IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI FRIDAY, THE 15TH FEBRUARY 2008 / 26TH MAGHA 1929 WP(C).No. 1663 of 2008(W) ------------------------------------- PETITIONERS: ------------------- 1. M/S.MALABAR CEMENTS LIMITED, WALAYAR, PALAKKAD, REPRESENTED BY ITS MANAGING DIRECTOR. 2. K.S.SREENIVAS I.A.S., MANAGING DIRECTOR, MALABAR CEMENTS LIMITED, WALAYAR, PALAKKAD. BY ADV. SRI.P.K.VIJAYAMOHANAN RESPONDENTS: ---------------------- 1. THE STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM-695 001. 2. P.SAABU, S/O.SETHUMADHAVAN, COUNCILLOR, WARD NO.45, PALAKKAD MUNICIPALITY, RESIDING AT PUTHENVEEDU, VADAKKANTHARA, PALAKKAD DISTRICT. *3. THE KERALA LOK AYUKTHA, REP. BY ITS REGISTRAR, LEGISLATURE COMPLEX, VIKAS BHAVAN P.O., THIRUVANANTHAPURAM- 695 033. *ADDL. R3 IS IMPLEADED AS PER ORDER IN IA NO. 1131/2008. BY GOVERNMENT PLEADER SRI. P.NANDAKUMAR ADV. SRI.M.RAMESH CHANDER --R2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15/02/2008, ALONG WITH WPC NO. 4891 OF 2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO: 1663/2008 APPENDIX PETITIONER'S EXHIBITS EXT.P1. COPY OF THE COMPLAINT DT. 9/10/07 OF THE R2. EXT.P2. COPY OF THE INTERIM ORDER DT. 11/12/2007 OF THE LOK AYUKTHA IN COMPLAINT NO. 2146/2007. EXT.P3. COPY OF THE COUNTER AFFIDAVIT OF THE PETITIONERS DT. 19/12/07 TO THE COMPLAINT OF THE R2. EXT.P4. COPY OF THE ORDER DT. 31/12/2007 OF THE R1. EXT.P5. COPY OF THE RESOLUTION NO.12 DT. 3/12/2007 OF THE COMPANY. EXT.P6. COPY OF THE COMMUNICATION NO. 38750/H2/07/ID DT. 2/2/08. RESPONDENT'S EXHIBITS EXT.R2A. COPY OF THE ENQUIRY REPORT DT. NIL IN JUNE 2005. EXT.R2B. COPY OF THE ENQUIRY REPORT DT. 4/07/05. EXT.R2C. COPY OF THE ORDER OF THE P2 DT. 21/07/05. EXT.R2D. COPY OF THE ORDER OF THE P2 DT. 22/8/05. EXT.R2E. COPY OF THE REPRESENTATION BY J.P. JAMES BEFORE THE P2. EXT.R2F. COPY OF THE ORDER OF THE P2 DT. 19/6/2006. EXT.R2G. COPY OF THE REPRESENTATION BY SRI. J.P. JAMES BEFORE THE P2 ON 2ND AUG. 2006. True copy tga V.GIRI, J. ----------------------- W.P.(C)No.1663 & 4891 of 2008 ----------------------- Dated this the 15th day of February, 2008. JUDGMENT The parties in these two writ petitions are the same. Issues, which arise for consideration are related and therefore, the writ petitions have been heard together and are disposed of by this common judgment. I will refer to W.P.(C)No.1663/08, for the sake of convenience. 2. First petitioner is a public limited company incorporated under the Companies Act, fully owned, operated, managed and controlled by the State Government. Second petitioner is its Managing Director. The second respondent herein filed Ext.P1 complaint before the Hon'ble Lok Ayukta as Complaint No.2146/07. The main allegation raised in the complaint relates to the action taken by the second petitioner herein in reviewing a punishment which was imposed on one J.P.James, who is not a party to W.P.(C)No.1663/08, but the 4th respondent in W.P.(C)No.4891/08. Apparently, Sri.James had been proceeded against in disciplinary action for wilful negligence W.P.(C).NO.1663/08 & Con.case :: 2 :: of duty, behaviour in an insubordinate manner, acting in a manner intended to bring discredit to the company or its management, wilful damage to work in progress or any property of the company and pursuit of a conduct against the interest of the company. It seems that at the end of the disciplinary action, he was imposed with a punishment of reduction in rank to that of a Plant Manager (Mechanical). Sri.James sought for a review of the punishment by moving an application before the Managing Director. It seems that in the first instance, the said application for review was rejected. The, further allegation in Ext.P1 is that after the second petitioner took charge as Managing Director, a further application for review of the punishment was moved and it seems that the Managing Director took note of the fact that Sri.James had unblemished service record of 25 years and apparently, he was instrumental in commissioning the Cherthala Cement Grinding Unit. Inter alia taking note of this, he was reinstated in the original position as Chief Engineer (Mechanical) in M-3 Grade. In effect, therefore, the W.P.(C).NO.1663/08 & Con.case :: 3 :: punishment imposed on Sri.James by the disciplinary authority was reversed. The decision so taken by the Managing Director was placed before the Board of Directors of the company and by resolution dated 18.11.2006, the Board of Directors ratified the action taken by the Managing Director. 3. At or about this point of time, the company felt the need for a new General Manager. Sri.James was to retire on 31.12.2007. In anticipation of this, the company had advertised in the newspapers for appointing a person in the vacancy that would arise on the retirement of Sri.James. It seems that the company received 5 applications. But, it was found that none of them were qualified. The company decided to make a recommendation to the Government to permit the company to engage Sri.James on a contract basis, on a consolidated salary of Rs.32,000/- per mensem for a period of three months. The Board itself had resolved in this regard and the Board resolution was forwarded to the Government for its approval. W.P.