Gujarat High Court
Alpesh Natvarbhai Gajjar vs State Of Gujarat on 2 July, 2018
Equivalent citations: AIRONLINE 2018 GUJ 86
Bench: Harsha Devani, A.S. Supehia
C/LPA/163/2018 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO.163 of 2018
In SPECIAL CIVIL APPLICATION NO.11314 of 2017
With
R/LETTERS PATENT APPEAL NO.164 of 2018
In SPECIAL CIVIL APPLICATION NO.20232 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS.JUSTICE HARSHA DEVANI Sd/
and
HONOURABLE MR.JUSTICE A.S. SUPEHIA Sd/
===================================================
1 Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2 To be referred to the Reporter or not ? YES 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the NO interpretation of the Constitution of India or any order made thereunder ?
=================================================== ALPESH NATVARBHAI GAJJAR Versus STATE OF GUJARAT =================================================== Appearance:
MR DIPEN DESAI for the APPELLANTS MR PRAKASH K JANI, ADDITIONAL ADVOCATE GENERAL for the RESPONDENT STATE MR MIHIR THAKORE, SENIOR ADVOCATE, with MS ARCHNA ACHARYA for the RESPONDENT APMC NOTICE SERVED BY DS(5) for the RESPONDENT(s) No. 2 =================================================== CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI and HONOURABLE MR.JUSTICE A.S. SUPEHIA Page 1 of 44 C/LPA/163/2018 JUDGMENT Date : 02/07/2018 ORAL (COMMON)JUDGMENT (PER : HONOURABLE MR.JUSTICE A.S. SUPEHIA) (1) Since the issue involved in both the letters patent appeals is common, the same have been heard analogously and are being decided by this common judgement.
(2) The present appeals arise out of a common judgement dated 11.10.2017 rendered by the learned single judge in Special Civil Applications No.11314 of 2017 and No.20232 of 2016, wherein and whereby the learned Single Judge has rejected both the petitions.
(3) This is yet another case that brings to the fore the sad state of affairs of the Agricultural Produce Market Committees in making the appointments of its employees.
(4) The case of the appellants is that they were appointed by the Board of the Agricultural Produce Market Committee, (APMC), Ahmedabad, on different posts like clerks, peons and subinspectors by different orders between 30.03.2015 to 15.05.2015. It is their say that their appointment orders were for one year on probation period and after Page 2 of 44 C/LPA/163/2018 JUDGMENT completion of probation period, they were made permanent. Vide Resolution No.29 passed on 07.11.2015 by the Board of the APMC, the appointment of the appellants were approved.
The appellants thereafter, were made permanent vide Resolution No.1 dated 05.02.2016 passed by the Board of APMC.
(5) It is the grievance of the appellants that they were terminated from services by the orders passed by the Director of Agriculture Marketing and Rural Finance, Gujarat State in view of an inquiry held in the recruitment procedure in which the present appellants had participated, and it was found that the entire recruitment process was tainted with arbitrariness and nepotism.
(6) Learned advocate Mr. Dipen Desai appearing on behalf of the appellants at the outset has submitted that the respondent No.2 Director has no authority to terminate the services of the present appellants or the employees of the APMC since it is the appellate authority as per the provisions of the Gujarat Agricultural Produce Markets Rules, 1965 (hereinafter to be referred to as the "Rules"), hence the present appellants are deprived of their statutory Page 3 of 44 C/LPA/163/2018 JUDGMENT remedy of appeal. Thus, the impugned orders suffer from nonapplication of mind and, therefore, the same are required to be quashed and set aside.
(7) It is also submitted that neither the provisions of the Gujarat Agricultural Produce Markets Rules, 1965 nor the Gujarat Agricultural Produce Markets Act, 1963 (hereinafter to be referred to as the "Act") incorporates any provisions empowering the respondent No.2 Director to terminate the services of the employees of the APMC. He has also submitted that the resolutions passed by the Market Committee appointing and regularizing the appellants was never rescinded by any higher authority and hence, the respondent No.2 Director had no authority to terminate the services of the appellants. A specific reference has been made to section 47 of the Act, which lays down the power of the Director to call for proceedings etc. He has submitted that the aforesaid section does not anywhere indicate about any proceedings to be held against the employees and hence, the entire exercise carried out by the respondent No.2Director is without any authority of law. He has also referred to Rule 41A of the Rules, wherein Page 4 of 44 C/LPA/163/2018 JUDGMENT he has submitted that there are various scales mentioned therein and a ceiling limit of expenditure has been laid down by the said Rule. He has submitted that it is not the case of the respondent No.2Director that the expenditure has been breached and hence, termination of the appellants is contrary to the aforesaid Rules and the same is liable to be set aside. He has also submitted that termination of the employees is excess than the irregularities found for 52 candidates and the present appellants would fall in the same category. He has submitted that the respondent No.2 Director can exercise the power only qua administration and he has no power to terminate the employees of the respondent No.2.
