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CASE NO.:

Appeal (civil) 3719 of 2006

PETITIONER:

B. Srinivasa Reddy

RESPONDENT:

Karnataka Urban Water Supply & Drainage Board Employees' Association & Others

DATE OF JUDGMENT: 28/08/2006

BENCH:

Dr. AR. Lakshmanan & Tarun Chatterjee

JUDGMENT:

J U D G M E N T

(Arising out of SLP (C) No. 9393/2006)

WITH

CIVIL APPEAL NO. 3722 OF 2006

Arising out of SLP (C) No. 10388/2006)

Dr. AR. Lakshmanan, J.

Leave granted in both the special leave petitions.

These appeals have raised substantial questions of law

involving interpretation of certain provisions of the Karnataka

Urban Water Supply and Drainage Board Act, 1973 (for short

"the Act") and the Rules made thereunder and also the

principles of law governing the Writ of Quo Warranto and the

power of the Government to make a contractual appointment

under Section 4(2) of the Act.

Civil Appeal No._____________ of 2006

(Arising out of SLP (C) No. 9393 of 2006)

This appeal was filed by Mr. B. Srinivasa Reddy

(hereinafter called Mr. Reddy) seeking leave to appeal against

the final judgment and order dated 04.04.2006 passed by the

High Court of Karnataka at Bangalore in Writ Appeal No. 86 of

2006. By the impugned order, the High Court dismissed the

writ appeal filed by the appellant-herein against the order

dated 10.01.2006 passed by a learned Judge of the said Court

in Writ Petition No. 9852 of 2004 and has declared that the

appellant is not entitled to hold the post of Managing Director

of the Karnataka Urban Water Supply & Drainage Board

(hereinafter called 'the Board') (respondent No.4).

Civil Appeal No.___________ of 2006

(Arising out of SLP (C) No. 10388 of 2006)

The above appeal was filed by the Government of

Karnataka against the very same judgment passed by the

Division Bench of the High Court in Writ Appeal No. 254 of

2006 whereby the Division Bench dismissed the writ appeal

filed by the State.

FACTS:

The Karnataka Urban Water Supply & Drainage Board

Act, 1973 was enacted to provide for the establishment of

water supply and drainage Board and the regulation and

development of drinking water and drainage facilities in the

urban areas in the State of Karnataka. The Board, with the

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previous sanction of the Government of Karnataka, framed the

Karnataka Urban Water Supply & Drainage Board Services

(Cadre and Recruitment) Regulations, 1985. An amendment

to serial No. 1 of the Schedule to the Regulations was

introduced by the Board whereby even the Chief Engineers of

the Board were made eligible for appointment to the post of

Managing Director. Respondent No.1 is the Karnataka Urban

Water Supply & Drainage Board Employees' Association

represented by its President Halakatte. He is also respondent

No.2 in his capacity as President of the Employees'

Association. The State of Karnataka and the Board are also

the contesting respondents 3 and 4 in this appeal.

Respondent No.1 (hereinafter called the Employees'

Association) filed writ petition No. 44001 of 1995 in the High

Court of Karnataka challenging the appointment of one S.

Ramamurthy as the Managing Director of the Board on the

ground that by virtue of Section 7(1)(d) of the Act, the said

Ramamurthy, being an officer/servant (Chief Engineer earlier)

of the Board, could not have been appointed as the Managing

Director of the Board.

The Government of Karnataka, vide notification No.

UDD/14/UB/91 dated 28.04.1997, nominated the appellant

who was a Chief Engineer of the Board as one of the Directors

of the Board "with immediate effect and until further orders".

The Board, after due approval of the State, vide G.O. No. HUD

15 UWE 93 dated 11.12.1997, amended the method of

recruitment for the post of Managing Director of the Board in

serial No. 1 of the Schedule to the Regulations to the effect

that a Managing Director can be selected only from amongst

the Chief Engineers of the Board. Other criterias were

removed.

On 28.01.1998, the Government of Karnataka, through

the Urban Development Department, vide Notification No.

UDD 4 UWE 98 dated 28.01.1998, pursuant to Section 53 of

the Act read with Rule 27 of and serial No. 1 of the Schedule

to the Regulations, promoted the appellant on officiating basis

and appointed him as the Managing Director of the Board

w.e.f. 31.01.1998 afternoon and "until further orders" since S.

Ramamurthy, the then Managing Director of the Board took

voluntary retirement.

The Employees' Union filed an amended version of the

writ petition before the High Court also challenging the above-

mentioned amendment to the Regulation which relates to

making of a provision of appointing the Chief Engineer of the

Board as its Managing Director. The writ petition was further

amended to include the challenge to the

promotion/appointment of the appellant as the Managing

Director of the Board pursuant to the said amendment.

The learned Single Judge of the High Court allowed the

writ petition on 12.04.2002 and held:

a) that the impugned amendment of the

Regulations was illegal since the same was

contrary to Section 7(1)(d) of the Act;

b) that the appointment of the appellant is illegal

since, being a Chief Engineer of the Board, he

was disqualified under Section 7(1)(d) of the Act

and hence his appointment was contrary to the

provisions of Sections 7(1)(d), 68 and 69 of the

Act, Rules and Regulations;

c) that the appointment was further held to be

illegal since it was also contrary to Regulation 27

of the Regulations as the appointment was not

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restricted to one year but until further orders.

The High Court quashed the appointment orders and

directed the State to take immediate steps to appoint the

Managing Director of the Board.

Writ appeals were filed by the Board, the Government

and the appellant \026 Mr. Reddy.

The Division Bench of the High Court in Writ Appeal No.

2877-78 of 2002, issued notice and stayed the order of the

learned Single Judge for a period of two months which was

later continued. By virtue of this order, the appellant

continued to enjoy the post of Managing Director.

The appellant retired as Managing Director of the Board

on 31.01.2004. The Relieving Order reads thus:

"Sri B. Srinivasa Reddy, Managing Director, KUWS&DB

who retired from service on attaining superannuation as

31-01-2004 is relieved from his duties on the afternoon

of 31-01-2004."

He was re-appointed as Managing Director of the Board

until further orders on 01.02.2004. Writ Petition No. 9852 of

2004 was filed for a Writ of Certiorari, Writ of Quo Warranto

and any other writ, order or direction under Article 226.

Learned Single Judge allowed the Writ Petition No. 9852 of

2004. Writ Appeal No. 86 of 2006 was admitted and the

operation of the learned Single Judge's order was stayed on

16.01.2006 and Writ Appeal No. 86 of 2006 was finally

dismissed on 04.02.2006.

The Court also imposed costs of Rs.10,000/- against the

appellant and also imposed cost against the State Government

and respondent No.4 at Rs.5,000/- each separately.

It is pertinent to notice that in 2002, a complaint was

made to the Lokayukta against the Chairman and the

appellant - Mr. Reddy by Mr. Halakatte, President of the

Employees' Association (R2 herein). By order dated

13.08.2003 Lokayukta held that the allegation against the

appellant is baseless. Lokayukta after absolving the appellant

of false allegations directed action against the then FA & CAO

of the Board. The Lokayukta closed the complaint on

01.02.2005 after Government has taken action against FA &

CAO.

We heard Mr. P.P. Rao, learned senior counsel assisted

by Mr. P.S. Rajagopal, learned counsel for the appellant and

Mr. Sanjay R. Hegde for the State of Karnataka and Mr. Raju

Ramachandran, learned senior counsel assisted by Mr.

Devashish Baruka and Mrs. Hansa Baruka, learned counsel

for the contesting respondent \026 the Employees' Union.

Mr. P.P. Rao, learned senior counsel made elaborate

submissions on facts and on law with reference to the

pleadings, annexures, judgments and the relevant provisions

of the Act. He made submissions on the following issues:-

1. Writ petition as framed not maintainable at the

instance of an unregistered Trade Union;

2. Locus of the writ petitioners \026 Employees' Union;

3. No Writ of Quo Warranto unless there is violations of

statutory provisions in making appointment;

4. No violation of Section 4(2) and or Rule 3 of Rules as

held by the High Court;

5. Government has always the power to make contractual

appointment until further orders and finding to the

contrary is ex facie erroneous;

6. High Courts reliance on official Memorandum dated

23.12.1994 is erroneous;

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7. Pleasure of the Government under Section 6(1) of the

Act and Rule 3 of the Rules which envisages the

qualifications;

8. Until further orders \026 pleasure of the Government and

discretion;

9. Legal malice \026 finding is unsustainable;

10. Writ petition by R1, R2 was motivated as R1 had

lodged a false complaint to the Lokayukta against the

appellant Reddy which was found to be baseless.

The above submissions will be dealt with in extenso in

paragraphs infra.

Mr. Sanjay R. Hegde adopted the arguments of Mr. P.P.

Rao. He invited our attention to Article 310(2) of the

Constitution of India.

