Divl^loH lf"cn {o IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR (C.G.) W. P. (ViresTNo.t2C&^./2010 (Division Bench) PETmONERS .4^ -'J~f ^,<^' ^^^ T J^ \ ^&. ^y - I.Hrishikesh Prasad, (P.No. 149950) Aged about 41 years, S/o Shri S.M. Prasad, Diploma in Mech. Engg. And A.M.I.E.(Mech. Engg.), Engg. Operative in S-10 grade, Safety Engineering Department,6A/33/4, Bhilai, Tah. & Distt. - Durg(C.G-) / 2. Thakur Nirmal Singh,P.No.151069, Aged about 40 years, S/o Shri Hanuman Singh, Diploma In Electrical Engineering and A.M.I.E. (First Class), Senior Operator cum Technician, Blast Furnace, 5A/24/1, Bhilai, Tah. & Distt. - Durg(C.G.) / 3. AlokAgrawal, (P. No. 150291), Aged about 41 years, S/0 Shri Mahendra Prasad Agrawal, A.M.I.E.(Elec. & Tele.), Sr. Tech. In P-10 grade, Medical, MIG- 62, Padmanabhpur, Durg, Tah. & Distt. - Durg(C.G.) ^-~~-<^ ^^ ,...^'^ J ^ ....•^ ^-^":.-.s. •t ^ c^ §^ :^^^ ":"^;r^^t"^^. '^^ / ;L-" f^ O ^'^- ;w-^, H^>- ^ 4. A.V. Dayashankar, (P.No. 149082) Aged about 46 years, S/o Shri A.V. Kurma Rao, Diploma in Mech. Engg., Chargeman Cum Master Technician, S- 10 grade, Wire Rod Mill, 417, MIG-II, Hudco, Bhilai, Tah. & Distt. - Durg (C.G.) 4 ^ 5. V. Sekhar, (P.No. 149397), Aged about 46 years, S/o Late Shri V. Subba Rao, Diploma in Electrical Engg., S-10, Sr. OCT, Blast Furnace, Nehru Award M-48, Padmanabhpur, Durg, Tah. & Distt. - Durg (C.G.) VERSUS RESPONDENTS 1. STEELAUTHORITYOF INDIALIMITED Through : Chairman Steel Authority of India Ltd. Ispat Bhawan, Lodi Road, NEWDELHI-110003 / 2. MANAGING DIRECTOR Bhilai Steel Plant Steel Authority of India Ltd. Ispat Bhawan, Bhilai Nagar Tah. & Distt. Durg (C.G.) PETITION UNDER ARTICLE 226 OF THE CONSITITUTION OF INDIA \^ ^^ HIGH COURT OF CHHATTISGARH AT BILASPUR DIVI8ION BENCH: V Hon'ble Shri I.M. Ouddusi 85 Hon'ble Shri N. K. ARarwal. JJ. ^- ^ W,P.(C) No. 2685 of 2010 . Petitioners Hrishikesh Prasad & others Versus Respondents Steel Authority of India Limited & another JUDGMENT FOR CONSIDERATIQN Sd/- "JTTD G E 28.08.2010 HQN'BLE MR. JUSTICE N. K. AGARWAL ^ ^- Sd/- N.K. Agarwal Judge POST FQR JUDGMENT ON 31^ August, 20 10 Sd/- LM. Quddusi Judge ^%^^^!?l%^;ijf^^?i^f^^(^^^^ HIGH COURT QFLCHHATnSGARH : BILA8PUR W. P. (Q No. 2685 of 2010 \^ Petitioners Hrishikesh Prasad & others Versus Respondents Steel Authority of India Limited 8& another WRIT PETITION UNDER ARTICLES 226 OF THE CQNSTITUTIQN OF INDIA DB: Hon'ble Mr. I. M. Quddusi, & Hon'bleMr. N. K.Agai-wal, JJ. Shri V. G. Tamaskar, Advocate for the petitioners. Shri B. P. Mishra, Advocate with Shri C. R. Sahu, Advocate for the respondents. JUD GM EN T ( Delivered on this 3>^^"day ofAzigust, 2010 ) Per I.M.Ouddusi, J. ! • ' .\' 1. The petitioners, who are permanent employees and belong to the non-executive cadre of Bhilai Steel Plant, under the Steel Authority of India Limited, have filed the instant writ petition with a.prayer to declare the policy dated 21.5.2010 (Annexure P/2) and the circulars dated 21.5.2010 (Annexure P/3), 25.5.2010 (Annexure P/4) and 1.6.2010 (Annexure P/5), as null and void. 2. Brief facts, in nutshell, are that the petitioners are permanent employees ofBhilai Steel Plant and belong to Non-Executive Cadre, They are eligible for promotion to Executive Cadre i.e. JO (Juniof Officer) EO grade. According to the petitioners, since they along with other equally placed Non-Executives are agitating their grieyances before this Court, are not being considered for promotion as per the order dated 16.7.2007 passed in Writ Petition "^^ No. 1749/1996. The respondent No.l is a Government company, registered under the provisions of the Companies Act, 1956. As per Article 84(1) of the Memorandumof Association and Articles of Association (Incorporated on 24th Januaiy, 1973 under the Companies Act, 1956), the Directors of the Steel Authority of India Limited should have made bye-laws to regulate service conditions of its officers and servants but such bye-laws have not been framed. In the early stage Bhilai Steel Plant was a unit of Hindustan Steel Limited. Since Bhilai Steel Plant is an industry as such fhe terms and conditions of its Non-Executives are also regulated by the provisions of the Chhattisgarh Industrial Relations Act, 1960 and the Industrial Disputes Act, 1947. The respondent No.l issued the impugned policy for promotion and the circulars without framing bye-laws under Article 84(1) of the Memorandum of Association. and Articles ofAssociation. Section 14 in Chapter IV of the Public Sector Iron and Steel Companies (Restructuring) and Miscellaneous Provisions Act, 1978 (Act No. 16 of 1978) { for short (the Act, 1978') provides for the provisions relating to officers and other employees of dissolved companies, which reads as under : "14. Provisions relating to officers and other employees qf dissolved companies.