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2018 DIGILAW 476 (ORI)

Chita Ranjan Patnaik v. Union of India

2018-04-27

S.N.PRASAD

body2018
JUDGMENT S.N.PRASAD,J. - This writ petition is for issuance of direction upon the opposite parties 2 and 3 to promote the petitioner to the post of Executive Director w.e.f. 1.2.2011. 2. Brief facts of the case is that the petitioner joined the Reserve Bank of India(RBI) on 22.10.1971. In the year 1979 he was selected as a direct recruit Officer in Grade-B(Manager) in the erstwhile ARDC, the then subsidiary of RBI, subsequently he came to National Bank for Agriculture and Rural Development (NABARD) after its formation in the year 1982. The petitioner after working in various capacities was promoted to the rank of Chief General Manager (CGM) in the year 2002. He retired from service in the month of April,2011 as Chief General Manager, next promotion due to the petitioner was in the rank of Executive Director. In the year 2011 the Selection Committee convened a meeting to select two Executive Directors. The petitioner being eligible for the same, his name was shortlisted at serial no.2 and other three candidates. Case of one V.Ramkrishna Rao was not considered for promotion since some cases were pending against him, and as such the petitioner ought to have been extended the benefit of promotion by promoting him to the post of Executive Director but in gross violation of the National Bank for Agriculture and Rural Development(Staff) Rules,1982 the claim of the petitioner was rejected and one B.S.Sekhawat was promoted as Executive Director superseding the petitioner. The petitioner thereafter retired from service w.e.f. 30.4.2011. It has been contended in the writ petition that the petitioner could not be able to know the reason for non-consideration for promotion and as such he has sought for information under the Right to Information Act and only then he was appraised with the reason that he was not considered as he was left only one month remaining of service. According to the petitioner, the Staff Rules,1982 and amended up to 23.6.2004 is applicable wherein the post of Executive Director is to be filled up by way of promotion of officers in Grade-F from Rural Development Banking Service of the National Bank, subject to such officer having the requisite experience, seniority and such other relevant factors as may be considered necessary by the Bank. Promotions shall be effected on a selective basis after taking into consideration the Performance Appraisal Reports of the officers for the last three years and the personal assessment made by a Committee comprising the Chairman and Managing Director of the National Bank and the Deputy Governor of reserve Bank of India on the Board of National Bank. According to the petitioner, he is eligible as per the eligibility criteria laid down in the Staff Rules,1982 but he has been eliminated from the zone of consideration for the reason which was not under the rule, hence the action of the authority is contrary to the provisions of the Staff Rules,1982, hence this writ petition. 3. Counter affidavit has been filed by the opposite parties 2 and 3 wherein preliminary objection has been raised regarding maintainability of the writ petition against the NABARD. Ground has been taken on merit that it is the precedence of the NABARD that the officers who is to retire shortly from the date of promotion they are not being promoted to the cadre of Executive Director and relying upon the said precedence, the claim of the petitioner has not been considered in positive direction. It has further been contended that the authority, taking precedence, has taken up decision and as such there is no illegality in the same. Rejoinder has been filed rebutting the stand taken by the opposite parties 2 and 3 in the counter affidavit wherein it has been stated that there is no ground for eliminating officers from the zone of consideration on the ground of retirement shortly. An affidavit has been filed by the opposite parties 2 and 3 in reply to the statement made by the petitioner in the rejoinder reiterating the stand taken in the counter affidavit. 4. Heard learned counsel for the parties and perused the documents available on record. 5. This Court, before going into the merit of claim of the parties, thinks it proper to answer the issue raised by the opposite parties on the ground of maintainability of the writ petition. It is the case of the opposite party-bank that the petitioner is not a Government servant and not holder of civil post. Jurisdiction of writ Court challenging any violation of service rules like promotion etc. It is the case of the opposite party-bank that the petitioner is not a Government servant and not holder of civil post. Jurisdiction of writ Court challenging any violation of service rules like promotion etc. as postulated under Part-XIV of the Constitution of India could only be available to Government employees whose service conditions are governed as such against the Odisha Government or the Central Government only, as the case may be. Since the petitioner is not a Government servant and the opposite parties are not Government, the petitioner cannot approach this Court under the extraordinary writ jurisdiction conferred under Article 226 of the Constitution of India which could only be invoked for any violation of the provisions of fundamental rights or the derivative principles of State policy under Parts III and IV of the Constitution of India. 