THE HON’BLE SRI JUSTICE B. PRAKASH RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NOS. 10012 & 10013 OF 2006 WRIT PETITION NO. 10012 OF 2006 Date: 17.11.2006 Between: J.V.S. Ramars. … Petitioner and G. Sudarshan and two others. … Respondents. THE HON’BLE SRI JUSTICE B. PRAKASH RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NOS. 10012 & 10013 OF 2006 COMMON ORDER: (per Hon’ble Sri Justice Ramesh Ranganathan) The A.P. Administrative Tribunal, in its common order in O.A.Nos.8203, 8194, 8195 and 8605 of 2005 dated 2.5.2006, held that the government had neither the power nor the competence to transfer employees working in the “Hyderabad Metro Water Supply and Sewerage Board” (hereinafter referred to as the ‘Board’), in the face of the express provisions of the “Hyderabad Metropolitan Water Supply and Sewerage Board Act, 1989” (hereinafter referred to as the ‘Act’) and the service regulations made thereunder (hereinafter referred to as the “Regulations”) and that such orders of transfer were void ab initio and could not be acted upon. Aggrieved thereby, the 4th respondent in O.A.8203 of 2005 and the 3rd respondent in O.A.8195 of 2005 have filed W.P.Nos.10012 and 10013 of 2006 respectively. G.O.Rt. No.1629, MA dated 06.12.2005 and G.O.Rt. No.1628 MA dated 06.12.2005 were under challenge in O.A. No.8195 and 8203 of 2005 respectively. In G.O.Rt.No.1628, MA dated 6.12.2005, the state government transferred the petitioner in W.P.10012 of 2006, who was earlier working in the Quli Qutub Shah Urban Development Authority as a Superintending Engineer, to the post of Chief General Manager of the Board in the place of the 1st respondent who was posted in his place at the Quli Qutub Shah Urban Development Authority. In G.O.Rt.No.1629 dated 6.12.2005, the state government transferred the petitioner in W.P.10013 of 2005, who was working as the Executive Engineer, Division No.7, Municipal Corporation of Hyderabad, to the O & M Division in the Board in the place of the 1st respondent who, in turn, was posted as Executive Engineer, Division NO.7 of the Municipal Corporation of Hyderabad. The first respondent in W.P.10013 of 2006, prior to the impugned orders of transfer in G.O.Rt.No.1629 MA dated 6.12.2005, was working as the General Manager, O & M Division IV, HMWSSB, Hyderabad. Facts, in both the writ petitions, shall briefly be noted. The applicant in O.A.8195 of 2005 (1st respondent in W.P.10013/06), was directly recruited to the post of Deputy Executive Engineer through the A.P.P.S.C. in 1987 and, after his selection, was posted to the Hyderabad Metro Water Works and Sewerage and Sewage Treatment Works. This institution was constituted into the Hyderabad Metro Water Supply & Sewerage Board under Act 15 of 1989. Under the Act, every officer, or employee of the A.P. Public Health & Municipal Engineering service, serving in a post not below the rank of Assistant Engineer, in the Hyderabad Metro Water Works and Sewerage & Sewage Treatment Works, was required to be continued in service, under the same terms and conditions, until their absorption was finally determined by the Board in accordance with the rules and regulations made under the Act. The Act contemplates such officer or employee being given an opportunity to opt for the service of the Board or for repatriation to the service of his parent department. In terms of the powers conferred under Section 80 of the Act, service regulations were made and notified in B.P.No.16 dated 30.1.1992. Regulation 23 thereunder provides that every officer or employee of the Public Health and Municipal Engineering Service, and the Public Health and Municipal Engineering Subordinate Service, in the post not below the rank of an Assistant Engineer in the Hyderabad Metro Water Works, or the Sewerage and Sewage Treatment works, working in the Board as on 01.11.1989 shall be given an opportunity to opt for the service of the Board or for repatriation to the service of his parent department. Such options are required to be submitted to the Managing Director and the options once exercised, and accepted by the Managing Director, are to be final. In his application, filed in O.A.No.8195 of 2005, the respondent-applicant submitted that he was invited to and had exercised his option for absorption into the service of the Board, that the Board, in its proceedings dated 05.08.1992, had accepted the options category-wise for various posts. The option of the respondent-applicant, in the category of Deputy Executive Engineers, was accepted by the Managing Director in Statement No.III and his name was shown at Sl.No.26 in the original list and at Sl.No.10 in re-confirmed list. The respondent-applicant contended that he and the other persons shown in the list have been absorbed in the service of the Board. The government, vide G.O.Ms.No.321 dated 16.4.2005, directed the Board to finalise the options