2006 Supreme(SC) 789

2006(7) Supreme 4
SUPREME COURT OF INDIA
(From Karnataka High Court)
Dr. AR. Lakshmanan and Tarun Chatterjee, JJ.
B. Srinivasa Reddy—Appellant
versus
Karnataka Urban Water Supply & Drainage Board Employees’ Association & Ors.—Respondents
Civil Appeal No. 3719 of 2006
(Arising out of SLP (C) No. 9393/2006)
With
Civil Appeal No. 3722 of 2006
(Arising out of SLP (C) No. 10388/2006)
Decided on 28-8-2006
Counsel for the Parties :
For the Appellant : P.P. Rao, Sr. Advocate, P.S. Rajagopal, Ms. Lalit Mohini Bhat, Naveen R. Nath, Ms. Hetu Arora and Sanjay R. Hegde, Advocates.
For the Respondents : Raju Ramachandran, Sr. Advocate, Devashish Bharuka, Mrs. Hansa Bharuka, Ms. Ruchi Kohli, Alok Sangwan and Dr. Sushil Balwada, Advocates.

IMPORTANT POINTS
1. It is settled law that Writ of Quo Warranto does not lie if the alleged violation is not of a statutory nature.
2. It is settled law 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.

Headnote:(i) Constitution of India—Article 226—Industrial Disputes Act, 1947—Section 2(q)(q) and 36—Trade Unions Act, 1926—Locus standi of Unregistered Trade Union to file writ petition—Government of Karnataka nominated appellant as one of the Directors of the Karnataka Urban Water Supply and Drainage Board—He was then promoted as the Managing Director of the Board—Employees Association filed writ petition challenging appellant’s appointment—Respondent association was a recognized association—It was registered as a trade union before the pronouncement of judgment of the High Court—Writ petitioner union made a false averment that it is a registered trade union—Whether High Court was justified in holding that respondent has locus standi to challenge the appointment of appellant—(No)—In the instant case, employees association approached the High Court with unclean hands—Karnataka Urban Water Supply and Drainage Board Act, 1973—Section 4(2)—Karnataka Urban Water Supply and Drainage Board Services (Cadre and Recruitment) Regulations, 1985.

       Held : 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 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.(Para 38)

       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. 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.(Paras 40 and 41)

       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. (Para 44)

       (ii) Constitution of India—Article 226—Writ of Quo Warranto—Maintainability to challenge an appointment made ‘until further orders’ on ground that it is not a regular appointment—Order appointing appellant as Managing Director of Karnataka Urban Water Supply Drainage Board, clearly stated that the appointment is until further orders—Whether High Court was justified in law in issuing a Writ of Quo Warranto —(No)—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—Karnataka Urban Water Supply and Drainage Board Act, 1973—Section 4(2)—Karnataka Urban Water Supply and Drainage Board Services (Cadre and Recruitment) Regulations, 1985.

       Held : 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.(Para 45)

       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 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.(Para 46)

       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. l(Para 50)

       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. (Para 54)

       (iii) Karnataka Urban Water Supply and Drainage Board Act, 1973—Section 4(2) and Rule 3—Karnataka Urban Water Supply and Drainage Board Services (Cadre and Recruitment) Regulations, 1985—Appointment as Managing Director of Karnataka Urban Water Supply Drainage Board—Challenged as violative of Section 4(2) and Rule 3—Government of Karnataka nominated appellant who was a Chief Engineer of the Board as one of the Directors of the Board ‘with immediate effect and until further order’—He was then promoted on officiating basis and appointed as the Managing Director of the Board—Whether there was any violation of Section 4(2) of the Act and Rule 3 of the Rules—(No).

       Held : 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. (Para 65)

       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.(Para 72)

       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. (Para 78)

       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.(Para 83)

       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 – 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.(Para 90)

       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. (Para 96)