Source: https://www.legalcrystal.com/case/429264/v-rajagopala-reddy-vs-pradesh-electricity
Timestamp: 2019-04-19 17:00:28+00:00

Document:
Judge M. Jagannadha Rao and ;Ramachandra Raju, JJ.
1. This writ appeal is preferred against the judgment of our learned brother in W.P. No. 5829 of 1983 dated 22nd December, 1983 dismissing the writ petition.
2. The appellant challenged the proceedings in B.P. Ms. No. 592 dated 29th June, 1983 (as amended in B.P. Ms. No. 610 dated 2nd July, 1983) of the Andhra Pradesh State Electricity Board ( hereinafter called the Board) terminating his services as standing counsel for the Electricity Board. The 1st respondent is the Board while the 2nd respondent is the State of Andhra Pradesh. The Chairman of the Board is impleaded in his official capacity as the 3rd respondent.
3. Under the proceedings dated 29th June, 1983 the services of the appellant as standing counsel were terminated without giving the required notice of three months. In modification of the same, the Board issued a fresh order of termination dated 2nd July, 1983 terminating the appointment of the appellant as standing counsel to be effective after expiry of three months from the date of receipt of the proceedings.
4. The appellant was earlier appointed by the Board on 25th July, 1981 as standing counsel in due consultation with the Advocate General of Andhra Pradesh. Along with the Appellant, two other advocates were also appointed as standing counsel. The allocation of work between the three standing counsel was made by proceedings dated 16th November, 1982. However by another order dated 7th July, 1982, the earlier orders of allocation and distribution of work were cancelled and the appellant was intimated that work will be allotted from time to time depending upon the requirements of the Board. It is stated that the appellant was entrusted with about 200 cases and he was discharging his duties and functions satisfactorily.
5. The Board has frames regulations under Clause (1) of S. 79 of the Electricity (Supply) Act, 1948 (hereinafter referred to as the Act) for the purpose of regulating the appointment and conditions of service of its standing legal adviser and other legal counsel. These proceedings were issued in B.P. Ms. No. 998 dated 7th December, 1981. Under Regulation 2(c) an appointment shall be for a period of not less than three years in the first instance and may be continued for such further periods as the Board may direct. The petitioner's appointment as legal counsel was therefore effective from 25th July, 1981 to 24th July, 1984.
6. Before our learned brother several contentions were raised on behalf of the appellant. It was argued that the impugned orders of termination were issued without following the procedure for the conduct of the meetings of the Board inasmuch as there was no meeting as such held and the approval of the members was obtained in circulation. It was also contended that the constitution of the Board itself was not valid inasmuch as initially only one member was appointed who was subsequently designated as Chairman while the other members were appointed to the Board much later. Some of the members had both taken charge, according to the appellant, by the date when the impugned proceedings were issued. One other submission of the appellant was that the power of termination of services was arbitrarily exercised in violation of the provisions of Arts. 14 and 16 of the Constitution of India. It is the contention of the appellant that there are no reasonable grounds to cut short the period of service of three years even by giving notice of termination. The respondents are not able to assign any justifiable reasons and therefore the termination must be treated as arbitrary. We are not referring to the other contentions raised before our learned brother inasmuch as those grounds are not canvassed before us by Sri V. Venkataramanaiah the learned counsel for the appellant. Suffice it to say that our learned brother rejected these three contentions above mentioned and dismissed the writ petition.
7. In this appeal we are concerned with the correctness of the conclusions of our learned brother on the above three points. We have heard Sri. E. Manohar, the Addl. Advocate General, who represented the respondents.
8. We shall first take up the question relating to the manner in which the file was circulated.
'DISPOSAL OF THE BUSINESS OF THE BOARD : During the period between the meetings, matters may be considered in circulation unless they are such as to warrant a discussion and exchange of views by the members at a meeting. The discretion to decide whether a case should be referred to the Board for discussion or not shall rest with the Chairman who may be advised in this regard by the Secretary.
