1. This is a petition under Arts. 226 and 227 of the Constitution of India in which prayer has been made that a writ in the nature of certiorari or any other suitable writ or direction be issued quashing the orders Annexures 'G' and 'H' passed by the Governor of Haryana, whereby the petitioner was removed from the office of the Managing Director of the Haryana State Small Industries and Export Corporation Ltd. (hereinafter called the Corporation), and also his nomination as director of the Corporation cancelled. Further prayer is that the petitioner be declared entitled to the salary of a Joint Director, Industries Department, from which post he was sent on deputation and he must be deemed to be holing the post of a Joint Director during his terms of foreign service and even after his recall from the Corporation till he is removed from that post in accordance with law. The petitioner also challenges the appointment of respondent 9 as Deputy Principal Secretary to the Chief Minister of Haryana. It is pleaded by him that even if the petitioner could be lawfully reverted from the Corporation to Secretariat post of Secretary to Minister, he should have been considered for appointment as Deputy Principal Secretary to which post the said respondent was appointed as an act of nepotism without considering the petitioner or any other person in the cadre of Secretariat Service and that such action on the part of the Government denying equality of opportunity to the petitioner in the matter of his promotion was violative of Art. 16 of the Constitution of India. A confidential report for the year 1967-68 covering a period of about five months given to the petitioner by respondent 8 as Chairman of the Corporation is also sought to be quashed on the ground of the alleged mala fides of the said respondent.
2. The petitioner joined Government service in the Secretariat somewhere in the year 1940 before partition of the country and earned various promotions from time to time. In the year 1959, he was appointed as Secretary to a Minister in the erstwhile State of Punjab. It is not denied that the petitioner had throughout a good record of service except for one confidential report given by respondent 8 in the year 1967-68 as Chairman of the Corporation when the petitioner was working as its Managing Director. At one time, the name of the petitioner was recommended for nomination to the Indian Administrative Service but the recommendation did not produce any result. By Punjab Government notification, dated 6th March, 1963, a copy whereof is appended as Annexure 'A' with the writ petition, the Governor of the erstwhile Punjab appointed the petitioner as Joint Director of Industries (Rural Industrialisation) with effect from 12th February, 1963. He was directed to take over the new assignment immediately and was to draw his salary in the senior scale of Indian Administrative Service plus a special pay of Rs. 100/- per month. Within a few months, the petitioner was sent on deputation, as a Managing Director of the Punjab Export Corporation Limited, on which post he was entitled to a deputation allowance of 20 per cent of his pay as Joint Director of Industries (Rural Industrialisation) and was also to continue to retain the benefit of specially of Rs. 100/- per month which he was drawing as Joint Director. The other usual conditions of foreign service on deputation were imposed on the petitioner with a direction that he shouldn't be given any additional facilities by the Corporation without the prior approval of the Government. There then came the re-organisation of the State of Punjab under Punjab Reorganisation Act, 1966, and it was then proposed to set up in the State of Haryana as well a corporation under the name and style of Haryana State Small Industries and Export Corporation Limited on the same pattern on which Punjab Corporation was brought into existence. The Corporation was to be got registered under the Indian Companies Act, 1956, and the petitioner was appointed as its first Managing Director by the State Government with a direction that he should take necessary steps in consultation with the Director of Industries to get the company incorporated. The terms of appointment were, however, not settled at that time. An extract from the Memorandum and Articles of Association (hereinafter called the Articles) for the said corporation as formed in Haryana has been filed as Annexure 'D' withthe writ petition. The authorised share capital of the Corporation was Rs. 50 lakhs divided into shares of Rs. 100/- each and all shares were held in the name of the Governor. The following officers were nominated by the State Government as the first Directors of the Corporation :-
Shri P. N. Bhalla, I. A. S. , Chairman
Secretary to Government, Haryana, Industries Department.
