Civil Writ Petition No. 16930 of 2006 [1] IN THE HIGH COURT OF PUNAJB AND HARYANA AT CHANDIGARH Date of Decision: January 09, 2008 Raj Narayan Yadav ............ Petitioner versus State of Haryana and others ............. Respondents CORAM HON'BLE MR.JUSTICE HEMANT GUPTA. HON'BLE MR.JUSTICE MOHINDER PAL 1.Whether Reporters of local papers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3.Whether the judgment should be reported in the Digest ? -.- Present: Shri Balram Gupta, Senior Advocate with Shri Namit Kumar, Advocate for the petitioner Shri S.K. Hooda, Senior DAG Haryana for respondent No.1 Shri S.C. Sibal, Senior Advocate with Shri V.S. Rana, Advocate for respondents No.2 and 3 Shri P.K. Mutneja, Advocate for respondent No.4 Shri Rakesh Gupta, Advocate for respondent No. 5 HEMANT GUPTA, J. The petitioner, an Accountant in the Shahabad Cooperative Sugar Mills Limited, Shahabad (hereinafter to be referred as “the Mill”), has invoked the jurisdiction of this Court under Article 226/ 227 of the Civil Writ Petition No. 16930 of 2006 [2] Constitution of India claiming a writ of mandamus directing respondents No.1 to 3 not to promote respondent No. 4 to the post of Chief Accounts Officer of the Mill in pursuance of the meeting of Board of Directors of the Mill to be held on 28.10.2006 and also a writ in the nature of certiorari setting aside the resolution / orders Annexures P-2, P-3 and P-6 to P-8 whereby the said respondent was adjusted against the post of Security Officer in the Mill. It is the case of the petitioner that he was working as Accountant in the Mill and that since January, 1994, he has been assigned the duties of Deputy Chief Accounts Officer as well. Respondent No.4 Shri R.P. Godara was the Chief Accounts Officer in the Bhuna Cooperative Sugar Mills Limited, Bhuna. The said respondent joined the Mill as Chief Accounts Officer for a period of two years on 3.10.2002 on deputation but the said respondent was resolved to be absorbed as Chief Accounts Officers subject to the decision of CWP No. 19569 of 2003. The said writ petition was filed by the Mill against the order passed by the Special Secretary to Government Haryana, Cooperation Department Haryana on 29.10.2003 whereby one Shri S.C. Sharma, Chief Accounts Officer in the respondent Mill, was ordered to be reinstated in service while setting aside his termination. It is admitted fact that though the writ petition filed by the respondent Mill was dismissed on 12.09.2005 but Hon'ble Supreme Court in judgment reported as The Shahabad Cooperative Sugar Mills Ltd. v. Special Secretary to Govt. of Haryana Corp. & Ors., 2006 (12) SCC 404, has set aside the order passed by this Court in the writ petition holding that the State of Haryana was not competent to exercise the revisional jurisdiction in the facts of the case i.e., the order passed on 29.10.2003 Civil Writ Petition No. 16930 of 2006 [3] could not have been passed in revisional jurisdiction. Thus, the order of reinstatement of Shri S.C. Sharma was set aside. However, the matter was remanded back to the Registrar of Co-operative Societies in respect of the question whether Shri S.C. Sharma was gainfully employed during the period of his termination and his reinstatement. It is the case of the petitioner that Shri R.P. Godara cannot be appointed as Chief Accounts Officer in the Mill. It is contended that respondent No.4 has been taken on deputation on the direction of the State Government without any decision of the Board of Directors of the respondent Mill. Therefore, the deputation of respondent No.4 itself is vitiated. The State of Haryana in exercise of revisional jurisdiction has passed an order of reinstatement of Shri S.C. Sharma on 29.10.2003 but still the Board of Directors of the respondent Mll considered the request of respondent No.4 Shri R.P. Godara for absorption on permanent basis against the vacant post of Chief Accounts Officer on 3.11.2003. It is argued that on the said date the post of Chief Accounts Officer cannot not be said to be vacant as by virtue of the order passed, Shri S.C. Sharma is deemed to be occupying the post of Chief Accounts Officer. The Board of Directors of the respondent Mill on 30.09.2005 resolved to adjust Shri R.P. Godara, respondent No.4, against the post of Security Officer though Shri Godara is not eligible and qualified to be adjusted against the post of Security Officer and that too without any advertisement or public notice and that Shri R.P. Godara cannot be appointed as Chief Accounts Officer of the Mill by absorption in its resolution dated 28.10.2006. The Board of Directors of the respondent Mill in its meeting held on 28.10.2006 has resolved to