Manohar Pandhari Deulkar Vs. Commissioner, Nagpur Division and ors. - Court Judgment

V.C. Daga, J.

1. This petition filed by the petitioner under Articles 226 and 227 of the Constitution of India is from an order dated 7th January 2003 passed by the respondent No. 1, the Commissioner, Nagpur Division, Nagpur in Case No. 50/2002 holding that the petitioner has incurred disqualification under Section 16(1)(h) of the Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961 ('the Act', for short).

The Statutory Provisions :

2. The relevant statutory provisions are as under :--

Section 16(1)(h) of the Act reads as Act

'16. (1) Subject to the provisions of Sub-section (2), a person shall be disqualified for being chosen as, and for being, a Councillor -

(h) if he holds any office of profit under a Panchayat or Zilla Parishad orunder or in the gift of the Government.'

Whereas; Section 40 of the Act is as under :

'40. (1) Subject to the provisions of Sub-section (2) of Section 62, if anyCouncillor during the term of his office

(a) becomes disqualified under Sub-section (1) of Section 16, or

(b) is, for a period of six consecutive months (excluding in the case of presiding authority the period of leave duly sanctioned) without the permission of the Zilla Parishad, absent from meetings thereof or isabsent from such meetings for a period of twelve consecutive months,

the office of such Councillor shall, notwithstanding anything contained in Clause (c) of Sub-section (1) of Section 8, become vacant. (2) If any question whether a vacancy has occurred under this section is raised either by the Commissioner suo motu or on an application made to him by any person in that behalf, the Commissioner shall decide the question, as far as possible, within ninety days from the date of receipt of such application; and his decision thereon shall be final. Until the Commissioner decides that the vacancy has occurred, the Councillor shall not be disabled from continuing to be a Councillor; Provided that, no decision shall be given against any Councillor without giving him a reasonable opportunity of being heard.'

The Facts in brief.

3. The facts in brief giving rise to the present petition in nut-shell are that the petitioner was elected as Councillor of Zilla Parishad, Chandrapur in the elections held in the month of February 2002. After being elected, the petitioner started functioning as Councillor of respondent No. 2 Zilla Parishad, Chandrapur.

4. On 19th April 2002, respondent No. 3 filed an application under Section 40 of the said Act alleging therein that since the petitioner was and is employed with western Coalfields Limited ('the WCL' for short), he is holding office of profit under the Government as such disqualified under Section 16(1)(h) of the Act.

5. On being noticed the petitioner appeared before the respondent No. 1and filed his reply admitting the factual averments but denying the legal effectthereof and consequently denying contentions raised by the respondent No. 3. Itwas thus contended that the petitioner did not incur any disqualification by virtueof his employment with the WCL.

6. The respondent No. 1, after hearing rival contentions and after perusing the documents on record vide order dated 7th January 2003 was pleased to hold that the petitioner has incurred disqualification under Section 16(1)(h) of the Act being in the employment of the WCL and as such, he could not be continued as Councillor of the respondent No. 2, the Zilla Parishad, Chandrapur. The respondent No. 2, pursuant to the said order dated 7th January 2003, has issued letter to the petitioner on 13th January 2003, informing him in view of the order of the respondent No. 1, the Commissioner, Nagpur Division, Nagpur, the post of the Councillor held by the petitioner is being declared as vacant.

7. The petitioner has filed the present petition seeking to challenge the above order passed by the respondent No. 1 dated 7th January 2003 and consequent letter issued by the respondent No. 2 dated 13th January 2003 contending that the respondent No. 1 has misconstrued the provisions of Section 16(1)(h) of the Act while holding the petitioner to be disqualified on account of his employment with the Western Coalfields Limited.