6. After hearing the rival submissions made by the learned counsel for the parties, the main consideration is as to whether NABARD is a State or other authorities under Article 12 of the Constitution of India. For better appreciation of the controversy it becomes necessary to look into the constitution of the body, purpose for which it has been created, manner of its function including mode of its fund. Article 12 of the Constitution of India provide an inclusive definition of the term „State by saying, in this part, unless the context otherwise requires, the State includes the Government and Parliament of India and the government and the legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. The leading authority in this field is the decision of the Constitution Bench of the Apex Court in the case of Ajay Hasia and others –vs- Khalid Mujib Sehravardi and others, reported in (1981) 1 SCC 722 wherein Hon’ble Shri Justice P.N.Bhagawati, as he then was, explained that the government in many of its ventures and public enterprises is resorting to more and more frequently to this resourceful legal contrivance as it has many practical advantages and at the same time does not involve the slightest diminution in its ownership and control of undertaking. In such cases, “the true owner is the State, the real operator is the State and the effective controllate is the State and accountability for its actions to the community and to Parliament is of the State. It is undoubtedly true that the corporation is a distinct juristic entity with a corporate structure of its own and it carries on its functions on business principles with a certain amount of autonomy which is necessary as well as useful from the point of view of effective business management, but behind the formal ownership which is cast in the corporate mould, the reality is very much the deeply pervasive presence of the Government. It is really the Government which acts through the instrumentality or agency of the corporation and the juristic veil of corporate personality worn for the purpose of convenience of management and administration cannot be allowed to obliterate the true nature of the reality behind which is the Government. Now it is obvious that if a corporation is an instrumentality or agency of the Government, it must be subject to the same limitations in the field of constitutional law as the Government itself, though in the eye of the law it would be a distinct and independent legal entity. If the Government acting through its officers is subject to certain constitutional limitations, it must follow a fortiorari that the Government acting through the instrumentality or agency of a corporation should equally be subject to the same limitations. If such a corporation were to be free from the basic obligation to obey the fundamental rights, it would lead to considerable erosion of the efficiency of the fundamental rights, for in that event the Government would be enabled to override the fundamental rights by adopting the stratagem of carrying out its functions through the instrumentality or agency of a corporation, while retaining control over it. The fundamental rights would then be reduced to little more than an idle dream or a promise of unreality. Against the preliminary objection, learned counsel for the petitioner submits that NABARD is the creation of statute i.e. created under the National Bank for Agriculture and Rural Development Act,1981, a 3-tier machinery is prescribed to achieve the object set out in the opening part of NABARD Act. Against the preliminary objection, learned counsel for the petitioner submits that NABARD is the creation of statute i.e. created under the National Bank for Agriculture and Rural Development Act,1981, a 3-tier machinery is prescribed to achieve the object set out in the opening part of NABARD Act. The object is as under: “An act to establish a bank to be known as the National Bank for Agriculture and Rural Development for providing credit for the promotion of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting integrated rural development and securing prosperity of rural areas, and for matters connected therewith or incidental thereto. (emphasis supplied) 6.1 The term State Cooperative Bank is defined in clause (u) of Section 2 of the NABARD Act. The definition reads as under State Cooperative Bank means the Principal Cooperative Society in a state, the primary object of which is the financing of other Cooperative Societies in the State” It is the legal position that the prerogative writ of mandamus confined only to public authorities to compel performance of public duty. The ‘public authority’ for them means everybody which is created by statute - and whose powers and duties are defined by statute. So Government departments, local authorities, police authorities, and statutory undertakings and corporations, are all ‘public authorities’. But there is no such limitation for our High Courts to issue the writ ‘in the nature of mandamus’. Article 226 confers wide powers on the High Courts to issue writs in the nature of prerogative writs. This is a striking departure from the English law. Under Article 226, writs can be issued to any person or authority’. It can be issued “for the enforcement of any of the fundamental rights and for any other purpose”. Article 226 confers wide powers on the High Courts to issue writs in the nature of prerogative writs. This is a striking departure from the English law. Under Article 226, writs can be issued to any person or authority’. It can be issued “for the enforcement of any of the fundamental rights and for any other purpose”. Article 226 of the Constitution of India reads: “Power of High Courts to issue certain, writs (1) Notwithstanding anything in Art. 32, every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority including in appropriate cases, any Government, within those territories directions, orders or writs, including (writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari,) or any of them for the enforcement of any of the rights conferred by Part III and for any other purpose.” The term “authority” used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Art. 