SUPREME COURT OF INDIA
B. Srinivasa Reddy
Vs
Karnataka Urban Water Supply and Drainage Board Employees' Association and
Others
Civil Appeal No. 3719 of 2006 With Civil Appeal No. 3722 of 2006
(Dr. Ar. Lakshmanan and Tarun Chatterjee, JJ)
28.08.2006
DR. AR. LAKSHMANAN, J.
Leave granted in both the special leave petitions.
2. These appeals have raised substantial questions of law involving
interpretation of certain provisions of the Karnataka Urban Water Supply and
Drainage Board Act, 1973 (lor short, 'the Act') and the Karnataka Urban Water
Supply and Drainage Board Rules, 1974 made thereunder and also the principles
of law governing the writ of quo warranto and the power of the Government to
make a contractual appointment under Section 4(2) of the Act.
3. Civil Appeal No. 3719 of 2006 (Arising out of SLP (C) No. 9393 of
2006).-This appeal was filed by Mr. B. Srinivasa Reddy (hereinafter called 'Mr.
Reddy') seeking leave to appeal against the final judgment and order dated 4-4-2006
passed by the High Court of Karnataka at Bangalore in Writ Appeal No. 86 of
2006 (B. Srinivasa Reddy v Karnataka Urban Water Supply and Drainage Board
Employees' Association and Others 2006 Indlaw KAR 159
(DB) : 2006(3) AIR Kar. It. 497 (DB)]). By the impugned order, the High Court
dismissed the writ appeal filed by the appellant herein against the order dated
10-1-2006 passed by a learned Judge of the said Court in Writ Petition No. 9852
of 2004 {Karnataka Urban Water Supply and Drainage Board Employees'
Association, Dharwad and Another v State of Karnataka and Others 2006 (1)
KarLJ 4 : 2006(2) AIR Kar. R. 10, 5]) and has declared that the appellant is
not entitled to hold the post of Managing Director of the Karnataka Urban Water
Supply and Drainage Board (hereinafter called 'the Board') (respondent 4).
4. Civil Appeal No. 3722 of 2006 (Arising out of SLP (C) No.10388 of 2006).-The
above appeal was filed by the Government of Karnataka against the very same
judgment passed by the Division Bench of the High Court in Writ Appeal No. 254
of 2006 whereby the Division Bench dismissed the writ appeal filed by the
State.
5. Facts.-The Karnataka Urban Water Supply and Drainage Board Act, 1973 was
enacted to provide for the establishment of Water Supply and Drainage Board and
the regulation and development of drinking water and drainage facilities in the
urban areas in the State of Karnataka. The Board, with the previous sanction of
the Government of Karnataka, framed the Karnataka Urban Water Supply and Drainage
Board Services (Cadre and Recruitment) Regulations, 1985. An amendment to
Serial No. 1 of the Schedule to the Regulations was introduced by the Board
whereby even the Chief Engineers of the Board were made eligible for
appointment to the post of Managing Director. Respondent 1 is the Karnataka
Urban Water Supply and Drainage Board Employees' Association represented by its
President Halakattc. lie is also respondent 2 in his capacity as President of
the Employees' Association. The State of Karnataka and the Board are also the
contesting respondents 3 and 4 in this appeal. Respondent 1 (hereinafter called
the 'Employees' Association') filed Writ Petition No. 44001 of 1995 (Karnataka
Urban Water Supply and Drainage Board Employees' Association v State of Karnataka
and Others 2002 ILR(Kar) 2435 in the High Court of Karnataka challenging
the appointment of one S. Ramamurthy as the Managing Director of the Board on
the ground that by virtue of Section 7(l)(d) of the Act, the said Ramamurthy,
being an officer/servant (Chief Engineer earlier) of the Board, could not have
been appointed as the Managing Director of the Board.
6. The Government of Karnataka, vide Notification No. UDD H UB 91, dated
28-4-1997, nominated the appellant who was a Chief Engineer of the Board as one
of the Directors of the Board "with immediate effect and until further
orders". The Board, after due approval of the State, vide G.O. No. HUD 15
UWE 98, dated 11-12-1997, amended the method of recruitment for the post of
Managing Director of the Board in Serial No. 1 of First Schedule to the
Regulations to the effect that a Managing Director can be selected only from
amongst the Chief Engineers of the Board. Other criterias were removed.
7. On 28-1-1998, the Government of Karnataka, through the Urban Development
Department, vide Notification No. UDD 4 UWE 98, dated 28-1-1998, pursuant to
Section 58 of the Act read with Regulation 27 and Serial No. 1 of First
Schedule to the Regulations, promoted the appellant on officiating basis and
appointed him as the Managing Director of the Board with effect from 31-1-1998
afternoon and "until further orders" since S. Ramamurthy, the then
Managing Director of the Board took voluntary retirement.
8. The Employees' Union filed an amended version of the writ petition before
the High Court also challenging the above mentioned amendment to the Regulation
which relates to making of a provision of appointing the Chief Engineer of the
Board as its Managing Director. The writ petition was further amended to
include the challenge to the promotion/appointment of the appellant as the
Managing Director of the Board pursuant to the said amendment.
9. The learned Single Judge of the High Court allowed the writ petition on
12-4-2002 and held:
(a) that the impugned amendment of the Regulations was illegal since the same
was contrary to Section 7(l)(d) of the Act;
(b) that the appointment of the appellant is illegal since, being a Chief
Engineer of the Board, he was disqualified under Section 7(l)(d) of the Act and
hence his appointment was contrary to the provisions of Sections 7(1 )(d), 68
and 69 of the Act, Rules and Regulations;
(c) that the appointment was further held to be illegal since it was also
contrary to Regulation 27 of the Regulations as the appointment was not
restricted to one year but until further orders.
10. The High Court quashed the appointment orders and directed the State to
take immediate steps to appoint the Managing Director of the Board.
11. Writ appeals were filed by the Board, the Government and the appellant-Mr.
Reddy.
12. The Division Bench of the High Court in Writ Appeal Nos. 2877 and 2878 of
2002, issued notice and stayed the order of the learned Single Judge for a
period of two months which was later continued. By virtue of this order, the
appellant continued to enjoy the post of Managing Director.
13. The appellant retired as Managing Director of the Board on 31-1- 2004. The
Relieving Order reads thus:
"Sri B. Srinivasa Reddy, Managing Director, KUWS and DB who retired from service
on attaining super annuation as 31-1-2004 is relieved from his duties on the
afternoon of 31-1-2004".
14. He was reappointed as Managing Director of the Board until further orders
on 1-2-2004, Writ Petition No. 9852 of 2004 was filed for a writ of certiorari,
writ of quo warranto and any other writ, order or direction under Article 226.
Learned Single Judge allowed the Writ Petition No. 9852 of 2004. Writ Appeal
No. 86 of 2006 was admitted and the operation of the learned Single Judge's
order was stayed on 16-1-2006 and Writ Appeal No. 86 of 2006 was finally
dismissed on 4-4-2006.
15. The Court also imposed costs of Its. 10, 000/- against the appellant and
also imposed cost against the State Government and respondent 4 at Rs. 5, 000/-
each separately.
16. It is pertinent to notice that in 2002, a complaint was made to the
Lokayukta against the Chairman and the appellant-Mr. Reddy by Mr. Halakatte,
President of the Employees' Association (respondent 2 herein). By order dated
13-8-2003 Lokayukta held that the allegation against the appellant is baseless.
Lokayukta after absolving the appellant of false allegations directed action
against the then FA and CAO of the Board. The Lokayukta closed the complaint on
1-2-2005 after Government has taken action against FA and CAO.
17. We heard Mr. P.P. Rao, learned Senior Counsel assisted by Mr. P.S.
Rajagopal, learned Counsel for the appellant and Mr. Sanjay R. Hegde for the
State of Karnataka and Mr. Raju Ramachandran, learned Senior Counsel assisted
by Mr. Devashish Bharuka and Mrs. Hansa Bharuka, learned Counsels for the
contesting respondent-the Employees' Union.
18. Mr. P.P. Rao, learned Senior Counsel made elaborate submissions on facts
and on law with reference to the pleadings, annexures, judgments and the
relevant provisions of the Act. He made submissions on the following issues.-
1. Writ petition as framed not maintainable at the instance of an unregistered
Trade Union;
2. Locus of the writ petitioners - Employees' Union;
3. No writ of quo warranto unless there is violations of statutory provisions
in making appointment;
4. No violation of Section 4(2) of the Act and/or Rule 3 of Rules as held by
the High Court;
5. Government has always the power to make contractual appointment until
further orders and finding to the contrary is ex facie erroneous;
6. High Courts reliance on official memorandum dated 23-12-1994 is erroneous;
7. Pleasure of the Government under Section 6(1) of the Act and Rule 3 of the
Rules which envisages the qualifications;
8. Until further orders - Pleasure of the Government and discretion:
9. Legal malice - finding is unsustainable;
10. Writ petition by respondents 1 and 2 was motivated as respondent 1 had
lodged a false complaint to the Lokayukta against the appellant-Reddy which was
found to be baseless.
