Allahabad High Court
Ganpat Prasad S/O Ram Harakh vs State Of U.P. Thru Secretary Sarvajanik ... on 27 May, 2013
Bench: Abdul Mateen, Devi Prasad Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH AFR Court No. - 25 Case :- SERVICE BENCH No. - 397 of 2011 Petitioner :- Ganpat Prasad S/O Ram Harakh Respondent :- State Of U.P. Thru Secretary Sarvajanik Udyam & Ors. Counsel for Petitioner :- Jyotinjay Verma Counsel for Respondent :- C.S.C.,Anuj Kudesia Along with Writ Petition Nos. 366(SB) of 2007, 1303 (SB) of 2010, 106(SB) 2007, 1179(SB) of 2007, 1804(SB) of 2008, 1692(SB) of 2008 and 1198 (SB) 2006. Hon'ble Abdul Mateen,J.
Hon'ble Devi Prasad Singh,J.
1. Heard learned counsel for the petitioners and learned counsel for the respondents as well as learned Standing counsel.
2. Counter affidavit filed today is taken on record. Learned counsel for the petitioner submits that he does not want to file rejoinder affidavit to the counter affidavit. With the consent of parties' counsel, we proceed to decide the writ petition along with connected petitions by a common judgement finally at admission stage.
3. These are the petitions under Article 226 of the Constitution of India preferred against the impugned orders by which State Government had declined to enhance the age of superannuation up to the 58 years from 60 years being not in agreement with the decision taken by the Board of Directors of U.P. Samaj Kalyan Nirman Nigam Ltd. The Board of Directors took a decision for enhancement of age from 58 to 60 years and send it for approval by the State Government. By the impugned order State Government had declined to enhance the age of superannuation up to 60 years. However, later on by the Government order dated 22.12.2011 the State Government had extended the age of superannuation.
Originally the Board of Directors of the Nigam by its resolution dated 23.12.2011 had resolved that the age of superannuation of the employees of the Nigam be enhanced up to 60 years and send it for approval to the State Government. By impugned order, the State Government had rejected the same.
4. Nigam is a government company constituted under Section 617 of the Companies Act. Nigam is managed by various authorities in pursuance to provision contained in Memorandum of Association. The Board of Director of the Nigam is the highest supervisory authority which is empowered under the Memorandum of Association to manage the affairs of the Nigam. The power of Board has been defined under Chapter XVI of the Memorandum of Association which also relates to power of Board to deal with service conditions of employees relevant portion is reproduced as under:-
clause 9,10 and 15 of the memorandum of association
(ix)To appoint officers, clerks and servants for permanent, temporary or special service as the Board may from time to time think fit and to determine their powers and duties and to fix their salaries and emoluments and to require security in such instances and to such amount as the Board may think fit and to remove or suspend any such officers, clerks and servants:
Provided, however, that no post the basic pay of which, either exceed Rs. 2,500 p.m. or the maximum of the scale of which exceeds Rs. 2,500 p.m. shall be created and filled without the prior approval of the Governor of Uttar Pradesh, but in case it is found useful to avail the services of retired Government servants of good competence and experience, this limit of Rs. 2,500 may be raised to Rs. 3,000 inclusive of pension: Provided further that appointment of any foreign national shall not be made without the prior approval of the Governor of Uttar Pradesh except the appointment of foreign technical personnel to any post without any ceiling of salary to such personnel and also when such appointment is in broad conformity with the policy of the Government.
(x) To sanction, pay and re-imburse the officers and employees of the Company in respect of any expenses incurred by them on behalf of the Company.
(xv) To pay and give gratuities, pensions and allowances to any person or persons including any director, to his widow, children or dependents, that may appear to the Board just or proper whether any such person, widow, children or other dependents have or have not a legal claim upon the company and whether such person is still in the service of the Company or has any funds and pay premium for the purchase or provision of any such gratuity, pension or allowance."
5. Article 202 of the Memorandum of Association contains the provision with regard to rights of the State Government to interfere with the functioning of the Nigam through Governor of the State. For convenience Article 202 of Chapter XXXIV of the Memorandum of Association is reproduced as under :-
"202. (a) The Governor of Uttar Pradesh in keeping with the statutory requirements of the Companies Acts, may from time to time issue directives to the Company as to the exercise and performance of its functions in matters involving the security of the State or substantial public interest and such other directives as he may consider necessary in regard to the finances and the conduct of business and affairs of the Company and in the like manner may vary and annul any such directive (s). The company shall give immediate effect to the directive (s) so issued.
(b) The Governor of Uttar Pradesh may call for such returns, accounts and other information with respect to the property and activities of the Company as may be required by him from time to time."