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words “Any person or authority” used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed. If a positive obligation exists mandamus cannot be denied. In the case of Praga Tools Corporation –vs- Shri C.A. Imanual, reported in AIR 1969 SC 1306 it has been held that a mandamus can be issued against a person or body to carry out the duties placed on them by the Statutes even though they are not public officials or statutory body. It was further observed: “It is, however, not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. It was further observed: “It is, however, not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. A mandamus can issue, for instance, to an official of a society to compel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporations to carry out duties placed on them by the statutes authorising their undertakings. A mandamus would also lie against a company constituted by a statute for the purpose of fulfilling public responsibilities.” In the case of Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust –vs- V.R.Rudani, reported in (1989) 2 SCC 691 the Hon ble Apex Court held: “Article 226 confers wide powers on the High Courts to issue writs in the nature of prerogative writs. This is a striking departure from the English law. Under Article 226, writs can be issued to “any person or authority”. The term “authority” used in the context, must receive a liberal meaning unlike the term in Article 12 which is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers powers on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words “any person or authority” used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owned by the person or authority to the affected party, no matter by what means the duty is imposed. If a positive obligation exists mandamus cannot be denied.” Thus it is clear that when a private body exercised its public duty even it is not a State the aggrieved has remedy not only under the ordinary law but also under the Constitution by way of writ petition under Article 226 of the Constitution of India. If a positive obligation exists mandamus cannot be denied.” Thus it is clear that when a private body exercised its public duty even it is not a State the aggrieved has remedy not only under the ordinary law but also under the Constitution by way of writ petition under Article 226 of the Constitution of India. This Court has also gone through the judgment rendered by the Apex Court in the case of International Airport Authority Case, reported in (1979)3 SCC 489 as also in Ajay Hasia and others –vs- Khalid Mujib Sehravardi and others(supra) and the following summer may be gathered from both the decisions: “(1) One thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the corporation is an instrumentality or agency of Government. (2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with Governmental character. (3) It may also be a relevant factor ... whether the corporation enjoys monopoly status which is State conferred or State protected. (4) Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality. (5) If the functions of the corporation are of public importance and closely related to Governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government. (6) „Specifically, if a department of Government is transferred to a corporation, it would be a strong factor/supportive of this inference of the corporation being an instrumentality or agency of Government.” Thus, NABARD since creation of the statute of the year 1981 and as such it will come under the fold of the State Government within the meaning of Article 12 of the Constitution of India and as such amenable to the prerogative writ. Learned Senior counsel has also raised objection that since prerogative writ is under Article 226 of the Constitution of India is only for enforcement of the legislature conferred under Part-III, since according to him, certain matters since come under Part-III and IV of the precedence, hence writ under Article 226 of the Constitution of India cannot be issued in the matter of service jurisprudence. This Court, after appreciating the arguments advanced by the learned counsel for the opposite parties, is of the view that fundamental right has been conferred under Part-III of the Constitution, one of the fundamental right is under Article 14 which speaks about equality before law. Article 14 speaks that the State shall not deny to any persons equality before the law or the equal protection of the laws within the territory of India. Meaning of equal protection is right to equal treatment in similar circumstances, both in the privileges conferred and in the liabilities imposed. The petitioner here has made out a case that he has been discriminated from promotion merely on the ground that he was to retire shortly and thereby he has been eliminated from the zone of consideration for promotion to the post of Executive Director and as such, according to my view, the petitioner has raised question of violation of fundamental right as conferred to him under Article 14 of the Constitution of India and as such the contention raised by the opposite parties that since the petitioner is raising dispute related to service matter, the same will not come under the fold of Article 226 of the Constitution of India, is not sustainable in the eye of law, accordingly the said contention is rejected, hence the writ petition is held to be maintainable. 