-(l) Every officer (not being a director or other employee holding office immediately before the appointed day in a dissolved company in relation to any undertaking of such company, other thdn an officer or other employee holding such office in relation to transferred units referred to in section 6, shall, as from the appointed day, continue to Hold office as such in the corresponding untt ofthe Integral Company the same tenure and upon the same terms and conditions of service and with the same rights and ..^;/^. 'ff'^"^ i';' ^. ^.. s^'. ^ ,1^^' ^ privileges as to retirement benefits as would have been admissibleto him if the company in which he was holding office had not been dissolved and shall continue to do so unless and until such tenure and terms and conditions are duly altered by the Integral Company. (2) Notwithstanding anything contained in sub-section (1), rules relating to the conditions ofservice and Standing Orders applicable to the officers or other employees referred to in sub- section (1), as immediately before the appointed day, shall continue to apply unless and until they are duly altered by the integral Company or other authority, as the case may be/) 4. Article 84(1) of the Articles of Association of the Steel Authority of India Limited, inter alia, provides that the Directors shall have the power to make, vary and repeal from time to time bye-laws for the regulation of the business of the Company, its officers and servants. The relevant provisions ofArticle84 are quoted as under : (e84. Subject to the provisions ofthe Act and without prejudice to the general powers conferred by the Act and the other powers conferred by these Articles, the Directors shall have the following powers, that is to say powers; 1) To make, vary and repealfrom time to time bye-lawsfor the regulation of the business of the Company, its officers and servants;" 13) Subject to Article 73(b) (viii), to appoint and at their discretion remove or suspend such Managers, Secretaries, Officers, Clerks, Agents and Servants for permanent, temporary or special service, as they may, from time to time, think fit, and to determine their powers and duties and fbc their salaries or emoluments and require security in such instances and to such amounts as they may think fit and also without prejudice as aforesaid, from time to time to prouide forthe management and transaction oftheaffairs ofthe Company in any specified locality in India in such manner as they thinkfit; '^ :"^:^ -€'%• ^"^~^ ll ^l) ^ y^"y \v^ 14) Subject to Section 292 ofthe Act, to sub-delegate all or any ofthe powers, authorities and discretions for the time being vested in the Directors, subject however to the ultimate control and authority being retained by them; 15) Any such delegate or aforesaid may be authorized, by the Directors to sub-delegate all or any ofthe powers, authorities and discretions for the time being vested in them;)) 5, According to the petitioners, the policy for promotion from Non-Executive to Executive Cadre, as well as the circulars which are impugned in the instant writ petition were issued without framing bye-laws. 6. Shri V. G. Tamaskar, learned counsel for the petitioners submitted that the policy decision cannot be taken by way of circulars, letter or executive instructions. He relied upon a decision of Hon'ble Apex Court in the case of Punjab Water Supply & Sewerage Board Vs, Ranjodh Singh and others 2007(2) SCC 491, decided by the Hon'ble Apex Court. He has further submitted that first of all the respondents were supposed to frame bye-laws togovern the service conditions of the officers and employees of the company i.e, Steel Authority oflndia Ltd. but the same has not been done and any amendment in the Memorandum of Association can only be done by the Boardof Directors. Before changing the conditions of servrice of employees and servrant a predecisional hearing is must but the same has not been given. In fhis regard he relied upon ajudgment in the case Sukhdev Singh and others Vs. Bhagatram Sardar SinghRaghuvanshi and another {A I.R. 1975 SC 1331 }. 7. In fcheir return, the respondents have submitted that the Steel Authority of India Limited (SAIL) is a Government of India enterprise, company within the meaning of Section 617 of the .•^.*..^ ^'"^1^> •^^, ? ^.:ty '^^' ll^ Companies Act, 1956. The respondent Company has several steel plants, iron ore mines, limestone and dolomite quarries and collieries in addition to other units and Central Marketing Organization, spread over 65 locations in several States across the cquntry. Bhilai Steel Plant is one of its units in the State of Chhattisgarh. The Company has a workforce of more than 1.16 lakh employees in all its plants and units, including employees in all its branehes and the head office. For the purpose of promotion from Non-Executive to Executive Cadre, there is a common policy applicable to all the plants and units. As and when found necessary, the policy was amended with the approval of Board of Directors. The said policy was last modified and approved by the Board of Directors