fill up the post of Chief Civil Writ Petition No. 16930 of 2006 [4] Accounts Officer subsequent to the superannuation of Shri S.C. Sharma and resolved that earlier resolution of the Board dated 30.09.2005 be implemented and Shri R.P. Godara be posted as Chief Accounts Officer according to condition No.3 of resolution of the Board of Directors meeting held on 30.09.2005. The said resolution was passed for the reason that one of the terms and conditions of adjustment of Shri R.P. Godara against the post of Security Officer was that as and when equivalent post will become vacant, he will be posted against the post of Chief Accounts Officer. It is alleged that under Service Rules for employees of the Cooperative Sugar Mills in the State of Haryana, the method of recruitment to fill up the post of Chief Accounts Officer or Security Officer is either by way of promotion, deputation or by direct recruitment. There is no provision for appointment by absorption or by transfer. Therefore, absorption of respondent No.4 is in contravention of the statutory rules. Learned counsel for the respondent Mill and that of respondent No.4 have raised a preliminary objection that the writ petition against the Co-operative Society is not maintainable which is not a State within the meaning of Article 12 of the Constitution of India. The learned counsel also supported the action of the Mill by submitting that absorption has been made in exercise of powers of relaxation available with the management under Rule 48 of the aforesaid Rules. Such resolution was passed by the Board of Directors on 03.11.2003. Subsequently, respondent No.4 was resolved to be absorbed as Security Officer on 30.09.2005. The said decision of the Board of Directors was approved by the Managing Director, Haryana State Federation of Cooperative Sugar Mills Limited exercising the power of Registrar, Cooperative Societies. Therefore, the absorption of Shri Civil Writ Petition No. 16930 of 2006 [5] R.P. Godara against the post of Security Officer would be deemed to be in terms of Rule 48 of the Rules. It is also argued that the decision taken by the Board of Directors to appoint Shri R.P. Godara against the post of Chief Accounts Officer on 03.11.2003 and against the post of Security Officer on 30.09.2005 are being sought to be disputed by the petitioner after gross delay and latches i.e., by way of writ petition filed in October, 2006. Still further, it is argued that the claim of Shri R.P. Godara for absorption as Chief Accounts Officer was proposed to be considered on 28.10.2006 whereas the writ petition was filed even before the decision could be taken by the competent authority in respect of absorption of Shri R.P. Godara against the post of Chief Accounts Officer. It is, thus, argued that the writ petition challenging the absorption of Shri R.P. Godara against the post of Chief Accounts Officer is pre mature. We have heard learned counsel for the parties at considerable length. Firstly, we shall discuss the preliminary objection raised by learned counsel for the respondents that the writ petition is not maintainable. Learned counsel for the petitioner referred to a judgment of this Court reported as Pant Raj Sachdev v. The Indian Red Cross Society and others, 1986 (1) Services Law Reporter 675 wherein a Single Bench of this Court has held that the Red Cross Society may not be a State within the meaning of Article 12 of the Constitution but a writ petition on the ground of infraction of service rules or in violation of the rules of natural justice can be maintainable against the Society. The said judgment was affirmed by a Division Bench of this court reported as The District Red Cross Society, Sirsa v. Radha Kishan Rajpal and another, 2005 (1) Services Law Reporter 781. Civil Writ Petition No. 16930 of 2006 [6] In Miss Ravneet Kaur vs. The Christian Medical College, Ludhiana, 1997 (4) Services Law Reporter 221, a Five Judges Bench of this Court has held that the writ petition is maintainable against unaided Private Medical College affiliated to University. Specific reliance was placed on Para No. 50 and the conclusion drawn in Para No. 59, which read as under:- “ 50. The above observations clearly show that the issue of 'prerogative writs' is not limited to the authorities having a duty to act judicially. It can issue when there is an error of law or a failure to act fairly towards the person who is adversely affected by the order. Equally, a writ of certiorari can issue when there is violation of the principles of natural justice. 