Question

Given below are two statements, Assertion (A) and Reason (R).

Assertion (A): The State Finance Commission can be considered a quasi-judicial body.

Reason (R): It is vested with the powers of a Civil Court under the Code of Civil Procedure, 1908, while performing its functions.

Choose the correct answer from the options given below:

• A. Both (A) and (R) are true and (R) is the correct explanation of (A).
• B. Both (A) and (R) are true, but (R) is not the correct explanation of (A).
• C. (A) is true, but (R) is false.
• D. (A) is false, but (R) is true.

Answer 1

Answer:

A. Both (A) and (R) are true and (R) is the correct explanation of (A).

State Finance Commission: A Quasi-Judicial Body

• Constitutional Basis: The State Finance Commission is a constitutional body established under Article 243-I and Article 243-Y of the Constitution of India.

• Role and Functions: Its primary role is to review the financial position of Panchayats and Municipalities and recommend measures to strengthen their financial resources. This includes:

  • Distribution of net proceeds of taxes, duties, tolls, and fees between the State and the Panchayats/Municipalities.

  • Allocation of such proceeds among Panchayats/Municipalities at all levels.

  • Grants-in-aid to Panchayats/Municipalities.

  • Measures to improve the financial position of these local bodies.

• Quasi-Judicial Nature: A body is considered quasi-judicial if it has the power to adjudicate on rights and obligations and its decisions have legal effect. The State Finance Commission, while performing its functions, possesses certain powers akin to a civil court.

• Powers of a Civil Court: As per statutory provisions (often detailed in the respective State Acts governing Panchayats and Municipalities), the State Finance Commission is usually vested with the powers of a Civil Court under the Code of Civil Procedure, 1908 (CPC). These powers typically include:

  • Summoning witnesses.

  • Requiring the discovery and production of documents.

  • Receiving evidence on affidavits.

  • Issuing commissions for the examination of witnesses or documents.

• Significance of Quasi-Judicial Powers: These powers enable the Commission to conduct thorough inquiries, gather necessary information, and make informed recommendations based on evidence, thereby enhancing the credibility and effectiveness of its work. This resemblance to judicial proceedings is why it is often termed a quasi-judicial body.

• Distinction from Judicial Bodies: While it possesses some judicial-like powers, it is not a full-fledged court. Its recommendations are generally advisory, though they carry significant weight with the state government.