LAJPAT RAI MAGO Vs. GOVERNOR OF HARYANA

JUDGEMENT

(1.) THIS is a petition under Arts. 226 and 227 of the Constitution of India in which prayer has been made that a writ in the nature of certiorari or any other suitable writ or direction be issued quashing the orders Annexures 'g' and 'h' passed by the Governor of Haryana, whereby the petitioner was removed from the office of the Managing Director of the Haryana State Small Industries and Export Corporation Ltd. (hereinafter called the Corporation), and also his nomination as director of the Corporation cancelled. Further prayer is that the petitioner be declared entitled to the salary of a Joint Director, Industries Department, from which post he was sent on deputation and he must be deemed to be holing the post of a Joint Director during his terms of foreign service and even after his recall from the Corporation till he is removed from that post in accordance with law. The petitioner also challenges the appointment of respondent 9 as Deputy Principal Secretary to the Chief Minister of Haryana. It is pleaded by him that even if the petitioner could be lawfully reverted from the Corporation to Secretariat post of Secretary to Minister, he should have been considered for appointment as Deputy Principal Secretary to which post the said respondent was appointed as an act of nepotism without considering the petitioner or any other person in the cadre of Secretariat Service and that such action on the part of the Government denying equality of opportunity to the petitioner in the matter of his promotion was violative of Art. 16 of the Constitution of India. A confidential report for the year 1967-68 covering a period of about five months given to the petitioner by respondent 8 as Chairman of the Corporation is also sought to be quashed on the ground of the alleged mala fides of the said respondent.

(2.) THE petitioner joined Government service in the Secretariat somewhere in the year 1940 before partition of the country and earned various promotions from time to time. In the year 1959, he was appointed as Secretary to a Minister in the erstwhile State of Punjab. It is not denied that the petitioner had throughout a good record of service except for one confidential report given by respondent 8 in the year 1967-68 as Chairman of the Corporation when the petitioner was working as its Managing Director. At one time, the name of the petitioner was recommended for nomination to the Indian Administrative Service but the recommendation did not produce any result. By Punjab Government notification, dated 6th March, 1963, a copy whereof is appended as Annexure 'a' with the writ petition, the Governor of the erstwhile Punjab appointed the petitioner as Joint Director of Industries (Rural Industrialisation) with effect from 12th February, 1963. He was directed to take over the new assignment immediately and was to draw his salary in the senior scale of Indian Administrative Service plus a special pay of Rs. 100/- per month. Within a few months, the petitioner was sent on deputation, as a Managing Director of the Punjab Export Corporation Limited, on which post he was entitled to a deputation allowance of 20 per cent of his pay as Joint Director of Industries (Rural Industrialisation) and was also to continue to retain the benefit of specially of Rs. 100/- per month which he was drawing as Joint Director. The other usual conditions of foreign service on deputation were imposed on the petitioner with a direction that he shouldn't be given any additional facilities by the Corporation without the prior approval of the Government. There then came the re-organisation of the State of Punjab under Punjab Reorganisation Act, 1966, and it was then proposed to set up in the State of Haryana as well a corporation under the name and style of Haryana State Small Industries and Export Corporation Limited on the same pattern on which Punjab Corporation was brought into existence. The Corporation was to be got registered under the Indian Companies Act, 1956, and the petitioner was appointed as its first Managing Director by the State Government with a direction that he should take necessary steps in consultation with the Director of Industries to get the company incorporated. The terms of appointment were, however, not settled at that time. An extract from the Memorandum and Articles of Association (hereinafter called the Articles) for the said corporation as formed in Haryana has been filed as Annexure 'd' withthe writ petition. The authorised share capital of the Corporation was Rs. 50 lakhs divided into shares of Rs. 100/- each and all shares were held in the name of the Governor. The following officers were nominated by the State Government as the first Directors of the Corporation : Shri P. N. Bhalla, I. A. S. , Chairman Secretary to Government, Haryana, Industries Department. Shri P. N. Sahni, I. A. S. , Director of Industries, Haryana, and Additional Secretary to Government , Haryana Shri L. C. Gupta, I. A. S. , Additional Secretary to Government, Haryana, Finance Department Shri O. P. Sikand, Officer-on-Special Duty, Industries Department, Haryana Shri L. R. Magomanaging Director I am informed that one share each was allotted to the Director whereas all the remaining shares stood in the name of the Governor of Haryana. According to the Memorandum and Articles of Association of the Corporation, the Board of Directors is to be nominated by the Governor from time to time and shall consist of officers of the Haryana Government or any other non-official person or persons as may be nominated by the Governor. The Governor has been given the powers under the Articles to nominate one of the Directors as Chairman of the Board and determine the period of his office. The Governor has also the power to appoint any Director as the Managing Director of the company on such terms and remuneration as he may think fit and can also from time to time remove or dismiss him from office, and appoint another person in his place. The relevant Art. 84 of the Memorandum is in the following terms: "84. The Governor may from time to time appoint one of the Director to the office of the Managing Director of the Company for such terms and at remuneration (whether by way of salary or commission or participation in profits or otherwise or partly in one way and partly in other) as he may think fit, and may from time to time remove or dismiss him from office and appoint another in his place. Any such Director appointed to any such office shall, if he ceases to hold the office of Director from any cause, ipso facto and immediately cease to be a Managing Director. "

