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2007 DIGILAW 1964 (ALL)

BRIGADIER AMITABHA v. STATE OF UTTAR PRADESH

2007-07-25

SANJAY MISRA, SUDHIR AGARWAL

body2007
JUDGMENT Hon’ble Sudhir Agarwal, J.—Both these writ petitions filed by the petitioner Brigadier Amitabha since involves similar questions of law and fact, as agreed by learned Counsel for the parties, they have been heard together and are being decided by this common judgment. 2. The petitioner joined Indian Army commissioned as 2nd Lieutenant in September, 1970 and after serving for about 34 years was relieved therefrom since he was going to attain the age of superannuation. It so happened that he applied for premature retirement since in the meantime he was offered employment as Director Sainik Kalyan Evam Punarwas, State of U.P. by the State Government and in order to join the new assignment, he sought premature retirement from Indian Army which was accepted by the Government of India Ministry of Defence vide letter dated 30.8.2004. The State Government issued appointment letter dated 9.8.2004, a copy whereof has been placed on record as Annexure-3 to the writ petition No. 1659 of 2006. to the petitioner appointing him on the post of Director Sainik Kalyan Evam Punarwas The aforesaid post itself was temporary, consequently the petitioner was appointed temporarily on the said post in the pay scale of Rs. 14,300 -18,300/ subject to certain conditions contained in the said letter dated 9.8.2004 which includes that the appointment of the petitioner is on contract basis initially for a period of one year, liable to be extended twice each time for one year but shall automatically cease on expiry of three years or on attaining the age of 60 years which ever is earlier. The petitioner while working as Director, Sainik Kalyan Evam Punarwas was under the State Government and his services were liable to be terminated even before expiry of one year in case of being found un-satisfactory. Pursuant to the said appointment letter, the petitioner joined on 14.9.2004. The petitioner while working as Director, Sainik Kalyan Evam Punarwas was under the State Government and his services were liable to be terminated even before expiry of one year in case of being found un-satisfactory. Pursuant to the said appointment letter, the petitioner joined on 14.9.2004. It appears that after expiry of one year, the matter of extension was considered by the Government and vide order dated 17.10.2005 (Annexure-7 in writ petition No. 1659 of 2006), the extension was allowed for a period of two years with effect from 14.9.2005 to 13.9.2007 subject to other conditions as contained in the appointment letter dated 9.8.2004.Further while working as Director, Sanik Kalyan Evam Punarwas U.P .Lucknow, the State Government passed another order on 22.9.2005 giving additional charge of Managing Director U.P. Purva Sanik Kalyan Nigam Ltd. (hereinafter referred to as ‘Corporation’) to the petitioner. The order dated 22.9.2005 mentions that in his capacity as Director, Sainik Kalyan Evam Punarwas U.P., the petitioner was Ex. Officio(Paden) Director of the Corporation and therefore, shall look after the work of the post of Managing Director of the Corporation for which no additional remuneration shall be payable to him. The petitioner pursuant to the aforesaid order of the Government started to function as Managing Director of the Corporation. It is said that the Board of Directors of the Corporation vide resolution No. 62/2004, passed in its meeting dated 30.1.2006 also approved/ rectified the said decision of the Government. The petitioner claimed to have worked very efficiently as a result whereof the Corporation showed wide spread progress, and development in various spheres of its functioning. It is said that the concerned Minister of the department namely respondent No. 2 in writ petition No. 1659 of 2006 desired vide its order communicated to the petitioner vide Government letter dated 4.4.2006 to terminate all the persons working as Zila Sainik Kalyan Evam Punarwas Adhikari in 65 districts of State of Uttar Pradesh to which the petitioner did not agree and refused to comply. He submitted his reply vide letter dated 7.4.2006 requiring the Government to pass appropriate order at its own level : Vide letter dated 27.4.2006, sent by the Special Secretary to the Government, the petitioner was informed that he should comply with the Government letter dated 4.4.2006 and inform the Government accordingly, whereupon, the petitioner sent letter dated 27.4.2006 informing the concerned authorities not to make any further payment of salary to various persons working as Zila Sainik Kalyan Evam Punarwas Adhikari whose period of contract has already expired.The petitioner thereafter also requested the Government to extend the contract of the aforesaid officers since they are involved in discharge of pious duty of ensuring payment of pension to Army veteran and war widows etc and are working re settlement of soldiers. It is said that the concerned Minister got annoyed with the petitioner as a result there of he directed the Principal Secretary, Samaj Kalyan