Faizul Hasan v. Rajasthan State Industrial Development and Investment Corporation
2014-10-16
MOHAMMAD RAFIQ
body2014
DigiLaw.ai
JUDGMENT : Petitioner-Faizul Hasan in this writ petition has challenged the order of his compulsory retirement dated 12.1.2001 and also the validity of adverse remarks recorded in his APARs of the year 1991-92, 1997-98 and 1998-99 and Rule 36A of the Rajasthan State Industrial Development and Investment Corporation Limited Employees (Classification, Disciplinary Action & Appeal) Rules, 1969 (for short-`the Rules of 1969'). In the course of arguments, however, learned counsel for the petitioner has not pressed the validity of the Rules and has confined his arguments as to the correctness of the order of compulsory retirement. Original writ petitioner died during the pendency of the writ petitioner on 31.1.2013. His legal representative have substituted him and have prosecuted the matter. Reference to the petitioner hereinafter should however be construed to mean original writ petitioner. Petitioner, consequent upon his appointment as Senior Assistant on 6.1.1975, entered the service of the respondent-Corporation. He was later promoted to the post of Accountant against the vacancies of the year 1978-79 vide order dated 30.6.1983. He was further promoted to the post of Senior Accountant vide order dated 30.3.1991. The Chairman cum Managing Director of the respondent-Corporation by the impugned order dated 12.1.2001 compulsorily retired the petitioner with effect from the date of issuance of such order. The order was accompanied by banker's cheque of Rs.34, 362 representing the amount of pay and allowances payable to the petitioner for the notice period. It is this order which is assailed by the petitioner in this writ petition on various grounds. Shri Mahendra Singh, learned counsel for the petitioner argued that as per Rule 36A(ii) of the Rules of 1969, an employee may be retired by management from service on the date on which he completes 20 years of service or on the date on which he attains the age of 50 years, whichever is earlier, after giving at least three months' notice in writing or by payment of three months' pay and allowances in lieu thereof. Management has been defined in Rule 5(xxiv) to mean the Board of Directors of the Corporation in relation to any power exercisable by it. In the present case, the decision to compulsory retire the petitioner was not taken by the Board of Directors and, therefore, such decision was wholly incompetent illegal and arbitrary.
Management has been defined in Rule 5(xxiv) to mean the Board of Directors of the Corporation in relation to any power exercisable by it. In the present case, the decision to compulsory retire the petitioner was not taken by the Board of Directors and, therefore, such decision was wholly incompetent illegal and arbitrary. When this argument was made before the Court on 22.2.2011, the respondents were required to produce the relevant records and show whether the order of compulsory retirement was passed on the basis of decision taken by the Board of Directors and whether Board prior to issuance of impugned order has had the occasion to consider the service record of the petitioner. Instead of producing the record, the respondents have relied on a resolution passed on 17.3.2011 whereby the Board has purportedly given an ex-post facto approval with retrospective effect to the order passed by the Executive Director. The said resolution has been placed on record along with affidavit by the respondents on 28.3.2011. Shri Mahendra Singh argued that only the Board of Directors can take a decision to retire an employee compulsorily and the Chairman cum Managing Director had no authority to do so. Admittedly, therefore, the order of compulsory retirement passed by the Chairman cum Managing Director in the case of the petitioner had no approval from the Board inasmuch as the Board had no occasion to apply its mind to the service record of the petitioner. The ex-post facto approval, with retrospective effect, cannot rectify such an inherent illegality. Unlike many other service rules, there is no enabling provision in the Rules here that the Chairman cum Managing Director could have taken such decision with the approval of the Board of Directors inasmuch as rule making authority has not provided for any mechanism of obtaining ex-post facto approval as has been done by the respondents. It is argued that the rule making authority has no power of subordinate legislation with retrospective effect without impairing existing rights. The administrative authority in the absence of any such power in the Statute or Rule is not competent to take any executive action with retrospective effect. In absence of enabling provisions in the Rules, an administrative action cannot be taken against a person with retrospective effect as held by the Supreme Court in Shri Govind Prasad vs. RG Prasad- 1993 (6) JT 233 .