Shri P. N. Sahni, I. A. S. ,
Director of Industries, Haryana, and Additional Secretary to Government , Haryana
Shri L. C. Gupta, I. A. S. ,
Additional Secretary to Government, Haryana, Finance Department
Shri O. P. Sikand, Officer-on-Special Duty, Industries Department, Haryana
Shri L. R. MagoManaging Director
I am informed that one share each was allotted to the Director whereas all the remaining shares stood in the name of the Governor of Haryana. According to the Memorandum and Articles of Association of the Corporation, the Board of Directors is to be nominated by the Governor from time to time and shall consist of officers of the Haryana Government or any other non-official person or persons as may be nominated by the Governor. The Governor has been given the powers under the Articles to nominate one of the Directors as Chairman of the Board and determine the period of his office. The Governor has also the power to appoint any Director as the Managing Director of the company on such terms and remuneration as he may think fit and can also from time to time remove or dismiss him from office, and appoint another person in his place. The relevant Art. 84 of the Memorandum is in the following terms:-
'84. The Governor may from time to time appoint one of the Director to the office of the Managing Director of the Company for such terms and at remuneration (whether by way of salary or commission or participation in profits or otherwise or partly in one way and partly in other) as he may think fit, and may from time to time remove or dismiss him from office and appoint another in his place. Any such Director appointed to any such office shall, if he ceases to hold the office of Director from any cause, ipso facto and immediately cease to be a Managing Director. '
3. After Shri P. N. Bhalla, Shri R. I. N. Abuja, Secretary to Government, Haryana, Industries Department, respondent 8, was nominated as Chairman of the Corporation. He issued an order on 16th August, 1968 (Annexure 'G'), in the name of the Governor, in exercise of the powers vested in the latter under the above said Article, removing the petitioner from the office of the Managing Director with immediate effect. It is conceded before me by Mr. C. D. Dewan, learned counsel for the respondents, and the same is also apparent from the executive files, that the file of the case relating to the reversion of the petitioner from the Corporation was never by (sic) the Governor before the impugned order was passed and the order was really of the Chief Minister though authenticated in the name of the Governor under Articles 154 of the Constitution of India. In the same order, it was stated that the petitioner would revert to his parent department meaning thereby Secretariat Establishment. A wish was expressed in this order by the Chief Minister respondent 2 that consequent upon the petitioner's reversion, the interests of the existing incumbents in the Secretariat be not ignored. Simultaneously on the same day, another order Annexure 'H' was passed under Clause (k), sub-article 1 of Art. 68 of the Articles of Association of the Corporation whereby the nomination of the petitioner as a Director of Corporation was cancelled with immediate effect. The petitioner then submitted representations by which he protested against his recall from the Corporation and stated that all that was being done at the instance of respondent 8 who was actuated by mala fides. It was protested that the petitioner being the Managing Director of the Company could be removed only by the Board of Directors and not by the State Government. The petitioner objected to the authority of respondent 8, Secretary of Industries Department, to give an adverse confidential report to the petitioner for a period about five months from 26th October, 1967 to 31st March, 1968, which was believed by the petitioner to be responsible for his reversion. It may be mentioned that the report was actually given on 1st May, 1968, and conveyed to the petitioner on 5th September, 1968, after his reversion order had been passed. The petitioner made representations against the adverse remarks a conveyed to him asking for expunction of the same from his record of service but they were rejected on March 17, 1969. He asked for reasons in support of the adverse remarks made by respondent 8 in order to expose the hollowness of the report. It is alleged that respondent 8 in giving the adverse confidential report was actuated by his feelings of animosity and malice against the petitioner. There were some incidents and circumstances pointed out in the representation which, according to the petitioner, indicated the malice of this respondent. It was averred that the petitioner had unblemished record of 28 years of service in which he was throughout receiving excellent reports from his superior officers and nobody ever doubted his integrity or efficiency but it was this respondent alone who, for extraneous reasons, deliberately gave a false adverse report in order to wreak his vengeance against the petitioner for some wrong, believed by the respondent, to have been done by the petitioner when the latter was the Secretary to late Sardar Pratap Singh Kairon, the then Chief Minister. The last representation on this subject is Annexure 'J'. Allegations of personal malice, mala fides and ulterior motives were made against respondent 8 and they will be stated in detail hereafter.
