: 1 : IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2694 OF 2005 1. The State of Maharashtra, ) through the Additional Chief ) Secretary (Services) General ) Administration Department, ) Mantralaya, Mumbai - 400 032.) 2. Additional Chief Secretary ) (Services), General ) Administration Department, ) Mantralaya, Mumbai - 400 032.) 3. Principal Secretary, ) Urban Development Department,) Mantralaya, Mumbai - 400 032.) ... Petitioners (Orig. respondents) Versus 1. Vinay Mohan Lal ) 31, Yashodhan, Dinshaw Vacha ) Road, Mumbai - 400 032. ) 2. Union of India, through the ) Secretary Department of ) Personnel & Training, North ) Block, New Delhi - 110 011. ) 3. Vilasrao Deshmukh, ) Chief Minister, Maharashtra ) State, Mantralaya, Mumbai - ) 400 032. ) 4. Satish Tripathi, ) IAS Secretary, Food and Civil) Supplies, Government of ) Maharashtra, Mantralaya, ) Mumbai - 400 032. ) ... Respondents (Respondents 2 to 4 are original respondents to the O.A. and respondent 1 is original applicant to the O.A.) Mr. Ravi M. Kadam, advocate general with Mr. R.M. Sawant, government pleader and Vinay Masurkar for the petitioners. Mr. E.P. Bharucha, senior counsel with Ms. Kashmira Bharucha, Mr. Shetty and Ms. S.S. Marne i/b Sandeep Marne for the respondents. : 2 : CORAM: CORAM: CORAM: SMT. RANJANA DESAI & SMT. RANJANA DESAI & SMT. RANJANA DESAI & ABHAY ABHAY ABHAY S. OKA, JJ. S. OKA, JJ. S. OKA, JJ. DATE DATE DATE ON WHICH JUDGMENT ON WHICH JUDGMENT ON WHICH JUDGMENT RESERVED RESERVED RESERVED : 28TH NOVEMBER, 2005. : 28TH NOVEMBER, 2005. : 28TH NOVEMBER, 2005. DATE DATE DATE ON WHICH JUDGMENT ON WHICH JUDGMENT ON WHICH JUDGMENT PRONOUNCED PRONOUNCED PRONOUNCED : 13TH DECEMBER 2005. : 13TH DECEMBER 2005. : 13TH DECEMBER 2005. JUDGMENT :- (Per Smt. Ranjana Desai, J.) 1. The State of Maharashtra through the Additional Chief Secretary (Services), General Administration Department, Additional Chief Secretary (Services), General Administration Department and the Principal Secretary, Urban Development Department, Mantralaya, Mumbai, have challenged in this writ petition order dated 2/9/2005 passed by the Central Administrative Tribunal (in short, "the Tribunal") in Original Application No.293 of 2005 whereby the Tribunal has quashed and set aside order of transfer dated 24/5/2005 of respondent 1 - Mr. Vinay Mohan Lal who is the applicant in the said application. The petitioners are respondents 1, 3 and 4 respectively in the said application. Respondent 2 - Union of India is respondent 2 therein. Respondent 3 Mr. Vilasrao Deshmukh, the Chief Minister of Maharashtra is respondent 4 therein and respondent 4 Mr. Satish Tripathi, Secretary, Food & Civil Supplies Department, Government of Maharashtra, is respondent 5 therein. The Principal Secretary, Urban Development Department, Mantralaya is respondent 6 therein. We shall refer to the parties as per their status in the original application as it would be easier to understand the facts if they are so referred. : 3 : 2. We may first give gist of the facts as given by the applicant in his original application. That would indicate his grievance also. 3. The applicant is a member of the Indian Administrative Services of 1970 batch allotted to Maharashtra Cadre. He held various important posts during his career. He was appointed as the Vice Chairman & Managing Director (V.C. & M.D.), City & Industrial Development Corporation (for short, "CIDCO") on 26/5/2003 when Mr. Sushilkumar Shinde was the Chief Minister of Maharashtra. According to the applicant before he completed the legally prescribed tenure of three years, he was prematurely and without any reason transferred from CIDCO on 28/12/2004 as ordered by respondent 4 Mr. Deshmukh, the Chief Minister of Maharashtra. The applicant was given order of appointment as the Chairman of the Third Maharashtra Finance Commission (for short, "TMFC") vide Notification dated 15/1/2005. As per this Notification, the applicant was to hold the office from the date on which he assumes office till 31/12/2005. According to the applicant, this appointment order was dated 28/12/2004 when the Commission was not even constituted. 