(C).NO.1663/08 & Con.case :: 4 :: 4. It is in this background, that Ext.P1 complaint was filed before the Lok Ayukta seeking the following reliefs: (i) To find that the allegations against respondents 1 and 2 are substantiated and a report under Section 12(3) may be forwarded to the competent authority for initiating prosecution and disciplinary action after conducting appropriate investigation into the allegations raised against them; (ii) To declare that R1 and R2 are unfit to hold the post held by them under Section 14 of the act; (iii) To pass such other orders as this Lok Ayukta may deem fit and appropriate as per the provisions of the Kerala Lok Ayukta Act. 5. It seems that Ext.P1 complaint was posted before the Lok Ayukta on 30.11.2007 for filing the statement of defence. It further seems that no statement was filed on that day. On 7.12.2007, Ext.P2 order was passed. The operative portion of the said order reads as follows: “Since we are prima facie convinced of this relationship between 1st and 2nd respondents, as an interim measure we order that 2nd respondent's tenure as Deputy General W.P.(C).NO.1663/08 & Con.case :: 5 :: Manager should not be extended beyond 31.12.2007 unless otherwise ordered by this forum. Adjourned to 18.1.2008.” 6. On coming to know of Ext.P2 order, the company and the Managing Director filed a statement of defence as Ext.P3 and also sought for variation of Ext.P2. The Lok Ayukta heard both sides and declined to vary Ext.P2 order. This was as per Ext.P4 order, the operative portion of which reads as follows: “The action of the 1st respondent in interfering with the punishment imposed on the 2nd respondent amounted to maladministration. The order which is the outcome of maladministration cannot be the basis for allowing the 2nd respondent to continue in office. In this basis, we are not inclined to interfere with the interim order passed earlier. The interim order will continue till the final disposal of this petition. Adjourned to 12.2.2008. Exts.P2 and P4 have been challenged in this writ petition. 7. Notice on admission was issued to the 2nd respondent in the writ petition viz., the original complainant before the Lok Ayukta and a counter affidavit has been filed by the 2nd respondent as well. On 28.1.2008, after hearing W.P.(C).NO.1663/08 & Con.case :: 6 :: counsel on both sides as well as the Senior Government Pleader, an order was passed directing the 1st respondent viz., the State, to take a decision in the matter of approval of Ext.P5 resolution. It was further made clear that if such approval is made by the Government, it shall be implemented only after getting orders from this court. 8. Taking note of the said interim order, the Government, by letter dated 3.2.2008, granted approval for Ext.P5 resolution. This approval vide its order dated 3.2.2008 has been challenged in W.P.(C)No.4891/08 by the 2nd respndent in W.P.(C)No.1663/08, viz., original complainant before the Lok Ayukta. 9. I heard counsel on both sides and also the learned Senior Government Pleader. 10. The petitioner in W.P.(C)NO.1663/08 contends that the Lok Ayukta acted without jurisdiction in proceeding with Ext.P1 complaint inasmuch as that the same is barred under Section 8 of the Lok Ayukta Act, 1999. Section 8(1) of the Act reads as follows: W.P.(C).NO.1663/08 & Con.case :: 7 :: “Section 8. Matters not subject to investigation (1): Except as hereinafter provided, the Lok Ayukta or an Upa-Lok Ayukta shall not conduct any investigation under this Act, in the case of a complaint involving a grievance in respect of any action, if such action relates to any matter specified in the Second Schedule.” 11. Since the same refers to the Second Schedule of the Act, Clause (d) of the Second Schedule is also extracted hereunder: “(d) Action taken in respect of appointment, removal, pay, discipline, superannuation or other matters relating to conditions of service of public servants but, not including actions relating to claims for pension, gratuity, provident fund or to any claims which arises on retirement, removal or termination of service.” 12. The contention is that the main allegation Ext.P1 is in relation to the appointment/removal or discipline or in relation to matters connected thereto. Inasmuch as it relates to the conditions of service of Sri.J.P.James, who is categorised as a public servant, cognizance of the same is barred in terms of Section 8(1) of the Act. Learned counsel for the petitioner in W.P.(C) W.P.(C).NO.1663/08 & Con.case :: 8 :: No.4891/08 submits that a reading of Ext.P1 would show that it is not a case where the complaint is restricted only to matters of appointment or discipline insofar as Sri.James is concerned. It also takes in 'mal-administration' as against the company and its Managing Director and in that view of the matter, the Lok Ayukta would have jurisdiction to entertain a complaint and consider it. 13. I agree with the learned counsel for the petitioner in W.P.