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1988 DIGILAW 157 (PAT)

Bihar State M. B. As Association v. State Of Bihar

1988-04-18

L.P.N.SHAHDEO, P.S.MISHRA

body1988
Judgment P. S. Mishra and L. P. N. Shahdeo, JJ. 1. Three applications which have been heard one after the other, seek, inter alia, a writ in the nature of mandamus to the respondents, Bihar State Financial Corporation and the Managing Director of the said Corporation to follow the directions of the State of Bihar in its letter dated 10-4-1981, as contained in Annexure-3 and accordingly to prepare a management pool for appointment and promotion of officers of Class I and class II in the Corporation. 2. The Bihar State Financial Corporation is a body created by a Notification of the State Government as contemplated in the State Financial Corporation act, 1951. Its management is in the hands of a Board appointed in accordance with the provisions of the said Act and subject to the provisions as contained in Sections 23 and 39 thereof which, inter alia state that the corporation may appoint such officers Advisors and employees as it considers necessary for the efficient performance of its function and determine by regulation their conditions and appointments in service and the remuneration payable to them provided that the State Government may in consultation with and after obtaining the advise of the Development Bank specify the class or categories of post in respect of which appointment may be made by the Board on such remuneration and other conditions of service as the Board may determine and no regulation made under the Act shall apply to such posts in respect of matters so determined by the Board, and that the Corporation shall be guided by such instruction on the question of policy in the discharge of its functions as may be given to it by the State Government after obtaining the advise of the Development Bank. The instructions on the question of policy laid down by the State Government, if not obeyed, may cause supersession of the Board and appointment of a new board in its place. 3. The State Government has, it appears, entered into various activities and for the said purpose created several Corporations, Boards and other types of undertakings. According to a list appended to the writ application the State government has already created as many as 49 such undertakings and also bureau of public enterprises as the body to control and exercise some sort of superintendence over the functioning of such undertakings. According to a list appended to the writ application the State government has already created as many as 49 such undertakings and also bureau of public enterprises as the body to control and exercise some sort of superintendence over the functioning of such undertakings. The Bureau which was established on 1-3-1976 was conferred powers and functions as are enumerated in a Government order dated 26-4-1979. ID exercise of its such function on 10-4-1981 it communicated (under the orders of the Government of the state of Bihar) to the undertakings on the subject of appointment in any Class i and Class II posts therein tkat a management pool be created and appointments be made in such undertakings from the said pool in Class I and Class II posts therein. The communication mentioned that the same be treated as a directive of the State Government. Notwithstanding, however, the said directive the respondent-Corporation issued advertisement inviting applications for appointment as Management Trainees in various categories of Class I and class II posts, under it seeking that closing date for receipt of applications was 31-12-1986. The advertisement contemplated appointments in various categories of Management Trainees by a selection process mentioned therein on the basis of a written examination (objective type) Group exercises and personal interviews. It ignored altogether the scheme of the appointments to be made from the management pool created in accordance with the Governments directives dated 10-4-1981 as contained in Annexure-3. Petitioners who are included in the pool apprehending that they could not for the said reason of the corporation independently deciding to hold objective type written examination, group exercises and personal interviews in violation of the Governments directive as contained in Annexure-3, may not be selected, have moved this court. 4. They State, inter alia, that they are qualified being included in the management pool for such appointments and, in case appointments are made from the Management Pool as directed by the State Government to the Corporation, they stand fair chance of selection and appointment. Corporation by adopting its own procedure has not only ignored the Governments directive but has almost decided to make arbitrary determination of the qualification and merits of the candidates for the various posts. Their contention before this court is that the respondent-Corporation is obliged to act as directed by the state Government. Corporation by adopting its own procedure has not only ignored the Governments directive but has almost decided to make arbitrary determination of the qualification and merits of the candidates for the various posts. Their contention before this court is that the respondent-Corporation is obliged to act as directed by the state Government. It has no choice to follow a procedure of its own which, if allowed to mature and conclude, shall result in violation of the rights of the persons included in the Management Pool. 5. The main contest to the case has come from the Corporation. The state of Bihar, the Chairman Bureau Public Enterprises and the Industrial Development bank of India, which is the banker concern, have not chosen to file any return. There has, however, been intervention by some of the candidates who had responded to the Corporations invitation and applied for selection, Mr. Basudeo Prasad learned counsel appearing for the respondent Corporation and mr. Sunil Kumar who followed Mr. Prasad in advancing arguments on behalf of the Corporation, have mainly attacked the contention of the petitioners on the ground that Sec.23 of the said Financial Corporation Act has no application to the facts of the case and that the Directive issued by the State Government, is not binding even as a policy to guide the Corporation as the said instruction as contained in Annexure-3, was issued without consulting the development Bank and without obtaining its advice. 