B. Srinivasa Reddy Vs. Karnataka Urban Water Supply and Drainage Board Employees' Association and Ors. (03.04.2006 - KARHC) - Court Judgment

V. Gopala Gowda, J.

1. These three writ appeals are filed by (1) Mr. B. Srinivasa Reddy who is appointed as the Managing Director; (2) Karnataka Urban Water Supply and Drainage Board (hereinafter referred to as the Board); and (3) the State Government represented by its Secretary to the Urban Development Department respectively questioning the correctness of the order dated 10-1-2006 passed by the learned Single Judge in W.P. No. 9852 of 2004 (S-RES) (Karnataka Urban Water Supply and Drainage Board Employees' Association, Dharwad and Anr. v. State of Karnataka and Ors. 2006(1) Kar. L.J. 448), holding that the appointment of B. Srinivasa Reddy, the appellant in W.A. No. 86 of 2006, as Managing Director on contract basis with effect from 1-2-2004 as per Annexure-A and his continuation in the said office for nearly two years is illegal and he is an usurper of the said public office and further issuing a writ of quo warranto ousting him from the office of the Managing Director of the Board, urging various legal contentions.

2. Necessary brief facts are stated in this common judgment to appreciate the rival legal contentions urged by the learned Counsel for the parties :

(a) Karnataka Urban Water Supply and Drainage Board Employees' Association represented by its President (hereinafter called as the 'Association') and one Mr. V.N. Halakatte filed Writ Petition No. 9852 of 2004 seeking to quash the notification dated 31-1-2004 bearing No. UDD : 3 : UWE : 2004 produced at Annexure-A and to issue a writ of quo warranto and also to declare the appointment and continuation of Mr. B. Srinivasa Reddy as Managing Director of the Board as illegal. The case of the Association and another petitioner is that the Board is a statutory Board regulated by the provisions of Karnataka Urban Water Supply and Drainage Board Act, 1973 and Karnataka Urban Water Supply and Drainage Board Rules, 1974 (hereinafter referred to as 'Act and Rules'). Section 4(2) of the Act provides that the Chairman and the Managing Director shall possess the prescribed qualification and the other Directors shall be appointed by the Government. Section 7 of the Act deals with disqualification for appointment of Director and Managing Director of the Board. Section 68 confers power upon the State Government to make Rules for giving effect to the provisions of the Act. The State Government can make Rules providing for qualification for appointment of Chairman and Managing Director of the Board. Section 69(2)(b) of the Act confers power upon the Board to frame Regulations and the same has to be approved by the State Government regarding the terms and conditions of appointment and pay scales of officers and servants of the Board;

(b) The case of the Association is that it is a Trade Union registered under the provisions of the Trade Unions Act, 1926 (hereinafter called as the Unions Act'). It is asserted by it that it is the only registered Trade Union existing in the Board. It is stated that the Board had several negotiations with the Association with regard to the service conditions of the employees of the Board since its formation in the year 1986. The Board has entered into several settlements with the Association with regard to the service conditions of the employees of the Board. It is further stated that it is a recognised trade union entitled to agitate the matter with regard to the appointment of B. Srinivasa Reddy. It is also stated that it is concerned with the functioning of the Board and as such, it is entitled to question his appointment as Managing Director on contract basis and hence, it has locus standi to file the writ petition. The further case of the Association is that the post of Managing Director was always filled up by the State Government by appointing one of its senior most Government servants. The employee of the Board was not appointed as the Managing Director of the Board. The Regulation earlier provided that a Managing Director can be appointed on deputation from the Government from the cadre of Senior Chief Engineer of Public Works Department. The Regulations was amended by the Board by Notification dated 22-11-1989 providing for appointment of the Managing Director on the basis of selection among the officers holding the post of Chief Engineer, Grade II, PWD who have a minimum experience of five years in the field of Public Health Engineer and Chief Engineers of the Board. The Regulation was again amended to the Schedule I of item No. 1 by notification dated 11-12-1997 providing that the Managing Director shall be appointed by the State Government on the basis of selection from amongst the Chief Engineers of the Board, It is further provided that if no suitable qualified candidate is available, an officer of the Indian Administrative Service not below the rank of Secretary to the Government be posted. Prior to the said amendment, the appointment was required to be made on the basis of selection from among the officers of Chief Engineer of PWD.

Pursuant to the said notification, one Mr. Ram Murthy who was working as Chief Engineer in the Board was appointed as Managing Director of the Board vide notification dated 28-1-1998. The same was questioned by the Association in Writ Petition No. 44001 of 1995 on 12-4-2002 (Karnataka Urban Water Supply and Drainage Board Employees' Association v. State of Karnataka and Ors. ILR 2002 Kar. 2435) before this Court. During the pendency of the said writ petition, the said Ram Murthy took voluntary retirement on 31-1-1998. Thereafter, Mr. B. Srinivasa Reddy was appointed as the Managing Director of the Board with effect from 31-1-1998. His appointment was also questioned by the Association and another petitioner by filing an amendment application in the said writ petition urging various legal contentions. One among such contention was that Mr. Srinivasa Reddy being an officer of the Board is disqualified under Section 7(1)(d) of the Act from being appointed as the Director of the Board much less as the Managing Director. The said writ petition was allowed by this Court holding that the appointment of Mr. Srinivasa Reddy was contrary to law and the Regulation in question. Further, the notification amending the Regulations with regard to the appointment of Managing Director from among Chief Engineers of the Board was also quashed holding that the same is ultra vires to the provisions of the Act and Rules. The said order was questioned by the present two appellants viz., Mr. Srinivasa Reddy and the State Government in Writ Appeal Nos. 2877 and 2878 of 2002. In the said writ appeal,/interim order was granted on 17-4-2002 staying the operation of the order passed in W.P. No. 44001 of 1995 and the same came to be continued till they were withdrawn by them on the application filed by the association for vacating the interim order, vide order of this Court dated 17-6-2002 the office was directed to connect another Writ Appeal No. 3182 of 2002 filed by the State Government with above appeals. By virtue of the interim order granted in the above writ appeals, Mr. Srinivasa Reddy continued as the Managing Director of the Board till 31-1-2004 on which date he has been relieved from the post on attaining the age of superannuation. Immediately on the very same day, the impugned notification has been issued by the State Government appointing Mr. Srinivasa Reddy as the Managing Director on contract basis with effect from 1-2-2004 until further orders. It is the case of the Association and another petitioner that the said notification is illegal and contrary to the provisions of the Act, Rules and Regulations. It is stated that it is not permissible for the State Government to make any appointment contrary to the provisions of the Act, Rules and Regulations, when the Act and Regulations specifically provide the manner in which the appointment to the post of Managing Director of the Board should be made by the State Government. It is further stated that the appointment of Mr. Srinivasa Reddy to the said post is contrary to law and he has no authority to continue in the post. It is also stated that as per the Government Circular dated 23-12-1994 issued by the State Government, a retired officer cannot be appointed either on contract or permanent basis, therefore, they have contended that the appointment of Mr. Srinivasa Reddy is contrary to the policy of the State Government as stated in its Government Order referred to supra.

3. Certain allegations were made against Mr. Srinivasa Reddy in the writ petition stating that a complaint is pending before the Lokayukta in the matter relating to financial irregularities of the Board. The Comptroller and Auditor General of India (Civil) has submitted a report for the year ending 31-3-2000 wherein it is stated that Mr. Srinivasa Reddy has paid to a contractor Rs. 15.62 lakhs to Rs. 32.60 lakhs, even before they became due resulting in loss of interest of Rs. 15.40 lakhs to the Board. The relevant portion of the said report is also produced. It is further stated that the Board has awarded the work of augmentation of water supply in Chickmagaiur to M/s. Supreme Chemiplast Piping Private Limited, despite the fact that fake bank guarantee had been submitted by the said company, Mr. Srinivasa Reddy permitted the said company to participate in the tender and awarded contract in its favour. It is stated that with regard to the alleged misappropriation of funds of the Board in relation to water supply scheme of Chickmagaiur, the matter has been referred to Lokayukta for investigation.

4. The appellants herein who were served in the writ petition filed their detailed statement of objections traversing the petition averments and sought to justify the appointment order of Mr. Srinivasa Reddy, the Managing Director of the Board and prayed for dismissal of the writ petition.

5. Insofar as the State Government is concerned, it has, for the reasons stated at paragraphs 7 and 8 of the statement of counter, it has sought to justify the appointment order issued by it contending that the same was passed by the State Government appointing Mr. Srinivasa Reddy, as the Managing Director of the Board in exercise of its power under Section 4(2) of the Act. It has been specifically asserted that it has got the full authority to appoint a person as Managing Director of the Board on contract basis or on permanent basis as per Section 4(2) of the Act and therefore, it has justified the appointment order passed by it as valid in law. It has also spelt out at paragraph 8 of its Statement of Counter that Mr. Srinivasa Reddy was appointed as Managing Director of the Board with an intention of utilizing his vast experience and expertise in the area of water supply to the towns in the Karnataka State. With regard to the various allegations made against Mr. Srinivasa Reddy regarding certain serious omissions and commissions, it is stated that investigation made by Lokayukta did not come in the way of the State Government to appoint Mr. Srinivasa Reddy as the Managing Director as he had no role to play in relation to the acts which had constituted acts referred to in the petition. Pursuant to the direction issued by this Court to the learned Additional Government Advocate Mr, P.C. Chengappa, the original records of the Government in relation to the appointment of Mr. Srinivasa Reddy were produced. As per the directions of this Court, he has also produced the original records in relation to filing of writ appeals challenging the earlier order of this Court passed in the writ petition in striking down the relevant regulation and also the earlier appointment of Mr. Srinivasa Reddy as Managing Director of the Board.