on 30.10.2007. The policy was circulated and was later notified by the respondent vide circular dated 30.1.2008. The last promotion policy was in force since 1988. The decision was taken to change the new promotion policy by the Board of Directors in its 331st meeting, held on 30th October,2007. It was circulated by the SAIL Corporate Office and further notified by the Bhilai Steel Plant vide circular No.M & R -08/2008, dated 31.1.2008. Subsequently, an amendment was made vide circular No. 25/2008, dated 6.5.2008 in the above policy. Promotion policy was notified by the Bhilai Steel Plant also. The eligibility for promotion to Executive Cadre is reckoned from entry in S-8 grade. The qualification wise eligibility is as under: Year of Servrice in S-8 and above grades 1 Minimum Quallfication in Technical Stream in Degree Engineering or equivalent. Minimum Qualification Non-Technical Stream in Any specified profession qualification r -^. l:':.f^ "^ j 'v^~ \\^ 8. The procedure for selection has been given according to which a written test followed by interview will be taken. The written test will be conducted by an external agency centrally. The candidate will have to obtain minimum qualifying marks in the test, with relaxation of 10% of SC/ST candidates. Those who qualify in the written test will be called for interview in the ratio of 1:4 in order of merit. The weightage should be given to those who obtain 50% in the written test and 20% in the interview. Performance rating is 15% ahd experience rating is 15%. A plant wise merit list wtll be prepared based on the cornbined scores obtained in the above manner and promotions will be carried out in order of merit. Rest of the conditions as given in the return are as under : "(c) Conditions with respect to performance and conduct: (a) The candidate should have consecutive 'Good' or better ratings in the last three preceding years. (b) The candidate should be clear from disciplinaiy and vigilance angle. (d) Frequency ofPromotions: The promotion will be carried out every alternate year. The orders will be effective from 30th June of the promotion year. (e) Number of promotions: The number of proniotion within a plant/unit will be maximym 10% of the number of applicants. (f) The eligibility ofthe candidateswill be reckoned as on 30til June of the promotion year. (g) The employees working in non-technical areas having Matric/Matric+ITI qualifications or a qualification specified for technical stream can opt for promotion in technical stream. 4 • Diploma in Engineering or equivalent/B.Sc. Graduate or equivalent. 9 Matric or Matric+ ITI in technical stream only. •^- 9. W'> Similarly employees working in Technical stream can also opt for promotion in Non-technical stream provided they have the qualification specified for that area. In such cases, the employees will have to qualify in the test to be conducted for the area of option. (h) The written test will be conducted at plant/units centrally by an external agency and MTI will function as on overall coordinating agency. (i) To qualify in the written test, candidates will have to obtain minimum of 40% marks in the aggregated (30% for SC/STcandidates). (j) Two separate DPCs will be constituted under head of Works and Head of Personnel and Administration respectively for technical and non-technical areas. The DPCs will have minimum three members including a representative ofSC/ST and representative of personnel Department. The DPC will prepare merit lists in descending order based on combined performance of the candidates in written test, inter^iew, rating of last 3 years and experience in S-8 and above grades. (k) The candidate should have minimum 'B'or equivalent rating in the last 3 consecutive years." We have to consider as to what is the meaning of bye-laws. Therefore, the policy framed for promotion from Non-Executive to Executive Cadre cannot be kept out of the definition of the bye-laws. They are very well bye-laws. Any circular, issued in respect of promotion policy, can be said to be supplement to the bye-laws and cannot be termed as illegal. Article 84 of the Articles of Association of the respondent No.l empowers the Board of Directors to make any amendment and therefore the amendment to the promotion policy or circulars can be termed as amendment in the bye-laws and cannot be said to be illegal. ^ \ 10. Further, in Article 84 of the Articles of Association the Directors have been conferred the powers to make, vary and repeal from time to time bye-laws for the regulation of the business of the Company, its officers and sen/rants, but it does not enjoin the Directors to make bye-laws.It is not mandatory in this Article to frame bye-laws and also no such condition is found in the Article that if the bye-laws are not framed the executive instructions of the Directors wlll be withoutjurisdiction. 