and July 2015.Accordingly, no purpose will be served by issuing a writ of quowarranto or a declaration as prayed for at this point in time. 30.Mr Rohit Bras De Sa, learned counsel for the Petitioners, couldnot point out any provisions to the effect that a disqualified memberwould be ineligible to be appointed as a member of the Conservation Committee for a new term. Accordingly, it would not be proper for usto issue a writ of quo warranto or a declaration about thedisqualification of Respondent No.4 during his current term. 31.The Conservation Committee must, however, ensure that thereis scrupulous compliance with the Conservation Regulationsincluding, in particular, the Regulation dealing with disqualification ofmember or barring of member from proceedings referred to in Clause(5)(n) quoted above. In particular, the Conservation Committee mustensure that the members who have direct or indirect interest orprofessional interest in any proposal that comes for considerationbefore the Conservation Committee must disclose such interest and ifsuch disclosure is made, the same must be recorded in the minutes ofthe meeting of the Committee. If there is any breach, then, suchinterested member would cease to be a member of the ConservationCommittee as provided under Clause (5)(n) quoted above. Thisprovision must be scrupulously observed so that there is no conflictbetween the interest and duties of the members of the ConservationCommittee. 32.With the above directions, we dispose of this petition. However,there shall be no order for costs. BHARAT P. DESHPANDE, J M. S. SONAK, J