(8) Reliance is placed by him upon the judgements rendered in the cases of Hema Ritesh Thakker & Ors. vs. State of Gujarat, Through Registrar & Ors., 2017 (3) G.L.R. 2106 [Paragraph No.48]; Joint Action Committee Of Airlines Pilots Associations Of India vs. Director General Of Civil Aviation, 2011 (5) S.C.C. 435, Kamal Nayan Mishra vs. State Of Madhya Pradesh, 2010 (2) S.C.C. 169, and Ratnesh Kumar Choudhary vs. Page 5 of 44 C/LPA/163/2018 JUDGMENT Indira Gandhi Institute Of Medical Sciences, Patna, Bihar, 2015 (15) S.C.C. 151. Mr.Desai has also placed reliance on the judgement rendered by the single judge of this Court in the case of Vegad Chitarbhai Mohanbhai vs. Khetivadi Utpan Bazar, 2017 (2) LLJ 103, in which the learned single judge has examined the section 22 of the Act and Rule 41 of the Rules.
(9) Summarizing his arguments, learned advocate Mr. Dipen Desai has reiterated his stand that the respondent No.2 Director has no power under the Act or the Rules to issue orders of termination of the employees of the APMC and hence, the same are de hors the provisions of the Act as well as the Rules, the same are required to be quashed and set aside. He has also asserted that the impugned orders are passed without affording any opportunity of hearing to the appellants; the same are passed in violation of principles of natural justice and, therefore, the same are quashed and set aside. It is also contended that since no action is taken against the members of the market committee who have appointed the Page 6 of 44 C/LPA/163/2018 JUDGMENT present appellants, their appointments cannot be set aside.
(10) Mr. Prakash K. Jani, learned Additional Advocate General appearing on behalf of the State has placed reliance on the comprehensive report prepared by the Deputy Director after examining the entire recruitment process undertaken by the Market Committee. He has strenuously argued that the entire recruitment process appointing the present appellants as well as the other employees undertaken by the APMC was a sham and bogus and de hors the provisions of the Act and Rules. He has referred to the resolution dated 13.03.2015 passed by the Secretary of the APMC, whereby the employees, who were working on temporary basis, were made permanent. He has also contended that thereafter, the said employees were confirmed vide Resolution No.29 dated 07.11.2015. On 03.05.2016, some of the appellants were appointed on permanent basis. Putting emphasis on the report of the Deputy Director, he has submitted that all the employees who were initially appointed and made permanent by the Market Committee were accommodated in the recruitment process initiated vide Page 7 of 44 C/LPA/163/2018 JUDGMENT public notice issued on 04.09.2015 in "Sandesh" newspaper.
(11) Learned Additional Advocate General has submitted that on receiving various complaints, on 07.10.2016, the Director, directed the Deputy Director and District Registrar, Cooperative Societies to submit a report after examining the irregularities in appointments of the workers of the APMC. On 07.11.2016, after carrying out inquiry, the Deputy Director Registrar, submitted his report wherein number of irregularities/ illegalities and lacunas in the process of recruitment process were reported.
(12) Thereafter, on 30.11.2016, the Director, after considering the entire report and considering the illegalities committed during the recruitment process, directed removal of 155 workers, including the present appellants. On 01.12.2016, apropos the order passed by the Director, the respondent no.3, issued the letters of termination of each of the appellants.
(13) Learned Additional Advocate General, Mr.Jani, while referring to the report of the Deputy Director has pointed out the Page 8 of 44 C/LPA/163/2018 JUDGMENT irregularities/illegalities committed in appointments to the various posts. He has also stated that in the said recruitment names of the candidates from the employment exchange were also called for. Pointing the irregularity done in fillingup the post of subinspector, he has submitted that the employee No.1 Shailesh G. Gohel was graduate having 37% marks was appointed whereas one Rabari Dimple Amrat, who was having 87.9% marks and had applied through employment exchange is not appointed., wherein one Jignesh S. Vaishnav, who was having 86% marks in his graduation was not appointed, whereas the employee No.1 Shailesh G. Gohel, who was having merely 37% marks in his graduation was appointed to the post of subinspector.
(14) Similarly, the learned Additional Advocate General has pointed out that for the post of clerk various irregularities have been committed and the chart (Page 368 of Letters Patent Appeal No.164 of 2018) refers that the persons who were appointed to the post of clerk were having very less percentage in comparison to the candidates who had also applied pursuant to the advertisement as well as those candidates whose names were Page 9 of 44 C/LPA/163/2018 JUDGMENT called for from the employment exchange. Thus, he has invited the attention of the court that in various posts like gate keeper, peon, watchman and waterman grievous irregularities have been committed by the APMC. He has submitted that the entire recruitment was sham and bogus and the recruitment was only done favouring some candidates and the candidates who were less meritorious and those who had made applications pursuant to the advertisement as well as the candidates whose names were called for from the employment exchange were not at all appointed.
