IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC FRIDAY, THE 9TH OCTOBER 2009 / 17TH ASWINA 1931 WP(C).No. 14694 of 2008(Y) -------------------------- PETITIONER(S): --------------- 1. BASIL.T.K., FORMERLY ASSISTANT MANAGER,KERALA TRANSPORT DEVELOPMENT FINANCE CORPROATION LIMITED, THIRUVANANTHAPURAM, RESIDING AT THAKKIRICKAL, CHELAD P.O., KALLAD, ERNAKULAM. 2. SHERITH A FORMERLY ASSISTANT MANAGER,KERALA TRANSPORT DEVELOPMENT FINANCE CORPROATION LIMITED, THIRUVANANTHAPURAM, RESIDING AT HOUSE NO. 38/99 MUNDATHUVAYAL, CHUNGAM, WEST HILL PO, KOZHIKODE. 3. JASMY S, FORMERLY ASSISTANT MANAGER,KERALA TRANSPORT DEVELOPMENT FINANCE CORPROATION LIMITED, THIRUVANANTHAPURAM, RESIDING AT AAJMEER HOUSE POOKADU, ANJUMOORTHY P.O.,MANGALAM,PALAKKAD. BY ADV. SRI.P.RAMAKRISHNAN RESPONDENT(S): --------------- 1. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT GOVERNMENT SECRETARIAT,THIRUVANANTHAPURAM 2. THE PRINCIPAL SECRETARY TO GOVERNMENT TRANSPORT DEPARTMENT, GOVERNMENT SECRETARIAT,THIRUVANANTHAPURAM. 3. KERALA TRANSPORT DEVELOPMENT FINANCE CORPORATION LIMITED, REPRESENTED BY ITS MANAGING DIRECTOR, TRANSPORT BHAVAN, FORT, THIRUVANANTHAPURAM 695 023. WPC NO.14694/08 -2- 4. THE MANAGING DIRECTOR KERALA TRANSPORT DEVELOPMENT FINANCE CORPORATION LIMITED, TRANSPORT BHAVAN, FORT,THIRUVANANTHAPURAM. ADV. SRI.KRB.KAIMAL, SENIOR ADVOCATE FOR R3 & R4 SRI.B.UNNIKRISHNA KAIMAL FOR R3 & R4 GOVERNMENT PLEADER SRI.P.NANDAKUMAR FOR R1 & 2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC NO.14694/08 APPENDIX PETITIONERS' EXHIBITS EXT.P1: TRUE COPY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE 3RD RESPONDENT. EXT.P2: TRUE COPY OF NOTIFICATION PUBLISHED BY THE 3RD RESPONDENT IN INDIAN EXPRESS DAILY OF 15/12/99. EXT.P3: TRUE COPY OF LETTER DT 7.8.2000 ISSUED BY THE 3RD RESPONDENT. EXT.P4: TRUE COPY OF ORDER OF APPOINTMENT DATED 7.12.2000 ISSUED TO THE 1ST PETITIONER. EXT.P5: TRUE COPY OF SERVICE RULES OF THE 3RD RESPONDENT ESTABLISHMENT. EXT.P6: TRUE COPY OF LETTER DTD 4.10.05 FROM THE 3RD RESPONDENT TO THE 2ND RESPONDENT. EXT.P7: TRUE COPY OF GO MS.13/2006 DTD.22.2.06. EXT.P8: TRUE COPY OF GO MS 14/2006 DATED 22.2.2006. EXT.P9: TRUE COPY OF GO MS 15/2006 DATED 22.2.2006. EXT.P10: TRUE COPY OF ORDER DATED 23.2.2006 ISSUED TO THE 1ST PETITIONER. EXT.P11: TRUE COPY OF ORDER DATED 23.2.2006 ISSUED TO THE 2ND PETITIONER. EXT.P12: TRUE COPY OF ORDER DATED 23.2.2006 ISSUED TO THE 3RD PETITIONER. EXT.P13: TRUE COPYOF ORDER DATED 12/2/2007 ISSUED BY THE 2ND RESPONDENT. EXT.P14: TRUE COPY OF COUNTER AFFIDAVIT DATED 13/3/2007 FILED BY RESPONDENTS 1 AND 2 IN WPC NO.5102/07. EXT.P15: TRUE COPY OF JUDGMENT DTD 9.4.07 IN WPC NO.5102/07. EXT.P16: TRUE COPY OF GO(MS) NO.36/07/TRAN DTD 10.9.07. EXT.P17: TRUE COPY OF GO(RT) NO.326/07/TRAN DATED 10.9.07 ISSUED IN RESPECT OF THE 1ST PETITIONER. WPC NO.14694/08 -2- EXT.P18: TREU COPY OF ORDER DT 12.9.07 ISSUED BY THE 4TH RESPONDENT TO THE 1ST PETITIONER. EXT.P19: TRUE COPY OF JUDGMENT DATED 7.11.07 IN WPC NO.27993/07. EXT.P20: TRUE COPY OF NOTICE DATE 3.1.08 ISSUED BY THE 1ST RESPONDENT. EXT.P21: TRUE COPY OF THE ARGUMENT NOTES DATED 15/1/2008 SUBMITTED BY THE 1ST PETITIONER. EXT.P22: TRUE COPY OF ORDER DATED 25/4/2008 ISSUED BY THE 1ST RESPONDENT. EXT.P23: TRUE COPY OF ADVERTISEMENT WHICH APPEARED IN MALAYALA MANORAMA DAILY DT 5.3.2008. EXT.P24: TRUE COPY OF NOTE PUT UP BY THE 4TH RESPONDENT IN RELATION TO THE SELECTION. EXT.P25: TRUE COPY OF PROCEEDINGS OF THE 4TH RESPONDENT DATED 16.11.2005. EXT.P37: TRUE COPY OF NOTIFICATION PUBLISHED IN MALAYALA MANORAMA DAILY DTD 10/11/2008 EXTS. OF R3 EXT.R3(a): TRUE COPY OF THE JUDGMENT OF THIS HON'BLE COURT IN WA NO.94/08 DTD.15.1.2008. //TRUE COPY// P.A. TO JUDGE Rp ANTONY DOMINIC, J. ================ W.P.