and Sainik Kalyan to remove the petitioner from the post of Managing Director as a consequence whereof the order dated 20.9.2006 was issued by the Principal Secretary, Sanik Kalyan department communicating the decision of the Government to withdraw additional charge of the post of Managing Director of the Corporation from the petitioner and further directing that till further arrangement, Colonel A.K. Bajpai (retired) who was working as General Manager of the Corporation .shall look after the work of Managing Director of the Corporation. Aggrieved by the order dated 20.9.2006, the petitioner preferred writ petition No. 1401 of 2006 (hereinafter referred to as first petition) seeking the following reliefs : “(a) To issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 20.09.2006 passed by the opposite party No. 1, and also the letter dated 04.08.2006 arbitrarily issued by the opposite party No. 4, the true copies of which are contained as Annexure Nos. 1 and 16 respectively to the writ petition. 1 and 16 respectively to the writ petition. (b) To issue a writ order or direction in the nature of mandamus commanding the opposite parties to allow the petitioner to continue to function as Managing Director of Uttar Pradesh Poorva Sainik Kalyan Nigam Ltd., Lucknow notwithstanding the impugned order dated 20.09.2006 contained as Annexure No. 1 to the writ petition and further restraining the opposite parties 1 and 2 from treating and recognizing and also restraining the opposite party No. 3 from working as Managing Director of Uttar Pradesh Poorva Sainik Kalyan Nigam Ltd., Lucknow on the basis of the impugned exercise contained in Annexure 1 to the writ petition. (c) To award the cost of this petition in favour of the petitioner. (d) To issue any other writ, order of direction in the nature and manner which this Hon’ble Court may deem fit and proper in the circumstances of the case.” 3. While the aforesaid writ petition was pending, another order was passed on 24.11.2006 stating that the extension of contract for the post of Director Sainik Kalyan Evam Punarwas U.P. Lucknow for two years by order dated 17.10.2005 was not in accordance with the terms of appointment letter dated 9.8.2004 which provides that at a time the extension can be granted only for one year, and therefore, the said extension expired on 13.9.2006 and there having no justification for extending the period of contract, therefore, the contract of the appointment of the petitioner on the said post of Director Sainik Kalyan Evam Punarwas U.P. Lucknow, is being cancelled/revoked with immediate effect. 4. Aggrieved by the said order dated 24.11.2006, the petitioner has preferred writ petition No. 1659 of 2006 (hereinafter referred to as second petition) seeking the following reliefs. (a) To issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 24.11.2006 passed by the opposite party No. 1, the true copy of which is contained as Annexure-1 to the writ petition. (b) To issue a writ, order or direction in the nature of mandamus commanding the opposite parties to allow the petitioner to continue to function as Director Sanik Kalyan Evam Punarwas U.P. Lucknow notwithstanding the impugned order dated 22.11.2006 contained as Annexure No. 1 to the writ petition. (c) To award the cost of this petition in favour of the petitioner. (c) To award the cost of this petition in favour of the petitioner. (d) To issue any other writ, order or direction in the nature and manner which this Hon’ble Court may deem fit and proper in the circumstances of the case. 5. The second writ petition at the time of admission came up before the Division Bench of this Court on 17.12.2006 whereupon an interim order was passed to the following effect : “......... in view of the aforesaid facts, we stay the operation and enforcement of the impugned order dated 24.11.2006, a copy of which has been annexed as Annexure-1 to the writ petition till further orders of this Court.. The opposite parties shall allow the petitioner to work on the post on which he was working prior to the passing of the impugned order.” 6. It is said that pursuant to the aforesaid interim order, the petitioner had continued to discharge his duties as Director Sainik Kalyan Evam Punarwas U.P. Lucknow. 7. Assailing the order dated 24.11.2006 in the second writ petition, the learned Counsel for petitioner contended that the appointment of the petitioner was for a particular tenure namely initially for a period of one year and subsequently it was extended for a period of two years. The letter dated 17.10.2005 clearly provides the period of contract of the petitioner 14.9.2005 to 13.9.2007. Having been appointed for a particular tenure, he contended that the said period cannot be curtailed or reduced and that too in an abrupt manner without any show cause notice and opportunity to the petitioner and therefore, the impugned order dated 24.11.2006 in so far as it has the effect of curtailing the tenure of the petitioner on the post of Director, Sainik Kalyan Evam Punarwas, U.P. Lucknow and has effect of terminating his service from the said post is clearly illegal, arbitrary being violative of Articles 14 and 16 of the Constitution of India. He further contends that the aforesaid order has been passed as a result of malafide on the part of respondent No. 2 i.e. the concerned Minister of the department for not complying with his illegal wishes of termination of 65 officers working as Zila Sainik Kalyan Evam Punarwas Adhikari and therefore, the impugned order is vitiated in law and is liable to be set aside. 