(15) The learned Additional Advocate General has also invited the attention of this court to the various circulars issued by the Director time and again. He has referred to the first circular dated 16.01.1990, in which it has been declared that the recruitment process of the employees undertaken by such Market Committees shall be done by a regular recruitment process after holding interviews of the eligible candidates. The same has been reiterated in the circular dated 22.12.2002 which prescribes the procedure to be undertaken by the APMC for recruiting its employees. He has submitted that in the Page 10 of 44 C/LPA/163/2018 JUDGMENT present recruitment process, none of the appellants or the employees who were recruited had undertaken the regular recruitment process as no merits of the candidates have been examined by the Market Committee. It is also asserted by him that the Market Committee had not followed the recruitment process as envisaged in such circulars and the appointments have been made without holding any interview or judging the eligible criteria of such employees. He has invited the attention of this court to the various provisions of the Act and the Rules. He has submitted that the entire scheme of the Act as well as the Rules recognizes the powers of the Director as well as the State Government. He has invited the attention of this court to section 10(2) of the Act, which provides that a Market Committee shall be deemed to be a local authority within the meaning of clause(26) of section 3 of the Bombay General Clauses Act, 1904. Thus, it is contended that the Market Committee being a local authority was required to follow a regular recruitment process as followed by the State Government in various recruitments since the recruitment process being de hors the public policy and the State policy, such Page 11 of 44 C/LPA/163/2018 JUDGMENT appointments are required to be quashed and set aside. He has also relied upon section 44 of the Act which states about the power to hold an inquiry by the Director on his own motion, himself or by an officer authorised by him. Thus, it is submitted that the Director was fully authorized by section 44 of the Act to hold an inquiry in the irregularities committed by the Market Committee, including the recruitment process. Reliance is also placed by the learned Additional Advocate General on section 47 of the Act, which lays down the powers of the Director to call for the proceedings etc. He has submitted that the Market Committee has abused and misused the power and the Director is well within his power to act into the validity of the recruitment made by such Market Committee. It is also submitted by him that though there is no inbuilt mechanism provided in the Act, the appointments made in utter disregard of Articles 14 and 16 of the Constitution of India are liable to be quashed and set aside. He has also submitted that the unconstitutional act of the local authority of Article 12 of the Constitution of India can be scrutinized by the Director and hence, the Director was justified in Page 12 of 44 C/LPA/163/2018 JUDGMENT holding such inquiry in the entire recruitment process, which was sham and bogus and ultimately it was found that the employees were appointed by the Market Committee which were not eligible for the posts which were advertised.
(16) In response to the submissions regarding violations of principles of natural justice, the learned Additional Advocate General has submitted that no prior notice or an opportunity of hearing was required to be given to such employees who are back door entrants. He has submitted that the Market Committee initially appointed such employees on temporary basis and thereafter, they were kept for probation for one year and after one year they were made permanent. It is also submitted that the elected body delegated the power to the chairman who thereafter made appointment by the resolution, which is gross misconduct on the part of the officebearer and it was not incumbent upon the Director to follow the principles of natural justice. Lastly, it was submitted that strict directions may be issued to the Market Committee who resorted to favoritism and nepotism and the State Government may be directed to streamline the Page 13 of 44 C/LPA/163/2018 JUDGMENT appointments in the Market Committees in the State of Gujarat.
(17) In support of the contentions, the learned Additional Advocate General has placed reliance on various judgements of Supreme Court, which are as follows:
(a) State of Uttar Pradesh Vs. Uttar Pradesh State Law Officers Association, 1994 (2) S.C.C. 204;
(b) Ashwani Kumar Vs. State of Bihar, 1997(2) S.C.C. 1;
(c) Aligarh Muslim University Vs. Mansoor Ali Khan, 2000 (7) S.C.C. 529;
(d) Escorts Farms Limited Vs. Commissioner Kumanon Division, Nainital, 2004 (4) S.C.C. 281;
(e) A. Umarani Vs. Registrar of Cooperative Societies, 2004 (7) S.C.C. 112;
(f) Secretary, State of Karnataka Vs. Umadevi, 2006 (4) S.C.C. 1;Page 14 of 44
C/LPA/163/2018 JUDGMENT
(g) Dharampal Satyapal Limited Vs. Deputy Commissioner of Central Excise Gauhati, 2015 (8) S.C.C. 519; AND
(h) State of Jammu and Kashmir Vs. District Bar Association, 2917(3) S.C.C. 410.
(18) Learned Additional Advocate General has submitted that if quashing of order which is in breach of natural justice is likely to revive illegal order then such order shall not be quashed. It is also submitted that the rules of natural justice shall not be followed for completing mere ritual of hearing without possibility of any change in decision on merits. Thus, in view of the aforesaid submissions, the learned Additional Advocate General has requested that the impugned orders of the learned single judge does not call for any interference by this court and the appeals deserve to be dismissed.
(19) Learned Senior Counsel Mr. Mihir Thakore appearing on behalf of the respondent APMC has supported the contentions raised by the learned Additional Advocate General. He has submitted that the entire process carried out by the then Market Committee was de hors Page 15 of 44 C/LPA/163/2018 JUDGMENT the regular recruitment process and the entire appointments were back door entries.
He has also submitted that all the appointments were made on 30.03.2015 onwards. Reliance is also placed by him on sections 26, 45 and 47 to 48 of the Act. He has also submitted that there was an alternative remedy available to the appellants under section 48 of the Act to approach the State Government in revision, however, they have chosen not to follow the same and have straightway approached this court.