59. In view of the above, we hold that:- (i) to (ii) xx xx xx xx xx (iii)The power under Article 226 of the Constitution is not confined to the enforcement of fundamental rights like the power under Article 32. Still further, the High Courts can issue writs, orders or directions even to any person or authority discharging a public duty for enforcement of the fundamental rights or for any other purpose. (iv)The words “ any person or authority” used in Article 226 do not mean only State as defined in Article 12 or statutory authorities. These cover any person or body performing a public duty. (v) To (vi) xx xx xx xx” Apart form the said judgment, it may be noticed that the Registrar Co-operative Societies, the authority created under the Haryana Co-operative Societies Act, 1984, controls the functioning of the respondent Mill. The rules applicable to the respondent Mill are approved by the Civil Writ Petition No. 16930 of 2006 [7] Registrar Co-operative Societies and, in fact, the relaxation under the Rules, as per arguments raised by learned counsel for the respondents, is also to be made by the Registrar. Therefore, the activities of the respondent Mill are controlled, regulated and supervised by the authority under the Act which will, thus, make the action or inaction of such authority amenable to writ petition. In view of the above, we do not find any substance in the argument raised by learned counsel for the respondent that writ petition against the respondent Mill is not maintainable. Before adverting to respective contentions of the parties on the merits of the questions raised, it will be advantageous to extract the relevant portion from the Rules:- “ 6. Method of Recruitment:- The method of recruitment will be as under:- (a) By Promotion (b) On Deputation (c) Direct Recruitment (a) By Promotion: - By promotion from the permanent/ temporary employees of the Societies fulfilling the qualification and experience of the post and having good work and conduct. (b) On Deputation:- By taking on deputation from the Govt. or Coop. Sugar Mils in the State of Haryana. (c) Direct Recruitment:- Direct recruitment through advertisement/ Employment Exchange as per instructions of Govt. issued from time to time”. “ 48. Relaxation of Rules:- Where the Managing Director is of the opinion that it is necessary or expedient to do so, he may be, by order, for reasons to be recorded in writing, relax any of the provisions of these rules with respect to any class or category of persons with the prior approval of Board of Directors and the Registrar”. Civil Writ Petition No. 16930 of 2006 [8] Category of post By Direct Appointment By Promotion Chief Accounts Officer (Rs.3000-5000) B.Com with 15 years exp. CA/ICWA with 5 years exp. Experience should be on a Senior post. Preference will be given to persons having experience of Sugar Industry. B. Com. with 15 years experience in the Sugar Industry as Acctt. Or M.Com with 10 years experience as Accountant. Security Officer(Sup.-C) Retired Commissioned Officer from Army not below the rank of Captain (Min.) 5 years experience. ----- In respect of challenge of action of respondent No.3 in taking respondent No. 4 on deputation, it may be mentioned that respondent No. 3 could not refer to any resolution of the Board of Directors resolving to take respondent No. 4 on deputation. It was a direction of the State Government which was given effect to by the respondent Mill. However, for the purposes of present petition, we need not examine the question of deputation of respondent No.4 any further. Suffice it to state that the manner in which respondent No. 4 was taken on deputation does not appear to have preceded by the resolution of Board of Directors. Still further, the absorption of respondent No.4 as Chief Accounts Officer in pursuance of the meeting of Board of Directors on 3.11.2003 is again not required to be examined. The said order was subject to Court order. The letter of appointment dated 13.02.2004, Annexure P-3, issued was specifically made subject to decision of CWP No. 19569 of 2003 i.e., writ petition challenging the reinstatement of Shri S.C. Sharma. After the said writ petition is allowed by this Court on 12.09.2005, the absorption of respondent No.4 stood annulled. May be, on account of subsequent decision of the Hon'ble Supreme Court, the post held by Shri S.C. Sharma would be deemed to be vacant but the core question is whether the absorption of Shri R.P. Godara in meeting held on 30.09.2005 or on Civil Writ Petition No. 16930 of 2006 [9] 28.10.2006 is legal and valid. As per the Rules reproduced above, the method of recruitment is either by promotion or deputation or by direct recruitment. There is no source of appointment by way of absorption or by way of transfer. Respondent No.4 was taken on deputation for a