(C) NO. 14694 OF 2008 (Y) ===================== Dated this the 9th day of October, 2009 J U D G M E N T Ext.P2 is a vacancy notification issued by the 3rd respondent on 15/12/99 inviting applications for the post of Assistant Manager on contract basis. It is stated that the petitioners 1 and 2 applied in response to Ext.P2 and were called for an interview. Ext.P3 is the call letter issued to the second petitioner. Accordingly, petitioners 1 and 2 were appointed as Assistant Managers and Ext.P4 is the order of appointment issued to the first petitioner. Similarly, after a process of selection as above, the third petitioner was also appointed as Junior Assistant. The appointments were on contract basis for a period of one year and were on consolidated pay. The period of appointment was extended from time to time. 2. While the petitioners were thus continuing in service, the 3rd respondent framed its Recruitment Rules as per Ext.P5 dated 18/2/2005. In terms of the provisions contained in Ext.P1 Memorandum and Articles of Association of the 3rd respondent, Ext.P5 Recruitment Rules were forwarded to the Government for WPC 14694/08 :2 : approval and approval was awaited. While so, by Ext.P6 dated 4/10/05, the 3rd respondent recommended to the 1st respondent to regularize the petitioners' services. Ext.P6 also mentions that the Board of Directors in the 78th meeting held on 30/8/05 vide Agenda No.1441 had resolved to absorb all the contract and daily wages personnel currently in the service of the company to its regular service and further to take up the matter with the Government for obtaining sanction for counting their previous service in the 3rd respondent. On this basis, the Government was requested to accord necessary sanction to regularize the contract and daily waged personnel, then working in the service of the company to its permanent service. 3. The recommendation was considered and on 22/2/2006, the Government issued Exts.P7, P8 and P9 orders. In Ext.P7, it is stated that the Government examined the matter in detail and was pleased to accord sanction for the creation of 143 posts in various categories with the scales of pay as shown in Annexure II to the said order. It is also stated that the staff pattern proposed by the Managing Director of the Company was also sanctioned. Thereafter, the Government ordered that once WPC 14694/08 :3 : the ongoing regularisation process is completed, the recruitment at the 3rd respondent will be entrusted to Kerala Public Service Commission and that the 143 posts sanctioned will include two posts of Assistant Manager, Junior Grade, created as per Government order dated 11/11/2005. By Ext.P8, the Government also accorded sanction to Ext.P5, the Service Rules framed by the 3rd respondent with the amendments proposed therein. Based on Ext.P7, Ext.P9 was also issued, according sanction for regularisation of 106 contract/daily wages employees working in the 3rd respondent and for their absorption into the regular service against the newly created posts, counting their previous service as per the decision of the Board of directors of the company by giving retrospective effect to the order of regularization from the dates of their joining the company, but without any monetary benefits. Based on Exts.P7 and P9, the 3rd respondent issued Exts.P10, P11 and P12 orders on 23/2/2006, regularizing the service of the petitioners 1 and 2 as Assistant Manager in the scale of pay of 7200-11400 and the third petitioner as Junior Assistant in the scale of pay of 4000-6090. 4. Almost one year thereafter, the Government issued WPC 14694/08 :4 : Ext.P13 order dated 12/2/2007 cancelling Ext.P9 and the reason for cancellation stated in the said order was that the appointments were not made through any competitive exams/interview by inviting applications and advertising the vacancies through dailies and that communal reservation was not followed while regularizing the appointments and that there was no representation of SC/ST communities among the ministerial staff. The petitioners challenged Ext.P13 order before this Court in WP(C) No.5102/07 in which the 1st respondent filed Ext.P14 counter. In para 3 of the counter affidavit, it has been stated that “the petitioners were appointed against sanctioned posts after a due selection process. Communal reservation including SC/ST reservation was followed in the selection procedure”. The writ petition was heard and by Ext.P15 judgment rendered on 9th of April, 2007, Ext.P9 Government order was quashed on the ground that the said order was passed without issuing notice or hearing the petitioners. It is to be noticed that in the said judgment, the learned Judge had taken note of the submission made on behalf of the petitioners that even the stand of the respondents in Ext.P14 counter affidavit was that the petitioners have been WPC 14694/08 :5 : appointed against sanctioned posts, after a due process and in confirmity with the principles of communal rotation. 