The main legal point established in the judgment is that the Government has the power to direct the suspension of public servants employed by a government-owned company for the purpose of conducting a smooth investigation of criminal cases registered under the Prevention of Corruption Act.

K.S. Radhakrishnan, J.

The question that has come up for consideration in these cases is as to whether Government have got power to direct Managing Director of a Government Company to place some of their officers under suspension for the purpose of investigation of criminal cases registered under the Prevention of Corruption Act.

2. Petitioners were holding the post of Manager (Personnel & administration) and Welfare Officer respectively in Malabar Cements Ltd. a Company wholly owned by State Government. Various complaints were received by the Government against the petitioners with regard to appointments of Mazdoors in the Malabar Cements Ltd. A preliminary enquiry was conducted by Deputy Superintendent of Police, Vigilance Department, Palghat. After considering evidence, both oral and documentary he came to the conclusion, petitioners had committed various malpractices in-the matter of appointment of 28 Mazdoors in Malabar Cements Ltd. Report was submitted to the Superintendent of Police, Vigilance Department, Northern Range, Kozhikode with recommendation. He concurred with the report and opined that there is prima facie evidence of involvement of petitioners in the matter of irregular appointments and that they have abused their official position and committed criminal misconduct in effecting appointments. Eventhough petitioner in O.P. 9109/97 was the head of Personnel and Administration Department and also the custodian of the entire records relating to the selection of Mazdoors, he failed to produce the used and unused question/answer papers before the Enquiry Officer.

3. Under the above mentioned circumstances the Superintendent of Police, Vigilance also endorsed the views of the Enquiry Officer and recommended to register case under S.13(1) read with 13(2) of Prevention of Corruption Act 1988 and section 204 read with 34IPC against accused persons.

4. After obtaining necessary sanction Crime No. 3/96 was registered in Vigilance Police Station, Palakkad on 5.9.96 against petitioners and former Managing Director of Malabar Cements Ltd; Additional Director General of Police, Vigilance Department later wrote to the Government vide letter dated 19.11.1996 requested the Government to place petitioners under suspension with immediate effect for smooth conduct of investigation. In the meantime, then Managing Director of the Company Sri. Mohanthy was also placed under suspension by Government vide letter dated 21.5.1997 since he was involved in three other cases registered by Vigilance Police Station, Alappuzha under the provisions of Prevention of Corruption Act 1988. That was in connection with purchase of magnesium metals and vitaminD3 from two foreign firms while he was Managing Director of Kerala State Drugs & Pharmaceuticals Ltd.

5. The Government then wrote a letter dated 26.5.1997 to the Managing Director of Malabar Cements Ltd. to place petitioners under suspension with immediate effect for smooth conduct of investigation of criminal case No. Cr. 3/96/PKD. Managing Director of Malabar Cements therefore issued order dated 27.5.97 placing petitioners under suspension. Evidently the said order was issued by the Company on the basis of direction issued by the Government.

6. The principal contention raised by the counsel for petitioners was that the Managing Director of the Company has no jurisdiction to place petitioners under suspension on the basis of the Government directions. It was contended that the officers of the Company are governed by their own service regulations. Regulation 15(a) empowers the management of the company to place an employee charged with misconduct of a grave and serious nature under suspension. The power has to be exercised by

Managing Director of the Company untrammelled by the directions of the Government. It is their case. Managing Director of the Company never exercised any powers under the staff regulations to place petitioners under suspension. Even the management can exercise the powe