Case: Madhya Pradesh Hasta Shilpa Vikas Nigam Ltd Vs. Devendra Kumar Jain

2. The appellant is a Government Company within the meaning of Section617 of the Companies Act which is controlled and owned by the State Government and a subsidiary company of M.P. Laghu Udhyog Nigam Limited which is carrying on business activities of development of handicrafts and handloom products. At the relevant time one Shri K. P. Thakur was the Managing Director of the appellant-company who by an order dated 6-7-89 Annexure-D appointed the respondents No. 1 to 3, namely, Devendra Kumar Jain, Dilip Goel and Promod Mishra as temporary Jr. Manager and by subsequent two orders both dated 8-6-89 (Annexure E/1 and 2) appointed the respondents No. 4 and 5, namely, Mehboob Hussain and Liaquat Mohd. Khilzi as temporary Junior Manages in the appellant-company. Soon after their appointment the appellant-company noticed that the aforesaid appointment of respondents No. 1 to 5 were made by then Managing Director, Shri K. P. Thakur in contravention of the Government Order dated 1-4-89 Annexure-B without the approval of the State Government and therefore, another Managing Director successor of Shri K. P. Thakur by order dated 31.7.89 terminated the services of the respondents No. 1 to 5. The respondents challenged the aforesaid order of termination in the High Court of Madhya Pradesh in Miscellaneous Petition No. 3973/83 which was allowed by judgment dated 1.12.93 whereby the order of termination of the respondents was quashed. It has been directed that the respondents will continue in service till their services till their services are not validly terminated. It is this order which has been challenged in this appeal.

Reasoning:
In our considered opinion the High Court fell in serious error in taking in taking the aforesaid view and, therefore, the order of the High Court could not be sustained inis appears that the High Court ignored the said order of the State Government while observing that no material in support of the contention that the Government has issued instructions not to make appointment was produced by the appellant.8. It is noteworthy that Shri K. P. Thakur, the then Managing Director himself was retiring on 31-7-89 and in hot haste he issued the orders of appointment of the respondents on 6-7-89 and 8-6-89 inspite of the instructions of the State Government to the contrary. In these facts and circumstances the impugned order passed by the High Court question the termination of service of the respondents cannot be sustained.