Article 310 deals with tenure of office of persons serving

the Union or a State. Under the pleasure doctrine, a servant

of the Government holds office during the pleasure of the

sovereign. But in order to protect civil servant against the

political interference Article 311 introduces certain safeguards.

Moreover, a specific contract can override the doctrine of

pleasure as reported in Parshotam Lal Dhingra vs. Union of

India, AIR 1958 SC 36.

Mr. Raju Ramachandran in his usual fairness fairly

conceded that he is not questioning the State Government's

power in appointing persons on contract basis. According to

him, the entire case is not based on end of lack of power but

an abuse and mis-use of that power by the State Government.

According to him, non-specification of a period of appointment

amounts to abuse of power, mis-use of power and illegal

malafides and that power is not used for the purpose for which

it is vested in the Government. According to him, form of the

writ should not be a matter which should inhibit the Court.

This argument was advanced in regard to the prayer made in

the writ petition on the maintainability of the writ petition.

Mr. Raju Ramachandran submitted though the employees

association was not a registered body on the date of filing of

the writ petition, the association was registered again as a

trade union under the Trade Unions Act on 20.01.2005 and

that though the employees union was not a registered trade

union but was a recognized union by all and, therefore, the

association is entitled to maintain the writ petition as framed.

He also made elaborate submissions with reference to the

records, annexures and the judgments and of the Government

orders.

Mr. Raju Ramachandran also submitted that the civil

appeal has now become infructuous in view of the

developments which have taken place subsequent to the

orders of this Court dated 08.05.2006 by which notice was

issued to the respondents in view of the fact that the

Government of Karnataka has now appointed one Mr.

P.B.Ramamurthy as the Managing Director of the Board with

immediate effect by an order contained in the notification

dated 17.05.2006 and pursuant to the above order the

appellant Mr.Reddy has already made over the charge of the

office of Managing Director of the Board to the said P.B.

Ramamurthy who had received charge of the said office on

19.05.2006. It was submitted that the appellant has no

substantive right left qua the post of Managing Director of the

Board since even as per his appointment order dated

31.01.2004 he is to have charge only "until further orders". In

view of the above subsequent developments, learned counsel

for the Union submitted that the present appeal has become

infructuous.

According to Mr. Raju Ramachandran, though the power

to appoint is vested with the State Government under Section

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4(2) of the Act the same is not unfettered or uncontrolled. It

cannot be based on mere ipsi dixit of the Government the

discretion of the Government cannot be said to be without any

bounds. If the High Court on the facts of a particular case

finds that such discretion has been mis-used, the High Court

would be within its power to check such actions of the

Government.

According to him, a Writ of Quo Warranto would lie to

challenge an appointment made until further orders on the

ground that it is not a regular appointment. Merely because

the appointment is for until further orders would oust the

jurisdiction of the High Court to issue a Writ of Quo Warranto

when it is found that the very appointment was illegal and not

warranted within the provision of law.

It is submitted that the words \026 pleasure of the

Government found in Section 6(1) of the Act cannot be given a

meaning so as to grant arbitrary and un-fettered powers to the

Government with respect to appointment of a Managing

Director to the Board. It is submitted that the words cannot

mean as absolute and unconditional will of the Government,

for that would go counter to the constitutional scheme and to

the rule of law itself.

In the instant case, under the guise of temporary

appointment made until further orders, the Government in

fact by misusing its discretionary powers ensured that the

appellant's appointment continues without any limit as to

tenure or term. It is submitted the High Court rightly passed

the impugned order since the appointment was in violation of

the provisions of law. It is submitted that no appointment to a

public post can be made without a specific tenure. According

to Mr. Raju Ramachandran, the official memorandum dated

23.12.1994 squarely applies to the Board in question and that

the said memorandum in express terms provide that

procedure contained therein shall apply, inter alia, to Boards

which are subordinate to or under the control of the

Government. It is thus submitted that the Board is covered

with the said memorandum.

It is further contended that Section 7(1) (d) of the Act

read with the above official memorandum would make it clear

that retired employees cannot be appointed the post of

Managing Director of the Board. The purpose of Section

7(1)(d) and the office memorandum dated 23.12.1994 has to

be looked into while deciding the legality of the appointment of

the appellant to the post of Managing Director of the Board.

According to Mr. Raju Ramachandran it has nowhere come on

record that the appellant possessed such exceptional and high

qualifications as to warrant the Government to deviate from its

own policy and appointed the appellant. In fact any

experience gained by the appellant during his tenure as the

Managing Director prior to his retirement is of no consequence

since such appointment was held to be illegal and invalid by

the High Court. No exceptional circumstances has been

shown that the appointment of the appellant to the post of

Managing Director in deviation to regular mode of

appointment of IAS officers on deputation.

In regard to the maintainability of the writ petition Mr.

Raju Ramachandran submitted that the High Court did not

rely upon the status of the writ petitioners as registered trade

union but rather accepted their locus standi as employees of

the Board and their right to form trade unions associations

though unregistered and on such basis permitted them to

challenge the appointment in writ proceedings. According to

him, the unregistered unions, in the eyes of law can contend

that it has to come and knock the doors of this Court seeking

justice by pointing out the illegalities of the State Government

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in appointing the appellant as Managing Director of a

Statutory Board wherein public interest is involved. The

purpose, according to him, is to espouse the cause of the

workers. Therefore, the writ petitioners were employees of the

Board and cannot be considered as wayfarers and that the

employees approached the High Court in public interest and

have been attempting to dissuade the Government from

granting favour to the appellant herein by appointing him at

the post of Managing Director of the Board for long.

We have carefully considered the rival submissions with

reference to the entire records.

1) Locus of the unregistered Trade union = Maintainability:

Respondent No. 1 association was a recognized

association. It is registered again as a trade union on

20.01.2005 i.e. before the pronouncement of judgment of the

learned single judge. Respondent No.2 Halakatte, who is the

President of Respondent No.1 in his individual capacity has

also challenged the appointment. In Quo Warranto

proceedings any concerned person can file a writ petition.

While dealing with the locus, the High Court has relied upon

the right of persons to form association and consequently to

file a Writ in Quo Warranto proceedings.

In fact, Mr. Rao distinguished the cases referred to by the

respondents on the issue of non-registered associations having

no locus to file writ petitions as distinguishable and

inapplicable in the present facts and circumstances.

In Mahinder Kumar Gupta and Others vs. Union of

India, Ministry of Petroleum and Natural Gas, (1995) 1

SCC 85, this Court held that the writ petition filed by an

Association is not maintainable as Association has no

fundamental right under Article 32 of the Constitution of

India.

In Coinpar and Another vs. General Manager,

Telecom District and Others, (2004) 13 SCC 772, the

appellant before this Court was an Association which claims

working in public interest preferred an appeal against the

judgment of the High Court with an application for permission

to file special leave petition. The said permission was granted.

After the matter was heard, this Court found that the

appellant was neither party in the case before the Forum nor

before the High Court. It was also not shown before this Court

in what manner the appellant was aggrieved by the judgment

of the High Court. This Court held that the appellant has no

locus standi and cannot be permitted to challenge the

judgment of the High Court.

Our attention was also drawn to the proceedings of the

Deputy Registrar of the Trade Union Dharwad (Division) Hubli

dated 02.11.1992 Government of Karnataka (Department of

Labour). The said proceedings reads thus:-

"Subject: Cancellation of registration of Trade Unions,

under Trade Union Act, 1926.

Reference: This office notice No. TUA/AR.1991 dated

30.7.1992

*****

WHEREAS a notice was issued from this office to the

General Secretary/Secretary, Karnataka Urban Water

Supply & Drainage Board Employees Association, Hubli,

cause as to why the registration of trade union should

not be cancelled owing to the violation of the provisions

of section 28 of the Trade Union Act, 1925, by not

submitting the Annual Return of the union for the year

ending 31st December, 1991.

AND whereas the union was not complied with the

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above requirements, even after notice, contravened the

above provisions of law. Therefore in exercise of my

powers conferred under Section 10(b) of the Act, I

hereby order that the Registration of the Water Supply

& Drainage Board Employees Association, Hubli

Bearing Registration No. 544/85 be cancelled with effect

from the date of this order.

The General Secretary is hereby directed to surrender

the certificate of registration."

In the instant case, the appellant was appointed w.e.f.

01.02.2004. The Employees Union filed the writ petition on

08.03.2004. On the said date, the respondent-Union was not

a registered trade union and the Certificate of Registration of

the Trade Union in Form 'C' was issued by the Government of

Karnataka, Department of Labour only on 20.01.2005 which

reads thus:-

"It is hereby certified that the

Karnataka Nagar Niru Sarbaraju Mattu Olacharandi

Noukarar Sangha, Dharwa.

has been registered under the Indian Trade Unions Act,

1926.