In absence of enabling provisions in the Rules, an administrative action cannot be taken against a person with retrospective effect as held by the Supreme Court in Shri Govind Prasad vs. RG Prasad- 1993 (6) JT 233 . Submission of the learned counsel for the petitioner that by a simple resolution purporting to accord ex-post facto approval and that too, with retrospective effect, the impugned action taken by the Chairman cum Managing Director, which is ultra vires of the Rules, cannot be validated. Unless the rule is amended in accordance with law, the administrative action taken by an authority acting ultra vires the rules cannot be validated by the another authority and that too with retrospective effect. Learned counsel for the petitioner in this connection has relied on judgements of the Supreme Court in Marathwada University vs. Seshrao Balwant- 1989 (3) SCC 132 and State of Orissa vs. Mamta Mohanty- 2011 (3) SCC 436 . Learned counsel for the petitioner further argued that where the power is conferred by any Rule and the manner of exercise of power is also laid down therein, then such power has to be necessarily exercised in the manner laid down therein and in no other manner. Reliance in this connection is placed on judgement of the Supreme Court in J.N. Ganatra vs. Morvi Municipality- 1996 (6) JT 661 , Dhananjay Reddy vs. State- (2001) 4 SCC 9 and Ramchandra vs. Govind- AIR 1975 SC 915 . Learned counsel argued that even when any power is conferred by a rule, but no time limit has been prescribed for exercise of such power, the said power has to be exercised within a reasonable time. Assuming without admitting that the Board could ratify and thereby validate an ultra vires and stillborn decision of the Chairman cum Managing Director, even then the subsequent resolution which has been passed after inordinate and unreasonable delay of 10 years, cannot be legally approved of. Learned counsel in this connection has relied on the judgement of Supreme Court in State of Gujarat vs. Patel Raghav Nath- 1969 (2) SCC 187 . Shri Virendra Lodha, learned senior counsel appearing for the respondents has opposed the writ petition and submitted that Chairman cum Managing Director had the legal competence to issue the order of compulsory retirement dated 12.1.2001. The said power was exercised by him in the interest of Corporation.
Shri Virendra Lodha, learned senior counsel appearing for the respondents has opposed the writ petition and submitted that Chairman cum Managing Director had the legal competence to issue the order of compulsory retirement dated 12.1.2001. The said power was exercised by him in the interest of Corporation. The aforesaid order of compulsory retirement is not a punishment order. Such order has been passed after screening the whole service record of the petitioner and thereafter invoking provisions of Rule 36A(ii) of the Rules. Rule 36A (ii) empowers the respondent-RIICO to retire an employee from its service on the date on which he completes 15 years of service or the date on which he attains the age of 50 years, whichever is earlier. Besides, the Board of Director of the respondent-RIICO on 17.3.2011 passed the resolution granting ex-post facto approval to the order compulsory retiring the petitioner on completion of 15 years of qualifying period of service. In view of such a resolution of the Board, the order dated 12.1.2001 should be treated as validly passed and approved by the Board of Directors. It is argued that management means the Board of Directors of the Corporation in relation to any power exercisable by it. Once the Board of Directors has passed the resolution validating the order to retire the petitioner compulsorily, the illegality in the order dated 12.1.2001, if at all any, stands cured and the order becomes valid for all purposes. Reliance in this connection is placed on the judgement of Supreme Court in Ashok Kumar Das & Ors. vs. University of Burdwan & Ors.- (2010) 3 SCC 616 . Argument thus is that once approval is taken, the order dated 12.1.2001 becomes valid for all purposes. There is thus no infirmity in the order dated 12.1.2001 and no interference in the order is called for. Shri Virendra Lodha, learned senior counsel for the respondents further submitted that even otherwise Rajasthan State Industrial Development and Investment Corporation Limited Employees (Classification, Disciplinary Action & Appeal) Rules, 1969 includes compulsory retirement as one of the major penalties. Rule 10 of the Rules postulates that the penalties imposed upon the employee includes the penalty of compulsory retirement. The disciplinary authority for imposing the major penalties is Chairman cum Managing Director.