4. According to the applicant, he incurred the displeasure of respondent 4 because when he was working as the V.C. & M.D., CIDCO, a proposal for allotment of land for the printing press of the son of respondent 4 : 4 : was not cleared by him and because the Manjra Charitable Institutional Trust owned by some family members of respondent 4 was fined Rs.20 lacs as per CIDCO policies. Respondent 4, therefore, directed the Chief Secretary, Government of Maharashtra, to conduct administrative inquiry against the allotment of plots made during the applicant’s tenure. In compliance with this order, Dr. D.K. Sankaran, conducted the inquiry against the applicant without following the principles of natural justice. According to the applicant, Dr. Sankaran did not take cognizance of correct facts and purposely made the inquiry report public. He submitted his report that CIDCO has suffered a loss of Rs.347 crores from the transactions in land carried out by the applicant. According to the applicant, he was wrongly charged with criminal intent and corruption. Only an incomplete and abridged version of the report was supplied to the applicant and he was asked to give his say within eight days. The State Government has accepted the said report and decided to initiate departmental inquiry. The State Government has also directed an inquiry through the Anti Corruption Bureau. This has been done in a haste even without waiting for the applicant’s say. The applicant’s case is that while working as the Chairman of TMFC, which is a post under the Constitution of India, he was outside the administrative jurisdiction of the State of Maharashtra. Since the applicant had taken strong objection to the actions initiated against him, without the approval of the Governor, the 1st petitioner proposed : 5 : to the Governor that the applicant had incurred disqualification under clause (d) of the Maharashtra Finance Commission (Misc. Short Title Provisions) Act, 1994 (for short, "the said Act") and, therefore, he should be removed from the post of the Chairman, TMFC and reverted to the administrative control of the State. The Governor did not act on it. To expedite the matter, a revised proposal was submitted by the 1st petitioner to the Governor, proposing Mr. Satish Tripathi’s name for being appointed as the Chairman, TMFC in place of the 1st respondent without giving any reasons in support of the proposed change. 5. According to the applicant, there was no justification for the State to transfer the applicant from the said post vide transfer order dated 24/5/2005 when his appointment was for a fixed term i.e. upto 31/12/2005 and when such a transfer was not in the interest of functioning of the Commission. At the instance of respondent 4, the Governor accorded his approval and the State and respondent 4 posted the applicant as the M.D., MAFCO a loss making public sector undertaking of Government of Maharashtra to wreak vengeance and to humiliate and damage the applicant’s reputation. 6. According to the applicant, the Additional Chief Secretary (Planning), Government of Maharashtra, who was asked to find out some irregularities about the : 6 : applicant’s functioning, calculated hypothetical loss to CIDCO in illegal and irregular manner without understanding the pricing mechanism. The applicant’s case is that the State wants to suspend him. The State could not have placed him under suspension since he was holding a post under the Constitution outside the administrative control of the State Government. According to the applicant, the instances cited by him in the application are clear cut cases which have resulted in respondent 4 having personal, mala fide and deep grouse against the applicant. In the circumstances, the applicant prayed that the impugned transfer order dated 24/5/2005 moving the applicant from the post of the Chairman, TMFC and the order dated 24/5/2005 posting him as M.D., MAFCO and the records relating to the reference made to Anti Corruption Bureau be quashed and set aside. 7. The respondents resisted the original application by filing their written statement. Basically it was contended by the respondents that the transfer is an incidence of service and transfer orders cannot be lightly interfered with. The allegations of mala fides were denied. 8. Before we deal with the rival contentions, it is necessary to state certain events as arguments are advanced in connection with them. The original application was filed on 30/5/2005. On 1/6/2005, the Tribunal stayed the impugned order dated 24/5/2005. The : 7 : respondents applied for vacating the stay on 15/6/2005. On 17/6/2005, the Tribunal declined to vacate the stay. On 4/7/2005, the petitioner filed Writ Petition No.1636 of 2003 challenging the Tribunal’s order dated 17/6/2005. On 4/7/2005, this court set aside the Tribunal’s orders granting stay and order refusing to vacate the stay. On 6/7/2005, Mr. Satish Tripathi took charge and since then he has been functioning as the Chairman of the TMFC. 9. On 29/7/2005, the applicant filed an application for amendment of the original application. He wanted to aver that the post of M.D., MAFCO is not included in Schedule III-A or III-B of the All India Services (Pay) Rules, 1954 (for short, "the said Rules") being an ex-cadre post. Therefore, unless a declaration is made by the State Government that the post of M.D., MAFCO is equivalent in status and responsibility to a post specified in schedule III, he cannot be appointed to the said post. The proposed