Ballabb Kumar v. State Of Bihar — 1995 DIGILAW 276 (PAT)

Judgment Radha Mohan Prasad, J. 1. The petitioners in the present writ application have prayed for quashing of the Government instruction dated 10-8-1992 issued b"y the Joint Secretary, Department of Water Resources (respondent no.2), as contained in Annexure 36, and the office order contained in letter no.2131 dated 17-8-1992 issued by the Secretary, Administration of the Bihar state Construction Limited (respondent no.5), as contained in Annexure 37, whereby and whereunder, in implementation of the aforementioned instruction dated 10.8.1992, the absorption of the petitioners as Movement Inspector in the aforesaid Corporation and their upgradation in the scale of the Movement inspector sanctioned earlier have been cancelled, consequently the petitioner s have been reverted to work on daily wages as they were working before their absorption. Further, the petitioners have also prayed to issue a writ in the nature of mandamus commanding the respondents to treat them in continuous service on the posts of Movement Inspector in respondent Corporation and continue to pay the salary allowances etc. to them of the said posts. 2. In short, the case of the petitioners is that the Bihar State construction Corporation Limited (hereinafter referred to as the Corporation) is a company incorporated under the Indian Companies Act with its 100% share of the Government of Bihar and, thus, it is an instrumentality of the State. The work of the Corporation is of construction and it has got its own Articles of Association defining its power and functions. 3. Clause 47 of the said Articles of Association provides the power of Directors which includes the power to appoint staff Under sub-clause (iii) the Board of Directors has been vested with the power to appoint such staff or create such posts as may be necessary for the purposes of the company, provided that no appointment or creation of such post carrying on ultimate salary exceeding Rs.2,250/- per month is to be made without the prior approval of the Governor. Clause 48 of the said Articles of Association contains the rights of the Governor to issue directives which reads as follows : "48. Notwithstanding anything contained in any of these Articles the Governor may from time to time, issue such directives or instructions as may be considered necessary in regard to the finance, conduct of business and affairs of the Company. / The company shall give immediate effect to the directives or instructions so issued. Notwithstanding anything contained in any of these Articles the Governor may from time to time, issue such directives or instructions as may be considered necessary in regard to the finance, conduct of business and affairs of the Company. / The company shall give immediate effect to the directives or instructions so issued. Approval of the Governor will also be required for (i) the enterprises five year and annual plans of development and the enterprises capital budget; and (ii) agreements involving foreign collaboration proposed to be entered into by the Company. " 4. According to the petitioners, there is no provision in the said articles of Association that the Board shall have to obtain the clearance of the Bureau of Public Enterprises (hereinafter referred to as the Bureau)in making such appointment. It is further stated that by resolution of the board certain powers, including the power of appointment and promotion up to the scale of Rs.1060-1580, has been vested with the Management the appointment is to be made on the basis of the recommendation of the properly constituted selection committee. The true copy of the said resolution of the Board has been annexed as Annexure 1. Thus, according to the petitioners, the Management of the Company vests in the Board of Directors and they are sovereign authority in the matter of affairs of the Corporation subject to only certain directions in relation to the policy matter issued by the Government under clause 48 of the Articles of Association. 5. One Ashok Kumar Singh, who was working as Assistant Laision officer of the respondent Corporation, remained absent with effect from 1.2.1981 without any information or permission from the authorities of the respondent Corporation. Petitioner no.1 having learnt about the same contacted the Managing Director and filed an application for appointment on the said post. The matter was considered and in the interest of the work of the Corporation he was given an appointment vide order dated 22.4.1981 on daily wages for a period of three months. Since Ashok Kumar Singh did not turn up and the authority having found the work of petitioner no 1 satisfactory, extended his service until further orders vide memo no.1829 dated 24.6.1981, a true copy whereof has been annexed as Annexure 3. Petitioner no 1 continued to work on the said post without any break to the satisfaction of the authorities concerned. 6. Petitioner no 1 continued to work on the said post without any break to the satisfaction of the authorities concerned. 