8. 8. Assailing the order impugned in the first writ petition, he contented that the aforesaid order is also illegal having been passed on account of malafide of concerned Minister who has been impleaded eo-nomine as respondent No. 4 in the first writ petition. He further contends that the order dated 20.11.2006 in so far as it directs that the respondent No. 3, Colonel A.K. Bajpai would look after the work of Managing Director is concerned, the same is patently illegal in as much as under the provision of Articles of Associations, the duties of Managing Director cannot be looked after by a person who is below the rank of Brigadier and is not a Director of the Company. He further submits that the power to appoint a person as Managing Director of the Corporation vests with the Board of Directors of the Corporation and therefore, the State Government has no authority to pass such order. Hence the impugned order is illegal and without jurisdiction. 9. The respondents have opposed the writ petition by filing a counter affidavit. The respondent No. 2 i.e. the Corporation has filed its separate counter affidavit in the first writ petition alleging that there is no sanctioned post of Managing Director in the Corporation and the highest managerial post in the Corporation is of General Manager which was duly sanctioned by the Government vide its order dated 26.3.1991. The order dated 20.9.2006 does not appoint Colonel A.K. Bajpai working as General Manager as Managing Director of the Corporation but only permits him to discharge duties of the said post meaning thereby till an appointment on the said post is made, he has been authorised only to look after the duties of the said post which is a stop gap arrangement. It is further said that the petitioner was only given additional responsibility of the Managing Director of the Corporation and he has no right to hold the post, therefore the writ petition to challenge the order dated 20.9.2006, at the instance of the petitioner, is wholly misconceived and liable to be dismissed. It is further said that the petitioner was only given additional responsibility of the Managing Director of the Corporation and he has no right to hold the post, therefore the writ petition to challenge the order dated 20.9.2006, at the instance of the petitioner, is wholly misconceived and liable to be dismissed. It is said that while authorising the petitioner to discharge additional duties as Managing Director of the Corporation, it was already made clear that he would not be entitled for any additional pay or allowance for the said work and therefore, withdrawing the said duties from the petitioner does not entail any civil consequences warranting any interference of this Court. It is also pointed out that the order dated 20.9.2006 has been modified by the Government vide order dated 11.10.2006 terminating the arrangement of giving additional charge of Managing Director of the Corporation to the petitioner since he was not being given any additional remuneration for the same and was already working as Director, Sainik Kalyan Evam Punarwas, U.P. Lucknow. 10. Learned Counsel appearing for respondent No. 2 in first writ petition contended that the petitioner is blowing hot and cold in the same breath as on the one hand he treats his appointment to assume charge of Managing Director pursuant to the order dated 22.11.2005 of the State Government dated to be valid but simultaneously is challenging the authority of the State Government in withdrawing the said arrangement on the ground that the State Government has no authority or jurisdiction to pass such orders since the power of appointment vests with the Board of Directors of the Corporation. He contended that since the petitioner was given said charge by the State Government, therefore, the same authority has withdrawn the same and there is no illegality in the order impugned in the first writ petition. He further contended that there is no illegality even otherwise in permitting the General Manager of the Corporation to look after the duties of the Managing Director of the Corporation since it is only a stopgap arrangement till appointment in accordance with the Article of Associations is made and it is not contrary to any statutory provision. He further contended that there is no illegality even otherwise in permitting the General Manager of the Corporation to look after the duties of the Managing Director of the Corporation since it is only a stopgap arrangement till appointment in accordance with the Article of Associations is made and it is not contrary to any statutory provision. He further raised legal issue with respect to the maintainability of the writ petitions on the ground that the Article of Associations of the Corporation are not statutory in nature and in any case the order impugned in the writ petition amounts to termination of service of the petitioner from the Corporation against which no writ petition under Article 226 of the Constitution of India would lie. He contended that the engagement of the petitioner was purely contractual and stopgap, it was terminated in accordance with the terms of the contract and therefore, there is no question of violation of any fundamental or legal right of the petitioner hence the writ petition under Article 226 of the Constitution of India is not maintainable. 