IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No 10091 of 2009 Krishna Kant Choubey, son of late Damodar Choubey, Resident of 26 A, Anandpuri, West Boring Canal Road, Patna, Post Office – Boring Road and Police Station – S K Puri, District – Patna - Petitioner Versus 1 The Infrastructure Development Authority, (IDA) through its Managing Director, having office at First Floor, Udyog Bhawan, East of Gandhi Maidan, Patna 2 The Managing Director, Infrastructure Development Authority, (IDA), having office at First Floor, Udyog Bhawan, East of Gandhi Maidan, Patna 3 Smt Ansuli Arya, IAS, presently holding the post of Managing Director, Infrastructure Development Authority, (IDA), having office at First Floor, Udyog Bhawan, East of Gandhi Maidan, Patna 4 The State of Bihar through Principal Secretary, Department of Industries, Government of Bihar, Patna - Respondents *** For the petitioner : M/s Anand K Ojha & Ashok K Karn, Advocates For the IDA : Mr Lalit Kishore, Sr Advocate with Mr Piyush Lall, Advocate For the S t a t e : Mr Gyan Prakash Ojha, A C to G A VII *** 6 05.08.2010 The present writ application was filed against the order of respondent No 2, the Managing Director of the Infrastructure Development Authority (IDA) as communicated to the petitioner under Memo No 101 dated 20.07.2009 by which the petitioner’s contractual appointment as Director (Administration) with the IDA was prematurely terminated. The concerned respondent having entered appearance and having filed a counter affidavit, rejoinder thereto having been filed, with consent of parties, the writ petition was heard for final disposal at that stage itself. The said impugned order is contained in Annexure-5 to the writ petition. 2 There appears to be no dispute so far as material facts are concerned. In order to provide for the rapid development of physical and social infrastructure in the State and to attract private sector participation in the infrastructure projects in the State, State Government made a comprehensive legislation known as the Bihar Infrastructure Development Enabling Act, 2006. Under the Act, Section 3 authorises the State Government to constitute the IDA. The IDA was to be a body corporate. Section 4 provides for composition of the IDA. Chief Secretary to the Government was to be Chairperson of the IDA and the Development Commissioner of Bihar, its Vice Chairman. The IDA is to consist of the Chairperson and such other members including ex-officio members not exceeding 15 in number. There is to be a Managing Director of the IDA appointed by the Government and in addition thereto, there are other members who are to be appointed in the IDA, namely, Director (Finance), Director (Project Implementation) and Director (Administration). These appointments are to be made as per procedure laid down. By notification dated 27.04.2006, in terms of Section 3 of the Act, the State Government constituted the IDA consisting of 12 members presided by the Chief Secretary as the Chairperson. This included, inter alia, the Director (Administration). This notification is Annexure-F to the counter affidavit of IDA itself. Thus seen, the IDA is the Apex Body of this corporate entity consisting of the Chief Secretary, the Development Commissioner, the Managing Director and the three Directors aforesaid apart from other members for carrying out the functions entrusted to it under Section 10 of the Act. This includes, by virtue of Section 10 (xxix) power to make regulations, to regulate its own procedure and Section 11 provides for the powers of the IDA. Section 5 lays out the terms of the office and the 3 members of the IDA and is quoted hereunder : “5. Term of office of the Members:- Every member other than the Ex- officio member shall hold office during the pleasure of the Government.” Section 66 authorises the IDA, with approval of the Government by notification in the official gazette, to make regulations for the proper performance of its functions under the Act. Section 67 authorises the State Government to make Rules for carrying out all or any of the purposes of the Act. That, it appears in terms of Section 66 read with Section 10 (xxix) of the Act, with the approval of the State Government, the IDA framed regulations which were notified on the 02nd of January, 2008 known as the IDA (Financial, Service and Technical) Regulations, 2007. These regulations were to apply to every employee of the IDA including those on deputation as also on contract basis to the extent they are not in contravention of the terms and conditions of their deputation/contract to IDA. In terms of Clause 1.3 (ii), the Managing Director of IDA has been designated as the appointing authority in respect of every employee of IDA. Again, in terms of Clause 1.3 (v), the controlling authority in relation to all posts has been designated as the Managing Director. It may be noted here that there are three categories of posts, namely, Categories A, B and C. It appears that IDA contemplates employment on contractual basis apart from being on deputation from other Departments. Clause 1.4.3 