6. Mr. Srinivasa Reddy and the Board filed a detailed counter-statements on similar lines traversing the petition averments and justified the appointment of Mr. Srinivasa Reddy as the Managing Director of the Board. Further, they have taken preliminary objections contending that the Association and another petitioner have no locus standi to file the writ petition questioning the correctness of the appointment order of the Managing Director. They have further stated that the Association is a dead trade union, it is not registered, it has got only a handful of employees and it does not represent substantial number of employees of the Board, therefore, the writ petition of the Association is not maintainable. It is also stated that against the second petitioner Mr. V.N. Halakatte, a criminal complaint was filed by Mr. Srinivasa Reddy under Section 200 of the IPC as he has made certain reckless allegations against him which are defamatory in nature and the same is registered in C.C. No. 4152 of 2003 by the Jurisdictional Magistrate Court, Bangalore in which proceedings, Mr. V.N. Halakatte got enlarged on bail furnishing surety to the Criminal Court. The said case is still pending. As a measure of counterblast to wreck vengeance against Mr. Srinivasa Reddy, the present writ petition was filed questioning the correctness of his appointment order as Managing Director of the Board. With regard to the allegations of investigation on certain omissions and commissions alleged to have been committed by Mr. Srinivasa Reddy as Managing Director stating that he is solely responsible for the entire Administration and Management of the Board, a report was submitted by the Lokayukta holding that the same are not proved. Regarding the comptroller and auditor general's report, it is stated that steps are taken by the Board to recover the amount from the Contractor for causing loss to the Government and a criminal case is also registered against the concerned firm. It is further stated that the appointment of Mr. Srinivasa Reddy as Managing Director was made by the State Government considering his rich experience in the administration and knowledge in the commercial matters for effective management and administration of the Board and the same cannot be questioned by any person much less the petitioners in the writ petition for the reason that the appointment is made by the State Government in exercise of its power under the provisions of the Act and Rules. It is further stated that the relevant regulation of Schedule I of Item No. 1 was struck down by this Court in the earlier writ petition referred to supra and therefore, the contention urged by the writ petitioners that the appointment order passed by the State Government appointing Mr. Srinivasa Reddy is contrary to the Regulations and the provisions of the Act and Rules is wholly untenable in law, It is also stated that there are absolutely no bona fides on the part of the petitioners to question the correctness of the appointment order issued by the State Government, It is further stated that the petitioners have failed to show that Mr. Srinivasa Reddy is an usurper of the post in the Board which is a public office. It is therefore contended that the petitioners are not entitled for issuance of a writ of certiorari to quash the appointment order and a writ of quo warranto also cannot be issued as they have miserably failed to show that the appointment order is in violation of the statutory provisions of the Act and Rules and that the. State Government is not competent to pass the order of appointment and the appointee was ineligible to be appointed to the post.

7. The Board has also sought to justify the appointment order of Mr. Srinivasa Reddy on similar contentions as urged by him. It has contended that during his regime as Managing Director, he had made steady progress and development to achieve the intentment and object of the Act for supply of water and providing drainage system to the residents of various towns in Karnataka State. It is stated that the budget allocation of the Board for every year would be Rs. 600 crores. The State Government, acknowledging the service of Mr. B. Srinivasa Reddy and his skill that he would effectively and properly administer and manage the Board and also with a view to achieve the purpose for which the Board is incorporated was appointed as the Managing Director on contract basis with effect from 1-2-2004 on his attaining the age of superannuation on 31-1-2004. It is further stated that his appointment to the said post was very much in need to see that the World Bank loan be utilised for implementation of the project which had been chalked out and was in the process of implementation. Therefore, the Board also prayed for dismissal of the writ petition. In support of the contentions urged by the appointee and Board, they have produced number of documents along with their counter-statements filed in the writ petitions.

8. After hearing, the rival legal contentions of the learned Counsel for the parties with reference to the pleadings and documents produced in the writ petition the learned Single Judge has passed the impugned order granting the relief by issuing a writ of quo warranto and also a writ of certiorari quashing the appointment order after referring to the Constitutional Bench judgments of the Apex Court with regard to the power of the State Government to appoint Mr, Srinivasa Reddy as the Managing Director of the Board and has also recorded a finding of fact on the contentious points that were raised in the writ petitions after considering the rival legal contentions, the provisions of the Act, Rules the order passed in the earlier petition and held that the appointment order of Mr. Srinivasa Reddy is on contract basis and therefore the same is not legal and valid as the State Government has no power to appoint him as Managing Director of the Board. No doubt, it has been stated in the course of the judgment that under Sub-section (2) of Section 4 of the Act, the State Government has got the authority to appoint but, to appoint a person as Managing Director on contract basis is not permissible in law, the said conclusion is based on two Constitutional Bench judgments of the Apex Court referred to in the impugned judgment. Further, with reference to the earlier decision of this Court rendered in the writ petition referred to supra, this Court has struck down the relevant regulation made by the Board which has been approved by the State Government by amending the Schedule I of Item No. 1 to the Regulations incorporating that the Chief Engineers of the Board are also eligible to be appointed as Managing Director of the Board and this Court has held that the same is ultra vires to the provisions of Sections 7(1)(d), 68 and 69 of the Act. Further, this Court has quashed the appointment order Mr. Srinivasa Reddy holding that he had suffered disqualification under Section 7(1)(d) of the Act as an officer of the Board and therefore he was disqualified for appointment as either Director or Managing Director of the Board. The learned Single Judge has also rejected the preliminary objection raised by the appointee and Board regarding the locus standi of the Association and another petitioner to file and maintain the writ petition before this Court holding that the same amounts to res judicata as the similar contention of them in the earlier petition was considered at length and held against them and the said finding became final as the writ appeals filed by them were dismissed as withdrawn. The correctness of the said order is questioned by the appellants herein urging various legal contentions.

9. It would be suffice for this Court to refer to the legal contentions urged by Mr. P.S. Rajagopal on behalf of the Managing Director, Mr. Srinivasa Reddy (hereinafter referred to as the appointee').

The Association's registration under the provisions of the Trade Unions Act was cancelled by the Registrar of Trade Unions on 2-11-1992 and therefore, it is a non-existing, non-registered trade union which is dead and gone. He therefore had contended that they have no locus standi to file the writ petitions challenging the order of appointment of Mr. Srinivasa Reddy. He further contended that the finding recorded by the learned Single Judge in his order with reference to the earlier writ petition proceedings wherein similar contention was rejected and answered holding that they have the locus standi, the appellants herein have got every right to show that the writ petition cannot be maintained for the reason that it is not a recognised nor a registered trade union. In support of his contention, he placed reliance on Section 2(q) of the Industrial Disputes Act, 1947 and also the decisions of the Supreme Court in Chairman, State Bank of India and Anr. v. All Orissa State Bank Officers' Association and Anr. : (2003)IIILLJ751SC , wherein with reference to the provisions of the Trade Unions Act, it has been held that a minority union must be registered and on failure to comply with law, it has no locus standi to challenge any action of the employer. This factual and legal contention of the appointee is seriously rebutted by learned Counsel Mr. Ashok Haranahalli appearing for the petitioners firstly, seeking to justify the finding recorded by the learned Single Judge in this regard holding that the finding on the question of locus standi operates as constructive res judicata as similar contention was rejected by the appointee was considered and recorded a finding by this Court in the order of the earlier writ petition between the same parties holding that the writ petitioners have got locus standi to maintain the writ petitions and the same was the subject-matter in the writ appeals referred to supra, which were got dismissed as withdrawn on 31-8-2004. Therefore, he had contended that the finding recorded on the question of locus standi of the Association by this Court in the earlier writ petition proceedings has become final and the very same contention cannot be allowed to be re-agitated by them. Therefore, it is contended by him that it is not open for the appointee and the Board to reopen this issue again in these proceedings. Nonetheless, he has placed strong reliance upon the decisions of the Supreme Court in Newspapers Limited, Allahabad v. Uttar Pradesh State Industrial Tribunal and Ors. : (1960)IILLJ37SC ; State of Bihar v. Kripa Shankar Jaiswal : 1961CriLJ447 ; Chairman, State Bank of India and Anr. v. All Orissa State Bank Officers' Association and Ors. : (2002)IILLJ562SC and Ghulam Qadir v. Special Tribunal : (2002)1SCC33 . In Balmer Lawrie Workers' Union, Bombay and Anr. v. Balmer Lawrie and Company Limited and Ors. : (1985)ILLJ314SC , it is held that 'conferring the status of recognised union on the union satisfying certain prerequisites of which the other union is not in a position to satisfy does not deny the right to form, association and espouse the genuine cause of workmen. In fact the appellant-union has been registered under the Trade Unions Act and the members have formed their association without hindrance of anyone. Not only that the appellant-union can communicate with the employer, it is not correct to say that the disinclination of the workmen to join the recognised union violates the fundamental freedom to form association. It is equally not correct to say that recognition by an employer is implicit in the fundamental freedom to form an association. Forming an association is entirely independent and different from its recognition. Recognition of a union confers rights, duties and obligations. Non-conferring of such rights, duties and obligations on a union other than the recognised union does not put it in an inferior position nor the charge of discrimination can be entertained. The members of a non-recognized association can fully enjoy their fundamental freedom of speech and expression as also to form the association'.