6. In the counter affidavit the corporation has, no doubt, said that State governments directive came without any consultation with or advice of the development Bank, and some documents have been appended suggesting that the Development Bank had already expressed that it would notbe advisable for the State Goyernmentss to issue directives in the matter of appointments to various offices in the Corporation. It had written to the State Government to withdraw its directive and not to enforce it upon the Corporation for the reason, inter alia, that its implementation would deny to the Corporation services of people who may be most suitable for discharging functions at various levels of appointment in its services. It had written to the State Government to withdraw its directive and not to enforce it upon the Corporation for the reason, inter alia, that its implementation would deny to the Corporation services of people who may be most suitable for discharging functions at various levels of appointment in its services. A technical objection has also been raised on behalf of the Corporation that the applications are not maintainable at the instance of the petitioner in C. W. J. C. No.3485 of 1987 which is an association of those who hold qualifications for their being included in the Management pool or the pelitioner in C. W. J. C. No.764 of 1987 which is a forum claiming to represent the public cause. Petitioners in these two cases, according to the learned counsel for the Corporation do not qualify as persons interested in the matter of appointment to the various offices in Class I and Class II in the Corporation, no rights of any one of them, according to the learned counsel, have been infringed, no interest even of people represented by them is jeopardised. According to the learned counsel, no mandate of the constitution or any rule of law is violated if selection is made by the Corporation of persons who are meritorious and deserve the appointments advertised by it. 7. Such contentions enjoyed preference in the courts when there was insistence on the locus of the petitioners seeking a writ or a direction from the court. Concept of locus standi has since undergone a substantial change. It is not always necessary for invoking the writ jurisdiction of the court to have some interest of ones own. It is enough, if there is a cause and interest of a class or a Group of people to be vindicated. M. D. As Association has claimed that it represents the group of people who qualified for being included in the management pool and its grievance before this court is that Corporation has violated the State Governments policy directive denying to those who qualify for inclusion in the management pool opportunity of being considered for appointment. According to the petitioners, in C. W. J. C, No.764 of 1987 they represent the cause of those, who by virtue of their qualifying to be included in the management pool, are denied their right. According to the petitioners, in C. W. J. C, No.764 of 1987 they represent the cause of those, who by virtue of their qualifying to be included in the management pool, are denied their right. They have brought to the notice of the court a violation of the statutory directive issued by the state Government and contended that the Corporation, has made itself liable for such violation. Petitioner in C. W. J. C. No.1746 of 1987 is placed better in the sense that It is his interest which is in Jeopardy, his locus for no reason, can be doubted. The other contention touching the question of maintainability is derived from the language of Sec.39 of the Act. Sec.39 of the Act, according to the learned counsel, empowers the State Government to give instructions to the Board with respect to its functions. According to the learned counsel, Boards functions are referable to the various provisions of the Act which relate to various kinds of business such as granting loans raised by indus trial concerns under writing of issue of stock shares bonds adventures by industrial concerns. In no way, according to learned counsel, appoinments to various offices of the Corporation can be called something done in the discharge of its functions. According to learned counsel, that is why a separate provision has been made about the determination of the conditions of an appropriate writ. We would have given some more consideration to this contention of learned counsel, had we not taken notice of the fact that while Sec.23 talks only of specifying the class or categories of posts in respect of which appointments may be made by the Corporation. Sec.39 is couched in a more pervasive language touching every fuaction of the Corporation. While Section 23 says that appointment be made in accordance with the regulations framed in that behalf by the Corporation subject to such appointments which may be covered by the directive of the State Government in which case the appointment will be made by the Board of the Corporation only as indicated therein. Sec.39 puts the State Government in control of the functions of the Board of the Corporation and gives power to issue guidelines and directives subject to the conditions mentioned therein. 8. Sec.39 puts the State Government in control of the functions of the Board of the Corporation and gives power to issue guidelines and directives subject to the conditions mentioned therein. 8. Learned counsel for the respondents Corporation has, however, placed reliance upon a judgment of the Andhra Pradesh High Court in The Andhra pradesh State Electricity Board and anr V/s. Ramachandra Rao and anr. , [air 1969 andhra Pradesh 328] and a judgment of the Kerala High Court in A. M. Mani v Kerala State Electricity Board [air 1968 Kerala 76]. These two are cases relating to the function of the Electricity Board and the provisions in the electricity Act. They do not have any bearing to the question in issue and we do not find any support to the contention of the learned counsel in either of the two judgments. 