6. The case of petitioner no.2 is that in pursuance of an advertisement as published in the newspaper, he submitted an application for the post of purchase-cum-Laision Officer. He was called for an interview and was found fit for appointment but the authority, however, asked him to file another application which he filed on 19.9.1978 and the same was considered by the authority of the Corporation and he was given appointment for three months on daily wages on the post of Sr. Account Assistant vide office order dated 27.10.1978, as contained in Annexure 7. The service of the said petitioner was extended by the Corporation vide Annexure 8 until 18.2.1979. Later, the General Manager of the Corporation made a proposal that in the interest of work a post of Movement and Laision Inspector should be created which was approved by the Chairman-Cum-Managing Director of the corporation. Accordingly, the said petitioner was appointed on the said post on a consolidated pay of Rs 450/- per month vide respondent Corporation memo no.669 dated 19.2.1979 (Annexure 10 ). Later, the said petitioner was asked to take training of the post of Assistant Transport Officer from Shri S. K. Bakahi, who was to retire and after completion of the training and retirement of Shri Bakshi, he was appointed to work in his place, vide office order of the Secretary-Administration of the Corporation, contained in memo no.3225 dated 18.12.1980, a true copy whereof has been annexed as Annexure 13. 7. On 26.11.1981, the State Government, vide Annexures 14 and 15, issued instruction to the Managing Director of Corporation to extend its work and appoint the employees working on daily wages against temporary vacancies. Thereafter, the petitioners were absorbed by the Board of Directors of the Corporation against the post of class III Junior Assistant and their pay was also fixed, vide Annexures 16 and 17. According to the petitioners, before their absorption a consent was asked from them to which both protested and claimed absorption on regular basis on the posts of Junior assistant in the prrscribed scale. According to the petitioners, before their absorption a consent was asked from them to which both protested and claimed absorption on regular basis on the posts of Junior assistant in the prrscribed scale. The said protest petition of the petitioners was considered by a selection committee constituted by the Board of Directors of the Corporation consisting of three senior officers of the Corporation and, on consideration of their cases by the said committee, the creation of the post and their appointment were found to be justified. It was also considered that no extra burden would be borne by the Corporation on account of the said appointment. However, later an another committee differed with the said recommendation but, finally, the Management of the Corporation accepted the recommendation of the earlier committee and appointed them in the scale of rs.680/- to 965/- on the post of Movement Inspector which was suitable according to their qualification and in which posts the petitioners were working sjnce before. The services of the petitioners were regularised in the aforesaid capacity, vide letters of appointment dated 22-12-1987, contained in Annexures 27 and 28. Since thereafter the petitioners continued to work in that capacity. Later, on account of additional work entrusted to the petitioners, pay was raised from Rs.850 to Rs.1360/-. 8. Vide impugned instruction dated 10-8-1992, contained in Annexure 36, the State Government directed for cancellation of the petitioners upgradation on the post of Movement Inspector in the scale of Rs.850/- to rs.1360/- on the ground that a ban was put by the Bureau in the year 1982 on the creation of posts yet the appointments were made without roster clearance from the Bureau. The respondent Corporation in compliance of the said instruction of the Government retrenched the services of the petitioners from the posts of Movement Inspector and they have been treated ton casual basis again on the said posts vide order contained in the letter dated 17-8-1992 (Annexure 37 ). It is stated that no show cause was ever askid either by the State Government or the Corporation from the petitioners before the said orders were paseed on the basis of question raised in the House by a member of Legislative Assembly on non-existent ground. 9. It is stated that no show cause was ever askid either by the State Government or the Corporation from the petitioners before the said orders were paseed on the basis of question raised in the House by a member of Legislative Assembly on non-existent ground. 9. A counter affidavit has been filed on behalf of the respondents 1 and 2 in which it has been stated that the principle of roster clearance laid down by the Bureau in order to safe-guard the interest of Scheduled Castes and Scheduled Tribes has not been considered and followed in appointing the petitioners. It is further stated that having come to know that the guidelines issued by the Bureau, contained in Annexure A, have not been followed and the petitioners have been adjusted and allowed the pay scales in violation of the said Government directives, the Government had no option but to direct the Managing Director of the Corporation to cancel the appointment. In paragraph 9 of the said counter affidavit, it is contended that the state Government have power in terms of clause 48 of the Articles of association to give the direction in the public interest to the Corporation from time to time which is binding on the Corporation. In sum and substance, the contention in the counter affidavit is that as instructions issued by the bureau in the Department of Finance had not been followed before arriving at decision by the Corporation to absorb the petitioners, the impugned orders have been passed for valid reasons and the same are justified. 10. A counter affidavit on behalf of the respondents 3, 4 and 5, the corporation, its Managing Director and Secretaries, has also been filed and the reply to the said counter affidavit has. also been filed on behalf of the petitioners. A counter affidavit has also been filed on behalf of the Bureau (respondent no.6 ). In paragraph 19 of the said counter affidavit, it has been stated that the initial appointment of the petitioners and their regularisation on the post of Movement Inspector was within the powers of the Corporation (respondent no.8) and that their regularisation orders were cancelled at the instance of the instructions issued by the administrative Department, /. e. the Water Resources Department (respondent no.2) by the Corporation. e. the Water Resources Department (respondent no.2) by the Corporation. It is further stated that the said matter relating to the absorption/ regularisation of the petitioners to the post of Movement Inspector or the situation arising thereof is the subject matter of the Corporation and the water Resources Department and onus lies with them to contest the instant writ application. It is also stated that the Bureau has no role to play in the matter. 11. In response to the notice of this Court for the purpose of consideration as to what are the powers and role of the Bureau in such matters and how far the directions issued by it will be binding upon different government Corporation/companies, certain facts have been stated in the counter affidavit of the Bureau. It appears from the said facts that the Bureau was created vide Government resolutions no.2124 dated 1.3.1976 and 7812 dated 28.5.1979 as an independent wing of the Finance Department of the government of Bihar with a view of providing adequate guidelines to the state Undertaking for their proper development, planning, Inspect, Budgeting etc. so that optimum utilisation of benefits can be ensured and their targets got achieved. Accordingly, the State Government issued further directives to all State undertakings to make required alterations in their Articles of Association in the rules in respect of appointment/promotions so that directives of the State government in this regard may be enforced without any legal or procedural obstacles. The said directive is contained in resolution no.637 dated 10-4-1981, a photo copy whereof has been annexed as Annexure F/1 to the said counter affidavit. It is stated that, in terms of letters no.2686 dated 18-9-1986 and 581 dated 12-1-1979 issued by the Bureau, it was decided that no resolution should be/passed by the Board of Directors against the instructions issued by the State Government. In case of passing of such resolution a duty has been imposed upon the government nominated Director to inform about such a decision to the administrative Department of the concerned Undertakings/corporations and such decision shall not be implemented until the decision of the State government is communicated to the concerned Administrative Department. Photo copies of the said letters have been annexed as Annexure F/1 and G/1 to the said counter affidavit. Photo copies of the said letters have been annexed as Annexure F/1 and G/1 to the said counter affidavit. According to the Bureau, the Corporation being fully State sponsored Corporation/undertaking and its entire share capital being subscribed by the State Government is enlisted under the purview of the Bureau with Irrigation Department (now water Resources department) as its Administrative Department and, according to them, the recommendations of the Bureau are, therefore, binding upon the corporation. However, it is contended that the matter of appointment/regularisation of the petitioners to the post of Movement Inspector was reviewed by the administrative Department, namely, respondent no.2, and on consideration, it was found that regularisation of the petitioners against the Movement inspector was wholly unjustified and, thus, the same was cancelled, vide letter no.320 dated 10-8-1992 and, consequently, by the Corporation also, vide its letter no.2131 dated 17-8-1992. 