amendment further stated that since the State Government had failed to make a declaration as provided in Rule 9 of the said Rules, the transfer order dated 24/7/2005 is ex facie illegal and deserves to be set aside. However, since the respondents filed a copy of the State Government Resolution dated 26/7/2005 stating that the post of M.D., MAFCO will be treated as equivalent to the post of the Principal Secretary to the State Government from the date the applicant assumes charge of the said post that application was filed. : 8 : 10. On 8/8/2005, the Supreme Court disposed of the State of Maharashtra’s special leave petition filed challenging the High Court’s judgment dated 4/7/2005. Since the original application was to be heard on 29/8/2005, the Supreme Court directed the Tribunal to hear the matter on the appointed date without entertaining any request for adjournment and decide it finally. On 29/8/2005, the applicant made another application for amendment. It was stated in the application that in reply dated 22/8/2005, the respondents have enclosed a copy of the Gazette Notification dated 27/5/2005 appointing Mr. Satish Tripathi - respondent 5 as the Chairman of the TMFC. This was not known to the applicant earlier and, hence, he wants to amend the prayer clause so as to challenge order dated 27/5/2005. The said application was rejected as a belated application in view of the abovementioned direction of the Supreme Court to hear the original application on 29/8/2005. On that day, final arguments were heard and on 2/9/2005, the Tribunal quashed and set aside the order dated 24/5/2005. 11. In the impugned order dated 2/9/2005, the Tribunal has noted that the Chairman can be removed either when he incurs disqualification under Section 6 of the said Act or when he resigns from the office as mentioned in Section 7 thereof. However, as per the provisions contained in General Clauses Act, the appointing authority has a power to remove or dismiss a person : 9 : appointed by him. The Tribunal has, therefore, concluded that the Governor who is the appointing authority is also competent to remove the Chairman by following the due process of law. However, after perusing the files the Tribunal has observed that the proposal submitted to the Governor does not contain information about the tenure of the applicant, the reasons for removing him before completion of tenure and supporting legal provisions. The Tribunal has referred to the judgment of the Supreme Court in Dr. L. P. Agarwal v. Union of India (1992) 3 SCC 526 and observed that the tenure appointee can be removed before completion of his tenure on justifiable grounds. Curtailment of such tenure can be done only by following the procedure conforming to the principles of natural justice. According to the Tribunal, in this case, principles of natural justice were violated. 12. The Tribunal has observed that the respondents have now mentioned that the State Government decided to recall the applicant since he was found to have committed gross irregularities in the allotment of land while holding the post of V.C. & M.D. CIDCO. Referring to the judgment of Supreme Court in Mohinder Singh Gill & Anr. v. The Chief Election Commissioner, New Delhi & Ors. (1978) 1 SCC 405, the Tribunal has observed that additional grounds cannot be offered in support of a decision after the decision is given by the statutory authority. The Tribunal was of the opinion that the fact that the applicant was appointed for a fixed tenure was a very : 10 : crucial factor and non-consideration of the said factor by the Competent Authority while taking the decision has made judicial intervention necessary. 13. The Tribunal has observed that the competent authority had to act judicially and it was necessary for the Competent Authority to inform the applicant reasons for curtailment of his tenure and if on account of administrative exigencies it was considered inappropriate to disclose the reasons to the applicant at least the grounds for curtailing the tenure should have been placed before the Competent Authority while seeking his approval. Since this was not done, according to the Tribunal order removing the applicant from the post of Chairman, TMFC. is legally not sustainable. The Tribunal has further held that the Resolution dated 26/7/05 equating the post of M.D., MAFCO to the post of Principal Secretary as well as the order appointing the applicant to the post of M.D., MAFCO are not legally sustainable because the equivalence order was issued nearly two months from the date of the impugned order and such Resolution is against the law laid down by the Supreme Court in E.P. Royappa v. State of Tamil Nadu & Anr., (1974) 4 SCC 3. 