4. In the wake of all this, another development took place against which also the petitioner has a grievance to make. By an order Annexure R-4/4, dated 17th July, 1968, of the Governor of Haryana, one post of Deputy Principal Secretary to the Chief Minster in the Haryana Civil Secretariat Service in the grade of Rs. 1250-50-1500 1250-50-1500 on a temporary basis was created up to 28th February, 1969, with retrospective effect from 12th June, 1968, by holding in abeyance the post of Secretary to the Chief Minster in the grade of Rupees 800-40-1000. Respondent 9 who was already working as Secretary to the Chief Minister and was in the cadre of the service of the petitioner in the grade of Rs. 800-40-1000, though junior to him, was promoted and appointed in the newly created position 18th July, 1968, as Deputy Principal Secretary in an officiating capacity on a purely temporary basis, though factually he had already been promoted on 12th June, 1968, and this is what seems to have necessiated the creation of the post on 17th July, 1968, with retrospective effect. The promotion was to be provisional till the allocation of services of the erstwhile State of Punjab to the successor units had been finalised. This temporary post was afterwards converted into a permanent one by an order, Annexure R-4/6 of the Governor passed on 18th November, 1968. Respondent 9 who was holding the post was confirmed with effect from 27th November, 1968, and made permanent.
5. The petitioner filed another representation dated 24th August, 1968, before the Government against the appointment of respondent 9 as Deputy Principal Secretary in a higher grade. It was claimed by the petitioner that he was senior to this respondent and that he should have been considered for the post before any appointment was made when he was not being appointed as Joint Director on reversion from the Corporation to which he was entitled in the first instance. Before the appointment of respondent 9 was made to the post of Deputy Principal Secretary, the case was referred to the Haryana Public Service Commission and it was mentioned in the reference that the petitioner could not be considered because he was in service with the Corporation and enjoyment of higher scale of pay. A reference was again made to the Commission on 27th September, 1968, as stated by respondent 8 in his affidavit. The reason for not considering the petitioner, as given in this communication, was that there were some specific cases against the petitioner pending with the department of Vigilance and that the Deputy Principal Secretary to the Chief Minister must be of an unimpeachable integrity and calibre. It was mentioned that the Government would consider the claim of the petitioner forhitherto grade equivalent to that of the post of Deputy Principal Secretary only after the findings of the department of Vigilance had been received and final decision taken thereon. The petitioner was attached as Secretary to one of the Ministers soon after his reversion from the Corporation. It is in these circumstances that the present writ petition has been filed by the petitioner.
6. Affidavits in reply to the various averments of the petitioner as made in the writ petition and the two replications have been filed by the Chief Secretary, Shri R. I. N. Ahuja, Secretary Industries, respondent 8 and the Chief Minister of Haryana, respondent. The sum and substance of the case of the respondents is that the initial appointment of the petitioner as Joint Director was a case of nepotism and favouritism by late S. Partap Singh kairon and the high powered Establishment Board set up by the then State Government after the fall of the said Chief Minister to examine such cases expressed the view that the appointment of the petitioner in the senior scale of Indian Administrative Service was an act of favouritism inasmuch as he had neither the qualifications nor the experience required for the post of Joint Director in the Industries Department or even for his post as Managing Director where he was to get deputation allowance of 20 per cent in addition to his pay in the senior scale of I. A. S. and a special pay of Rs. 100/- per mensem. It is denied that the petitioner was appointed on regular basis as Joint Director or that he was appointed even to the temporary post in substantive capacity. According to the pleadings of the respondents, the petitioner all along since 1959, when he was appointed as Secretary to a Minister and subsequently confirmed to that post, had always been shown in the Graduation List as one of the permanent Secretaries to the Ministers and that he had no right to continue to hold the post of Managing Director, nor could he legally lay any claim to the post of a Joint Director. The applicability of Art. 311 of the Constitution of India or that of any rule of natural justice is denied it being submitted that the petitioner could be retained as Managing Director of the Corporation or as Director only so long as his retention was considered desirable by the Government. The mere fact that the petitioner had held the post of Joint Director Industries for about five months in the erstwhile State of Punjab before his appointment as Managing Director of the Punjab Export Corporation could not give any legal right to him to hold that post after his reversion from the post of Managing Director of the Corporation in Haryana.