7. So far as the merit of the case of the parties are concerned, admittedly, the Staff Rules,1982 floated by the NABARD of the year 1982 is applicable which contains a provision to fill up the posts through direct recruit and promotion under the provision of Rule 3. Since the post here is of the Executive Director, hence this Court is dealing with the provisions of law for filling up of the post of Executive Director and as per the Rule 3(g) the post of Executive Directors shall be filled up by way of promotion of officers in Grade-F. The part of the Rule for giving promotion to the post of Executive Director is hereby quoted below: “The posts of Executive Directors shall be filled up by way of promotion of Officers in Grade-F from Rural Development Banking Service of the National Bank. Officers in Grade F from the Economic Service shall also be considered along with officers of Rural Development Banking Service for promotion to the post of Executive Director, subject to such officers having requisites experience, seniority and such other relevant factors as may be considered necessary by the Bank. The promotions shall be effected on a selective basis after taking into consideration the Performance Appraisal Reports of the officers for the last three years and the personal assessment made by the Committee comprising the Chairman and Managing Director of the National Bank and the Deputy Governor of Reserve Bank of India on the Board of National Bank.” It is evident from the Rule quoted above that the posts of Executive Directors shall be filled up by way of promotion of Officers in Grade-F from Rural Development Banking Service of the National Bank. Officers in Grade-F from the Economic Service shall also be considered along with officers of Rural Development Banking Service for promotion to the post of Executive Director, subject to such officers having requisites experience, seniority and such other relevant factors as may be considered necessary by the Bank. The promotions shall be effected on a selective basis after taking into consideration the Performance Appraisal Reports of the officers for the last three years and the personal assessment made by the Committee comprising the Chairman and Managing Director of the National Bank and the Deputy Governor of Reserve Bank of India on the Board of National Bank. The petitioner in the light of the said provision of law has got right to participate in the selection process, accordingly his case was placed before the Selection Committee on 22.3.2011 the Chief General Manager have shortlisted candidates namely (1) V.Ramakrishna Rao, (2) C.R.Patnaik(the petitioner), (3) B.S.Sekhawat and (4) R.Narayan. It is evident from the materials available on record and it is not in dispute that the case of Sri V.Ramakrishna Rao was not considered on the ground of pendency of some cases against him. The petitioner was next to him but not considered rather one B.S.Sekhawat (serial no.3) was promoted as Executive Director. It is evident from the materials available on record and it is not in dispute that the case of Sri V.Ramakrishna Rao was not considered on the ground of pendency of some cases against him. The petitioner was next to him but not considered rather one B.S.Sekhawat (serial no.3) was promoted as Executive Director. The petitioner was not assigned with any reason which led him to make an application under the provision of Right to Information Act and thereafter he has got information that since he was to retire shortly i.e. w.e.f. 30.4.2011 and as such he was eliminated from the zone of consideration. The petitioner being aggrieved has approached this Court alleging therein that he has been discriminated merely on the ground that he was to retire w.e.f. 30.4.2011. The ground taken by the petitioner is under the Staff Rules,1982 which is applicable to the petitioner for promotion to the post of Executive Director, there is no provision to eliminate a candidature of the candidate from the zone of consideration on the ground that the officer is to retire shortly. The opposite parties have taken stand right from 2001-02 that the practice adopted by the NABARD not to extend promotion to the post of Executive Director who is to retire shortly but this Court, after appreciating the submissions made by the learned counsel for the parties in this regard, is of the view that if post is to be filled up by way of direct recruit, or from promotion, or from deputation or byway of transfer, relevant rule applicable, is to be followed and there cannot be any deviation from the provisions of law. Here the Rule has been enacted upon from the year 1982 