exercised in the year 1992 and subsequent options, if any, given by those persons who were working in the Board as on 01.11.1989. After the aforesaid orders of the government, the Board published the list of Engineers whose options were accepted and were absorbed in the service of the Board in the year 1992 and the subsequent options of those who were working in the Board as on 01.11.1989. The respondent- applicant’s name is shown at Sl.No.10 against the post of Dy. Executive Engineers. The respondent applicant contended that he stood absorbed into the service of the Board and, therefore, the question of his being transferred outside the Board did not arise under the Presidential Order. He contended that though the petitioner, (3rd respondent in the O.A.), was invited to exercise options during the year 1992, he did not choose to do so and therefore his name did not find place in the Board Proceedings dated 05.08.1992. The respondent– applicant contended that, since the petitioner was not in the service of the Board and was not a member of the Board’s service (in the absence of any option being exercised), he should not have been transferred to the service of the Board as that would be in violation of the provisions of Act 15 of 1989 as also the Presidential Order. The respondent–applicant contended that the Board was a corporate body and that, under Regulation 9 of the Service Regulations read with Annexure IV thereof, the Managing Director of the Board was the appointing authority for the post of General Manager. According to the respondent– applicant, the government had no power or jurisdiction either to transfer him out of the Board or to bring the petitioner (3rd respondent in the O.A.) into the service of the Board as it was in violation of Act 15 of 1989, the service regulations made thereunder and the Presidential Order. According to the respondent–applicant the Board was not a government department and the government could not, therefore, effect transfers either from the Board to another department of the government or to the Municipal Corporation of Hyderabad or vice-versa. The 1st respondent–applicant in W.P.10012 of 2006, was appointed in the year 1976. He was promoted as a Dy. Executive Engineer in the year 1987 and as an Executive Engineer in the year 2000. He was further promoted as Superintendent Engineer, under G.O.Ms.No.1398 MA dated 14.12.2004, and was posted as the Chief General Manager of the Board in the place of Sri S.Prabhakar Sarma. The Managing Director of the Board, vide proceedings dated 22.12.2004, posted the respondent – applicant in Project Classification, Circle No.2 against the existing vacancy pursuant to which he joined duty and has been working thereat ever since. The petitioner, (4th respondent in the O.A.), was working as the Superintending Engineer in Quli Qutubshah Urban Development Authority for a year prior to the filing of the O.A and his posting thereat was at his own request. The respondent – applicant contended that G.O.Ms.No.144 dated 7.6.2005 applied even to cases of transfer of officers in the rank of Superintending Engineers, that there was a ban on transfers and that transfers could only be made in relaxation of the ban orders and, that too, only after the concurrence of the Finance Minister and the Chief Minister was obtained. He contended that the impugned G.O.Ms. No. 1628 dated 06.12.2005 did not disclose any such exercise and was contrary to the ban orders and to the policy underlying it. The respondent-applicant alleged that his transfer was at the instance of the petitioner – 3rd respondent and was not on administrative grounds. The Tribunal, while examining the competence of the state government to effect transfers and postings of public health engineers into and out of the Board, noted the definition of ‘public health engineers’ under Section 2(1)(i) of the Act, to Section 80 whereunder the Board is empowered to frame regulations and to Section 110 which provides that the Managing Director shall be the Chief Controlling Authority. The Tribunal noted the contents of the letter dated 12.12.2005, addressed by the Board to the Government, with regards transfer of the 1st respondent in W.P.10013 of 2005 from out of the Board, wherein attention was drawn to Section 110 of the Act and the Government informed that the Managing Director was the Chief Controlling authority for effecting transfers within the Board for smooth administration and for effective functioning of the water supply and sewerage system. The Government was requested to reconsider its decision in G.O.Rt.No.1629 MA dated 06.12.2005, to allow the Managing Director to effect transfers within the Board and to retain the 1st respondent in W.P.10013 of 2006 in the Board itself. The Tribunal noted that the Board had been asserting that transferring persons, within and out of the Board, was within the purview