The claim of the petitioner that his salary as Joint Director was protected under the Punjab Reorganisation Act, 1966, is denied, the assertion being that the directive of the Central Government as contained in the Ministry of Home Affairs letter No. 22/48/67-SR(S) of February, 1968, is not applicable to the case of the petitioner which could not be equated with that of Select List officers to whom the protection has been extended. The further claim of the petitioner to be appointed as Deputy Principal Secretary to the Chief Minister on his reversion from the post of Managing Director of the Corporation is denied and the averment of the respondents is that the petitioner had only a right to be absorbed in his parent department, namely, the Secretariat Establishment, where he held the permanent post of Secretary to Minister on substantive basis and that had been done. It has not been admitted that the post of Deputy Principal Secretary was created only for respondent 9 and it is asserted that according to the well-established practice followed by the State Government in the matter of considering cases for promotion, a panel of names of three senior-most persons in the service was sent to the Public Service Commission and it was on their recommendation that the appointment of respondent 9 to the post of Deputy Principal Secretary was made. The stand of the State Government is that the question of grant of higher grade of pay to the petitioner has not been decided and was merely kept pending till the Vigilance Department gave its findings and a final decision on the report of this department was taken by the Government.
7. Mala fides as alleged against Shri R. I. N. Ahuja respondent 8, cover a wide range and it is stated by the petitioner that the respondent even used abusive language to him in a meeting of the Corporation held on 5th December, 1967. These allegations are denied by the respondent and other respondents could not have any personal knowledge in this regard. The Chief Secretary in his affidavit only admitted this much that the petitioner had met him at one or two occasions about 6th December 1967 and stated that the 'treatment he was receiving from Shri Ahuja was lacking in courtesy and consideration and was open to objection'. The petitioner averred in the writ petition that respondent 8 spoke of the petitioner in a very derogatory manner and even went to the extent of calling he petitioner a dunce. It is not disputed that this meeting was attended by Mr. P. N. Sahni, the then Director of Industries, Shri O. P. Sikan and the petitioner. Shri Sahni has also filed an affidavit in this case at the instance of the respondents. The conduct of Mr. Ahuja has been criticised by the petitioner who alleges that the said respondent had been deliberately trying to malign him and spoil his reputation so much so that he went to the extent of disowning the minutes of the Corporation recorded by the petitioner and approved by the respondent. The petitioner in this connection refers to the meetings of the Board of Directors held on 5th December, 1967, 22nd December, 1967, 4th May, 1968 and 28th August, 1968, copies of which proceedings have been filed with the writ petition as Annexure 'E'. The petitioner had for some time, after the re-organisation been working as Managing Director of both the Punjab Corporation and the Haryana Corporation. The allegation is that in December, 1967, respondent 8 passed an order without the concurrence of the Governor during the President's rule directing the petitioner to resign from the Haryana Corporation on the plea that by continuing as Managing Director with the Punjab Corporation he would be able to better look after the interests of Haryana and that it was at the intervention of the Chief Secretary that these orders were subsequently withdrawn. There is a note dated 8th August, 1968, in which respondent 8 as Chairman of the Corporation criticised certain conduct of the petitioner it being suggested that the latter had probably some ulterior motive in bringing in a party to act as middle-man for a particular deal. It appears that the petitioner persisted in some proposal and the respondent suspected motives of the petitioner.