and when the rule is applicable it should not have been deviated in any way. The contention raised by the learned counsel for the opposite parties that the claim of the petitioner was rejected on the ground of precedence of not granting promotion to the post of Executive Director to such eligible officer who is to retire shortly, according to my considered view, precedence cannot prevail upon the statutory rule otherwise there will be no meaning of the enactment of the Rule and it will lead to arbitrariness on the part of the authority, which will be against Article 14 of the Constitution of India. This is being observed by this Court on the basis of the cardinal legal position that where statute provides that if anything is to be done, it should be done in the manner prescribed in the Institution, reference in this regard may be made to the judgment rendered in the case of BABU VERGHESE VS. BAR COUNCIL OF KERALA reported in (1999)3 SCC 422 wherein at paragraphs 31 and 32 Hon ble the Apex Court has held: “Para-31-It is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in that manner or not at all. The origin of this rule is traceable to the decision in Taylor –vs- Taylor, (1875)1 Ch.D.426 which was followed by Lord Roche in Nazir Ahmad –vs- King Emperor, AIR 1936 pc 253 who stated as under: 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.” “Para-32- This rule has since been approved by this Court in Rao Shiv Bahadur Singh –vs- State of U.P., AIR 1954 SC 322 and again in Deep Chand –vs- State of Rajasthan, AIR 1961 SC 1527 . These cases were considered by a three-Judge Bench of this Court in State of U.P. –v- Singhara Singh, AIR 1964 SC 358 and the rule laid down in Nazir Ahmad case was again upheld. This rule has since been applied to the exercise of jurisdiction by Courts and has also been recognized as a salutary principle of administrative law.” In the case of Juari Cemet Limited –vs- Regional Director, Employees State Insurance Corporation, Hyderabad and others reported in (2015) 7 SCC 690 wherein at para-14 it has been held by the Hon ble Apex Court, which is being quoted hereunder: “As per the scheme of the Act, the appropriate Government alone could grant or refuse exemption. When the statute prescribed the procedure for grant or refusal of exemption from the operation of the Act, it is to be done in that manner and not in any other manner. In State of Jharkhand –vs- Ambay Cements, 3 (2005) 1 SCC 368 , it was held that: “26….. When the statute prescribed the procedure for grant or refusal of exemption from the operation of the Act, it is to be done in that manner and not in any other manner. In State of Jharkhand –vs- Ambay Cements, 3 (2005) 1 SCC 368 , it was held that: “26….. It is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way.” In the case of State of Jharkhand and others –vs- Ambay Cement and another, reported (2005)1 SCC 368 the Hon ble Apex Court at paragraph-26 has held: “Whenever the statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to severe consequences, such requirement would be mandatory. It is the cardinal rule of the interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. It is also settled rule of interpretation that where a statute is penal in character, it must be strictly construed and followed. Since the requirement, in the instant case, of obtaining prior permission is mandatory, therefore, non-compliance of the same must result in canceling the concession made in favour of the grantee-the respondent herein. 8. Thus, from the discussions narrated above, I am of the considered view that that the authorities while eliminating the petitioner from the zone of consideration on the ground that he was to retire w.e.f. 30.4.2011, cannot be said to be in consonance with the provisions of the Rule. This finding is being given by this Court on the basis of the settled legal position and the petitioner is every right to be considered for promotion as his fundamental right and if the service rule does not provide if the officer is going to retire shortly, he cannot be denied from his opportunity to be considered for promotion to the higher post. In view thereof, the action taken by the authority in denying claim of the petitioner for promotion cannot be approved. Accordingly, denial of consideration of the case of the petitioner for promotion to the post of Executive Director is held to be illegal. 9. In view thereof, the action taken by the authority in denying claim of the petitioner for promotion cannot be approved. Accordingly, denial of consideration of the case of the petitioner for promotion to the post of Executive Director is held to be illegal. 9. This Court is conscious of the fact that at this stage the petitioner cannot take any benefit of actual service even if he would be promoted to the post of Executive Director since he has already retired from service w.e.f. 30.4.2011 but if he would be found to be suitable, certainly he would be entitled to get monetary benefit by getting the notional promotion. 10. Accordingly, the matter is remitted before the competent authority to consider the case of the petitioner and take final decision in accordance with law for promotion to the post of Executive Director notionally within reasonable period, preferably within three months from the date of production of certified copy of this order. With the aforesaid observations and direction, the writ petition is disposed of. Petition disposed of.