IMPORTANT POINT
Section 85(5), Electricity Act, 2003 is mandatory.

JUDGMENT

K. S. Radhakrishnan, J.-Leave granted.

2. We are, in this case, concerned with the question whether the High Court was justified in issuing a writ of quo warranto holding that the appellant has no authority in continuing as Chairperson of U.P. State Electricity Regulatory Commission (for short ‘the Commission’) on the ground that the Selection Committee had not complied with sub-section (5) of Section 85 of the Electricity Act, 2003 (for short ‘the Act’).

3. The post of the Chairperson of the Commission fell vacant on 21.10.2008. The government of Uttar Pradesh, in exercise of its powers conferred under Section 85(1) of the Act, constituted a Selection Committee vide notification dated 22.12.2008 consisting of three members headed by a retired judge of the High Court and two other members i.e. Chief Secretary of the State of U.P. and Chairman of the Central Electricity Commission for finalizing the selection of the Chairperson. Applications were invited intimating various authorities including Ministry of GOI, CAG, CEA, all the Secretaries of Power working in different States in the country, CBDT, PSUs power sectors etc. Thirty persons applied for the post including the appellant. The meeting of the Selection Committee was held on 26.12.2008 and Selection Committee selected two persons on merit, namely, the appellant and one Mr. Amit Kumar Asthana. Panel of two names was forwarded by the Selection Committee to the government of U.P. with an asterisk against the name of the appellant stating that if he was appointed, the government would ensure first that the provisions of sub-section (5) of Section 85 of the Act would be complied with. The government appointed the appellant as the Chairman of the Commission on 29.12.2008. The appellant on that date sent a letter to the State Government stating that he had resigned from his previous assignments on 27.12.2008 and severed all his links with the private sector as required under Section 85 of the Act.

4. The first respondent herein who was the General Secretary, Jal Vidyut Unit, filed a writ petition before the High Court of Allahabad, Lucknow Bench seeking a writ of quo warranto, challenging the appointment of the appellant on various grounds. Apart from the contention that the Selection Committee had not followed the provisions contained in sub-section (5) of Section 85 of the Act, it was also alleged that the appellant could not have been selected since he was working as the Joint President of the J.P. Power Ventures Ltd at the time of selection, hence he had financial and other interests in that company which would prejudicially affect his functions as the Chairperson of the Commission. Further, it was also pointed out that the procedure laid down in U.P. Electricity Regulatory Commission (Appointment and Conditions of Service of the Chairperson and Members) Rules, 1999 (for short ‘the 1999 Rules’) were also not complied with before initiating the selection process. The appellant questioned the locus standi of the first respondent and contended that he was not an aspirant for the post and that the writ petition was filed after a period of more than two years after his assumption of charge as Chairperson of the Commission. Referring to the minutes of the Selection Committee dated 26.12.2008, it was pointed out that the selection was validly made and the appellant was ranked first in panel on merit and sub-section (5) of Section 85 was also complied with. Further, it was stated that the appellant had no financial or other interests in J.P. Power Venture Ltd. so as to prejudicially affect his functions as Chairperson. In any view, it was pointed out that he had resigned from that post on 27.12.2008.

5. The High Court after considering the rival contentions came to the conclusion that the Selection Committee had failed to follow the provisions of sub-section (5) of Section 85 of the Act, hence the appointment was vitiated and the appellant had no authority to hold the