Rule 10 of the Rules postulates that the penalties imposed upon the employee includes the penalty of compulsory retirement. The disciplinary authority for imposing the major penalties is Chairman cum Managing Director. Once the petitioner has been retired compulsorily by the Chairman cum Managing Director, who is otherwise his disciplinary authority, competent to inflict penalty of compulsory retirement, the order passed by him cannot be faulted on that count. It is contended that the petitioner was visited with various penalties during his entire service career. His entire service record was scrutinised by the Screening Committee, which recommended his compulsory retirement. There is a catena of judgements of the Supreme Court holding that employer has absolute right to retire an employee in public interest if he has become a liability to the service or a dead wood to be chopped off. The scope of interference in such like matters is restricted. Learned senior counsel in this connection has relied on the judgement of Supreme Court in Swaran Singh Chand vs. Punjab State Electricity Board & Ors.- (2009) 13 SCC 758 , National Aviation Company of India Ltd. vs. S.M.K. Khan- (2009) 5 SCC 732 , Ashok Kumar Das & Ors. vs. University of Burdwan & Ors.- (2010) 3 SCC 616 , M.L. Binjolkar vs. State of M.P.- (2005) 6 SCC 224 , Mangi Lal vs. State & Ors.-2010 (4) WLC 196 and S.N. Derashri vs. State & Anr.-2011 (5) SLR 729 and Sher Singh vs. State of Rajasthan-2011 (5) SLR 749. I have given my anxious consideration to the submissions made by Shri Mahendra Singh, learned counsel for the petitioner and Shri Virendra Lodha, learned senior counsel appearing for the respondents, perused the material on record and studied the cited precedents. In order to appreciate the rival submissions, it would be apposite to extract the relevant provisions of the Rules of 1969 as under: “Rule 5 (xxiv) - “Management means the Board of Directors of the Corporation in relation to any power exercisable by it.”.
In order to appreciate the rival submissions, it would be apposite to extract the relevant provisions of the Rules of 1969 as under: “Rule 5 (xxiv) - “Management means the Board of Directors of the Corporation in relation to any power exercisable by it.”. Rule 24 - “The increment acquiring in a time scale of pay shall ordinarily be drawn as a matter of course unless it is withheld by an authority empowers to withhold the said increment.” “The increment of the employee will be admitted from the first of the month in which it would fall due under the operation of the normal rules and orders regulating the increment.” Rule 34- “The authority competent to order reinstatement shall make a specific order with regard to pay and allowances to be paid to an employee for the purpose of suspension and whether or not the said period shall be treated as period spent on duty.” 36(a) “The date of compulsory retirement of an employee shall be the afternoon of the last day of the month in which he attains the age of 55/58 years. He may be retained in service after the date of compulsory retirement with the sanction of the Board in the interest of the service of the corporation and for reason to be recorded in writing but shall not be retained after the age of 58/60 years in any case.” “36A(i) An employee may, after giving at least three month's notice in writing to the Management retire from the service on the date on which he completes 20 years of service or the date on which he attains the age of 50 years, whichever is earlier or, any date thereafter to be specified in the notice. (ii) The Management may, after giving at least 3 months previous notice in writing or by payment of three month's pay and allowances in lieu of such notice require an employee to retire from the service on the date on which he completes 20 years of service or the date on which he attains the age of 50 years whichever is earlier, or on any date thereafter.” Indisputably, the impugned order of compulsory retirement when it was originally passed on 12.1.2011, did not have the approval of the Board of Directors.
The Board of Directors, therefore, had no occasion to consider and apply its mind to the service record of the petitioner so as to satisfy itself about the justification of invoking its power under Rule 36A(ii) to compulsorily retire him from service. The Board thus actually did not record the satisfaction that petitioner has become a liability to service or otherwise a dead wood to be chopped off, the consideration that is germane for retiring an employee compulsorily by the employer. Contention of the learned senior counsel for the respondents that since compulsory retirement of the petitioner is prescribed as one of the major penalties under Rule 10 of the Rules of 1980 and the Chairman cum Managing Director as the disciplinary authority is competent to inflict such a major penalty, therefore impugned order should be taken to have been validly passed, cannot be countenanced for the simple reason that the penalty of compulsory retirement is preceded by a disciplinary enquiry as per prescribed procedure wherein various safeguards have been provided for protecting the interest of the employee inasmuch as a full fledged enquiry is conducted wherein he has the opportunity to cross examine the witnesses produced by the employer and rebut the evidence adduced by employer. The employee has also got the right to adduce his evidence, produce his witnesses and demand any document or material that is sought to be made use of against him by the employer. He has right to receive a copy of the enquiry report and submit representation there against to the disciplinary authority with a view to persuading the authority to take a contrary view. If eventually, he is awarded such penalty, he has the right to file an appeal against such order. All these protections are not available to an employee against the order of compulsory retirement simplicitor, otherwise than by way of penalty, which order in that sense is not treated penal in nature. Therefore, competence of Chairman-cum- Managing Director for the purpose of awarding the penalty of compulsory retirement under Rule 10 of the Rules of 1980 cannot supply for the deficiency of his competence (or incompetence) in passing the order of compulsory retirement with reference to Rule 36A(ii) of the Rules of 1969.