6. A plain reading of the aforesaid provision as contained in Clause IX, X and XV of Chapter XVI reveals that it is the Board of Director which possess power to deal with service conditions of the employees. Whether the employees are permanent, temporary or engaged on short term basis it is the Board which has been conferred power to make provision or deal with the service conditions of the employees.
7. So far as the power of State Government is concerned, under Memorandum of Association the government itself does not has got direct nexus with the functioning of the Nigam. It is the Governor of the State who has been conferred power to pass appropriate order or direction keeping in view the statutory requirement under the Companies Act or in the matter regarding security of State and public interest from time to time. Meaning thereby Government may exercise power to issue appropriate order or direction as the policy measure to the respondents Nigam relating to the subjects covered under the Companies Act security of State and public interest regulating the functioning of the Nigam.
8. Needless to say that the power of the Governor is subject to Rules of Business. The Division Bench of this Court, of which one of us (Hon'ble Devi Prasad Singh) was a Member reported in 2010(28) LCD 1637, Luxmi Kant Shukla Vs. State of U.P. and others and Writ petition No. 980 (SB) of 2007, Dr. Yaduvir Singh Vs. State of U.P. and others decided on 7.10.2010, had already dealt with the matter how under Rules of Business the State Government may exercise power.
9. It is the Board of Director which has been conferred power under the Memorandum of Association to frame rule or to deal with the subject matters under the Memorandum of Association. The service condition has been dealt with by Rule namely mRrj izns'k lekt dY;k.k fuekZ.k fuxe fy0 ds lsodksa ds fy, lsok fu;ekoyh. Rule 26 relates to age of superannuation of the employees of Nigam. For convenience Rule 26 is reproduced as under:-
26- सेवानिवृत्ति:-
कोई कर्मचारी सामान्यतया 58 वर्ष की आयु पर सेवानिवृत्त होगा जब तक कि बोर्ड राज्य सरकार की पूर्व अनुमति के साथ सेवायोजन की अवधि का विस्तार न कर दें, जो कि किसी भी दशा में 60 वर्ष की आयु से अधिक न होगी।
(2) किसी कर्मचारी को, जिसने 50 वर्ष की आयु प्राप्त कर ली हो और जिसका कार्य अपेक्षित स्तर की दक्षता से कम का रहा हो, बोर्ड या राज्य सरकार के दिशा निर्देशों के अनुरूप सम्यक् परीक्षण के पश्चात निगम की सेवा से तीन महीने की नोटिस देने के बाद या उसके बदले में 3 महीने का वेतन देकर, अनिवार्य सेवानिवृत्ति दी जा सकती है।
(3) कोई कर्मचारी 45 वर्ष की आयु प्राप्त करने के पश्चात् या 20 वर्ष की निरन्तर सेवा पूण्ज्र्ञ कर लेने के पश्चात् नियुक्ति प्राधिकारी को 3 महीने की नोटिस देकर निगम की सेवा से स्वैच्छिक सेवानिवृत्ति ले सकता है।
नियंत्राण और अपील:-
निगम में कार्यरत अधिकारी भविष्य में नियन्त्राण एवं उपशासनात्मक कार्यवाीर हेतु सिविल सेवा (क्लासिफिकेशन कन्ट्रोल एण्ड अपील) रूल्स के स्थान पर उ0 प्र0 सरकारी सेवक (अनुशासन एवं अपील) नियमावली 1999 से शासित होंगे।
व्यावृत्ति:-
इस नियमावली में किसी बात का कोई प्रभाव ऐसे आरक्षण और अन्य रियायतों पर नहीं पड़ेगा जिनका इस सम्बन्ध में सरकार द्वारा समय-समय पर जारी किये गये आदेशों के अनुसार अनुसूचित जातियों, अनुसूचित जनजातियों और अन्य विशेष श्रेणियों के व्यक्तियों के लिए उपलब्ध किया जाना अपेक्षित हो।"
10. A plain reading of Rule 26 reveals that the age of superannuation of the employees of Nigam shall be 58 years. Rule further provides that the age of employees shall be 58 years which may be extended up to age of 60 years. Rule 26 starts with the word "कोई कर्मचारी सामान्यतया 58 वर्ष की आयु पर सेवानिवृत्त होगा ". It means every employee shall be retired at the age of 58 years. Further Clause 2 of Rule 26 has been exemplified by the word "किसी कर्मचारी को, जिसने 50 वर्ष की आयु प्राप्त कर ली हो " It means the employees completing the age of 50 years, may be compulsory retired after serving three months notice. A plain reading of Rule 26 provides that age of superannuation shall be 58 years and the age of individual employees may be extended keeping in view their service record rendered up to the age of 60 years. It is incorrect to say that Rule 26 deals with extension of age of all the employees commutatively.
