2006 (8) TMI 653 - SC - Indian Laws

Writ of quo warranto - Interpretation Of Statutes - Karnataka Urban Water Supply and Drainage Board Act 1973 ( the Act ) and the Rules - Power of the Government to make a contractual appointment u/s 4(2) - appointment for the Post of Managing Director - violation of law - HELD THAT - 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 which is an unregistered Association under the Trade Unions Act cannot 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. Thus the appeals are allowed and the order impugned in this appeal passed by the Division Bench of the High Court 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 Karnataka. 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.

Summary

Issues Involved:
1. Locus of the unregistered Trade Union: Maintainability.
2. Writ of Quo Warranto.
3. Contractual appointment/powers of the Government.
4. Legal Malice.
5. "Until further orders" appointment.

Detailed Analysis:

1. Locus of the unregistered Trade Union: Maintainability:
The court examined whether an unregistered trade union had the locus standi to file the writ petition. The respondent association was recognized but not registered at the time of filing the writ petition. The court noted that any concerned person can file a writ of quo warranto. The High Court relied on the right to form associations and consequently file a writ in quo warranto proceedings. The court referenced several cases, including Mahinder Kumar Gupta v. Union of India and Coinpar v. General Manager, Telecom District, which held that unregistered associations do not have the fundamental right to approach the court under Article 226. The court concluded that the employees' union approached the court with unclean hands by suppressing material facts and making false averments about its registration status. Therefore, the writ petition was liable to be dismissed on this ground alone.

2. Writ of Quo Warranto:
The court analyzed whether a writ of quo warranto could be issued to challenge an appointment made "until further orders" and whether there was a clear violation of law in the appointment. The court held that the power to appoint the Managing Director of the Board is vested in the Government under Section 4(2) of the Act, and neither the Act nor the Rules prescribed any mode or tenure of appointment. The court found that the High Court erred in issuing a writ of quo warranto as there was no clear violation of law. The court also noted that the official memorandum dated 23.12.1994 applied only to government servants and not to employees of statutory boards. The court emphasized that the appellant had the requisite qualifications and experience for the post, and the appointment was made in accordance with the Act and the Rules.

3. Contractual appointment/powers of the Government:
The court examined the Government's power to make contractual appointments. It was noted that the Government has the undoubted power to make contractual appointments until further orders. The court referenced several cases, including Satish Chandra Anand v. Union of India and P.K. Sandhu v. Shiv Raj V. Patil, which held that the State can enter into contracts of temporary employment and impose special terms. The court concluded that the appointment of the appellant on a contractual basis was valid and within the Government's power.

4. Legal Malice:
The court addressed the allegations of legal malice in the appointment of the appellant. It was argued that the appointment was made without reasonable cause and was motivated by personal animosity. The court found that the allegations of legal malice were unsustainable and based on a misunderstanding of the law and facts. The court emphasized that the appointment was made in the larger public interest and was justified by the urgency of the situation, including impending negotiations with the World Bank. The court also noted that the writ petition was motivated by personal animosity, as evidenced by the false complaints lodged by the second respondent against the appellant.

5. "Until further orders" appointment:
The court considered whether an appointment made "until further orders" was valid. It was argued that such an appointment should have a specific period and not be open-ended. The court referenced Article 310(2) of the Constitution, which allows for contractual appointments with specific terms. The court concluded that the appointment of the appellant "until further orders" was valid and within the Government's discretion. The court also noted that the post of Managing Director is a highly responsible position, and the Government has the authority to make appointments based on the exigencies of administration.

Conclusion:
The appeals were allowed, and the judgment of the High Court was set aside. The court held that the appellant was not disqualified for the appointment, and there was no violation of statutory provisions. The writ petition filed by the respondents was found to be motivated and lacking in bona fides. The court emphasized that the Government has the power to make contractual appointments and that the appointment of the appellant was justified and made in the larger public interest. The court also noted that the Government or the Board would be at liberty to consider the candidature of the appellant for future appointments on a contract basis.