19. The above submissions will be dealt with in extenso in paragraphs infra.
20. Mr. Sanjay R. Hegde adopted the arguments of Mr. P.P. Rao. He invited out
attention to Article 310(2) of the Constitution of India.
21. Article 310 deals with tenure of office of persons serving the Union or a
State. Under the pleasure doctrine, a servant of the Government holds office
during the pleasure of the sovereign. But in order to protect civil servant
against the political interference Article 311 introduces certain safeguards.
Moreover, a specific contract can override the doctrine of pleasure as in
Parshotam Lai Dhingra v Union of India : : 1958 SCR 828 :
(SC)]
22. Mr. Raju Ramachandran in his usual fairness fairly conceded that ho is not
questioning the State Government's power in appointing persons on contract
basis. According to him, the entire case is not based on end of lack of power
but an abuse and misuse of that power by the State Government. According to
him, non-specification of a period of appointment amounts to abuse of power,
misuse of power and illegal mala fides and that power is not used for the
purpose for which it is vested in the Government. According to him, form of the
writ should not he a matter which should inhibit the Court. This argument was
advanced in regard to the prayer made in the writ petition on the
maintainability of the writ petition. Mr. Raju Ramachandran submitted though
the employees association was not a registered body on the date of filing of
the writ petition, the association was registered again as a Trade Union under
the Trade Unions Act, 1926 on 20-1-2005 and that though the employees union was
not a registered Trade Union but was a recognised union by all and, therefore,
the association is entitled to maintain the writ petition as framed. He also
made elaborate submissions with reference to the records, annexures and the
judgments and of the Government orders.
23. Mr. Raju Ramachandran also submitted that the civil appeal has now become
infructuous in view of the developments which have taken place subsequent to
the orders of this Court dated 8-5-2006 by which notice was issued to the
respondents in view of the fact that the Government of Karnataka has now
appointed one Mr. P.B. Ramamurthy as the Managing Director of the Board with
immediate effect by an order contained in the notification dated 17-5-2006 and
pursuant to the above order the appellant Mr. Reddy has already made over the
charge of the office of Managing Director of the Board to the said P.B.
Ramamurthy who had received charge of the said office on 19-5-2006. It was
submitted that the appellant has no substantive right left qua the post of
Managing Director of the Board since even as per his appointment order dated
31-1-2004 he is to have charge only "until further orders". In view
of the above subsequent developments, learned Counsel for the Union submitted
that the present appeal has become infructuous.
24. According to Mr. Raju Ramachandran, though the power to appoint is vested
with the State Government under Section 4(2) of the Act the same is not
unfettered or uncontrolled. It cannot be based on mere ipse dixit of the
Government the discretion of the Government cannot be said to be without any
bounds. If the High Court on the facts of a particular case finds that such
discretion has been misused, the High Court would be within its power to check
such actions of the Government.
25. According to him, a writ of quo warranto would lie in challenge an
appointment made until further orders on the ground that it is not a regular
appointment. Merely because the appointment is for until further orders would
oust the jurisdiction of the High Court to issue a writ of quo warranto when it
is found that the very appointment was illegal and not warranted within the
provision of law.
26. It is submitted that the words - pleasure of the Government found in
Section 6(1) of the Act cannot be given a meaning so as to grant arbitrary and
unfettered powers to the Government with respect to appointment of a Managing
Director to the Board. It is submitted that the words cannot mean as absolute
and unconditional will of the Government, for that would go counter to the
constitutional scheme and to the rule of law itself.
27. In the instant case, under the guise of temporary appointment made until
further orders, the Government in fact by misusing its discretionary powers
ensured that the appellant's appointment continues without any limit as to
tenure or term. It is submitted the High Court rightly passed the impugned
order since the appointment was in violation of the provisions of law. It is
submitted that no appointment to a public post can be made without a specific
tenure. According to Mr. Raju Ramachandran, the official memorandum dated 23-12-1994
squarely applies to the Board in question and that the said memorandum in
express terms provide that procedure contained therein shall apply, inter alia,
to Boards which are subordinate to or under the control of the Government. It
is thus submitted that the Board is covered with the said memorandum.
28. It is further contended that Section 7(l)(d) of the Act read with the above
official memorandum would make it clear that retired employees cannot be
appointed to the post of Managing Director of the Board. The purpose of Section
7(l)(d) and the office memorandum dated 23-12-1994 has to be looked into while
deciding the legality of the appointment of the appellant to the post of
Managing Director of the Board. According to Mr. Raju Ramachandran it has
nowhere come on record that the appellant possessed such exceptional and high
qualifications as to warrant the Government to deviate from its own policy and
appointed the appellant. In fact any experience gained by the appellant during
his tenure as the Managing Director prior to his retirement is of no
consequence since such appointment was held to be illegal and invalid by the
High Court. No exceptional circumstances has been shown that the appointment of
the appellant to the post of Managing Director in deviation to regular mode of
appointment of IAS Officers on deputation.
29. In regard to the maintainability of the writ petition Mr. Raju Ramachandran
submitted that the High Court did not rely upon the status of the writ
petitioners as registered Trade Union but rather accepted their locus standi as
employees of the Board and their right to form Trade Unions associations though
unregistered and on such basis permitted them to challenge the appointment in
writ proceedings. According to him, the unregistered unions, in the eyes of law
can contend that it has to come and knock the doors of this Court seeking
justice by pointing out the illegalities of the State Government in appointing
the appellant as Managing Director of a Statutory Board wherein public interest
is involved. The purpose, according to him, is to espouse the cause of the
workers. Therefore, the writ petitioners were employees of the Board and cannot
be considcred as wayfarers and that the employees approached the High Court in
public interest and have been attempting to dissuade the Government from
granting favour to the appellant herein by appointing him at the post of
Managing Director of the Board for long.
30. We have carefully considered the rival submissions with reference to the
entire records.
31. (1) Locus of the unregistered Trade Union Maintainability.-Respondent
1-Association was a recognised association. It is registered again as a Trade
Union on 20-1-2005 i.e., before the pronouncement of judgment of the learned
Single Judge. Respondent 2-Halakatte, who is the President of respondent 1 in
his individual capacity has also challenged the appointment. In quo warranto
proceedings any concerned person can file a writ petition. While dealing with
the locus, the High Court has relied upon the right of persons to form
association and consequently to file a writ of quo warranto proceedings.
32. In fact, Mr. Rao distinguished the cases referred to by the respondents on
the issue of non-registered associations having no locus to file writ petitions
as distinguishable and inapplicable in the present facts and circumstances.
33. In Mahinder Kumar Gupta and Others v Union of India, Ministry of Petroleum
and Natural Gas 4 : 1994 AIR(SOW) 5139, this
Court held that the writ petition filed by an Association is not maintainable
as Association has no fundamental right under Article 32 of the Constitution of
India.
34. In Coinpar and Another v General Manager, Telecom District and
Others 2004 (13) SCC 772 the appellant before this Court was an
Association which claims working in public interest preferred an appeal against
the judgment of the High Court with an application for permission to file
special leave petition. The said permission was granted. After the matter was
heard, this Court found that the appellant was neither party in the case before
the Forum nor before the High Court. It was also not shown before this Court in
what manner and appellant was aggrieved by the judgment of the High Court. This
Court held that the appellant has no locus standi and cannot be permitted to
challenge the judgment of the High Court.
35. Our attention was also drawn to the proceedings of the Deputy Registrar of
the Trade Union, Dharwad Division, Hubli, dated 2-11-1992 Government of
Karnataka (Department of Labour). The said proceedings reads thus:
"Subject: Cancellation of registration of Trade-Unions, under Trade Unions
Act, 1926.
Reference: This office Notice No. TUA/AR.1991, dated 30-7-1992.
Whereas, a notice was issued from this office to the General
Secretary/Secretary, Karnataka Urban Water Supply and Drainage Board
Employees'Association, Hubli to show cause as to why the registration of Trade
Union should not be cancelled owing to the violation of the provisions of
Section 28 of the Trade Unions Act, 1926, by not submitting the Annual Return
of the Union for the year ending 31st December, 1991. and whereas, the Union
has not complied with the above requirements, even after notice, contravened
the above provisions of law. Therefore, in exercise of my powers conferred
under Section 10(b) of the Act, I hereby order that the Registration of the
Water Supply and Drainage Board Employees' Association, Hubli Bearing
Registration No. 544 of 1985 be cancelled with effect from the date of this
order.
The General Secretary is hereby directed to surrender the certificate of
registration".
