IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN WEDNESDAY, THE 7TH DECEMBER 2011 / 16TH AGRAHAYANA 1933 WP(C).No. 29150 of 2006(T) ------------------------------------- PETITIONER(S): ------------------- DR.Y. SHAHUL HAMEED, FORMER MANAGING DIRECTOR, KERALA STATE PALMYRA PRODUCTS DEVELOPMENT AND WORKERS' WELFARE CORPORATION LTD., (KELPAM), RESIDING AT `JAYASREE', TC.4/1184/1, KURUVANKONAM, KAWDIYAR P.O., THIRUVANANTHAPURAM-3. BY ADV. SRI.ELVIN PETER P.J. SRI.S.RAMESH SRI.NAVEEN.T SRI.C.X.ANTONY BENEDICT SMT.POOJA SURENDRAN RESPONDENT(S): ------------------------- THE STATE OF KERALA, REPRESENTED BY ITS PRINCIPAL SECRETARY, INDUSTRIES DEPARTMENT SECRETARIAT, THIRUVANANTHAPURAM. *ADDL. R2 IMPLEADED. 2. KERALA STATE PALMYRAH PRODUCTS DEVELOPMENT AND WORKERS' WELFARE CORPORATION LTD., (KELPALM), REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR, KELPALM HOUSE, PANCHAPPURA LANE, NANDAVANAM, THIRUVANANTHAPURAM 695 033. *ADDL. R2 IS IMPLEADED AS PER ORDER DTD. 7.12.2011 IN IA. 1233/2007. R1 BY GOVT. PLEADER SRI.NOBLE MATHEW R2 BY ADVS. SRI.B.J.YESUDAS, SRI.K.JITHIN, SRI.P.K.VIJAYAMOHANAN . THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 07/12/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.29150/2006 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE ORDER DTD. 30.3.1992 ISSUED BY THE GOVT. APPOINTING THE PETITIONER AS MANAGING DIRECTOR OF KERALA ARTISANS DEVELOPMENT CORPN. P2:- COPY OF THE ORDER DTD. 11.8.1995 ISSUED BY THE GOVERNMENT. P3:- COPY OF THE ORDER DTD. 18.7.96 ISSUED TO THE PETITIONER BY THE GOVT. P4:- COPY OF THE REPORT OF THE VIGILANCE DEPARTMENT IN VIGILANCE CASE NO.3/1996. P5:- COPY OF THE ORDER DTD. 27.10.2003 ISSUED BY THE VIGILANCE AND ENQUIRY COMMISSIONER. P6:- COPY OF THE ORDER DTD. 27.4.1998 ISSUED BY THE GOVT. REINSTATING THE PETITINER IN SERVICE. P7:- COPY OF THE ORDER DTD. 6.5.98 ISSUED BY THE GOVERNMENT. P8:- COPY OF THE ORDER DTD. 11.11.199 ISSUED BY THE GOVERNMENT. P9:- COPY OF THE REPRESENTATION DT.D 2.5.2001 SUBMITTED BY THE PETITIONER BEFORE THE GOVERNMENT. P10:- COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER BEFORE THE HONOURABLE MINISTER FOR INDUSTRIES. P11:- COPY OF THE ORDER DTD. 19.9.2001 OF THE GOVERNMENT. P12:- COPY OF THE ORDER DTD. 11.6.2003 OF THE GOVERNMENT. P13:- COPY OF THE ORDER DTD. 0.5.1998 BY THE GOVERNMENT. P14:- COPY OF THE ORDER DTD. 29.5.2006 OF THE GOVERNMENT. P15:- COPY OF THE ORDER DTD. 31.5.2006 ISSUED BY THE GOVERNMENT. R2(a):- COPY OF THE REPRESENTATION DT.D 24.2.2006 SUBMITTED BY THE PETITIONER BEFORE THE HONOURABLE FOR INDUSTRIES. R2(b):- COPY OF THE NOTE SUBMITTED BY THE PETITIONER DTD. 28.2.06. R2(c):- COPY OF THE STATEMENT SHOWING THE DETAILS OF ADVANCE AMOUNT DRAWN BY THE PETITIONER tss W.P.(C) NO.29150/2006 R2(d):- COPY OF THE COMMUNICATION NO.KELPALM /VIII-14/07/659 DTD. 17.2.2007 TO THE GOVERNMENT. R2(e):- COPY OF THE COMMUNICATION NO.TR.NO.8/R-2/TVM/2006-07 DTD. 16.3.2007 OF THE TAX RECOVERY OFFICER. RESPONDENT'S EXHIBITS NIL:- TRUE COPY P.S. TO JUDGE tss S.SIRI JAGAN, J. ================== W.P.(C).No. 29150 of 2006 ================== Dated this the 7 th day of December, 2011 J U D G M E N T The petitioner entered service of the Steel Industries Kerala Limited, a Government company, as a Liaison Officer. Subsequently, he was appointed as the Public Relations Officer in the same company. In 1992 he was appointed as the Manging Director of the Kerala Artisans Development Corporation, by Ext.P1 order. While the petitioner was working as the Managing Director of the Kerala Artisans Development Corporation, he was suspended from service by Ext.P3 order. The same was apparently on the basis of a vigilance enquiry pending. After the enquiry, the Vigilance and Anti Corruption Bureau found that the allegations against the petitioner were on the basis of a mistake of fact and recommended to drop further action in that regard. Based on the same, by Ext.P6 order, the petitioner was ordered to be reinstated in service. Accordingly, by Ext.P7 order, he was reinstated as the Public Relations Officer of the Steel Industries Kerala Ltd., since, while under suspension, he was ordered to be reverted to his parent Department. But the petitioner did not join duty pursuant to Ext.P7 order. (Although the petitioner challenged his reinstatement in Steel Industries Kerala Ltd., instead of as Managing Director of Kerala Artisans Development Corporation, in a writ petition, that challenge w.p.c.29150/06 - : 2 :- was repelled by this Court.) While so, by Ext.P8 order on 11.11.1999, the petitioner was appointed as the Managing Director of the Malabar Co-operative Textiles Limited. The petitioner filed Exts.P9 and P10 representations for regularisation of his suspension