period of two years and the said period has come to end with the efflux of time. Thereafter, the post of Chief Accounts Officer could be filled up either by promotion or by direct recruitment. Admittedly, the post of Chief Accounts Officer has not been advertised nor applications from the general public were invited to fill up the post of Chief Accounts Officer. Therefore, the only source available to fill up the post of Chief Accounts Officer was by way of promotion. Instead of filling up the said post in any of the mode contemplated under Rule 6, the respondents have proceeded to absorb respondent No. 4 by absorption. In terms of Rule 48, the Managing Director was required to record the reasons in writing, after being satisfied, that it is necessary and expedient to do so to relax any of the provisions of the Rules. Still further, relaxation of such Rule could be with the prior approval of the Board of Directors and the Registrar. No resolution of Board of Directors or approval of the Registrar has been produced on record to relax the provisions of the Rules so as to fill up the post of Chief Accounts Officer by way of transfer or absorption. After having received approval to relax the Rules, the matter could possibly be considered for appointment of a candidate to the post of Chief Accounts Officer by transfer. In fact, the respondents have not made any averment in the written statement filed that the appointment of respondent No.4 is by way of relaxation of Rules. Therefore, there is no Civil Writ Petition No. 16930 of 2006 [10] pleading that appointment of respondent No.4 is by way of relaxation of Rules. Even Rule 48 is not satisfied in the present case as consideration of filling up post of Chief Accounts Officer by respondent No. 4 or any other person could be arrived only after the Rule was relaxed. Still further, no reasons have been recorded by the Managing Director or Board of Directors of the respondent Mill so as to seek relaxation of the Rules. It is without going into the question whether the respondent Mill could relax the Rules for appointment of respondent No.4 to the post of Chief Accounts Officer, falling within the class or category of persons. The present writ petition was filed on 24.10.2006 before the claim of respondent No. 4 for absorption as Chief Accounts Officer could be considered by the Board of Directors on 28.10.2006. This Court on 27.10.2006 directed that the proceedings of the meeting convened for 28.10.2006 be not notified and the same be produced before this Court in a sealed cover on the adjourned date. On 10.11.2006, this Court opened the sealed cover and permitted respondents No.2 and 3 to proceed with their decisions except agenda item No. 4 i.e., pertaining to absorption of respondent No. 4 as Chief Accounts Officer. Today, during the course of hearing, we have opened the sealed envelop again and kept a photo copy of the same on the record and returned the original to learned counsel for respondents No.2 and 3. The Agenda and decision of the Board of Directors in its meeting held on 28.10.2006 needs to be reproduced in its entirety, which reads as under:- “ Agenda Item No. 4: To fill up the post of Chief Accounts Officer. The BOD considered the agenda item No. 4 regarding filling of the post of Chief Accounts Officer. For this post Shri Civil Writ Petition No. 16930 of 2006 [11] R.N. Yadav, Accountant and Sh. R.D. Aggarwal, Cane Accountant have given representations for promoting them as Chief Accounts Officer. Sh. R.P. Godara has also given representation for posting him to the post of Chief Accounts Officer. All these three representations have been considered by the BOD along with detailed note on the agenda. Sh. S.B. Agnihotri, nominee of MD, Sugarfed suggested that legal opinion may be taken on the issue of filling up the post of Chief Accounts Officer. However, this suggestion was not accepted in view of the BOD's decision on 30.09.2005. The BOD considered the records of all the three candidates. Sh. R.D. Aggarwal does not fulfil the required qualification and experience. Sh. R.P. Godara is found more suitable being well qualified and more experienced in comparison to Sh.R.N. Yadav. Sh. R.N. Yadav is not found suitable. Sh. R.P. Godara deserves to be reposted as Chief Accounts Officer. Even otherwise Sh. R.P. Godara, Chief Accounts Officer who was taken on deputation from Bhuna Cooperative Sugar Mills as per decision of BOD dated 24.09.2002 joined as Chief Accounts Officer on 3.10.2002 and was absorbed as Chief Accounts Officer on permanent basis w.e.f. 13.2.2004 in the pay scale of Rs.10000-325-13900 as per decision of the BOD dated 3.11.2003 subject to any Court Order, as