36. In the instant case, the appellant was appointed with effect from 1-2-2004.
The Employees' Union filed the writ petition on 8-3-2004. On the said date, the
respondent-Union was not a registered Trade Union and the Certificate of
Registration of the Trade Union in Form 'C was issued by the Government of
Karnataka, Department of Labour only on 20-1-2005 which reads thus:
"It is hereby certified that the Karnataka Nagar Niru Sarabaraju Matthu
Olacharandi Noukarara Sangha, Dharwad, has been registered under the Trade
Unions Act, 1926.
Dated 20th January, 2005
Sd/-
Deputy Registrar of Trade Unions Assistant Labour Commissioner, Dharwad
Division, Hubli".
37. In Parents Teachers Association and Others v Chairman, Kendriya Vidyalaya
Sangathan and Others[AIR2001 Raj. 35 (DBS)], speaking for the Bench, Chief
Justice Dr. AR. Lakshmanan, in Paras 12 and 13 observed as under:
"12. The appellants-petitioners have not placed before this Court any
document to show that the Parents-Teachers Association is a registered and
recognised association. The writ petition has been allegedly filed in public
interest and the alleged large interest of the students. It is evident that the
so-called Parents-Teachers Association is an unregistered and unrecognised
association and, therefore, in our view, has no fundamental right to approach
this Court under Article 226 of the Constitution. This point has been concluded
by the decision of the Apex Court in the case of Mahinder Kumar Gupta u Union
of India, Ministry of Petroleum and Natural Gas, 4
and by the decision of Full Bench of this Court in the case of R.S.E.B.
Accountant's Association of Rajasthan v R.S.E.B., 1995 (3) WLC 1 (FB). A
reply to the preliminary objection raised by the respondents was also made by
the appellants. It is stated that the Parents-Teachers Association has been
recognised by the KVS and that the Principal is the Vice-Chairman of the said
Association and hence, the Association is competent to file the writ petition
on behalf of the students. In our view, the above reason cannot be considered
as a valid reason for maintaining the writ petition. It is not in dispute that
the Association is not a registered body and recognised Association. Thus,
after examining this point of law in detail and placing reliance on various
judgments delivered by the Apex Court from time to time, the Full Bench of this
Court in the case of RSEB Accountant's Association held as under:
"It may also be observed that an unregistered association has no
fundamental right to approach this Court under Article 226 of the Constitution
and this point is concluded by the decision in the case of Mahinder Kumar
Gupta. A decision in the case of Akhil Bharatiya Soshit Karamchari Sangh
(Railway) v Union of India and Others, : : (SC), was
relied where the non-registered Association was held to apply under Article 32
of the Constitution. We may observe that there had been number of the instances
of public interest litigation where large body of persons is having the
grievance against inaction of the State. Even letters have been considered to
be a writ petition but all these are the matters where large section of public is
affected and the personal interest of any person or a smaller section as in the
present case, is not involved. Even in the case of People's Union for
Democratic Rights and Others v Union of India and Others, : :
(SC) : (SC), when the question of locus standi was considered, the
Hon'ble Supreme Court had taken into consideration the poverty, illiteracy and
the ignorance obstructing and impeding accessibility of the judicial process
and on that ground it was considered that the writ petition can be filed. In
D.S. Nakara and Others v Union of India, : : , the old
pensioners individually were unable to undertake journey through labyrinths of
costly and protracted legal judicial process for allowing to espouse their
cause. In case of S.P. Gupta and Others v President of India and Others,
: , poverty, helplessness and disability or social or economic
disadvantaged, position was considered a sufficient ground for maintaining the
writ petition. There had been other decisions of the Apex Court as well and
principles which emerge from all of them are as under:
(a) That the members of the said association should have sufficient strength so
as to come in the category of a large sect of public;
(b) That the members should be identifiable;
(c) That the members must be of the category of poor/illiterate/helpless or
disabled;
(d) That the individual member must not be capable of filing a writ petition;
(c) That the entire body of the members must authorise the association to
protect their legal rights;
(f) That such an association must have its own constitution; and
(g) That there must be authority to file a writ petition on behalf of all the
members".
13. In the instant case, none of the grounds mentioned above in (a) to (g) have
been satisfied by the present appellants to maintain the writ petition. Since
the above conditions are not fulfilled such an unregistered association cannot
tile writ petition in respect of the legai rights of the said association for
the alleged breach of fundamental right as the association itself has no
fundamental right of its own".
38. We shall now advert to the provisions of the Industrial
Disputes Act. 1947 with reference to the registration of Trade Unions. Section
2(qq) defines Trade Union which means a Trade Union registered under the Trade
Unions Act, 1926 (16 of 1926). Section 36 of the Industrial Disputes Act, 1947
says that the workman who is a party to dispute shall be entitled to be
represented in any proceedings under this Act by any member of the executive or
other office bearer of a registered. Trade Union of which he is a member or by
any member of the executive or other office bearer of a federation of Trade
Unions to which the Trade Unions referred to in Clause A is affiliated. The
writ petitioner-union made a false averment that it is a registered Trade Union
that itself, in our opinion, is a ground to dismiss the writ petition. The writ
petitioner has made an averment to the following effect in its wit petition
which is also reflected in the order passed by the High Court in the writ
petition which runs thus:
"The petitioner is a registered Trade Union of employees of 2nd
respondent-Karnataka Urban Water Supply and Drainage Board (hereinafter
referred to as "the Board) constituted under the Karnataka Urban Water
Supply and Drainage Board Act, 1973 (hereinafter referred to as 'the
Act')".
'59. In the writ petition filed by respondents 1 and 2 their locus standi to
challenge the appointment of the appellant was asserted in the following words.
---
"The petitioner-Association is Trade Union registered under the Trade
Unions Act, 1926. The petitioner is the only registered Trade Union existing in
the 2nd respondent-Board. The Board lias held several negotiations with the
petitioner-Union in regard to the service conditions of the employees of the
2nd respondent-Board since its formation in the year 1986. The Board has
entered into several settlements with the petitioner-Union with regard to their
service conditions. The petitioner which is a recognised Trade Union is
entitled to agitate the matter with regard to the appointment of the 3rd
respondent to the Board. The petitioner is concerned about the functioning of
the 2nd respondent-Board, and as such is entitled to question the appointment
of the 3rd respondent as Managing Director on contract basis. Hence, the
petitioner has locus standi to file this writ petition".
(Emphasis supplied)
40. These averments were established to be false. The registration of the first
respondent under the Trade Unions Act had been cancelled as early as on
2-11-1992. It is not a registered and recognised union. In fact, it was pointed
out that recognised association is one Karnataka Urban Water Supply and
Drainage Board Officers and Employees Association and the first respondent does
not have even a handful of members. The fact of cancellation of registration of
the first respondent came to the knowledge of the appellant long after the
disposal of the earlier Writ Petition No. 44001 of 1995 wherein the Court had
given a finding that the first respondent has locus standi to challenge the
appointment of the appellant to the post of Managing Director of the Board
solely on the ground that it is a registered Trade Union. In our opinion, the
High Court gravely erred in refusing to examine the question of locus standi on
the ground that it is decided in the earlier writ petition which operates as
res judicata and that the petitioners even otherwise have locus standi. Chapter
III of the Trade Unions Act, 1926 sets out rights and liabilities of the
registered Trade Unions. Under the said enactment, an unregistered Trade Union
or a Trade Union whose registration has been cancelled has no manner of right
whatsoever even the rights available under the Industrial Disputes Act have
been limited only to those Trade Unions which are registered under the Trade
Unions Act, 1926 by insertion of clause (qq) of Section 2 in the Industrial
Disputes Act with effect from 21-8-1984 defining a Trade Union to mean a Trade
Union registered under the Trade Unions Act, 1926.
41. The High Court, in our opinion, miserably failed and gravely erred in
holding that the respondents 1 and 2 have locus standi to question the
appointment of the appellant in the light of the change of law that has been brought
about by insertion of Section 2(qq) of the Industrial Disputes Act and having
regard to the provisions of' Chapter III of the Trade Unions Act, 1926. This
Court, in many judgments, held that the Union has locus standi in the facts and
circumstances of that case, however, cautioning that if a citizen is no more
than a wayfarer or officious intervenor without any interest or concern beyond
what belongs to anyone of the 660 million people of this country, the door of
the Court will not be ajar for him. Fertilizer Corporation Kamagar Union
(Registered), Sindri and Others v Union of India and Others[AIR 1.981 SC
344-"u981)l SCO 568 : (SC)].
42. In the instant case, the employees association approached the High Court
with unclean hands. The employees who approaches the Court for such reliefnust
come with frank and full disclosure of facts. If they failed to do so and
suppress material facts their application is liable to be dismissed.
43. The Constitution Bench of this Court in Naralndas v Government of Madhya
Pradesh and Others 1974 AIR(SC) 1252, held that if a wrong or misleading
statement is deliberately and wilfully made by a party to a litigation with a
view to obtain a favourable order, it would prejudice or interfere with the due
course of judicial proceeding and thus amount to contempt of Court.