The Submissions:

8. It is submitted that by virtue of the employment of the petitioner with the WCL, the petitioner is not holding any office of profit under or the gift of theGovernment. Learned counsel for petitioner has further contended that while considering the legal aspect as to whether or not the office in question is an office of profit under the Government, it has to be seen as to whether or not the Government makes appointment to the post held by the person in question, the Government has a right to remove or dismiss the holder of such office or post or whether the payments made by the Government for the duties discharged by the petitioner or whether the Government exercises any control over the performance of those functionaries. In the submission of the learned counsel for the petitioner, petitioner is holding the post of 'Pump Khalasi' with the WCL. According to him, WCL admittedly, is a Company registered under the provisions of the Companies Act, 1956, coming into existence after enactment of the Coal Mines (Nationalisation) Act, 1973. He sought to contend that the Central Government is neither an appointing authority nor it had any role to play in providing for the employment of the petitioner. According to the learned counsel for petitioner, by no stretch of imagination it could be said that the petitioner was holding an office of profit under the Government. Learned counsel further urged that considering the post held by the petitioner, it cannot be said that he could, in any manner, be influenced or pressurised by the WCL in his independent functioning as a Councillor of Zilla Parishad, Chandrapur. Further, there is no question of conflict of interest and duty as sought to be canvassed. According to the learned counsel for petitioner, all these aspects have been lost sight of by the respondent No. 1 while holding this petitioner as disqualified to hold the office of councillor of the Zilla Parishad.

9. Learned counsel for the petitioner further urged that the respondent No. 1 has unnecessarily laid much emphasis on the letter dated 4th December 1999 issued by the Western Coalfields Limited (WCL) which, at the most, could govern the aspect of employment of the petitioner and its nature was disciplinary and not disqualificatory. By virtue of the said letter, ineligibility could not be imposed on the petitioner to continue as a Councillor. It is submitted that Section 16(1)(h) of the Act does not disqualify employees of Limited Companies from becoming councillors. By placing reliance on the said letter dated 4th December 1999, the respondent No. 1 has introduced a disqualification which does not exist in the aforesaid relevant provision of the Act. According to him, the employer cannot introduce additional disqualification for its employees and thereby debar its employees from contesting elections. At the most, it could initiate disciplinary action against such employees; if it felt that service conditions were violated. While concluding his arguments, learned counsel urged that the impugned order not only suffers from non-application of mind, but it misinterprets the provisions of Section 16(1)(h) of the Act as such the impugned order is perverse. He further sought to urge that it was specifically brought to the notice of the respondent No. 1 that the question involved in the present petition is no longer res integra in view of the decision of the Apex Court in the case of Pradyut Bordoloi v. Swapan Roy (2001) 2 SCC 19, but the respondent No. 1 chose not to refer to the said judgment of the Apex Court while deciding the question of disqualification of the petitioner.

10. In Pradyut Bordoloi's case (supra) the respondent was an employee of Tirap Colliery, North Eastern Coal Fields under Coal India Limited holding thepost of Clerk Grade I. The gross salary attached with the post was around Rs. 6000 per month. Coal India Limited is a government company within the meaning of Section 617 of the Companies Act, 1956 (with 100% share capital owned by the Central Government) having come into existence consequent upon the nationalisation of the coal mines under the Coal Mines (Nationalisation) Act, 1973, Under Section 3 of the said Act the right, title and interest of the owners in relation to the coal mines came to vest absolutely in the Central Government initially and then came to be vested in the Government company under Section 5 of the said Act. The company has not more than 15 Board members. The business of the company is entrusted to a Board of Directors consisting of not less than 3 and not more than 15 Directors. The Chairman of the Board is to be appointed by the President of India and other members of the Board including the Vice-Chairman are be appointed by the President in consultation with the Chairman. The President may also from time to time appoint Functional Directors who shall be wholetime employees of the company. Chairman, Vice-Chairman or any wholetime or part-time Director is liable to be removed from the office, subject to certain conditions by the President. Certain important matters including winding up of the company must be reserved for the decision of the President. The President is empowered to issue directions and instructions, as may be considered necessary, in regard to the conduct of business and affairs of the company. However, power to create posts in the scales of pay not equivalent to or higher than the post at the Board level or to appoint, remove of suspend managers including the General Managers, Secretaries, officers, clerks, agents and all other categories of employees are the powers vested in the Board of Directors.

