ORDER
1. In the present writ petition, the only question requiring consideration is regarding the authority of Dr. R.A. Parangusa Das (in short 'Dr. Das') to continue as the Director of the Sanjay Gandhi Institute of Accident and Rehabilitation and Physical Medicine, Bangalore, (in short 'the Institute') after 19-6-1997, the date on which, according to the petitioner, his tenure to the post expired.
2. I have heard Mr. V. Balakrishna, learned Counsel appearing for the petitioner, learned Advocate General for the State Government and Mr. Gopal Hegde, learned Counsel appearing for Dr. Das, 3rd respondent, on the above question.
3. The Institute is established by the 'Bangalore Accidents Rehabilitation and Other Services' (in short 'the Society'), which is a registered society under the provisions of the Karnataka Societies Registration Act, 1960. As per Clause 6(a) of the memorandum of association of the Society, the management and control of all the affairs of the Society are vested in the 'Governing Council', which inter alia, consists of various political and administrative executives in their ex ex-official capacities. As per Clause 15 of the Memorandum, funds of the Society includes grants from the State or the Central Government. Keeping in view these aspects, it has not been disputed by any of the contesting parties that the Society is not a 'State' within the meaning of Article 12 of the Constitution of India. But, nonetheless, it is well-settled that such Societies, for the said reason, does not become a department of the State Government so as to entitle the Government to exercise any administrative power thereon except under and in accordance with the provisions of the memorandum of association or the rules and regulations of the Society.
4. To substantiate the above proposition, I may usefully refer to the observations made by Lord Denning in the case of Jamlin v Hannaford, which is to the following effect.-
'In the eye of the law', said Lord Denning 'the corporation is its own master and is answerable as fully as any other person or corporation. It is not the Crown and has none of the immunities or privileges of the Crown. Its servants are not civil servants, and its property is not Crown property. It is as much bound by Acts of Parliament as any other subject of the King. It is, of course, a public authority and its purposes, no doubt, are public purposes, but it is not a Government department nor do its powers fall within the province of Government'.
5. The above observations of Lord Denning have been quoted with approval by the Supreme Court in the case of Andhra Pradesh State Road Transport Corporation by its Chief Executive Officer, Hyderabad vIncome Tax Officer, BIB-Ward, Hyderabad and Another , wherein it has been held that.-
'The corporation, though statutory, has a personality of its own and this personality is distinct from that of the State or other shareholders. It cannot be said that a shareholder owns the property of the corporation or carries on the business with which the corporation is concerned. The doctrine that a corporation has a separate legal entity of its own is so firmly rooted in our notions derived from common law that it is hardly necessary to deal with it elaborately';
6. The Society has framed rules for recruitment etc., of the employees of the Institute called 'Sanjay Gandhi Institute of Accident Rehabilitation and Physical Medicine. (Cadre, Recruitment, Conditions of Service and Miscellaneous Provisions) Rules, 1989' (in short 'the Rules'). As per clause (2) of Rule 3 of the said Rules, the 'Governing Council' is the Appointing Authority in relation to the post of Director of the Institute. Annexure-I to the said Rules, contains subsidiary rules for cadre and recruitment. Rule 1 of the Subsidiary Rules provides the method of recruitment, age limit and classification for appointment to various posts in the Institute which shall be as per the Schedule II appended thereto.
7. Under Sl. No. 1 of the Schedule II, mode of recruitment for the post of Director has been prescribed as 'by appointment by the Governing Council by direct recruitment or on contract basis or by nomination' to be made by the organisations specified therein.
8. Before being appointed as the Director of the Institute, Dr. Das was working as the Professor and Head of the Department of Plastic Surgery, Bowring and Lady Curzon Hospitals, Bangalore, which is owned by the State Government, and as such he was a Government employee. By Notification dated 19-6-1992 (Annexure-A), the State Government sought to appoint him as the Director of the Institute on 'contract basis'. Subsequently, in partial modification of the notification at Annexure-A, the Government issued another notification dated 20-6-1992 (Annexure-B), wherein, the expression 'on contract basis' stood deleted.
9. Admittedly, Dr. Das took charge of the post of Director of the Institute on 20-6-1992. The Governing Council of the Society, under its Resolution dated 17-7-1992 (Annexure R-31), ratified the Government Notification dated 20-6-1992 upholding Dr. Das as the Director of theInstitute. The said resolution is to the following effect.-
'The Government letter No. HFW/73/PTD/92, dated 20-3-1992 approving the Amendment of the Institute is ratified.
The Secretary to Government, Health and Family Welfare Department, Government of Karnataka and the Vice-Chairman informed the Governing Council that, in the earlier Governing Councilmeeting, a Sub-Committee was constituted to screen candidates for appointment of Director to the Institute.