10. Learned Counsel for the appointee/Managing Director has also placed reliance upon the judgment of the Supreme Court in Statesman (Private) Limited v. H.R, Deb and Ors. : [1968]3SCR614 , wherein it is held that in quo warranto proceedings, even if there be some doubt that is to be resolved upholding the appointment and the High Court should be slow to pronounce upon the matter unless there is a clear infringement of law. He has also relied upon another decision of the Apex Court in High Court of Gujarat and Anr. v. Gujarat Kishan Mazdoor Panchayat and Ors. AIR 2003 SC 1201 : (2003) 4 SCC 712, in support of the proposition of law that a writ of quo warranto can be issued against the appointee only when the appointment is contrary to the statutory provisions of the Act and Rules (para 23). Further, he placed reliance upon another decision in University of Mysore and Anr. v. C.D. Govinda Rao and Anr. : [1964]4SCR575 , in support of the said proposition of law. The learned Counsel further elaborating his submission, has placed reliance upon the decision of this Court in D. Rudraiah and Anr. v. Chancellor, University of Agricultural Sciences and Ors. : AIR1971Kant84 , wherein it is held that in quo warranto, the relator can only ask the Court to examine whether the statutory provisions under which the holder of public office has been appointed have been complied with and nothing more than that can be done. In support of the same contention, he has also placed reliance on another decision of this Court in S.V. Krishnamurthy v. Deputy Commissioner, Chickmagalur and Anr. 1972(1) Mys. L.J. 629 (DB), wherein it is held that a writ of quo warranto by its very name implies that the petitioner who is a mere relator and who does not claim any personal right brings up the question before the Court as pro bono publico. No further questions relating to the process of selection and appointment arise in the quo warranto proceedings at the instance of relator (para 16). He also placed reliance upon the decision of the Kerala High Court in K.C. Chandy v. R, Balakrishna Pillai : AIR1986Ker116 , in support of the contention that no quo warranto could be issued when a post is held at pleasure, no quo warranto which could be defeated by the mere exercise of executive will would be issued. Further, he has also placed reliance upon the decision in R.K. Jain v. Union of India and Ors. : 1993(65)ELT305(SC) , wherein it is held that the Court cannot sit in judgment over the wisdom of the Central Government in the choice of the person to be appointed as a President so long as the person chosen possesses the prescribed qualification and is otherwise eligible for appointment, strong reliance is placed at paragraphs 73 and 74, wherein it is held that when a candidate is found to be qualified and eligible and was appointed, the Court cannot sit in judgment over the choice of the selection and that should be left to the executive and further contended that in service jurisprudence, it is settled law that it is for the non-appointee to assail the legality of offending action. Third party has no locus standi to canvass the legality or otherwise of the action of the State Government, He has placed reliance upon the decision of the Supreme Court in Dr. N.C. Singhal v Union of India and Ors. : [1980]3SCR44 , in support of his contention that a person who is not eligible is least competent to challenge an appointment as he has no locus standi (para 21). In this regard, he has also placed reliance on the judgment of the Apex Court in the case of B.R. Kapur v State of Tamil Nadu and Anr. : AIR2001SC3435 . Further, placing reliance upon another decision of the Apex Court A.N. Shashtri v State of Punjab and Ors. : [1988]2SCR363 , he has contended that malice and ill-will disentitle the petitioners for relief in the quo warranto proceedings.

In support of this contention, Mr. Rajagopal placed strong emphasis on the criminal complaint in the case registered in C.C. No. 4152 of 2003 against the second petitioner-Mr. V.N. Halakatte at the instance of the appointee for having made serious allegations of defamatory in nature against him and the same is still pending consideration by the Criminal Court, that is the reason for him and the Association to which he is associated to question the correctness of his appointment order to wreck vengeance against him by filing writ petitions. He has further contended that the learned Single Judge ought to have dismissed the writ petition as the petitioners have failed to establish that the appointee does not possess the requisite qualification and that the State Government has no power to appoint him to the post and that there is violation of statutory provisions in appointing him as the Managing Director. Placing strong reliance upon the observations made in the operative portion of the order passed by this Court in striking down the relevant regulation of Schedule I of the Regulations and further directed the State Government to amend the Rule 3 of the Rules suitably regarding prescription of the qualification to appoint a person as Managing Director of the Board, he has contended that the same remains in operation as the writ appeals filed by the appointee, Board and Government were withdrawn and that being the factual position, the Court cannot issue a writ of quo warranto against the appointee which amounts to disobeying the writ of mandamus already issued by this Court in its order in the earlier writ petition proceedings. In support of this contention, he relied on a decision in Rajendra Prasad Yadav and Ors. v State of Madhya Pradesh and Ors. : AIR1997SC3723 . Further, placing reliance upon the decision of the Supreme Court in Delhi Development Authority and Anr. v. UEE Electricals Engineering (Private) Limited and Anr. : AIR2004SC2100 , he contended that there must be a clear proof to prove the allegations made against the persons who have passed the order of appointment by impleading them as necessary parties to the writ petition proceedings. Neither there is any material in this regard nor necessary persons were impleaded to the writ petition proceedings to prove the mala fides and therefore, it is contended that there is no substance in the allegations of mala fide and the same are devoid of merit. Further, it is contended that the learned Single Judge ought to have placed reliance upon the decision of the Supreme Court in Nilangshu Bhusan Basu v. Deb K. Sinha : AIR2001SC3654 , wherein it is held that in the absence of any rule to that effect; it would be an administrative function of the appointing authority to take a decision as to which method should be adopted for recruitment to fill up any particular post of public office (para 7), He also placed reliance on Medley Minerals India Limited v. State of Orissa and Ors. : (2004)12SCC390 , to contend that there must be specific and demonstrable plea of mala fides and persons against whom mala fides are alleged must be made a party otherwise no finding can be recorded in this regard and relief can be granted to the petitioners. He contended that the writ petition was required to be rejected by the learned Single Judge for suppression of material facts. In support of this contention, reliance was placed on the decision of the Apex Court in G. Narayanaswamy Reddy (dead) by L.Rs and Anr. v. Government of Karnataka and Anr. : [1991]2SCR563 and All India State Bank Officers' Federation through its President and Ors. v. Union of India and Ors. 1990 Supp. SCC 336 : 1991 SCC (L and S) 429, wherein it is held that making false statements in affidavits disentitle the petitioner hearing on merits.

Placing reliance on another decision of the Supreme Court both with regard to the verifying statement of writ petition and the affidavit in support of the application filed for production of additional documents viz., appointment order, xerox copy of the registration certificate and other documents produced during the course of hearing of these appeals, he contended that the affidavits sworn to by the second petitioner are false and it should be dealt with firmly. Further, placing reliance upon another decision of the Apex Court in Bhaurao Dagdu Paralkar v. State of Maharashtra and Ors. : AIR2005SC3330 , it is urged that misrepresentation of facts in the writ petition by the petitioners itself is fraud. Any judgment obtained by fraud by the parties is a nullity (paragraphs 15 and 16). In respect of the same contention, he relied on another decision of the Supreme Court in Shankar Sitaram Sontakke and Anr. v. Balkrishna Sitaram Sontakke and Ors. : [1955]1SCR99 , wherein it is held that even consent decree will not operate as res judicata if it is product of misrepresentation/fraud (para 9).

11. Further, reliance was also placed by him upon the decision of the Supreme Court in Amrit Lal Berry v. Collector of Central Excise, New Delhi and Ors. : (1975)ILLJ144SC , to show that the principle enunciated under Order 1, Rule 8 is applicable to the writ petition proceedings as the Association and another petitioner have filed the same in the representative capacity. In this regard, he has relied on the decision of the Apex Court in Dr. Umakant Saran v. State of Bihar and Ors. : (1972)IILLJ580SC , wherein it has held that a person who was not eligible for consideration for appointment at the time the decision to appoint a person was taken, such person had no right to question the appointment of the appointee since he was not aggrieved person. In support of the same contention, he relied on another decision of the Supreme Court in Ramachandra Sunda and Anr. v. Union of India and Ors. : (1999)9SCC105 . He has also placed reliance on the decision of the Apex Court in B. Singh v. Union of India : AIR2004SC1923 , to contend that only a person who comes 'to Court with bona fides and public interest can have locus standi, but not the persons who suppress material facts in the writ petition and affidavits filed in support of application seeking permission to produce additional documents. Trumpery proceedings are initiated by the persons before the Courts shall not be entertained (paragraphs 11 to 16). Reliance is also placed by him upon the decisions of the Apex Court in Canbank Financial Services Limited v. Custodian and Ors. : AIR2004SC5123 and Ashwani Kumar Singh v. Uttar Pradesh Public Service Commission and Ors. : AIR2003SC2661 , to contend that judgments cannot be interpreted as statutes and judgments should be understood in factual and statutory context. Strong reliance is also placed by the appointee Counsel of the Pull Bench decision of the Delhi High Court in P.L. Lakhanpal v. Ajit Nath Ray, Chief Justice of India, New Delhi and Ors. : AIR1975Delhi66 In the said case, the question which arose for consideration is whether the appointee could be reappointed subsequently and it is held that mala fides of the Appointing Authority or its motives in appointing a particular person are irrelevant and cannot be gone into by the High Court in a quo warranto proceedings. In respect of the same contention, he placed reliance upon the Division Bench decision of this Court in K.M. Byralingiah v Divisional Commissioner, Bangalore and Ors. 1968(2) Mys. L.J. 518 (DB) .wherein this Court has held that when the appointment is made if the appointee did not possess the qualification but acquired qualification when quo warranto is refused with reference to various judgments referred to in the paragraphs referred to supra and the legal contentions urged by the learned Counsel, he had prayed for allowing the appeal filed by Mr. Srinivasa Reddy by setting aside the impugned order.

12. Learned Senior Counsel Mr. S.N. Murthy appearing on behalf of the Board in Writ Appeal No. 87 of 2006, while adopting the aforesaid legal contentions urged on behalf of the appointee, had sought to set aside the impugned order passed by the learned Single Judge. He submitted that 3 important aspects are required to be examined by this Court viz. :

(i) Whether Government has got power to appoint the appointee in this case?

(ii) Whether the appointee has got experience in the administration and capacity in commercial matters as provided under Rule 3 of the Rules? and

(iii) Whether the appointee has got the capacity to discharge his functions as the Managing Director of the Board?

He contended that none of these aspects are examined and considered by the learned Single Judge while answering the contentious issues that arose for his consideration. He further contends that the learned Single Judge has also erred in accepting ground No. 9 urged in the writ petitions (para 9) that the appointment of the appointee on contract basis by the State Government was required to be made in accordance with the Regulations when the relevant Regulation which has amended Schedule I of Item No. 1, which provided to appoint any one of the Chief Engineers of the Board as its Managing Director has been struck down by this Court holding it is contrary to the provisions of the Act and Rules, He therefore contended that no ground is made out by the petitioners for granting the reliefs by the learned Single Judge as sought in the writ petition. He further contended that a non-existing ground is urged as ground No. 10 by the petitioners contending that the State Government has shown undue favour in favour of the appointee in appointing him on contract basis. Further, he has contended that the finding recorded by the learned Single Judge in the course of his order holding that appointment of the appointee on contract basis by the State Government is totally impermissible in law is incorrect because all appointments to the posts are in the nature of contract which is governed by either the Regulations or provisions of the Indian Contract Act, 1872 or any other statutory provisions and therefore, he has contended that mere phraseology of word 'Contract' is used in the appointment order cannot partake the real nature of the appointment order passed by the State Government in respect of the appointee in this case. He therefore contends that the learned Single Judge has misdirected himself with regard to the facts and provisions of the Act and Regulations in recording a finding of fact stating that appointment of the appointee is on contract basis is either factually or legally correct and therefore the impugned order of the learned Single Judge is vitiated in law and therefore liable to be set aside by allowing the writ appeal of the Board.