12. Mr. Singh, learned counsel appearing for the petitioners has contended that the State Government has not been vested with the powers to interfere with the day to day affairs of the Corporation or with the powers of appointment/regularisation etc vested in the Board of Directors under the provisions contained in the Articles of Association of the Corporation. The power under Article 48 only relates to the policy matters in regard to which the State Government has been vested with the power to issue such directives or instructions as may be considered necessary in regard to the finance, conduct of business and affairs of the Company as to give effect immediately. According to the learned counsel, this power cannot be read in the manner vesting the power in the State Government to interfere with the decision of the Board of Directors of the Corporation taken under the provisions contained in Articles of Association. 13. According to Mr. Singh, Annexure A to the counter affidavit which is alleged to have not been complied with before regularising the services of the petitioners has no application to the instant case inasmuch as the present case is in relation to regularisation of services of the petitioners who were already in the employment of the Corporation whereas Annexure A deals with appointment/deputation on all the vacant posts in different undertakings and creation of all new post/upgradation since after the issuance of the said instruction on 10th May, 1982. 14. 14. It is contended that the petitioners have been appointed much earlier to the ban putforth by the Bureau. As regards the roster clearance the learned counsel submitted that the same has also been given effect to as far as practicable, even though in the matter of regularisation it is not necessary. In support of this the learned counsel has placed reliance on annexure 43 annexed to the reply affidavit which has been issued by the state Government in connection with the absorption of the services of daily wages in the Corporation for whom the requirement of prior approval of the administrative Department is not necessary. Accordingly, it has also been contended that even if there is conflict bftween the directives issued by the State Government and the directives of the bureau, then the directives issued by the State Government shall be binding upon the Corporation in terms of Article 48 and not of the Bureau. Mr. Singh has further submitted that the. role of Bureau is advisory and articles of Association of the Corporation do not recognise the Bureau. 15. On the other hand, Mrs. Khan, learned counsel appearing for the state has contended that in view of the complete ban, the Corporation had no authority to make appointment or even to regularise the services of the petitioners According to her, even the rules of appointment had not been followed inasmuch as the provision relating to roster clearance had also not been given effect to. It was also contended by her that in any view of the matter, the upgradation of the post was illegal as it involved the finances which required the sanction of the State Government and the same was not obtained by the Corporation. 16. Mr. Ganga Prasad Roy, learned counsel appearing for the Corporation has, however, contended that there were no sanctioned posts against which the appointments were made on the daily wages in between 1978 and 1980. 16. Mr. Ganga Prasad Roy, learned counsel appearing for the Corporation has, however, contended that there were no sanctioned posts against which the appointments were made on the daily wages in between 1978 and 1980. It is also contended that the petitioners were also not appointed against the sanctioned posts initially nor any Government procedure was followed But, however, learned counsel submitted that the Management made various suggestions and a proposal was putforward before the Board of Directors for creation of three posts of Movement Inspector in the pay scale of Rs 680/- to 965/- with four advance increments stating therein that the same would be their personal pay along with the proposal for appointment of petitioners. Learned counsel submitted that the pay scale of Movement Inspector in the State Government is Rs, 380/- to 860/-. 17. The Board of Directors in its 59th meeting decided to create three posts of Movement Inspectors in the scale of Rs.680/- to 965/- in the corporation and, further, to appoint the petitioners on the said posts with four advance increments treating it to be their personal pay. However, in the said decision, it was made clear that they will not have any claim in future on the basis of the report to place them in higher scale. 18. Learned counsel in support of this referred to Annexure 10 to the counter affidavit filed on behalf of the Corporation. It appears that after some time the cases of the petitioners were directly considered again by the Establishment Committee appointed by the Managing director which recommended the scale of the petitioners as Rs.850/-to 1360/- and the same was also approved by the then Chairman-Cummanaging director. Later, the matter was placed before the Board of Directors in its 74th meeting in which it was decided to place the same with some more informations in the next meeting and the same is still pending before the Board. Thus, learned counsel submitted that so far as the upgradation of post in the scale of Rs 850/- to 1360/- is concerned, there is no sanction yet given by the Board It is also contended that the grant of such scale was objected by the Corporation as well as the Bureau. 