44. It is thus crystal clear that the Employees' Union have approached this
Court by suppressing the material facts and has snatched an order on the basis
of wrong averments when the employees union has no locus standi to maintain the
writ petition on the date relevant in question. Courts cannot grant any relief
to a person who comes to the Court with unclean hands and with mala fide
intention/motive. The writ petition filed by the Employees' Association is
liable to be thrown out on this single factor. Though it is eminently a fit
case for awarding exemplary costs, considering the employees financial aspect
and taking a lenient view of the matter, we are not ordering any costs.
45. (2) Writ of quo warranto.-Whether a writ of quo warranto lies to challenge
an appointment made "until further orders" on the ground that it is
not a regular appointment. Whether the High Court failed to follow the settled
law that a writ of quo warranto cannot be issued unless there is a clear
violation of law. The order appointing the appellant clearly stated that the
appointment is until further orders. The terms and conditions of appointment
made it clear that the appointment is temporary and is until further orders. In
such a situation, the High Court, in our view, erred in law in issuing a writ
of quo warranto. The rights under Article 226 can be enforced only by an
aggrieved person except in the case where the writ prayed for is for habeas
corpus or quo warranto.
46. In the instant case, the power to appoint the Managing Director of the
Board is vested in the Board under Section 4(2) of the Act. Neither the Act nor
the Rule prescribe any mode of appointment or tenure of appointment. When the
mode of appointment, tenure of appointment have been left to the discretion of
the Government by the Act and Rules and the Act makes it clear that the
Managing Director shall hold office at the pleasure of the Government the High
Court could not have fettered the discretion of the Government by holding that
Section 4(2) of the Act does not expressly give the power to the State
Government to make ad hoc or contract appointment when the Act and the
statutory rules have not prescribed any definite term and any particular mode,
the high Court could not have read into the statute a restriction or
prohibition that is not expressly prohibited by the Act and the Rules. It is
well-settled that when the statute does not lay down the method of appointment
or term of appointment and when the Act specifies that the appointment is one
of sure tenure, the Appointing Authority who has power to appoint has absolute
discretion in the matter and it cannot be said that discretion to appoint docs
not include power to appoint on contract basis. An appointment which is
temporary remains temporary and does not become a permanent with passage of
time. The finding records by the learned Single Judge that the appointment is
bad for the reason that the appointment which was made on temporary basis has
continued for nearly 2 years is wholly contrary to law particularly when the
Act and the Rules do not stipulate maximum period of appointment. The High
Court, in our view, gravely erred in issuing a writ of quo warranto when there
is no clear violation of law in the appointment of the appellant.
47. The official memorandum dated 23-12-1994 on a plain reading of it applies
only to Government servants. It has no manner of the application to the-
employees or servants of the statutory boards. The appellant is not a retired
Government servant. His appointment as Managing Director of the Board is not a
post in Government service. The High Court has erred in law in applying the
said official memorandum to the appointment of the appellant which is governed
only by the Act and the Rules, even otherwise the High Court has failed to
appreciate that the official memorandum running counter to the statutory
provisions are ineffective and at any event cannot be enforced in a quo
warranto proceedings.
48. The appellant joined the services of the State in the public health
engineering segment of its Power Works Department in the year 1967. From the
time, the Karnataka Urban Water Supply and Drainage Board was established in
the year 1975, he has been working in the Board having initially been appointed
to its services as Assistant Engineer, thereafter, absorbed in its services and
by his consistently good performance and unblemished record reached the post of
Chief Engineer of the Board. He has apart from about 34 years of experience in
development, establishment, maintenance and management of drinking water and
drainage facilities in the urban areas had undergone several training
programmes abroad in planning, appraisal implementation of water and anitation
projects and management development programme for senior public health
engineers.
49. Section 4(2) of the Act, 1973 mandates that the Managing Director shall
possess the prescribed qualification and he shall be appointed by the
Government. Rule 3 of the Rules, 1974 prescribes the qualification for
appointment of Managing Director in these words:
"The Managing Director shall be a person having experience in
administration and capacity commercial matters".
There was not even a pleading that the appellant does not have experience in
administration and capacity in commercial matters. The appointment of the
appellant has been made by the Government in exercise of powers conferred on it
by Section 4(2) of the Act. The High Court does not dispute the powers of the
Government to make the appointment. Mr. Raju Ramachandran, learned Senior
Counsel for the Union does not dispute that the power of the Government to make
contractual appointment. A perusal of the judgment of the High Court would only
go to show that the High Court did not record any finding that the appellant
does not possess the qualification prescribed by the Acts and Rules. The
disqualification for appointment as a Director of the Board are set out in
Section 7 of the Act. The only disqualification that the appellant suffered was
under Section 7(l)(d) of the Act. He being an employee of the Board and this
disqualification disappeared on 31-1-2004 when the appellant retired from
service of the Board on superannuation. The High Court having regard to the
technical nature of quo warranto proceedings could not have ousted the
appellant from the office on the ground of an inapplicable qualification
prescribed by administrative instruction dated 23-12-1994 which had no manner
of application for appointment to the post of Managing Director of the Board.
50. The law is well-settled. The High Court in exercise of its writ
jurisdiction in a matter of this nature is required to determine, at the
outset, as to whether a case has been made out for issuance of a writ of quo
warranto. The jurisdiction of the High Court to issue a writ of quo warranto is
a limited one which can only be issued when the appointment is contrary to the
statutory rules.
51. The official memorandum dated 23-12-1994 deals with reappointment of
retired Government servants and granting extension of service to retired
Government servants. As already stated, the appellant is not a Government
servant nor a retired Government servant. The official memorandum is an
administrative instruction which is contrary to the provisions of the Act and
statutory Rules neither the Act nor the Rules prescribe any age of retirement
for the Managing Director of the Board. On the other hand, having regard to the
disqualification prescribed by Section 7(1 Xd) of the Act to the effect that an
officer or servant of the Board cannot be appointed as Managing Director, the
High Court could not have read an additional disqualification that a retired
officer or a servant of the Board also cannot be appointed as Managing Director
of the Board. The memorandum dated 23-12-1994 is no manner of application to
the appointment in question and it is even otherwise ineffective inasmuch as it
is an administrative instruction which is contrary to the provisions of the Act
and the Rules. The High Court, in our opinion, erred in ousting the appellant
from his service by issue of a quo warranto on the ground that the appellant
having retired from this service of the Board on 31-1-2004 suffered
disqualification under the said memorandum. By a reading of the Act and the
Rules the appellant acquired qualification for appointment on 31-1-2004 on his
retirement and the view of the High Court that the appellant is disqualified on
31-1-2004 on his retirement from service of the Board is not only contrary to
the Act and the Rules is also plainly opposed to the language of the memorandum
itself. Even otherwise, no writ of quo ivarranto could have been issued on the
ground that even though the appointment is contrary to any statutory rule it is
contrary to the administrative instruction which the High Court holds as
disclosed the policy of the Government. There is no warrant to have taken such
a view at all.
52. It is settled law by a catena of decisions that Court cannot sit in
judgment over the wisdom of the Government in the choice of the person to be
appointed so long as the person chosen possesses prescribed qualification and
is otherwise eligible for appointment. This Court in U.K. Jain u Union of India
and Others 0 : 1993 (4) SCC 120 : 0 (SO : 1993 SCC (I, and S) 1128] was pleased to hold
that the evaluation of the comparative merits of the candidates would not be
gone into a public interest litigation and only in a proceeding initiated by an
aggrieved person, it may be open to be considered. It was also held that in
service jurisprudence it is settled law that it is for the aggrieved person,
that it., the non-appointee, to assail the legality or correctness of the
action and that third party has no locus standi to canvass the legality or
correctness of the action. Further, it was declared that only public law
declaration would be made at the behest of public spirited person coming before
the Court as a petitioner. Having regard to the fact that the neither of
respondents 1 and 2 were or could have been candidates for the post of Managing
Director of the Board, the High Court could not have gone beyond the limits of
quo ivarranto so very well -deli neated by a catena of decisions of this Court
and applied the test which could not have been applied even in a certiorari
proceedings brought before the Court by an aggrieved party who was a candidate
for the post.
53. The judgment impugned in this appeal not only exceeds the limit of quo
ivarranto but has not properly appreciated the fact that writ petition filed by
the Employees' Union and the President of the Union-Halakatte was absolutely
lacking in bona fides. In the instant case, the motive of the second
respondent-Halakatte is very clear and the Court might in its discretion
declined to grant a quo ivarranto.
54. This Court in A.N. Shashtri v State of Punjab and Others 3 : 3 : 1988 SCC (Lab)
536] held that the writ of quo warranto should be refused where it is an
outcome of malice or ill-will. The High Court failed to appreciate that on
18-1-2003 the appellant filed a criminal complaint against the second
respondent-Halakatte that cognizance was taken by the Criminal Court in C.C.