13. Learned Additional Government Advocate Sri P.G. Chengappa, has urged the similar legal contentions as has been urged by the learned Counsel and Senior Counsel on behalf of the appointee and Board and he has also adopted the contentions urged by the learned Counsel for the appointee and the Board, and therefore he has requested this Court to allow the Government appeal also.

14. Learned Counsel Mr. Ashok Haranahalli on behalf of the petitioners very strongly rebutted each one of the legal contentions urged on behalf of the appellants herein by placing strong reliance upon the order passed in W.P. No. 44001 of 1995, wherein this Court has struck down the amended Regulation of Schedule I of Item No. 1 framed by the Board in exercise of its power under Section 69 of the Act which was impugned, holding that it is ultra vires the provisions of Sections 7(1)(d), 68 and 69 of the Act and also quashed the earlier appointment order of the very same appointee on the ground that he being an officer of the Board was not eligible to be appointed as a Managing Director, which order was challenged by all the appellants herein by filling the writ appeals referred to supra and they also obtained an interim order on 17-4-2002 which was in force till they withdrew the writ appeals on 31-8-2004. Thereafter, by virtue of the interim order, the appointee continued in office till he was allowed to retire from the post by attaining the age of superannuation. The appellants herein contended that the appointee had experience in administration and capacity in commercial matters as he has been discharging functions as the Managing Director of the Board, therefore, the Government has appointed him as such as it had satisfied that he possessed the qualification prescribed under the Rule and it has got the power to do so. Section 4(2) read with Rule 3 of the Rules which confers power upon the Appointing Authority-State Government to appoint the Managing Director of the Board is seriously contested by the learned Counsel for the Association and another petitioner stating that the same is wholly untenable in law. The learned Counsel submits that the impugned appointment order passed by the State Government in appointing Mr. Srinivasa Reddy on contract basis cannot be construed as the regular appointment made by the State Government to fill up the post in question in exercise of its power under the provisions of the Act and the Rules as this Court has already declared that he was ineligible to be appointed as the Managing Director of the Board. No doubt, he had obtained the stay of the said order and continued in the post. The writ appeals filed by the appellants herein challenging the order passed by this Court were withdrawn and therefore the order became final. Therefore, it is not open either for the Government, the appointee or the Board to turn round and contend that he was qualified to be appointed as Managing Director under the provisions of Section 4(2) of the Act and Rule 3 of the Rules. This aspect of the matter has been carefully examined by the learned Single Judge with reference to the two Constitutional Bench judgments of the Apex Court. The Supreme Court in the case of Jammu and Kashmir Public Service Commission v. Dr. Narinder Mohan and Ors. : (1994)ILLJ780SC , wherein it had an occasion to deal with backdoor ad hoc appointments at the behest of the power of the State Government and has held that though the executive power is co-extensive with legislative power of the State under Article 162 of the Constitution of India, the State can create civil posts and fill them up according to executive instructions consistent with Articles 14 and 16 of the Constitution of India, While saying so, the Apex Court has held that it is settled law that once statutory rules have been made, the appointments shall be only in accordance with the Rules. The executive power could be exercised only to fill in the gaps but the instructions cannot and should not supplant the law, but would only supplement the law.

15. On similar lines, the learned Single Judge has referred to another Constitutional Bench decision of the Supreme Court in the case of B.N. Nagarajan and Ors. v. State of Mysore and Ors. : (1967)ILLJ698SC , wherein it has interpreted Articles 309 and 162 of the Constitution of India and held that the power under Article 309 does not abridges the power of the executive to act under Article 162 of the Constitution without a law. However, it is observed by the Apex Court that the executive must abide by that Act or Rule and it cannot, in exercise of the executive power under Article 162 of the Constitution, ignore or act contrary to that Rule or Act. Added to these judgments, strong reliance is placed by the learned Counsel for the petitioners upon the Official Memorandum issued by the Government dated 23-12-1994 referring to earlier Government Orders and reiterated that its earlier policy which was in force with effect from 15-12-1977 holds good under Clause (2) of the said order and directions were issued by the State Government to all the concerned not to reappoint the retired officials and not to continue them after retirement from their service. Further, at Clause 5 of the above memorandum it has been expressly made very clear that the instructions issued therein are applicable to autonomous bodies, aided institutions, Board, Corporations and companies under the control of State Government. In support of his contention, he has placed reliance upon the decision of Supreme Court in the case of Ramana Dayaram Shetty v. International Airport Authority of India and Ors. : (1979)IILLJ217SC , wherein it is held at para 10 of the said judgment, which relevant portion is extracted hereunder :

10. x x x It is well-settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of the act in violation of them.

16. He has also placed strong reliance upon another decision of the Supreme Court in Union of India v. K.P. Joseph and Ors. : [1973]2SCR752 , in support of his contention that where an administrative order confers justiciable right, it is really like all other general rules subject to exceptions. He has also referred to the decision of the Apex Court in Sant Ram Sharma v. State of Rajasthan and Ors. : (1968)IILLJ830SC , wherein it is held that although Government cannot supersede statutory rules of administrative instructions, yet, if the rules framed under Article 309 of the Constitution are silent on any particular point, the Government can fill up gaps and supplement the rules and issue instructions not inconsistent with the rules already framed and these instructions will govern the conditions of service. Learned Counsel, elaborating his submission, contended that rules are framed by the State Government in exercise of its power under Section 68 of the Act prescribing qualifications for appointment of Chairman and Managing Director of the Board. Further, from 1977, Executive Government Orders issued which are referred to supra by way of supplementing the rules regarding appointment to be made in various posts of the Board, Corporations, Aided Institutions and Government Companies and it is the State Government policy which is not inconsistent with the rules already framed by it Therefore, he submits that the same would govern the State Government for appointment of the Managing Director to the Board in exercise of its statutory power under the provisions of the Act and Rules. The learned Counsel placing strong reliance upon the above official memorandum having regard to the undisputed fact that the appointee was retired on attaining the age of superannuation on 31-1-2004, the impugned appointment order issued appointing Mr. Srinivasa Reddy on contract basis is without Authority of law and therefore, he submits that his appointment is in blatant violation of the policy of the Government and flagrant violation of the statutory provisions of the Act, Rules and also the judgments of the Apex Court referred to supra.

17. The learned Counsel has further placed strong reliance upon the decision of the Supreme Court in State of Punjab and Anr. v. Gurdial Singh and Ors. : [1980]1SCR1071 , which principle is being reiterated in the subsequent decision of the Apex Court in State of Andhra Pradesh and Ors. v Goverdhanlal Pitti : [2003]2SCR908 , wherein the Apex Court quoting Benjamin Disraeli, stated that all power is a trust; that we are accountable for its exercise; that, from the people and for the people, all springs, and all must exist. Fraud on power voids the order, if it is not exercised bona fide for the end designed. It is contended that power upon the State Government is to appoint a regular Managing Director of the Board but under the garb of power under provision of Section 4(2) read with Rule 3 and also in blatant violation of the Government Policy enunciated in the orders referred to supra, it cannot appoint a retired person as the Managing Director. Further, he has contended that contract appointment is not permissible in law in view of the provisions of the Act and the Rules framed for the purpose of appointing the Managing Director of the Board. The Government has got power only to appoint the Managing Director to the post on permanent basis but it had no authority under the garb of executive power to appoint any person much less a retired person on contract basis. That would be in blatant violation of rule of law as has been done in the instant case. Therefore, he submits that the impugned appointment order is tainted with legal mala fides and legal malice. He further elaborated his submission that the above grounds were urged but not considered and answered by the learned Single Judge while passing the impugned order. No doubt, the petitioners have not Come up before this Court challenging that portion of the order. The appellants, on various grounds, challenged the impugned order passed by the learned Single Judge. But, the respondents/petitioners would contend they have got every right to justify the same and they can also request the appeal Bench to consider the above aspects and supplement the reasons in support of the impugned order. He submits that while examining the various grounds urged, this Court is required to consider the matter at large and for the aforesaid legal contentions, it is urged that these are not fit appeals to be entertained and hence, prayed for ' dismissal of the same with exemplary costs.

18. The learned Counsel has also made elaborate submissions with regard to serious omissions and commissions alleged against the appointee during his period as Managing Director which order was quashed by this Court in the earlier writ petition. The Board is subject to the control of Comptroller and Auditor General of India under Article 151(2) of the Constitution of India, the Comptroller and Auditor General of India in his report has made serious observations regarding certain financial illegalities and irregularities in administration of the Board. Learned Counsel placing reliance upon Rule 18(2) of the Rules contended that the Managing Director shall operate the funds of the Board under his signature and is directly responsible for any omissions and commissions regarding financial matters of the Board. The said reports for the period in question were in the custody of the State Government, it should have verified the same before passing the appointment order, which are relevant for consideration for the State Government to examine the suitability of the appointee in exercise of its power, this exercise has not been done by it. Therefore, he has urged that the appointment order is not only vitiated in law but also bereft of bona fides and therefore, these appeals are not fit cases for this Court to interfere with the impugned order.

19. Learned Counsel Sri P.S. Rajagopal, placing reliance on various decisions rendered by the Apex Court in the service jurisprudence has contended that the petitioners are not competitors for the post and therefore the matter falls within the service jurisprudence and a writ of certiorari could not have been issued by the learned Single Judge. Therefore, he has contended that the order passed by the learned Single Judge quashing the appointment order in exercise of his power suffers from of error in law and hence, the same is liable to be set aside in these appeals.

20. With reference to the aforesaid rival legal contentions urged on behalf of the parties, we are required to examine the following points that would arise for our consideration and answer the same in these appeals :

(1) Whether the finding and reasons recorded by this Court in the order passed in Writ Petition No. 44001 of 1995 on the question of locus standi of the petitioners operates as res judicata in view of the undisputed fact that the order has become final?

(2) Whether the appointment order passed by the State Government represented by its political executive is in conformity with Section 4(2) of the Act read with Rule 3 of the Rules and also the law laid down by the Apex Court on this question?

(3) Whether the impugned appointment order passed by the State Government is vitiated on account of either legal mala fides or legal malice?

