IN THE HIGH COURT JUDICATURE AT MADRAS DATED 27.10.2010 CORAM THE HONOURABLE MR.JUSTICE M.SATHYANARAYANAN W.P.Nos.1552/2010, 4080/2010, 4081/2010 & M.P.Nos.1 & 2 of 2010 (3 cases) and W.P.No.15872/2010 & M.P.No.1 of 2010 W.P.No.1552/2010 Kovai Mandala Ex Servicemen and Family Welfare Association (Coimbatore, Erode Nilgiris District), represented by its President, V.Meckanz 99, Karuppusamy Nagar, Kavundampalayam, Coimbatore-641030 .. Petitioner Vs 1.Union of India, Rep. By is Secretary to Government, Department of Ex Servicemen Welfare, Ministry of Defence, New Delhi-I. 2.The Directorate General of Re-settlement, Government of India, Ministry of Defence, West Block IV, R.K.Puram, New Delhi-I. 3.The Tamil Nadu Exservicemen's Corporation Ltd., (TEXCO) (Govt. of Tamil Nadu Undertaking) 2, West Mada Street, Sri Nagar Colony, Saidapet, Chennai 600 015. 4.The Bharat Sanchar Nigam Ltd (BSNL), Rep by its Chief General Manager, Anna Salai, Chennai 600 002. 5.The General Manager (BSNL), Gandhi Road, Erode – 640 011 .. Respondents https://hcservices.ecourts.gov.in/hcservices/ W.P.Nos.4080 & 4081 /2010 Kovai Mandala Ex Servicemen and Family Welfare Association (Coimbatore, Erode Nilgris District), S.I.No.104/75 represented by its President, V.Meckanz, 99, Karuppusamy Nagar, Kavundampalayam, Coimbatore-641 030 .. Petitioner Vs 1.Union of India, Rep. By is Secretary to Government, Department of Ex Servicemen Welfare, Ministry of Defence, New Delhi-I. 2.The Directorate General of Re-settlement, Government of India, Ministry of Defence, West Block IV, R.K.Puram, New Delhi-I. 3.The Tamil Nadu Exservicemen's Corporation Ltd., (TEXCO) (Govt. of Tamil Nadu Undertaking) 2, West Mada Street, Sri Nagar Colony, Saidapet, Chennai 600 015. 4.The Bharat Sanchar Nigam Ltd (BSNL), Rep by its Chief General Manager, Anna Salai, Chennai 600 002. 5.The Principal General Manager (BSNL), Saibaba Colony Coimbatore-43. .. Respondents https://hcservices.ecourts.gov.in/hcservices/ W.P.No.15872/2010 Cuddalore District Ex-Services League, (Regd. No.169/2009) by its President L.A.Khan, 11, Pudupalayam Main Road, Cuddalore – 607 001 .. Petitioner Vs 1.The Bharath Sanchar Nigam Limited (BSNL), represented by its General Manager, Telecommunications, Cuddalore Circle,Hospital Road, Cuddalore-607001. 2.The Chief General Manager, The Bharath Sanchar Nigam Limited (BSNL) Anna Salai, Chennai 600 002. 3.The Assistant General Manager (BSNL) Telecommunications, Cuddalore Circle, Hospital Road, Cuddalore 607 001. .. Respondents Prayer in W.P.No.1552/2010: Writ petition filed under Article 226 of the Constitution of India seeking to call for the records relating to order bearing No.G180 / Security Guard / Gen.Corr./09/10/Vol.II/35 @ Erode passed by the fifth respondent and quash the same. Prayer in W.P.No.4080/2010: Writ petition filed under Article 226 of the Constitution of India seeking to call for the records relating to order made in No.OP/Security Corr Appl/2008-10/108 dated at Coimbatore the 9.2.2010 passed by the fifth respondent and quash the same. Prayer in W.P.No.4081/2010: Writ petition filed under Article 226 of the Constitution of India seeking to call for the records relating to order made in No.OP/Security Corr Appl/2008-10/114 dated at Coimbatore the 11.2.2010 passed by the fifth respondent and quash the same. Prayer in W.P.No.15872/2010: Writ petition filed under Article 226 of the Constitution of India praying to issue a writ of Mandamus, forbearing the respondents from removing the security staff on duty in the offices of Bharat Sanchar Nigam Limited (BSNL) telephone exchanges / offices under the control of the respondents. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner In W.P.Nos.1552/2010 : Mr.V.Lakshmi Narayanan 4080 & 4081/2010 for Mr.R.Thiagarajan In W.P.No.15872/2010 : Mr.R.Guru Raj For Respondents In W.P.No.1552/2010 : Mr.M.Rajasekaran, Central Govt. Standing Counsel for R1 & R2 Mr.S.Velusamy for R4 & R5 Ms.Pushpa Menon for R3 - TEXCO In W.P.Nos.4080/2010 : Mr.K.R.Rameshkumar for R4 & R5 & 4081/2010 Mr.P.D.Audikesavalu for R3 In W.P.No.15872/2010 : Mr.S.Velusamy for BSNL Mr.S.Dakshinamurthy for R1 & R2 C O M M O N O R D E R The issues arise in these writ petitions are one and the same and therefore all the writ petitions are disposed of by this common order. 2. W.P.No.1552/2010 is filed by Kovai Mandala Ex-Servicemen and Family Welfare Association, representing the members at Coimbatore, Erode and Nilgiris District, challenging the order dated 22.1.2010 passed by the 5th respondent, under which it has been proposed to reduce some quantum of security guards in many exchanges from 1.2.2010. In the affidavit filed in support of this writ petition, it is averred on behalf of the petitioner Association that it is registered under the provisions of Tamil Nadu Societies Registration Act, 1975 and it has in its rolls about 420 members. The main object of the Society is to protect the interest and welfare of the members of the Association who are all Ex-servicemen spread over Coimbatore, Erode and Nilgiris District. 