11. The learned Standing Counsel representing the State Government in both the writ petitions also contended that both the appointments of the petitioner were contractual in nature and do not govern by any statutory provision. At the best if the contention of the petitioner is accepted, there is breach of the contract, and for that purpose, remedy lies in the common law but not by filing a writ petition under Article 226 of the Constitution. He further contended that strictly in accordance with the terms of contract, the petitioner has been terminated and there is neither any malafide nor any violation of any statutory provision nor there is any error in the orders impugned in both the writ petition and the writ petitions are liable to be dismissed even on merits. 12. We have heard the learned Counsel for the parties and perused the record. We propose to deal firstly the first writ petition whereby additional charge of the post of Managing Director of the Corporation has been withdrawn from the petitioner. 13. It is not disputed by the parties that the Corporation is a Company registered under the Companies Act 1952 (hereinafter referred to as the Act) vide certificate of incorporation No. 20-10780/89 issued by the Registrar of the Companies, Kanpur on 23rd May, 1989. 13. It is not disputed by the parties that the Corporation is a Company registered under the Companies Act 1952 (hereinafter referred to as the Act) vide certificate of incorporation No. 20-10780/89 issued by the Registrar of the Companies, Kanpur on 23rd May, 1989. The corporation is a Government company within the meaning of Section 617 of the Act, 1936 was incorporated with object mainly described as under : (i) “To provide financial assistance to the ex-servicemen, their dependants family members of Ex-servicemen in schemes approved by the company. (ii) To encourage and impart training for entrepreneurship amongst the Ex-servicemen and their dependants family members. (iii) To arrange loans, subsidy grants and margin money loans to Ex-Servicemen and their dependants family members individually or through their co-operative societies established for the purpose to provide self-employment in trade and industry purposes. (iv) To frame and identify viable projects and model schemes and provide technical consultancy services to Ex-Servicemen and their dependants family members, (v) To strength and assist co-operative and other Institutions of the Ex-Servicemen and their dependants family members. (vi) To avail assistance from polytechnics, it is, Management Institutions, Agro Institutions and other Institutions for providing training to the Ex-Servicemen and their dependants family members in relevant trades. (vii)To provide to serving soldiers (prior to their retirement) Ex-Servicemen and their dependants family members for the opportunity of Employment/self employment and impart training in connection....with (viii)To make available loans etc. to Ex-Servicemen and their dependants family members under margin money scheme of banks or other financial institutions, (ix) To identify trades and industries which can be taken up by Ex-Servicemen and their dependants family members and to undertake feasibility studies of such schemes for the benefit of ex-servicemen entrepreneurs, (x) To make bulk purchases of raw materials, machineries, tools and implements and to ensure their fair distribution among ex-servicemen entrepreneurs, (xi) To undertake marketing activities and in pursuance thereof set up sales emporia within and outside the State of Uttar Pradesh.” 14. The aforesaid objects are stated in clause (III) of the memorandum of associations of the Company, a copy whereof has been placed on record as Annexure-2 to the first writ petition. The aforesaid objects are stated in clause (III) of the memorandum of associations of the Company, a copy whereof has been placed on record as Annexure-2 to the first writ petition. The company has also framed its articles of associations in accordance with the provisions of the Act duly proved by the Registrar of the Companies which shows that the State Government being 100 % share holder of the company has pervasive control on the Corporation in various spheres of its activities. In para 65 of the article of association, power of appointment of Director has been conferred upon Governor of Uttar Pradesh which reads as under : “The Governor of Uttar Pradesh shall be entitled to appoint not less than one third of the total numbers of Directors of the Company and shall be at liberty to re move from office all or any of the persons so appointed and on removal, resignation, retirement or death of any such person, whether original or substituted or upon his office being vacated for any cause whatsoever, to appoint any person or persons in his or their places. Such Directors shall not be liable to retire by rotation.” 