(20) In rejoinder, learned advocate Mr. Dipen Desai has placed reliance on the judgement reported in 2000 (3) G.L.R. 2236, which was rendered by this court prior to the amendment of section 47 of the Act. He has submitted that since the action of the respondent authorities was in violation of the principles of natural justice, they had directly approached this court by way of the writ petitions. In this regard reliance is placed on the judgement of the Apex Court in the case of D.K. Yadav vs. (M/s.) J.M.A. Industries Ltd., 1993(2) G.L.H. 174. Mr.Desai has contended that the State should have suo motu called for the proceedings and Page 16 of 44 C/LPA/163/2018 JUDGMENT examined the validity of the recruitment process. Thus, he has submitted that the impugned orders deserve to be interfered with by this court and the appellants are required to be reinstated in service.
(21) We have heard the learned advocates for the respective parties to the lis. We have also examined the documents placed on record as well as the judgements cited at the bar. The entire controversy rests on one issue "whether the Director has the power or authority to examine the legality/validity of the recruitment process under taken by the respondent - Market Committee for recruiting/appointing its employees, and thereafter recommend removal of such employees."
(22) The Director of Agriculture Marketing and Rural Finance, Gujarat State had asked the Deputy Director to hold a detailed enquiry in the entire recruitment undertaken by the Marketing Committee and submit a report. After a painstaking exercise, the Deputy Director has prepared a comprehensive report which runs into various pages. The following illegalities and irregularities were noted in the report dated 07.11.2016:
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(a) Though the schedule of staff for 210 workers was sanctioned, there is appointment of total 252 workers i.e. 42 workers are appointed against the sanctioned posts.
(b) The resolutions passed for appointment of workers, does not mention as to which worker shall be appointed. The same only records that the approved staff shall be appointed on temporary basis.
(c) Though resolution No.31 dated 27.04.2013 was passed resolving to appoint only necessary staff but no procedure for such appointment was decided or laid down in the said resolution. There is no agenda regarding the appointment of particular persons on particular posts;
(d) According to the report, sanction was granted to appoint total 40 workers on temporary basis as seasonal staff, but the name of such staff was not mentioned in the said resolution.
(e) The issue regarding the appointment of workers vide meeting dated 07.11.2015 was not mentioned in the Agenda of the meeting. During the period between 13.03.2015 and 07.11.2015, total 3 meetings were conducted. However, in the said meetings, there is no agenda regarding the appointment of the workers;
Page 18 of 44C/LPA/163/2018 JUDGMENT
(f) As per resolution no.24(1), 52 workers were appointed on temporary basis, out of which 28 workers were from 49 old workers and 24 workers were newly appointed.
(g) As per Agenda No.24 of meeting dated 13.03.2015, approval was given to staff schedule for appointment of extra staff on temporary basis. Whereas, 28 old workers were appointed and only 24 new workers were appointed;
(h) On the date of appointment, the names of newly appointed workers were not registered and the same was registered subsequently.
(i) Before appointing 52 workers, no procedure was followed. They were appointed on probation basis. The workers were made permanent by passing resolution no.20 and 36 without following any procedure.
(j) Except public notice dated 04.09.2015 in daily newspaper Sandesh, no other public notice was published in newspaper. In fact, public notice in more than one newspaper ought to have been published for better appointments, which is not done.
Page 19 of 44C/LPA/163/2018 JUDGMENT
(k) Further, in the said public notice, the time limit of 10 days was given for giving applications. In pursuance to the said public notice, total 1808 applications were received after the limitation mentioned in the public notice.
(l) Without following any procedure, comparing the capability and efficiency of workers, total 71 workers were appointed by way of passing resolutions. It was not verified as to whether more efficient workers for the posts on which the workers are appointed.
(m) In fact, no procedure known to law is followed. Only on the basis of oral instructions of the then Secretary appointments were made.
(n) No decisions pertaining to the appointment of workers were taken in the meetings dated 01.07.2016, 03.05.2016, 24.06.2016, 01.07.2016, 19.08.2016 and 01.10.2016.
(o) Though total 1808 applications were received, the same are not recorded in the inward register. The said 1808 applications are not discussed in the meetings;
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(p) Most of the applications of the workers appointed, are undated.
(q) It appears that the writing of all the applications are same. It seems that the candidates themselves have not written the said applications.
(r) In most of the applications, the candidates have not attached their passport size photos also;
(s) In most of the applications it is not written that the applications are given apropos to the public notice but it is written that they have come to know that APMC is appointing workers and therefore they have made application for appointment;
(t) The candidates have not mentioned as to on which post they desire to be appointed;
(u) As per the requirement, the candidate must have knowledge of computer and evidence to that effect is to be produced along with the application. However, such evidence is not produced by the appointment candidates;
Page 21 of 44C/LPA/163/2018 JUDGMENT
(v) Out of the appointed candidates two candidates were below 18 years and 48 candidates were above 27 years.
(w) It seems that the names of the appointed candidates were registered either before or after the prescribed date.
