1. This OA has been filed by the applicant for quashing and setting aside impugned order dated 24.5.2005 moving the applicant from the post of Chairman, Third Maharastra Finance Commission (in short 'TMFC') and posting him as Managing Director, MAFCO. After hearing the Counsel for applicant on 1.6.2005, ad-interim relief was granted restraining the respondents to operate the impugned order and the case was listed for 15.6.2005 i.e. after a period of 14 days. In the meantime the applicant moved Misc. Petition No. 338/05 on 14.6.2005 for adding the name of Dr.
D.K. Sankaran in the array of respondents and also to make certain amendments in the OA.2. On 15.6.2005 arguments were heard of the Counsel from both sides on the point of vacation or continuation of ad-interim relief granted on 1.6.2005 and the stay on the operation of the impugned order dated 24.5.2005 was continued vide order dated 17.6.2005.
3. The respondents filed a Writ Petition No. 1636 of 2005 before the Hon'ble High Court of Judicature at Bombay which was disposed of by the High Court vide its order dated 4.7.2005 and the operative portion of the order is set out below : ...we set aside both the orders of the Tribunal dated 1st June and 17th June, 2005 and direct the Tribunal to dispose of the Original Application No. 293 of 2005 in accordance with law, without being influenced by whatsoever has been stated in this order.
4. On a petition for Special Leave filed in the Hon'ble Supreme Court of India by the applicant, the Apex Court has passed an order on 8.8.2005 and its operative portion is set out below : ...Let the Tribunal hear the matter on the appointed date without entertaining any request for adjournment and decide the same finally. The hearing in this matter is adjourned by four weeks awaiting the orders of the Tribunal. We clarify that inasmuch as the order of the High Court has been passed against an interim order of the Tribunal, the Tribunal shall hear and decide the matter on the material available before it uninfluenced by its own interim order made earlier and order of the High Court.
5. The arguments from both sides were heard on 29,8.2005. At the outset, the learned Counsel for the applicant Mr. R.R. Shetty submitted that the amendments to OA as prayed for in M.P. No. 493/2005 may be allowed. However, after hearing the objection of the Respondents' Counsel, the M.P. was rejected. Applicant had moved one more M.P. No.453/2005 on 29.7.2005 pertaining to equation of the post of M.D. MAFCO to a post specified in Schedule - III as provided under Rule 9(1) of the All India Services (Pay) Rules, 1954. The respondents have already filed a copy of the State Government Resolution dt. 26.7.2005 that the post of M.D. MAFCO will be treated as equivalent to the Principal Secretary to the State Government from the date applicant resumes charge of the said post. Therefore, the M.P. was filed.
6. The learned Counsel for the applicant stated Maharashtra Finance Commission Act, 1994 (hereinafter called 'Act') specifically lays down that the Governor while appointing the Chairman has also to specify the period in the order. The Governor by Notification dt. 15.1.2005 appointed the applicant as Chairman from the date of assumption of charge upto 31.12.2005. The learned Counsel contended that, this cannot be regarded as a routine transfer, since it is an appointment by the Governor under a statute. He submitted that in normal course the IAS Officers are transferred from one post to another by the Government, but on the post of Chairman TMFC the applicant was appointed by the Governor. As a result, the administrative control shifted from Government to Governor. The learned Counsel submitted that by impugned order the applicant is actually being removed from the post of Chairman TMFC in the garb of transfer. The learned Counsel contended that the policy of the State Government on transfer, as well as, administrative guidelines on the subject are not relevant in the case of applicant since his appointment is governed by a statute. He also contended that the Act provides only for two modes for the removal of a working Chairman i.e. dis-qualification under Section 6 and resignation under Section 7, There is no other provision under the Act for removing a Chairman once he assumes charge. The learned Counsel submitted that the stand taken by the respondents that as per Section 16 of the General Clauses Act, 1904, the appointing authority has also powers for dismissing the person so appointed is not relevant in the present context since it inherently implies following of a procedure based upon the principles of natural justice. He reiterated that such power cannot be exercised for the curtailment of a specified tenure given under a notification issued by the Governor. The learned Counsel stated even assuming that the Governor has power to curtail the tenure then also such powers cannot be exercised arbitrarily. He argued that as per the reply filed by the respondents, the reason for transfer has been shown as violation of rules and policies by the applicant while holding the post of VC & M.D. CIDCO. However, no information was placed before the Governor about any such allegation. The learned Counsel for the applicant mentioned that the Government had earlier sent a proposal to Governor stating therein that the applicant stands disqualified under Section 6 of the Act. A mention to this effect has been clearly made in Para 4.22 of the OA and it has not been denied by the respondents in their reply. This proposal was subsequently withdrawn and a simplicitor proposal was sent mentioning only that Respondent No. 5 may be appointed as Chairman in place of applicant. The proposal does not indicate as to whether the applicant's term has expired or it has to be curtailed. The learned Counsel contended that no material in this regard was placed before the Governor. The Respondents are subsequently furnishing reasons in their reply. The learned Counsel has relied upon an Apex Court ruling in the case of Mohinder Singh Gill and Anr. v. The Chief Election Commissioner and Ors.
The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to Court on account of a challenge, get validated by additional grounds later brought out.
7. The learned Counsel for applicant citing the aforementioned ruling of the Apex Court stated that the respondents now cannot justify their action on the basis of newly created grounds which were not placed before the Governor when he applied his mind on the proposal submitted to him. The learned Counsel for the applicant has also relied upon an Apex Court ruling in the case of Dr. Bool Chand v. Chancellor, Kurukshetra University wherein it was held that the decision of the appointing authority to terminate the appointment may be passed only upon the result of an inquiry held in a manner consistent with the basic concept of justice and fairplay. The Apex Court had also emphasised that the power may not be exercised arbitrarily and it can only be exercised for good cause. The Apex Court, relying upon an earlier ruling given in State of Orissa v. Dr.