15. Clause 72 of the Article of Associations provide as under : 72 . ‘The office of a Director shall ipso facto become vacant if,’ (I) “Having been nominated a Director by the Governor of Uttar Pradesh is removed or substituted by the Governor of Uttar Pradesh.” 16. The appointment of Managing Director and its functions are provided in Clauses 106 to 112 which provides as under, 106. Subject to the provision of the Act and subject also to the control and superintendence of the Board the business and affairs of the company shall be carried out and managed by the Managing Director for the time being of the Company.s 107. The Board shall from time to time appoint any of the Director who is officer not below the rank of Brigadier or its equivalent from Navy/Air Force as Managing Director of the Company. 108. The Board shall from time to time appoint any of the Director who is officer not below the rank of Brigadier or its equivalent from Navy/Air Force as Managing Director of the Company. 108. Subject to the provision of section 255 of the Act, the Managing Director shall not while he continues to hold that office, be subject to retirement by rotation and he shall not be reckoned as a Director for the purpose of determining the rotation of retirement of Directors or in fixing the number of Directors to retire but ( subject to the provisions of any contract between him and the Company) he shall be subject to the same provisions as to resignation and removal as the other Directors and he shall, ipso facto, and immediately, cease to be the Managing Director if he ceases to hold the office of Director from any cause. 109. The Managing Director shall be paid such remuneration ( whether by way of salary or commission or participation in profits or partly in one way and partly in another)as may from time to time be determined by the Board. 110. Subject to the provisions of the Act and in particular to the prohibition and restrictions contained in section 292 thereof, the Board may from time to time entrust to and confer upon the Managing Director for the time being such of the power exercisable under these presents by the Board as it may think fit, and may confer such powers for such time and to be exercised for such objects and purposes, and upon such terms and conditions and with such restrictions as it thinks fit, and the Board may confer such powers, either collaterally with, or to the exclusion or , and in substitution for all or any of the power of the board in that behalf and may from time to time revoke, withdraw alter or vary all or any such powers. 111. The Company shall not appoint or employ or continue the appointment or employment of any person on its Managing Director or whole time Director who, (a) is an undischarged insolvent or has at any time been adjudged on insolvent. 111. The Company shall not appoint or employ or continue the appointment or employment of any person on its Managing Director or whole time Director who, (a) is an undischarged insolvent or has at any time been adjudged on insolvent. (b) Suspends or has at any time suspended payment to his creditors, or makes or has at any time made, a composition with them, or (c) is or has at any time been convicted by a Court of an offence involving moral turpitude. 112. The Board may from time to time provide for the management of the affairs of the Company conducted outside its registered office in respect of individual units owned, managed or by it or elsewhere and may in pursuance thereof appoint a person or persons to conduct and look after the business and affairs of the company and may, subject to the general control, direction and superintendence authorise him or them to exercise such of the powers as the Board may deem.” 17. A perusal of the aforesaid provisions of Articles of Associations make it clear that (for appointment of Director of the Corporation) State Government possess enough power and such directors can also be removed by the same authority. A Managing Director has to be one of the Directors of the Corporations and the only limitation with respect to his qualification as prescribed in clause 107 is that he should be an officer not below the rank of Brigadier or its equivalent from Navy/Air Force. However, any further and detailed scrutiny of the said provision , in our view may not be necessary in this case for the reasons that it is not a case of the petitioner also that he was appointed as Managing Director of the Corporation under the provisions of Articles of Associations, but, admittedly, in addition to his appointment as Director Sanik Kalyan Evam Punarwas, the State Government vide order dated 22.9.2005 gave additional charge of Managing Director of Corporation to the petitioner without any additional remuneration etc. Since only additional charge