8. There was an international industrial fair held at Prague in August, 1968, and respondent 8 organised participation of the Corporation in the said fair. Several industrialists send their goods to the fair and a question arose if any officer and who should go to Prague to personally supervise the interests of Haryana Industries. The petitioner alleges that Shri Ahuja requested the Government to send him but the Board of Directors, against his wishes, authorised Mr. Mathur, Foreign Sales Officer of the Corporation , to got to the fair. Shri Ahuja is said to have got annoyed and in spite of the Board's resolution did not allow Mr. Mathur to go. A similar fair was to be held in Budapest and the Board of Directors of the Corporation decided on 4th May, 1968, to send the petitioner who was to visit not only Budapest but also Middle Eastern Countries in order to canvass agencies and get orders booked. The allegation of th petitioner is that Shri Ahuja was annoyed over it. He, it is stated, confirmed the proceedings and signed the same on 21st May, 1967, but when the application of Shri Mathur for being permitted to go to Prague came up before him on 29th May, 1968, he wrote a note that the proceedings of the meeting in which it was resolved to send the petitioner and Shri Mathur abroad had not been correctly recorded since it was the Chairman who had in an earlier meeting been authorised to attend both the fairs. It may be mentioned that Budapest fair was held earlier in point of time and the petitioner attended the same. the assertion of the petitioner is that on his return from Budapest he put up a note for sending to Prague a representative of the Corporation which obviously meant Mr. Mathur. The respondent, however, observed in writing that he was not sure of the decision and that there had always been discord about the decisions arrived at the Board's meetings and their recording by the Managing Director.
9. Regarding the adverse confidential report for the period 1967-68 made by respondent 8 as Chairman of the Corporation, which covered about five months from 26th October , 1967 to 31st March, 1968, the case of the petitioner is that it was this report which brought about his reversion from the Corporation and stook in the way of his further promotion as Deputy Principal Secretary. It is pleaded that respondent 8 had no authority under law to make any confidential report about the work of the petitioner as Managing Director of the Corporation and that it was the Board alone which could do so. It is also pleaded that the adverse report was deliberately and mala fide given because of feelings of personal animosity that were being nurtured by this respondent. The alleged personal ill-will of the respondent is believed by the petitioner to be founded on the belief of the former that the petitioner as Secretary to the then Chief Minister late S. Pratap Singh Kairon in the erstwhile State of Punjab had a hand in his suppression for posting as Commissioner in the year 1962-63 and other punishments given to him from time to time during that regime. In support of his plea of mala fide against respondent 8, the petitioner refers to certain observations made by the respondent on his (petitioner's) tour programme. They are filed as Annexure QQ. The petitioner is stated to have gone to Delhi, along with Shri P. N. Sahni, a Member of the Board, and Director Industries, without the prior approval of the Chairman to meet Shri H. P. Nanda of Escorts Ltd. , in order to settle a dispute with respect to execution of some orders placed with the Company of Mr. Nanda. Shri Ahuja was not happy over it. In his explanation to respondent 8, the petitioner submitted that neither under the Companies Act nor under the Articles, nor under any standing orders of the Board of Directors, he was required to obtain prior approval of the Chairman before undertaking any journey. In fact, he found himself not bound by any obligation to get the tour programme approved by the Chairman for a journey which he considered to be in the interest of the work of the Corporation. In the T. A. bill prepared for this journey, an excess amount of Rs. 7/- was claimed but the office raised no objection. Before the amount was actually drawn the mistake had, however, been rectified. Shri Ahuja still referred the matter of excess claim of T. A to the Vigilance Department which refused to hold any inquiry saying that Vigilance inquiries are not made on flimsy grounds and that there was no case for inquiry.
10. Respondent 8 in his affidavit states that it was the Director of Industries, Shri. P. N. Sahni, who was of the view that in the larger interests of Haryana Government, the petitioner should for some time continue as Managing Director of the Punjab Export Corporation as well, but later on a note being put up by the Deputy Secretary Industries, he directed that to safeguard the financial interests of Haryana State the petitioner should continue as Managing Director of the Punjab Export Corporation and resign his post in Haryana. The then Chairman of the Punjab Export Corporation was, however, insisting that the petitioner be removed from that Corporation forthwith and in that view of the matter, after discussion with the Chief Secretary, it was decided somewhere in December 1967, that the petitioner be asked to resign from the Punjab Corporation. The allegations attributing motives to respondent 8 are denied by him and it is asserted that the decision to ask the petitioner to resign from the Haryana Corporation though he was allocated to the said State was taken in the larger interests of the State in consultation with the Director of Industries.