(4) Whether the impugned order of the learned Single Judge warrants interference in these appeals?

21. The aforesaid points are answered by us in seriatim by assigning the following reasons :

It is an undisputed fact that the petitioner-Association had questioned the legality and validity of the amended Item No. 1 to Schedule I of the Regulations including the Chief Engineers of the Board to be appointed as the Managing Director of the Board by the State Government on the basis of selection in their earlier writ petition referred to supra, the Association had also challenged the appointment of the very same appointee urging various legal contentions. The said writ petition was allowed by this Court vide order dated 12-4-2002 by rejecting all the legal contentions urged on behalf of the appointee, Board and the State Government who were party respondents in those proceedings. The main contention urged in that writ petition by them was regarding the locus standi of the very same petitioner-Association. This contention has been elaborately considered by this Court and held that the Association had locus standi for filing the writ petition questioning the legality of the amendment to Schedule 1 of the Regulations and the appointment of the very same appointee as the Managing Director after referring to the decisions of the Supreme Court in Fertilizer Corporation Kamagar Union (Regd.), Sindri and Ors. v. Union of India and Ors. : (1981)ILLJ193SC ; National Textile Workers' Union v. P.R. Ramakrishnan and Ors. : (1983)ILLJ45SC ; State of Haryana v. Haryana Co-operative, Transport Limited and Ors. : [1977]2SCR306 ; M.S. Jayaraj v. Commissioner of Excise, Kerala : 2000(72)ECC7 and also the Division Bench judgment of the Madras High Court in State Bank of Bikaner and Jaipur Employees' Association and Anr. v. State Bank of India and Ors. 1982-1-LLJ-413 (Mad.), and held that the Association had the locus standi for filing writ petition. It is an undisputed fact that the said judgment has become final though the very same appellants questioned the same by filing writ appeals on various grounds. After retirement of the appointee and on his further appointment, they withdrew the appeals after availing the benefit of interim stay for more than 2 years 4 months. In view of the finding recorded by this Court in its earlier order regarding locus standi. The learned Single Judge has not elaborately considered this argument of the appellants in this regard as he must have thought that it is not necessary for the reason that this Court had recorded a finding on the question of locus standi of the Association, therefore he had answered that legal contention urged as not tenable in law as it operates as res judicata. We concur with the said finding of the learned Single Judge recorded in the impugned order as the same is supported by the decisions of the Apex Court in the cases of Smt. Somawanti and Ors. v. State of Punjab and Ors. : [1963]2SCR774 and T. Govindaraja Mudaliar v. State of Tamil Nadu and Ors. : [1973]3SCR222 , which judgments are referred to at paragraphs 18 of the judgment of the Division Bench of Gujarat High Court in Murtujakhan Joravarkhan Babi (Nawab of Radhanpur) through his power of attorney holder Mohamad Umrbhai Desai v Municipal Corporation of Ahmedabad 1975 Guj. L.R. (sic), upon which strong reliance is placed by the learned Counsel Sri P.S. Rajagopal in support of his contention to justify the action of the appellants in withdrawing the earlier appeals.

He submits that withdrawal of the appeals do not come in the way for the appointee to urge the pleas which are existing regarding non-existence of the trade union of the petitioner-Association which is not recognised by the Board. According to him, false averments regarding registration of the Association and other aspects were made in the writ petition by suppressing relevant material facts. Therefore, he placed reliance on the said judgment to show that the finding recorded by the learned Single Judge regarding locus standi of the Association and another petitioner does not operate as res judicata and that they can urge the new facts raising in support of the plea of locus standi of the Association and another petitioner. We have considered this legal submission and we have perused para 18 of the above judgment, in that judgment after referring to Somawanti and T. Govindaraja Mudaliar's cases, wherein the Apex Court has observed that once the validity of the Act as a whole has been upheld by the Court after considering the various provisions of the Act and taking into account both the procedural as well as substantive aspects, it cannot possibly be urged that the validity of a particular section is still open to challenge because it has not been specifically considered. Emphasis is made to the observation of the majority decision in Somawanti's case and stated that the binding effect of a decision does not depend upon whether a particular argument was considered therein or not provided that the point with reference to which an argument was subsequently advanced was actually decided. Once it is found that the validity of the Act as a whole has been upheld, merely because the aspect now presented based on the guarantee contained in Article 19(1)(f) in the case referred to supra was not expressly considered or a decision given thereon, it will not take away the binding effect of the said decision, the above observations were made in Mudaliar's case. This Court in its earlier order between the same parties on the question of locus standi of the Association after referring to various decisions of the Apex Court and Division Bench judgment of Madras High Court referred to in the earlier paragraph of this judgment has answered the locus standi of the Association in its favour and that finding on the above legal contention has become final, therefore the learned Single Judge has rightly answered the contention against the appellants holding that it operates as res judicata, the new pleas taken in the statement of counter by the appointee and Board regarding locus standi of the petitioners is rejected holding that the same is untenable in law and held that it operates as res judicata.

22. Apart from the said reasons recorded in the impugned order, it is worthwhile for us to refer to the decision of the Constitutional Bench of the Supreme Court in the case of Fertilizer Corporation Kamagar Union, to justify the finding recorded earlier holding that the petitioners have locus standi in a matter like this and it is not a dead union but, a living union may be unregistered and consists only handful of persons as alleged by the appointee Counsel. They are very much concerned with the better and effective administration of the Board by appointing efficient and eligible persons to the key post of Managing Director. It being a public sector, public interest is involved and the Association has been agitating the illegal, arbitrary and mala fide action of the Board and the State Government in amending Schedule I to the Regulation by conferring the eligibility upon an officer of the Board for being appointed as Managing Director by selection who has suffered disqualification under the provision of the Act, which would affect the whole functioning of the Board and later appointing him as such on contract basis by the State Government under the garb of its statutory power which order is also challenged by filing writ petition which action of them would go to show that they have been relentlessly agitating the matter for the well-being of the Board. Therefore it cannot be contended that they have no locus standi and there are no bona fides on their part in questioning the correctness of the order of appointment for the reasons stated by the appellants in their gounter-statement. In this regard, it is worthwhile to extract relevant paragraphs of the aforesaid Constitutional Bench decision of the Apex Court which reads thus :

29-30. xxx Two questions incidentally arise : Have the workers locus standi under Article 32, which is a special jurisdiction confined to enforcement of fundamental rights? What, if any, are the fundamental rights of workmen affected by the employer's sale of machinery whose mediate impact may be conversion of permanent employment into precarious service and eventual exit? Lastly, but most importantly, where does the citizen stand, in the context of the democracy of judicial remedies, absent an ombudsman? In the face of (rare, yet real) misuse of administrative power to play ducks and drakes with the public exchequer, especially where developmental expansion necessarily involves astronomical expenditure and concomitant corruption, do public bodies enjoy immunity from challenge save through the post-mortem of Parliamentary organs. What is the role of the judicial process, read in the light of the dynamics of legal control and corporate autonomy? This juristic field is virgin but is also heuristic challenge, so that law must meet life in this critical yet sensitive issue. The active co-existence of public sector autonomy, so vital to effective business management, and judicial control of public power tending to berserk, is one of the creative claims upon functional jurisprudence.

31. The Court cannot wait and, despite allergy to minimal decisional law making in vacant spaces, the rule of law in this virgin area cannot leave the fertile field fallow.

xxx xxx xxx

34. Our national reconstruction involves an enormous increase in public sector operations in fulfillment of the paramount directives of Part IV of the Constitution. In a society in which the State had thrust upon it the imperative of effectuating massive transformation of economy and social structure the demands upon the legal order to inhibit administrative evils and engineer developmental progress are enormous, though novel. The present case, whatever, the merits and the ultimate conclusion, does raise the deeper issue of the dynamics of social justice vis-a-vis the role of the Rule of law where the public sector occupies the commanding heights of the national economy and yet asserts a right to be free from judicial review. That cannot be while, it is unnecessary for us to spell out in greater detail the emergence of a new branch of administrative law in relation to the national plan and the public sector of the economy. It is important to underscore the vital departure from the pattern of judicial review in the Anglo-American legal environment because the demands of development obligated by Part IV compel creative extensions to control jurisprudence in many fields, including business administrative law, contract law, penal law, fiscal law and the like.

X XX XXX XXX

36. A pragmatic approach to social justice compels us to interpret constitutional provisions, including those like Articles 32 and 226, with a view to see that effective policing of the corridors of power is carried out by the Court until other ombudsman arrangements - a problem with which Parliament has been wrestling for too long - emerges, I have dwelt at a little length on this policy aspect and the Court process because the learned Attorney General challenged the petitioner's locus standi either quo worker or qua citizen to question in Court the wrong doings of the public sector although he maintained that what had been done by the Corporation was both bona fide and correct. We certainly agree that judicial interference with the Administration cannot be meticulous in our Montesquien system of separation of powers. The Court cannot usurp or abdicate, and the parameters of judicial review must be clearly defined and never exceeded. If the Directorate of a Government company has acted fairly, even if it has faltered in its wisdom, the Court cannot, as a super auditor, take the Board of Directors to task. This function is limited to testing whether the administrative action has been fair and free from the taint of unreasonableness and has substantially complied with the norms of procedure set for it by rules of public administration.

37. Assuming that the Government company has acted mala fide, or has dissipated public funds, can a common man call into question in a Court the validity of the action by invocation of Article 32 or 226 of the Constitution? Here, we come up on the crucial issue of access to justice and the special limitations of Article 32 which is the passport to this Court.

38. We have no doubt that in competition between Courts and streets as dispenser of justice, the rule of law must win the aggrieved person for the law Court and wean him from the lawless street. In simple terms, locus standi must be liberalised to meet the challenges of the times. Ubi jus ibi remedium must be enlarged to embrace all interests of public-minded citizens or organisations with serious concern for conservation of public resources and the direction and correction of public power so as to promote justice in its triune facets. Lord Scarman's warning in his Hamlyn Lecturers lend strength to our view :

I shall endeavour to show that there are in the contemporary world challenges, social, political and economic, which, if the system, cannot meet them, will destroy it. These challenges are not created by lawyers; they certainly cannot be suppressed by lawyers : they have to be met either by discarding or by adjusting the legal system. Which is to be?' (English Law - The New Dimension - The Hamlyn Lecturers by Sir Leslie Scarman, 1974 - Stevens -P.D. XXX XXX

41. Law, as I conceive it, is a social auditor and this audit function can be put into action only when some one with real public interest ignites the jurisdiction. We cannot be scared by the fear that all and sundry will be litigation happy and waste their time and money and the time of the Court through false and frivolous cases. In a society where freedoms suffer from atrophy and activism is essential for participative public justice, some risks have to be taken and more opportunities opened for the public minded citizen to rely on the legal process and not be repelled from it by narrow pedantrynow surrounding locus standi.

