B. Srinivasa Reddy vs Karnataka Urban Water Supply & Drainage ...

J U D G M E N T (Arising out of SLP (C) No. 9393/2006) WITH CIVIL APPEAL NO. 3722 OF 2006 Arising out of SLP (C) No. 10388/2006) Dr. AR. Lakshmanan, J.

On 28.01.1998, the Government of Karnataka, through the Urban Development Department, vide Notification No. UDD 4 UWE 98 dated 28.01.1998, pursuant to Section 53 of the Act read with Rule 27 of and serial No. 1 of the Schedule to the Regulations, promoted the appellant on officiating basis and appointed him as the Managing Director of the Board w.e.f. 31.01.1998 afternoon and "until further orders" since S. Ramamurthy, the then Managing Director of the Board took voluntary retirement.

The Employees' Union filed an amended version of the writ petition before the High Court also challenging the above- mentioned amendment to the Regulation which relates to making of a provision of appointing the Chief Engineer of the Board as its Managing Director. The writ petition was further amended to include the challenge to the promotion/appointment of the appellant as the Managing Director of the Board pursuant to the said amendment.

The High Court quashed the appointment orders and directed the State to take immediate steps to appoint the Managing Director of the Board.

The Division Bench of the High Court in Writ Appeal No. 2877-78 of 2002, issued notice and stayed the order of the learned Single Judge for a period of two months which was later continued. By virtue of this order, the appellant continued to enjoy the post of Managing Director. The appellant retired as Managing Director of the Board on 31.01.2004. The Relieving Order reads thus:

He was re-appointed as Managing Director of the Board until further orders on 01.02.2004. Writ Petition No. 9852 of 2004 was filed for a Writ of Certiorari, Writ of Quo Warranto and any other writ, order or direction under Article 226. Learned Single Judge allowed the Writ Petition No. 9852 of 2004. Writ Appeal No. 86 of 2006 was admitted and the operation of the learned Single Judge's order was stayed on 16.01.2006 and Writ Appeal No. 86 of 2006 was finally dismissed on 04.02.2006.

The Court also imposed costs of Rs.10,000/- against the appellant and also imposed cost against the State Government and respondent No.4 at Rs.5,000/- each separately. It is pertinent to notice that in 2002, a complaint was made to the Lokayukta against the Chairman and the appellant - Mr. Reddy by Mr. Halakatte, President of the Employees' Association (R2 herein). By order dated 13.08.2003 Lokayukta held that the allegation against the appellant is baseless. Lokayukta after absolving the appellant of false allegations directed action against the then FA & CAO of the Board. The Lokayukta closed the complaint on 01.02.2005 after Government has taken action against FA & CAO.

Mr. Raju Ramachandran also submitted that the civil appeal has now become infructuous in view of the developments which have taken place subsequent to the orders of this Court dated 08.05.2006 by which notice was issued to the respondents in view of the fact that the Government of Karnataka has now appointed one Mr. P.B.Ramamurthy as the Managing Director of the Board with immediate effect by an order contained in the notification dated 17.05.2006 and pursuant to the above order the appellant Mr.Reddy has already made over the charge of the office of Managing Director of the Board to the said P.B. Ramamurthy who had received charge of the said office on 19.05.2006. It was submitted that the appellant has no substantive right left qua the post of Managing Director of the Board since even as per his appointment order dated 31.01.2004 he is to have charge only "until further orders". In view of the above subsequent developments, learned counsel for the Union submitted that the present appeal has become infructuous.