(3.) AFTER Shri P. N. Bhalla, Shri R. I. N. Abuja, Secretary to Government, Haryana, Industries Department, respondent 8, was nominated as Chairman of the Corporation. He issued an order on 16th August, 1968 (Annexure 'g'), in the name of the Governor, in exercise of the powers vested in the latter under the above said Article, removing the petitioner from the office of the Managing Director with immediate effect. It is conceded before me by Mr. C. D. Dewan, learned counsel for the respondents, and the same is also apparent from the executive files, that the file of the case relating to the reversion of the petitioner from the Corporation was never by (sic) the Governor before the impugned order was passed and the order was really of the Chief Minister though authenticated in the name of the Governor under Articles 154 of the Constitution of India. In the same order, it was stated that the petitioner would revert to his parent department meaning thereby Secretariat Establishment. A wish was expressed in this order by the Chief Minister respondent 2 that consequent upon the petitioner's reversion, the interests of the existing incumbents in the Secretariat be not ignored. Simultaneously on the same day, another order Annexure 'h' was passed under Clause (k), sub-article 1 of Art. 68 of the Articles of Association of the Corporation whereby the nomination of the petitioner as a Director of Corporation was cancelled with immediate effect. The petitioner then submitted representations by which he protested against his recall from the Corporation and stated that all that was being done at the instance of respondent 8 who was actuated by mala fides. It was protested that the petitioner being the Managing Director of the Company could be removed only by the Board of Directors and not by the State Government. The petitioner objected to the authority of respondent 8, Secretary of Industries Department, to give an adverse confidential report to the petitioner for a period about five months from 26th October, 1967 to 31st March, 1968, which was believed by the petitioner to be responsible for his reversion. It may be mentioned that the report was actually given on 1st May, 1968, and conveyed to the petitioner on 5th September, 1968, after his reversion order had been passed. The petitioner made representations against the adverse remarks a conveyed to him asking for expunction of the same from his record of service but they were rejected on March 17, 1969. He asked for reasons in support of the adverse remarks made by respondent 8 in order to expose the hollowness of the report. It is alleged that respondent 8 in giving the adverse confidential report was actuated by his feelings of animosity and malice against the petitioner. There were some incidents and circumstances pointed out in the representation which, according to the petitioner, indicated the malice of this respondent. It was averred that the petitioner had unblemished record of 28 years of service in which he was throughout receiving excellent reports from his superior officers and nobody ever doubted his integrity or efficiency but it was this respondent alone who, for extraneous reasons, deliberately gave a false adverse report in order to wreak his vengeance against the petitioner for some wrong, believed by the respondent, to have been done by the petitioner when the latter was the Secretary to late Sardar Pratap Singh Kairon, the then Chief Minister. The last representation on this subject is Annexure 'j'. Allegations of personal malice, mala fides and ulterior motives were made against respondent 8 and they will be stated in detail hereafter.