11. As we have observed that from the Memorandum of Association (supra) the service condition may be dealt-with only by Board of Directors. The power of the Governor may be exercised by the State Government in accordance to Rules of Business i.e. the delegated power of the Governor.
12. Shri Anuj Kudesia, learned counsel for the respondent has invited attention towards the Government order dated 5.2.1986 and 25.7.2002, the copies of which have been filed as Annexure 3 and 4 to the counter affidavit. According to which, State Government had provided that the age of superannuation shall not be increased beyond the age of 58 years by the Corporation.
13. We have doubts with regard to the rights of State Government to issue Government order or circular on their own without adventing to the Rules of Business which provides the manner under which the power on behalf of Governor may be exercised. The Memorandum of Association confers the power on the Governor. The State Government may exercise power on behalf of Governor under the Rules of Business and in case, power is exercised on behalf of Governor then Government order issued thereon must indicate that power has been exercised on behalf of the Governor. Simplicitor order shall not fulfill the requirement of Article 202 (supra) of the Memorandum of Association. Accordingly, no reliance may be placed on the Government order relied upon by Shri Anuj Kudesia learned counsel for the respondents. However, the fact remains that during the pendency of bunch of writ petitions the Government had issued the circular dated 22.12.2011 by which age of all the employees of the Corporation has been increased from 58 to 60 years. In pursuance to Government order, the Board of Directors of the respondents Nigam had also increased the age of superannuation w.e.f. 23.12.11.
14. Shri Anuj Kudesia learned counsel for the respondents submits that Nigam has amended its Service Rule and increased the age of superannuation of its employee w.e.f. 23.12.2011.
15. Since, in pursuance to Government order dated 23.12.2011 the Nigam has amended the service condition of the employees and increased the age of superannuation from 58 to 60 years w.e.f. 23.12.2011, to that extent that the employees of the Nigam shall be entitled to continue up to age of superannuation in terms of Nigam's decision dated 23.12.2011.
16. One of the question involved in the present bunch of writ petition is whether the resolution of the Board of Directors requires any approval from the State Government, that too under the teeth of Clause (IX), (X) and (XV) of Chapter XVI of the Memorandum of Association (supra). The overall reading of the Memorandum of Association reveals that it is the Board of Director which has empowered to adjudicated the controversy with regard to age of superannuation of the employees of the Nigam. The Government or the Governor has got no right to interfere with the decision taken by the Board of Director with regard to service condition of the employees of the Nigam. This fact is also obvious from Article 202 of the Memorandum of Association relied upon by learned State counsel as well as counsel for the Nigam. A perusal of Memorandum of Association reveals that the power of Governor is to issue appropriate order or direction is the subject matter which falls under the Companies Act or in public interest or for national security. That is why Article 202 speaks for exercise of power by Governor using the word " The Governor of Uttar Pradesh in keeping with the statutory requirements of the Companies Act..........". At the face of record the power is to be exercised by the Government relates to subject matter of the Nigam covered by the Companies Act or in public interest or for national security.
17. Shri Anuj Kudesia learned counsel for the respondents invited attention towards different provisions of the Companies Act, starting from Section 617. The provisions contained in Section 617 and onward of the Companies Act deals with the business of the Government Companies. It relates to share and other related business management and not with the service condition.
18. Learned counsel for the petitioner has not invited attention towards any provision of the Companies Act which may deal with the service condition of the employees. Of course power of general superintendence may be for all administrative function, but once memorandum confers the power on the Governor to deal with the specific subject matter then it means it relates to specified subject and not the service condition.
19. There is one other aspect of the matter. While deciding the Special Appeal reported in 2013(3) ADJ 745, U.P.State Warehousing Corporation Vs. Sunil Kumar Srivastava, a Division bench of this court of which one of us (Hon. Devi Prasad Singh,J) was a member had dealt with the power of the State Government and the autonomy of the government companies. It has been held by Division Bench though power conferred on the Board of Directors without containing any provision with regard to approval from the State Government for its routine work, does not confer any right on the State Government to approve or disapprove the decision of the Board of Directors. Once the regulative power with regard to service condition is conferred on the Board of Director then Government has no say in the matter. A Division Bench has also dealt with the power of the State Government with regard to policy matter. A finding has been recorded that Government has got no role with regard to day to day functioning of the Corporations. Keeping in view the statutory provision with regard to U.P. State Warehousing Corporation, the Division Bench has recorded a finding as under:-
"64. In view of above, the impugned judgment and order passed by Hon'ble Single Judge requires no interference on merit but it requires some modification in terms of the finding recorded hereinafter :-
(I)Policy decision means a decision in Rem, not in Personem.