5. In pursuance to the direction in Ext.P15 judgment that the respondents will be at liberty to initiate proceedings afresh, fresh notice was issued, petitioners were heard and finally, Ext.P16 order was issued by the 1st respondent on 10/9/07. In so far as the petitioners herein are concerned, para 9(v) of the order deals with their case and this paragraph says that posts were not available at the time of initial appointment of the petitioners and that, since service rules were in force at that time, the initial appointment of the petitioners was irregular and therefore their regularisation was also illegal. Once Ext.P16 order was issued, on the same day, that is 10/9/2007 itself, the 1st respondent issued Ext.P17 directing the 3rd respondent to terminate the services of the employees like the petitioners. In pursuance to Exts.P16 and P17 orders, on 12/9/07, 3rd respondent terminated the service of the petitioners and Ext.P18 is the order issued to the 1st petitioner. 6. Ext.P18 and other similar orders were again challenged before this Court in WP(C) No.27993/07. Usha K. v. State of WPC 14694/08 :6 : Kerala and others (ILR 2004(7) Kerala 862) is the judgment rendered on 7/11/2007 disposing of that writ petition and in para 6 of the judgment, it is held thus: 6. I have dealt with the case of persons, who were engaged on contract/daily wages basis in the Corporation, who were subsequently absorbed into regular service, in WP(C) No.27781/07 and connected cases. The Government had revoked its earlier order of regularisation. The reasons given by the Government in support of its stand has been considered in the said judgment. In my view, the petitioners stand on a different footing. The petitioners were appointed on a contractual basis, but after undergoing a selection process. No doubt, the term of appointment of the petitioners was limited to one year in the first instance. But the petitioners had continued in service even after the expiry of one year and it is thereafter that the Government by order dated 22.2.2006 directed the petitioners to be regularized in service. In my view, the petitioner's appointment cannot be considered as illegal and therefore, the order passed by the Government on 22.2.2006, according sanction for the petitioners being absorbed into regular service, cannot be considered as per se void. This seems to be a crucial distinction between the petitioners on the one hand and the other persons, who were engaged on contract/daily wages basis, on the other. I also take note of Ext.P17 counter affidavit filed by the Corporation in the earlier writ petition, wherein it was mentioned that the petitioners were appointed after due selection process and that the principles of communal reservation were observed in the original appointment of the petitioners. (emphasis supplied) A reading of this judgment shows that the learned Judge had dealt with the case of the remaining employees and held that the case WPC 14694/08 :7 : of the petitioners herein stand on a different footing in as much as they were appointed after undergoing a selection process and observing principles of communal reservation. The Learned Judge also held that the appointment of the petitioners cannot be considered as illegal. Further, the learned Judge has also taken note of the stand of the Government as reflected in Ext.P14 counter affidavit referred to above. However, in Ext.P19 judgment, the learned Judge set aside Ext.P16 order on the ground that the reason stated in para 9(v) of the said order were not relied on by the Government either in Ext.P13 or in the notice issued to the petitioners. Accordingly, the matter was remitted back to the 1st respondent for initiating proceedings afresh. This judgment was confirmed by the Division Bench, by dismissing WA No.94/2008. 