It is further contended that Section 7(1) (d) of the Act read with the above official memorandum would make it clear that retired employees cannot be appointed the post of Managing Director of the Board. The purpose of Section 7(1)(d) and the office memorandum dated 23.12.1994 has to be looked into while deciding the legality of the appointment of the appellant to the post of Managing Director of the Board. According to Mr. Raju Ramachandran it has nowhere come on record that the appellant possessed such exceptional and high qualifications as to warrant the Government to deviate from its own policy and appointed the appellant. In fact any experience gained by the appellant during his tenure as the Managing Director prior to his retirement is of no consequence since such appointment was held to be illegal and invalid by the High Court. No exceptional circumstances has been shown that the appointment of the appellant to the post of Managing Director in deviation to regular mode of appointment of IAS officers on deputation. In regard to the maintainability of the writ petition Mr. Raju Ramachandran submitted that the High Court did not rely upon the status of the writ petitioners as registered trade union but rather accepted their locus standi as employees of the Board and their right to form trade unions associations though unregistered and on such basis permitted them to challenge the appointment in writ proceedings. According to him, the unregistered unions, in the eyes of law can contend that it has to come and knock the doors of this Court seeking justice by pointing out the illegalities of the State Government in appointing the appellant as Managing Director of a Statutory Board wherein public interest is involved. The purpose, according to him, is to espouse the cause of the workers. Therefore, the writ petitioners were employees of the Board and cannot be considered as wayfarers and that the employees approached the High Court in public interest and have been attempting to dissuade the Government from granting favour to the appellant herein by appointing him at the post of Managing Director of the Board for long. We have carefully considered the rival submissions with reference to the entire records.

In the instant case, the appellant was appointed w.e.f. 01.02.2004. The Employees Union filed the writ petition on 08.03.2004. On the said date, the respondent-Union was not a registered trade union and the Certificate of Registration of the Trade Union in Form 'C' was issued by the Government of Karnataka, Department of Labour only on 20.01.2005 which reads thus:-

The official memorandum dated 23.12.1994 deals with re-appointment of retired government servants and granting extension of service to retired government servants. As already stated, the appellant is not a government servant nor a retired government servant. The official memorandum is an administrative instruction which is contrary to the provisions of the Act and statutory Rules neither the Act nor the Rules prescribe any age of retirement for the Managing Director of the Board. On the other hand, having regard to the dis- qualification prescribed by Section 7(1)(d) of the Act to the effect that an officer or servant of the Board cannot be appointed as Managing Director. The High Court could not have read an additional dis-qualification that a retired officer or a servant of the Board also cannot be appointed as Managing Director of the Board. The memorandum dated 23.12.1994 is no manner of application to the appointment in question and it is even otherwise ineffective inasmuch as it is an administrative instruction which is contrary to the provisions of the Act and the Rules. The High Court, in our opinion, erred in ousting the appellant from his service by issue of a Quo Warranto on the ground that the appellant having retired from this service of the Board on 31.01.2004 suffered dis-qualification under the said memorandum by a reading of the Act and the Rules the appellant acquired qualification for appointment on 31.01.2004 on his retirement and the view of the High Court that the appellant is dis- qualified on 31.01.2004 on his retirement from service of the Board is not only contrary to the Act and the Rules is also plainly opposed to the language of the memorandum itself. Even otherwise, no Writ of Quo Warranto could have been issued on the ground that even though the appointment is contrary to any statutory rule it is contrary to the administrative instruction which the High Court holds as disclosed the policy of the Government. There is no warrant to have taken such a view at all.