(II)Sub Section (4) of Section 20 may not be read in isolation but it should be read conjointly along with Sub Section(5) of Section 20 of the Act which provides that in the event of conflict with regard to the question of policy between the Central and State Warehousing Corporation, the matter shall be referred to the Central Government whose decision shall be final. A conjoint reading of Sub Section (4) and Sub Section (5) of Section 20 reveals that the policy decision should be pre-existing policy regulating an issue. In absence of any pre-existing policy decision, that too keeping in view Section 23 of the Act, the Board of Directors is empowered to take decision with regard to recruitment and appointment of its officers and staff, regulate service conditions.
Whether the government has got right to regulate the service conditions of the Corporation by taking a policy decision under the teeth of Section 23 of the Act is a question, which we leave open in case raised in appropriate case.
(III)Statutory corporations are autonomous bodies to some extent and the government lacks jurisdiction to interfere in their day to day functioning. Statutory corporations are juristic personality and they may sue and may be sued. Being legal entity, they have right to discharge their obligations in accordance with statutory provisions. The government lacks jurisdiction to interfere in their day to day functioning.
(IV)Under Section 23 of the Act, the appellant U.P. Warehousing Corporation has got right to make appointment of officers and employees. A decision to fill up the vacancies in accordance with rules is to be taken by the Corporation itself and the Government has not been conferred power under the Act to interfere in the matter.
Of course, the Corporation while taking a decision to make recruitment of officers and employees has to abide by law. Instead of sending the matter to the State Government for seeking approval for regularisation, the Board of Directors should have taken a decision on its own within the four corners of Section 23. Appropriate Scheme or regulation should have been framed by the Board of Directors for regularisation and continuance of almost 2000 respondent employees working since more than decade.
(V)Since out of 55 posts, 30 posts have been reserved leaving 25 posts for general category, the impugned advertisement suffers from the vice of arbitrariness in view of settled principle of law (supra)."
20. In view of above, we are of the view that Government does not have got power to approve or disapprove with regard to decision taken by the Board of Directors for enhancement of age. It is also not necessary to Board of Directors to send its resolution for approval to the State Government in case, the Memorandum of Association does not contain any provision to seek approval from the State Government.
21. Since, with regard to service condition the Memorandum of Association does not contain a provision to seek approval from the State Government then it is not necessary to seek approval from the State Government. However, in the present case since, according to Shri Anuj Kudesia learned counsel for the Nigam the service rule has been amended though in pursuance to circular of the State Government no further finding requires and employees shall deem to continue up to the age of 60 years who were in service on the date of notification.
22. A perusal of the decision of the Nigam dated 23.12.2011 reveals that it is prospective in nature. Accordingly, the employees who were in service up to 23.12.2011 shall be entitled to continue up to age of 60 years. It has vehemently been argued by learned counsel for the petitioner that all those employees who have filed writ petition be entitled to continue up to the age of 60 years. It has been also argued that the decision taken by the Nigam dated 23.12.2011 should be given retrospective effect. A perusal of the Office memorandum dated 23.12.2011 of the Nigam reveals that it has been given prospective effect. No retrospectivity can be given by the Courts to the decision taken by the Nigam or the Corporation with regard to age of superannuation as it shall amount legislation by process of judicial review.
23. It is well settled proposition of law that what should be age of superannuation is a subject matter which falls within the domain of State Government or the Employer(Corporation). In case, Government order or the office memorandum which increased the age of superannuation from particular date prospectively then it shall deem to be prospective in nature. Hon'ble Supreme Court in the cases reported in 2008 AIR SCW 2317, Government of A.P. and others Vs. N. Subbarayadu and others and 2007 (2) UPLBEC 1989, B. Bharat Kumar and others Vs. Usmania University held that circular for extension of age of superannuation binding. It is for the State Government or within the jurisdiction of executive authority to consider and decide the age of superannuation. No interference by the Court is called for.
24. In view of above, we allow the writ petition to the extent that impugned Government order dated 4.7.2007 and 17.9.2007 suffers from lack of jurisdiction interfering with the functioning of the Nigam with regard to age of superannuation.
Accordingly, writ petition is allowed. Impugned orders dated 4.7.2007 and 29.6.2009 and 17.9.2007 are quashed. All employees who were in service up to 23.12.2011 shall be entitled to continue up to the age of 60 years.
The employees who have worked even after age of 58 years shall be entitled for pensionary benefit keeping in view the age of superannuation of 58 years and in case, they have served and paid salary beyond 58 years, then no recovery shall be made from them. Though we are of the view that the Government order dated 22.11.2012 suffers from lack of jurisdiction but keeping in view the fact that Nigam itself had amended Service Rules enhancing the age up to 60 years we are not passing any order over it on merit, more so when it has not been impugned.
25. Writ petitions are allowed accordingly. No order as to costs.
Order Date :- 27.5.2013 Madhu