Therefore, competence of Chairman-cum- Managing Director for the purpose of awarding the penalty of compulsory retirement under Rule 10 of the Rules of 1980 cannot supply for the deficiency of his competence (or incompetence) in passing the order of compulsory retirement with reference to Rule 36A(ii) of the Rules of 1969. In J.N. Ganatra, supra when it was canvassed before the Supreme Court that the General Board of the Municipality had the power under Section 253(1) of the Gujarat Municipalities Act, 1963 to dismiss the appellant, which view found favour by the High Court, their Lordships in para 4 of the report held thus: “4.xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx CW 1650/01 // 14 // xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxx It is no doubt correct that the General Board of the Municipality had the power under the Act to dismiss the appellant but the said power could only be exercised in the manner indicated by Rule 35 of the Rules. Admittedly, the power of dismissal has not been exercised the way it was required to be done under the Act. It is settled proposition of law that a power under a Statute has to be exercised in accordance with the provisions of the Statute and in no other manner. In view of the categorical finding given by the High Court to that effect that the order of dismissal was on the face of it illegal and void, we have no hesitation in holding that the dismissal of the appellant was not an act done in pursuance or execution or intended execution of the Act. The order of dismissal being penalty and grossly in violation of the plain provisions of the Rules it cannot be treated to have been passed under the Act.” In the present case, when the rule making authority has purposely conferred the power of taking the extreme decision of compulsory retirement of the employee on the Board of Directors, it intended the prior satisfaction of the collective body rather than an individual official. Had it wanted to confer such power on the Chairman cum Managing Director, it would have provided so. The rule making authority did not even empower the Chairman-cum-Managing Director to take such decision with the approval of the Board of Director, but insisted taking of such decision only by the Board of Directors.
Had it wanted to confer such power on the Chairman cum Managing Director, it would have provided so. The rule making authority did not even empower the Chairman-cum-Managing Director to take such decision with the approval of the Board of Director, but insisted taking of such decision only by the Board of Directors. Once it is seen that such power is vested only in the management i.e. the Board of Directors, that would imply that it by necessary implication prohibited exercise of such power in any other manner. In Marathwada University, supra the question was whether the Vice Chancellor of the University could dismiss the Controller of Examination from service, whereas the power to appoint officers was vested in the Executive Council under Section 24(1)(xli)of the Marathwada University Act, which power also generally includes the power to remove. Action of the Vice Chancellor was sought to be justified with reference to Section 11(6)(a) of the Act, which conferred upon him “power to regulate the work and conduct of the officers” and the subsequent resolution of the Executive Council, which ratified the action taken by the Vice Chancellor. Relying on the authority of Friedman's Law of Agency, 5th Edition Chapter 5 at page 73 and Bowstead on Agency 14th Edition at page 39 on the principle of ratification, their Lordships held that ratification is generally an act of principal with regard to a contract or an act done by his agent. The principles of ratification apparently do not have any application with regard to exercise of powers conferred under statutory provisions. The statutory authority cannot travel beyond any power conferred and any action without power has no legal validity. It is void ab initio and cannot be ratified. When statute prescribes a particular body to exercise a power, it must be exercised by that body alone and not by others unless it is delegated. Void act of delegant cannot be cured by ratification of the delegant, held their Lordships. In Mamta Mohanty, supra, it was held by the Supreme Court in para 37 as under: “37. It is a settled legal proposition that if an order is bad in its inception, it does not get sanctified at a later stage. A subsequent action/development cannot validate an action which was not lawful at its inception, for the reason that the illegality strikes at the root of the order.