contemplates a Selection Committee for recruitment and selection of Categories A, B and C posts in the IDA of which Managing Director is the Chairman and other members of this Committee are In charge Administration, representative from Department of Personnel, 4 Government of Bihar and the in house consultant to be nominated by the Managing Director. It is provided therein that Selection Committee shall select all categories of employees but so far as employees in the Category A are concerned, the Selection Committee shall also seek approval of the IDA. The post of Director (Administration) is the first amongst Category A post. Clause 4.2 deals with the power of the Managing Director which states that the Managing Director shall be the Executive Head of the IDA and he shall have the authority to prescribe the duty of officers and all staff of IDA. He shall exercise such supervision and disciplinary control as may be necessary. Part II of the said regulations deals with service regulations and procedures. Clause 1.2 thereof, inter alia, provides that all appointments would be temporary and would be made for the contractual period as determined by the IDA. Curiously, this clause provides that all posts indicated in Annexure-A to Schedule I are temporary in nature and may be abolished by the IDA. Court has advisedly used the expression curious because if one refers to Annexure- A to Schedule I, it includes within itself the post of Director (Administration), Director (Finance) and Director (Programme Implementation) meaning thereby that these posts are temporary and could be abolished by the IDA which is not understandable as these three posts are posts of members of the IDA statutorily created by the Legislature and is not made dependant on the discretion of the IDA in any manner. Thus, arrogating its power to itself in the regulations is quite unexplained. Clause 1.4 of this Part II deals with termination of service which gives power to the Managing Director to terminate the service of an employee under the IDA. 5 From the provisions of the Act and the Regulations made thereunder, it would be seen that though the legislature considered it appropriate to form the IDA as a body corporate with members as the Apex Body to take decisions in the matter, the Regulations, in many manner, deviated from this concept of corporate governance to bureaucratic governance giving sweeping power over the administration to the Managing Director. This Court would not dwelve much upon this as this aspect is not very relevant. However, Court would observe, as it is relevant in view of submissions made by either party, that firstly when provisions refer to all appointments to be temporary, as seen in Part II, Clause 1.2 thereof, the appointments are not temporary as is generally understood but are temporary in the sense that the appointments are not permanent in the sense till superannuation. They are all on contract or deputations which are fixed term employments. Therefore, the submission of learned counsel for the IDA is not correct that appointments being temporary, the employees have no right to continue or no right to the post on which they have been appointed. Appointments are for a fixed term and all such employees have legitimate expectations to be permitted to continue for their full term unless the term is cut short either by resignation or by termination and once this is accepted then short termination of contractual appointment prior to its expiry would itself be sufficient prejudice to the employee to dispute and challenge the termination. It is again wrong to even suggest that merely because employment is contractual, the concept of non-arbitrariness in such termination cannot be read in for the simple reason that the Managing Director holds a public office and the IDA performs public functions and, as such, its actions are in public law domain in contradiction to private 6 law domain especially when it comes to matters of removal of a person of the rank of Director (Administration), who is a member of the IDA itself and who would have an equal say in matters when the IDA meets as a body corporate as compared to the Managing Director itself. The other thing to be seen is that Director (Administration) by virtue of the Act is a member of the IDA and by virtue of Section 5 to the Act, all members are at the pleasure of the Government. He sits alongside the Managing Director in the meeting of the IDA. Yet, by Regulations, his position is severely compromised by making the Managing Director his controlling authority, his appointing authority and his dismissing authority but advisedly the Regulations itself, in opinion of the Court, impose a safeguard against this otherwise sweeping autocratic powers of the Managing Director by providing that the selection and appointment of Category A employees which includes the three Directors as members of the IDA would be with the approval of the IDA and, hence, Court is of the opinion that it would equally apply in case of termination as well. It is well settled that if for appointment, certain conditions have to be met then those conditions must also be met for removal. Thus seen, it would be noticed that Director (Administration) is no menial servant/employee under the Managing Director. He is a senior responsible officer/member of the IDA itself and, thus, his position and authority requires to be respected accordingly by everybody including the Managing Director. These are relevant for considering the challenge to the manner in which petitioner’s contractual employment as Director (Administration) in the IDA was terminated by the Managing Director. 