(Miss) Binapani It is one of the fundamental rules of our constitutional set-up that every citizen is protected against exercise of arbitrary authority by the State or its officers. Duty to act judicially would, therefore, arise from the every nature of the function intended to be performed, it need not be shown to be super-added. If there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power. If the essentials of justice be ignored and an order to the prejudice of a person is made, the order is a nullity. That is a basic concept of the rule of law and importance thereof transcends the significance of a decision in any particular case.
8. The learned Counsel for the applicant has relied upon a verdict of the Apex Court in the case of Dr. L.P. Agarwal v. Union of India and Ors. wherein it made the following observations about the tenure posts: Tenure means a term during which an office is held. It is a condition of holding the office. Once a person is appointed to a tenure post, his appointment to the said office begins when he joins and it comes to an end on the completion of the tenure unless curtailed on justifiable grounds.
9. The learned Counsel for the applicant contended that in this case the tenure of the applicant has been curtailed without furnished any justifiable grounds to the Competent Authority. Such an order is completely in violation of the principles of natural justice.
10. The learned Counsel for the applicant stated that Respondent No. 4, soon after taking over as CM. had ordered that applicant be shifted from the post of V/C. & M.D. CIDCO. The first order dt. 15.12.2004 could not be implemented since it did not contain the name of the post to which the applicant will be transferred. Another order was issued on 28.12.2004 transferring the applicant from the post of V/C. M.D. CIDCO to Chairman TMFC. Then on 1.1.2005 Respondent No. 4 asked the Chief Secretary to conduct a discreet inquiry about the allotments made by CIDCO during the tenure of the applicant. The applicant took over as Chairman TMFC on 15.1.2005. The behaviour of Respondent No. 4 demonstrates beyond any doubt that the applicant could not have been posted to any significant or important post. However, in the reply, the respondents have stated that if there had been any mala fide against the applicant he would have been given some insignificant post instead of very important post of Chairman TMFC. The learned Counsel for the applicant submitted that the importance of TMFC is very apparent from the fact that 3 Members who were to be appointed separately as per Notification dt. 15.1.2005 have not yet been appointed although a period of more than 7 months has elapsed and the Chairman and other Members would be holding the office only upto 31.12.2005. Arguing on this point, the learned Counsel submitted that Chairman TMFC has no financial powers; he only collects information from various Departments and makes recommendations about the allocation of resources to Panchayats and other local bodies. The learned Counsel contended that the information given by the respondents in reply about the tenure of previous Chairman is quite mis-leading. It is true that Mr. R.Vasudevan had left before the completion of tenure, but he had submitted resignation which is provided under the Act. In the case of another Chairman Mr. K.C. Shrivastava, his initial term was already over. The learned Counsel for the applicant submitted that the importance of Finance Commission in the eyes of the Government can be well illustrated from the fate of the report of the Second Finance Commission. The report which was submitted on 30th March, 2002 was lying with the Government for a very long pefiod and the comments of administrative department were received by February, 2004. The Cabinet Sub-Committee, formed in this regard did not take any decision for another 8 months. In the meantime, Elections were declared and the new Government constituted again Cabinet Sub-Committee. Thus, four of the five years period, have already elapsed without any decision on the recommendations of the Commission. The learned Counsel contended that the primary reason of the Government for shifting the applicant from TMFC is to bring him under the control of the Government from the control of Governor. He stated that on the allegations made the applicant would welcome an impartial inquiry. However, the Government wants to shift him out of the control of Governor since otherwise everything will have to be routed through Governor. The Governor had earlier already declined to approve the proposal to declare the applicant as dis-qualified under Section 6 of the Act. The learned Counsel contended that the Notification dt. 15.1.2005 appointing the applicant as Chairman has been issued by S.M. Krishna, Governor of Maharashtra. He stated that another notification dt. 27.5.2005 appointing Mr. Satish Tripathi in place of Mr. V.M. Lal (applicant) have been issued by Secretary to Government, Finance Department. He contended that the later notification is not legally sustainable because Secretary to Government cannot modify a Notification issued over the signatures of the Governor.
11. The learned Counsel for the applicant stated that posting of the applicant as M.D. MAFCO, when that post was not equated against any cadre post is also against the rules. Though the respondents have now issued a notification dt. 26.7.2005 mentioning therein that the post of M.D. MAFCO will be treated as equivalent in status and responsibilities to the post of Principal Secretary from the date on which Mr. V.M. Lal assumes and holds the charge of this post. The learned Counsel for the applicant stated that the issue of equivalence has been dealt in fair detail by the Apex Court in its judgment E.P. Royappa v. State of Tamil Nadu and Anr. The Apex Court If the State Government wants to appoint a Member of the Indian Administrative Service to a non-cadre post created by it, it cannot do so unless it makes a declaration setting out which is the cadre post to which such non-cadre post is equivalent in status and responsibility. The making of such a declaration is a sine qua non of the exercise of power under Sub-rule (1). It is not an idle formality which can be dispensed with at the sweet will of the Government.... The object of this provision clearly is to ensure that the public services are, in the discharge of their duties, not exposed to the demoralising and depraving effects of personal or political nepotism or victimisation or the vagaries of the political machine. The determination of equivalence is, therefore, made a condition precedent before a member of the Indian Administrative Service can be appointed to a non-cadre post under Sub-rule (1). It is mandatory requirement which must be obeyed. The Government must apply its mind to the nature and responsibilities of the functions and duties attached to the non-Cadre post and determine equivalence.
There the pay attached to the non-Cadre post is not material.