period and payment of salary and other benefits due to him for the said period. Subsequently, by Ext.P11 order dated 19.9.2001, the petitioner was appointed as the Managing Director of the Kerala Construction Components Limited, another Government company. Still further, by Ext.P12 order, the petitioner was appointed as the Managing Director of the KELPAM. The petitioner continued as such till, by Ext.P14 dated 29.5.2006, he was relieved from service on 31.5.2006. On 15.1.2007, the petitioner was also served with Ext.P16 notice to show cause why an amount of ` 4,27,495/-, the details of which are enumerated therein, should not be recovered from him. It is under the above circumstances, the petitioner has filed this writ petition seeking the following reliefs: “(a) issue a writ of mandamus or other appropriate writ, order or direction directing the respondent to regularise the period of suspension of the petitioner from 18.7.1996 to 11.11.1999 under Rule 56(b)(3) of Part I of the K.S.R. and further disburse to the petitioner the full pay and allowances during the period of suspension. (b) issue a writ of certiorari or other appropriate writ, order or direction calling for the records leading to Ext.P14 and quashing the same. (c) declare that the petitioner is entitled to continue in service till he completes the age of 60 years. w.p.c.29150/06 - : 3 :- (d) issue a writ of mandamus or other appropriate writ, order or direction directing the respondent to reinstate the petitioner as Managing Director of KELPAM forthwith and allow the petitioner to continue in service till he completes the age of 60 years. (e) issue a writ of mandamus or other appropriate writ, order or direction directing the respondent to reinstate the petitioner as Managing Director of KELPAM with effect from 29.5.2006 and pay all consequential benefits and allow the petitioner to continue in service till he completes the age of 60 years.” 2. The petitioner raises three contentions. The first is that since the suspension was not followed by a disciplinary action and punishment, the petitioner is entitled to have the suspension period regularised as duty and all salary and other benefits paid to him. Regarding Ext.P4, whereby the petitioner has been removed from the post of Managing Director of the KELPAM, he would submit that the reason for removal from the service is that he completed 58 years of age. According to him, neither the Articles of Association of the company nor any order applicable to the company stipulates that the retirement age of the Managing Director of the company is 58 years. He would point out that under the provisions of the Companies Act, a Managing Director can continue for a period of five years. By Ext.P13 relating to the Central Public Sector Enterprises, the Government of India has prescribed the age of retirement of board level appointees in Central Public Sector Enterprises as 60 years and, therefore, the petitioner was entitled to continue either for five years or till he attains 60 years of age, whichever is earlier, as the Managing Director of the w.p.c.29150/06 - : 4 :- KELPAM is the contention raised. The petitioner would contend that the only reason mentioned in Ext.P14 is that he had completed the age of 58 years, which is not a reason, on which, a Managing Director of a Government company can be relieved from service. He contends that that is an arbitrary action violating the fundamental rights of the petitioner under Article 14 of the Constitution of India and, therefore, this Court should interfere with the same in exercise of powers under Article 226 of the Constitution of India. The petitioner submits that the petitioner is not liable for the amounts sought to be recovered as per Ext.P16. Therefore, Ext.P16 is also liable to be quashed is the contention raised. 3. A counter affidavit has been filed by the 1 st respondent taking the stand that the Governor is competent to remove the Managing Director of the company under Articles 21 and 22 of the Articles of Association of the company. They would contend that the guidelines issued by the Central Government in respect of the Central Public Sector Enterprises have not been adopted by the State Government and, therefore, Ext.P13 guidelines are not applicable to the Government companies under the Government of Kerala. They would also raise a contention that the petitioner's service has not been satisfactory. They raise several allegations against the petitioner in the counter affidavit. Therefore, according to them, the petitioner was not w.p.c.29150/06 - : 5 :- a fit person to continue as the Managing Director of the company and, therefore, the Governor has exercised powers under the proviso to Article 22 of the Articles of Association of the company, is the contention raised. 