(x) No proper system has been framed for appointment of better candidates. No oral/ written exam has been conducted and 155 candidates are given appointment illegally.
(y) Candidates with better capability and qualification are not appointed.
(z) No appointment was made from the Employment Regulation Office;
(aa) The Chairman is of Patel Community and Vice Chairman is of Bharvad Community. Out of appointed candidates 34 are Patels and 21 are Bharvads. Hence, it seems that the appointments are done on the basis of community preferences and references.
(23) Placing reliance on the aforesaid report prepared by the Deputy Director, the Director in his detailed report and Page 22 of 44 C/LPA/163/2018 JUDGMENT communication dated 30.11.2016 asked the Market Committee to remove such employees. After a scrutiny of the report of the Deputy Director and observations made by the Director, a pertinent query was raised by this court to the learned advocate Mr. Dipen Desai to clarify the procedure adopted by the Market Committee judging suitability/ eligibility of the appellants for the posts on which they were selected. Instead of giving a germane or significant reply, we were faced with prolix submissions on the absence of powers of the Directors in issuing the termination orders. The report indicates that none of the appellants or the employees, who were appointed by the Market Committee possessed better educational qualifications in comparison to the candidates who had applied directly pursuant to the advertisement as well as whose names were called for from the employment exchange. It appears that the appellants were appointed straightway without holding any interviews. Initially, some of the appellants and other employees were appointed as temporary employees, thereafter, they were made permanent, and they were selected in the recruitment process, and thereafter their names were Page 23 of 44 C/LPA/163/2018 JUDGMENT registered in the employment exchange. Though the Market Committee received various applications of the appellants as well as the candidates who had applied pursuant to the advertisement and whose names were called for from the employment exchange, the Market Committee had straightway appointed the present appellants without comparative examination of the marks of such candidates. A perusal of the report suggests that the entire process was carried out without holding any interviews or judging the respective criteria of such candidates and the same was infected with nepotism and favoritism. The report also reflects that the posts were filled in excess of the sanctioned posts.
(24) Indubitably, the Market Committee under sub section (2) of section 10 of the Act is deemed to be a local authority within the meaning of clause (26) of section 3 of the Bombay General Clauses Act, 1904. Thus, such an authority is expected to follow the regular recruitment process as envisaged in other recruitments undertaken by the State Government. The principles of reasonableness and fairness enshrined under Articles 14 and 16 of the Constitution prohibit exercise of Page 24 of 44 C/LPA/163/2018 JUDGMENT power in an arbitrary and capricious manner. The statutory authority is not permitted to act in such manner and its actions should be guided by the principles of reasonableness and fairness. The authority cannot be permitted to abuse the law. The public authority entrusted by the State has to exercise the power for public good instead abusing the same by resorting to nepotism and favouritism. Once a public notice for making appointment is issued, such recruitment process comes within the domain of public employment, therefore, the concept of "equality of opportunity" enshrined in the Preamble to the Constitution concerns all the candidates who have applied for the posts with hope of their selection. Hence, such recruitment process has to be in terms of the constitutional scheme. In the appointments made by the Market Committee, various illegalities and irregularities as mentioned in the report dated 07.11.2016 have surfaced. Thus, the entire appointments are made in utter disregard to the fairness and principle of fairness and equality of opportunity.
(25) We shall now endeavour to examine the powers of Director of Agriculture Marketing and Page 25 of 44 C/LPA/163/2018 JUDGMENT Rural Finance conferred upon him by the statute.
The appointment of the Director is made under section 4 of the Act, the same reads as under:
SECTION 4 : Director and other officers (1) The State Government may, by notification in the Official Gazette, appoint an officer to be the Director of Agricultural Marketing and Rural Finance, Gujarat State, who shall exercise such powers and perform such func tions and duties as are conferred or imposed on him by or under this Act and shall subject to such general or special orders as the State Government may pass, superintend the administration and carry out the purposes, of this Act.
(2) The State Government may appoint such number of officers as may be deemed necessary to be Joint Directors or Deputy Directors who shall subject to the control of the Director, exercise such powers, and perform such of his functions and duties under this Act as the State Government may by general or special order direct.
Section 44 of the Act reads as under:
"44. Power to hold inquiry. (1) The Director may of his own motion, himself or by an officer authorised by him, inspect or cause to be inspected the accounts of a market committee or hold an inquiry into the affairs of a market committee.Page 26 of 44
C/LPA/163/2018 JUDGMENT (2) When the affairs of a market committee are inquired into, all members, officers and servants of the committee shall furnish such information and produce such documents in their possession, relating to the affairs of the committee, as the Director or the officer may require.
(3) The Director and the officer shall have the power to summon and enforce the attendance of members and officers of the market committee and to compel them to give evidence and to produce documents by the same means and as far as possible in the same manner as is provided in the case of a Civil Court by the Code of Civil Procedure, 1908 (V of 1908).