12. The Apex Court in the ease of E.P. Royappa (supra) has further held as follows : The State Government cannot artificially create equivalence by saying that a particular non-Cadre post, whatever be the nature and responsibilities of the functions and duties attached to it, shall be in the rank or grade of any Cadre post it likes. The State Government has to apply its mind and make an objective assessment of the nature and responsibilities of the functions and duties and determine which is the Cadre post to which such non-Cadre post can be regarded as equivalent in status and responsibility and then only it can make a declaration of equivalence.... The status and responsibility of a non-Cadre post for the purpose of determining equivalence cannot depend on who is going to occupy it. It is really the other way round. The equivalence in status and responsibility determined on an objective assessment of the nature and responsibilities of the functions and duties attached to the post should decide which officer should occupy it.
13. The learned Counsel for the applicant contended that the Resolution of the State Government dt, 26.7.2005 declaring the post of M.D. MAFCO as equivalent to the Principal Secretary till the applicant holds charge of the post is not in conformity with the ratio laid down by the Apex Court. It is therefore, legally unsustainable. As a consequence, the orders dt. 24.5.2005 appointing applicant as M.D. MAFCO deserves to be quashed and set aside.
14. The learned Counsel for the applicant submitted that the main reason for shifting the applicant from TMFC is the mala fide harboured by the Respondent No. 4 against the applicant. He stated that there are a number of incidence to show that whenever the applicant put a reasonable and valid objection to any proposal of the interest of R-4 the applicant was shifted to a comparatively less important post. The applicant is well aware of transfer being an incident of service and further that no one has a right to a particular post. In view of this he never objected to earlier transfers, but when the impugned order which has been made with the sole objective of bringing applicant under the administrative control of the Government from that of Governor was issued he had to approach the Tribunal. The learned Counsel stated that the main cause of bias of R-4 towards the applicant is the objection put forth on the proposal for allotment of a plot of land to Amit Publication, a company owned by the son of R-4. The applicant took over as V/C & M.D. of CIDCO on 26.5.2003 and when a detailed note regarding the allotment of land to Amit Publication was put up to him by the Marketing Manager, the applicant on 27.1.2004 endorsed the note that the manner in which the proposal has been handled so far is full of infirmities and it would be difficult to sustain legally or administratively. It is also under watch of Shri Anna Hazare (a social crusader). The learned Counsel for the applicant submitted that the matter was considered by the Board of CIDCO on 5.2.2004 and it was decided to refer the same to the State Government and accordingly a letter was sent on 23rd March, 2004, The learned Counsel stated that the Hon'ble High Court of Judicature at Bombay vide its order dt.
29.4.2004 in Writ Petition No. 115/2004 has ordered cancellation of allotment to Amit Publication since the allotment was not complete. The learned Counsel contended that the applicant as per instructions of the then Chief Minister Shri Sushil Kumar Shinde met R-4 on 19.11.2003 at his Worli residence to explain to him the difficulty in regularising the allotment of the plot to his son's Amit Publication. However, the Respondent No. 4 indicated that the matter could have been approved by the Board at their level without any difficulty. The learned Counsel further mentioned that the interest of R-4 in this allotment is abundantly clear from the fact that during the earlier tenure as Chief Minister his P.A. Mr. Bhise had visited the site and had also spoken to the then V/C & M.D. CIDCO. This fact has been clearly mentioned in Para 4.28 (vi) of the O.A. and there is no denial by the respondents. The learned Counsel stated that the High Court by its order dt. 29.4.2004 has cancelled only two out of eight allotments made to News Paper Group/Publishing House because the possession of six plots was already handed over and construction work had also started. Since the allotment to Amit Publication was not complete essentially on account of applicant's action for referring the matter to State Government he incurred displeasure of R-4.
15. The learned Counsel for the applicant mentioned that another reason for R-4 being biased against the applicant is combined slum development scheme. The R-4 when he was Chief Minister had called a meeting at his residence on 24.6.2002 at 8.00 p.m. for discussing the scheme. The applicant who was then holding the post of Principal Secretary (Housing), pointed out that no such proposal had been received by the Department then he was handed over a copy of the letter of the Developer after the meeting. The proposal was put up for consideration in the meeting of MHADA on 27.7.2002, Minister of State for Home Shri Kripashankar Singh spoke to the applicant over Mobile that the proposal must be approved by MHADA and should not be objected to. Non-clearance of the proposal in the meeting resulted in the transfer of the applicant from the said post of Principal Secretary Housing.
16. The third incident in this chain is the demand for waiver or reduction of penalty of Rs. 27 lacs imposed upon the Manjra Charitable Trust, a Trust owned by some family members of R-4. The Trust was given some property for a School on a concessional rate. However, it was running an Engineering College in violation of the conditions of lease.
A penalty of Rs. 27 lacs was imposed much before the applicant joined as V/C & M.D. CIDCO. The learned Counsel stated that R-4 wanted the applicant to waive the penalty or to make it nominal. Since the applicant could not do so, it added to the grudge held by Respondent No. 4 against the applicant.
17. The learned Counsel submitted that because of such incidents as cited above, the R-4 soon after taking over as Chief Minister on 1.11.2004 shifted the applicant from the post of V/C and M.D. CIDCO.Firstly, on 15.12.2004 he was asked to hand over the charge of V/C and M.D. CIDCO, but the orders did not indicate the post to which the applicant was transferred to. Thereafter, order dt. 28.12.2004 was issued informing the applicant that he has been appointed as Chairman TMFC and he should take charge of the new post immediately. However, as on that date there was no TMFC. The Governor of Maharashtra has constituted TMFC by notification dt. 15.1.2005. The applicant, as directed by the Government, handed over charge of the post of V/C and M.D. CIDCO on receipt of orders dated 28.12.2004 and was on compulsory wait till 15.1.2005. Further, Respondent No. 4 had asked the Chief Secretary orally on 1.1.2005 to conduct a discreet inquiry about the allotments made by the CIDCO during the tenure of the applicant. The learned Counsel also drew our attention towards a News Paper item published in Lok Satta on 9.11.2004 that the applicant instead of directly granting a plot to the News Paper supported by R-4 imposed lot of conditions in the matter and the said allotment was eventually cancelled by an order of the Court. This infuriated the publisher of the said News Paper and the transfer of the applicant is presumed to be certain in the near future. The learned Counsel for the applicant stated that a sort of character assassination against the applicant was launched by the media and it was just not possible without the blessings of R-4.