4. The petitioner has filed a reply affidavit seeking to controvert the allegations in the counter affidavit. 5. I have considered the rival contentions in detail. 6. As far as the regularisation of the period of suspension of the petitioner is concerned, admittedly no disciplinary action followed pursuant to the suspension till the petitioner was relieved from service. As such, it must be assumed that the 1 st respondent decided to drop disciplinary action against the petitioner. Since the petitioner is no longer in service, no disciplinary action can be taken now also. Consequently, the petitioner is entitled to have the suspension period regularised as duty and paid salary for the period during which he was kept out of service on suspension. But in the counter affidavit it has been categorically stated that pursuant to the reinstatement as Public Relations Officer in the Steel Industries Kerala Limited, by Ext.P7, the petitioner did not join duty and he joined duty only as the Managing Director of the Malabar Co-operative Textiles Limited pursuant to Ext.P8. Therefore, the petitioner is not entitled to any salary or other allowances for the period from the date of Ext.P7 is the contention w.p.c.29150/06 - : 6 :- raised. I agree with the said contention of the 1 st respondent. The petitioner is entitled to salary and allowances only for the period from 18.7.1996, ie., the date of Ext.P3, till 6.5.1998, which is the date of Ext.P7. It is declared so. 7. But it is a different question when it comes to Ext.P14. The post of Managing Director of a Government company is a very important post as the executive head of that company. The Government should have sufficient powers to replace the Managing Director without assigning any reasons, if the Government is of opinion that the continuance of the Managing Director is not in the best interest of the company, even if he is not found guilty of any misconducts whatsoever. In fact, admittedly, there is a provision in Article 22 of the Articles of Association of the company that notwithstanding anything contained in the Articles of Association, the Governor may at any time remove or dismiss any Managing Director from the office of the Managing Director and appoint another person in his place. Of course, the learned counsel for the petitioner would submit that in Ext.P14 it is not stated that the Governor has decided to remove the petitioner from the post of Managing Director in exercise of powers under the proviso to Article 22. Completion of 58 years for relieving the petitioner from service is referred to therein. I do not think that simply because Ext.P14 says that the petitioner has w.p.c.29150/06 - : 7 :- completed the age of 58 years and in that circumstance, the Government has relieved the petitioner from service does not make it any the less an order under the proviso to Article 22 of the Articles of Association. I am satisfied that Ext.P14 has been passed in exercise of powers under the proviso to Article 22 of the Articles of Association of the company. As such, I am not inclined to accept the contention that the relieving of the petitioner from the post of Managing Director of the company is an arbitrary exercise of power by the Government. In the above circumstances, I am not inclined to interfere with Ext.P14 order of the Governor. As far as the challenge against Ext.P16 is concerned, the petitioner has not given any reasons in the writ petition as to why the amounts stated in Ext.P16 are not due from the petitioner. Even otherwise, Ext.P16 is only a show cause notice. Therefore, I am not inclined to interfere with Ext.P16. It is for the petitioner to take up the matter appropriately as and when orders are passed in respect thereof. In the above circumstances, this writ petition is disposed of with a direction to the 1 st respondent to regularise the suspension period of the petitioner for the period from 18.7.1996 to 6.5.1998 as duty and to pay to the petitioner all service benefits in respect of that period, which are due to the petitioner, after adjusting subsistence allowance, if any, paid to the petitioner for the period of suspension. The other prayers in the writ petition are rejected. If any retirement w.p.c.29150/06 - : 8 :- benefits are due to the petitioner for the period of service, which have not been disbursed to the petitioner, the same shall be disbursed to the petitioner, as expeditiously as possible, at any rate, within two months from the date of receipt of a certified copy of this judgment. Interlocutory applications stand closed. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge