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Andhra High Court · body

2000 DIGILAW 861 (AP)

R. Krishna Murthy v. Allwyn Watches Limited

2000-11-17

B.SUDERSHAN REDDY

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B. SUDERSHAN REDDY, J. ( 1 ) THE petitioner in the instant writ petition challenges the order dated 27th November, 1995 on the file of the first respondent purporting to terminate his services from the category of Senior Manager (Personnel ). The impugned order, according to the petitioner, is arbitrary, mala fide and without jurisdiction. ( 2 ) THE petitioner herein was originally appointed in M/s. Hyderabad Allwyn limited on 8-6-1961 as a clerk. Later on, he was promoted in the said organization from time to time and ultimately held the post of senior Manager (Personnel ). ( 3 ) M/s. Hyderabad Allwyn Limited ran into financial sickness and was referred to the Board for Industrial Financial reconstruction under the provisions of the sick Industrial Companies (Special provisions) Act, 1985. It so happened, on account of rehabilitation package, m/s. Hyderabad Allwyn Limited was trifurcated into three different units viz. , allwyn (a unit of Voltas Limited), Allwyn auto Limited and Allwyn Watches Limited. M/s. Hyderabad Allwyn Limited was transferred to Voltas Limited and the other two units viz. , watch division and auto division were formed into two different units. ( 4 ) M/s. Hyderabad Allwyn Limited (a unit of Voltas Limited) introduced a scheme for voluntary retirement for its employees. The petitioner at the relevant time was working in the Voltas division and opted for voluntary retirement. The petitioner was accordingly relieved from the services of M/s. Hyderabad Allwyn limited (a unit of Voltas Limited) on 31-7-1994. The petitioner received all the benefits under the said scheme. It would be required to notice that at the time of trifurcation of former Hyderabad Allwyn limited with effect from 1-4-1993, the petitioner herein was allotted to Allwyn, (a unit of Voltas Limited) during the trifurcation. ( 5 ) INTERESTINGLY, the petitioner herein submitted an application on 25-7-1994 itself to the Chief Executive, Allwyn Watches limited, Patancheruvu offering his candidature for the post of Senior Manager (Personnel) in the organization on the same terms and conditions as applicable to him prior to his voluntary retirement from allwyn (a Unit of Voltas Limited ). On the date of application, he was yet to be relieved from the Allwyn (a unit of Voltas limited ). On the date of application, he was yet to be relieved from the Allwyn (a unit of Voltas limited ). The Chief Executive, Allwyn watches Limited made an endorsement on 30-7-1994 on the very same application to the following effect:"approved for appointment as Senior manager (Personnel) on the same terms and conditions as applicable on the rolls of H. A. Appointment orders to be issued accordingly. " ( 6 ) ACCORDINGLY, proceedings dated 1-8-1994 were issued appointing the petitioner herein as Senior Manager (Personnel) in the grade of Rs. 3350-120-4070-130-4950 with effect from 1-8-1994 subject to certain terms and conditions stated therein. One of the conditions inter alia reads that "his appointment is terminable on three months notice on either side or payment of three months salary in lieu thereof. " The petitioner continued in the service of the first respondent till the impugned orders were issued terminating his services with effect from 27-11-1995. ( 7 ) SRI Vedula Srinivas, learned Counsel for the petitioner contends that the impugned order terminating the services of the petitioner is arbitrary and illegal. It is contended that the impugned order is vitiated by malice in fact and in law. The learned Standing Counsel for the respondent company contends that the entire appointment of the petitioner itself is illegal, irregular and the termination of his service does not suffer from any legal infirmity. The petitioner has no right to continue in the services of the first respondent company on the basis of an illegal appointment. It is contended that the procedure for appointment is contrary to the directions issued by the Government from time to time. The then Chief Executive of the first respondent-Company appointed the petitioner herein as a Senior Manager (Personnel) without following the prescribed procedure. It was an individual decision with an oblique motive of favouring the petitioner. ( 8 ) THE facts speak for themselves. It is an illustration as to how and in what manner the Public Sector Undertakings, once considered to be the commanding heights of Indian economy, were managed by the concerned to whom the management has been entrusted throwing all winds to norms. It may sound strange that the Chief executive of a Government undertaking could appoint an individual after his retirement in a senior position without following any procedure whatsoever. But, it happened in the instant case. It may sound strange that the Chief executive of a Government undertaking could appoint an individual after his retirement in a senior position without following any procedure whatsoever. But, it happened in the instant case. The petitioner having applied for voluntary retirement from M/s. Hyderabad Allwyn Limited (a public Sector Undertaking before its trifurcation) files an application before the first respondent even before its acceptance and gets an appointment in a similar post of senior Manager (Personnel) on the strength of the mere application dated 25-7-1994. We have already noticed the endorsement made by the then Chief Executive. ( 9 ) THIS episode would reveal the manner in which the Public Sector Undertakings were managed in this country by those in the higher echelons who were entrusted with onerous responsibilities of the management. It appears as though the undertakings existed for themselves and to cater the needs of the chosen individuals. The managers obviously ignored that the public sectors were intended to promote the economic development of the country and for doing common good. They were not meant for enjoyment of perks and facilities at the expense of public funds and providing employment for the chosen individuals. The country mutely witnessed the collapse of mighty public sectors under their own weight, ultimately paving the way for privatization of even crucial Public sector Undertakings and core industries. The infrastructure built at the cost of public quietly passed into the private hands. It is the capital that rules the roost. ( 10 ) THE question that falls for consideration is as to whether the appointment of the petitioner as Senior manager (Personnel) in the first respondent company is a valid one. Admittedly, the first respondent-Company is a State government Company owned and controlled by the State Government. It is conceded that it is an instrumentality of the state. Needless to observe that all its actions are susceptible to be judicially reviewed by this Court in exercise of its jurisdiction under Article 226 of the Constitution of india. All its actions are required to be fair reasonable and in the public interest. There cannot be any dispute whatsoever that the first respondent company is bound by the directions issued by the Government from time to time. The Government of Andhra pradesh vide G. O. Ms. All its actions are required to be fair reasonable and in the public interest. There cannot be any dispute whatsoever that the first respondent company is bound by the directions issued by the Government from time to time. The Government of Andhra pradesh vide G. O. Ms. No. 545, dated 16-9-1991 issued guidelines to be followed for implementing the various issues involved in respect of the State Level Public enterprises. Clause 3 of the guidelines deals with personnel matters. Clause 3. 02. 01 says that all Public Enterprises should prepare an organization chart indicating the personnel category-wise and send the same to the Administrative Department for approval. Clause 3. 02. 03 says that the administrative Department may in consultation with the Department of Public enterprises sanction the cadre strength. Clause 3. 03. 01 says that each Public enterprise shall be free to recruit personnel as per sanctioned strength. However, the selection procedure shall be as set out herein and subject to rules of reservation mentioned herein and as modified from time to time. Clause 3. 03. 04 says that for posts carrying a basic pay of Rs. 3,500 p. m. and above, Selection Committee shall be constituted under the Chairmanship of administrative Secretary by the Managing director of the Enterprise concerned. Commissioner of Public Enterprises or his representative, Finance Secretary, an expert member nominated by Commissioner of public Enterprises, the Managing Director of the Enterprise concerned shall be members of the Committee. Clause 3. 03. 05 says that for carrying a basic pay of Rs. 2,500 p. m. and above but less than Rs. 3,500 p. m. Selection Committee may be constituted by the Managing Director of the concerned enterprise. For this purpose the Managing director will approach the Department of public Enterprises for identifying an expert to be on the Selection Committee. In addition the DPE will be represented by its nominee. Clause 3. 03. 09 says that Public enterprises should follow scrupulously the rules of reservation communicated from time to time. ( 11 ) CAN the appointment of the petitioner be held to be a regular one? It is already noticed that the then Chief executive of the first respondent-Company received the application dated 25-7-1994 from the petitioner and made an endorsement on the very same application appointing the petitioner subject to the terms and conditions indicated by the petitioner in his application. It is already noticed that the then Chief executive of the first respondent-Company received the application dated 25-7-1994 from the petitioner and made an endorsement on the very same application appointing the petitioner subject to the terms and conditions indicated by the petitioner in his application. The matter never went before any Selection Committee. The petitioner was not even subjected to undergo any formal selection process. The petitioner asked for a senior position in the first respondent-Company and got it from its Chief Executive. All the norms are thrown to winds. The endorsement on the application of the petitioner reads something like a fireman . There is absolutely, no doubt whatsoever to hold that the petitioner s appointment itself is not a regular one. It is contrary to the guidelines and circular instructions issued by the Government from time to time prescribing methodology for selection of personnel in Public Sector Undertakings. ( 12 ) SRI V. Srinivas, learned Counsel for the petitioner, however, contends that in order to arrive at a conclusion that the petitioner s appointment is contrary to the guidelines, a finding has to be recorded and to arrive at such a finding, necessarily an enquiry will have to be made in accordance with the principles of natural justice. Admittedly, in this case notice has not been given to the petitioner before holding that his appointment is irregular. Hence, the impugned order of termination is violative of principles of natural justice. It is required to notice that there is no plea raised by the petitioner in the affidavit filed in support of the writ petition. The learned Counsel for the petitioner, however, would place reliance upon a decision of the Supreme court in Basudeo Tiwary vs. Sido Kanhu university and others. In the said case, the vice-Chancellor of the University terminated the services of a Lecturer in history on the ground that his appointment is contrary to the provisions of the Act. The vice-Chancellor invoked his power under section 35 (3) of Bihar Universities Act, which provides that an appointment could be terminated at any time without notice if the same had been made contrary to the provisions of the Act, statutes, rules or regulations or in any irregular or unauthorized manner. The vice-Chancellor invoked his power under section 35 (3) of Bihar Universities Act, which provides that an appointment could be terminated at any time without notice if the same had been made contrary to the provisions of the Act, statutes, rules or regulations or in any irregular or unauthorized manner. The Supreme Court having examined the provision observed:"the condition precedent for exercise of this power is that an appointment had been made contrary to Act, Rules, statutes and Regulations or otherwise. In order to arrive at a conclusion that an appointment is contrary to the provisions of the Act, statutes, rules or regulations etc. , a finding has to be recorded and unless such a finding is recorded, the termination cannot be made, but to arrive at such a conclusion necessarily an enquiry will have to be made as to whether such appointment was contrary to the provisions of the Act etc. If in a given case such exercise is absent, the condition precedent stands unfulfilled. To arrive at such a finding necessarily enquiry will have to be held and in holding such an enquiry the person whose appointment is under enquiry will have to be issued to him. If notice is not given to him then it is like playing Hamlet without the Prince of denmark, that is, if the employee concerned whose rights are affected, is not given notice of such a proceeding and a conclusion is drawn in his absence, such a conclusion would not be just, fair or reasonable as noticed by this Court in D. T. C. Mazdoor Sabha s case. In such an event, we have to hold that in the provision there is an implied requirement of hearing for the purpose of arriving at a conclusion that an appointment had been made contrary to the Act, statute, rule or regulation etc. , and it is onry on such a conclusion being drawn, the services of the person could be terminated without further notice. " ( 13 ) IN the instant case, there is no such provision requiring any interpretation as such. On the other hand, the Management relied upon the very terms of appointment and has given three months salary and sent a Cheque vide letter dated 28-11-1995 in lieu of notice as per Clause 4 of appointment. " ( 13 ) IN the instant case, there is no such provision requiring any interpretation as such. On the other hand, the Management relied upon the very terms of appointment and has given three months salary and sent a Cheque vide letter dated 28-11-1995 in lieu of notice as per Clause 4 of appointment. The learned Counsel for the petitioner would place reliance upon a decision of the Supreme Court in Central inland Water Transport Corporation Limited vs. Brojo Nath contending that the termination invoking the clause in the appointment order is void. Once again, it is required to notice that the respondent-Management has not invoked any rule which is similar to rule 9 (i) of Central Inland Water Transport corporation Limited Service Discipline and appeal Rules, 1979. In the said rules, Rule 9 dealt with termination of employment for acts other than misdemeanour, which has provided that the employment of a permanent employee shall be subject to termination on three months notice on either side. The Supreme Court in Central inland Water Transport Corporation struck down the Rule as unconstitutional. In the instant case, the Management invoked one of the clauses in the contract subject to which the petitioner has been appointed into the service. The terms and conditions are not challenged in this writ petition. Therefore, the Court cannot go into the question as to whether one of the clauses in the appointment order itself is void under section 23 of Contract Act as being opposed to public policy. The Court need not express any opinion as to whether the said clause is ultra vires Article 14 of the Constitution of india. The Management invoked one of the clauses in the order of appointment and terminated the services of the petitioner. ( 14 ) BUT the crucial question that arises for consideration is as to whether this Court in exercise of its jurisdiction under article 226 of the Constitution of India should interfere and set aside the order of termination in the light of the facts and circumstances of this case. We have already noticed the method and manner in which the petitioner has been appointed into the service of an instrumentality of the State. No procedure has been followed for appointing the petitioner into the service. We have already noticed the method and manner in which the petitioner has been appointed into the service of an instrumentality of the State. No procedure has been followed for appointing the petitioner into the service. The petitioner has not even appeared before the Selection Committee, The Management, according to the guidelines issued by the government, is required and bound to constitute a Selection Committee for selecting its employees, particularly, at the level of the officers drawing substantial salary. The Chief Executive of the first respondent having received the application from the petitioner straightaway appointed him. The conclusion is irresistible that the petitioner had not been appointed in accordance with law and there is absolutely no doubt whatsoever that the appointment itself is an irregular one. ( 15 ) IN the circumstances, it cannot be said that the termination of the petitioner s service without issuing any notice has caused any prejudice to the petitioner. ( 16 ) THE Supreme Court in Aligarh muslim University vs. Mansoor Ali Khan while interpreting Rule 5 (8} (i) of the Aligarh university Non-Teaching Employees (Terms and Conditions of Service) Rules, 1972, having held that the termination of the petitioner therein was in violation of principles of natural justice, as notice contemplated under the rule has not been given, refused to interfere in the matter. The supreme Court after referring to M. C. Mehta vs. Union of India ( (1999) 6 SCC 237 ) and s. L. Kapoor vs. Jagmohan ( (1980) 4 SCC 379 ) observed "if no other conclusion was possible on admitted or indisputable facts, it is not necessary to quash the order which was passed in violation of natural justice. of course, this being an exception, great care must be taken in applying this exception. " the Supreme Court also took note of the principle that "in addition to breach of natural justice, prejudice must also be proved". However, the Supreme Court cautioned that the useless formality theory is an exception. But the Supreme Court had taken into consideration that apart from the class of cases of "admitted or indisputable facts leading only to one conclusion", there had been a considerable debate of the application of that theory of useless formality . However, the Supreme Court cautioned that the useless formality theory is an exception. But the Supreme Court had taken into consideration that apart from the class of cases of "admitted or indisputable facts leading only to one conclusion", there had been a considerable debate of the application of that theory of useless formality . ( 17 ) IN the said decision, the Supreme court also applied the principle that "if the quashing of the order which is in breach of natural justice is likely to result in revival of another order which is in itself illegal, it is not necessary to quash the order merely because of violation of principles of natural justice. ( 18 ) WHETHER the case on hand would fall under the exception to the principles of natural justice? Whether the admitted or indisputable facts in the instant case lead only to one conclusion? As already been noticed, the appointment of the petitioner is without following any procedure whatsoever. The Chief Executive of the first respondent, which is an instrumentality of the State, straightaway could not have appointed the petitioner into its service. The appointment is contrary to the guidelines issued by the Government in the matter of recruitment of personnel in the Public sector Enterprises. Therefore, any order in i this case interfering with the order of termination would result in upholding an irregular and illegal order of appointment of the petitioner into the services of the first respondent-Company. ( 19 ) IN the instant case, indisputable facts lead to an irresistible conclusion that the petitioner s appointment itself was an irregular one. In the circumstances, it is not necessary to quash the impugned order even if it is in breach of principles of natural justice. ( 20 ) FOR the aforesaid reasons, I do not find any merit in this writ petition. The same shall accordingly stand dismissed. No order as to costs. ( 21 ) CONSEQUENTLY, the interim order earlier granted by this Court shall stand vacated.