Dated: 20th January 2005

Sd/

Deputy Registrar of Trade Unions

Assistant Labour Commissioner,

Dharwad Division, Hubli."

In Parents Teachers Association and Others vs.

Chairman, Kendriya Vidyalaya Sangathan and Others,

AIR 2001 Rajasthan 35, speaking for the Bench, Chief Justice

Dr. AR.Lakshmanan, in paras 12 and 13 observed as under:-

"(12). The appellant-petitioners have not placed before

this Court any document to show that the Parents-

Teachers Association is a registered and recognised

association. The writ petition has been allegedly filed in

public interest and the alleged large interest of the

students. It is evident that the so-called Parents-

Teachers Association is an unregistered and

unrecognised association and, therefore, in our view,

has no fundamental right to approach this Court under

Article 226 of the Constitution. This point has been

concluded by the decision of the Apex Court in the case

of Mahendra Kumar Gupta (supra) and by the decision

of Full Bench of this Court in the case of RSEB

Accountant's Association (supra). A reply to the

preliminary objection raised by the respondents was

also made by the appellants. It is stated that the

Parents-Teachers Association has been recognised by

the KVS and that the Principal is the Vice Chairman of

the said Association and hence, the Association is

competent to file the writ petition on behalf of the

students. In our view, the above reason cannot be

considered as a valid reason for maintaining the writ

petition. It is not in dispute that the Association is not a

registered body and recognised Association. Thus, after

examining this point of law in detail and placing

reliance on various judgments delivered by the Apex

Court from time to time, the Full Bench of this Court in

the case of RSEB Accountant's Association (supra) held

as under:-

"It may also be observed that an unregistered

association has no fundamental right to approach

this Court under Art. 226 of the Constitution and

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this point is concluded by the decision in the case

of Shri Maninder Kumar Gupta vs. Union of India,

Ministry of Petroleum and Natural Gas; JT 1995

(1) SC 11. A decision in the case of Akhil

Bharatiya Soshit Karamchari Sangh vs. Union of

India and others AIR 1981 SC 298 was relied

where the non-registered Association was held to

apply under Art. 32 of the Constitution. We may

observe that there had been number of the

instances of public interest litigation where large

body of persons is having the grievance against

inaction of the State. Even letters have been

considered to be a writ petition but all these are

the matters where large section of public is

affected and the personal interest of any person or

a smaller section as in the present case, is not

involved. Even in the case of People's Union for

Democratic Rights vs. Union of India; AIR 1982 SC

1473 when the question of locus standi was

considered, the Hon'ble Supreme Court had taken

into consideration the poverty, illiteracy and the

ignorance obstructing and impeding accessibility

of the judicial process and on that ground it was

considered that the writ petition can be filed. In

D.S. Nakara & Others vs. Union of India AIR 1983

SC 130 the old pensioners individually were

unable to undertake journey through labyrinths of

costly and protracted legal judicial process for

allowing to espouse their cause. In case of S.P.

Gupta and Others. vs. President of India; (AIR

1982 SC 149 poverty, helplessness and disability

or social or economic disadvantaged, position was

considered a sufficient ground for maintaining the

writ petition. There had been other decisions of

the Apex Court as well and principles which

emerge from all of them are as under:-

(a) That the members of the said association should

have sufficient strength so as to come in the category of

a large sect of public.

(b) That the members should be identifiable.

(c) That the members must be of the category of

poor/illiterate/helpless or disabled.

(d) That the individual member must not be capable of

filing a writ petition.

(e) That the entire body of the members must authorise

the association to protect their legal rights.

(f) That such an association must have its own

Constitution, and

(g) That there must be authority to file a writ petition on

behalf of all the members."

(13). In the instant case, none of the grounds mentioned

above in (a) to (g) have been satisfied by the present

appellants to maintain the writ petition. Since the above

conditions are not fulfilled such an unregistered

association cannot file writ petition in respect of the

legal rights of the said association for the alleged breach

of fundamental right as the association itself has no

fundamental right of its own."

We shall now advert to the provisions of the Industrial

Disputes Act with reference to the registration of Trade

Unions. Section 2(q)(q) defines trade union which means a

trade union registered under the Trade Unions Act, 1926 (16

of 1926). Section 36 of the Industrial Disputes Act, 1947 says

that the workman who is a party to dispute shall be entitled to

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be represented in any proceedings under this Act by any

member of the executive or other office bearer of a registered

trade union of which he is a member or by any member of the

executive or other office bearer of a federation of trade unions

to which the trade unions referred to in clause A is affiliated.

The writ petitioner union made a false averment that it is a

registered trade union that itself, in our opinion, is a ground to

dismiss the writ petition. The writ petitioner has made an

averment to the following effect in its writ petition which is

also reflected in the order passed by the High Court in the writ

petition which runs thus:

"The petitioner is a registered Trade Union of employees

of 2nd respondent Karnataka Urban Water Supply &

Drainage Board (hereinafter referred to as 'the Board')

constituted under the Karnataka Urban Water Supply

and Drainage Board Act, 1973 (hereinafter referred to as

'the Act')."

In the writ petition filed by respondent Nos. 1 and 2 their

locus standi to challenge the appointment of the appellant was

asserted in the following words:-

"The petitioner Association is Trade Union registered

under the Trade Unions Act, 1926. The petitioner is the

only registered trade union existing in the 2nd

respondent-Board. The Board has held several

negotiations with the petitioner Union in regard to the

service conditions of the employees of the 2nd

respondent-Board since its formation in the year 1986.

The Board has entered into several settlements with the

petitioner Union with regard to their service conditions.

The petitioner which is a recognized trade union is

entitled to agitate the matter with regard to the

appointment of the 3rd respondent to the Board. The

petitioner is concerned about the functioning of the 2nd

respondent-Board, and as such is entitled to question

the appointment of the 3rd respondent as Managing

Director on contract basis. Hence, the petitioner has

locus standi to file this Writ Petition."

(Emphasis supplied)

These averments were established to be false. The

registration of the first respondent under the Trade Unions Act

had been cancelled as early as on 02.11.1992. It is not a

registered and recognized union. In fact, it was pointed out

that recognized association is one Karnataka Urban Water

Supply and Drainage Board Officers and Employees

Association and the first respondent does not have even a

handful of members. The fact of cancellation of registration of

the first respondent came to the knowledge of the appellant

long after the disposal of the earlier writ petition No. 44001 of

1995 wherein the Court had given a finding that the first

respondent has locus standi to challenge the appointment of

the appellant to the post of Managing Director of the Board

solely on the ground that it is a registered Trade Union. In our

opinion, the High Court gravely erred in refusing to examine

the question of locus standi on the ground that it is decided in

the earlier writ petition which operates as res judicata and that

the petitioners even otherwise have locus standi. Chapter-III

of the Trade Unions Act, 1926 sets out rights and liabilities of

the registered Trade Unions. Under the said enactment, an

unregistered trade union or a trade union whose registration

has been cancelled has no manner of right whatsoever even

the rights available under the I.D. Act have been limited only

to those trade unions which are registered under the Trade

Unions Act 1926 by insertion of clause 2 (q)(q) in the I.D. Act

w.e.f. 21.08.1984 defining a trade union to mean a trade

union registered under the Trade Unions Act. 1926.

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The High Court, in our opinion, miserably failed and

gravely erred in holding that the respondent Nos. 1 and 2 have

locus standi to question the appointment of the appellant in

the light of the change of law that has been brought about by

insertion of Section 2(q)(q) of the I.D. Act and having regard to

the provisions of Chapter-III of the Trade Unions Act, 1926.

This Court, in many judgments, held that the Union has locus

standi in the facts and circumstances of that case, however,

cautioning that if a citizen is no more than a wayfarer or

officious intervener without any interest or concern that what

belongs to anyone of the 660 million people of this country.

Fertilizer Corporation Kamgar Union (Regd.) Sindri and

Others vs. Union of India and Others, (1981) 1 SCC 568.

The doors of the Court will not ajar for him.

In the instant case, the employees association

approached the High Court with unclean hands. The

employees who approaches the Court for such relief must

come with frank and full dis-closure of facts. If they failed to

do so and suppress material facts their application is liable to

be dismissed.

The Constitution Bench of this Court in Naraindas vs.

Government of Madhya Pradesh and Others, AIR 1974 SC

1252 held that if a wrong or mis-leading statement is

deliberately and wilfully made by a party to a litigation with a

view to obtain a favourable order, it would prejudice or

interfere with the due course of judicial proceeding and thus

amount to contempt of court.

It is thus crystal clear that the Employees' Union have

approached this Court by suppressing the material facts and

has snatched an order on the basis of wrong averments when

the employees union has no locus standi to maintain the writ

petition on the date relevant in question. Courts cannot grant

any relief to a person who comes to the Court with unclean

hands and with mala fide intention/motive. The writ petition

filed by the employees association is liable to be thrown out on

this single factor. Though it is eminently a fit case for

awarding exemplary costs, considering the employees financial

aspect and taking a lenient view of the matter, we are not

ordering any costs.