42. Schwartz and H.W.R. Wade wrote in legal control of Government :

Restrictive rules about standing are in general inimical to a healthy system of administrative law. If a plaintiff with a good case is turned away, merely because he is not sufficiently affected personally, that means that some Government agency is left free to violate the law, and that is contrary to the public interest. Litigants are unlikely to expend their time and money unless they have some real interest at stake. In the rare cases where they wish to sue merely out of public spirit, why should they be discouraged? (Professors Bernard Schwartz and H.W.R. Wade, O.C., in Legal Control of Government (1972), p. 291). They further observed :

The problem of standing, or locus standi is inherent in all legal systems.... But in the United States, perhaps because of the constitutional basis which the subject has acquired in federal law it can be discussed as a single topic. In Britain it is a thing of shreds and patches, made up of various differing rules which apply to various different remedies and procedures. It is a typical product of the untidy system of remedies, each with its own technicalities, which all British administrative lawyers would like to see reformed. (Ibid) We have no doubt that having regard to the conditions in Third World Countries, Cappelletti is right in his stress on the importance of access :

The right of effective access to justice has emerged with the new social rights. Indeed, it is of paramount importance among these new rights since, clearly, the enjoyment of traditional as well as new social rights presupposes mechanisms for their effective protection. Such protection, moreover, is best assured by a workable remedy within the framework of the judicial system. Effective access to justice can thus be seen as the most basic requirement -- the most basic liuman right' - of a system which purports to guarantee legal rights. (M. Cappelletti, Rabels Z. (1976) 669 at 672) The need for a radical approach has been underscored in New Zealand by Black : ... today it is unreal to suggest that a person looks to the law solely to protect his interests in a narrow sense. It is necessary to do no more than read the newspapers to see the breadth of the interests that today's citizen expects the law to protect - and he expects the Court where necessary to provide that protection. He is interested in results, not procedural niceties (Black 'The Right to be heard', New Zealand L.J., No. 4, 1977, 66).

23. The above said paragraphs of the Constitutional Bench decision of the Apex Court would squarely answer against the vehement argument of the learned Counsel Sri P.S. Rajagopal regarding the locus standi of the Association and another petitioner who are very much interested persons in an important matter like this. They have been knocking the doors of the Courts waiting patiently for years seeking justice by questioning the illegal, arbitrary and mala fide action of the Board and State Government. The appellants by filling writ appeals against the earlier order and obtaining interim order allowed ineligible appointee to continue in office as Managing Director. After his retirement he is again reappointed by the State Government in the same post on contract basis, thereafter they have withdrawn the appeals making the order of this Court passed in the earlier writ petitions ineffective, in which order this Court has held that the appointment order of the appointee is in blatant violation of the statutory provisions of the Act and Rules, they did not stop at that, but again, the State Government under the garb of its power has appointed Mr. Srinivasa Reddy as the Managing Director of the Board on contract basis. There may be only handful persons in the Association but an unregistered union cannot be termed as a non-existing union in the Board.

Unregistered union, in the eye of law, can contend that it has got right to come and knock the doors of this Court seeking justice by pointing out the illegalities of the State Government in appointing the appointee as the Managing Director of the Board which is a statutory Board, where public interest is involved. Therefore, we have to simply follow the law laid down by the Apex Court in the Fertilizer Corporation Kamagar Union's case. In this view of the matter, trade union is a legal person and its non-registration or non-recognition by the Board is totally irrelevant to expose the cause of workmen/public interest as held by the Supreme Court in Balmer Lawrie Workers' Union's case. Apart from this, the learned Counsel appearing on behalf of the writ petitioners has rightly placed reliance upon the other decisions of the Apex Court in the cases of Newspapers Limited; Kripa Shankar Jaiswal; Chairman, State Bank of India and Shivajirao Nilangekar Patil v. Dr. Mahesh Madhav Gosavi and Ors. : [1987]1SCR458 , though they are not aptly applicable to the case on hand wherein it is held that non-registered Trade Union can espouse the cause of the workmen. In the instant case, the Board has provided public employment to thousands of people, it has been involving in taking up mega projects covering the whole urban area of the Karnataka State for providing pure drinking water and sewerage lines are required to be laid. Therefore, it is the duty of the Court to examine the Us which has been initiated b the writ petitioners on merits and the matter cannot be thrown out on the ground of lack of locus standi as alleged by the appointee and Board by this Court. But on the other hand, the said judgments of the Apex Court in the above circumstances are applicable to the case on hand. Further, in view of the Constitutional Bench decision of the Supreme Court in the case referred to supra, the various decisions upon which reliance is placed by the learned Counsel for the appellants including Section 2(q) of the Industrial Disputes Act are totally inapplicable to the fact situation, as in the said case, the Apex Court has clearly laid down the law regarding locus standi of the petitioners. We have already accepted the finding recorded by learned Single Judge wherein he had held that the earlier decision on the very same question operates as resjudicata. In addition to that, the above said reasons assigned by us are supplemented in support of the finding of the learned Single Judge and accordingly, we answer Point No. 1 in favour of the petitioners against the appellants herein.

24. To answer Point No. 2, it is necessary for us to extract the notes put up both by the then Secretary of the Urban Development Department and the appointment order signed by the then political executive from the original file which reads thus :

Note put-up by the Secretary of the Urban Development Department

1, Sri B. Srinivasa Reddy, Managing Director of KUWSDB will retire from service on 31-1-2004.

2. As per Section 4(2) of the Karnataka Urban Water Supply and Drainage Board Act, 1973, the Managing Director shall be appointed by the Government as per Section 6(1). He shall hold office during the pleasure of the Government. As per Rule 3 of the KLJWSDB Rules, 1974, the Managing Director shall be a person having experience in administration and capacity in commercial matters. As per KUWSDB Rules, Rule 4(2), the Managing Director shall be a whole time officer of the Board and shall be paid remuneration as prescribed.

3. Therefore, it is necessary for the Government to appoint the Managing Director. The Managing Director can be a Serving Officer of the Government who can be sent on deputation to the KUWSDB. It is even open to the Government to appoint a retired official to the post of Managing Director. But generally Government has not appointed any retired official either to KUWSDB or other Boards and Corporations of the Government.

(emphasis supplied)

4. A decision has to be quickly taken as the Managing Director of KUWSDB has to hold negotiations with the World Bank on 9-2-2004 regarding the new Water Supply and Sanitation Improvement Programme.

5. In my view, an Engineer in water supply/public health engineering would be most ideal for the post of Managing Director, KUWSDB.

Note of Political Executive, the Minister of Urban Development Department

6. This is a critical juncture for Karnataka Urban Water Supply and Sewerage Board. Considering the projects on hand and the need to complete them within a definite time frame, there should be continuity in leadership and management. The services of Sri B, Srinivasa Reddy, are needed for the present.

7. Sri Srinivasa Reddy's continuation will help in the important negotiations with the World Bank Scheduled to be held in February, regarding the new Water Supply and Sanitation programme.

8. Considering the adverse seasonal conditions prevailing and prolonged drought, there is likelihood of severe water scarcity in urban areas in the coming months. For this, a sum of Rs. 15 crores by way of relief has been earmarked in the period February to June 2004. The Urban Water Supply Board will be required to augment water availability, especially in chronic places like Bagalkot, Pavagada and Hubli-Dharwad. For planning and executing these contingency measures, Sri Srinivasa Reddy's presence is essential.

9. Sri Srinivasa Reddy who has retired today may be appointed on contract basis from 1-2-2004 until further orders.

25. A plain reading of the above said notes from the original file of the State Government discloses that the Secretary to the Government has clearly stated in his note that the appointment of Managing Director to the Board was very much essential in view of the fact that the appointee would be retiring on 31-1-2004. His note also discloses that as per KUWSDB, Section 4(2), the Managing Director of the Board shall be a whole time officer. Further Secretary has stated that though option is given to the Government to appoint a retired official to the post of Managing Director, generally, it has not appointed any retired official to either to KUWSDB or other Boards and Corporations of the Government. This is in tune with the policy of the State Government referred to in the Government Official Memorandum dated 23-12-1994, which is supplemental to the provisions of the Act and Rule 3 of the Rules as held by the Supreme Court in the case in K.P. Joseph. From the note of the Secretary of the Department the fact that would emerge is that no appointment to the post of Chairman or Managing Director on contract basis was recommended to be made to any Board, Government owned companies, Aided Institutions and Statutory Corporations of the State Government. Further, the Secretary of the Department had also made an observation that in his view, an Engineer in water supply/public health engineering would be most ideal to the post of Managing Director of the Board, The political executive of the State, at the time of exercising his power under the provision of Section 4 read with Rule 3 of the Rules, has appointed the appointee on contract basis from 1-2-2004 holding that his presence is essential in the organisation of the Board. The order of appointment passed by the State Government explicitly makes it clear that it is not a regular appointment but, it is an appointment to the post of Managing Director of the Board on contract basis. Section 4(2) of the Act and the Rule 3 of the Rules do not permit the Appointing Authority-State Government to appoint a person on contract basis much less the appointee. This position of law is explicitly made it very clear in the two Constitutional Bench judgments of the Supreme Court in the cases of Jammu and Kashmir Public Service Commission and B.N. Nagarajan, which decisions are rightly referred to by the learned Single Judge at paragraphs 19 and 21 of the impugned order. In Jammu and Kashmir Public Service Commission's case, the Apex Court has held that the executive power is co-extensive with legislative power of other State and under Article 162, the State can create civil posts and fill them up according to executive instructions consistent with Articles 14 and 16 of the Constitution of India. The relevant portion of the said judgment from para 7 is extracted as under :

It is settled law that once statutory rules have been made, the appointments shall be only in accordance with the rules. The executive power could be executed only to fill in the gaps but the instructions cannot and should not supplant the law, but would only supplement the law.