No. 4152 of 2003 by the jurisdictional Magistrate on 24-2-2003, process was
issued to the second respondent who was enlarged on bail on 12-6-2003 and the trial
is in progress. That apart, the second respondent has made successive
complaints to the Lokayukta against the appellant which were all held to be
baseless and false. This factual background which was not disputed coupled with
the fact that the second respondcnt-IIalakatte initiated the writ petition as
President of the 1st respondent-Union which had ceased to be a registered Trade
Union as early as on 2-11-1992 suppressing the material fact of its
registration having been cancelled, making allegations against the appellant
which were no more than the contents of the complaints filed by him before the
Authorities which had been found to be false after thorough investigation by
the Karnataka Lokayukta would unmistakably establish that the writ petition initiated
by the respondents 1 and 2 lacked in bona fides and it was the outcome of the
malice and ill-will the 2nd respondent nurses against the appellant. Having
regard to this aspect of the matter, the High Court ought to have dismissed the
writ petition on that ground alone and at any event should have refused to
issue a quo warranLo which is purely discretionary. It is no doubt true that
the strict rules of locus standi is relaxed to an extent in a quo warranto
proceedings. Nonetheless an imposture coming before the Court invoking public
law remedy at the hands of a Constitutional Court suppressing material facts
has to be dealt with firmly.
55. This Court in Dr. B. Singh v Union of India and Others : :
2004(2j Supreme 387 : 2004 AIR(SCW) 1494 , held that only a person who
comes to the Court with bona fides and public interest can have locus. Coming
down heavily on busybodies, meddlesome interlopers, wayfarers or officious
interveners having absolutely no public interest except for personal gain or private
profit either of themselves or as a proxy of others or for any other extraneous
motivation or for glare of publicity, this Court at para 14 of the report held
as under:
"The Court has to be satisfied about: (a) the credentials of the
applicant; (b) the prima facie correctness or nature of information given by
him; and (c) the information being not vague and indefinite. The information
should show gravity and seriousness involved. Court has to strike a balance
between two conflicting interests: (i) nobody should be allowed to indulge in
wild and reckless allegations besmirching the character of others; and (ii)
avoidance of public mischief and to avoid mischievous petitions seeking to
assail, for oblique motives, justifiable executive actions. In such case,
however, the Court cannot afford to be liberal. It has to be extremely careful
to see that under the guise of redressing a public grievance, it does not
encroach upon the sphere reserved by the Constitution to the executive and the
Legislature. The Court has to act ruthlessly while dealing with imposters and
busybodies or meddlesome interlopers impersonating as public spirited holy men.
They masquerade as crusaders of justice. They pretend to act in the name of pro
bono publico, though they have no interest to the public or even of their own
to protect".
56. It is useful to refer to the case of University of Mysore v CD. Govinda Rao
and Another 1965 AIR(SC) 491: 1964 (4) SCR 575:
"As Halsbury has observed:
"An information in the nature of quo warranto took the place of the
obsolete writ of quo warranto which lay against a person who claimed or usurped
an office, franchise or liberty, to inquire by what authority he supported his
claim, in order that the right to the office or franchise might be determined".
Broadly stated, the quo warranto proceeding affords a judicial enquiry in which
any person, who holds an independent substantive public office, or franchise,
or liberty, is called upon to show by what right he holds the said office,
franchise or liberty, so that his title to it may be duly determined, and in
case the finding is that the holder of the office has not title, he would be
ousted from that office by judicial order. In other words, the procedure of quo
warranto gives the judiciary a weapon to control the Executive from making
appointment to public office against law and to protect a citizen from being
deprived of public office to which he has a right. These proceedings also tend
to protect the public from usurpers of public office, who might be allowed to
continue either with the connivance of the Executive or by reason of its
apathy. It will, thus, be seen that before a person can effectively claim a
writ of quo warranto, he has to satisfy the Court that the office in question
is a public office and is held by a usurper without legal authority, and that
inevitably would lead to the enquiry as to whether the appointment of the
alleged usurper has been made in accordance with law or not".
57. It is also beneficial to refer to the decision of this Court in Ghularn
Qadir u Special Tribunal and Other[(2002)1 SCO 33 : which reads thus:
"There is no dispute regarding the legal proposition that the rights under
Article 226 of the Constitution of India can be enforced only by an aggrieved
person except in the case where the writ prayed is for habeas corpus or quo
warranto. Another exception in the general rule is the filing of a writ
petition in public interest. The existence of the legal right of the petitioner
which is alleged to have been violated is the foundation for invoking the
jurisdiction of the High Court under the aforesaid Article. The orthodox rule
of interpretation regarding the locus standi of a person to reach the Court has
undergone a sea-change with the development of constitutional law in our
country and the Constitutional Courts have been adopting a liberal approach in
dealing with the cases or dislodging the claim for a litigant merely on
hyper-technical grounds. If a person approaching the Court can satisfy that the
impugned action is likely to adversely affect his right which is shown to be
having source in some statutory provision, the petition, filed by such a person
cannot be rejected on the ground of his having not the locus standi. In other
words, if the person is found to be not merely a stranger having no right
whatsoever to any post or property, he cannot be non-suited on the ground of
his not having the locus standi".
58. It is settled law that writ of quo warranto does not lie if the alleged
violation is not of a statutory nature. Three judgments relied on by Mr. P.P.
Rao can be usefully referred to in the present context.
59. In A. Ramachandran u A. Alagiriswami, Government Pleader High Court, Madras
and Another[1LR 1961 Mad 553 (DH) : 1961 AIR(Mad) 450 (DB)], the
Court observed in paragraphs (74) and (104) as under:
".... Where an authority has power to make rules relating to a
subject-matter and also the power to decide disputes arising in the field
occupied by that subject-matter, the two powers and functions must be kept
distinct and separate. This dispute must be decided with reference to the rules
in force at the time the adjudication had to be made and, the rule making power
cannot be invoked in relation to that adjudication.
.... It was also contended that it was incumbent on the State Government to
follow the principle of appointment as laid down in 1932 G.O. so as to avoid
arbitrariness or nepotism. Reliance was placed upon the decision in K.
Nagarathnammal v S. Ibrahim Saheb, 1955 ILR(Mad) 460 (FB) : 1955
AIR(Mad) 305 (FB) : 1955 (2) MadLJ 49 (FB), for the position that even
non-statutory regulations and rules contained in the Board's Standing Orders
are binding on the State Government, and that it cannot depart from such rules
arbitrarily and capriciously to suit the exigencies of a particular situation.
In that case the Government purported to exercise a revisional power over the
orders of the Board of Revenue which it did not have as per Board's Standing
Orders. The exercise of that power by the Government was sought to be justified
on the ground that the executive instructions contained in the Board's Standing
Orders count at any time be modified or amended and that if the Government had
power to bring about such modifications it followed that the Government had
power of revision though in terms such power was not conferred upon it".
60. In High Court of Gujarat and Another u Gujarat Kishan Mazdoor Panchayat and
Others : 12003)4 SCO 712 : 2003 SCO (L and Sj 565 : 2003 AIR(SCW) 1578,
it was held by this Court that a writ of quo warranto can only be issued when
the appointment is contrary to the statutory rules. The judgment in Mor Modern
Co-operative Transport Society Limited u Financial Commissioner and Secretary
to Government, Haryana and Another 9 : 9 : 2002 AIR(SCW) 2826, was also relied on.
61. Thus it is seen that no writ of quo warranto lies if the alleged violation
is not of a statutory provision.
62. The Official Memorandum of 1994, dated 23-12-1994 of the Government of
Karnataka reads thus:
"GOVERNMENT OF KARNATAKA
No. DPAR 15 SDE 94 Karnataka Government Secretariat,
Vidhana Soudha, Bangalore, dated 23-12-1994
OFFICIAL MEMORANDUM
Subject: Regarding reappointment of retired Government Employee and extension
of their services after retirement.
Ref: (i) O.M. No. DPAR 42 SSR 77, dated 15-12-1977.
(ii)O.M. No. DPAR 2 SDE 90, dated 22-2-1990.
1. In the O.M. referred at (1) above in respect of the teaching staff viz.,
Teachers, Lecturers, Professors who are working in educational institutions of
the Education Department retiring in the middle of the academic year, it was
permitted to continue their services till the end of the educational year with
the permission of the concerned officer.
2. In the O.M. referred at (2) above, it was instructed not to reappoint the
retired Government servants and not to give them extension of service.
3. It has come to the notice of Government that retired Government
Officers/officials have been reappointed on contact basis. Hence it is ordered
that the officers/officials who have been reappointed on contract basis and
continuing in service shall be removed from service forthwith.
4. If the teaching staff working in educational institutions of the Education
Department are retiring in the middle of the academic year, the instructions
given in O.M. No. DPAR 42 SSR 77, dated 15-12-1977 are applicable.
5. The procedure contained in the above paragraphs are also applicable to the
autonomous/grant-in-aid institutions. Boards and the companies which are
subordinate to or under the control of the Government.