2) Writ of Quo Warranto:

Whether a Writ of Quo Warranto lies to challenge an

appointment made "until further orders" on the ground that it

is not a regular appointment. Whether the High Court failed

to follow the settled law that a Writ of Quo Warranto cannot be

issued unless there is a clear violation of law. The order

appointing the appellant clearly stated that the appointment is

until further orders. The terms and conditions of appointment

made it clear that the appointment is temporary and is until

further orders. In such a situation, the High Court, in our

view, erred in law in issuing a Writ of Quo Warranto the rights

under Article 226 can be enforced only by an aggrieved person

except in the case where the writ prayed for is for Habeas

Corpus or Quo Warranto.

In the instant case, the power to appoint the Managing

Director of the Board is vested in the Board under 4(2) of the

Act. Neither the Act nor the Rule prescribed any mode of

appointment or tenure of appointment. When the mode of

appointment, tenure of appointment have been left to the

discretion of the Government by the Act and the Rules and the

Act makes it clear that the Managing Director shall hold office

at the pleasure of the Government the High Court could not

have fettered the discretion of the Government by holding that

Section 4(2) of the Act does not expressly give the power to the

State Government to make ad hoc or contract appointment

when the Act and the statutory rules have not prescribed any

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definite term and any particular mode, the High Court could

not have read into the statute a restriction or prohibition that

is not expressly prohibited by the Act and the Rules. It is well

settled that when the statute does not lay down the method of

appointment or term of appointment and when the Act

specifies that the appointment is one of sure tenure, the

Appointing Authority who has power to appoint has absolute

discretion in the matter and it cannot be said that discretion

to appoint does not include power to appoint on contract

basis. An appointment which is temporary remains temporary

and does not become a permanent with passage of time. The

finding records by the learned Single Judge that the

appointment is bad for the reason that the appointment which

was made on temporary basis has continued for nearly 2 years

is wholly contrary to law particularly when the Act and the

Rule do not stipulate maximum period of appointment. The

High Court, in our view, gravely erred in issuing a Writ of Quo

Warranto when there is no clear violation of law in the

appointment of the appellant.

The official memorandum dated 23.12.1994 on a plain

reading of it applies only to Government servants. It has no

manner of the application to the employees or servants of the

statutory boards. The appellant is not a retired government

servant. His appointment as Managing Director of the Board

is not a post in Government service. The High Court has erred

in law in applying the said official memorandum to the

appointment of the appellant which is governed only by the

Act and the Rules, even otherwise the High Court has failed to

appreciate that the official memorandum running counter to

the statutory provisions are ineffective and at any event

cannot be enforced in a quo warranto proceedings.

The appellant joined the services of the State in the

public health engineering segment of its Power Works

Department in the year 1967. From the time, the Karnataka

Urban Water Supply & Drainage Board was established in the

year 1975, he has been working in the Board having initially

been appointed to its services as Assistant Engineer,

thereafter, absorbed in its services and by his consistently

good performance and unblemished record reached the post of

Chief Engineer of the Board. He has apart from about 34

years of experience in development, establishment,

maintenance and management of drinking water and drainage

facilities in the urban areas has undergone several training

programmes abroad in planning, appraisal implementation of

water and sanitation projects and management development

programme for senior public health engineers.

Section 4(2) of the Act, 1973 mandates that the Managing

Director shall possess the prescribed qualification and he shall

be appointed by the Government. Rule 3 of the Rules, 1974

prescribes the qualification for appointment of Managing

Director in these words:

"The Managing Director shall be a person having

experience in administration and capacity commercial

matters."

There was not even a pleading that the appellant does not

have experience in administration and capacity in commercial

matters. The appointment of the appellant has been made by

the Government in exercise of powers conferred on it by

Section 4(2) of the Act. The High Court does not dispute the

power of the Government to make the appointment. Mr. Raju

Ramachandran, learned senior counsel for the Union does not

dispute that the power of the Government to make contractual

appointment. A perusal of the judgment of the High Court

would only go to show that the High Court did not record any

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finding that the appellant does not possess the qualification

prescribed by the acts and rules. The disqualification for

appointment as a Director of the Board are set out in Section 7

of the Act. The only disqualification that the appellant

suffered was under Section 7(1)(d) of the Act. He being an

employee of the Board and this disqualification disappeared on

31.01.2004 when the appellant retired from service of the

Board on superannuation. The High Court having regard to

the technical nature of quo warranto proceedings could not

have ousted the appellant from the office on the ground of an

inapplicable qualification prescribed by administrative

instruction dated 23.12.1994 which had no manner of

application for appointment to the post of Managing Director

of the Board.

The law is well settled. The High Court in exercise of its

writ jurisdiction in a matter of this nature is required to

determine, at the outset, as to whether a case has been made

out for issuance of a Writ of Quo Warranto. The jurisdiction of

the High Court to issue a Writ of Quo Warranto is a limited one

which can only be issued when the appointment is contrary to

the statutory rules.

The official memorandum dated 23.12.1994 deals with

re-appointment of retired government servants and granting

extension of service to retired government servants. As

already stated, the appellant is not a government servant nor a

retired government servant. The official memorandum is an

administrative instruction which is contrary to the provisions

of the Act and statutory Rules neither the Act nor the Rules

prescribe any age of retirement for the Managing Director of

the Board. On the other hand, having regard to the dis-

qualification prescribed by Section 7(1)(d) of the Act to the

effect that an officer or servant of the Board cannot be

appointed as Managing Director. The High Court could not

have read an additional dis-qualification that a retired officer

or a servant of the Board also cannot be appointed as

Managing Director of the Board. The memorandum dated

23.12.1994 is no manner of application to the appointment in

question and it is even otherwise ineffective inasmuch as it is

an administrative instruction which is contrary to the

provisions of the Act and the Rules. The High Court, in our

opinion, erred in ousting the appellant from his service by

issue of a Quo Warranto on the ground that the appellant

having retired from this service of the Board on 31.01.2004

suffered dis-qualification under the said memorandum by a

reading of the Act and the Rules the appellant acquired

qualification for appointment on 31.01.2004 on his retirement

and the view of the High Court that the appellant is dis-

qualified on 31.01.2004 on his retirement from service of the

Board is not only contrary to the Act and the Rules is also

plainly opposed to the language of the memorandum itself.

Even otherwise, no Writ of Quo Warranto could have been

issued on the ground that even though the appointment is

contrary to any statutory rule it is contrary to the

administrative instruction which the High Court holds as

disclosed the policy of the Government. There is no warrant to

have taken such a view at all.

It is settled law by a catena of decisions that Court

cannot sit in judgment over the wisdom of the Government in

the choice of the person to be appointed so long as the person

chosen possesses prescribed qualification and is otherwise

eligible for appointment. This Court in R.K. Jain vs. Union of

India, (1993) 4 SCC 119 was pleased to hold that the

evaluation of the comparative merits of the candidates would

not be gone into a public interest litigation and only in a

proceeding initiated by an aggrieved person, it may be open to

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be considered. It was also held that in service jurisprudence it

is settled law that it is for the aggrieved person that is the non-

appointee to assail the legality or correctness of the action and

that third party has no locus standi to canvass the legality or

correctness of the action. Further, it was declared that only

public law declaration would be made at the behest of public

spirited person coming before the Court as a petitioner having

regard to the fact that the neither of respondent Nos. 1 and 2

were or could have been candidates for the post of Managing

Director of the Board and the High Court could not have gone

beyond the limits of Quo Warranto so very well delineated by a

catena of decisions of this Court and applied the test which

could not have been applied even in a certiorari proceedings

brought before the Court by an aggrieved party who was a

candidate for the post.

The judgment impugned in this appeal not only exceeds

the limit of Quo Warranto but has not properly appreciated the

fact that writ petition filed by the Employees' Union and the

President of the Union \026 Halakatte was absolutely lacking in

bonafides. In the instant case, the motive of the second

respondent Halakatte is very clear and the Court might in its

discretion declined to grant a Quo Warranto.