In B.N. Nagarajan's case also, the Apex Court with reference to its another decision in the case of Rai Sahib Ram Jawaya Kapur and Ors. v. State of Punjab : [1955]2SCR225 , after interpretation of Articles 309 and 162 of the Constitution of India has held at para 5 relevant portion of which is extracted as under :

5. x x x It is hardly necessary to mention that if there is a statutory rule or an act on the matter, the executive must abide by that act or rule and it cannot in exercise of the executive power under Article 162 of the Constitution ignore or act contrary to that rule or act.

26. Further, the learned Single Judge has also rightly placed reliance upon the decision in the case of Ramana Dayaram Shetty, by referring to relevant portion from para 28 with reference to the Government Order of 1994 which is the policy of the State Government supplement to the recruitment provisions of the Act and the Rules, it has expressly stated that a retired person shall not be appointed as an officer of either Board or Corporation. The principles laid down in the above judgments of the Apex Court with all fours are applicable to the fact situation in favour of the petitioners against the appellants herein for the reason that the appointment of Mr. Srinivasa Reddy, is not a regular appointment is evident from the words used by the political executive in the appointment order available in the original file, who has passed the appointment order.

27. The note put up by the Secretary of the Department is for regular appointment but, regular appointment order is not passed by the Political Executive the Minister for the Urban Development Department, Contract appointment to the post of Managing Director of the Board is not provided under the provisions of the Act and the Rules. Further, the same is not permissible in law in view of the law laid by the Apex Court in the two Constitutional Bench judgments referred to supra. Further, vehement, submissions on behalf of the appointee, State Government and the Board that phrases used in the appointment order is not the real test to determine the character of the appointment order as to whether it is a regular appointment or on contract basis, they have urged that all appointments are contract of employment only, either it would be statutory provisions of the Act and Rules or under the provisions of Contract Act. Having regard to the fact that the tenure of appointment of the appointee is at the pleasure of the Government as mentioned in the appointment order, therefore, it should be construed as permanent appointment. The said submissions made by the appellants' Counsel are wholly untenable in law in view of the decision of the Supreme Court in the case of Commissioner of Police, Bombay v. Gordhandas Bhanji : [1952]1SCR135 wherein it is held that :

Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.

28. The said view is approved by the Apex Court in the case in Mohinder Singh Gill and Anr. v. Chief Election Commissioner, New Delhi and Ors. : [1978]2SCR272 . In fact, the usage of the word in the appointment order passed by the State Government represented by its political executive in appointing the appointee is on 'contract basis' though note was put up by the Secretary of the Department for regular appointment. The fact remains that the appointment of the appointee is on contract basis which is not provided under the provisions of the Act and the Rules. Therefore, the finding recorded by the learned Single Judge in this regard is perfectly based on the fact and original Government records made available to this Court. No doubt, the learned Judge has made an observation in the impugned order that the State Government has got the authority to appoint the Managing Director under the provisions of the Act and Rules, the same cannot be disputed by anybody and it is not the case of the petitioners also. But, the question which arose for consideration before the learned Single Judge and before us is whether the State Government has the power to appoint a person on contract basis or not. Having regard to the phrase used in the appointment order which is impugned in the writ petitions, we have to record a finding that the State Government has no authority to appoint a person on contract basis particularly, having regard to the factual position that the provisions of the Act and the Rules confer power upon the State Government to appoint a Managing Director to the Board on permanent basis. The subsequent correspondence made between the Board and State Government regarding the terms and conditions of appointee is clearly stated that the appointment of the appointee is on contract basis. The copies of correspondence made by the State Government with the Board are very much available in the original file of the Government. In fact, we have repeatedly asked the learned Additional Government Advocate Mr. P.G. Chengappa as to whether he would make submission with reference to the original file of the Government regarding appointment order of the appointee as we wanted to give him an opportunity to address his arguments with reference to the record, Learned Government Advocate Sri Chengappa very fairly submitted that record speaks for itself, the Court can peruse and pass appropriate orders. Therefore, the finding of the learned Single Judge that appointment of the appointee, though he has used the phrase ad hoc, he should have extracted the same phrase as used by the political executive in the appointment order. The fact remains that it is a contract appointment of the appointee. Contract appointment is not permissible in law is the view which we have already taken as the same is in blatant violation of the statutory provisions of the Act and the Rules and also the two Constitutional Bench judgments of the Supreme Court referred to supra. In the judgment of the Apex Court in K.P. Joseph's case, the Apex Court, after referring to its earlier decision in Sant Ram Sharma's case, it has held that although Government cannot supersede statutory rules by administrative instructions yet, if the rules framed under Article 309 of the Constitution are silent on any particular point, the Government can fill up gaps and supplement the recruitment rules and issue instructions not inconsistent with the rules already framed and these instructions will govern the conditions of service. The Government Order of 1994 is its policy wherein it has directed the Boards, Corporations and aided institutions not to appoint retired persons in the posts is an executive order that supplements the provision of Section 4(2) of the Act and Rule 3 of the Rules has clarified the factual position as indicated above. This is one more strong circumstance which is required to be adverted by us while dealing with the question whether the appointment order passed by the State Government suffers from legal malice or not? For this reason also, we have to hold that the impugned appointment order passed by the State Government without authority of law and the same is in violation of the statutory provisions, Even accepting the argument advanced by the appellants' Counsel for the sake of arguments that the appointment of the appointee is on permanent appointment, we say that he is ineligible to be appointed as Managing Director of the Board for the following reasons.

29. The appointment of the appointee-B. Srinivasa Reddy as Managing Director was quashed in the earlier writ petition proceedings at the instance of the very same Association solely on the ground that he has suffered disqualification under Section 7(1)(d) of the Act as an officer of the Board and therefore this Court has held that he should not have been appointed as such. That order was no doubt challenged in the writ appeals by all the appellants herein. We have also seen the original files of the State Government in respect of filing of those appeals. In the earlier appeal also, the State Government was not authorised to file the appeal questioning the correctness of the order in the earlier writ petition. The instructions were given to the learned Government Advocate to defend the earlier appointment order in the appeal filed by the appointee on the request made by the appointee, the State Government has filed the appeal and the Board has also filed the appeal. The said appeals came to be withdrawn by them during the pendency of the writ petition in which the impugned order of appointment was challenged. A direction was given to the State Government after quashing the earlier appointment order of the very same appointee by stating that the appointment order is in contravention of Sections 7(1)(d), 68 and 69 of the Act to fill up the post of Managing Director, the State Government and the Board supported the appointee in those proceedings keeping the appeals pending till the present appointment order on contract basis was issued eight months later, they withdrew those appeals. By virtue of the interim order granted in those appeals on 17-4-2002, an ineligible person viz., the present appointee has continued in the office of the Managing Director. In utter disregard to the order of this Court which has attained finality, he had been appointed again in the post after his retirement would speak volumes regarding the bona fides on the part of the State Government in appointing him as such. The State Government has made a venture to appoint him as Managing Director on contract basis.

From this point of view also, the appointee is an usurper of a public office and therefore the appointment cannot be allowed to sustain. The ineligible person merely because he has continued in his post should not have been appointed as Managing Director of the Board by the State Government after his retirement on the ground that he had administrative experience and capacity in commercial matters this Court has clearly held that he was not eligible to be appointed as Managing Director as he suffers disqualification under Section 7(1)(d) of the Act, later he could not have acquired qualification merely because he had continued in the post by virtue of interim stay in the writ appeals which came to be dismissed as withdrawn and he had retired from the post on attaining the age of superannuation. State Government should have honoured its own policy for good governance which is the most important aspect under the written Constitution of India in a republic country as laid down by the Apex Court in His Holiness Kesavananda Bharati Sripadagalavaru and Ors. v. State of Kerala and Anr. : AIR1973SC1461 . The appellant-Government is not expected to disregard its own policy which is supplemented to the Rules and it has overreached the order passed by this Court in the earlier writ petitions by ignoring the irregularities and illegalities as pointed out by the Comptroller and Auditor General against the appointee as evidenced from the documents produced in the writ petitions, details of which we feel unnecessary to state in this judgment is one more strong circumstance for us to concur with the findings recorded by the learned Single Judge wherein he had rightly held that the appointee is an usurper of a public office. Therefore, the contention urged on behalf of the appellants that disqualification suffered by the appointee under the provisions of Section 7(1)(d) after his retirement has come to an end and he had acquired vast experience in administration and capacity in commercial matters is the qualification for his appointment is the reason sought to be projected by all the appellants herein, this contention deserves to be rejected by us for the reason stated above by us as the same is wholly untenable in law, It is necessary for us to refer to the decision of the Supreme Court upon which the learned Counsel for the petitioners had rightly placed reliance in the case of Dr. Kashinath G. Jalmi and Anr. v Speaker and Ors. : [1993]2SCR820 , in support of his contention merely because a criminal case was filed against the second petitioner, as a measure of counter blast to wreck vengeance against appointee the present petition was filed does not hold water in view of the decision rendered in this case by the Apex Court, The Apex Court, after examining the power of the High Court under Article 226, held thus :

33. In our opinion, the exercise of discretion by the Court even where the application is delayed is to be governed by the objective of promoting public interest and good administration; and on that basis, it cannot be said that discretion would not be exercised in favour of interference where it is necessary to prevent continuance of usurpation of office or perpetuation of an illegality.

34. We may also advert to a related aspect. Learned Counsel for the respondents were unable to dispute that any other member of the public, to whom the oblique motives and conduct alleged against the appellants in the present case could not be attributed could file such a writ petition even now for the same relief since the alleged usurpation of the office is continuing, and this disability on the ground of oblique motives and conduct would not attach to him.

30. In view of the aforesaid decisions and also the Constitutional Bench judgments referred to supra in this judgment, the various decisions upon which learned Counsel Mr. P.S. Rajagopal has placed reliance in support of contention on the point that there are no bona fides on the part of the petitioners in filing the writ petitions questioning the legality of the impugned appointment order need not be referred to in this judgment as they do not render any assistance whatsoever to the appellants. For the reasons stated in the preceding paragraphs of this judgment we have to answer point No. 2 against the appellants and in favour of the petitioners.