19. Thus, learned counsel submitted that so far as the upgradation of post in the scale of Rs 850/- to 1360/- is concerned, there is no sanction yet given by the Board It is also contended that the grant of such scale was objected by the Corporation as well as the Bureau. 19. As regards the jurisdiction of the Bureau learned counsel submitted that it was established by the Government for giving direction and guidance to the Corporation and the Board and, in view of the Committee constituted by the Government for appointment/promotion etc, it was necessary for the corporation to send the information to the Bureau with regard to the pay scale. However, learned counsel has admitted that the services of 511 daily wages employees were regularised in the establishment of the Corporation without referring the matter to the Bureau but ban contended that the said appointment was not a new appointment. 20. However, it is not disputed that the case of the petitioners was considered by a selection committee constituted by the Board of Directors of the Corporation consisting of three senior officers of the Corporation which approved their appointment by holding the same to be justified. It is also not in dispute that the committee considered that no extra burden would be borne by the Corporation on account of the said appointment and the Management of the Corporation finally accepted the recommendation of the said committee and appointed the petitioners on the post of Movement Inspector in the scale of Rs.680/- to 965/- which, admittedly, is suitable according to their qualification and on which posts the petitioners were working since before. Thus, in my opinion, it is not a case where the petitioners have been given a new appointment rather it is a case of regularisation of the petitioners in services which was done as far back as on 22.12.1987. Thus, it is difficult to accept the contention that the regularisation of the petitioners in service was not made after following the procedure. 21. In so far as the contention of the learned counsel for the respondents that the instruction issued by the Bureau contained in Annexure A which required the clearance of roster, in my opinion, there is no substance in the same. 21. In so far as the contention of the learned counsel for the respondents that the instruction issued by the Bureau contained in Annexure A which required the clearance of roster, in my opinion, there is no substance in the same. Annexure A was in relation to a ban issued by the Bureau on the appointment and deputation on the vacant posts and creation of new posts/ upgradation of posts. It is neither a case of appointment/deputation nor upgradation/creation of new posts. 22. From perusal of Annexures 27 and 28 which are the letters of the corporation regularising the services of the petitioners on the posts of movement Inspector it appears that the petitioners services were regularised on the posts of Movement Inspector in the regular establishment by giving four advance increments to them at the initial pay of the said posts. The petitioners were initially appointed on the said posts on a consolidated pay of Rs.450/- per month in the year 1979 (Annexure 10 ). It is true that, in the meantime, different decisions were taken by the Board of Directors before regularising their services. Moreover, it is admitted on behalf of the Corporation that the services of such 511 daily wages employees were regularised in the establishment of the Corporation without referring their cases to the Bureau and they are still working. 23. From the impugned Government instruction dated 10.8.1992 (Annexure 36) it appears that the reason for cancellation of regularisation of the services of the petitioners on the posts of Movement Inspector is that the aid posts were created and upgraded within a year in the scale of Rs.850/-to 1360/- despite the ban issued by the Bureau in the year 1988 but, in fact, from the stand of the Corporation itself it appears that the decision regarding up gradation of the posts in question in the scale of Rs.850/- to 1360/-we placed befote the Board of Director in its 74th meeting and the same is still pending and no sanction has yet been given by the Board. Thus, it appears that the Government under misconception of fact that, the said posts have been upgraded to the scale of Rs.350/- to 1360/- held the same to be contrary to the ban issued by the Bureau in the year 1982. 24. Thus, it appears that the Government under misconception of fact that, the said posts have been upgraded to the scale of Rs.350/- to 1360/- held the same to be contrary to the ban issued by the Bureau in the year 1982. 