11. Article 72 of the Articles ofAssociation provides that subject to the provisions of Section 292 and 293 of the Act, the Board may, from time to time, entrust and confer upon the Chairman, Managing Director, Director or a departmental head for the time being such of the powers as they may think fit and may confer such powers for such time and to be exercised for such objects and purposes ancl upon such terms and conditions and with such restrictions as they may think expedient and may, from time to time, revoke, withdrawn alter or vary all or any such powers. Therefore, even the powers delegated by the Board of Directors can be exercised by the Chairman, Managing Director, Director or any other departmental head. Article 84 (14) ofArticles ofAssociation provides that subject to Section 292 of the Act, to sub-delegate all or any of the powers, authorities and discretions for the time being vested in the Directors, subject however to the ultimate control and authority being retained by them. Article 84(15) of the Articles of Association provides that any such delegate or aforesaid may be authorized, by the Directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in them. 1"^ ^•i- 1 ,'^ \^jy ^a^' \^ 12. Article 84(13) of the Articles of Association provides that subject to Article 73(b) (viii), to appoint and at their discretion remove or suspend such Managers, Secretaries, Officers, Clerks, Agents and Servrants for permanent, temporary or special servrice, as they may, from time to time, think fit, and to determine their powers and duties and fix their salaries or emoluments and require security in such instances and to such amounts as they may think fit and also without prejudice as aforesaid, from time to time to provide for the management and transaction of the affairs of the Company in any specified locality in India in such manner as they think fit. 13. In view of the above, the Directors have been conferred wide powers to appoint remove or suspend the Managers, Secrefaries, Officers, Clerks, Agents and Ser/ants and fix their salary, emoluments etc. and as such, the policies can be framed and circulars can be issued in exercise of such powers.Any circular to be issued which cannot be questioned unless any prejudice has been caused to anyone or the discretion is alleged and if no discrimination or illegality is alleged, there is hardly scope remains for judicial review. 14. In the case of P, U. Joshi and Ors. Vs. The Accountant General, Ahmedabad and Ors { (2003) 2 SCC 632} the Hon'ble Apx Court held as under: <<10. We have carefully considered the submissions made on behalf of both parties. Questions relating to the constitution, pattern, nomenclature of posts, cadres, categories, their creation/abolition, prescription of qualifications and ofher conditions of serv^ice including avenues of promotions and criteria to be fulfilled for such promotions pertain to the field of Policy and within the exdusive discretion and jurisdiction of the State, subject, of course, to the limitations or restrictions envisaged in the Constitution of India and it is not for the ^-:-'..:.. -•^ 10 .^ ^-^^ @^" ^ Statutory Tribunals, at any rate, to direct the Government to have a particular method of recruitment or eligibility criteria or avenues of promotion or impose itself by substituting its views for that of the State. Similarly, it is well open and within the competency of the State to change the rules relating to a service and alter or amend and vary by addition/substraction the qualifications, eligibility criteria and other conditions of service including avenues of promotion, from time to time, as the administrative exigencies may need or necessitate. Likewise, the State by appropriate rules is entitled to amalgamate departments or bifurcate departments into more and constitute different categories of posts or cadres by undertaking further classification, bifurcation or amalgamation as well as reconstitute and restructure the pattern and cadres/ categories of service, as may be required from time to time by abolishing existing cadres/posts and creating new cadres/posts. There is no right in any employee of the State to claim that rules governing conditions of his service should be forever the same as the one when he entered service for all purposes and except for ensuring or safeguarding rights or benefits already earned, acquired or accrued at a particular point of time, a Government servrant has no right to challenge the authority of the State to amend, alter and bring into force new rules relating to even an existing service.?? 15. 16. Th^r In the present case there is no allegation that in the promotion policy from Non-Executive Cadre to Executive Cadre the prornotion policy and circulars, which are impugned in this writ petition discriminate the employees or there is any illegality therein. In view ofthe above, there is no force in this writ petition. The same is.therefore.dismissed. No order as to costs. Sd/- I.M. Quddusi Judge Sd/- N.K.Agarwal Judge