18. The learned Counsel for the applicant submitted that the discreet inquiry was conducted by a batchmate of the applicant Dr. D.K. Sankaran and in his report he projected a figure of 357 crores of loss on account of allotments made during the tenure of applicant. The learned Counsel stated that the V/C and M.D. CIDCO Mr. Ashok Sinha had written a detailed letter to Dr. D.K. Sankaran explaining the methodology for fixing prices of cooperative housing society plots. It was also clarified that no future hypothetical data is used for working out the average price. However, this letter which has a crucial importance does not find any place in Dr. D.K. Sankaran's report. Further, the report of Dr. D.K. Sankaran was not made available to the applicant and he was asked to show cause on the basis of a summary of the report, that too within a period of 8 days. The learned Counsel relied on an Apex Court ruling in the case of State of Punjab v. V.K. Khanna and Ors. (2001) 2 SCC 330 : 2001(3) SLJ 402 (SC), wherein it has been held that: It is well settled in service jurisprudence that authority concerned has to apply its mind upon receipt of reply to the charge sheet or show cause as the case may be, as to whether a further inquiry is called for.
19. The learned Counsel stated that in the case of V.K. Khanna (supra), the Apex Court has also made following observations relating to 'bias': The test of bias is as to whether there is a mere apprehension of bias or there is a real danger of bias and it is on this score that the surrounding circumstances must and ought to be collated and necessary conclusion drawn therefrom. In the event, however, the conclusion is otherwise that there is existing a real danger of bias, administrative action cannot be sustained.
20. The learned Counsel for the applicant stated that the facts of the case as mentioned above amply prove that the applicant does not have a mere apprehension of bias, but a real danger of bias.
21. The learned Counsel Mr. P.K. Rele for Respondent Nos. 1, 3 and 6 stated that according to Section 5 of the Act even during the tenure of a particular Chairman of TMFC the Governor has to ensure himself from time to time that his other interests are not likely to affect prejudicially his functions as Chairman. The Governor can require the Chairman to furnish such information as the Governor may consider necessary. He contended that there is nothing in Section 7 of the Act to show that tenure of the Chairman cannot be curtailed. As per provisions of the Act it is the Governor who decides about the tenure of the Chairman. If the Governor has a power to fix a tenure, it is implied that he can also curtail the same and no reasons are required to be given for such action. The learned Counsel Mr. Rele submitted that contention of the applicant that the State Government has no control over the Chairman of Finance Commission is not correct. Section 8 of the Act provides that the Chairman and Members of the Commission shall be paid such salary and allowances as the State Government may determine from time to time. This provision shows that the applicant even after being appointed by the Governor as Chairman, continues to be an employee of the State. The learned Counsel for respondents stated that the applicant was nominated for the post of Chairman Finance Commission vide Government Order dt. 28.12.2004 and such appointment does not give any higher status to the applicant who continues to be an employee of the State Government. The applicant had no problem when he was transferred from CIDCO to the Finance Commission. He has no reason to grudge his transfer from Finance Commission to a post under the State Government. To avoid his transfer from Finance Commission, the applicant is unnecessarily making false allegations against R-4. The learned Counsel pointed out that though the applicant has made certain unfounded allegations of mala fide against R-4, but no mala fide is attributed to the Governor. The decision to transfer the applicant from TMFC to MAFCO has been taken at the level of Governor and therefore, no issue of mala fide can be raised on this decision. As per the provisions of the Act, the Governor has a right to appoint the Chairman and also to decide his tenure. This will obviously include the right of the Governor to curtail the tenure. Secondly, the Governor is not required to give any grounds for the curtailment of the tenure. The State Government had, however, sent a proposal to appoint R-5 as the Chairman TMFC since it was felt that the applicant being under cloud is not a fit person to continue as Chairman TMFC. The learned Counsel for the respondents replying to the objections of the applicant on his transfer to MAFCO stated that even earlier a number of senior IAS Officers had occupied the post of M.D. MAFCO. The State Government has also issued a Resolution dt. 26.7.2005 equating the post of M.D. MAFCO to the post of the Principal Secretary to State Government, the learned Counsel stated that this was done since the applicant repeatedly persisted for the same. He further mentioned that earlier there were no orders of equivalence of this post. The learned Counsel submitted that order of equivalence under Rule 9 of IAS (Pay) Rules is essentially a formality and one cannot object on the ground of high profile or low profile job. Moreover, nomala fide can be attributed on this ground.
The learned Counsel Mr. Rele stated that the applicant has been drawing inferences on the basis of certain old decisions of the Chief Minister.
The incidents quoted are of 1999 and 2002 and any inference about the annoyance of the Chief Minister are merely conjectures. Moreover, no objection was raised by the applicant on his transfer during those years. How the decisions taken at that time have contributed towards mala fide if any, in 2005. About the allotment of plot to Amit Publication, the learned Counsel stated that a plot was already allotted much before the applicant joined as V/C and M.D. CIDCO.Further, the allotment had been cancelled by the High Court in April, 2004. Thus, the applicant was in no manner responsible for either the cancellation of allotment to Amit Publication or failure to re-allot.
Thirdly, the High Court has quashed the allotment order of CIDCO and not any order of the State Government. The learned Counsel argued that the mala fide cannot be drawn lightly and has to be proved right upto the hilt and the onus of proof is on the person who alleges mala fide.