The Chief Engineer-Member of Members who sponsored the proposal need not be included in the circulation in the first instance. If, however, the Secretariat note suggests rejection either wholly or partially of the Chief Engineer's proposal, the file may be circulated to the Chief Engineer-Member of Members sponsoring the proposal. After the Chief Engineer - Member or Members record their views and/or when there is no unanimity in the views expressed in circulation, the file may be re-circulated to the Chairman and all members. If still there is no unanimity, the case should be referred to the Board for discussion ar a meeting.
If, in circulation, the Chairman and Members agree upon a decision unanimously, it shall have the effect of a decision taken at a meeting of the Board. Such decision shall, however, be be placed before the next meeting of the Board for ratification.
10. A reading of the above regulation would make it clear that between the meetings, matters may be considered in circulation unless they are such as to warrant discussion and exchange of views by the members at a meeting. The discretion to decide whether the case should be referred to the Board for a discussion or not is vested in the Chairman who may be advised in this regard by the Secretary. It may be noted that if in circulation, the Chairman and the Members agree upon a decision unanimously it shall have the effect of a decision taken at a meeting of the Board and such decision shall however be placed before the Board at its next meeting for ratification.
11. In our opinion, it cannot be said that the termination of the appointment of the appellant as standing counsel warranted a discussion and exchange of views by the members at a meeting as provided by Regulation 11 of the Act. In any event it is not in dispute that the orders of termination dated 2nd July, 1983 were rectified at a subsequent meeting of the Board dated 4th August, 1983. The Regulation 11 clearly provides for such a ratification. We are of the view that even assuming for a moment that the decision taken in circulation suffers from any irregularity, the subsequent ratification by the full Board validates the order of termination with effect from the date on which the order of termination was passed. It is not in dispute that even the appellant and two others were appointed as standing counsel on 25th July, 1981, the proceedings were issued after circulating the file to the members and no meeting was held. Subsequently the appointments were ratified by the Board. The learned counsel for the appellant has relied upon the judgment of the Madhya Pradesh High Court N. I. Corporation Private Limited v. M.P. Electricity Board, Jabalpur, : AIR1973MP281 . That case related top the powers of the M.P. Electricity Board in directing the sale of the property of the Board by circulating the file to the various members. Regulation 18 of the M.P. Electricity Board relating to meetings provided that 'routine and urgent matters' may be considered between meetings of the Board by circulation. It was held that the question of sale of the property was not a routine matter which could be disposed of mechanically. It was also held that a Corporation can do corporate acts only at a corporate meeting, unless a special method is authorised by its constitution. Vide (The Conservators of the River Tone v. Ash, (1829) 10 B & C 349 : 109 ER 479, Darcy v. The Tamar Kit Hall and Callington Railway Company (1866) LR 2 Ex. Ch. 158 : 4 H & C 463 and Haycraft Gold Reduction and Mining Company, In re (1900) 2 Ch. 230). It was held by the Madhya Pradesh High Court that an offer of sale made to the plaintiff-appellant pursuant to proceedings issued by the Board in circulation in respect of a matter which is not a routine or urgent matter did not create a valid agreement that could be the basis for a suit for specific performance. The judgment does not also indicate that the matter was ratified by the Board later. Further the words 'routine and urgent matters' contained in Regulation 18 obtaining in Madhya Pradesh Regulations are not to be found in Regulation 11 of the A.P. Electricity Board's Regulations. In our opinion therefore, the ruling of the Madhya Pradesh High Court is distinguishable and does not render any assistance to the appellant. Therefore, the first contention raised by Sri V. Venkataramanaiah is rejected.
12. The contention regarding the improper constitution of the Board has also to fail. It is true that under sub-clause (2) of S. 5 of the Act, the Board shall consist of not less than three and not more than seven members appointed by the State Government. Under sub-clause (5) of S. 5, one of the members shall be appointed as Chairman provided he has the qualifications mentioned in sub-clause (4).
