TaxTMI 
TaxTMI 
2006 (8) TMI 653
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....ent under Section 4(2) of the Act. 3. Civil Appeal No. _______ 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 04.04.2006 passed by the High Court of Karnataka at Bangalore in Writ Appeal No. 86 of 2006. By the impugned order, the High Court dismissed the writ appeal filed by the appellant-herein against the order dated 10.01.2006 passed by a learned Judge of the said Court in Writ Petition No. 9852 of 2004 and has declared that the appellant is not entitled to hold the post of Managing Director of the Karnataka Urban Water Supply & Drainage Board (hereinafter called 'the Board') (respondent No. 4). 4. Civil Appeal No. ________ 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. FACTS: 5. The Karnataka Urban Water Supply & Drainage Board Act, 1973 was enacted to provide for th....
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....tary retirement. 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. 8. The learned Single Judge of the High Court allowed the writ petition on 12.04.2002 and held: a) that the impugned amendment of the Regulations was illegal since the same was contrary to Section 7(1)(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(1)(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. 9. The High Court ....
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....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) 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 R1, R2 was motivated as R1 had lodged a false complaint to the Lokayukta against the appellant Reddy which was found to be baseless. The above submissions will be d....
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....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 19.05.2006. 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 31.01.2004 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. 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 mis-used, the High Court would be within its power to check such actions of the Government. According to him, a Writ of quo warranto would lie to challenge an appointment made until further orders on the ground that it is not a regular appointment. Merely because the ....
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....that the appointment of the appellant to the post of Managing Director in deviation to regular mode of appointment of IAS officers on deputation. 17. 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 considered 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....
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....92 ***** WHEREAS a notice was issued from this office to the General Secretary/Secretary, Karnataka Urban Water Supply & Drainage Board Employees Association, Hubli, 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 Union Act, 1925, by not submitting the Annual Return of the union for the year ending 31st December, 1991. AND whereas the union was 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 & Drainage Board Employees Association, Hubli Bearing Registration No. 544/85 be cancelled with effect from the date of this order. The General Secretary is hereby directed to surrender the certificate of registration. 20. In the instant case, the appellant was appointed w.e.f. 01.02.2004. The Employees Union filed the writ petition on 08.03.2004. On the said date, the respondent-Union was not a registered trade union and the Certificate of Registration of the Trade Union in Form &....
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....roleum and Natural Gas (1995)1SCC85 . A decision in the case of Akhil Bharatiya Soshit Karamchari Sangh v. Union of India and Ors. (1981)ILLJ209SC 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 v. Union of India (1982)IILLJ454SC 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 Ors. v. Union of India (1983)ILLJ104SC the old pensioners individually were unable to undertake journey through labyrinths of costly and protrac....
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....on 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 & 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'). In the writ petition filed by respondent Nos. 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 has 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 recognized trade union is entitled to agitate the matter with regard to the appointment of the 3rd respondent to the Board.....
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....er, cautioning that if a citizen is no more than a wayfarer or officious intervener without any interest or concern that what belongs to anyone of the 660 million people of this country. Fertilizer Corporation Kamgar Union (Regd.) Sindri and Ors. v. Union of India and Ors. (1981)ILLJ193SC . The doors of the Court will not ajar for him. In the instant case, the employees association approached the High Court with unclean hands. The employees who approaches the Court for such relief must 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. 23. The Constitution Bench of this Court in Naraindas v. Government of Madhya Pradesh and Ors. 1974CriLJ924 held that if a wrong or mis-leading 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. 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 th....
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.... who has power to appoint has absolute discretion in the matter and it cannot be said that discretion to appoint does 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 Rule 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. 26. 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 a....
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....cation disappeared on 31.01.2004 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. 28. 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. The official memorandum dated 23.12.1994 deals with re-appointment 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 ....
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....ion 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 respondent Nos. 1 and 2 were or could have been candidates for the post of Managing Director of the Board and the High Court could not have gone beyond the limits of Quo Warranto so very well delineated 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. The judgment impugned in this appeal not only exceeds the limit of Quo Warranto 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 bonafides. 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 Warranto. 30. This Court in A.N. Sashtri v. State of Punjab and Ors. (1988) Supp SCC 127 h....
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....s 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 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. 32. It is useful to refer to the case of The University ....
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....ourt 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 of 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. 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. 34. In A. Ramachandran v. A. Alagiriswami, Govt. Pleader High Court, Madras and Anr. AIR1961Mad450 , 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 ....
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....onal year with the permission of the concerned officer. 2. In the O.M. referred at (2) above, it was instructed not to re- appoint 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 re-appointed on contact basis. Hence it is ordered that the officers/officials who have been re-appointed 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 wi....
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....nt Department, in regard to the appointment of M.D. of the Board: Subject : Appointment of Managing Director of KUWSDB 1. Shri 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 KUWSDB 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 KUWSDB. 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 either to KUWSDB or other Boards and Corporations of the Government. 4....
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.... 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. 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. The above ruling was followed in A.N. Shashtri v. State of Punjab and Ors. [1988]2SCR363 . We are 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. 39. 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. ....
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....essential 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. 41. 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 (1972)IILLJ580SC held that the appointment cannot be challenged by one who is himself not qualified to be appointed. In Kumari Chitra Ghose v. Union of India [1970]1SCR413 , 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 standi in the matter of nomination to such seats. The assumption that if nominations to reserved seats are not in accor....
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....nt 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. 43. In P.K. Sandhu (Mrs.) v. Shiv Raj V. Patil [1997]3SCR352 , 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. Legal Malice: 44. It was argued by Mr. Raju Ramachandran, learned senior counsel appearing for the respondents, that there was no reason for the State to re-appoint the appellant on the post of M.D., specially in view of the following facts: i) His initial appointment to Managing Director on 28.01.1998 was admittedly in contravention of Section 7(1)(d) 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....
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....rum 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 No. 1 at the threshold. In any event, respondent No. 1 failed to discharge the heavy burden to substantiate the plea of mala fides (E.P. Royappa v. State of Tamil Nadu (1974)ILLJ172SC ) The finding of the High Court that the appointments from legal mala fides is wrong. The Court relied on the judgment in center for Public Interest Litigation and Anr. v. Union of India and Anr. AIR2005SC4413 . 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. 46. 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 Lokyukta in the matter relating to financial irregularities of the Board and that the Comptroller and Auditor G....
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....low 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. 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. 49. 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 wh....
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....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. It is pertinent to point out that there are 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 ....
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....ed 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 & 17 of the Act. 52. 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 felt out by the learned Jud....