This Court in A.N. Sashtri vs. State of Punjab and

Others, (1988) Supp SCC 127 held that the Writ of Quo

Warranto should be refused where it is an outcome of malice

or ill-will. The High Court failed to appreciate that on

18.01.2003 the appellant filed a criminal complaint against

the second respondent Halakatte that cognizance was taken

by the criminal court in CC No. 4152 of 2003 by the

jurisdictional magistrate on 24.02.2003, process was issued to

the second respondent who was enlarged on bail on

12.06.2003 and the trial is in progress. That apart, the

second respondent has made successive complaints to the

Lokayukta against the appellant which were all held to be

baseless and false. This factual background which was not

disputed coupled with the fact that the second respondent

Halakatte initiated the writ petition as President of the 1st

respondent Union which had ceased to be a registered trade

union as early as on 02.11.1992 suppressing the material fact

of its registration having been cancelled, making allegations

against the appellant which were no more than the contents of

the complaints filed by him before the Authorities which had

been found to be false after thorough investigation by the

Karnataka Lokayukta would unmistakably establish that the

writ petition initiated by the respondent Nos. 1 and 2 lacked in

bona fides and it was the outcome of the malice and ill-will the

2nd respondent nurses against the appellant. Having regard to

this aspect of the matter, the High Court ought to have

dismissed the writ petition on that ground alone and at any

event should have refused to issue a Quo Warranto which is

purely discretionary. It is no doubt true that the strict rules of

locus standi is relaxed to an extent in a Quo Warranto

proceedings. Nonetheless an imposture coming before the

Court invoking public law remedy at the hands of a

Constitutional Court suppressing material facts has to be

dealt with firmly.

This Court in Dr. B. Singh vs. Union of India and

Others, (2004) 3 SCC 363 held that only a person who comes

to the Court with bonafides and public interest can have

locus. Coming down heavily on busybodies, meddlesome

interlopers, wayfarers or officious interveners having

absolutely no public interest except for personal gain or

private profit either of themselves or as a proxy of others or for

any other extraneous motivation or for glare of publicity, this

Court at para 14 of the report held as under:-

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"The court has to be satisfied about: (a) the credentials

of the applicant; (b) the prima facie correctness or

nature of information given by him; and (c) the

information being vague and indefinite. The information

should show gravity and seriousness involved. Court

has to strike a balance between two conflicting

interests: (i) nobody should be allowed to indulge in wild

and reckless allegations besmirching the character of

others; and (ii) avoidance of public mischief and to avoid

mischievous petitions seeking to assail, for oblique

motives, justifiable executive actions. In such case,

however, the court cannot afford to be liberal. It has to

be extremely careful to see that under the guise of

redressing a public grievance, it does not encroach upon

the sphere reserved by the Constitution to the executive

and the legislature. The court has to act ruthlessly while

dealing with imposters and busybodies or meddlesome

interlopers impersonating as public spirited holy men.

They masquerade as crusaders of justice. They pretend

to act in the name of pro bono publico, though they

have no interest to the public or even of their own to

protect."

It is useful to refer to the case of The University of

Mysore and Another vs. C.D.Govinda Rao and Another,

[1964] 4 SCR 575 at pages 580 and 581

"As Halsbury has observed:

"An information in the nature of a quo warranto took

the place of the obsolete writ of quo warranto which lay

against a person who claimed or usurped an office,

franchise, or liberty, to inquire by what authority he

supported his claim, in order that the right to the office

or franchise might be determined."

Broadly stated, the quo warranto proceeding affords a

judicial remedy by which any person, who holds an

independent substantive public office or franchise or

liberty, is called upon to show by what right he holds

the said office, franchise or liberty, so that his title to it

may be duly determined, and in case the finding is that

the holder of the office has not title, he would be ousted

from that office by judicial order. In other words, the

procedure of quo warranto gives the Judiciary a weapon

to control the Executive from making appointment to

public office against law and to protect a citizen from

being deprived of public office to which he has a right.

These proceedings also tend to protect the public from

usurpers of public office, who might be allowed to

continue either with the connivance of the Executive or

by reason of its apathy. It will, thus, be seen that before

a person can effectively claim a writ of quo warranto, he

has to satisfy the Court that the office in question is a

public office and is held by a usurper without legal

authority, and that inevitably would lead to the enquiry

as to whether the appointment of the alleged usurper

has been made in accordance with law or not."

It is also beneficial to refer to the decision of this Court in

Ghulam Qadir vs. Special Tribunal and Others, (2002) 1

SCC 33 para 38 which reads thus:-

"There is no dispute regarding the legal proposition that the

rights under Article 226 of the Constitution of India can be

enforced only by an aggrieved person except in the case where

the writ prayed is for habeas corpus or quo warranto. Another

exception in the general rule is the filing of a writ petition in

public interest. The existence of the legal right of the

petitioner which is alleged to have been violated is the

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foundation for invoking the jurisdiction of the High Court

under the aforesaid Article. The orthodox rule of

interpretation regarding the locus standi of a person to reach

the court has undergone a sea-change with the development

of constitutional law in our country and the constitutional

courts have been adopting a liberal approach in dealing with

the cases or dis-lodging the claim of a litigant merely on

hyper-technical grounds. If a person approaching the court

can satisfy that the impugned action is likely to adversely

affect his right which is shown to be having source in some

statutory provision, the petition filed by such a person cannot

be rejected on the ground of his having not the locus standi.

In other words, if the person is found to be not merely a

stranger having no right whatsoever to any post or property,

he cannot be non-suited on the ground of his not having the

locus standi.

It is settled law that Writ of quo warranto does not lie if

the alleged violation is not of a statutory nature. Three

judgments relied on by Mr. P.P. Rao can be usefully referred to

in the present context.

In A. Ramachandran vs. A. Alagiriswami, Govt.

Pleader High Court, Madras & Anr. , AIR 1961 Madras 450,

the Court observed in paragraphs 74 and 104 as under:

"\005\005\005Where an authority has power to make rules

relating to a subject matter and also the power to decide

disputes arising in the field occupied by that subject matter,

the two powers and functions must be kept distinct and

separate. This dispute must be decided with reference to the

rules in force at the time the adjudication had to be made

and, the rule making power cannot be invoked in relation to

that adjudication."

"\005\005\005\005..It was also contended that it was

incumbent on the State Government to follow the principle of

appointment as laid down in 1932 G.O. so as to avoid

arbitrariness of nepotism. Reliance was placed upon the

decision in 1955-2 Mad LJ 49: (AIR 1955 Mad 305) (FB) for

the position that even non-statutory regulations and rules

contained in the Board's Standing Orders are binding on the

State Government, and that it cannot depart from such rules

arbitrarily and capriciously to suit the exigencies of a

particular situation. In that case the Government purported

to exercise a revisional power over the Orders of the Board of

Revenue which it did not have as per Board's Standing

Orders count at any time be modified or amended and that if

the Government had power to bring about such

modifications it followed that the Government had power of

revision though in terms such power was not conferred upon

it."

In High Court of Gujarat & Anr. Vs. Gujarat Kishan

Mazdoor Panchayat & Ors., (2003) 4 SCC 712, it was held

by this Court that a Writ of Quo Warranto can only be issued

when the appointment is contrary to the statutory rules. The

judgment in Mor Modern Coop. Transport Society Ltd. Vs.

Financial Commissioner & Secretary to Government of

Haryana, (2002) 6 SCC 269 was also relied on.

Thus it is seen that Writ of Quo Warranto lies if the

alleged violation is not of a statutory provision.

The Official Memorandum of 1994 dated 23.12.1994 of

the Government of Karnataka reads thus:

"GOVERNMENT OF KARNATAKA"

No.DPAR/15/SDE 94 Karnataka Government Secretariat

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Vidhana Soudha

Bangalore dated 23.12.1994

OFFICIAL MEMORANDUM

Sub: Regarding re-appointment of retired Government

Employee and extension of their services after

Retirement.

Ref : i) O.M. No. DPAR 42 SSR 77 dated 15.12.1977

ii) O.M. No. DPAR No. 2 SDE 90 dated 22.02.1990

1. In the O.M. referred at (1) above in respect of the teaching

staff viz., Teachers, Lecturers, Professors who are working in

educational institutions of the Education Department retiring

in the middle of the academic year, it was permitted to

continue their services till the end of the educational year

with the permission of the concerned officer.

2. In the O.M. referred at (2) above, it was instructed not to re-

appoint the retired Government servants and not to give them

extension of service.

3. It has come to the notice of Government that retired

Government officers/officials have been re-appointed on

contact basis. Hence it is ordered that the officers/officials

who have been re-appointed on contract basis and

continuing in service shall be removed from service forthwith.

4. If the teaching staff working in educational institutions of the

Education Department are retiring in the middle of the

academic year, the instructions given in O.M. No. DPAR 42

SSR 77 dated 15.12.1977 are applicable.

5. The procedure contained in the above paragraphs are also

applicable to the Autonomous/Grant-in-Aid institutions,

Boards and the Companies which are subordinate to or

under the control of the Government."