24. As regards the objecti on in the impugned Government instruction that the roster clearance was not taken before regularising their services, learned counsel for the State or of the Corporation has not referred to any rule in this regard re quiring taking clearance from the Bureau in the matter of regularisation of the services of the existing employees. Moreover, it has rightly been contended by Mr. Singh, learned counsel appearing for the petitioners that in the matter of regularisation of services of existing employees, there cannot be any question of clearance. 25. In so far as the power of the State Government, it is needless to say that under clause 48 notwithstanding anything contained in any of the articles of Association the Governor has power to issue such directives or instructions as may be considered necessary in regard to the finance, conduct of business and affairs of the Company, which the Company (Corporation) is bound to give effect to the same. Besides this, approval of the Governor is required in the matter of enterprises five year and annual plans of development and the enterprises capital budget and agreements involving foreign collaboration proposed to be entered into by the Company. But it is difficult to hold that the Government has been vested with the power to interfere with the day-to-day administration of the corporation. 26. The appointment /regularisation in the service of the Corporation is purely an administrative matter within the power of the Corporation, as is evident from sub-clause (iii) of clause 47 of the Articles of Association. 27. Learned counsel for the State placed reliance on a Division Bench order of this Court in [c. W J. C. No.6877 of 1992] disposed of on 13.11.92 to which I was also a party in which the petitioners of the said case had challenged the validity of the Government direction to the corporation downgrading their scale of pay. 27. Learned counsel for the State placed reliance on a Division Bench order of this Court in [c. W J. C. No.6877 of 1992] disposed of on 13.11.92 to which I was also a party in which the petitioners of the said case had challenged the validity of the Government direction to the corporation downgrading their scale of pay. The Court, on consideration of the fact that the matter involved the fixation of pay scale which was done contrary to the directives issued by the State Government was the policy matter for which the State government under Article 48 of the Articles of Association was empowered to take action inasmuch as the Court held that the question with regard to the fixation of pay scare of the employees is directly related With the finance of the Company and, as such, the State Government under Article 48 has been vested with the power to issue direction. Thus, the said decision of this Court is of no avail to the respondents in the facts and circumstances of the present case. 28. In so far the powers and role of the Bureau it appears that under the Government Resolution No.2124 dated 1.3.1976 and 7812 dated 28.5.1979, the same was created as an independent wing of the Finance Department with a view to provide adequate guidelines to the State Undertakings for their the State Government also issued further directives to all State Undertakings to make required alterations in their articles of association in the rules in respect of appointment/promotions so that directives of the State Government in this regard may be enforced without any legal or procedural obstacles. 29. 29. As I have already noticed above that Article 48 of the Articles of association empowers the governor to issue directives or instructions from time to time as may be considered necessary in regard to the finance, conduct business and affairs of the Company which shall immediately be given effect to by the Company Thus in my Opinion, it is difficult to accept the contention of learned counsel for the petitioners that the Bureau had no power to issue any guideline in the matter of appointments of staff of the Corporation the aforementtioned Government resolutions and the directives can very well be held to be in the light of the power conferred upon the Governor under article 48 and the same are binding upon all the Government Undertakings. However,in the facts of the present case and the decision arrived at hereinabove, i do not find it necessary to deal with this aspect, in detail. 30. In the result, the writ application is allowed and the impugned government instruction and the consequntial orders contained in Annexures 36 and 37 issued by the Corporation in so far as it purports to cancel the absorption of the petitioners as Movement Inspectors m the scale of Rs.680/-to 965/- are quashed and a writ in the nature of mandamus is issued commanding the respondents to treat them in continuous service on the posts of Movement inspector in the respondent Corporation and consequently to pay their salary, allowances etc. of the said posts. Petition allowed.