There is no evidence on record to substantiate such allegation. About Manjra Charitable Trust also, the learned Counsel stated that the penalty on the trust was imposed much before the applicant had joined CIDCO. The learned Counsel has relied on a verdict of the Apex Court given in the case of E.P. Royappa (supra) wherein the Apex Court has held as follows : The burden of establishing mala fide is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a higher order of credibility.... The Court would therefore be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave and they are made against the holder of an office which has a high responsibility in the administration.
The learned Counsel for respondents Mr. Rele contended that in view of the ratio laid down by the Apex Court the allegations of mala fide made against R-4 are not sustainable.
22. The learned Counsel Mr. Rele contended that no inference of mala fide can be drawn on the basis of conjectures and surmises of the applicant. In all the three instances, given by the applicant such inference is based only on conjectures. Moreover, instances cited rather old and such bald allegations against the holder of a high office cannot be entertained.
23. The learned Counsel submitted that a discreet inquiry was started against the applicant in the month of January, 2005 and when the report received by the Government in the month of May, 2005 revealed grave irregularities, it was decided to initiate disciplinary proceedings against the applicant. The applicant is alleging mala fide because disciplinary inquiry has been initiated against him.
24. The learned Counsel for the respondents Mr. Rele thereafter cited some rulings of the Apex Court on the principles for judicial interventions with the transfer orders. The learned Counsel has relied upon the Apex Court ruling in the case of State of U.P. and Ors. v.Gobardhan Lal Transfer of an employee is not only an incident inherent in the terms of appointment but also implicit as an essential condition of service in the absence of any specific indication to the contra, in the law governing or conditions of service. Unless the order of transfer is shown to be an outcome of a mala fide exercise of power or violative of any statutory provision (an Act or rule) or passed by an authority not competent to do so, an order of transfer cannot lightly be interfered with.
25. The learned Counsel Mr. Rele has also relied upon another verdict of the Apex Court given in the case of Union of India v. S.L. Abbas wherein it was held that : Unless the order of transfer is vitiated by mala fides or is made in violation of any statutory provisions, the Court cannot interfere with it.
26. The learned Counsel mentioned that on the issue of mala fide the Apex Court in the case of M. Sankaranarayanan v. State of Karnataka and Ors.
Any inference about mala fide must be based on factual matrix and such factual matrix cannot remain in the realm of insinuation, surmise or conjecture.
The learned Counsel contended that the allegation made by the applicant falls in the category of surmises and conjectures and hence should not be given any weight. He drew our attention towards following observations made in Para 12 of the Apex Court's Judgment: It appears to us that the appellant has not been able to lay any firm foundation warranting a finding that the impugned order of transfer was passed mala fide and/or to humiliate him.... It may not always be possible to demonstrate malice in fact with full and elaborate particulars and it may be permissible in an appropriate case to draw reasonable interference of mala fide from the facts pleaded and established. But such inference must be based on factual matrix and such factual matrix cannot remain in the realm of insinuation, surmise or conjecture.Union of India and Ors. v. H.N. Kirtania also the Apex Court has held that: Transfer of a public servant made on administrative grounds or in public interest should not be interfered with unless there are strong and pressing grounds rendering the transfer order illegal on the ground of violation of statutory rules or on ground of mala fides.
The learned Counsel Mr. Rele concluding his submissions stated that in view of the arguments advanced by him along with ratios laid down by the Apex Court there is no need of judicial intervention in the impugned order and the O.A. deserves to be dismissed.
28. The learned Counsel for R-4 Mr. V.S. Masurkar stated that the applicant has alleged that R-4 harbours bias against him and has cited three cases. He stated that the R-4 has to deal with as many as 500 All India Service Officers and he would certainly not remember or bother about two or three individual cases. Drawing our attention towards Para 4.9 of the OA he submitted that there is only general allegation without giving specific details. It is practically impossible for R-4 to remember details of the cases handled while discharging official duties. However, in the Rejoinder filed by the applicant some details about the case have been given, but even those are insufficient to arrive at any meaningful conclusion. Further, there is nothing on record to prove the narrated incidents. The learned Counsel contended that inference of mala fide cannot be drawn based on the basis of only conjectures and surmises. He submitted that in Paras 4, 5 and 6 of the reply filed on behalf of R-4 satisfactory explanation have been furnished in relation to these events. On the proposal of Slum Rehabilitation Scheme, it is clearly stated that the Government was considering the scheme on the recommendations of the MHADA and the Respondent No. 4 is not attached in any nature whatsoever with the same. The allegation that the applicant was transferred only because he raised some objections is entirely incredulous because during the course of meeting it is usual for high ranking administrative officers to raise questions or objections.
29. The learned Counsel for R-4 Mr. Masurkar submitted that the allegation of bias on account of cancellation of allotment to M/s. Amit Publication is also baseless since the allotment order was cancelled by the High Court and the applicant was in no manner responsible for the same. Thus, there is no reason to hold a grudge against the applicant on this account. About the third allegation, the learned Counsel stated that Manjra Charitable Education Trust is an independent legal entity and the penalty on the trust was imposed in January, 2003. The applicant joined as V/C and M.D. CIDCO only on 26.5.2003. Thus, the applicant cannot be held responsible for any penalty imposed on the Trust. The learned Counsel stated that the burden to prove allegations lies on the person who makes it. The applicant has not been able to produce any satisfactory evidence in this regard. In fact, the applicant in an attempt to hide his own mis-deeds has chosen to make false and baseless allegations of mala fides against Respondent No. 4.
The order of transferring applicant out of Finance Commission is neither vitiated by mala fides nor is in violation of any statutory provisions. The learned Counsel drew our attention towards Para 3 of the affidavit filed by the Respondent No. 4 on 24.8.2005, wherein it is clearly mentioned that the order to transfer applicant is an administrative decision and is not motivated by any mala fide of any nature whatsoever. Regarding allotment of plot to M/s. Amit Publication it has been mentioned in this affidavit that allotment was made way back in November, 2001 which was revoked by CIDCO due to non-payment of lease premium and non-submission of Audit Bureau of Circulation Certificate. The Member of CIDCO considered the case of allotment on 5.2.2004 and submitted a report to the Government on 23.3.2004 for its consideration. Thus, during the tenure of the applicant the proposal was forwarded to the Government by CIDCO. Thereafter, the High Court vide its order dt. 29.4.2004 has cancelled the allotment. In view of such facts there can be no reason for any grudge against the applicant.