7. In pursuance to the said judgment, Ext.P20 notice was issued to the petitioners calling them for a hearing. Petitioners submitted their replies and Ext.P21 is the reply submitted by the 1st petitioner. Thereafter, Ext.P22 order was issued by the 1st respondent, para 5 and 6 of the order reads as under: 5) Accordingly, they were heard by the WPC 14694/08 :8 : Transport Secretary to the State Government on 16/1/2008. The matter of regularisation or otherwise, of the termination of those six persons' service in the K.T.D.F.C was examined in detail. I was found that no deviation from the decision taken earlier in the Government order read as the 3rd paper above was necessary, the request for regularisation in service of K.T.D.F.C, put forth by S/Shri. Basil T.K, Mohanan P.K, Sherith A, Radhakrishnan I.S, Smt.Sheeja C.V, and Smt.Jasmy S is rejected. 6) This order is issued in compliance with the direction of the Hon'ble High Court in the judgment read as 4th paper above. Immediately thereafter, the 3rd respondent issued Ext.P23 notification inviting applications for the post of Assistant Manager and it was in these circumstances this writ petition is filed challenging Exts.P22 and P23 and for directing the respondents to reinstate the petitioners in service with consequential benefits w.e.f. 12/9/07. 8. The main contentions urged by the learned counsel for the petitioners is that Ext.P22 is a non speaking order and that Ext.P22 has been issued by the Additional Chief Secretary although the petitioners were heard by the Transport Secretary. It is also contended that the reasons for termination viz., that posts were not in existence in 2000 and that Service Rules were not framed then, are erroneous and unsustainable. WPC 14694/08 :9 : 9. The learned Government Pleader submitted that the statement in Ext.P14 counter affidavit that the appointment of the petitioners were against sanctioned posts was a factual mistake. It is stated that since the posts were not in existence at the time of initial engagement of the petitioners, Ext.P9 order according sanction for the regularisation of the petitioners was an erroneous order and therefore by Ext.P23, the Government was only correcting a mistake it had committed. In this context, the learned Government Pleader placed considerable reliance on the findings in para 29 of the judgment in Usha. K v. State of Kerala and others (ILR 2007(4) Kerala 862). Learned Government Pleader also placed reliance on Clause 61 of Ext.P1, the Memorandum and Articles of Association of the third respondent and contended that the Government had the power to issue directions and even to rescind the resolutions adopted by the 3rd respondent company. 10. On behalf of the 3rd respondent, learned counsel adopted the submissions made by the learned Government Pleader and sought to justify Ext.P22 order. He also invited my attention to Ext.R3(a), judgment in WA No.94/08 dismissing the appeal filed against the judgment of the learned Single Judge in WPC 14694/08 :10 : Usha's case referred to above. 11. I have considered the submissions made by both sides. 12. The first contention raised by the learned counsel for the petitioners is that Ext.P22 is a non speaking order. A reading of Ext.P22 shows that in para 5, all that is stated by the 1st respondent is that no deviation from the decision taken in the earlier Government order was necessary. However, why such a conclusion has been arrived at is not seen mentioned in this order. Therefore, no reason whatsoever has been given in the order to justify the conclusion as to why deviation was not called for. Hence, the counsel for the petitioners is perfectly justified in the contention that Ext.P22 order is vitiated for it does not contain any reasons to support the conclusion. 