was given and that too by the State Government, it cannot be said that it has no authority to withdraw the same. 18. Moreover, the entire argument of the learned Counsel for petitioner is based on the provisions of Article of Association and the alleged contravention thereof. Since only additional charge was given and that too by the State Government, it cannot be said that it has no authority to withdraw the same. 18. Moreover, the entire argument of the learned Counsel for petitioner is based on the provisions of Article of Association and the alleged contravention thereof. The statutes of Articles of Association framed under the Act came up for consideration before the Apex Court in Cooperative Central Bank Ltd and others etc. v. Additional Central Tribunal A.P. Hyderabad and others, AIR 1970 S.C, 245 and it held , “We are unable to accept the submission that the bye-laws of a Cooperative Society framed in pursuance of the provisions of the Act can be held to be law or to have the force of law.......they may be binding between the persons effected by them, but they do not have the force of a statute.....In fact, after such bye-laws laying down the conditions of service are made and any person enters in the employment of a society those conditions of service will have to be treated as conditions accepted by the employee when entering the service and will thus bind him like conditions of service specifically forming part of the contract of service. The bye-laws that can be framed by a society under the Act are similar in nature to the Article of Associations of a Company incorporated under the Companies Act and such Articles of Association have never been held to have the force of law........”(emphasis added) 19. In Hanuman Prasad Gupta v. Hira Lal, AIR 1971 SC 206 , the Apex Court held, “.........It is well established that the Articles of Association constitute a contract between a company and its members in respect of their ordinary rights as members" (emphasis added) 20. In Hanuman Prasad Gupta v. Hira Lal, AIR 1971 SC 206 , the Apex Court held, “.........It is well established that the Articles of Association constitute a contract between a company and its members in respect of their ordinary rights as members" (emphasis added) 20. In Babaji Kondaji and others v. Nasik Merchants Co-operative Bank Ltd. Nasik, AIR 1984 SC 192 , the Apex Court reiterated its view taken in Central Cooperative Bank (supra) as under, “.............Bye- laws of a Cooperative Society can at best have the status of an Article of Association of a Company governed by the Companies Act, 1956 and as held by this Court in Co-operative Central Bank Ltd. v. Additional Industrial Tribunal, Andhra Pradesh (1970) 1 SCR 205 , AIR 1970 SC 245 , the bye-laws of a Cooperative Society framed in pursuance of the provisions of the relevant Act cannot be held to be law or to have the force of law. They are neither statutory in character nor they have statutory favour so as to be raised to the status of law.” 21. It is no doubt true that the Corporation is a State Government company and the Government of U.P. has pervasive control over it thus answers, the description of “State” under Article 12 of the Constitution of India but that by itself would not mean that against each and every action of the Corporation a writ petition would lie. As long as back as 1970 a Constitution Bench of the Apex Court in R.C. Capoor v. Union of India, AIR 1970 SC 564 held “A company registered under the Companies Act is a legal person, separate and distinct from its individual members. Property of the Company is not the property of the shareholders. A shareholder has merely an interest in the Company arising under its Article of Association measured by a sum of money for the purpose of liability, and by a share in the profit.” 22. The aforesaid view was reiterated in Heavy Engineering Mazdoor Union v. State of Bihar and others, AIR 1970 SC 82 , Andhra Pradesh State Road Transport Corporation v. Income Tax Officer, AIR 1964 SC, 1486, Western Coalfields, Ltd. v. Special Area Development Authority, AIR 1982 SC 697 . A Constitution Bench of the Apex Court in M/s Electronics Corporation of India Ltd . A Constitution Bench of the Apex Court in M/s Electronics Corporation of India Ltd . v. Secretary, Revenue Department Government of A.P., ( AIR 1999 SC 1734 ) has held as under, “A clear distinction must be drawn between a company and its shareholder, even though that shareholder may be only one and that the Central or a State Government In the eye of the law, a company registered under the Companies Act is a distinct legal entity other than the legal entity or entities that hold its shares." 23. The Company wherein the State Government is 100% shareholder does not identify itself with the State Government and while discharging duty or function in the Company even if when the State Government passes certain order, it is entitled to act and proceed in a manner a Company function. Merely because the order has been passed by the State Government, it would not identify itself with Company as its own department. In Shrikant v. Vasant Rao, 2006 ( 2) SCC 682, the Apex Court in para 24 of the judgment held that, “In the matter of a company where the entire share capital is held by the State Government, yet it cannot be identified with the State Government and is always entitled to act and proceed in a manner a Company function.” 