The applicant has only tried to pressurise the Government to drop the proceedings initiated against him in relation to the financial irregularities of Rs. 347 crore during his tenure as V/C and M.D.CIDCO.30. The learned Counsel for R-4 submitted that a discreet inquiry was ordered on 1.1.2005 for examining the allotments made during the tenure of the applicant and the enquiry report was received on 1.4.2005 wherein irregularities to the tune of 347 crore were highlighted.
Therefore, in the interest of administration, it was decided to recall the applicant from the post of Chairman TMFC. The learned Counsel for R-4 Mr. V.S. Masurkar stated that in a PIL 43/2005 filed in the High Court of Judicature at Bombay it has been alleged that there has been indiscriminate allotment of plots in Navi Mumbai to dummy co-operative housing societies at highly concessional rates and a prayer was made to restrain CIDCO from allotting any land to dummy co-operative societies.
On the allegation of petitioners, the High Court has ordered as follows : On consideration of the facts and circumstances of the case, in our opinion, the matter requires full examination.
31. The learned Counsel for R-4 stated that when gross irregularities in the allotment of land during the tenure of the applicant came to surface the Government had to take necessary action. In the report submitted by Dr. D.K. Sankaran it is mentioned that the then V/C and M.D. CIDCO first acquired powers from the Board by submitting misleading notes. Thereafter, plots were allotted to fictitious co-operative societies floated by the builders. This action of the then V/C and M.D. CIDCO had resulted in allotment of strategically located land at 50 per cent lower rate than market rate prevailing in that area to favour selected builders under the guise of the Society. The learned Counsel for R-4 stated that the Apex Court in the case of E.P. Royappa (supra) has held that the burden of establishing mala fide is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved and the very seriousness of such allegations demands proof of a high order of credibility. The learned Counsel stated that in view of the facts mentioned and Court rulings cited by him, the O.A. deserves to be dismissed.
32. The learned Counsel for the applicant is reply stated that Section 7 of the Act provides that a Chairman shall hold office for such period as may be specified by the order of the Governor appointing him. Thus, it is amply clear that the Governor while appointing the Chairman has to specify the period as well. The Governor has approved the proposal of curtailment of the period when no grounds for such proposal were given to him. The reasons are being given now in the reply filed by the respondents which shows that the decision was taken by the Governor in the absence of any reason. The learned Counsel submitted that the Apex Court in the case of E.P. Royappa(supra) has held that the equivalence to the post has to be made not on the basis of pay or who is going to occupy it, but on the basis of duties and responsibilities of the post while in the instant case the equivalence has been notified only for the period to be occupied by the applicant. The learned Counsel for the applicant stated that ample evidence has come on record to prove mala fide on the part of R-4 towards the applicant. In the case of Manjra Trust it has been stated by the respondents that penalty of Rs. 27 lacs was imposed in January, 2003. The applicant joined after a few months when a request was made to waive the penalty or to make it nominal since Manjra Trust is controlled by the family of R-4. He argued that the proposal for allotting land to M/s. Amit Publication was initiated by the Joint Secretary to the State Government in the Urban Development Department when R-4 was the Chief Minister and had that Department under him. Thereafter vide letter dt. 6.11.2001 allotment of nearly 8000 mtrs. area was made though it was much above the entitlement. The applicant has also stated on oath that R-4 wanted that the allotment to M/s. Amit Publication has lapsed and be re-allotted on the same terms and conditions which applicant did not do and referred the matter to State Government. About third incident relating to Slum Development Authority it has been mentioned in the affidavit given by applicant that the then Minister of State had rung him up over Mobile to ensure clearance of the plot. The learned Counsel contended that these averments made on oath are sufficient to prove that the applicant has fully discharged the burden to prove mala fide on the part of R-4. The learned Counsel for the applicant submitted a copy of the affidavit filed on behalf of CIDCO in PIL No. 43/2005. In the reply the respondent No. 2 i.e. CIDCO has stated that the allotments have been made at a rate 30% to 40% higher than the rates fixed by the Government, and therefore the contention of the petitioner that the CIDCO has suffered loss is hypothetical and deserves to be rejected.
33. We have heard Mr, R.R. Shetty, learned Counsel for the applicant, Mr. P.K. Rele for Respondents No. 1, 2 and 3 and Mr. V.S. Masurkar for Respondent No. 4 and have gone through the material placed on record.
The main issue for adjudication is the legal sustainability of the order shifting the applicant out of TMFC before completion of tenure mentioned in the notification. It has been argued that as per the provisions of the Act Chairman once appointed for a particular tenure by the Governor can be removed only when he incurs dis-qualification as laid down under Section 6 or resigns from the office as mentioned in Section 7. He cannot be removed under any other provision because a provision not specifically provided in the Act can't be read into the Act. Further, the provision in Section 16 of the General Clauses Act that an appointing authority in the absence of any provisions to the contrary can also dismiss the person so appointed is not applicable to the instant case since any action for dismissal is to be preceded by a procedure based on the principles of natural justice.
6. A person shall be disqualified for being appointed as, or for being as the Chairman or a Member of the Commission- (c) if he has been convicted of an offence involving moral turpitude; (d) if he has such financial or other interest as is likely to affect prejudicially his functions as Chairman or a Member of the Commission.
7. The Chairman and every Member of the Commission shall hold office for such period as may be specified in the order of the Governor appointing him, but shall be eligible for reappointment: Provided that, he may, at any time, by writing under his hand addressed to the Governor, resign his office.