14. So far as the allegation that respondent 4 was biased against the applicant and, therefore, at his instance the applicant was transferred is concerned, the Tribunal has held that though the incidents cited by the : 11 : applicant have a potential of generating bias against him, it was not possible to infer that bias was the sole reason for removing the applicant from the post of Chairman, TMFC because the decision to this effect was taken at the level of the Governor. The Tribunal has concluded that the primary objection of curtailing the tenure of the applicant was to bring him under the control of the State Government from that of the Governor. In short the Tribunal has held that the appointment of the applicant to the post of Chairman TMFC was for a specific period which could be curtailed only on justifiable grounds. Since no grounds were given in the proposal submitted for the approval of the competent authority i.e. the Governor, the order issued on the basis of such approval is legally not sustainable. In view of this, the Tribunal has quashed and set aside the impugned order dated 24/5/05. 15. Mr. Kadam, the learned Advocate General appearing for the petitioners has assailed the impugned order on several counts. He submitted that under the said Act, the Governor is designated as an appointing authority for appointment of the Chairman of TMFC. The Chairman is to hold office for such period as may be specified in the order appointing him. By Notification dated 15/1/2005, the Governor of Maharashtra appointed the applicant as the Chairman of TMFC. He was to hold the office from the date he assumes office upto 31/12/2005. In the meanwhile, it came to light that there were certain : 12 : irregularities in allotment of plots/lands of CIDCO during the time when the applicant was the Chairman and M.D. of CIDCO i.e. between 26/5/2003 to 28/5/2004. A discrete preliminary enquiry was ordered by the Government and Dr. D.K. Sankaran, A.C.S. (Planning) was directed to conduct the preliminary enquiry on 31/3/2005. Dr. Sankaran submitted a detailed report running into three volumes reporting that there are huge financial losses to CIDCO to the tune of Rs.347 crores on account of various irregularities committed during the tenure of the applicant as V.C. & M.D. of CIDCO. In April, 2005, a public interest litigation was filed in this court placing reliance on Dr. Sankaran’s report and alleging allotment of CIDCO plots to dummy co-operative societies at highly concessional rates. On 20/4/2005, the said petition was admitted and this court restrained the developers from selling any flats and directed them to furnish a bank guarantee for the apprehended loss of Rs.36.55 crores as a pre-condition for continuing developmental activities. It was, therefore, considered prudent to transfer the applicant from the post of Chairman of TMFC in public interest. 16. Mr. Kadam pointed out that the action taken by the petitioners is vindicated by the judgment of the Division Bench of this court finally disposing of the said public interest litigation. He took us through the said judgment dated 28/10/2005 wherein in several paragraphs this court has commented on dereliction of : 13 : responsibilities on the part of the applicant and has expressed that the State Government and CIDCO should take appropriate action against the concerned persons. He led stress on the observations of the Division Bench that there was grand plan to take advantage of the poverty and lack of understanding and ignorance of the people and this plan could not be executed unless the original chief promoters, the builders and the officers of CIDCO at the higher level such as the M.D. were party to it. The learned Advocate General contended that such is the extent of irregularities committed in the allotment of plots during the time when the applicant was holding the post as V.C. & M.D. of CIDCO that this court has forfeited the constructions made by the builders and several other directions have been issued. The learned Advocate General contended that it can no longer be argued that the transfer of the applicant was not warranted or was illegal or that there was any colourable exercise of power. The learned Advocate General relied on several judgments of the Supreme Court to emphasise that the transfer of an employee is not only an incidence of service inherent in the terms of employment but also implicit as an essential condition of service. He submitted that the person holding transferable post has no legal right to insist for his continuance at any particular posting. In support of this, the learned Advocate General relied on the judgments of the Supreme Court in Union of India & Ors. v. Janardhan Debanath, (2004) 4 SCC 245; State of U.P. & Ors. v. : 14 : Govardhanlal, (2004) 11 SCC 402; Kendriya Vidyalaya Sangathan v. Damodar Prasad Pandey & Ors., (2004) 8 SCALE 188; State of U.P. & Anr. v. V.N. Prasad, (1995) Supp. (2) SCC 151; N.K. Singh v. Union of India (1994) 6 SCC 98 and Union of India & Ors. v. H.N. Kirtania (1989) 3 SCC 445. Relying on Janardhan Debanath’s case (supra), the learned Advocate General contended that for the purposes of effecting a transfer, there is no requirement to hold a detailed enquiry. 