(4) The Director or, as the case may be, the officer may require the market committee either as a result of the inquiry or otherwise to do a thing or to abstain from doing a thing which the Director or the officer considers necessary for the purposes of this Act, and to send a written reply to him within a reasonable time stating whether the aforesaid requisition is complied and in case it is not complied, stating its reason for not complying with the requisition."Page 27 of 44
C/LPA/163/2018 JUDGMENT "47. Power of Director to call for proceedings etc.[(1)] The Director shall have power
(a) to call for any proceedings of a market committee or an extract therefrom, any book or document in the possession or under the control of a market committee and any return, statement, account or report which the Director thinks fit to require such market committee to furnish; and (2) Nothwithstanding anything contained in subsection(1), the Director shall have power to cancel such proceedings called for under subsection(1), in case market committee refrains from taking actions as directed by the Director within the period as specified by him.
(b) to require a market committee to take into consideration (i) any objection which appears to the Director to exist to the doing of anything which is about to be done, or is being done, by such market committee; or
(ii) any information which the Director is able to furnish, and which appears to the Director to necessitate the doing of anything by the market committee,"Page 28 of 44
C/LPA/163/2018 JUDGMENT Subsection (1) of section 44 signifies that "the Director may of his own motion, himself or by an officer authorised by him, inspect or cause to be inspected the accounts of a market committee or "hold an inquiry into the affairs of a market committee". In our considered opinion, the expression "hold an inquiry into the affairs of a market committee" has very wide implications. As per Oxford dictionary the word "affairs"
means "activities, business, dealings, transactions". Thus, the term "affairs" incorporated in the statute will encompass the recruitment process undertaken by the market committee since Rule 41A of the Rules, provides a ceiling limit of 40% of the expenditure on the salaries and all other allowances including retirement benefits including daily rated or causal employees. Any illegal or excess appointments or the appointments which are made over and above the sanctioned posts will unquestionably impact the expenditure of the market committee in spite of the fact that the same does not breach the ceiling limit. Thus, the Director is empowered to inquire into "affairs" which embraces the process of appointments/recruitment of the employees of the market committee, and Page 29 of 44 C/LPA/163/2018 JUDGMENT suggest the action to be taken on such malignant affairs which have direct financial implications.
Subsection (4) of Section 44 of the Act stipulates that "the Director or, as the case may be, the officer may require the market committee either as a result of the inquiry or otherwise to do a thing or to abstain from doing a thing which the Director or the officer considers necessary for the purposes of this Act." Thus, the Director is well within his power and is authorised by section 44 of the Act to hold inquiry into the affairs of the Market Committee and further direct the Market Committee "to do a thing" or "to abstain from doing a thing" which the Director or the officer considers appropriate.
The recommendations made by the Director to the market committee to remove the illegally appointed employees will fall under the expression "to do a thing" or "to abstain from doing a thing". In the present case, the Director had asked the Deputy Director and District Registrar Cooperative Societies to inquire into the irregularities committed in the appointments. The Deputy Director Page 30 of 44 C/LPA/163/2018 JUDGMENT prepared a comprehensive report incorporating various illegalities and irregularities. The same was accepted by the Director, and on 30.11.2016 after observing such illegalities, he recommended the Respondent no.3 to pass appropriate orders terminating the services of such employees, pursuant to the same, the respondent no.3 terminated the services of the appellants. The market committee had no cavil on the report or on the recommendations of the Director. The respondent market committee had accepted the illegalities and irregularities without any demur. The appellants have not challenged the findings of the report. It is also observed in the report that no procedure was followed in appointing the workers as no decision was taken in the meetings and they were appointed without verification of their efficiency. The fact that the Director has only recommended the Market Committee for removing such tainted employees belie the arguments made by the learned Advocate for the appellants that the employees were terminated by the Director. The termination of the appellants was not done by the Director but by the respondent market committee after accepting the reports. Thus, Page 31 of 44 C/LPA/163/2018 JUDGMENT the aforesaid analysis of the sections incorporated in the Act empowers the Director to hold an inquiry or direct an officer to hold an inquiry into the affairs of the Market Committee. Section 47 empowers the Director to call for any proceedings and also requires a market committee to take into consideration any objection which appears to the Director to exist to the doing of anything which is about to be done, or is being done, by such market committee. In our well measured opinion, the entire exercise undertaken by the Director does not in any manner infringe the statutory provisions of the Act.
(26) The contention raised by leaned Advocate for the Appellants that by the impugned action of the Director, who is the appellate authority, the appellants are deprived of their statutory remedy of appeal as per the Discipline and Appeal regulations adopted by the market committee does not merit acceptance, since in the present case the appellants are not terminated by way of any disciplinary proceedings under the Discipline and Appeal Regulations. Their removal was imposed having regard to their illegal appointments done by the market Page 32 of 44 C/LPA/163/2018 JUDGMENT committee, and not on the ground of any misconduct for which a regular departmental inquiry is necessary. Assuming that their right of appeal is affected, then also the same would have been a futile exercise. The market committee has accepted the findings of the Deputy Director and the Director that their appointments were illegal. The remedy of challenging the findings of Deputy Director, Director and the acceptance of such reports by the market committee was still open for them to challenge. Significantly, despite repeated queries from the Court, the appellants have failed to justify that their appointments were legal and their eligibility was suitably judged by the market committee.