11. So far as the conduct of the business of the company and management of day-to-day affairs is concerned, it is the Board of Directors of Coal India Limited in whom vests the power. The President of India does not have power or control in the matter of creation of posts below the Board level and in the matters relating to appointment, removal and disciplinary control over the incumbents holding the posts below the Board level. The salaries, emoluments and perks of such employees are payable from the funds of the company. The Central Government does not remunerate or augment the funds for such payments. In the above set of facts, the question before the Apex Court was, whether the respondent was holding any office of profit under the Government of India within the meaning of Article 191(1)(a) of the Constitution? The High Court had held that the respondent was neither holding an office of profit under the Government of India within the meaning of Article 191(1)(a) nor was a managing agent, manager or secretary of any company or corporation in the capital of which the Government of India has not less than 25% shares. The High Court further held that the nomination paper of the respondent could not have been rejected on the ground of alleged disqualification as the same rejection of the nomination was illegal, the election of the appellant was thus void.

12. Dismissing the appeal from the above judgment, the Apex Court in the aforesaid case was pleased to hold as under:

'The phrase 'office of profit' is not defined in the Constitution. Posed with the perplexed problem--whether a person holds an office underthe Government, the first and foremost question to be asked is: Whether the Government has power to appoint and remove the person on and from the office? If the answer is in the negative, no further inquiry is called for, the basis determinative test having failed. If the answer be a positive one, further probe has to go on finding answers to questions framed in Shivamurthy case viz. (1) whether the Government makes the appointment; (2) whether the Government has the right to remove or dismiss the holder; (3) whether the Government pays the remuneration; (4) what are the functions of the holder? Does he perform them for the Government; and (5) does the Government exercise any control over the performance of those functions? In Guru Gobinda Basu case the Supreme Court pointed out several factors entering into the determination of the question which are (i) the appointing authority, (ii) the authority vested with power to terminate the appointment, (iii) the authority which determines the remuneration, (iv) the source from which the remuneration is paid, and (v) the authority vested with power to control the manner in which the duties of the office are discharged and to give directions in that behalf. But all these factors need not coexist. Mere absence of one of the factors may not negate the overall test. It has to be searched for as to how many of the factors pointed out in Guru Govinda Basu case do exist? The totality of the facts and circumstances reviewed in the light of the provisions of relevant Act, if any, would lead to an inference being drawn if the office held is under the Government. The inquisitive overview-eye would finally query : On account of holding of such office would the Government be in a position to so influence him as to interfere with his independence in functioning as a Member of Legislative Assembly and/or would his holding of the two offices--one under the Government and the other being a member of Legislative Assembly, involve a conflict of interests inter se? This is how the issue has to be approached and resolved ...........

In the present case the Government of India does not exercise any control on appointment, removal, service conditions and functioning of the respondent. The respondent does not hold an 'office' and there is 'profit' attaching with the office, but such office of profit is not 'under the Government of India'. He being a Clerk in Coal India Ltd. does not and cannot bring any influence or pressure on him in his independent functioning as a Member of Legislative Assembly. The finding that the respondent was neither a managing agent nor a manager nor a Secretary under Coal India Ltd. though the company has 100% share-holding of the Government, was not seriously disputed. Even otherwise, the respondent was merely a Clerk Grade I. Occasionally in the absence of his senior officer on account of leave or absence, he exercised some supervisory function over his subordinates, but this would not make him a manager of the Company. Therefore, the respondent was not holding an office of profit under the Government of India and therefore no disqualification attached to him under Article 19(1)(a) of the Constitution. The respondent did not incur a disqualification underSection 10 of RPA also. As the respondent's nomination was improperly rejected, the appellant's election was liable to be declared void without proof of the result of the election, insofar as it concerns the returned candidate, having been materially affected.'