Applications were called for the post of the Director of SGIARPM. The name of Dr. R.A. Parangusa Das was in the panel of doctors recommended by the sub-committee. On its recommendation the Government has selected and appointed Dr. R.A. Parangusa Das as the Director of SGIARPM.
Government Order No. HFW/73/PTD/92, dated 19/20-6-1992 appointing Dr. R.A. Parangusa Das as the Director of SGIARPM is ratified.
The Governing Council decided that the period of appointment of Dr. R.A. Parangusa Das as Director of SGIARPM be on a contract basis for a period of five years or till he attains the age of 62 years'.
10. Subsequently, the Governing Council of the Society passed another resolution dated 26-12-1992 (Annexure-R32) which is to the following effect.-
No. Amendment to C and R Rules:
'The Governing Council felt that the contract term to the post of Director of the Institute be fixed at 62 years or five years, whichever is less from the date of appointment on contract basis. The present Director will be on contract basis for five years from the date of his assuming the charge on contract basis or till he attains the age of 62 years whichever is earlier.
The Probationary period for all appointments in the Institute be modified from one year to two years as prevailing in Government Department'.
11. Subsequently, one more notification dated 14-7-1993 (Annexure-C) came to be issued by the State Government which is to the following effect.-
'Dr. R.A. Parangusa Das is appointed as Director of Sanjay Gandhi Accident Hospital and Research Institute, Bangalore, for a period of 5 years or till he attains 62 years of age, whichever is earlier from the date he assumes charge on contract basis as per the resolution No. 05 of Governing Council of Sanjay Gandhi Accident Hospital and Research Institute.
The terms and conditions governing the contract appointment shall be issued in due course'.
12. Despite close examination of the Memorandum of Association as also the Rules of recruitment referred to above, learned Advocate General could not convincingly satisfy the Court that the Government had any power to appoint Dr. Das as the Director of the Institute. Still, it was sought to be so done under Annexures-A, B and C to the writ petition as referred to above. Nonetheless, since the Government Order/Notification dated 20-6-1992 pursuant to which Dr. Das had takencharge of the post of Director, on that very day and it has been ratified by the Governing Council under its resolution dated 17-7-1992 (Annexure-R31), therefore, in law, it can be accepted that Dr. Das had assumed the office of the Director on 20-6-1992 pursuant to the decision of the 'Governing Council' which is the Appointing Authority for the said post. By subsequent resolution dated 26-12-1992 (Annexure-R32) passed by the Governing Council it has further been clarified that Dr. Das will be on contract basis for a period of only 5 years from the date of assuming the office on contract basis or till he attains the age of 62 years, whichever is earlier.
13. Admittedly, the date of birth of Dr. Das is 1-6-1937. He will attain the age of 62 years on 31-5-1999, but the term of 5 years from the date of assuming the office has already expired on 19-6-1997. Therefore, the contract of service between Dr, Das and the Society has come to an end on 19-6-1997. Consequently, it has been held that his continuance on the post of Director after 19-6-1997 is without any authority and therefore, from the said date, he has, in law i.e., de jure ceased to hold the post of Director, though de facto (i.e., in fact) he has been discharging the functions of the Director.
14. Mr. Gopal Hegde, learned Counsel appearing for Dr. Das, has submitted that keeping in view the order dated 14-7-1993 (Annexure-C), date of assuming charge on contract basis should be reckoned from 14th July, 1993. I do not find any basis for accepting this argument for the simple reason that he had already assumed the office of the Directorship on 20-6-1992 and his appointment on contract basis had been duly ratified by the Governing Council from 20-6-1992. Merely because at a subsequent stage one more order came to be passed by the State Government, in terms of the resolution of the Governing Council, cannot enure to any benefit to Dr. Das. This order of the State Government cannot be read in isolation and if it is sought to be so read, then it will have to be held as ultra vires the State Government. I may also notice here that so far as Government Order dated 20-6-1992 at Annexure-B purporting to appoint Dr. Das as the Director is concerned, it can be justified only to the extent that since as on that day, Dr. Das was a Government servant, therefore, this order, if reasonably construed, can at best be taken as lending him on deputation to the Society and nothing beyond.
15. Accordingly, the writ petition is allowed to the above extent. It may be clarified that no doubt it is being declared that on and from 20-6-1997 Dr. Das had no legal authority to act as Director of the Institute but keeping in view the de facto doctrine, even if Dr. Das was holding office of the Director under the colour of lawful authority and as found above his continuance in the office was unauthorised after 20-6-1997 but nonetheless the powers and functions exercised and discharged by him in de facto capacity has to be treated as having been done under valid authority. (Gokaraju Rangaraju v State of Andhra Pradesh ). No order as to costs.