the dismissal case of Sh.S.C. Sharma, Ex-CAO was pending before the Hon'ble Punjab & Haryana High Court. After the orders of Hon'ble Punjab & Haryana High Court in CWP 19569 of 2003 the Mill had to take back Sh. S.C. Sharma as Chief Accounts Officer. Sh. S.C. Sharma joined as Chief Accounts Officer on 1.10.2005 and on the request of Sh. R.P. Godara who was absorbed as Chief Accounts Officer, the BOD adjusted him against the post of Security Officer and the BOD passed the following resolution on 30.09.2005. “Board considered the request of Sh. Godara and discussed the matter in length. Managing Director apprised the Board that Sh. R.P. Godara , CAO was taken Civil Writ Petition No. 16930 of 2006 [12] in this mills on deputation from Bhuna Coop. Sugar Mills and he joined the Mills on 3.10.2002 and later on his absorption was made as per decision dated 3.11.2003 of Board subject to the decision of CWP No. 19569 of 2003 which was filed against the order of Special Secretary, Co-operation Deptt., Haryana in the Hon'ble High Court, Punjab & Haryana, Chandigarh. Now the above CWP has been dismissed by the Hon'ble Court on 12.09.2005. In view of the dismissal of said CWP as well as decision of Board, Sh. S.C. Sharma has to join the service as Chief Accounts Officer in this Mill, so Mill is required to relieve Sh. R.P. Godara immediately from the post of Chief Accounts Officer as per terms No. 8 & 9 of his appointment letter. Managing Director also told the Board that Govt. has sanctioned some new projects i.e. Distillery, Expansion of plant & Co-generation for the Mills for which the services of Sh. Godara may be utilized. Mr. Godara was called in the meeting and it was made clear to him that against one post two persons cannot be retained and his services cannot be adjusted in the existing pay scale on other post. Sh. Godara requested the Board that Mill can adjust him against any post in less pay scale than the existing pay scale till the retirement of Sh. S.C. Sharma, CAO and he also requested that he may be sent to in any Coop. Sugar Mills/ Sugarfed on deputation by keeping his lien in this Mills. Board told him that his request can be considered if he gives in writing for adjustment in lesser payscale than the existing. Sh. Godara submitted his request/ consent in writing to the Board. Board also cleared that his adjustment can be made only against the post of Security Officer which is vacant. Sh. Godara shown his willingness to adjust against the post of Security Officer in the prescribed payscale of the post. Board after detailed discussion resolved that the services of Sh. R.P. Civil Writ Petition No. 16930 of 2006 [13] Godara may be adjusted on the following terms and conditions:- 1. That his adjustment will be against the post of Security officer. 2. He will be paid consolidated salary equivalent to the total emoluments of the maximum pay scale of the post of Security Officer + Rs.2500 P.P. 3. As and when equivalent post will become vacant he will be posted against this post. 4. He will also do the job assigned by the Mills Management from time to time. The Board decided that before adjustment his consent in writing be obtained. The Board also decided that the above adjustment of Sh. R.P. Godara is subject to the approval of Registrar, Cooperative Societies (Sugar Mills). OR The Board also resolved that Managing Director, H.S.M.F. Panchkula / R.C.S. (Sugar Mills) may be requested to send Sh. R.P. Godara, CAO on deputation to other Coop. Sugar Mills or Sugarfed and lien of Sh. R.P. Godara may be kept in Shahabad Coop. Sugar Mills during his deputation period”. Shri R.P. Godara is on deputation in Rohtak Cooperative Sugar Mills as Chief Accounts Officer w.e.f. 22.5.2006. One of the terms and conditions when Sh. R.P. Godara was adjusted against the post of Security Officer was that as and when equivalent post will become vacant, he will be posted against this post. Since the post of Chief Accounts Officer has now fallen vacant on retirement of Sh. S.C. Sharma, hence Sh. R.P. Godara has first right to the post as resolved by the BOD on 30.09.2005. Accordingly, it is resolved that earlier resolution of the Board dated 30.09.2005 be implemented and Sh.R.P. Godara be posted as Chief Accounts Officer according to condition No.3 of resolution of the Board of Directors meeting Civil Writ Petition No. 16930 of 2006 [14] held on 30.09.2005. In view of above facts, the BOD decided to reject the representation of Sh. R.N. Yadav & Sh. R.D. Aggarwal”. A perusal of the resolution would show that the same is based upon earlier resolution dated 30.09.2005 whereby Shri R.P. Godara was absorbed as Security Officer. As mentioned above,