3. The 2nd respondent was established for the purpose of providing employment opportunities to the Ex-servicemen in various public sector undertakings and corporate bodies by sponsoring security agents. Similarly, the Government of Tamil Nadu has established the 3rd respondent for the above said purpose. The contract of providing security arrangement is awarded in favour of the 3rd respondent Corporation and payment is made directly to them and the 3rd respondent in turn, pays monthly salary to its members https://hcservices.ecourts.gov.in/hcservices/ through bank account. The members of the petitioner Association are also covered by Group Insurance Scheme. 4. According to the petitioner, there are about 256 Ex- servicemen working in various Bharat Sanchar Nigam Limited (in short “BSNL”) Officers/Installation in Erode alone and out of them, more than 105 Ex-servicemen are members of the petitioner Association. The petitioner Association aggrieved by the impugned order, under which, BSNL has proposed to reduce the quantum of security guards in many exchanges with effect from 1.2.2010 and accordingly, the present strength of 256 persons employed will come down to 148. 5. It is further averred in the affidavit that the 3rd respondent filed W.P.No.23934/2008, challenging the proceedings of the 5th respondent in awarding contract for supply of security personnel in favour of private security agencies, writ petitions were filed, are dismissed on 22.4.2009. The 3rd respondent aggrieved by the dismissal of all of the writ petitions, filed writ appeal in W.A.No.573/2009 and the same was allowed by the Division Bench of this Court on 27.11.2009. In order to overcome the said order, BSNL has resorted to reduction of security personnel employed through the 3rd respondent/TEXCO and the action on the part of BSNL is arbitrary, which would ultimately affect the livelihood of many Ex-servicemen, who fought for the security of the country and their families will also be affected. Hence, challenge is made to the above said impugned order passed by the BSNL. 6. On behalf of the respondents 4 & 5, counter affidavit has been filed stating among other things that the reduction of security guards who were employed through the 3rd respondent has nothing to do with the disposal of the Writ Appeal No.573/2009. According to BSNL, its revenue has been drastically reduced due to steep reduction in tariff and operating expenses had gone up. With a view to curtail the expenditure in all the areas, relevant factors were examined and several measures were initiated to curtail the expenditure and the reduction of number of guards is one among such measures. It is further stated in the counter that the security guards were engaged for protecting the telecom exchanges and stores and over a period of time, many of the stores were shifted to central locations and some stores which were less valuable and obsolete, were disposed of through MSTC (Metal Scrap Trading Corporation - a Govt. of India Undertaking). Consequently, only at selected places, stores are available. Further in view of additional staff of BSNL made available due to the reduction of telecom lines, there being no necessity to secure all exchanges round the clock. Whenever stores are not kept and telephone exchanges considered to be minor one, BSNL no longer needs security guards and only vital installations and major exchanges, necessity arises for deploying the security guards has arisen. Accordingly, a policy decision has been taken to engage the services of large number of Group C & Group D staffs of BSNL who https://hcservices.ecourts.gov.in/hcservices/ have become surplus. It was further found that the services of Group C & Group D staffs cannot be dispensed with and as a matter of administrative policy and in view of the functional requirements, it has been proposed to utilize their services to man the security points. The reduction of security staffs employed through the 3rd respondent is one such measure. 7. It is further averred that the contract awarded to the 3rd respondent for providing security personnel has already came to an end on 31.3.2008 and it has been periodically extended till date. On account of the availability of Group C & Group D staffs, the services of the security personnel employed through the 3rd respondent is no longer required for major exchanges and installations and therefore, BSNL acting in a bonafide manner, taken a policy decision to reduce the strength. On a financial front, BSNL Erode Telecom District is incurring a sum of Rs.11,20,000/- towards unnecessary expenditure which are non-productive on account of deployment of security personnel through the 3rd respondent. Therefore, for the above said reasons, 4th and 5th respondent pray for the dismissal of the writ petition. The 3rd respondent/TEXCO has filed a counter, supporting the case of the petitioner association, as the security personnel are engaged through them. 8. On behalf of the petitioner, reply affidavit has been filed stating among other things that there has been no recruitment in BSNL in Group C & Group D category for the past few years and the present strength is far less than the sanctioned strength and in fact there is a acute shortage of staffs. It is further averred that any policy/administrative decision of a public sector undertaking should be reasonable, bonafide and tenable. It is also averred that only in order to get over the effect of the judgment in W.A.No.573/2009, the BSNL has decided to reduce the strength of the security personnel and painted a picture as if they got their surplus staffs and went to deploy them for guarding the installations. 