24. A question arises as to whether rules and regulations framed by the Company under the Articles of Association, would have statutory force or not. A Division Bench of this Court in writ petition No. 14670 of 2006, Rajeev Kumar and others v. State of U.P. and others, decided on 29.11.2006 held as under, “Thus we hold that a Company can determine terms and conditions of its employees as provided under Article of Association but since the Article of Association of a Company is neither a Rule nor Regulation and has no statutory force the conditions determined thereunder would also be not statutory. The UPRVUNL thus have the power to determine terms and conditions of its employees by making provisions in exercise of powers under provisions of Article of Association read with Companies Act.” 25. The order impugned in the first writ petition admittedly is not contrary to any statutory provision in view of the discussion made above. The UPRVUNL thus have the power to determine terms and conditions of its employees by making provisions in exercise of powers under provisions of Article of Association read with Companies Act.” 25. The order impugned in the first writ petition admittedly is not contrary to any statutory provision in view of the discussion made above. That being so, for violation i.e. for any breach of the provisions of the Articles of Association ,in our view , the writ petition under Article 226 of the Constitution of India would not lie .The view we have taken finds support from the judgment in the case of A.K. Home Chaudhary v. National Textile Corporation U.P. Ltd. and others, 1984 (48) F.L.R 96 ( Hon’ble K.N. Singh and Gopinath JJ.) wherein this Court held, “It is not necessary to go deeper into the matter to decide the question as to whether the National Textile Corporation is an authority as in our opinion even assuming it to be so, the provisions of Article 311 of the Constitution are not applicable. Even if the National Textile Corporation is authority and a juristic unit within the meaning of Article 12 of the Constitution, the petitioner would be entitled to the protection of his fundamental rights and part III and IV of the Constitution would only be applicable. Since the petitioner’s service have been terminated in accordance with the terms of contract, no question of violation of petitioners fundamental rights arises.” 26. Similar view has been taken in Smt. Farret Futtado v. State of Goa and others, 1994 (80) Comp Cas 659 and by another Division Bench of this Court in B.M. Varma v. State of U.P., 2004 (4) AWC 2875. 27. Moreover at the best, the assignment of the petitioner as additional charge has been taken away which is in the realm of contract of personal service. The contract at the best can be said to have arrived at under the provisions of Article of Association, and therefore, cannot be said to have statutory force for the reasons discussed above. Where a person seeks to enforce contract of personal service which is not statutory in nature , there will certain exceptions only when such contract may be enforced by issuing a writ under Article 226 of the Constitution of India and not otherwise. Where a person seeks to enforce contract of personal service which is not statutory in nature , there will certain exceptions only when such contract may be enforced by issuing a writ under Article 226 of the Constitution of India and not otherwise. Exceptions have been elaborated in catena of cases, some of which may be referred as hereunder 28. Executive Committee of U.P. State Warehousing Corporation v. C.K. Tyagi, AIR 1970 SC 1244 the Apex Court held that, “From the two decisions of this Court, referred to above, the position in law is that no declaration to enforce a contract of personal service will be normally granted. But there are certain well-recognised exceptions to this rule and they are : To grant such a declaration in appropriate cases regarding (1) a public servant, who has been dismissed from service in contravention of Article 311 (2) Reinstatement of a dismissed worker under Industrial Law by Labour or Industrial Tribunals. (3) A statutory body when it has ‘acted in breach of a mandatory obligation, imposed by statute.” 29. The view taken in C.K. Tyagi (supra) has been followed in Vaish Degree College Shyamli and others v. Laxmi Narain and others, 1976 (2) SCC 58 and Pearlite Liners (P). Ltd. v. Manorama Sirsi, 2004 (3) SCC page 172 . Admittedly the case of the petitioner does not fall in any of the exceptions recognised by the Apex Court in the aforesaid case. Where the matter is governed by the contract, even the limitation imposed by principles of natural justice cannot operate upon the powers which are governed by terms of an agreement. An act contrary to the contract or alleged breach thereof cannot be assailed under Article 226 of the Constitution on the ground that no notice or opportunity has been given and there is violation of the principle of natural justice as held in M/s Radha Krishan Agarwal and others v. State of Bihar, AIR 1977 S.C. 1496 . In view of the aforesaid discussion, we have no hesitation in holding that the first writ petition assailing the order dated 20.9.2006 whereby the additional charge of Managing Director of the Corporation has been withdrawn from the petitioner does not lie and is liable to be dismissed as not maintainable, since the petitioner is not entitled for enforcement of contract of service under Article 226 of the Constitution of India. 