Sd/-
(A.V. Ramamurthy) Joint Secretary to Government, D.P.A.R. (SR)".
Paragraph 5 of the Memorandum makes it amply clear that Boards are included
within the said memorandum and hence the procedure adopted for Government
employees will equally apply to the Board. The initial appointment of the
appellant as Managing Director was on 28-1-1998. lie was relieved vide
relieving Order dated 31-1-2004 as M.D. His pension order stated that he has
retired as M.D. Thereafter he was reappointed as M.D. on 31-1-2004. The said
Notification reads as follows.-
"In exercise of the powers conferred under Section 4(2) of the KUWS and DB
Act, 1973 (Karnataka Act 25 of 1974), Sri B. Srinivasa Roddy, No. 427, 12th
Main, RMV Extension, Bangalore-560 080 is appointed as Managing Director, KUWS
and DB on contract basis with effect from 1-2-2004 until further orders.
The terms and conditions will be issued separately". Therefore, the
official memorandum squarely applies to the appellant.
63. In Union of India v K.P. Joseph and Others : , it .was held by
this Court that administration instructions made to fill gaps or to supplement
the statutory rules and affecting conditions of service would be binding and
enforceable by writ under Article 226 of the Constitution of India.
64. A close scrutiny of the official memorandum would show that it is
restrictive to appointment to any post but as a general application to all the
posts and that the intention of the memorandum is that retired person should
not be appointed again.
65. No violation of Section 4(2) of the Act and Rule 3 of the Rules.-There is
no violation of Section 4(2) and Rule 3 as held by the High Court because the
appellant having been the Chief Engineer of the Board had experience in
administration and capacity in commercial matters before he was appointed as
M.D. on contract basis by the Government. Section 4(2) of the Act reads as
under:
"4. (2) The Chairman and the Managing Director shall possess the
prescribed qualifications. They and the other directors shall be appointed by
the Government".
Rule 3 of the Rules deals with qualification for appointment of the Chairman
and the Managing Director. Rule 3 reads thus:
"The Chairman shall be a person having experience in matters concerning
public welfare. The Managing Director shall be a person having experience in
Administration and capacity in commercial matters".
66. In this context, it is useful to peruse the original file produced by Mr.
Sanjay R. Hegde, learned Counsel appearing for the State, before us. A note was
prepared by the Secretary to Government, Urban Development Department, in
regard to the appointment of M.D. of the Board:
"Subject: Appointment of Managing Director of' KUWS and DB.
1. Sri B. Srinivasa Reddy, Managing Director of KUWSD will retire from service
on 31-1-2004,
2. As per Section 4(2) of the Karnataka Urban Water Supply and Drainage Board
Act, 1973, the Managing Director shall be appointed by the Government as per Section
6(1). He shall hold office during the pleasure of the Government. As per Rule 3
of the KUWS and DB Rules, 1974, the Managing Director shall be a person having
experience in administration and capacity in commercial matters. As per KUWSDB
Rule 4(2), the Managing Director shall be a whole time officer of the Board and
shall be paid remuneration as prescribed.
3. Therefore, it is necessary for the Government to appoint the Managing
Director. The Managing Director can be a serving officer of the Government who
can be sent on deputation to the KUWS and DB Rules. It is even open to the
Government to appoint a retired official to the post of Managing Director. But
generally Government has not appointed any retired official cither to KUWSDB or
other Boards and Corporations of the Government.
4. A decision has to be quickly taken as the Managing Director of KUWSDB has to
hold negotiations with the World Bank on 9-2-2004 regarding the new Water
Supply and Sanitation Improvement Programme.
5. In my view, an Engineer in Water Supply/Public Health Engineering would be
most ideal for the post of Managing Director, KUWSDB".
67. The file was placed before Sri S.M. Krishna, Chief Minister. The order
passed by the Chief Minister is at page 2 of the File which reads thus:
"This is a critical juncture for Karnataka Urban Water Supply and Sewerage
Board. Considering the projects on hand and the need to complete them within a
definite time frame, there should be continuity in leadership and management.
The services of Sri B. Srinivasa Reddy, are need for the present.
Sri Srinivasa Reddy's continuation will help in the important negotiations with
the World Bank scheduled to be held in February, regarding the new Water Supply
and Sanitation programme.
Considering the adverse seasonal conditions prevailing and prolonged drought,
there is likelihood of severe water scarcity in urban areas in the coming
months. For this, a sum of Rs. 15 crorcs by way of relief has been earmarked in
the period February to June 2004. The Urban Water Supply Board will be required
to augment water availability, especially in chronic places like Bagalkot,
Pavagada and Hubli-Dharwad. For planning and executing these contingency
measures, Sri Srinivasa Reddy's presence is essential.
Sri Srinivasa Rcddy who has retired today may be appointed on Contract basis
from 1-2-2004 until further orders".
68. It is thus seen that the Chief Minister after considering the relevant
material, experience in administration and capacity in commercial matters of
the appellant accepted the office note put up by the Secretary to Government
and appointed a retired official to the post of M.D. Ample reasons arc given
for considering the name of the appellant and the consequential appointment
made by the Government.
69. In the instant case, there is no violation of statutory provision and,
therefore, in our view, a writ of quo warranto does not lie. If there be any
doubt, it has to be resolved in favour of upholding the appointment.
70. In Statesman (Private) Limited v H.R. Deb and Others : 1968 LlC
1525 (SO : , M. Hidayatullah, C.J., speaking for the Constitution Bench
indicated:
"The High Court in a quo warranto proceeding should be slow to pronounce
upon the matter unless there is a clear infringement of the law".
71. In the circumstances which we have narrated above in paragraphs supra, it
is indeed difficult to hold that the appellant did not have the requisite
qualification.
72. The above ruling was followed in A.N. Shastri's case. We arc of the view
that in the facts of this case, the reasonable conclusion to reach should have
been that the writ petitioners had failed to establish that the appellant did
not possess requisite qualification and the appeals are, therefore, be allowed
and the judgment of the High Court has to be set aside and the writ petition
has to be dismissed.
73. The finding of disqualification given in the earlier round of litigation
while the appellant was holding a lien on the post of Chief Engineer i.e.,
while he was an officer of the Board, ceased to hold good after the appellant
retired from the service of the Board on 31-1-2004 (AN) and the appointment
impugned in the second round of litigation was effective from 1-2-2004 after
the appellant had ceased to be an officer of the Board.
74. Contractual appointment/powers of the Government.-Mr. Raju Ramachandran,
learned Senior Counsel appearing for the Trade Union, fairly conceded that the
Government has unrestricted power to make contractual appointment. Even
otherwise, the Government, in our opinion, has the undoubted power to make a
contractual appointment until further orders. The finding to the contrary is ex
facie erroneous.
75. The Notification dated 31-1-2004 clearly states that the appointment is on
contract basis and until further orders. While laying down the terms of
appointment in its order dated 21-4-2004, the Government of Karnataka clearly
stated that "term of contractual appointment of Sri B. Srinivasa Rcddy
shall commence on 1st February, 2004 and will be in force until further orders
of the Government and this is a temporary appointment''. Section 6(1) of the
Act categorically states that the Managing Director shall hold office during
the pleasure of the Government. Power and functions of the Board are laid in
Chapter V of the Act. A reading of the Act clearly shows that neither the Board
nor its Managing Director is entrusted with any sovereign function. Black's Law
Dictionary defines public office as under:
"Public Office: Essential characteristics of "public office"
are: (1) authority conferred by law; (2) fixed tenure of office, and (3) power
to exercise some portion of sovereign functions of Government, key element of
such test is that "officer" is carrying out sovereign function.
Spring u Constantino, 168 Conn. 563 : 362 A. 2d 871. Essential elements to
establish public position as "public office" are position must be
created by Constitution. Legislature or through authority conferred by
Legislature, portion, of sovereign power of Government must be delegated to
position duties and power must be defined, directly or impliedly, by
Legislature or through legislative authority, duties must be performed
independently without control by superior power other than law, and position
must have some permanency and continuity, State ex rel. E. li Lilly and Company
.u Gaertner, Mo. App. 619 S.W. 2d 6761, 764".
76. Carrying out sovereign function by the Board and delegation of a portion of
sovereign power of Government to the Managing Director of the Board and some
permanency and continuity in the appointment are quintessential features of
public office. Every one of these ingredients are absent in the appointment of
the appellant as Managing Director of the Board. This aspect of the matter was
completely lost sight of by the High Court.