7 The then Managing Director of IDA, apart from being made party-respondent as Managing Director, has been made party by name as well in view of allegations of personal mala fide. Regrettably, inspite of that, she has chosen not to file any counter affidavit herself in the matter but authorised the Chief Consultant (Finance and Accounts) of the IDA to file affidavit on behalf of IDA, its Managing Director and respondent No 3, the Managing Director in person. The Managing Director in question, even though the post involved a full time commitment, was a part time IAS officer who was, admittedly, holding the post of Managing Director of Bihar Industrial Area Development Authority (BIADA) and was given additional charge of IDA by the Government. Pursuant to advertisement issued in respect of recruiting suitable officer to be appointed as member of the IDA as Director (Administration), the petitioner applied. The petitioner had been member of the Bihar Administrative Service and recently retired as Deputy Secretary in the Department of Parliamentary Affairs under the Government of Bihar. The Selection Committee of IDA having found him suitable for the job, he was duly selected and appointed as such by the IDA and, as such, entered into an agreement in this regard for a period of one year on 21st of October, 2008 and, as such, appointment was valid upto 20th of October, 2009. The same came to be short terminated by the impugned order on 20th of July, 2009. The first stand taken by Shri Lalit Kishore, Senior Advocate and AAG III appearing for the answering respondents that the employment being contractual and temporary, the petitioner could not make a grievance with regard to short termination of contract and Article 14 of the Constitution is not attracted at all. As noticed above, the argument is noticed only for the sake of rejection. A public officer 8 exercising jurisdiction in public law domain conferred with powers for public purpose cannot be permitted to take such a plea. It requires no discussion that even in contractual matters, Article 14 of the Constitution is attracted as has been held over three decades back in the case of Ramana Dayaram Shetty –Versus- The International Airport Authority of India and others since reported in AIR 1979 Supreme Court 1628 as also in the case of ABL International Ltd and Another –Versus- Export Credit Guarantee Corporation of India Ltd and others since reported in (2004) 3 Supreme Court Cases 553. These decisions clearly lay down to the contrary. Thus, the action of termination has to satisfy Article 14 of the Constitution and cannot be at the whims and caprice of the Managing Director. Now let us see the facts. The show cause notice which led to the termination is contained in Annexure-2 to the writ petition. It is notice dated 14.07.2009 by the Managing Director to the petitioner. It seeks explanation from the petitioner on two issues. The first allegation and issue being that the petitioner was asked to seek explanation from one Shri Amit Charles who was Consultant in the IDA and one Mahendra Ram, a Driver as regards the disruption in plying vehicle of IDA for about a week but no action was allegedly taken by the Director (Administration) and no report was submitted. The second allegation was that inspite of orders being issued on 19.06.2009, petitioner continued to use air conditioned vehicle which was an act of insubordination. Petitioner was asked to show cause and pending further orders, he was virtually suspended but in the show cause notice, it was not stated as to what action was contemplated to be taken in case the explanations were found unsatisfactory. Petitioner, on 15.07.2009, immediately responded. He 9 clearly stated in relation to the first charge that the relevant file having been received, petitioner had called the Consultant (Administration) Amit Charles and had asked him on the file itself to give his explanation. Immediately thereafter, petitioner had to rush to Delhi to attend to his son who had to undergo a serious knee operation and on his return from Delhi, because of family tension, he lost sight of the explanation as called for nor was the file again put up to him. So far as the second charge is concerned, petitioner clearly pointed out that under agreement with the Travel Agency through whom the AC car was rented, it was provided that in case the particular car was not required, which was on daily rent, then 15 days notice was required to be given. Order for use of non-air conditioned car having been