30. 30. Now coming to the second writ petition, we find that here also though the petitioner was appointed and was under subordination of State Government, his appointment was contractual, governed by the terms of the appointment as well as agreement. It is not disputed that under the terms of appointment, the petitioner could have been granted two extensions of one year each but it appears that by order dated 17.10 2005 ignoring the aforesaid condition of appointment he was allowed extension straightway for a period of two years i.e. 14.9.2005 to 13.9.2007. The learned Counsel for petitioner could not dispute that this was not consistent to the conditions of appointment mentioned in the appointment letter dated 9.8.2004. 31. In Chandigarh Administration and others v. Naurang Singh and others, 1997(4) SCC177 the Apex Court in para 6 of the judgment held “We are however, of the opinion that a mistake committed by the Administration cannot furnish a valid or legitimate ground for the Court of Tribunal to direct the administration to go on repeating that mistake.” 32. If the State Government has committed mistake, it is always open to it to rectify the same and that being so, in our view, it cannot be said that in passing the order dated 24.10.2006, the State Government has actually divested some vested rights of the petitioner. Moreover at the best it is also within the realm of contract of personal service and therefore for the reasons we have already discussed with respect to first writ petition, the second writ petition also liable to be dismissed, since no relief can be granted to the petitioner for alleged breach of conditions of agreement. Remedy lies in common law for claiming the damages and not by enforcing the relief under Article 226 of the Constitution of India. 33. So far as the plea of malafide is concerned, though the petitioner has sought to place his case of malafide on a very high pedestal to show that the Minister of the concerned department was inclined to oust him and the impugned order has been passed at his instance but after considering the entire material on record, we are not satisfied that the plea of malafide could have been substantiated by the petitioner. It is true that the Minister while discharging his executive functions, exercise power in accordance with Rules of Business, since all executive actions are to be taken in the name of Governor but they are in fact discharged by the council of ministers, individually or collectively as the case may be, subject to Rules of Business. Minister found that a number of officers are continuing to work though they were appointed on contract basis and their terms have expired long back. The said continuance obviously could not have been said to be acted or in accordance with law, therefore, we do not find any infirmity in issuance of direction by the Government that such unauthorised persons cannot be paid salary from the State Exchequer unless the contract is renewed or they are appointed in accordance with law. The petitioner for whatever the reasons loud and pious in pleading for the benefits of those persons but he admits that he tried to resist the said action of the State Government This by itself cannot constitute a sufficient reason for a Minister to exercise a power with malafide since in administrative functions, such activities used to happen time and again but if such disagreement or pursuation if any is taken to cause to generate malafide of the higher officers, the administrative function would be difficult to perform since every time every action would be liable to be challenged on the ground of malafide. In order to prove a case of malafide, a specific and clear case of malafide of the individual concerned has to be shown and mere reference to some transaction undertaken in official capacity by itself would not lead to prove malafide unless there is some substantial material available on record to show malafide of the individual concerned. 34. Before parting, it would be appropriate to notice that pursuant to the interim order passed by this Court, the petitioner if was working as Director, Sainik Kalyan Evam Punarwas, it would be appropriate to direct that payment of emoluments if any, already made to the petitioner pursuant to his functioning as Director, Sainik Kalyan Evam Punarwas in view of the interim order passed by this Court shall not be recovered from him. 35. With the aforesaid direction both the writ petitions lack merit and are dismissed. 36. No order as to costs. ————