77. The High Court, in the instant case was not exercising certiorari
jurisdiction. Certiorari jurisdiction can be exercised only at the instance of
a person who is qualified to the post and who is a candidate for the post. This
Court in Dr. Umakant Saran v State of Bihar and Others : :
(SC)], held that the appointment cannot be challenged by one who is
himself not qualified to be appointed. In Kumari Chitra Ghosh and Another v
Union of India and Others : U 96912 SCC 228], a Constitution Bench of
this Court held as under:
"The other question which was canvassed before the High Court and which
has been pressed before us relates to the merits of the nominations made to the
reserved seats. It seems to us that the appellants do not, have any right to
challenge the nominations made by the Central Government. They do not compete
for the reserved seats and have no locus staruli in the matter of nomination to
such seats. The assumption that if nominations to reserved seats are not in
accordance with the rules all such seats as have not been properly filled up
would be thrown open to the general pool is wholly unfounded".
But the High Court of Delhi in P.L. Lakkanpal v Ajit Nath Ra[A1R 1975 Del. 66
(FI3)], held as under:
''Another facet of the preliminary objection relates to the allegations of mala
fide made in the petition. It will bear repetition to state that the
preliminary objection is on the assumption and not admission that the
appointment of Justice A.M. Ray was mala fide. It is indisputable that mala
fide action is no action in the eye of law. But, to my mind, the mala fides of
the Appointing Authority or, in other words, the motives of the appointing
authority in making the appointment of a particular person are irrelevant in
considering the question of issuing a writ of quo warranto.... ".
78. The discretion available to the Competent Authority under the Rules has
been exercised by the Appointing Authority in making the appointment of the
appellant. That could not have been annulled by the High Court. In Writ
Petition No. 44001 of 2005, decided on 12-4-2002, the very High Court had
directed the Government by a direction akin to mandamus to immediately take
steps to appoint the Managing Director of the Board in accordance with the Act
and the Rules. The present appointment of the appellant was made under the
provisions of the Act and the Rules. This appointment could not have been
interdicted by a writ of quo warranto as it amounted to issuance of writ of quo
warranto to disobey the mandamus already issued and is in operation. Such a
course adopted by the High Court is contrary to law declared by this Court
Rajendra Prasad Yadav and Others u State of Madhya Pradesh and Others 3 : 1997 (16) SCC 678.
79. In Satish Chandra Anand v Union of India 1953 SCR 655, a
Constitution Bench of this Court while dealing with a case of a contract
appointment which was being terminated by notice under one of its clauses, this
Court held that Articles 14 and 16 had no application as the petitioner therein
was not denied equal opportunity in a matter relating to appointment or
employment who had been treated just like any other person to whom an offer of
temporary employment under these conditions was made. This Court further held
as under:
"The State can enter into contracts of temporary employment and impose
special terms in each case, provided they are not inconsistent with the
Constitution, and those who choose to accept those terms and enter into the
contract are bound by them, even as the State is bound".
80. In Mrs. P.K. Sandhu v Shiv Raj V. Patil 4
: (1997)4 SCO 348 : 1997 SCC (L and S) 954], it was held by this Court as
under:
"The power to make an appointment includes the power to make an appointment
on substantive basis, temporary or officiating basis, ad hoc basis, on daily
wages or contractual basis".
81. Legal malice.-It was argued by Mr. Raju Ramachandran, learned Senior
Counsel appearing for the respondents, that there was no reason for the State
to reappoint the appellant on the post of M.D., specially in view of the
following facts:
"(i) His initial appointment to Managing Director on 28-1-1998 was
admittedly in contravention of Section 7dXd) of the Act. Yet, he continued till
31-1-2004. He, thereafter, withdrew his appeal thereby confirming that his
entire tenure as M.D. from 1998 to 2004 was illegal and in contravention of the
Act;
(ii) He was relieved from his duty as "Managing Director" and is
receiving pension accordingly;
(iii) Reports pertaining to malpractices committed by the petitioner of which
he has not been exonerated so far reveal that he is not a person with an
undoubtful character;
(iv) List of persons appointed to the post of Managing Director of the Board
since its inception show that only IAS Officers or PWD officials have been
appointed to this post. For the first time, a retired Board servant was brought
as the Managing Director for "until further orders".
(v) The note sheet of the Chief Minister, though proposes certain exigencies,
does not indicate that he is the only person who can cater to such demands;
(vi) There was no need for an appointment for "until further orders"
where admittedly, the purpose of appointment would have been accomplished at
the most by June 2004".
82. According to him something was done by the State without excuse and it is
an act done wrongfully and wilfully without reasonable or probable cause. He
also referred to the findings of the High Court on legal malice.
83. In our opinion, the finding of legal mala fides is unsustainable being
based on a misunderstanding of the law and facts. When a competent and
experienced officer of an outstanding merit is appointed to a higher post on
contract basis after his superannuation from service in larger public interest
does not suffer from legal malice at all. The decision of the then Chief
Minister, Sri S.M. Krishna, recorded in the file which is also extracted by the
High Court ai page 69 of S.L.P. Paper Book, Volume II, in the context of the
note put up by the Secretary of the Department, it is again extracted at page
67 and 68 which clearly bring out the fact that the appointment was made in the
interest of the Board and the State at a time when nobody else other than the
appellant could have served the interests of the State better. The High Court
failed to appreciate the element of urgency involved in making the appointment
because of impending negotiations with the World Bank scheduled for 9-2-2004.
The writ petition, in our opinion, was motivated as respondent 1 had lodged a
false complaint to the Lokayukta against the appellant which was found to be
baseless by the Lokayukta (Annexure-P9). A petition praying for a writ of quo
warranto being in the nature of public interest litigation, is not maintainable
at the instance of a person who is not unbiased. The second respondent is the
President of the first respondent-Union. He has chosen this forum to settle
personal scores against his erstwhile superior officer after his retirement.
The proceedings, in our view, is not meant to settle personal scores by an
employee of the department. The High Court, in our view, ought to have
dismissed the writ petition filed by respondent 1 at the threshold.
84. In any event, respondent 1 failed to discharge the heavy burden to
substantiate the plea of mala fides (E.P. Royappa v State of Tamil Nadu and
Another: 1974 (12) SCR 348.
85. The finding of the High Court that the appointment is from legal ma'a fides
is wrong. The Court relied on the judgment in Centre for Public Interest
Litigation and Another v Union of India and Another[AIR 2005 SC 4-113 :
2005 AIR(SCW) 5252 : 2005 (8) SCC 202. It was a case of appointment
of an officer against whom criminal proceedings were pending even the Commission
will look into the charges against the officer. Therefore, the above ruling has
no application at all in the present case.
86. The Division Bench noted that certain allegations were made against the
appellant and observed in paragraph 3 that the complaint was stated to be
pending before the Lokayukta in the matter relating to financial irregularities
of the Board and that the Comptroller and
Auditor General submitted a report for the year ending 31-3-2000 wherein the
appellant has paid the amounts to contractor even before they became due
resulting in loss of interest of Rs. 15.40 lakhs to the Board. However, the
Division Bench did not take notice of that fact that Lokayukta had completely
exonerated the appellant.
87. Until further orders.-Mr. Raju Ramachandran, learned Senior Counsel
appearing for the respondents, submitted that the pleasure of the Government
and discretion cannot be completely discretionary and at the ipse dixit of the
executive. Even a contractual appointment has to be made with a certain ascertainable
period and cannot be open ended. According to him, use of words "until
further orders" is not a safety notch but is rather prone to misuse. Even
in the constitutional scheme, under Chapter XIV of the Constitution, a
contractual appointment presumes a specific period. Article 310(2) of the
Constitution provides that:
"(2) Notwithstanding that a person holding a civil post under the Union or
a State holds office during the pleasure of the President or, as the case may
be, of the Governor of the State, any contract under which a person, not being
a member of a defence service or of an all-India services or of a civil service
of the Union or a State, is appointed under this Constitution to hold such a
post may, if the President or the Governor, as the case may be, deems it
necessary in order to secure the services of a person having special
qualifications, provide for the payment to him of compensation, if before the
expiration of an agreed period that post is abolished or he is, for reasons not
connected with any misconduct on his part, required to vacate that post".
88. In E.P. Koyappa's case, further question before us is whether the
appointment made by the Government includes any component of mala fides. The
burden of establishing mala fides is very heavy on the person who alleges it.
The allegations of main fides are often more easily made than proved, and the
very seriousness of such allegations demands proof of a higher order of
credibility. Here respondents 1 and 2 have flung a series of charges of oblique
conduct against the then Chief Minister through their Advocate. The anxiety of
the Court should be all the greater to insist on a high decree of proof. The
Court would, therefore, be slow to draw dubious inferences from incomplete
facts placed before it by a party, particularly when the imputations are grave
and they are made against the holder of an office which has a high
responsibility in the administration.
89. This Court, in the above judgment, held that such is the judicial
perspective in evaluating charges of unworthy conduct against Ministers and
other high authorities, not because of any special status which they are
supposed to enjoy, nor because they are highly placed in social life or
administrative set up, these considerations are wholly irrelevant in judicial
approach - but because otherwise, functioning effectively would become
difficult in a democracy.