35. It is apparent from above that a Chairman can be removed either when he incurs disqualification under Section 6 or submits his resignation under Section 7 of the Act. However, as per provision contained in the General Clauses Act, the appointing authority has the power to remove/dismiss the person appointed by him. We, therefore, hold that the Governor, who is the appointing authority, is also competent to remove the Chairman by following due process of law.
36. We had asked for the relevant papers for perusal and we see no harm in reproducing the note submitted to the Governor, since the note does not contain any confidential information or any one's opinion. There were no other papers in the concerned file and it contained only following note submitted by Principal Secretary, General Administration Department on 10.5.2005 : 2. The name of Mr. Satish Tripathi, IAS is proposed for appointment to the post of Chairman, Third Maharashtra Finance Commission, Mumbai in place of Mr. V.M.Lal, IAS. 3. The above proposal is submitted herewith for the approval of H.E. The Governor.
The proposal submitted to the Governor does not contain information about the tenure of the applicant, the reasons for removing him before completion of tenure and supporting legal provisions. It does not even mention the tenure proposed for Mr. Satish Tripathi. As per the ratio laid down by the Apex Court in Dr. L.P. Agarwal v. Union of India (supra) a tenure appointee can be removed before the completion of the tenure only when his tenure is curtailed on justifiable grounds. Since no grounds have been indicated in the proposal submitted to the Governor, the removal of the applicant from the post of Chairman, TMFC is not legally sustainable. We are of the considered view that when an appointing authority, specifies tenure for a particular post based upon an essential requirement of the related statute and the designated appointee occupies the said post then his removal before completion of tenure can be made only on justificable grounds. The very purpose of making the need for prescribing the tenure mandatory is to provide a security of tenure to the appointee, considered necessary by the legislature and any curtailment in such a tenure can be done only by following the procedure conforming to the principles of natural justice. Further, even a person, who is not a serving civil servant can also be appointed as Chairman. The Apex Court had made following observations in the case of Dr. L.P. Agarwal (supra): Even an outsider (not an existing employee of the AIIMS can be selected and appointed to the post of Director. Can such person be retired pre-matruely curtailing his tenure of 5 years? Obviously not.
Section 4 of the Act provides that 'The Chairman of the Commission shall be an eminent serving/retired civil servant well versed in Administration and Finance or a person with experience in public affairs'. Thus, even an outsider can be appointed on the post of Chairman TMFC and therefore the above cited observation of the Apex Court are very much relevant to the present case.
37. Another issue for adjudication is whether the manner of curtailing the tenure of the applicant in the instant case is legally sustainable.
Since the Chairman of TMFC's appointment is under an Act by the Governor and the period of his tenure has also been curtailed by the Governor the ratio of Apex Court in the case of Mohinder Singh Gill (supra) is relevant. Thus, the validity of the order has to be judged by the reasons mentioned at the time of order and no fresh reasons can be added later on. The respondents have now mentioned that the State Government decided to recall the applicant since he was found to have committed gross irregularities in the allotment of land while holding the post of V/C M.D. CIDCO. Such additional grounds are of no avail after the decision of the statutory authority. Statutory powers are to be exercised reasonably in good faith and on correct grounds.
38. According to Wednesbury principles for the judicial review of administrative action relied upon by the Apex Court in the case of Om Kumar and Ors. v. Union of India 2000 SCC 3689, interference in administrative decisions is not permissible unless one or the other of the following conditions are satisfied viz. the order was contrary to law or relevant factors were not considered or irrelevant factors were considered or the decision was one which no reasonable person could have taken. In the instant case the fact that the applicant was appointed for a fixed tenure, was the crucial factor and must have been brought on record while submitting the case for approval of the Competent Authority which happens to be Governor in this case. On account of non-consideration of the most relevant factor while taking the decision judicial intervention becomes necessary in this case.
39. The Apex Court rulings relied upon by the learned Counsel for respondents only relate to ordinary transfers pertaining to non-tenure posts which the concerned persons occupy until further orders. Hence, they are distinguishable. However, most of the Apex Court rulings relied upon by the respondents lay down that Courts should not normally interfere with transfers except when (i) transfer order is vitiated by mala fides or (ii) is in violation of any statutory provisions or (iii) being passed by an authority not competent to pass such an order. Thus, even as per rulings relied upon by the respondents the compliance with the statutory provisions is a must.
40. We have also to examine the impugned order in the light of principles of natural justice. It has long been settled law that a decision which offends against principles of natural justice is outside the jurisdiction of the decision making authority. When a person is appointed for a fixed tenure and the tenure is cut short in between certainly it causes prejudice to the appointee and his expectation of knowing the reasons is quite legitimate. It has been held by the Apex Court in the case of Dr. Bool Chand (supra) that: If there is a power to decide and determine to the prejudice of a persons duty to act judicially is implicit in exercise of such powers.
Thus, the competent authority had to act judicially and the applicant should have been informed, at least along with the order, about the reasons for curtailment of his tenure. However, if on account of some administrative exigencies it was not considered appropriate to disclose the reasons to applicant even then the grounds for curtailing the tenure should have been placed before the competent authority while seeking his approval.
41. In view of facts of the case and rulings of the Apex Court mentioned in foregoing paragraphs, we hold that order removing the applicant from the post of Chairman TMFC is not legally sustainable.
42. It has been mentioned in Para 4.22 of the OA that the respondents had earlier submitted aproposal to the Governor stating that the applicant has incurred dis-qualifications under Clause 6(d) of the Act.
The respondents have not given any reply on this point. However, from the second file submitted for the perusal of the Tribunal it is observed that a proposal in this regard was submitted to H.E. the Governor on 25.4.2005 by the Chief Secretary to the State Government and the same was withdrawn by the Chief Secretary on 11.5.2005 after speaking to the Secretary to the Governor. These facts lend sufficient credence to the averment made by the applicant that a proposal to declare him disqualified for holding the post of Chairman was sent by the Government but was not approved by the Governor. Thereafter, another proposal simply proposing the name of respondent No. 5 was moved without giving any reasons in support of the proposal.