13. The Apex Court while taking the aforesaid view, relied upon its earlier judgment in Guru Gobinda Basu v. Sankari Prasad Ghosal, : [1964]4SCR311 . In paragraphs 7 and 8, the Apex Court has observed as under :--

'7. In Guru Gobinda Basu v. Sankari Prasad Ghosal the Constitution Bench emphasised the distinction between the holder of an office of profit under the Government and the holder of a post or service under the Government and held that for holding an office of profit under the Government, one need not be in the service of Government and there need be no relationship of master and servant between them. Several factors entering into the determination of question are : (i) the appointing authority, (ii) the authority vested with power to terminate the appointment, (iii) the authority which determines the remuneration, (iv) the source from which the remuneration is paid and (v) the authority vested with power to control the manner in which the duties of the office are discharged and to give directions in that behalf. But all these factors need not coexist. Mere absence of one of the factors may not negate the overall test. The decisive test for determining whether a person holds any office of profit under the Government, the Constitution Bench holds, is the test of appointment; stress on other tests will depend on facts of each case. The source from which the remuneration is paid, is not by itself decisive or material.

8. The available case law was reviewed by this Court in Madhukar G.E. Pankakar v. Jaswant Chobbildas Rajan. The Court described certain aspects as elementary;

(i) for holding an office of profit under Government one need not be in the service of Government and there need be no relationship of master and servant; (ii) we have to look at the substance and not the form; and (iii) all the several factors stressed by this Court (in Guru Govinda case) as determinative of the holding of an 'office' under Government, need not be conjointly present. The critical circumstances, not the total factors, prove decisive. A practical view, not pedantic basket of tests, should act as guide.'

The Consideration:

13-A. The learned counsel for the respondent No. 3 tried to support impugned order but could not take submissions to the logical conclusion and in view of several legal hurdles. The survey of the aforesaid cases coupled with the other cases cited at the Bar, detailed reference of which is not necessary for deciding this matter, would make it clear that the question sought to be raised in this petition, is no longer res integra and the same stands resolved by catena of the decisions of this Court as well as Apex Court, some of them available at hand are as under :--

(1) Satrucharia Chandrashekhar Raju v. Vyricheria Pradeep Kumar Dev : AIR1992SC1959 . (2) Aklu Ram Mahto v. Rajendra Mahto : [1999]2SCR362 . (3) Vasudeo Genu Vartak v. The Returning Officer, 1968 Mh.L.J. 79. (4) Manohar Nathusao Samarth v. Marotrao and Ors., : [1979]3SCR1078 .

14. Once again turning to the facts of the present case on the canvas of the above well-settled legal scenario, it would be clear that the petitioner; who is an employee of the Western Coalfields Limited which is one of the subsidiaries of Coal India Limited could not be held to be disqualified to hold the post of Councillor of the respondent No. 2. When the Apex Court has held that the employee working with the North-Eastern Coalfields Limited cannot be said to have held office of profits within the meaning of Article 191(1)(a) of the Constitution of India, one fails to understand as to how the petitioner, a Pump Khalasi working with the Western Coalfields Limited, which is at par with North Eastern Coalfields Limited be held to be disqualified on the ground that he is holding the office of profit with the Government.

15. While dealing with the aforesaid case, the Apex Court held that the Government had no power to make appointment of the respondent therein; it had no power to remove or dismiss him. Similar is the position in the present case. Government has no power or authority to remove the petitioner nor his appointing authority is the Government. On the aforesaid backdrop of the law and facts the impugned order passed by the respondent No. 1 cannot be sustained on any count whatsoever. It is no doubt true that the petitioner holds the office of profit and there is profit attaching with his office, but the said office of profit is not under the Government. The impugned order, in the circumstances, cannot stand to the scrutiny of law being contrary to the law laid down by this Court as well as Apex Court. As such, the same is liable to be quashed and set aside.

16. In the result, impugned order is set aside. Petition is allowed and it is declared that the petitioner shall be entitled to hold the Office of Councillor of respondent No. 2 Zilla Parishad, Chandrapur in accordance with the provisions of the Act. So far as right of employer is concerned, we say nothing in that behalf.

Rule is made absolute in terms of this order with no order as to costs.