17. The learned Advocate General pointed out that since the applicant was appointed as Chairman of TMFC by the Governor of Maharashtra, the approval of the Governor of Maharashtra was sought as he was the appointing authority. A proposal was placed before the Governor. On 2/5/2005, the three volumes of Dr. Sankaran’s report were forwarded to the Governor for his consideration. The note of the Urban Development Department in which details of facts which emerged from Sankaran’s report were mentioned, was brought to the notice of the Governor. On 19/5/2005, the applicant made a detailed representation as to why no approval should be granted. Therefore, the Governor was fully seized of all the relevant material. On 24/5/2005, the Governor approved the file and a Notification was issued appointing Mr. Satish Tripathi in place of the applicant as Chairman of TMFC. The Governor as an appointing authority curtailed the tenure of the applicant as Chairman of TMFC. He was transferred to the post of Chairman of MAFCO. There are, : 15 : therefore, no irregularities or illegalities in this transfer. The learned Advocate General further contended that the transfer order is not punitive and does not affect the applicant financially or otherwise. It does not affect his service conditions and, therefore, the Tribunal ought not to have interfered with the order of transfer. In the absence of any prejudice to the applicant, interference by the Tribunal is erroneous and contrary to law. 18. Mr. Kadam further contended that the applicant has expressed his apprehension that if he joins the post of M.D., MAFCO, he would be under the administrative control of the petitioners and would be suspended. He is thus trying to avoid any disciplinary action being taken against him. The learned Advocate General further pointed out that the applicant’s challenge is to the order of transfer from the post of Chairman of TMFC and the order appointing him as M.D. of MAFCO. The applicant never pleaded that the post of Chairman, TMFC is a tenure post and cannot be curtailed. The order of the Governor which was gazetted in Notification dated 27/5/2005, whereby the applicant ceased to be the Chairman of TMFC and Mr. Satish Tripathi was appointed as Chairman was not the subject matter of challenge in the original application. At a belated stage, the original application was sought to be amended. The amendment application was rejected. Thus the order of the Governor dated 27/5/2005 was not challenged. The : 16 : Tribunal was, therefore, dealing with a simplicitor case of a challenge to a transfer. The Tribunal, therefore, should not have widened the scope of its enquiry. In fact, the Tribunal exceeded its jurisdiction and transgressed beyond the pleadings. The argument that the order of the Governor dated 27/5/2005 was not served on the applicant must be rejected because the order was gazetted on 27/5/2005 and the applicant is deemed to have the knowledge of the same. 19. The learned Advocate General took us to Articles 243(1) and 243(1)(2) and Article 280 of the Constitution of India. He submitted that on a fair reading of these Articles, it is clear that the Governor, while appointing the applicant as Chairman of TMFC, acted as a statutory appointing authority. He was not exercising constitutional powers. Since the Governor was exercising powers as the statutory authority, the embargo under Article 361 of the Constitution of India was not applicable and, hence, the Governor ought to have been impleaded as a party respondent. He submitted that since the Governor was not impleaded as a party respondent, it was wrong on the part of the Tribunal to make any observations against him in his absence. In this connection, he relied on a Full Bench judgment of the Punjab and Haryana High Court in Hardwarilal Rohtak v. G.D. Tapase, AIR 1982 P&H 439. The learned Advocate General further contended that the post of the Chairman of TMFC is not a tenure post. There is no period of : 17 : tenure specified in any Act or Rule for the said post and the period is left to the discretion of the appointing authority. He submitted that the reading of the said Act makes it apparent that the Chairman of TMFC is to hold the office at the pleasure of the appointing authority and, therefore, the appointment was terminable at will. The Governor had every authority to curtail the period mentioned in the appointment order. In this connection he relied on the judgment of the Supreme Court in Pu Myllai Hiychho v. State of Mizoram,