31. Regarding Point No. 3.--This question also requires to be answered against the appellants for the reasons recorded by us in the preceding paragraphs of this judgment wherein we have answered Point No. 2 we have held that the State Government has no power to appoint the appointee as Managing Director of the Board on contract basis. In this regard we are required to refer to the decision of the Supreme Court in the case of State of Punjab, upon which the learned Counsel Mr. Ashok Haranahalli had very aptly relied to show that the impugned order passed by the State Government is tainted with legal mala fides, at para 9 of the above decision it is held thus :

9. The question then, is what is mala fides in the jurisprudence of power? Legal malice is gibberish unless juristic clarity keeps it separate from the popular concept of personal vice. Pithily put, bad faith which invalidates the exercise of power - sometimes called colourable exercise or fraud on power and often times overlaps motives, passions and satisfactions - is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining legitimate goal. If the use of the power is for the fulfillment of a legitimate object the actuation or catalysation by malice is not legicidal. The action is bad where the object is to reach an end different from the one for which the power is entrusted, goaded by extraneous considerations, good or bad but irrelevant to the entrustment. When the custodian of power is influenced in its exercise by considerations outside those for promotion of which the power is vested, the Court calls it a colourable exercise and is undeceived by illusion. In a broad, blurred sense Benjamin Disraeli was not off the mark even in law when he stated, 'repeat... that all power is a trust - that we are accountable for its exercise - that in; from the people and for the people all springs, and all must exist'. Fraud on power voids the order if it is not exercise bona fide for the end designed. Fraud in this context is not equal to moral turpitude and embraces all cases in which the action impugned is to affect some object which is beyond the purpose and intent of the power, whether this be malice lade or even being. If the purpose is corrupt, the resultant act is bad. If consideration foreign to the scope of the power or extraneous to the statute, enter the verdict or impulse the action mala fides a fraud on power vitiates the acquisition or other official act.

(emphasis supplied)

32. In this regard, another decision of the Supreme Court in the case of State of Andhra Pradesh, upon which reliance is rightly placed by the petitioners' Counsel wherein legal malice is explained by the Apex Court at paragraphs 12 and 14 which reads thus :

12. The legal meaning of malice is 'ill-will' or spite towards a party and any indirect or improper motive in taking an action'. This is sometimes described as 'malice in fact' : 'Legal malice' or 'malice in law' means 'something done without lawful excuse'. In other words, it is an act done wrongfully and willfully without reasonable or probable cause, and not necessarily an act done from ill feeling and spite. It is a deliberate act in disregard of the rights of others.

xxx xxx

14. The legal malice, therefore, on the part of the State as attributed to it should be understood to mean that the action of the State is not taken bona fide for the purpose of the Land Acquisition Act, 1894, and it has been taken only to frustrate the favourable decisions obtained by the owner of the property against the State in the eviction and writ proceedings.

(emphasis supplied)

33. These above two judgments of the Apex Court are aptly applicable to the fact situation of the case on hand for the reasons recorded by us while answering the Point No. 2, wherein we have held that power is not conferred upon the State Government to appoint the appointee on contract basis to the post of Managing Director and power is exercised by it other than the purpose for which it is entrusted with it. Entrustment of power with the State Government is only for appointment of a person to the post of Managing Director of the Board under the provisions of Section 4(2) of the Act read with Rule 3 of the Rules on permanent basis and the same is also in violation of the policy of the Government. In the backdrop of earlier proceedings this Court has held that the appointee was ineligible in the year 1998 to be appointed as Managing Director of the Board. Despite mandamus issued to the State Government to appoint an eligible person to the post, no order is passed by the political executive as required under the Karnataka Government (Transaction of Business) Rules, 1977. In fact, against the earlier order passed by this Court quashing the earlier appointment order of the appointee, the State Government has filed an appeal justifying its action in appointing him as Managing Director and it has supported the appointee when the interim order of stay was granted in his appeal. By virtue of the interim order, the appointee has been allowed to continue in the office of the Managing Director and after retirement, again, he has been appointed in the post. These undisputed facts would clearly disclose the mind of the State Government and the manner in which power is exercised by it in appointing the appointee on contract basis which goes to show that the appointee's services is indispensable for ever to the organisation. In this regard, it is worthwhile to refer to the observation made by the Supreme Court in the case of Centre for Public Interest Litigation and Anr. v. Union of India and Anr. : AIR2005SC4413 , upon which the learned Counsel for petitioners relied which is rendered on the basis of report of the Commission headed by Mr. Justice KT. Thomas which reads thus :

It is not the case of respondent 2-the State of Uttar Pradesh that no other officer is suitable to hold that post or that the services of respondent 3 are so indispensable that none but she should be appointed as Chief Secretary. This is purely a case of justifying an action. Linked with it is the question of transparency in action. It is true that the allegations against respondent 3 have to be established. It is often said that justice should not only be done but it should appear to have been done. Lord Denning in Metropolitan Properties Company v. Lannon, (1968) 3 All E.R. 304 said : Justice must be rooted in confidence and confidence is destroyed when right-minded people go away thinking 'The Judge is biased'. The logic is equally applicable to Governmental action and Government. The State Government could have avoided the washing of dirty linen which as contended by learned Counsel for respondents 2 and 3 is the sole object of the writ petition.

34. The contention urged on behalf of the appointee that the plea of legal mala fides and non-imp leading the persons against whom the allegations of mala fides are made is concerned, reliance is placed by the learned Counsel on behalf of the appointee upon the judgments of the Supreme Court in the cases of Delhi Development Authority and Medley Minerals India Limited, wherein it is held by the Apex Court that there must be a clear proof of mala fides, there must be specific and admissible plea of mala fides and the person against whom mala fides are alleged must be made a party. Having regard to the reasons recorded by us in answer to the Point No. 3 on the basis of the judgments of the Apex Court referred to supra and also for the reason that power is exercised by the State Government other than the purpose for which it is entrusted in passing the appointment order, we hold that the appointment order which is impugned in the writ petitions suffers from legal mala fides/legal malice. Therefore, the aforesaid decisions upon which reliance is placed by the learned Counsel for the appellant-appointee are totally inapplicable to the fact situation and hence, the contention urged in this regard is liable to be rejected, accordingly rejected as the same are misconceived.

35. For the foregoing reasons recorded by us on Point Nos. 1 to 3 against the appellants, we decline to interfere with the impugned judgment on any one of the grounds urged by the appellants. The conclusions of the learned Single Judge on the contentious points and issuing a writ of qua warranto against the appointee are based on the Constitutional Bench judgments and other judgments of the Supreme Court which we have elaborately discussed and assigned our reasons in this judgment by supplementing our, reasons in support of the conclusions and findings recorded in the impugned order by the learned Single Judge. The learned Single Judge, relying on the Constitutional Bench decisions, has rightly recorded a finding of fact and held that the appointee is an usurper of a public office and his appointment is in contravention of the Act, the Rule said judgments of the Apex Court therefore, we confirm the said order as the same is based on undisputed facts and law laid down by the Apex Court and this Court.

36. As per law laid down by the Apex Court in the case of B.R. Kapur, the appointee alone was required to justify the appointment order passed by the State Government, the petitioners have been dragged to this Court unnecessarily by the Board and State Government and precious public time of this Court is also wasted on hearing the case for quite a long time which makes us to impose exemplary costs upon them. How the Board and the State Government are affected by issuing a writ of quo warranto against the appointee is neither forthcoming from the records of the State Government nor the Senior Counsel on behalf of the Board has made submission to this Court in the course of addressing his arguments. We may have to observe here that at the instance of the appointee, these appeals are filed by them which fact is evidenced from the records of the State Government. One more strong circumstance is that the Board, in its statement of counter, has opposed the writ petition on similar lines as has been stated by the appointee in his statement of counter though in law, the appointee was required to justify his eligibility and capacity to be appointed as Managing Director to the Board which is a public office and the State Government was required to justify its authority to appoint him as such. The Board is required to function within the parameters of the statutory provisions of the Act and Rules to achieve the object and intendment of the Act. Public money cannot be spent by the Board for litigating on behalf of an individual merely because he is appointed as Managing Director on contract basis. These observations are made by us in this judgment having regard to the facts of the case for future guidance of the Board to see that public money should not be spent by it on fighting unnecessary litigation in the Courts instead of discharging its statutory duties by carrying on with the developmental works for which it is constituted.

37. For the foregoing reasons, we dismiss all these appeals with costs of Rs. 10,000/- payable by the appointee and Rs. 5,000/- each payable by the State Government and the Board to the Legal Services Authority which can be utilized for the purpose of spreading legal literacy in the State of Karnataka to educate the people to create legal awareness and the achieve the social order in the country which is one of the laudable object of the Constitution.

38. After dictating the judgment, an oral application is made by the learned Counsel Mr. P.S. Rajagopal, on behalf of the appointee requesting this Court to continue the stay order to enable him to challenge this judgment.

39. Learned Counsel for the petitioners strongly opposed the same.

40. We do not feel that it is a fit case for continuation of stay order for the reason that the matter was heard in detail, we have considered each one of the legal contentions urged on behalf of the appellants and answered the same against them by recording a categorical finding on the contentious points framed in these appeals on the basis of records of the Government and we have held that the State Government had no authority to pass the appointment order appointing the appointee as Managing Director of the Board on contract basis and there is a statutory violation of the provisions of the Act and Rules. The said finding is supported with the Constitutional Bench decisions and the judgments of the Supreme Court. When once this Court records a finding on considering the rival legal contentions with reference to the record and held that the appointee is an usurper of a public office, it is not proper for this Court to grant stay as prayed by the learned Counsel. We have also perused the valid reasons recorded by the learned Single Judge for issuing a writ of quo warranto, which have been affirmed by supplementing our reasons. Therefore, we decline to grant the interim stay, after dismissal of the appeals accordingly, the oral application is rejected. It is open for the State Government to make necessary arrangements to fill up the post strictly in conformity with the provisions of the Act, Rules and law laid down by the Apex Court on this legal aspect. If there is any urgency, the State Government shall take up the matter on top priority basis and see that a proper person is appointed as the Managing Director of the Board in accordance with the provisions of the Act and Rules.