90. Two important considerations must weigh with us in determining our approach
to these questions. First, the post of Managing Director is a highly
respectable post. It is a post of great confidence - a lynchpin in the
administration and smooth functioning of the administration requires that there
should be complete rapport and understanding between the Managing Director and
the Chief Minister. The Chief Minister as a Head of the Government is in
ultimate charge of the administration and it is he who is politically
answerable to the people for the achievements and failures of the Government.
If the Chief Minister forfeits the confidence in the appellant, he may
legitimately in the larger interests of administration appoint him until
further orders as M.D. of the Board. It does not involve violation of any legal
or constitutional rights. Secondly, that the vast multitudinous activities in
which a modern State is engaged, there are bound to be some posts which require
for adequate discharge of their functions, high degree of intellect and
specialised experience. It is always a difficult problem for the Government to
find suitable officers for such specialised posts. There are not ordinarily
many officers who answer the requirements of such specialised posts and the
choice with the Government is very limited and this choice becomes all the more
difficult, because some of these posts, though important and having onerous
responsibilities, do not carry wide executive powers and officers may not,
therefore, generally be willing to be transferred to those posts. The
Government has in the circumstances to make the best possible choice it can, keeping
in view the larger interests of the administration. When in exercise of this
choice, the Government transfers an officer from one post to another, the
officer may feel unhappy because the new posts does not give him the same
amplitude of powers which he had while holding the old post. But that does not
make the appointment arbitrary. So long as the appointment is made on account
of the exigencies of administration, it would be valid and not open to attack
under Articles 14 and 16. Here the post of M.D. was admittedly a selection post
and after careful examination of the merits, the Chief Minister selected the
appellant for the post of M.D. It was not the case of the respondents that the
appellant was not found qualified to the task or that his work was not
satisfactory.
91. It was argued by Mr. P.P. Rao, learned Senior Counsel appearing for the
appellant that the Division Bench while answering Point No. 2 in paragraph 25
that the order of appointment passed by the State Government is not a regular
appointment. It has further been observed that Section 4(2) of the Act and Rule
3 of the Rules framed do not permit the Government to appoint the Managing
Director on contractual basis. It was submitted that the finding of the
Division Bench as well as the Single Judge are legally unsustainable. The Act
makes clear distinction between appointments to the Board and appointment of
officers and servants of the Board. All appointments of Directors are
"appointments at the pleasure of the Government". He drew our attention
to Section 6(1) of the Act which reads thus:
"6. (1) All Directors including the Chairman and the Managing Director
shall hold office during the pleasure of the Government".
The expression 'contract basis' is only to indicate that the appointment was to
subsist till the withdrawal of the pleasure of the Government. It could not be
said that the contractual appointment is made contrary to the Rules that
contemplate regular appointment.
92. It is pertinent to point out that there arc no separate conditions of
service or tenure prescribed for 'Directors', which expression under the Act
includes the Managing Director. Appointments at the pleasure of the Government
are not the same as ordinary appointments. It was further submitted that
ordinary principles of recruitment applicable to posts governed by Chapter I of
Part XIV of the Constitution of India would not apply to the instant
appointment being an appointment at the pleasure of the Government. This is
also for the simple reason that ordinary appointments in public service entail
security of tenure which has an essential feature of such appointment. These
characteristics are noticeably absent in the instant case.
93. Our attention was also drawn to the conclusion reached by the High Court
that the appellant was not qualified for the post and under Rule 3 of the
Rules, the qualification for appointment is explicitly provided. No age of
retirement is prescribed for Director including Managing Director. Neither any
age limit for appointment is prescribed. These qualifications do not prescribe
any age limit. Section 8 of the Act itself suggests that even a legal
Practitioner could be appointed as a Director. The only limitation or
disqualification is with regard to a serving officer or servant of the Board
from being appointed as Director. Section 7(1)(d) does not apply to an officer
or servant who ceased to be such on the date of his appointment as Managing
Director. Section 7 stipulates all disqualifications for appointment as
Director. It is not the case of the contesting respondent that the appellant
was disqualified from holding the post on any other grounds.
94. Our attention was also drawn to the judgment of the Division Bench holding
that the State Government and the Board could not have filed an appeal against
the order of the learned Single Judge. Reference has been made to the judgment
of this Court in B.R. Kapur v State of Tamil Nadu and Another 27 : 27 : 2001
AIR(SCW) 3720. The said judgment is wholly in applicable to this case inasmuch
the issue therein did not pertain to the appointment under service Rules. In
the said case, no question relating to the issuance of writ of quo warranto
pertaining to service jurisprudence was involved. That case related to
appointment by the Governor of a person convicted of a criminal offence by
which she stood disqualified under the provisions of the Representation of the
People Act, 1951. Moreover, the writ of quo warranto in that case was issued in
the light of several provisions of the Prevention of Corruption
Act, 1988, the Representation of the People Act, 1951 and various other
enactments which clearly prohibited the appointment of a convicted person to a
public office. There is no legal postulation in the said judgment which seeks
to restrain any interested party from challenging a judgment. In the instant
case, the appellant did not solicit or engineer his appointment. His
appointment was at the instance of the State Government in accordance with
provisions of the Act and the Rules. The State Government has power to take its
own decision for deciding on a suitable candidate for appointment as long as
the eligibility criteria was satisfied. The appointment in the instant case is
not one of recruitment, but of a different species of appointment for rendering
services. It is more in the nature of a contract for service. This is specially
required considering fact that the functions of the Board are essentially
technical in nature as would be evident from a perusal of Sections 16 and 17 of
the Act.
95. At any event implicit in the finding of the Division Bench that the
Appointing Authority has no right to appeal in quo warranto proceedings is that
the Court cannot probe the mind of the Appointing Authority in a motion for quo
warranto. The High Court erred in probing the mind of the Government and acted
contrary to its own finding on the role of Appointing Authority in quo warranto
proceedings. The reasons spelt out by the learned Judges of the Division Bench
are not sustainable in law and the impugned judgment is liable to bo interfered
with in these appeals. The learned Judges are not right in quashing the
appointment of the appellant as Managing Director on the misconception that he
has been reappointed to the said office, whereas it was a fresh appointment
under the provisions of the Act and in accordance with the prescribed
qualification and eligibility under the Act. Further the appointee holds the
office during pleasure of the Government as provided under Section 6(1) of the
Act. The learned Judges are not correct in holding that the Government is not
affected by allowing the writ of quo warranto against the appointee and
observed that the Government ought not have filed the appeal. It is unfortunate
that the learned Judges have observed that the Government has filed the appeal
at the instance of the appointee. The learned Judges, in our opinion, failed to
appreciate that it is the duty of the Government to justify the appointment as
such there is no wrong in fding the writ appeal.
96. In the result, we hold:
(a) That the appellant was not disqualified for appointment as Managing
Director with effect from 1-2-2004;
(b) There is no bar for appointment to the post in question on contract basis.
The Government has absolute right to appoint persons on contract basis;
(c) Writ of quo warranto does not lie if the alleged violation is not of a
statutory provision;
(d) There is no violation of Section 4(2) of the Act and Rule 3 of the Rules
because the appellant had experience in administration and capacity in
commercial matters before he was appointed as Managing Director on contract
basis by the Government;
(e) The Government has no doubt power to make contractual appointment until
further orders. The power included the power to make appointment on substantive
basis temporary, officiating basis, ad hoc basis, daily wages or contractual
basis;
(f)Writ filed by respondents 1 and 2 is motivated;
(g) The petitioners in the writ petition, respondent 1 herein which is an unregistered
Association under the Trade Unio:is Act cannot maintain the writ petition;
(h) The findings of legal mala fides is unsustainable and has no basis.
The finding of legal mala fides suffers from other infirmities as far as
placing reliance on the complaints against the appellant without adverting to
the orders of the Lokayukta detail examination, the appellant is unequivocal
terms in both the cases.
97. For the foregoing reasons, the appeals are allowed and the order impugned
in this appeal passed by the Division Bench of the High Court in W.A. No. 86 of
2006 affirming the judgment of the learned Single Judge is set aside.
98. The Division Bench of the High Court ordered cost in the writ appeal. There
is no justification in ordering cost in the facts and circumstances of the
case. Therefore, the appellant, State Government and respondent 4 are entitled
to refund the cost, if it has already been paid. However, we are not ordering
cost against respondents 1 and 2 taking into consideration of the financial
constraint of the employees and by taking a lenient view of the matter.
99. In view of this judgment, we allow the appeals filed by Mr. B. Srinivasa
Roddy and by the State of Karnataka. As noted herein earlier, the appellant has
already been released and in his place a person has already been appointed as a
Managing Director of the Board on contract basis. Keeping this admitted fact in
mind, we therefore, keep it on record that the Government or the Board would be
at liberty to consider and appoint a candidate, if occasion arises, on contract
basis. If such a situation docs arise in that case it would be open to the
State or the Board to consider the candidature of the appellant (B. Srinivasa
Reddy) with others.
J