of the Chief Controlling Authority i.e., the Managing Director of the Board and any interference by the government in this regard could only be after prior consultation with the Board. The Tribunal held that the service regulations, issued under B.P.No.16 dated 30.01.1993, did not confer any power on the government to exercise control over the individuals who were posted into and out of the Board. The Tribunal held that reliance placed by the petitioner herein, (respondent in the O.A), on Section 81 of the Act, to contend that the Government was empowered to issue instructions to the Board was misplaced in as much as the government was empowered to give directions, under Section 81 of the Act, only on questions of policy and, at best, only policy issues relating to transfers could be considered as matters of policy and that routine transfers, for administrative reasons, could not be treated as policy matters. The Tribunal held that, even in such cases, Section 81(1) contemplated prior consultation with the Board before any such directions were given by the government and the impugned proceedings did not disclose any such consultation as having been resorted to by the government and that, on the other hand, it was the assertion of the government that they had inherent powers. The Tribunal noted that, while the government’s powers to effect transfers, in respect of employees of the public health engineering department, were traceable to the A.P. State and Subordinate Service Rules and the special rules relating to their services, the powers conferred on the Board were under the statute i.e., the Hyderabad Metro Water Supply & Sewerage Board Act, 1989. The Tribunal held that the powers vested in the Board, under the Act, were superior to the powers of the government which were traceable to the transitory proviso to Article 309 of the Constitution of India whereunder service rules were issued by the government. The Tribunal held that the government had neither the power nor the competence to issue the impugned proceedings of transfer, in the face of the express provisions of the Act as well as the Service Regulations issued thereunder by the Board with the prior approval of the government and as such were ab initio void and could not be acted upon. Sri Nooty Ramamohan Rao, learned counsel for the petitioner, would submit that, since the petitioners and the respondents in both the writ petitions were members of the Municipal Engineering Service and were government servants, it was always open to the government to recall its employees, who had earlier been deputed to the Board, or to send its employees on deputation to the Board. Learned counsel would submit that while recalling an employee, sent earlier on deputation to the Board, was the sole prerogative of the government, it is the Board alone which can be said to be aggrieved by the action of the government in sending its employees on deputation to the Board and that the respondent–applicant cannot be said to be aggrieved thereby. According to the learned counsel it was not open to the respondent–applicant to contend that the Board should not accept employees, sent on deputation, into its service. Learned counsel would submit that, since there exists an employer-employee relationship between the government on the one hand and the petitioners and the respondents-applicants on the other, it was for the government to decide as to where its employees should be posted. Learned counsel would contend that the litmus test was whether the petitioners and the respondents still continued to be the members of the Municipal Engineering Service and, as long as they continued to be so, their place of posting would necessarily be at the choice of the government and it was not for the respondents-applicants to contend that they alone, and not the petitioners herein, should be deputed to the services of the Board. Learned counsel would submit that, merely because the Board is a distinct legal entity, the government was not disentitled, under the Presidential Order, from deputing employees to the Board or to recall its employees who had earlier been deputed to the services of the Board. Learned counsel would refer to G.O.Ms.No.1398 dated 14.12.2004 wherein the 1st respondent applicant was temporarily promoted as a Superintending Engineer, Public Health and Municipal Engineering Service under Rule 37(a)(i) of the Andhra Pradesh State and Subordinate Service Rules, to submit that his promotion was purely temporary and that, on promotion, he was posted as the Chief General Manager in the Board in the place of Sri S. Prabahakar Sarma. Learned counsel would refer to the order dated 22.12.2004, whereunder the Board had posted the respondent-applicant as the Chief General Manager, Project Construction Circle II against the existing vacancy, and submit that, while the Board had accepted the deputation of the 1st respondent – applicant, a member of the A.P. Public Health & Municipal Engineering Service and had posted him as the Chief General Manager, it was well within the powers of the government to recall his services, vide G.O.Rt. No.1628 dated 6.12.2005, and to post the petitioner in his place. Learned counsel would submit that, while deputation of a government servant to the services of the Board may necessitate the Board’s concurrence, it was not necessary for the government either to consult the Board or to seek its concurrence to recall its employees who had earlier been deputed to the services of the Board. Learned counsel would submit that, since the government could always recall the services of the respondent–applicant and he had no right to continue in the service of the Board, it was not for him to make out a grievance with regards deputation of the petitioner to the Board as these were all matters between the government and the Board. Learned counsel would submit that the relief sought for by the respondent – applicant, in the O.A. filed before the Tribunal, was to declare G.O.Rt.No.1628 dated 6.12.2005 as illegal and arbitrary and to declare that the petitioner was not entitled to be posted as the Chief General Manager of the Board. Learned counsel would submit that the respondent – applicant had no right to continue in the services of the Board and, as long as he continued to be an employee of the government, it was for the government, in its wisdom, to decide as to where he should be posted. Learned counsel would submit that the Division Bench judgment of this Court, in M.P.Anantha Narayana v. State of A.P.[1], had no application to the case on hand. Learned counsel would make a detailed analysis, of the provisions of Article 371-D of the Constitution of India and the Presidential Order, to submit that nothing in the Presidential Order disentitled the government either from recalling the services of the respondents – applicants who had earlier been deputed to the service of the Board or to depute the petitioners to serve the Board Sri P. Balakrishna Murthy, learned counsel for the respondent–applicant in W.P.No.10013 of 2005, would submit that, under Section 3(1)(b) of Act 15 of 1989, the respondent – Board is a body corporate and as such is a legal entity distinct from the government. Learned counsel would submit that under Section 113 of the Act, every officer employed in the erstwhile Hyderabad Metro Water Works and Sewerage and Sewage Treatment Works shall stand transferred to and become an officer of the Board with such designation as the Board may determine and shall hold the same tenure, at the same remuneration and the same terms and conditions of service applicable before such transfer, and shall continue to do so unless and until such tenure, remuneration and terms and conditions are duly altered by the Board. Learned counsel would submit that, under Section 113(2), until the question of his absorption in the Board is finally determined, the respondent–applicant, who was in the service of the Board as on 01.11.1989, is statutorily required to be continued in the service of the Board and the government has no right to recall him back to the Municipal Engineering Service. Learned counsel would refer to section 80 whereunder the Board has been conferred the power to make Regulations and submit that, in exercise of the said powers, the Board had made the Hyderabad Metropolitan Water Supply and Sewerage Board Service Regulations, 1992. Learned counsel would refer to Regulation 9 whereunder the appointing authority for all the posts in the Board shall be as specified in Annexure IV. He would refer to the applicable regulations, with regards absorption under Section 113(2) of the Act, to submit that employees of the Public Health and Municipal Engineering Service, who held posts not below the rank of an Assistant Engineer, and were working in the Board as on 01.11.1989, were required to be given an opportunity to opt for the service of the Board or to remain in the service of their parent department, that such options were required to be exercised and accepted by the Managing Director within the time prescribed, that the procedure for consideration and acceptance of options shall be as specified by the Board and that the options once exercised and accepted by the Managing Director shall be final. Learned counsel would submit that, for the post of General Manager (Operations), the appointing authority, under Annexure IV, was the Managing Director. He would refer to B.P.No.16 dated 30.01.1992 wherein the Board’s Service Regulations were approved. Learned counsel would refer to the proceedings of the Board dated 05.08.1992 and submit that a Screening Committee was constituted to consider and finalize options of Engineers, from the rank of Assistant Engineers and above, that the Screening