9. On behalf of the respondents 4 & 5, additional counter as well as reply affidavit had been filed stating among other things that the Ex-servicemen employed through the 3rd respondent are not their employees and only their members and hence they can be accommodated by other security agencies and also in other installations. 10. The petitioners in W.P.Nos.4080 & 4081/2010 had filed these writ petitions challenging the orders dated 9.2.2010 and 11.2.2010 respectively, passed by the 5th respondent, under which the security guards noted in the said proceedings are to be withdrawn with effect from a particular date. Challenging the vires of the said proceedings similar contentions were raised in these writ petitions. https://hcservices.ecourts.gov.in/hcservices/ 11. Cuddalore District Ex-Services League, a registered body has filed the W.P.No.15872/2010, forbearing the respondents/BSNL from removing the security staff on duty in the offices of BSNL telephone exchanges/installations under the control of the respondents. Similar contentions were raised and the respondents in their counter had taken similar stand as that of their counter in W.P.No.1552/2010. 12. Heard Mr.V.Lakshmi Narayanan appearing for Mr.R.Thiagarajan, learned counsel for the petitioner in W.P.Nos.1552, 4080 & 4081/2010, Mr.R.Guru Raj, learned counsel for the petitioner in W.P.No.15872/2010, Mr.Rajasekaran, Mr.S.Velusamy, Mr.K.R.Rameshkumar, Mr.S.Dakshinamoorthy, learned counsel appearing for the BSNL in respective writ petitions and Ms.Pushpa Menon appearing for the 3rd respondent/TEXCO in W.P.No.1552/2010 and Mr.P.D.Audikesavalu, learned counsel appearing for the 3rd respondent/TEXCO in W.P.Nos.4080 & 4081/2010. 13. The learned counsel for the petitioners in the respective writ petitions would contend that admittedly the members of the petitioners Association were registered with the 3rd respondent namely Tamil Nadu Ex Servicemen's Corporation Ltd (TEXCO) - A Govt. of Tamil Nadu Undertaking and they fought for the security of the country. After their period of active service, they are rehabilitated by engaging their services in installations of national importance as they, in their capacity as Ex Army men are trained in such kind of activities. It is further submitted that challenging the proceedings of BSNL in taking steps to employ the services of the private security agencies, W.P.Nos.21489, 21788 & 23934/2008 were filed by TEXCO and those writ petitions were dismissed by a common order dated 22.4.2009. Challenge was made by TEXCO with regard to the dismissal of W.P.No.23934/2008, by filing an appeal in W.A.No.573/2009. The Division Bench of this Court vide order dated 27.11.2009 has allowed the writ appeal and in Para 23 it has been held as follows : “23. Hence, there is nothing wrong in the appellant corporation participating in the tender process and challenging their restriction to one zone. Their participation was necessary to examine whether they were giving an equal offer. That is necessary from the welfare of ex-servicemen. That is a material condition. If that was not so, their bid could have been rejected. However, once they give an equal offer and if they are being restricted, there is nothing wrong in their pointing out that the decision is contrary to BSNL's own decision dated 16th May 2007, which is in consonance with the directives of the Defence Ministry. Since BSNL has itself issued the circular dated 16th May, 2007 giving a preferential treatment to the appellant, clause 7(3) of the tender document will have to be confined only to examine if the appellant is giving equal terms. In the event, it does not it will get eliminated, but if it gives equal terms, the entire work will https://hcservices.ecourts.gov.in/hcservices/ have to be given to the appellant. It was submitted that as per Note No.1, below guideline no.73, all guidelines/instructions issued on the subject prior to the guidelines stand suspended with effect from 01.02.2006. This note however, cannot supersede the directives of the Ministry itself nor the circular of BSNL issued thereafter on 16th May, 2007.” 