received, the Travel Agency was told to change the car which took a couple of days, less than a week during which period due to technical reasons, as a matter of fact, the air conditioner in the car was not used. Seemingly, these allegations were too innocuous. Ordinarily, these allegations were too innocuous and too trivial even to take note of but it appears that the Managing Director had pre-determined to get rid of the petitioner because while seeking explanation itself, petitioner was divested of his authority which itself is humiliating for such a high official of the rank of member of the IDA itself and if that was not enough, on 20th of July 2009, the impugned order, as contained in Annexure-5, was issued. The order is equally innocuous which merely notes that explanation was asked for, explanation was submitted, allegations and charges were found proved, as such, the service contract was immediately cancelled. All that I can say, it is an apology for an order of this nature having such drastic civil consequences. Apart from 10 short terminating a contract, it is a great stigma on an officer of such a high rank and position to which no credence was given by the Managing Director. The impugned order cannot be sustained for more than one reason. Firstly, as noted above, the action has to be in conformity with Article 14 which means it has to be non-arbitrary and has to have reason and rational. On the face of it, considering the charges, the action is totally out of order being grossly disproportionate and, thus, cannot be sustained. There is absolutely no co-relation between the dereliction complained and the punishment meted out. Then even though the order is administrative in nature and does not have to give elaborate reasons like a judgment but still it must disclose application of mind as the order is subject to judicial review both under the Regulations and by this Court. I say so because as held by the Apex Court in the case of Smt Maneka Gandhi –Versus- Union of India and another since reported in AIR 1978 Supreme Court 597, no stand can be taken by any administrative authority that it can act arbitrarily. As has been noticed in the judgment of Union of India and Another –Versus- Sudhir Kumar Jaiswal, AIR 1994 Supreme Court 2750 that even before the case of Maneka Gandhi, the Apex Court had held that the law was that no administrative authority had absolute discretion to decide a matter within its competence the way it chooses. Referring to the case of United States –Versus- Wonderlich (1951) 342 US 98, the Apex Court held : “Law has reached its finest moments, when it has freed men from unlimited discretion of some ruler, some official, some bureaucrat. Absolute discretion is a ruthless master. It is more destructive of freedom than any of man’s other invention.” 11 The other being with regard to stating of reasons. Here, I may refer to the case of Uma Charan –Versus- State of Madhya Pradesh and another, AIR 1981 Supreme Court 1915 where referring to earlier judgment, the Apex Court held that the most that could be said for the stock reason is that it is a general description of the process adopted in arriving at a conclusion. This apology, for reason to be recorded, does not go beyond indicating a conclusion in each case that the record of the officer concerned is not such as to justify his appointment. It was manifest that Article 14 of the Constitution, inter alia, provided that reasons should be stated in a manner which would disclose how the matter was dealt with which is the only visible safeguard against possible injustice and arbitrariness. Reasons are the link between the materials on which certain conclusions are based and the actual conclusion. They disclose how the mind is applied to the subject matter for the decision. Whether it is purely administrative or quasi judicial, they should reveal a rational nexus between the facts considered and the conclusion reached. Only in this way can opinion or decisions recorded be shown to be manifestly just and reasonable. Thus, the issues of law have totally been ignored in a brazen manner in which petitioner was dismissed by short termination of his contract for service. This Court need not go into the allegations of personal mala fide wherein petitioner has sought to bring on record his objections taken with regard to conduct of his predecessor who had now become the Secretary of BIADA of which the Managing Director was the full time Managing Director while holding Additional charge of Managing Director of IDA and other wrongs being committed in IDA as they are unnecessary 12 for the present purpose. Thus found, the short termination cannot be sustained either on facts or in law but as, by now, the contract period itself has expired and, as submitted by the learned counsel for the petitioner even at the time of final hearing that he did not wish to get the contract continued but only wanted to vindicate his stand that he was arbitrarily dismissed, the writ petition is disposed of without any further relief to the petitioner. M.E.H./ (Navaniti Prasad Singh)