Sd/-

(A.V. Ramamurthy)

Joint Secretary to Government

D.P.A.R.(SR)"

Paragraph 5 of the Memorandum makes it amply clear that

Boards are included within the said memorandum and hence

the procedure adopted for Government employees will equally

apply to the Board. The initial appointment of the appellant

as Managing Director was on 28.1.1998. He was relieved vide

relieving Order dated 31.1.2004 as M.D. His pension order

stated that he has retired as M.D. Thereafter he was re-

appointed as M.D. on 31.1.2004. The said Notification reads

as follows:

"In exercise of the powers conferred under Section 4(2) of

the KUWS&D B Rules, 1973 (Karnataka Act 25/1974) Sri

B. Srinivasa Reddy, No. 427 12th Main, RMV Extension,

Bangalore \026 560 080 is appointed as Managing Director,

KUWS&D B on contract basis w.e.f. 01.02.2004 until

further orders.

The terms and conditions will be issued separately."

Therefore, the official memorandum squarely applies to the

appellant.

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In Union of India vs. K.P. Joseph & Ors., (1973) 1 SCC

194, it was held by this Court that administration instructions

made to fill gaps or to supplement the statutory rules and

affecting conditions of service would be binding and

enforceable by Writ under Art. 226 of the Constitution of

India.

A close scrutiny of the official memorandum would show

that it is restrictive to appointment to any post but as a

general application to all the posts and that the intention of

the memorandum is that retired person should not be

appointed again.

No violation of Section 4(2) of the Act and Rule 3 of the

Rules:

There is no violation of Section 4(2) and Rule 3 as held by

the High Court because the appellant having been the Chief

Engineer of the Board had experience in administration and

capacity in commercial matters before he was appointed as

M.D. on contract basis by the Government. Section 4(2) of the

Act reads as under:

"4(2) The Chairman and the Managing Director shall

possess the prescribed qualification. They and the other

directors shall be appointed by the Government."

Rule 3 of the Rules deals with Qualification for

appointment of the Chairman and the Managing Director.

Rule 3 reads thus:

"The Chairman shall be a person having experience in

matters concerning public welfare. The Managing Director

shall be a person having experience in Administration and

capacity in commercial matters."

In this context, it is useful to peruse the original file

produced by Mr. Sanjay R. Hegde, learned counsel appearing

for the State, before us. A note was prepared by the Secretary

to Government, Urban Development Department, in regard to

the appointment of M.D. of the Board:

"Subject : Appointment of Managing Director

of KUWSDB

1. Shri B. Srinivasa Reddy, Managing

Director of KUWSD will retire from

service on 31.1.2004.

2. As per Section 4(2) of the

Karnataka Urban Water Supply

and Drainage Board Act, 1973, the

Managing Director shall be

appointed by the government as

per Section 6(1). He shall hold

office during the pleasure of the

government. As per Rule 3 of the

KUWSDB Rules 1974, the

Managing Director shall be a

person having experience in

administration and capacity in

commercial matters. As per

KUWSDB Rule 4(2), the Managing

Director shall be a whole time

officer of the Board and shall be

paid remuneration as prescribed.

3. Therefore, it is necessary for the

Government to appoint the

Managing Director. The Managing

Director can be a serving Officer of

the Government who can be sent

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on deputation to the KUWSDB. It

is even open to the Government to

appoint a retired official to the post

of Managing Director. But

generally Government has not

appointed any retired official either

to KUWSDB or other Boards and

Corporations of the Government.

4. A decision has to be quickly taken

as the Managing Director of

KUWSDB has to hold negotiations

with the World Bank on 9.2.2004

regarding the new Water Supply

and Sanitation Improvement

Programme.

5. In my view, an Engineer in water

supply/public health engineering

would be most ideal for the post of

Managing Director, KUWSDB."

The file was placed before Shri S.M. Krishna, Chief

Minister. The order passed by the Chief Minister is at page 2

of the File which reads thus:

"This is a critical juncture for Karnataka

Urban Water Supply and Sewerage Board.

Considering the projects on hand and the need to

complete them within a definite time frame, there

should be continuity in leadership and

management. The services of Shri B. Srinivasa

Reddy, are need for the present.

Shri Srinivasa Reddy's continuation will help

in the important negotiations with the World Bank

scheduled to be held in February, regarding the new

Water Supply and Sanitation programme.

Considering the adverse seasonal conditions

prevailing and prolonged drought, there is likelihood

of severe water scarcity in urban areas in the

coming months. For this, a sum of Rs.15 crores by

way of relief has been earmarked in the period

February to June 2004. The Urban Water Supply

Board will be required to augment water availability,

especially in chronic places like Bagalkot, Pavagada

and Hubli-Dharwad. For planning and executing

these contingency measures, Shri Srinivasa Reddy's

presence is essential.

Shri Srinivasa Reddy who has retired today

may be appointed on Contract basis from 1.2.2004

until further orders."

It is thus seen that the Chief Minister after considering

the relevant material, experience in administration and

capacity in commercial matters of the appellant accepted the

office note put up by the Secretary to Government and

appointed a retired official to the post of M.D. Ample reasons

are given for considering the name of the appellant and the

consequential appointment made by the Government.

In the instant case, there is no violation of statutory

provision and, therefore, in our view, a writ of Quo Warranto

does not lie. If there be any doubt, it has to be resolved in

favour of upholding the appointment.

In Statesman (Private) Ltd. Vs. H.R. Deb, (1968) 3 SCR

614, Hidyatullah, C.J., speaking for the Constitution Bench

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indicated:

"The High Court in a quo warranto proceeding

should be slow to pronounce upon the matter unless there

is a clear infringement of the law."

In the circumstances which we have narrated above in

paragraphs supra, it is indeed difficult to hold that the

appellant did not have the requisite qualification.

The above ruling was followed in A.N. Shashtri vs.

State of Punjab & Ors., 1988 (Supp) SCC 127. We are of the

view that in the facts of this case, the reasonable conclusion to

reach should have been that the writ petitioners had failed to

establish that the appellant did not possess requisite

qualification and the appeals are, therefore, be allowed and

the judgment of the High Court has to be set aside and the

writ petition has to be dismissed.

The finding of disqualification given in the earlier round

of litigation while the appellant was holding a lien on the post

of Chief Engineer i.e. while he was an officer of the Board,

ceased to hold good after the appellant retired from the service

of the Board on 31.1.2004 (AN) and the appointment

impugned in the second round of litigation was effective from

1.2.2004 after the appellant had ceased to be an officer of the

Board.

Contractual appointment/powers of the Government

Mr. Raju Ramachandran, learned senior counsel

appearing for the Trade Union, fairly conceded that the

Government has unrestricted power to make contractual

appointment. Even otherwise, the Government, in our

opinion, has the undoubted power to make a contractual

appointment until further orders. The finding to the contrary

is ex facie erroneous.

The Notification dated 31.1.2004 clearly states that the

appointment is on contract basis and until further orders.

While laying down the terms of appointment in its order dated

21.4.2004, the Government of Karnataka clearly stated that

"term of contractual appointment of Sri B. Srinivasa Reddy

shall commence on 1st February, 2004 and will be in force

until further orders of the Government and this is a temporary

appointment." Section 6(1) of the Act categorically states that

the Managing Director shall hold office during the pleasure of

the Government. Power and functions of the of the Board are

laid in Chapter V of the Act. A reading of the Act clearly

shows that neither the Board nor its Managing Director is

entrusted with any sovereign function. Black's Law Dictionary

defines public office as under:

"Public Office: Essential characteristics of "public

office" are (1) authority conferred by law, (2) fixed tenure of

office, and (3) power to exercise some portion of sovereign

functions of government, key element of such test is that

"officer" is carrying out sovereign function. Spring v.

Constantino 168 Conn.563, 362 A.2d 871, 875. Essential

elements to establish public position as "public office" are

position must be created by Constitution, legislature or

through authority conferred by legislature, portion of

sovereign power of government must be delegated to

position, duties and power must be delegated to position,

duties and powers must be defined, directly or impliedly,

by legislature or through legislative authority, duties must

be performed independently without control or superior

power other than law, and position must have some

permanency and continuity, State ex rel. E.li Lilly & Co. v.

Gaertner, Mo.App 619 S.W. 2d 6761, 764."

Carrying out sovereign function by the Board and

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delegation of a portion of sovereign power of Government to

the Managing director of the Board and some permanency and

continuity in the appointment are quintessential features of

public office. Every one of these ingredients are absent in the

appointment of the appellant as Managing Director of the

Board. This aspect of the matter was completely lost sight of

by the High Court.

The High Court, in the instant case, was not exercising

certiorari jurisdiction. Certiorari jurisdiction can be exercised

only at the instance of a person who is qualified to the post

and who is a candidate for the post. This Court in Dr.

Umakant Saran vs. State of Bihar, (1973) 1 SCC 485 held

that the appointment cannot be challenged by one who is

himself not qualified to be appointed. In Kumari Chitra

Ghose vs. Union of India, (1969) 2 SCC 228, a Constitution

Bench of this Court held as under:

"The other question which was canvassed before the

High Court and which has been pressed before us relates

to the merits of the nominations made to the reserved

seats. It seems to us that the appellants do not have any

right to challenge the nominations made by the Central

Government. They do not compete for the reserved seats

and have no locus standi in the matter of nomination to

such seats. The assumption that if nominations to

reserved seats are not in accordance with the rules all

such seats as have not been properly filled up would be

thrown open to the general pool is wholly unfounded."