The allegation that the respondent did not want the petitioner to work as Managing Director of the Haryana Corporation as the former was out to harm his interests is denied. The respondent pleaded that he was entitled to take a decision during the President's rule and no consultation of the Governor was necessary. The other personal allegations against this respondent are also denied and it is asserted by the respondent that he never believed that the petitioner figured or was in any way responsible for his suppression for posting as Commissioner in 1962-63. The averment of the petitioner that the respondent had expressed his feelings of annoyance to the Director or to Shri P. N. Sahni was denied. It was also denied that he ever spoke in a derogatory manner about the petitioner or called him a dunce in the Board meeting of the Corporation in December, 1967. It is admitted by the respondent that he stopped implementation of the proposal advanced by the petitioner which benefited a middle-man and suggested the share of profit of the corporation in regard to a particular scheme to be shared with a middle-man. The respondent, however, maintained that to the best of his recollection the petitioner was not faithful in recording minutes about some items of business as transacted in the meetings of the Board.
As regards participation in the Prague Fair held in August, 1968, it is stated that the Board authorised the Chairman, respondent 8, to represent the Corporation but the Government, however, for reasons of exigencies of service, mid-term elections and formation of new Government, did not consider it advisable for the respondent who was Secretary of the Department to go abroad at that time. The respondent admits that it is true that he did not allow the ex-Foreign Sales Officer, Shri Mathur, to go to abroad as a representative of the Corporation, but it is said to have been done because some cases involving moral turpitude had come to the notice of the Chairman in his capacity as Secretary to the Government. After prima facie inquiry, the allegations against this officer were found to have some substance. Two cases for offences under the Indian Penal Code were at the instance of respondent 8 registered against Shri Mathur who was arrested by the police and later released on bail. Shri Mathur had submitted his departmental explanation Exhibit R. 3/3 in which he stated that he made some local purchase under the authority of the Managing Director and as a matter of fact, his defence was that he actually complied with the orders of the petitioner. The allegation of he petitioner that the Directors of the Corporation opposed going abroad of the Chairman in denied, it being asserted that in the presence of a unanimous resolution of the Board approving Chairman's tour abroad no question of any opposition could arise and that even if Shri P. N. Sahni later expressed different views, it could not change complexion of the matter. The respondent admits that on the application of Shri Mathur he did record observations as stated by the petitioner suggesting that the Board had not taken the decision about sending Shri Mathur abroad.
11. The petitioner had placed on record and so have the respondents, several voluminous documents and copies of the office notes but the relevant facts as are necessary for the decision of the writ petition have been stated above.
12. The following contentions have been raised by Mr. Kuldip Singh, learned counsel for the petitioner :-
(1) That the orders Annexure 'G' and 'H' have been passed not by the Governor acting in his individual capacity in terms of the Memorandum and Articles of Association of the Corporation, but by the State Government in exercise of its executive power. The submission is that the Corporation once have been brought into being and registered as a company under the Indian Companies Act, 1956, its affairs are regulated and controlled by its Articles only and the provisions of the Indian Companies Act and that the power to remove or dismiss a Managing Director under Art. 84 vests only in the Governor and it is he alone who can, in his individual judgment, exercise that power. The removal of the petitioner by respondent a Secretary to the State Government who, according to the rules of business, purports to act on behalf of the Government, is, therefore, illegal and without jurisdiction.
(2) That the removal of the petitioner was by way of punishment because of some allegations against him and the impugned action was, violative of Art. 311 of the Constitution of India inasmuch as he was given no opportunity whatsoever to defend himself as contemplated in the said Constitutional Guarantee.
(3) That the petitioner on reversion from the Corporation was entitled to be posted back as Joint Director from which post he was sent on deputation on foreign service. The submission further is that in the absence of there being in existence any post of a Joint Director, the petitioner was entitled to a post carrying the same grade and status. It is argued that by virtue of Sections 82 and 83 of the Punjab Reorganisation Act, 1966 (Act No. 31 of 1966), the service of the petitioner, on his allocation to the State of Haryana, was subject to the same conditions as were applicable before the reorganisation and that the various protections as given by the Central Government in exercise of its Statutory powers under the said Act as per instructions contained in the directive, Annexure P, are available to the petitioner.