43. The applicant has also challenged the order posting him as M.D.MAFCO on the ground that equivalence of the post with a cadre post was not declared as required by Rule 9(1) of IAS (Pay) Rules, 1954. The Apex Court in the case of E.P. Royappa (supra) has held that the equivalence to a cadre post has to be decided on the basis of status and responsibility and it cannot depend on who is going to occupy it.
It has further held that 'the object of this provision clearly is to ensure that the public services are, in the discharge of their duties, not exposed to the demoralising and depraving effects of personal or political nepotism or victimisation or the vagaries of the political machine'. Moreover, such declaration has to precede the posting orders.
In the instant case the order equating the post to the Principal Secretary was issued on 26.7.2005 i.e. after nearly two months of the date of impugned order. Further, the equivalence has been notified from the date when the applicant assumes charge of the said post till he holds the charge of the said post. Such Resolution is totally against the law laid down by the Apex Court that the equivalence of the post should be determined on the basis of nature and responsibilities of the post and cannot depend on who is going to occupy it. We therefore hold that the resolution dt. 26.7.2005, as well as, the order appointing the applicant on the post of M.D. MAFCO, both are not legally sustainable.
44. Regarding the allegation of bias harboured by R-4 against the applicant, three instances have been mentioned. In reply it has been stated that since the allotment of land in favour of Amit Publication, owned by a son of R-4, was cancelled by the High Court, there is no question of having any grudge against applicant on this account.
However, on the analysis of the facts of the case, we do not find this explanation satisfactory because as per the decision of the High Court those cases, where the allotment was complete, were not to be re-opened. The relevant extract from the High Court order dt. 29.4.2004 is set out below: We may also mention that out of 8 allotments to newspaper groups/publishing houses possession of 6 plots have been already handed over and construction work is also started. Those cases may not be re-opened. However, the allotment in favour of Amit Publications and Satej Prakashan is not complete. CIDCO shall consider their applications afresh and pass appropriate orders in the light of the observations made in this judgment.
45. It is evident from the facts of the case that the allotment in favour of Amit Publication could not be completed since the applicant in his capacity as V/C and M.D. CIDCO was of the view that such allotment is not legally sustainable and therefore, decided to refer the matter to State Government after obtaining approval of the Board.
But for such objection, the allotment of Amit Publication could have easily moved into the category of cases not to be re-opened. The interest of R-4 in such allotment is manifested by the fact that during his earlier tenure as Head of the Government his P.A. Mr. Bhise had visited the site and he had also spoken to the then V/C and M.D. CIDCO for allotment of a plot to Amit Publication. The applicant has brought this fact on record by way of an amendment and there is no denial by the respondents. Further, when R-4 was not the Chief Minister then the applicant, on the direction of the then Chief Minister had met R-4 at latter's residence to explain as to why land could not be allotted to Amit Publication. In view of such facts the possibility of R-4 having a grudge against the applicant cannot be ruled out. In the case of Majra Trust also, though the penalty for violation of lease conditions was imposed in January, 2003 i.e. before the applicant joined CIDCO, but the allegation made by the applicant is not that R-4 was unhappy because of the penalty. It has been stated that the cause of grudge was non-reduction of penalty to nominal level by the applicant. In the third case relating to combined slum development scheme the applicant has stated that the then Minister of State for Home had spoken over mobile for clearance of proposal discussed in the meeting with R-4.
Non-clearance of this proposal can also contribute to grudge. However, we find considerable weight in the argument put forth by learned Counsel Mr. V.S. Masurkar that R-4 in his capacity as head of the Government has to deal with nearly 500 All India Service Officers and many senior officers do raise objections on the proposals during the course of meetings; it does not mean that head of Government will have grudge against all such officers. The Apex Court in the case of E.P.Royappa (supra) has observed that "the anxiety of the Court should be to insist high degree of proof on the allegation of mala fide and the Court should be slow to draw dubious inferences from incomplete facts placed before it by a party". Though the incident cited by the applicant do have a potential of generating bias against him, but we will not like to infer, that bias was the sole reason for removing the applicant from the post of Chairman TMFC because the decision to this effect was taken at the level of Governor.
46. We are unable to appreciate the argument that the post of Chairman, TMFC is a very important post. Because so far only one member in addition to Chairman has been appointed while Section 3 of the Act provides that "The Commission shall consist of a Chairman and four other Members". Remaining three Members have not yet been appointed through the term of the Commission is going to expire on 31st December, 2005. Further the recommendations of the earlier Finance Commission submitted on 30th March, 2002 are yet to be implemented. These facts lend credence to the contention that the primary objective of curtailing the tenure of applicant was to bring him under the control of State Government from that of Governor. However, we do not consider it a significant issue for adjudication of the matter under consideration.
47. The main relief sought by the applicant in this O.A. is for quashing and setting aside order dt. 24.5.2005 of the respondents removing him from the post of Chairman TMFC and posting him as M.D.MAFCO. The powers to curtail the tenure of Chairman are vested with the Governor while the appointment on an ex-cadre post of M.D. MAFCO comes within the domain of State Government.
48. As we have discussed in foregoing paragraphs the appointment of the applicant on the post of Chairman TMFC was for a specific period which could be curtailed only on justifiable grounds. Since no grounds were given in the proposal submitted for the approval of the Competent Authority, the order issued on the basis of such approval is legally not sustainable. Another part of the impugned order posting the applicant as M.D. MAFCO is not in conformity with the law laid down by the Apex Court and therefore cannot be sustained.
49. We therefore, quash and set aside the impugned order dt. 24.5.2005.
Respondents to take necessary follow up action in this regard. No costs.