But the High Court of Delhi in P.L. Lakhanpal vs. Ajit Nath

Ray, AIR 1975 Delhi 66 held as under:

"Another facet of the preliminary objection relates to

the allegations of mala fides made in the petition. It will

bear repetition to state that the preliminary objection is on

the assumption and not admission that the appointment

of Justice A.N. Ray was mala fide. It is indisputable that

mala fide action is no action in the eye of law. But, to my

mind, the mala fides of the appointing authority or, in

other words, the motives of the appointment authority in

making the appointment of a particular person are

irrelevant in considering the question of issuing a writ of

quo warranto\005.."

The discretion available to the competent authority under

the Rules has been exercised by the appointing authority in

making the appointment of the appellant. That could not have

been annulled by the High Court. In Writ Petition No. 44001

of 2005 decided on 12.4.2002, the very High Court had

directed the Government by a direction akin to mandamus to

immediately take steps to appoint the Managing Director of

the Board in accordance with the Act and the Rules. The

present appointment of the appellant was made under the

provisions of the Act and the Rules. This appointment could

not have been interdicted by a writ of Quo Warranto as it

amounted to issuance of writ of Quo Warranto to disobey the

mandamus already issued and is in operation. Such a course

adopted by the High Court is contrary to law declared by this

Court Rajendra Prasad Yadav vs. State of Madhya

Pradesh, (1997) 6 SCC 678.

In Satish Chandra Anand vs. Union of India, (1953)

SCR 655, a Constitution Bench of this Court while dealing

with a case of a contract appointment which was being

terminated by notice under one of its clauses, this Court held

that Articles 14 & 16 had no application as the petitioner

therein was not denied equal opportunity in a matter relating

to appointment or employment who had been treated just like

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any other person to whom an offer of temporary employment

under these conditions was made. This Court further held as

under:

"The State can enter into contracts of temporary

employment and impose special terms in each case,

provided they are not inconsistent with the Constitution,

and those who choose to accept those terms and enter

into the contract are bound by them, even as the State is

bound."

In P.K. Sandhu (Mrs.) vs. Shiv Raj V. Patil, (1997) 4

SCC 348, it was held by this Court as under:

"The power to make an appointment includes the

power to make an appointment on substantive basis,

temporary or officiating basis, ad hoc basis, on daily

wages or contractual basis."

Legal Malice:

It was argued by Mr. Raju Ramachandran, learned senior

counsel appearing for the respondents, that there was no

reason for the State to re-appoint the appellant on the post of

M.D., specially in view of the following facts:

i) His initial appointment to Managing Director on 28.01.1998 was

admittedly in contravention of Section 7(1)(d) of the Act. Yet, he

continued till 31.1.2004. He, thereafter, withdrew his appeal

thereby confirming that his entire tenure as M.D. from 1998 to

2004 was illegal and in contravention of the Act.

ii) He was relieved from his duty as "Managing Director" and is

receiving pension accordingly.

iii) Reports pertaining to malpractices committed by the petitioner

of which he has not exonerated so far reveal that he is not a

person with an undoubtful character.

iv) List of persons appointed at the post of Managing Director of the

Board since its inception show that only IAS Officers or PWD

officials have been appointed at this post. For the first time, a

retired Board servant was brought as the Managing Director for

"until further orders".

v) The note sheet of the Chief Minister, though proposes certain

exigencies, do not indicate that he is the only person who can

cater to such demands.

vi) There was no need for an appointment for "until further orders"

where admittedly, the purpose of appointment would have been

accomplished at the most by June,2004.

According to him something was done by the State

without excuse and that it is an act done wrongfully and

wilfully without reasonable or probable cause. He also referred

to the findings of the High Court on legal malice.

In our opinion, the finding of legal mala fides is

unsustainable being based on a misunderstanding of the law

and facts. When a competent and experienced officer of an

outstanding merit is appointed to a higher post on contract

basis after his super-annuation from service in larger public

interest does not suffer from legal malice at all. The decision of

the then Chief Minister, Shri S.M. Krishna, recorded in the file

which is also extracted by the High Court at page 69 of S.L.P.

Paper book, Vol.II. In the context of the note put up by the

Secretary of the Department, it is again extracted at pages 67

& 68 which clearly bring out the fact that the appointment was

made in the interest of the Board and the State at a time when

nobody else other than the appellant could have served the

interests of the State better. The High Court failed to

appreciate the element of urgency involved in making the

appointment because of impending negotiations with the World

Bank scheduled for 9.2.2004. The writ petition, in our

opinion, was motivated as respondent No.1 had lodged a false

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complaint to the Lokayukta against the appellant which was

found to be baseless by the Lokayukta (Annexure P-9). A

petition praying for a Writ of Quo Warranto being in the nature

of public interest litigation, it is not maintainable at the

instance of a person who is not unbiased. The second

respondent is the President of the first respondent- Union. He

has chosen this forum to settle personal scores against his

erstwhile superior officer after his retirement. The

proceedings, in our view, is not meant to settle personal scores

by an employee of the department. The High Court, in our

view, ought to have dismissed the writ petition filed by

respondent No.1 at the threshold.

In any event, respondent No.1 failed to discharge the

heavy burden to substantiate the plea of mala fides (E.P.

Royappa vs. State of Tamil Nadu, (1974) 2 SCR 348.

The finding of the High Court that the appointments from

legal mala fides is wrong. The Court relied on the judgment in

Centre for Public Interest Litigation & anr. Vs. Union of

India & Anr. (2005) 8 SCC 202. It was a case of appointment

of an officer against whom criminal proceedings were pending

even the Commission will look into the charges against the

officer, therefore, the above ruling has no application at all in

the present case.

The Division Bench noted that certain allegations were

made against the appellant and observed in paragraph 3 that

the complaint was stated to be pending before the Lokyukta in

the matter relating to financial irregularities of the Board and

that the Comptroller and Auditor General submitted a report

for the year ending 31.3.2000 wherein the appellant has paid

the amounts to contractor even before they became due

resulting in loss of interest of Rs.15.40 lakhs to the Board.

However, the Division Bench did not take notice of that fact

that Lokayukta had completely exonerated the appellant.

Until further orders

Mr. Raju Ramachandran, learned senior counsel

appearing for the respondents, submitted that the pleasure of

the Government and discretion cannot be completely

discretionary and at the ipse dixit of the executive. Even a

contractual appointment has to be made with a certain

ascertainable period and cannot be open-ended. According to

him, use of words "until further orders" is not a safety notch

but is rather prone to misuse. Even in the constitutional

scheme, under Chapter XIV of the Constitution, a contractual

appointment presumes a specific period. Art. 310(2) of the

Constitution provides that:

"(2) Notwithstanding that a person holding a civil post

under the Union or a State holds office during the

pleasure of the President or, as the case may be, of the

Governor of the State, any contract under which a

person, not being a member of a defence service or of an

all-india service or of a civil service of the Union or a

State, is appointed under this Constitution to hold such

a post may, if the President or the Governor, as the case

may be, deems it necessary in order to secure the

services of a person having special qualifications, provide

for the payment to him of compensation, if before the

expiration of an agreed period that post is abolished or

he is, for reasons not connected with any misconduct on

his part, required to vacate that post."

In E.P. Royappa vs. State of Tamil Nadu & anr.

(supra), further question before us is whether the appointment

made by the Government includes any component of mala

fides. The burden of establishing mala fides is very heavy on

the person who alleges it. The allegations of mala fides are

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often more easily made than proved, and the very seriousness

of such allegations demands proof of a higher order of

credibility. Here respondents 1 & 2 have flung a series of

charges of oblique conduct against the then Chief Minister

through their advocate. The anxiety of the Court should be all

the greater to insist on a high decree of proof. The Court

would, therefore, be slow to draw dubious inferences from

incomplete facts placed before it by a party, particularly when

the imputations are grave and they are made against the

holder of an office which has a high responsibility in the

administration.

This Court, in the above judgment, held that such is the

judicial perspective in evaluating charges of unworthy conduct

against ministers and other high authorities, not because of

any special status which they are supposed to enjoy, nor

because they are highly placed in social life or administrative

set up, these considerations are wholly irrelevant in judicial

approach \026 but because otherwise, functioning effectively

would become difficult in a democracy.

Two important considerations must weigh with us in

determining our approach to these questions. First, the post

of Managing Director is a highly respectable post. It is a post

of great confidence \026 a lynchpin in the administration and

smooth functioning of the administration requires that there

should be complete rapport and understanding between the

Managing Director and the Chief Minister. The Chief Minister

as a Head of the Government is in ultimate charge of the

administration and it is he who is politically answerable to the

people for the achievements and failures of the Government.