14. It is the specific stand of the respective writ petitioner that only in order to get over the effect of the order passed in the above said writ appeal, BSNL under the guise of policy decision had taken a decision to reduce the strength of security personnel employed through TEXCO and the said act is actuated by malafides. It is further contended that the act on the part of BSNL in taking such a decision is an arbitrary one and in fact there is no reduction in the business of BSNL even though the private players are also operating in the said field and that the revenue of BSNL has getting increased day by day. Hence there is no necessity on the part of BSNL to reduce the strength of the security personnel employed through TEXCO. 15. It is contended by the respective counsel appearing for the petitioners that in fact there is a shortage of Group C & Group D personnel in BSNL and it is false to contend that there are surplus staff available in those categories. It is further contended by the respective counsel appearing for the petitioners that telecom installations are vital and security oriented and in view of the present trend, specialization is required and members of the petitioners Association who are registered with TEXCO are Ex Army men and they are the right persons to guard the installations/stores of BSNL. In the event of Group C & Group D staff of BSNL is employed for security purposes, then the security of vital installations will get diluted. Therefore, the respective counsel appearing for the petitioners prayed for the quashment of the impugned orders and for continuous deployment of Ex-service personnel. 16. Per contra, the respective counsel appearing for the BSNL would contend that respective petitioner Association cannot maintain these writ petitions and if at all any person aggrieved, it is only the TEXCO and they have not chosen to challenge the vires of the impugned orders. It is further contended by the learned counsel appearing for the BSNL that the decision was taken after deliberations and taking into account the expenditure involved in deploying the security personnel through the 3rd respondent and reduction in the revenue of BSNL and the surplus staff available on account of closing of some of the installations, a policy decision has been taken to reduce the strength of such security personnel and instead to deploy the surplus Group C & Group D staffs of BSNL. The only option left with the BSNL is to retrench the services of the Group C & Group D staffs and it may lead to further complications and https://hcservices.ecourts.gov.in/hcservices/ labour unrest and hence a decision has been taken in a fair and proper manner to deploy them in minor installations/stores during day time and during night time the services of security personnel deployed through TEXCO will be utilized. In so far as major installations/stores are concerned, the services of Ex-servicemen will continue to be utilized. It is also contended by the respective counsel appearing for the BSNL that the said policy decision has been taken in a bonafide manner and there is no arbitrariness involved and the said decision has been taken purely on account of interest of public sector undertaking namely BSNL. It is vehemently denied by the respective counsel appearing for the BSNL that the said decision has been taken not on account of orders passed in the above said writ appeal. It is also submitted that the contract period has expired on 31.3.2008 and by virtue of the interim orders, it has been extended and since the period of contract has already came to an end, it is not open to the petitioner Association to compel the BSNL to employ their services. Hence for the said reasons, the respective counsel appearing for the BSNL prayed for dismissal of these writ petitions. 17. This Court carefully considered the rival submissions and also perused the materials available on record. 18. As regards the preliminary objection raised by the learned counsel appearing for BSNL that the respective Association cannot maintain these writ petitions, this Court is of the considered view that admittedly they are the members of TEXCO, a Government of Tamil Nadu undertaking which has been established solely for the purpose of providing further employment opportunities to Ex-service personnel. The members of the petitioner Association had also registered with TEXCO and their services were utilized through TEXCO. Regarding the reduction of security personnel employed through TEXCO, the TEXCO cannot challenge such proceedings as it is not directly affected by such a reduction. The persons ultimately affected by such reduction are the members of the petitioner Association and apprehending that their livelihood will be in danger, they filed these writ petitions. In fact TEXCO has also supported their cause. In view of the said reasons, this Court holds that the writ petitions preferred by the respective Association are maintainable. 19. The primordial question arises for consideration is whether the decision taken by the BSNL to reduce the strength of security personnel deployed through TEXCO is sustainable ? 20. It is useful to refer some important decisions dealing with the aspect of judicial review in the matters of Government contracts, tenders and change in policy. 