The judgment impugned in this appeal not only exceeds the limit of Quo Warranto but has not properly appreciated the fact that writ petition filed by the Employees' Union and the President of the Union Halakatte was absolutely lacking in bonafides. In the instant case, the motive of the second respondent Halakatte is very clear and the Court might in its discretion declined to grant a Quo Warranto. This Court in A.N. Sashtri vs. State of Punjab and Others, (1988) Supp SCC 127 held that the Writ of Quo Warranto should be refused where it is an outcome of malice or ill-will. The High Court failed to appreciate that on 18.01.2003 the appellant filed a criminal complaint against the second respondent Halakatte that cognizance was taken by the criminal court in CC No. 4152 of 2003 by the jurisdictional magistrate on 24.02.2003, process was issued to the second respondent who was enlarged on bail on 12.06.2003 and the trial is in progress. That apart, the second respondent has made successive complaints to the Lokayukta against the appellant which were all held to be baseless and false. This factual background which was not disputed coupled with the fact that the second respondent Halakatte initiated the writ petition as President of the 1st respondent Union which had ceased to be a registered trade union as early as on 02.11.1992 suppressing the material fact of its registration having been cancelled, making allegations against the appellant which were no more than the contents of the complaints filed by him before the Authorities which had been found to be false after thorough investigation by the Karnataka Lokayukta would unmistakably establish that the writ petition initiated by the respondent Nos. 1 and 2 lacked in bona fides and it was the outcome of the malice and ill-will the 2nd respondent nurses against the appellant. Having regard to this aspect of the matter, the High Court ought to have dismissed the writ petition on that ground alone and at any event should have refused to issue a Quo Warranto which is purely discretionary. It is no doubt true that the strict rules of locus standi is relaxed to an extent in a Quo Warranto proceedings. Nonetheless an imposture coming before the Court invoking public law remedy at the hands of a Constitutional Court suppressing material facts has to be dealt with firmly.

In the instant case, the employees association approached the High Court with unclean hands. The employees who approaches the Court for such relief must come with frank and full dis-closure of facts. If they failed to do so and suppress material facts their application is liable to be dismissed.

Ref : i) O.M. No. DPAR 42 SSR 77 dated 15.12.1977

1. In the O.M. referred at (1) above in respect of the teaching staff viz., Teachers, Lecturers, Professors who are working in educational institutions of the Education Department retiring in the middle of the academic year, it was permitted to continue their services till the end of the educational year with the permission of the concerned officer.

2. In the O.M. referred at (2) above, it was instructed not to re- appoint the retired Government servants and not to give them extension of service.

In the circumstances which we have narrated above in paragraphs supra, it is indeed difficult to hold that the appellant did not have the requisite qualification. The above ruling was followed in A.N. Shashtri vs. State of Punjab & Ors., 1988 (Supp) SCC 127. We are of the view that in the facts of this case, the reasonable conclusion to reach should have been that the writ petitioners had failed to establish that the appellant did not possess requisite qualification and the appeals are, therefore, be allowed and the judgment of the High Court has to be set aside and the writ petition has to be dismissed.

Legal Malice:

In the result, we hold :

(c) Writ of Quo warranto does not lie if the alleged violation is not of a statutory provision.

(f) Writ filed by respondents 1 & 2 is motivated.

(g) The petitioners in the writ petition, respondent No.1 herein which is an unregistered Association under the Trade Unions Act cannot maintain the writ petition.

(h) The findings of legal mala fides is unsustainable and has no basis.

The finding of legal mala fides suffers from other infirmities as far as placing reliance on the complaints against the appellant without adverting to the orders of the Lokyukta detail examination, the appellant is unequivocal terms in both the cases.

For the foregoing reasons, the appeals are allowed and the order impugned in this appeal passed by the Division Bench of the High Court in W.A. No. 86/2006 affirming the judgment of the learned single Judge is set aside.

The Division Bench of the High Court ordered cost in the writ appeal. There is no justification in ordering cost in the facts and circumstances of the case. Therefore, the appellant, State Government and respondent No.4 are entitled to refund the cost, if it has already been paid. However, we are not ordering cost against respondent Nos. 1 & 2 taking into consideration of the financial constraint of the employees and by taking a lenient view of the matter.

In view of this judgment, we allow the appeals filed by Mr. B. Srinivasa Reddy and by the State of Karanataka. As noted herein earlier, the appellant has already been released and in his place a person has already been appointed as a Managing Director of the Board on contract basis. Keeping this admitted fact in mind, we, therefore, keep it on record that the Government or the Board would be at liberty to consider and appoint a candidate, if occasion arises, on contract basis. If such a situation does arise in that case it would be open to the State or the Board to consider the candidature of the appellant (B.Srinivasa Reddy) with others.