(27) There is yet another aspect which necessitates observations from this Court. Vide Circular dated 16.01.1990 and 22.12.2002, the Director has issued the administrative directions to all the Market Committees to follow the regular recruitment process in the appointments of its employees. It is no more res integra that the government can always fill up the gaps and issue instructions not inconsistent with Rules. Thus, the respondentmarket committee Page 33 of 44 C/LPA/163/2018 JUDGMENT was required to adhere to the administrative instructions issued vide aforesaid circulars. Any violation or contravention of such administrative instructions can always be examined by the Director, and he is empowered to issue appropriate directions to the concern market committee to remove such fallacies and ask it to implement the administrative directions in true perspective. The appellants have not challenged the powers of the Director issuing such administrative instructions regulating the recruitment and appointments of the employees of the market committee.
(28) From the aforesaid analysis, there cannot be any scintilla of doubt that the Director of Agricultural Marketing and Rural Finance, Gujarat state is empowered to examine the recruitment process and appointments of the employee of the market committee and recommend the market committee for removal of such employees. The issue stands answered accordingly.
(29) As regards the contention raised by learned advocate Mr. Dipen Desai about violation of principles of natural justice, it would be apposite to incorporate the observations Page 34 of 44 C/LPA/163/2018 JUDGMENT made by the Apex Court in the case of Aligarh Muslim University (supra) [Paragraphs No.20, 21 and 23 and 24] "20. As pointed recently in M.C. Mehta Vs. Union of India (1999 (6) SCC 237), there can be certain situations in which an order passed in violation of natural justice need not be set aside under Article 226 of the Constitution of India. For example where no prejudice is caused to the person concerned, interference under Article 226 is not necessary. Similarly, if the quashing of the order which is in breach of natural justice is likely to result in revival of another order which is in itself illegal as in Gadde Venkateswara Rao vs. Government of Andhra Pradesh (1965) 2 SCR 172, it is not necessary to quash the order merely because of violation of principles of natural justice.
21. In M.C.Mehta it was pointed out that at one time, it was held in Ridge vs. Baldwin ( 1964 AC 40) that breach of principles of natural justice was in itself treated as prejudice and that no other 'defacto' prejudice needed to be proved. But, since then the rigour of the rule has been relaxed Page 35 of 44 C/LPA/163/2018 JUDGMENT not only in England but also in our country. In S.L. Kapoor Vs. Jagmohan (1980 (4) SCC
379), Chinnappa Reddy, J. followed Ridge vs. Baldwin and set aside the order of supercession of the New Delhi Metropolitan Committee rejecting the argument that there was no prejudice though notice was not given. The proceedings were quashed on the ground of violation of principles of natural justice. But even in that case certain exceptions were laid down to which we shall presently refer.
22. Chinnappa Reddy, J. in S.L.Kapoor's case, laid two exceptions namely, " if upon admitted or indisputable facts only one conclusion was possible", then in such a case, the principle that breach of natural justice was in itself prejudice, would not apply. In other words if no other conclusion was possible on admitted or indisputable facts, it is not necessary to quash the order which was passed in violation of natural justice. Of course, this being an exception, great care must be taken in applying this exception.
23. The principle that in addition to breach of natural justice, prejudice must also be Page 36 of 44 C/LPA/163/2018 JUDGMENT proved has been developed in several cases. In K.L. Tripathi Vs. State Bank of India ( 1984(1) SCC 43), Sabyasachi Mukherji, J. ( as he then was) also laid down the principle that not mere violation of natural justice but de facto prejudice (other than nonissue of notice) had to be proved. It was observed: quoting Wade Administrative Law, (5th Ed.PP.472475) as follows:
"....it is not possible to lay down rigid rules as to when principles of natural justice are to apply, nor as their scope and extent ....There must have been some real prejudice to the complainant; there is no such thing as a merely technical infringement of natural justice. The requirements of natural justice must depend on the facts and circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter to be dealt with and so forth".
Since then, this Court has consistently applied the principle of prejudice in several cases. The above ruling and various other rulings taking the same view have been exhaustively referred to in State Bank Page 37 of 44 C/LPA/163/2018 JUDGMENT of Patiala Vs. S.K. Sharma ( 1996(3) SCC
364). In that case, the principle of 'prejudice' has been further elaborated. The same principle has been reiterated again in Rajendra Singh Vs. State of M.P. ( 1996(5) SCC 460).
24. The 'useless formality' theory, it must be noted, is an exception. Apart from the class of cases of "admitted or indisputable facts leading only to one conclusion" referred to above, there has been considerable debate of the application of that theory in other cases. The divergent views expressed in regard to this theory have been elaborately considered by this Court in M.C. Mehta referred to above. This Court surveyed the views expressed in various judgments in England by Lord Reid, Lord Wilberforce, Lord Woolf, Lord Bingham, Megarry, J. and Straughton L.J. etc. in various cases and also views expressed by leading writers like Profs. Garner, Craig, De. Smith, Wade, D.H. Clark etc. Some of them have said that orders passed in violation must always be quashed for otherwise the Court will be prejudging the issue. Some others have said, that there is no such absolute rule and prejudice must be Page 38 of 44 C/LPA/163/2018 JUDGMENT shown. Yet, some others have applied via media rules. We do not think it necessary, in this case to go deeper into these issues. In the ultimate analysis, it may depend on the facts of a particular case."