13. The following facts are not in dispute. On 15th January, 1983, the term of the previous Board expired and on 16th January, 1983, when the Chairman was appointed there were no other members on the Board but they were appointed later. It is true that the term of the Board is three years under the statute but the Chairman was appointed not only for a period of five years but before the other members were appointed. On 27th June, 1983 six members were appointed to the Board and the Accountant member who is one of these six persons had not taken charge by 27th June, 1983 when the first termination order was passed in this case. The Board passed a second termination order on 2nd July, 1983 after giving the requisite notice of three months. However, by that date the Accountant member had taken charge on 1st July, 1983. Another member Sri K. N. Murthi took charge on 20th July, 1983, but after the second termination order.
14. In our opinion neither the fact that the Chairman alone was appointed initially and at a time when other members were not appointed to the Board, nor the fact that the Accountant member took charge after the first termination order and Sri K. N. Murthi took charge after the second termination order can be of any significance so far as the appellant's case is concerned. By the date of the second termination order, the Chairman and other members were all appointed and took charge except one person namely, Sri K. N. Murthi. This will not vitiate the second order of termination especially when the full Board ratified the second order of termination on 4th August, 1983 by which time all the members had been appointed and had also taken charge. The question whether sub-s. (7) of S. 5, which provides that no action done by the Board shall be called in question on the ground only of the existence of any vacancy in or any defect in the constitution of the Board, protects the action of the Board in the context of the decision of the Supreme Court in State of Haryana v. Haryana Co-operative Transport : 2SCR306 , need not therefore be gone into. The second contention of Sri Venkataramanaiah is therefore without force.
15. We shall now come to the last contention of the appellant that the impugned order is arbitrary and violative of Arts. 14 and 16 of the Constitution.
16. There can be no dispute that the Electricity Board is a State for purposes of Part III of the constitution and the limitations prescribed by Arts. 14 and 16 are clearly applicable to any action of the Board. The Supreme Court in Royappa v. State of Tamil Nadu [1974-I L.L.J. 172], has held that arbitrary action affecting the right to public employment would be hit by Arts. 14 and 16 of the Constitution of India. Arbitrary action is now clearly held to be violative of Art. 14 of the Constitution and Art. 14 is no longer confined to invalid discrimination between equals. See Ajai Hasia v. Khalidmujib [1981-I L.L.J. 103]. In District Manager A.P.S.R.T.C. v. Labour Court, : AIR1980AP132 a Full Bench of this Court ruled that the right to public employment is a new species of property. The Supreme Court in State of Maharashtra v. Chandrabhan [1983-II L.L.J. 256], also held that public employment is in the nature of a right to property.
'(c) The appointment shall be for a period of less than three years in the first instance and may be continued for such further periods from time to time as the Board may by order direct.
18. That these Regulations are statutory admits of no doubt but at the same time, the exercise of power under these Regulations by the Board cannot be arbitrary so as to violate the fundamental rights of the appointees guaranteed under Arts. 14 and 16 of the Constitution of India.
19. In recent times, the Courts had occasion to consider contracts of employment made between public authorities (which fall within the meaning of 'State' in Art. 12 of the Constitution) and their employees, where a period of notice on either side could be issued for termination of the service. It is true, that in Subba Reddi v. Andhra University, : 3SCR1013 their Lordships of the Supreme Court upheld a termination of the service of a University employee as being in conformity with the terms of the appointment by giving the requisite notice.
20. But in our opinion their Lordships of the Supreme Court were not, in that case, considering the question in the context of Arts 14 and 16 of the Constitution as being a case where the power of termination was arbitrarily exercised. We are in agreement with a similar view expressed by our learned brothers Jeevan Reddi, J. in Ranga Rao v. Hindustan Aeronautics (1981) 2 A.P. L.J. 17 (SOC) : and by P. A. Choudary, J. in D. P. Seshachalam v. Administrative Staff College of India (Reported in 1984 Lab. IC 875), as regards the ratio of Subba Reddi's case (supra).
21. The change in the law relating to master and servant was noticed by Mathew, J. in Sukhdev Singh v. Bhagatram [1975 - I L.L.J. 399]. It is worthwhile to refer to some of the passages in that judgment which are almost classic.
The basis concept of status was first expressed in Roshan Lal's case [1968-I L.L.J. 576].
23. Regarding non-statutory regulations governing a contract of a person in the service of the State or a public authority, Mathew, J. observed in Sukhdev's case (supra) that a declaration can be obtained even in such cases for continuance in service inasmuch as the question is one of status and not of a contract-simpliciter. The learned Judge also referred the standardised terms of contract governing such relationships. Similarly in R. M. Joshi v. Reserve Bank of India, (AIR 1981 NOC 46) (FB) a Full Bench of the Delhi High Court held that even where the regulations were non-statutory and were to be treated as part of a contract of service in a standardised form entered into by the State of Public authorities, the service is one of status inasmuch as the employer is subject to the constitutional obligations.
(1) Service under the State as defined under Art. 12 of the Constitution is one of status and cannot be equated with a contract of service simpliciter, the reason being that the employer being a State is subject to the limitations in Part III of the Constitution including Art. 14 and Art. 226. The employee is no longer bound to sue for damages. In cases of unlawful termination of service, he can sue for a declaration that the termination is void and that he is to be deemed to be in service resulting in reinstatement. Such declaration granted under Art. 226 does not amount to specific performance of a contract of service though it may indeed have the same effect, in law. The old concept of the Courts refusing to enforce a contract of service has given way to the concept of declaratory relief resulting in reinstatement.
(2) The provisions of Art. 14 govern not only cases of invalid discrimination but also cases of arbitrary action by employers who fall within the definition of 'State' in Art. 12 of the Constitution. Even if the right to terminate the services of the employees is provided in the regulations, statutory or non-statutory or in the terms of a standardised form contract entered into between the employee and the public authority, such a right of termination or its exercise can be challenged if it is arbitrary and does not conform to the provisions of Arts. 14 and 16 of the Constitution of India.
25. The next question is as to the general relationship between a public authority and its legal adviser or standing counsel.
26. The Supreme Court considered the said question while deciding whether an advocate appointed as Government Pleader held an 'office under the State' in the context of Art. 191 of the Constitution of India. In Mahadeo v. Shantibai, C.A. No. 1832 (NEC) of 1967 dated 15th October 1968 (SC), (1970) 2 SCJ 407, Mitter, J. speaking for the court held that an advocate on the panel of lawyers of the Railway was holding an office of profit. However, in Smt. Kanta Kathurai v. Manakchand Surana, : 2SCR835 , the Junior counsel appointed to assist the Government Pleader was held not to hold an office of profit. Chinnappa Reddy, J. (as he then was) in R. Somayya v. The Election Officer, (1973) 2 Andh. WR 119 held that an Assistant Government Pleader governed by rules made under the proviso to Art. 309 was an officer of the Government, P. A Choudary, J. in P. Kesava Reddy v. State of A. P. (1981) 1 Serv. LR 240 held that a Government Pleader appointed to the subordinate Courts was governed by Art. 16 of the Constitution.
27. In view of the above rulings, the legal counsel and legal advisers of the Electricity Board whose services are regulated by statutory regulations are certainly its officers governed by Arts. 14 and 16 of the Constitution of India and have a status constitutionally protected.
28. Having thus reviewed the recent trends in the law of 'master and servant' relating to public authorities we shall now deal with the question whether the impugned order can be said to be arbitrary.
29. We thus come to the last and the more important question that arises in this case.
31. In our opinion, the employees of authorities falling under Art. 12 have the benefit of Arts. 14 and 16 like public servants employed by the Government. While the former do not have the additional protection of Art. 311 the latter have such a protection. In the matter of termination of the services of employees of public authorities, they too have the protection against arbitrary termination on account of Art. 14 and 16, but not on account of Art. 311.
32. What is 'arbitrary' in the context of Arts. 14 and 16 cannot be exhaustively defined. In the case of Government employees, several principles have been laid down by the Courts depending upon the nature of the tenure, temporary, on probation, or permanent etc. or other conditions of service. The instrumentalities of Government having come out from the main parent body of the Government, there is every reason to extent these legal principles to the employees of the instrumentalities of Government in so far as they are referable to Arts. 14 and 16. Concepts of natural justice are equally either applicable or deemed excluded in like manner as the said principles are applied or excluded in the case of Government servants. Arbitrariness has certainly to be struck down but at the same time it is to be made clear that the employees of the instrumentalities of Government cannot, in that context, be treated with higher favour than the employees of the Government itself.
33. For example, the Supreme Court has laid down that in the case of temporary employees whose services are liable for termination without assigning any reasons, the order of termination will be bad if it contains any stigma. The Courts can go behind the order and see from the record if any allegation against the employee's conduct is the foundation for the termination. But this must be 'manifest' and discernible. But if it merely operated in the mind of the Government without nothing in the order or in the record, the termination in terms of the contract or rule is valid.
34. We fail to see why, for example in the case of temporary employees of the public authorities falling under Art. 12 every termination of a temporary employee in terms of the contract or rule or bye-law could be characterised as arbitrary even if there is nothing in the order or in the record manifest or discernible to contend that some conduct of the employee was the foundation for the termination.
35. If absence of reasons in an order of termination in certain special circumstances was protected in the case of the Government from challenge on the ground of arbitrariness or violation of principles of natural justice, we fail to see why a different and more liberal concept has to be applied in the case of employees of the instrumentalities of Government.
36. That is why, we are of the view that there can be no broad generalisation that every termination of a temporary service without reasons should be deemed to be arbitrary and violative of Arts. 14 and 16 the case of the employees of these public authorities. Principles of natural justice cannot be different when applied to employees of Government and when applied to its instrumentalities. Of course, if the contract or rule expressly gives the latter higher rights, they will have to be followed strictly and in the manner provided, as stated by Justice Frankfurter.
37. So far as permanent Government servants are concerned, a rule permitting the Government to terminate the services before the employees attain the age of superannuation has no doubt been held to be ultra vires by the Supreme Court in Motiram Deka v. N. E. Frontier Railway, (1964 - 11 LLJ 465). If a similar question arises in the case of permanent employees of a public authority where the rule or contract provides for a similar termination, the matter may certainly call for serious consideration in the context of arbitrariness violative of Arts. 14 and 16.
38. Summarising the position, an employee of a public authority which is a State within the meaning of the said words in Art. 12 of the Constitution not governed by Art. 311 but any termination of service under the terms of the contract of service or the rules has to be tested in the context of Arts. 14 and 16 of the Constitution of india. The position of these employees who may be either temporary or probationers or permanent and entitled to the benefits of Arts. 14 and 16 and of principles of natural justice cannot be higher than that of Government servants who have not only benefit of Arts. 14 and 16 and of principles of natural justice but also of Art. 311 of the Constitution.
39. If absence of reasons in an order of termination of a Government servant in terms of a contract or is to be valid when misconduct of the servant is a mere motive but not the foundation, the servant of a public authority in identical circumstances cannot challenge a similar order as being 'arbitrary' or there by offending Arts. 14 and 16 of the Constitution merely because the order or the record does not contain the reasons. Unless there is anything special in the contract or rules governing them, the employees of these authorities cannot be placed on a higher pedestal than Government servants.
40. Coming now to the facts of the case, it is to be seen that Regulations governing the appellant relate to appointment etc. of legal counsel or legal advisers. There does not appear to be a cadre or cadres with rights of promotion as in the case of other employees of the Board. The Regulations do not provide for probation or for absorption on a permanent basis. The appointee is to advise the Board and conduct its cases. There is no regulation compelling the Board not to engage any other counsel during the tenure of a legal adviser or legal counsel appointed by it. The appointment is however to be for a period of three years.