9. Disposal of this case has been delayed only because of the said two contentions for, on the facts that have been presented before us while on the one hand the petitioners claim is based upon a directive issued by the State government which evidently is an act done in exercise of the power conferred in terms of the Article 162 of the Constitution of India, since it has impressed the affairs of the Corporation in exercise of the power under Sec.39 of the act respondent Corporation has relied upon certain communications of the development Bank which has expressed its reservations to the State Governments interference in the matter of appointments m such Corporations. But there is always a presumption that all official acts are done validly and in accordance with law until it is demonstrated that there has been some sort of invalidity attached to it. Such presumptions can be rebutted but rebuttal shall reauire proof. Communications which the Corporation made to the state Government clearly show that it never mentioned that the Government had issued the directives without consulting or obtaining the advise of the development Bank. It rather asked for it being exempted by the State Government from the said directive. Controversy about it would have been settled had the State Government or the Development Bank which have been impleaded as party respondent, filed their respective returns. They have, however, chosen to be silent. It rather asked for it being exempted by the State Government from the said directive. Controversy about it would have been settled had the State Government or the Development Bank which have been impleaded as party respondent, filed their respective returns. They have, however, chosen to be silent. One may read in their silence approval of the statement of the petitioner but can not read in it a denial or a dispute. There are some documents produced by the intervenors which created boubt about any consultation done by the State Government with the Development Bank, but that again is not sufficient to hold that-there was no consultation at all. It is not a case m which we are required at this stage to decide whether a directive issued by the state Government without consulting and without obtaining the advise of the development Bank will be binding upon the Corporation or not, because unless it is settled as a fact that there was no consultation, such a contention will not arise It is in this back-ground that we think it reasonable to hold that the appointments which have remained in abeyance until now must await the consultation, if not already done, and in case there is concurrence or even disagreement the State Government decides afresh whether to keep the Corporation within the reach of its directive as contained in Annexure-3 or not. 10. We do not propose to go into the question whether in the past appointments in Class I and Class II posts in the Corporation were made in accordance with the directives issued by the State Government or not. We may however, state that the State Financial Corporation does not appear to have framed any regulation for recruitment in Class I and Classii of its services. It is, indeed, a cause of concern for in making the recruitment of various categories of trainees in Class I and Class II of the Corporation Services, it is required to take decision as to qualifications etc. to be incorporated in the advertisement. Without there being any law framed for the said purpose when there is a number of provisions in the Act for such regulations, petitioners herein and any other person qualified for such appointments may have a genuine grievance to such arbitrary act of the Corporation. to be incorporated in the advertisement. Without there being any law framed for the said purpose when there is a number of provisions in the Act for such regulations, petitioners herein and any other person qualified for such appointments may have a genuine grievance to such arbitrary act of the Corporation. In case, the Corporation is to decide the modality of making recruitments, it advisedly should frame regulations and abide by it but subject to the provisions as contained in Sections 23 and 39 of the Act. No arguments have been advanced before or by either party as to the scope and limitations under which Sec.39 of the Act has to work. It, however, is not in doubt that any matter relating to the functions of the Corporation shall be within its reach and the State Government shall be accordingly empowered to issue instructions/directions. This, however, may not amount to saying that in case regulations are framed, instructions issued in exercise of the power under Sec.39 of the Act shall nullify them. At the moment the controversy is confined to the consultation and advice of the development Bank. Consultation with it may, for the present, resolve the controversy. If, however, any dispute shall arise between the State Government and Board as to whether the instructions issued by it, concern any ques-tion of policy or not, parties shall be well advised to take recourse to Section 39 (2) of the Act. 11. Having noticed as above, in our considered view, a direction to respondent-State of Bihar be given to consult the Development Bank that is to say, Industrial Development Bank of India, within a reasonable time and accordingly decide whether to insist upon observance of the instruction as contained in Annexure-3 or not. The Corporation shall be at liberty to seek state Governments decision on the question after such consultation is made in accordance with the sub-section (2) of Sec.39 of the Act. It shall be open to the petitioners and/or the intervenor-respondents to seek such remedy as may be available under the law in the event of either the State Government enforcing instruction in the name of policy decision or the Corporation proceeding to make appointments without framing regulations, as provided in the Act. 12. In the result, the applications are allowed to the extent indicated above. 12. In the result, the applications are allowed to the extent indicated above. Let a writ in the nature of mandamus issue to the respondent State of Bihar to forthwith make consultation with the Industrial Development bank of India and obtain its advice and thereafter take a decision whether to enforce upon the Bihar State Financial Corporation directives as contained in annexure-3 or not. The consultation as directed must be made within six weeks of the receipt of the order and decision whether to enforce a directive upon the Corporation or not, be taken within two months from the said date. Unreasonable delay has already taken place in making the appointments. If any further delay is made that will cause prejudice to the petitioners as well as intetvenor respondents. It is accordingly clerified that in case no consultation is made by the State Government of Bihar within six weeks as indicated above and decision taken within two months as above, the Corporation shall proceed to make appointments in accordance with law. There shall be no order as to costs, applications decided accordingly.