(30) The Apex court in the case of A Umarani Vs. Registrar, Cooperative Societies & Ors., (2004) 7 S.C.C. 112 has held as under:
"26. It is equally wellsettled that those who come by backdoor should go through that door.
27. Regularisation furthermore cannot give permanence to an employee whose services are adhoc in nature.
41. In M.D., U.P. Land Development Corporation and Another Vs. Amar Singh and Others [(2003) 5 SCC 388], this Court noticed a large number of earlier decisions of this Court wherein it had been held that once employees are appointed for the purpose of Scheme, they do not acquire any vested right to continue after the project is over.Page 39 of 44
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51. We are also of the opinion that in a case of this nature, where the validity or otherwise of a government order is in question, the principles of natural justice will have no role to play and in any event recourse thereto would result in futility."
(31) The conspectus of the aforesaid observations made by the Supreme Court in the decisions propose that if the initial appointments are illegal and de hors the provisions of law, merely setting aside the same on account of violation of principles of natural justice would be an empty formality. The judgement in case of D.K.Yadav supra, cited by learned advocate Mr.Dipen Desai in support of his submissions would not apply in the facts of the present case. In the case of Hema Ritesh thakker(supra), this Court had examined the powers of Registrar of Gujarat Cooperative societies Act, 1961 under section 160 of the Cooperative Societies Act. The same will not apply to the facts of the present case since the provisions of the Acts are not pari materia. In case of Joint Association Committee of Airlines Pilots Asso(supra), the Supreme Court has observed that if any decision taken by statutory authority at behest or on suggestion of a paper who was Page 40 of 44 C/LPA/163/2018 JUDGMENT no statutory role to play, same would be patently illegal. In the present case, as observed in the preceding paragraphs, the Director is a statutory authority to inquiry in to the affairs of the market committee. The law enunciated by the Apex Court in the case of Kamal Nayan Mishra(supra) will not apply to the facts of the present case since the same pertained to the issue of termination based upon concealing the facts and giving incorrect information at the time of appointment. In case of Ratnesh Kumar Choudhary (supra), the Apex Court after examining the facts of the case has set aside since the termination of an employee was found stigmatic as the same was based on the report that reflected many allegation subsequent to the imposition of punishment relating to his conduct, misbehaviour and disobedience. As regards the reliance placed on the judgment rendered in the case of Vegad Chitarbhai Mohanbhai(supra), we are of the considered opinion, that the learned single judge has not examined the facts of the case in light of the provisions of sections 44 and 47 of the Act, which stipulate the powers of the Director. As observed in the preceding paragraphs, in our Page 41 of 44 C/LPA/163/2018 JUDGMENT considered opinion, the Director has acted well within his power, as authorised by the Act to inquire in such illegal appointments done by the Market Committee.
(32) The undisputed fact remains that the initial appointments of the appellants were illegal and replete with impropriety and the same were tainted with favoritism and nepotism. It is also noted that the Market Committee has totally ignored the circulars issued by the Director time and again regulating the procedure of such appointments. The Market Committee, being a local authority, was required to observe the sanctity of such procedure. The appointments made ignoring such procedure would be against the public policy and would fail. The appointments are made in abuse of exercise of powers by taking undue advantage of absence of mechanism regulating the recruitment process and appointments of the employees of such Committees. We have noticed that there has been blatant misuse of power by such Market Committees, therefore, we direct the State Government to formulate appropriate Rules or Regulations governing the appointments of the employees of such Agricultural Produce Markets at the earliest.
Page 42 of 44C/LPA/163/2018 JUDGMENT (33) We may also hasten to add that the Act of 1963 was enacted to regulate the various market committees established under the Act in the State of Gujarat. Though, the Director has examined the legality of the recruitment process, correspondingly, the provisions of the Act, also obligate the State government to initiate inquiry against the members of the market committees, who have indulged in such illegal activities under sections 34S and 34T of the Act and their accountability is required to be fixed accordingly. Merely because there is change in the body or board of such market committees, the state cannot be a mute spectator to the illegal acts committed by the erstwhile members of market committee. Thus, it was essential for the State Government to examine the propriety of the Market Committee and its members at whose behest the illegal appointments were made. The action of the Director cannot be set aside on this account to enrich the appellants who were appointed pursuant to the illegal acts committed by the members of market committee. The appellants being beneficiaries of illegal orders passed by the Market Committee are not fit to carry a writ of this court.
Page 43 of 44C/LPA/163/2018 JUDGMENT (34) For the foregoing reasons, the present appeals being sans merit, stand dismissed. There shall be no order as to costs.
(35) Registry to place a copy of this order in the connected matter.
Sd/ [HARSHA DEVANI, J] Sd/ [A. S. SUPEHIA, J] *** Bhavesh[pps]* Page 44 of 44