It is a settled legal proposition that if an order is bad in its inception, it does not get sanctified at a later stage. A subsequent action/development cannot validate an action which was not lawful at its inception, for the reason that the illegality strikes at the root of the order. It would be beyond the competence of any authority to validate such an order. It would be ironic to permit a person to rely upon a law, in violation of which he has obtained the benefits. If an order at the initial stage is bad in law, then all further proceedings consequent thereto will be non est and have to be necessarily set aside. A right in law exists only and only when it has a lawful origin.” In Shri Govind Prasad, supra it was held by the Supreme Court that an executive order of the Government cannot be made operative with retrospective effect. In Dhanajaya Reddy, supra, it was held by the Supreme Court that where law requires a thing to be done in a certain manner, it has to be done in that manner and not at all. In that case, the Magistrate while recording the statement under Section 164 of Cr.P.C. omitted to make compliance of sub-section (4) thereof. It was held that omission to comply with the mandatory provisions is likely to render the confessional statement inadmissible. In Ramchandra Keshav Adke, supra, the Supreme Court with reference to Section 5(3)(b) of the Bombay Tenancy & Agricultural Lands Rules, 1956 noted that surrender of tenancy by a tenant in order to be valid and effective must fulfill the following requirements: (1) it must be in writing. (2) it must be verified before the Mamlatdar. (3) while making such verification, the Mamlatdar must satisfy himself in regard to two things; namely; (a) that the tenant understands the nature and consequences of the surrender and (b) that it is voluntary. (4) the Mamlatdar must endorse his finding as to such satisfaction upon the document of surrender. It was held by their Lordships that the requirement as to the recording of its satisfaction by the authority in the manner prescribed by the Rule, is the substance of the matter and not an empty formality. In the absence of the requisite endorsement, it cannot be said that there has been even a substantial compliance with the statutory requirements.
It was held by their Lordships that the requirement as to the recording of its satisfaction by the authority in the manner prescribed by the Rule, is the substance of the matter and not an empty formality. In the absence of the requisite endorsement, it cannot be said that there has been even a substantial compliance with the statutory requirements. Failure to comply with the mandatory provisions as to verification of the surrender vitiates the surrender and renders it non est for the purpose of Section 5(3)(b). Their Lordships therefore held that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and other methods of performance are necessarily forbidden. This rule squarely applies where the whole aim and object of the legislature would be plainly defeated if the command to do the thing in a particular manner did not imply a prohibition to do it in any other. The judgement of Supreme Court in Ashok Kumar Das, supra, which was been relied upon by learned senior counsel appearing on behalf of the respondents, dealt with Section 21 (xiii) of the Burdwan University Act, 1981, which pertained to the powers and functions of the Executive Council. It was provided therein that the Executive Council shall apart from exercising enumerated powers and performing various other functions, determine with the approval of the State Government, the terms and conditions of librarian and non-teaching staff. The words used in Rule 21(xiii) were thus “with the approval of the State Government” and not “with the permission of the State Government” or “with the prior approval of the State Government”. It was held by the Supreme Court that if the words used were neither “with the permission of the State Government”, nor “with the prior approval of the State Government”, but were “with the approval of the State Government”, the Executive Council of the University could determine the terms and conditions of service of the non-teaching staff and obtain the approval of the State Government subsequently and in case the State Government did not grant approval subsequently, any action taken on the basis of the decision of the Executive Council of the University would be invalid and not otherwise.
Not only the facts of the aforesaid case are totally different, but the provision therein was also distinguishable because Section 21(xiii) in that case envisaged two authorities, one the Executive Council, which was to exercise the power and perform the functions listed therein and another authority in particular with reference to clause (xiii) of Section 21 was approving authority, which was the State Government. The power to lay down the terms and conditions of the Librarians/non-teaching staff was thus essentially with the Executive Council but such power was to be exercised with the approval of the State Government. It was in that context that the Supreme Court held that even if the terms and conditions have been laid down first and thereafter approval has been obtained, this would not invalidate the decision of the Executive Council. Here in the present case, one and the only competent authority in Rule 36A(ii) to authorise the compulsory retirement is the management i.e. the Board of Directors and there is no second authority. Admittedly, that authority has not taken the decision to retire the petitioner compulsorily, therefore, ex-post facto approval, as already discussed above, cannot cure the legal flaw in the order. Various other judgements which have been relied on behalf of the RIICO are on the question of compulsory retirement simplicitor based on the service record of the employee and have been decided on their own facts. Question involved in all of them was whether employee concerned could on the basis of record of the service retired compulsorily. They do not examine the competence or otherwise, of the authority passing the order of compulsory retirement. Those judgements obviously therefore do not afford any assistance to the respondents. In view of above discussion, the writ petition deserves to be succeed and is accordingly allowed. The impugned order of compulsory retirement dated 12.1.2001 is quashed and set aside. The legal representatives of the original petitioner are held entitled to all the consequential benefits including that of promotion, if granted to any of his juniors, deeming as if the original petitioner had continued in service till the date of his death, together with interest @ 9% per annum. Compliance of the judgement shall be made within a period of two months from the date copy of this judgement is produced before the respondents.