41. In our opinion, the case of the appellant is not comparable to that case of a permanent employee of the Board. The services of the appellant may be utilised for a period of three years subject to a right vested in the Board to give its legal adviser advance notice that his services are not required. In the context of the various provisions in the regulations, we cannot say that during the period of three years, the tenure is not capable of termination, if it be without casting any stigma on the appointee either expressly or in the record or note-file. We may also make it clear that the appellant has not challenged the validity of the regulation providing for termination by three months notice from either side. The only challenge is to the exercise of the right of termination.
42. In Samsher Singh's case : (1974)IILLJ465SC , Ray, C.J. pointed out (at page 2205 of AIR) that if the misconduct is the motive, it would merely adhere in the mind of the employer but will not be discernible. If it is foundation, it is manifest. A Division Bench of this court in Singareni Collieries Co. v. Dr. Raghuram (1983 - II LLJ 57) reviewed the case-law on the question and explained in detail what is 'motive' and what is 'foundation'. In that case the appointment order permitted the Singareni Collieries Co. to terminate the services of the officer by three months notice. The employer in that case was a 'State' within Art. 12 of the Constitution of India. On the facts of that case, the Bench held that certain allegations against the doctor were the foundation of the order of termination and were not the mere motive. The termination was held void.
43. In Seshavataram v. Government of A. P., ILR (1974) Andh Pra 818, the services of the Government Pleader were terminated by issuing two months' notice contemplated by rules by made under the proviso to Art. 309. It was held that the tenure must be deemed to be temporary and that the rule was valid. In that case it was not established that the termination was punitive or cast any stigma.
44. In Ranga Rao's case (supra) Jeevan Reddy, J. dealing with termination with due notice, of a doctor in the HAL felt that even if the allegations preceding the termination by advance notice might have been the foundation, the case was not a fit one for exercise of the extraordinary jurisdiction under Art. 226. However, in Seshachalam's case (supra) where notice of termination was issued, as stipulated to an employee of the Staff College, P. A. Choudary, J. felt, on the facts and the basis of the order, that principles of natural justice should have been followed.
45. In the present case, in paragraph 7 of the counter-affidavit, the Board has denied that the termination was arbitrary, whimsical or discriminatory. The Board's action is said to have been based upon the 'requirement of the work and confidence' and in conformity with the provisions of B.P. Ms. No. 998 dated 8th December, 1981. In paragraph 20, it is stated that the Board entrusts the work to its legal counsel according to its requirement and the nature of the case. In para 21, it is submitted that the Board is entitled to entrust its work to any legal counsel of its choice and it is question of confidence of the Board. In para 25, it is stated that the Board, in order to safeguard its interests, has to take certain decisions with regard to the manner in which it should have legal advice or assistance. We may also point out that under the impugned order, the services of three counsel, namely the appellant, one other legal counsel as well as the services of its standing legal adviser were simultaneously terminated.
46. On the facts of this case, there is no material to show that any personal allegations are the foundation for the impugned order or that any stigma is cast on the appellant. Mere absence of reasons cannot, on the facts of this case, amount to arbitrariness. The termination is otherwise in terms of the Regulation or contract between the parties. We are, therefor, of the view that no arbitrariness can be inferred from the action of the Board which can be said to infringe Arts. 14 and 16 of the Constitution of India.
47. Before parting with the case, we may echo the general observation of M. Krishna Rao, J. in seshavataram's case (supra) relating to the termination of services of legal advisers. Said the learned Judge.
While we agree that that should be the minimum expected from the State or the public authorities, the members of the honourable profession of law who are appointed as Law Officers or Standing Counsel should also accept that there is no point in continuing to exercise a right to advise or assist a client who is not willing to take it.
48. The position is peculiar. The lawyer is to give legal advice and assistance to his client, the public authority, which is his employer or master in a technical sense. The employer is to conform to Arts. 14 and 16 of the Constitution and be free from arbitrariness.
49. For all the above reasons, we confirm the decision of our learned brother and dismiss this writ appeal. There shall be no order as to costs.
50. We are of the opinion that the case does not raise any substantial questions of law or of public importance which in our opinion, should be decided by the Supreme Court of India. The oral application for leave is rejected.

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