13. Ordinary, once an order is held bad for not containing reasons in support thereof, the matter needs to be remitted back. However, in this case, both sides addressed arguments on the merits of the respective contentions insisting on a decision on merits, and therefore, I do not think I should remit the case for reconsideration. This is all the more so, for the reason that, this is the third round of litigation on the same issue. WPC 14694/08 :11 : 14. The other contention raised by the learned counsel for the petitioner is that before issuing Ext.P22, Ext.P20 notice was issued, Ext.P21 and other replies were filed and they were heard by the Transport Secretary, and that, Ext.P22 order is issued by the Additional Chief Secretary to Government, who did not hear them. In other words, what is contended is that the order has been issued by an officer, who did not hear the petitioners and therefore the order is violative of the principles of natural justice and illegal. However, it is noticed that recently a Full Bench of this court in Sudheer v. Susheela (2009(4) KLT 29) has held that decisions are taken by the Government in accordance with the Rules of Business and communicated in the name of Governor and therefore the principle that the officer who heard the parties should decide the matter, does not apply to Government decisions. In view of this judgment rendered by the Full Bench, the contention advanced by the learned counsel for the petitioners that Ext.P22 is violative of the principles of natural justice, is liable to be rejected and I do so. 15. As already noticed, in Ext.P22, what is stated by the 1st respondent is that a deviation from the decision taken in Ext.P16 WPC 14694/08 :12 : order is not called for. Para 9(v) of Ext.P16, which is now reiterated in Ext.P22, reads as follows: (v) In so far as contract appointments of the 6 persons were concerned, such appointments were made for one year each. In case of these employees appointed on contract basis, there is specific stipulation that they have no right for absorption into the regular service of the Corporation. Though the six contract appointments were made after inviting applications, the appointments were only for one year which was extended by separate orders for one year each. There was no assurance of any continued employment either on contract basis or on regular basis, and in the agreement it was clearly agreed by the employee that he/she will not make any claim over the post as is appointed purely on contract basis and his/her service is liable to be terminated at any time. In the case of these persons, though they were engaged after a procedure, the said posts against which they were subsequently regularized were not in existence at the time they were engaged and in addition there were no service rules in KTDFC at that time. In this paragraph, though the 1st respondent has accepted the fact that it was after a selection procedure that the petitioners were appointed on contract basis, the subsequent order of regularization was held to be erroneous mainly for two reasons. First reason stated is that the post against which the petitioners were subsequently regularized were not in existence at the time when they were initially engaged. The second reason is that, at WPC 14694/08 :13 : that time, there were no Recruitment Rules in the 3rd respondent. Therefore, the validity of this order will depend upon the validity of these two reasons. 16. The petitioners mainly rely on Ext.P14, the counter affidavit filed by the 1st respondent in WP(C) No.5102/07 where in para, 3 it is stated that the petitioners were appointed against sanctioned posts after due process of selection, in which the principles of communal reservation was also followed. This statement in the counter affidavit has been taken note of in Ext.P15 judgment. In Usha's case (supra), a copy of the judgment is Ext.P19, this assertion in the counter affidavit has been relied on by this Court. In view of these judgments and without even making any attempt to get the judgments corrected, the respondents cannot ask this Court to brush aside those judgments on the ground that facts mentioned therein are incorrect. Even otherwise, even if it is accepted