Committee, after two sittings, had submitted its report and that the recommendations of the Screening Committee, in its report dated 05.08.1992, were accepted by the Board. Consequential orders were issued and the unconditional options exercised by Engineers, from the rank of Assistant Engineers upto the rank of Superintending Engineer, as mentioned in Statement I to V appended to the order, were accepted and they were deemed to have been absorbed into the services of the Board in the relevant categories in the Engineering Service of the Board. Learned counsel would refer to Statement No. III, which relates to the individuals whose options were accepted and were absorbed in the categories of Deputy Executive Engineers and Dy. Geneal Managers (Engineering)/Projects under the Engineering Service of the Board, wherein the respondent – applicant’s name was shown at Sl.No.26. Learned counsel would submit that even thereafter the government, in G.O.Ms.No.321 MA dated 16.4.2005, had directed the Board to finalise the options exercised in the year 1992 and subsequent options, if any, given by persons who were working in the Board as on 01.11.1989. Learned counsel would also refer to the letter dated 18.11.2005 addressed by the Managing Director of the Board, wherein the list of Engineers who had confirmed their options to be absorbed in the service of the Board was submitted to the government, for issuance of final orders in the matter. In the list of Engineers, annexed to the said letter dated 18.11.2005, the respondent–applicant’s name was shown at Sl.No.10 and it was recorded therein that his option had been confirmed. According to the learned counsel, if the proceedings dated 05.08.1992 were to be taken as orders of absorption, the respondent–applicant is an employee of the Board consequent upon his absorption and as such is no longer an employee of the government. Learned counsel would submit that, even if it were held from the subsequent proceedings of the Managing Director dated 18.11.2005 that options had not yet been finalized, even then under Section 113(2), as the respondent–applicant had exercised his option to be absorbed into the services of the Board, he was statutorily required to be continued in the service of the Board till the options were finalsed. Learned counsel would submit that, in any view of the matter, the impugned orders of transfer, in G.O.Ms. No. 1629 dated 06.12.2005, were contrary to the statutory provisions under Act 15 of 1989 and had been rightly declared by the Tribunal to be illegal. According to the learned counsel the petitioner herein, having not exercised his option either in 1992 or at any time thereafter, cannot seek to be appointed into the services of the Board since the Division Bench of this Court, in W.P.26072 of 2006 and batch dated 28.6.2006, had held that it was not open to the government to impose its employees on the respondent – Board. Sri M.Surender Rao, learned counsel for the respondent – applicant in W.P.10012 of 2006, while adopting the submissions of Sri P. Balakrishna Murthy, would, in addition, submit that the government, in G.O.Ms.No.144 dated 7.6.2005, had lifted the ban on transfers only for a limited period upto 30.6.2005 and that the ban was re-imposed thereafter. Learned counsel would submit that, in view of the ban imposed in G.O.Ms.No.144 dated 7.6.2005, it was not open to the government to effect transfers thereafter under G.O.Rt.No.1628 dated 6.12.2005. On being asked as to whether the respondent – applicant, in W.P.No.10012 of 2006, had exercised his option under Section 113(2) of Act 15 of 1989, learned counsel would fairly submit that neither the petitioner nor the respondent – applicant in W.P.10012 of 2006 had exercised any option for absorption into the services of the Board. Before examining the rival contentions, it is necessary to take note of the applicable statutory provisions. The “Hyderabad Metropolitan Water Supply & Sewerage Board Act, 1989” is an Act to make provision for water supply, sewerage and sewage treatment in the Hyderabad Metropolitan Area and for matters connected therewith. Section 2(a) defines the Board to mean the Hyderabad Metropolitan Water Supply and Sewerage Board constituted under Section 3. Section 2 (k) defines “prescribed” as prescribed by rules made by the government or the regulations made by the Board as the case may be under the Act. Section 2(l) defines “Public Health Engineer” to mean an officer appointed by the Board to be the Public Health Engineer to discharge the duties of sanction and water supply under the provisions of the Act and includes any officer placed in charge of the duties of the Public Health Engineer. Chapter II of the Act relates to the establishment of the Board and Section 3 thereunder relates to constitution and composition of the Hyderabad Metropolitan Water Supply and Sewerage Board. Under