B SRINIVASA REDDY Vs. KARNATAKA URBAN WATER SUPPLY

JUDGEMENT

(1.) THESE three writ appeals are filed by (1) Mr. B. Srinivasa Reddy who is appointed as the Managing Director; (2) Karnataka Urban Water Supply and Drainage Board (hereinafter referred to as the Board);3 State Government represented by its Secretary to the Urban Development Department respectively questioning the correctness of the order dated 10-1-2006 passed by the learned Single Judge in W.P. No. 9852 of 2004 (S-RES) (Karnataka Urban Water Supply and Drainage Board Employees' Association, Dharwad and Anr. v. State of Karnataka and Ors. 2006(1) Kar. L.J. 448), holding that the appointment of B. Srinivasa Reddy, the appellant in W.A. No. 86 of 2006, as Managing Director on contract basis with effect from 1-2-2004 as per Annexure-A and his continuation in the said office for nearly two years is illegal and he is an usurper of the said public office and further issuing a writ of quo warranto ousting him from the office of the Managing Director of the Board, urging various legal contentions.

(2.) NECESSARY brief facts are stated in this common judgment to appreciate the rival legal contentions urged by the learned Counsel for the parties : (a) Karnataka Urban Water Supply and Drainage Board Employees' Association represented by its President (hereinafter called as the 'Association') and one Mr. V.N. Halakatte filed Writ Petition No. 9852 of 2004 seeking to quash the notification dated 31-1-2004 bearing No. UDD : 3 : UWE : 2004 produced at Annexure-A and to issue a writ of quo warranto and also to declare the appointment and continuation of Mr. B. Srinivasa Reddy as Managing Director of the Board as illegal. The case of the Association and another petitioner is that the Board is a statutory Board regulated by the provisions of Karnataka Urban Water Supply and Drainage Board Act, 1973 and Karnataka Urban Water Supply and Drainage Board Rules, 1974 (hereinafter referred to as 'Act and Rules'). Section 4(2) of the Act provides that the Chairman and the Managing Director shall possess the prescribed qualification and the other Directors shall be appointed by the Government. Section 7 of the Act deals with disqualification for appointment of Director and Managing Director of the Board. Section 68 confers power upon the State Government to make Rules for giving effect to the provisions of the Act. The State Government can make Rules providing for qualification for appointment of Chairman and Managing Director of the Board. Section 69(2)(b) of the Act confers power upon the Board to frame Regulations and the same has to be approved by the State Government regarding the terms and conditions of appointment and pay scales of officers and servants of the Board; (b) The case of the Association is that it is a Trade Union registered under the provisions of the Trade Unions Act, 1926 (hereinafter called as the Unions Act'). It is asserted by it that it is the only registered Trade Union existing in the Board. It is stated that the Board had several negotiations with the Association with regard to the service conditions of the employees of the Board since its formation in the year 1986. The Board has entered into several settlements with the Association with regard to the service conditions of the employees of the Board. It is further stated that it is a recognised trade union entitled to agitate the matter with regard to the appointment of B. Srinivasa Reddy. It is also stated that it is concerned with the functioning of the Board and as such, it is entitled to question his appointment as Managing Director on contract basis and hence, it has locus standi to file the writ petition. The further case of the Association is that the post of Managing Director was always filled up by the State Government by appointing one of its senior most Government servants. The employee of the Board was not appointed as the Managing Director of the Board. The Regulation earlier provided that a Managing Director can be appointed on deputation from the Government from the cadre of Senior Chief Engineer of Public Works Department. The Regulations was amended by the Board by Notification dated 22-11-1989 providing for appointment of the Managing Director on the basis of selection among the officers holding the post of Chief Engineer, Grade II, PWD who have a minimum experience of five years in the field of Public Health Engineer and Chief Engineers of the Board. The Regulation was again amended to the Schedule I of item No. 1 by notification dated 11-12-1997 providing that the Managing Director shall be appointed by the State Government on the basis of selection from amongst the Chief Engineers of the Board, It is further provided that if no suitable qualified candidate is available, an officer of the Indian Administrative Service not below the rank of Secretary to the Government be posted. Prior to the said amendment, the appointment was required to be made on the basis of selection from among the officers of Chief Engineer of PWD. Pursuant to the said notification, one Mr. Ram Murthy who was working as Chief Engineer in the Board was appointed as Managing Director of the Board vide notification dated 28-1-1998. The same was questioned by the Association in Writ Petition No. 44001 of 1995 on 12-4-2002 (Karnataka Urban Water Supply and Drainage Board Employees' Association v. State of Karnataka and Ors. ILR 2002 Kar. 2435) before this Court. During the pendency of the said writ petition, the said Ram Murthy took voluntary retirement on 31-1-1998. Thereafter, Mr. B. Srinivasa Reddy was appointed as the Managing Director of the Board with effect from 31-1-1998. His appointment was also questioned by the Association and another petitioner by filing an amendment application in the said writ petition urging various legal contentions. One among such contention was that Mr. Srinivasa Reddy being an officer of the Board is disqualified under Section 7(1)(d) of the Act from being appointed as the Director of the Board much less as the Managing Director. The said writ petition was allowed by this Court holding that the appointment of Mr. Srinivasa Reddy was contrary to law and the Regulation in question. Further, the notification amending the Regulations with regard to the appointment of Managing Director from among Chief Engineers of the Board was also quashed holding that the same is ultra vires to the provisions of the Act and Rules. The said order was questioned by the present two appellants viz., Mr. Srinivasa Reddy and the State Government in Writ Appeal Nos. 2877 and 2878 of 2002. In the said writ appeal,/interim order was granted on 17-4-2002 staying the operation of the order passed in W.P. No. 44001 of 1995 and the same came to be continued till they were withdrawn by them on the application filed by the association for vacating the interim order, vide order of this Court dated 17-6-2002 the office was directed to connect another Writ Appeal No. 3182 of 2002 filed by the State Government with above appeals. By virtue of the interim order granted in the above writ appeals, Mr. Srinivasa Reddy continued as the Managing Director of the Board till 31-1-2004 on which date he has been relieved from the post on attaining the age of superannuation. Immediately on the very same day, the impugned notification has been issued by the State Government appointing Mr. Srinivasa Reddy as the Managing Director on contract basis with effect from 1-2-2004 until further orders. It is the case of the Association and another petitioner that the said notification is illegal and contrary to the provisions of the Act, Rules and Regulations. It is stated that it is not permissible for the State Government to make any appointment contrary to the provisions of the Act, Rules and Regulations, when the Act and Regulations specifically provide the manner in which the appointment to the post of Managing Director of the Board should be made by the State Government. It is further stated that the appointment of Mr. Srinivasa Reddy to the said post is contrary to law and he has no authority to continue in the post. It is also stated that as per the Government Circular dated 23-12-1994 issued by the State Government, a retired officer cannot be appointed either on contract or permanent basis, therefore, they have contended that the appointment of Mr. Srinivasa Reddy is contrary to the policy of the State Government as stated in its Government Order referred to supra.

(3.) INSOFAR as the State Government is concerned, it has, for the reasons stated at paragraphs 7 and 8 of the statement of counter, it has sought to justify the appointment order issued by it contending that the same was passed by the State Government appointing Mr. Srinivasa Reddy, as the Managing Director of the Board in exercise of its power under Section 4(2) of the Act. It has been specifically asserted that it has got the full authority to appoint a person as Managing Director of the Board on contract basis or on permanent basis as per Section 4(2) of the Act and therefore, it has justified the appointment order passed by it as valid in law. It has also spelt out at paragraph 8 of its Statement of Counter that Mr. Srinivasa Reddy was appointed as Managing Director of the Board with an intention of utilizing his vast experience and expertise in the area of water supply to the towns in the Karnataka State. With regard to the various allegations made against Mr. Srinivasa Reddy regarding certain serious omissions and commissions, it is stated that investigation made by Lokayukta did not come in the way of the State Government to appoint Mr. Srinivasa Reddy as the Managing Director as he had no role to play in relation to the acts which had constituted acts referred to in the petition. Pursuant to the direction issued by this Court to the learned Additional Government Advocate Mr, P.C. Chengappa, the original records of the Government in relation to the appointment of Mr. Srinivasa Reddy were produced. As per the directions of this Court, he has also produced the original records in relation to filing of writ appeals challenging the earlier order of this Court passed in the writ petition in striking down the relevant regulation and also the earlier appointment of Mr. Srinivasa Reddy as Managing Director of the Board.