21. In Hughes v. Deptt. Of Health and Social Security, 1985 AC 776, Lord Diplock, J. said (AC p.788B) “.... Administrative policies may change with changing https://hcservices.ecourts.gov.in/hcservices/ circumstances, including changes in the political complexion of governments. The liberty to make such changes is something that is inherent in our constitutional form of government.” 22. In Attorney General for the State of New South Wales v. Quin, (1990) 64 Aust LJR 327 (Aust HC), Mason, C.J. (majority view, the Australian High Court) observed: “ Once this is accepted, I am unable to perceive how a representation made or an impression created by the Executive can preclude the Crown or an Executive from adopting a new policy, or acting in accordance with such a policy, in relation to the appointment of Magistrates, so long as the new policy is one that falls within the ambit of the relevant duty or discretion, as in this case the new policy unquestionably does. The Executive cannot by representation or promise disable itself from; or hinder itself in, performing a statutory duty or exercising a statutory discretion to be performed or exercised in the public interest, by binding itself not to perform the duty or exercise the discretion in a particular way in advance of the actual performance of the duty or exercise of the power...” 23. In R. v. Secy of State for Transport, ex p Richmond upon Thames London Borough Council, (1994) 1 WLR 74, while laying down that the Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. (1948) 1 KB 223] reasonableness test alone was applicable for finding out if the change from one policy to another was justified, Laws, J. stated : (Secy. of State case, WLR p.94 B-C) “ …. The Court is not the judge of the merits of the decision-maker's policy. …. the public authority in question is the judge of the issue whether 'the overriding public interest' justifies a change in policy.... But this is no more than to assert that a change in policy, like any discretionary decision by a public authority, must not transgress Wednesbury principles.” 24. In State of Maharashtra and Another v. Lok Shikshan Sanstha and Others, (1971) 2 SCC 140, the petitioner moved an application for opening a new school which was rejected by the authority. The rejection was challenged by the petitioner by filing a writ petition in the High Court. The High Court allowed the petition and directed the authority to grant permission to the petitioner to start school. Reversing the judgment, the Hon'ble Supreme Court said: “9.... So long as there is no violation of any fundamental rights and if the principles of natural justice are not offended, it was not for the High Court to lay down https://hcservices.ecourts.gov.in/hcservices/ the policy that should be adopted by the educational authorities in the matter of granting permission for starting schools. The question of policy is essentially for the State and such policy will depend upon an overall assessment and summary of the requirements of residents of a particular locality and other categories of persons for whom it is essential to provide facilities for education. If the overall assessment is arrived at after a proper classification on a reasonable basis, it is not for the courts to interfere with the policy leading up to such assessment.” 25. In M.P. Oil Extraction and Another v. State of M.P. and Others, (1997) 7 SCC 592, the Hon'ble Supreme Court said that unless a policy decision is absolutely capricious, unreasonable and arbitrary and based on mere ipse dixit of the executive authority or is violative of any constitutional or statutory mandate, court's interference is not called for. The executive authority of the State must be held to be within its competence to frame a policy for the administration of the State. Policy decision is in the domain of the executive authority of the State and the court should not embark on the adequacy of public policy and should not question the efficacy or otherwise of such policy so long it falls within the constitutional limitations and does not offend any provision of the statute. 26. In Ugar Sugar Works Ltd. v. Delhi Administration and Others, (2001) 3 SCC 635, a challenge was made to the executive policy regulating trade in liquor in Delhi. The Hon'ble Supreme Court held that it is well settled that the courts, in exercise of their power of judicial review, do not ordinarily interfere with the policy decisions unless such policy framed could be faulted on the grounds of malafide, unreasonableness, arbitrariness, unfairness, etc. However, if the policy cannot be faulted on any of these grounds, the mere fact that it would hurt business interests of a party, does not justify invalidating the policy. The courts are not expected to express their opinion as to whether at a particular point of time or in a particular situation any such policy should have been adopted or not. It is best left to the discretion of the State. 27. In Dharmpur Sugar (Kashipur) Ltd. v. State of Uttaranchal and Others, (2007) 8 SCC 418,