(C)No.4891/08 that if there are allegations of maladministration as against the Managing Director or as regards the company in general, the Lok Ayukta would definitely have jurisdiction to proceed with the complaint in accordance with law. At any rate, I do not propose to consider the question as to whether the Lok Ayukta would have jurisdiction to further proceed with Ext.P1 complaint as such. That is obviously a matter which has to be considered by the Lok Ayukta. I am only concerned with the correctness or regularity or propriety of Exts.P2 and P4 orders in W.P.(C)No.1663/08 and Ext.P14 in W.P.(C)No.4891/08. W.P.(C).NO.1663/08 & Con.case :: 9 :: 14. A perusal of the operative portion of Ext.P2 would show that the order of restraint or injunction passed by the Lok Ayukta is directly relatable to the appointment or discipline or the conditions of service of Sri.J.P.James and consequently Ext.P2 order passed by the Lok Ayukta which has been declined to be varied as per Ext.P4 order is one which would be comprehended by the first part of Clause (d) of the second schedule to the Act. In that view of the matter, even if it is assumed for a moment that there are general allegations of maladministration in the complaint and therefore the Lok Ayukta might have jurisdiction to conduct an enquiry into such complaint, the power exercised by the Lok Ayukta in that regard shall not relate to the appointment, discipline or conditions of service of the public servant as such. In my view, Ext.P2 order restricting the extension of the tenure of Sri.James in the company and consequently preventing the company from re-engaging Sri.James even on a contract basis as such would be comprehended by the first part of Clause (d) of Second Schedule to the Act. W.P.(C).NO.1663/08 & Con.case :: 10 :: 15. I also take note of the specific case of the complainant in Ext.P1 that Sri.James is also a public servant within the meaning of the Act. If that be so, the orders Ext.P2 and Ext.P4 insofar as they relate to the appointment of Sri.James is clearly hit by the first part of Clause (d) of the second schedule to the Lok Ayukta Act. 16. Sri.Vijayamohanan, learned counsel for the petitioner then contends that the second respondent herein does not have a 'greivance' within the meaning of Section 2 (h) of the Act inasmuch as that he is not facing any undue hardship in consequence of Ext.P5 board resolution or the consequent decision to engage Sri.James on a contract basis. I find considerable force in this submission. But, as I have noted above, this is a matter that has to be considered by the Lok Ayukta, in the course of enquiry into Ext.P1. I do not think it necessary to express any opinion in that regard. 17. Insofar as the order impugned in W.P.(C) No.4891/08 is concerned, I do not detect any illegality or infirmity in the same. The company is a fully owned W.P.(C).NO.1663/08 & Con.case :: 11 :: Government undertaking and weighty reasons have been given by the company in having decided to re-engage Sri.James on contract basis. Going by Ext.P3 counter affidavit filed before the Lok Ayukta, it is clear that the company had, anticipating the retirement of Sri.James, advertised for the post in question, but was not able to find a suitable person. The highest decision making body of the company, the Board of Directors itself decided that it is in the best interest of the company to re-engage Sri.James, who has the richness of experience of about 25 years in the company, behind him. I do not find any illegality in the approval given by the Government to what can only be termed as a 'legitimate' request on the part of the Board of Directors of the company. 18. Since the jurisdiction is one invoked under Article 226 of the Constitution, I am also constrained to take note of the fact that the petitioner in W.P.(C) No.4891/08 has not been able to make out any genuine 'grievance' insofar as the re-engagement of Sri.James is concerned. He is not a rival aspirant for the post. He is W.P.(C).NO.1663/08 & Con.case :: 12 :: not a stake holder in the company. He has not been able to demonstrate as to how the company's interest would be detrimentally affected by Ext.P4 resolution. He has not been able to demonstrate as to why the resolution passed by the Board of Directors amounts to maladministration. His entire 'grievance' relates to the remission of the punishment which was originally imposed on Sri.James. Even if such remission is found to be beyond the normal exercise of powers by the Managing Director or by the Board of Directors, still there is nothing which prevents the company from seeking appointment of Sri.James on contract basis, taking note of his rich experience and his competence. In the ultimate analysis, it is for the Board of Directors of the company to take a decision, keeping in mind the best interests of the company. In my view, there is no infirmity in Ext.P14 order in W.P.(C)No.4891/08 passed by the Government. For all these reasons W.P.(C)No.1663/08 is allowed in part. Exts.P2 and P4 orders are set aside. But, it is made clear that this judgment will not, in any manner, W.P.(C).NO.1663/08 & Con.case :: 13 :: stand in the way of the Hon'ble Lok Ayukta proceeding with Ext.P1 complaint and obviously both sides are at liberty to raise their contentions as are available to them in Ext.P1. Consequently W.P.(C)No.4891/08 is dismissed. Sd/- (V.GIRI) JUDGE sk/ //true copy//