If the Chief Minister forfeits the confidence on the appellant,

he may legitimately in the larger interests of administration

appoint him until further orders as M.D. of the Board. It does

not involve violation of any legal or constitutional rights.

Secondly that the vast multitudinous activities in which a

modern State is engaged, there are bound to be some posts

which require for adequate discharge of their functions, high

degree of intellect and specialized experience. It is always a

difficult problem for the Government to find suitable officers

for such specialized posts. There are not ordinarily many

officers who answer the requirements of such specialized posts

and the choice with the Government is very limited and this

choice becomes all the more difficult, because some of these

posts, though important and having onerous responsibilities,

do not carry wide executive powers and officers may not,

therefore, generally be willing to be transferred to those posts.

The Government has in the circumstances to make the best

possible choice it can, keeping in view the larger interests of

the administration. When in exercise of this choice, the

Government transfers an officer from one post to another, the

officer may feel unhappy because the new posts does not give

him the same amplitude of powers which he had while holding

the old post. But that does not make the appointment

arbitrary. So long as the appointment is made on account of

the exigencies of administration, it would be valid and not

open to attack under Arts. 14 & 16. Here the post of M.D. was

admittedly a selection post and after careful examination of

the merits, the Chief Minister selected the appellant for the

post of M.D. It was not the case of the respondents that the

appellant was not found qualified to the task or that his work

was not satisfactory.

It was argued by Mr. P.P. Rao, learned senior counsel,

appearing for the appellant that the Division Bench while

answering Point No.2 in paragraph 25 that the order of

appointment passed by the State Government is not a regular

appointment. It has further been observed that Section 4(2) of

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the Act and Rule 3 of the Rules framed do not permit the

Government to appoint the Managing Director on contractual

basis. It was submitted that the finding of the

Division Bench as well as the single Judge are legally

unsustainable. The Act makes clear distinction between

appointments to the Board and appointment of Officers and

servants of the Board. All appointments of Directors are

"appointments at the pleasure of the Government". He drew

our attention to Section 6(1) of the Act which reads thus:

"6(1) All directors including the Chairman and the

Managing Director shall hold office during the pleasure of

the Government. The expression 'contract basis' is only to

indicate that the appointment was to subsist till the

withdrawal of the pleasure of the Government. It could

not be said that the contractual appointment is made

contrary to the Rules that contemplate regular

appointment."

It is pertinent to point out that there are no separate

conditions of service or tenure prescribed for 'Directors', which

expression under the Act includes the Managing Director.

Appointments at the pleasure of the Government are not the

same as ordinary appointments. It was further submitted that

ordinary principles of recruitment applicable to posts governed

by Chapter I of Part XIV of the Constitution of India would not

apply to the instant appointment being an appointment at the

pleasure of the Government. This is also for the simple reason

that ordinary appointments in public service entail security of

tenure which has an essential feature of such appointment.

These characteristics are noticeably absent in the instant case.

Our attention was also drawn to the conclusion reached

by the High Court that the appellant was not qualified for the

post and under Rule 3 of the Rules, the qualification for

appointment is explicitly provided. No age of retirement is

prescribed for Director including Managing Director. Neither

any age limit for appointment is prescribed. These

qualifications do not prescribe any age limit. Section 8 of the

Act itself suggests that even a legal practitioner could be

appointed as a Director. The only limitation or disqualification

is with regard to a serving officer or servant of the Board from

being appointed as Director. Section 7(1)(d) does not apply to

an officer or servant who ceased to be such on the date of his

appointment as Managing Director. Section 7 stipulates all

disqualifications for appointment as Director. It is not the case

of the contesting respondent that the appellant was

disqualified from holding the post on any other grounds.

Our attention was also drawn to the judgment of the

Division Bench holding that the State Government and the

Board could not have filed an appeal against the order of the

learned single Judge. Reference has been made to the

judgment of this Court in B.R. Kapur vs. State of Tamil

Nadu & Anr., 2001(7)SCC 231. The said judgment is wholly

in applicable to this case inasmuch the issue therein did not

pertain to the appointment under service Rules. In the said

case, no question relating to the issuance of Writ of Quo

Warranto pertaining to service jurisprudence was involved.

That case related to appointment by the Governor of a person

convicted of a criminal offence by which she stood disqualified

under the provisions of the Representation of Peoples Act,

1951. Moreover, the Writ of Quo Warranto in that case was

issued in the light of several provisions of the Prevention of

Corruption Act, the Representation of Peoples Act, 1951 and

various other enactments which clearly prohibited the

appointment of a convicted person to a public office. There is

no legal postulation in the said judgment which seeks to

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restrain any interested party from challenging a judgment. In

the instant case, the appellant did not solicit or engineer his

appointment. His appointment was at the instance of the State

Government in accordance with provisions of the Act and the

Rules. The State Government has power to take its own

decision for deciding on a suitable candidate for appointment

as long as the eligibility criteria was satisfied. The

appointment in the instant case is not one of recruitment, but

of a different species of appointment for rendering services. It

is more in the nature of a contract for service. This is specially

required considering fact that the functions of the Board are

essentially technical in nature as would be evident from a

perusal of Sections 16 & 17 of the Act.

At any event implicit in the finding of the Division Bench

that the appointing authority has no right to appeal in Quo

warranto proceedings is that the Court cannot probe the mind

of the appointing authority in a motion for Quo Warranto. The

High Court erred in probing the mind of the government and

acted contrary to its own finding on the role of appointing

authority in Quo Warranto proceedings. The reasons felt out

by the learned Judges of the Division Bench are not

sustainable in law and the impugned judgment is liable to be

interfered with in these appeals. The learned Judges are not

right in quashing the appointment of the appellant as

Managing Director on the misconception that he has been re-

appointed to the said office, whereas it was a fresh

appointment under the provisions of the Act and in accordance

with the prescribed qualification and eligibility under the Act.

Further the appointee holds the office during the pleasure of

the Government as provided under Section 6(1) of the Act.

The learned Judges are not correct in holding that the

Government is not affected by allowing the writ of Quo

Warranto against the appointee and observed that the

Government ought not have filed the appeal. It is unfortunate

that the learned Judges have observed that the Government

has filed the appeal at the instance of the appointee. The

learned Judges, in our opinion, failed to appreciate that it is

the duty of the Government to justify the appointment as such

there is no wrong in filing the writ appeal.

In the result, we hold :

(a) that the appellant was not disqualified for

appointment as Managing Director w.e.f.

1.2.2004.

(b) There is no bar for appointment to the post in

question on contract basis. The Government

has absolute right to appoint persons on

contract basis.

(c) Writ of Quo warranto does not lie if the alleged

violation is not of a statutory provision.

(d) There is no violation of Section 4(2) of the Act

and Rule 3 of the Rules because the appellant

had experience in administration and capacity

in commercial matters before he was appointed

as Managing Director on contract basis by the

Government.

(e) The Government has no doubt power to make

contractual appointment until further orders.

The power included the power to make

appointment on substantive basis temporary,

officiating basis, ad hoc basis, daily wages or

contractual basis.

(f) Writ filed by respondents 1 & 2 is motivated.

(g) The petitioners in the writ petition, respondent

No.1 herein\026 which is an unregistered

Association under the Trade Unions Act cannot

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maintain the writ petition.

(h) The findings of legal mala fides is unsustainable

and has no basis.

The finding of legal mala fides suffers from other infirmities as

far as placing reliance on the complaints against the appellant

without adverting to the orders of the Lokyukta detail

examination, the appellant is unequivocal terms in both the

cases.

For the foregoing reasons, the appeals are allowed and

the order impugned in this appeal passed by the Division

Bench of the High Court in W.A. No. 86/2006 affirming the

judgment of the learned single Judge is set aside.

The Division Bench of the High Court ordered cost in the

writ appeal. There is no justification in ordering cost in the

facts and circumstances of the case. Therefore, the appellant,

State Government and respondent No.4 are entitled to refund

the cost, if it has already been paid. However, we are not

ordering cost against respondent Nos. 1 & 2 taking into

consideration of the financial constraint of the employees and

by taking a lenient view of the matter.

In view of this judgment, we allow the appeals filed by

Mr. B. Srinivasa Reddy and by the State of Karanataka. As

noted herein earlier, the appellant has already been released

and in his place a person has already been appointed as a

Managing Director of the Board on contract basis. Keeping

this admitted fact in mind, we, therefore, keep it on record that

the Government or the Board would be at liberty to consider

and appoint a candidate, if occasion arises, on contract basis.

If such a situation does arise in that case it would be open to

the State or the Board to consider the candidature of the

appellant (B.Srinivasa Reddy) with others.