The State Government's directive to the Corporation to create a management pool and make appointments from it was valid and binding, as it was issued in exercise of the power conferred under Article 162 of the Constitution of India and Section 39 of the State Financial Corporation Act, 1951.

P.S.Misra, J.

1. Three applications which have been heard one after the other, seek, inter alia, a writ in the nature of mandamus to the respondents, Bihar State Financial Corporation and the Managing Director of the said Corporation to follow the directions of the State of Bihar in its letter dated 10-4-1981, as contained in Annexure-3 and accordingly to prepare a management pool for appointment and promotion of officers of Class I and Class II in the Corporation.

2. The Bihar State Financial Corporation is a body created by a Notification of the State Government as contemplated in the State Financial Corporation Act, 1951. Its management is in the hands of a Board appointed in accordance with the provisions of the said Act and subject to the provisions as contained in Sections 23 and 39 thereof which, inter alia state that the corporation may appoint such officers Advisors and employees as it considers necessary for the efficient performance of its function and determine by regulation their conditions and appointments in service and the remuneration payable to them provided that the State Government may in consultation with and after obtaining the advise of the Development Bank specify the class or categories of post in respect of which appointment may be made by the Board on such remuneration and other conditions of service as the Board may determine and no regulation made under the Act shall apply to such posts in respect of matters so determined by the Board, and that the Corporation shall be guided, by such instruction on the question of policy in the discharge of its functions as may be given to it by the State Government after obtaining the advise of the Development Bank. The instructions on the question of policy laid down by the State Government, if not obeyed, may cause supersession of the Board and appointment of a new Board in its place.

3. The State Government has, it appears, entered into various activities and for the said purpose created several Corporations, Boards and other types of undertakings. According to a list appended to the writ application the State Government has already created as many as 49 such undertakings and also bureau of public enterprises as the body to control and exercise some sort of superintendence over the functioning of such undertakings. The Bureau which was established on 1-3-1976 was conferred powers and functions as are enumerated in a Government order dated 26 4-1979. In exercise of its such function on 10-4-1981 it communicated (under the orders of the Government of the State of Bihar) to the undertakings on the subject of appointment in any Class I and Class II posts therein that a management pool be created and appointments be made in such undertakings from the said pool in Class I and Class II posts therein. The communication mentioned that the same be treated as a Directive of the State Government. Notwithstanding, however, the said directive, the respondent-Corporation issued advertisement inviting applications for appointment as Management Trainees in various categories of Class I and Class II posts, under it seeking that closing date for receipt of applications was 3112-1986. The advertisement contemplated appointments in various categories of Management Trainees by a selection process mentioned therein on the basis of a written examination (objective type) Group exercises and personal interviews. It ignored altogether the scheme of the appointments to be made from the management pool created in accordance with the Governments Directives dated 10-4-1981 as contained in Annexure-3. Petitioners who are included in the pool apprehending that they could not for the said reason of the corporation independently deciding to hold objective type written examination, group exercises and personal interviews in violation of the Governments directive as contained in Annexure-3, may not be selected, have moved this Court,

4. They state, inter alia, that they are qualified bein