that posts were not available at the time of their initial appointment, posts were admittedly created by Ext.P7 order dated 22/2/2006. It was thereafter that the petitioners were ordered to be regularized by Ext.P9 order dated 22.2.2006 issued by the 1st respondent. It is pointed out WPC 14694/08 :14 : that at the time when they were ordered to be regularized, petitioners were working on contract basis and posts were available. Therefore, even if the submission of the learned Government Pleader that the statement in Ext.P14 counter affidavit that sanctioned posts were available at the time of the petitioners' initial appointment is taken as a factually erroneous statement, at the time when the petitioners were ordered to be regularized by Ext.P9 and when they were actually regularized by Exts.P10, P11 and P12 orders issued in 2006, posts were available. If so, the reason stated in Ext.P22 that posts were not available in 2000, is absolutely irrelevant, unsustainable and is not one worthy of acceptance. 17. The other reason stated in Ext.P22 is that Service Rules were not in force in 2000 when the petitioners were engaged in service. True, it was by Ext.P5 dated 18/2/2005, Recruitment Rules were framed, and was approved by the Government only as per Ext.P8 dated 22/2/2006. Here again, as I have already held, at the time when the petitioners were regularized, Service Rules were already framed. Even otherwise, it was with the full knowledge that Service Rules were not in force in 2000 that the WPC 14694/08 :15 : Government directed regularisation of the petitioners and therefore the fact that Service Rules were not framed is immaterial. 18. Learned Counsel for the petitioners made reference to Ext.P25 order dated 16/11/2005, where two persons who were then working as Senior Assistants were ordered to be promoted as Assistant Managers. If as stated in the case of the petitioners, Service Rules were framed only in 2006, the same defect exists in the case of the promotions ordered by Ext.P25 as well. Respondents have no such case, and if that be so, they cannot take a contrary stand in the case of the petitioners alone. 19. I also take note of the averment in para 5 of the reply affidavit filed by the petitioners that the earlier Managing Director of the Corporation himself was appointed as an Assistant Manager long before 2006, when the Recruitment Rules were framed. That person was thereafter promoted upto the post of Managing Director, which could not have been done if the reasons assigned in the case of the petitioners were relied on against that appointment as well. Therefore, these reasons are put forward by the respondents only to justify the erroneous stand which is now WPC 14694/08 :16 : adopted. 20. The learned Government Pleader argued that the direction contained in Ext.P7 was that the posts should be left within the purview of the PSC. According to him, therefore, the direction to regularise the contract appointees was contradictory and was a mistake. A reading of Ext.P7 Government order dated 22/2/2006 itself show that what is ordered therein is that once the ongoing regularisation process is completed, further recruitments at the 3rd respondent will be entrusted to PSC. Therefore, it is evident that the question of entrusting recruitment to PSC ordered by the Government was to take effect only after the process of regularisation is completed and can apply only in relation to subsequent appointments. Therefore, this contention is only to be rejected. 21. For the aforesaid reasons, I am not prepared to accept the contention of the learned Government Pleader that in ordering regularisation, they had committed a mistake warranting its correction. If so, the principles laid down by this Court in para 29 of the judgment in Usha. K v. State of Kerala and others (ILR 2007(4) Kerala 862) are irrelevant and inapplicable. WPC 14694/08 :17 : 22. For these reasons, I cannot sustain Ext.P22 and therefore Ext.P22 will stand quashed. Respondents are directed to reinstate the petitioners in service immediately with retrospective effect from 12/9/07. In