(4) That in view of Rules 3 and 10 of Punjab Industries Service (State Service Class I) Rules, 1966, the petitioner must be deemed to have been confirmed as a Joint Director.
(5) That the appointment of respondent 9 as Deputy Principal Secretary must be quashed as the post was created only for this respondent and the petitioner nor any one else in the service was considered for promotion to the newly created post which action of the State Government being purely one of nepotism, offends against Art. 16 of the Constitution of India. It is urged that it makes no difference in this connection whether the newly created post is a cadre post or an ex-cadre post.
(6) That the confidential report for the period 26th October, 1967, to 31st March, 1968, which forms the basis of petitioner's suppression in service must be struck down as it was made mala fide for extraneous considerations by respondent 9 who was antagonistic to the petitioner.
(7) That the petitioner was reverted from the Corporation, not posted as Joint Director to which post he was entitled nor considered for promotion to the post of Deputy Principal Secretary only because of the mala fides of Shri R. L. N. Ahuja, who was then the Secretary, Industries Department, and was responsible for different orders prejudicially affecting the career and chances of promotion of the petitioner. It is submitted that the exercise of power having been mala fide, all decisions based thereon cannot be sustained.
13. I have given my careful thought to the various contentions raised by the parties and they are dealt with hereunder.
14. The main grievance of the petitioner is that he could not be reverted from the post of Managing Director by an execute order of the State Government and that it was the Governor alone who in his individual capacity could pass an order as envisaged in Art. 84 of the Articles of the Corporation. No copy of the Memorandum and Articles of Association was filed by any of the parties but the same was placed on record, during the course of arguments, with the consent of their counsel and it is marked as Annexure 'T'. The Corporation is a company registered under the Indian Companies Act, 195, with liability of the members being limited. The authorised capital of the Corporation is Rs. 50,00000 divided in 50,000 shares of Rs. 100/- each. Out of the allotted shares all are held by the Governor of Haryana who is shown as principal subscriber and his address is given in the Articles as 'Secretary to Government, Haryana, Industries Department, for and on behalf of the Governor of Haryana'. One share each has been subscribed by the other six members of the Board all of whom are Government Officers. It is a common ground before me that none of these officers paid the price of the same from his own pocket and amount was paid by the Government. This Corporation has been brought into being to enable the State Government to do business both in and outside Indian in the exercise of its executive power and it is really a State-Owned undertaking formed to carryout a commercial enterprise and having several objects as stated in the Articles. Shares cannot be offered to the public unless so order by the Governor. those shares had to be subscribed, as there must be some promotes who agree to form themselves into a Company and the device of making certain officers as subscribers seems to have been adopted by the Government in order to comply with the requirements of the Company Law. The Board of Directors is to be nominated by the Governor from time to time and even a non-official not holding any share is eligible to be nominated as a Director of the Corporation. For the management of the Corporation, the Governor is authorised to appoint a Managing Director on such terms and remuneration as he may think fit and he can also remove or dismiss him from his office and appoint another in his place. The whole control is by virtue of the Articles given to the Governor Mr. Kuldip Singh, learned counsel for the petitioner, has strenuously urged that the use of the expression 'Governor' in the Articles is not intended to equate him with the Government so as to say that it is a case where the executive action of the Government is sought to be taken or expressed in the name of the Governor within the meaning of Article 166 of the Constitution. the argument indeed is that the State and a Corporation formed under a statute, though owned and controlled by the State, are two distinct legal entities and a corporation cannot be treated as a department or an agent of the State and that it will be governed only by its Articles of Association and the Act incorporating the same. In support of his contention that a State-owned Corporation and the State are two separate legal entities, the learned counsel has invited my attention to a number of authorities, such as, State Trading Corporation of India, Ltd. v. Commercial Tax Officer, AIR 1963 SC 1811, Andhra Pradesh State Road Transport Corporation v. Income Tax Officer, B 1 B-Ward. Hyderabad, AIR 1964 SC 1486, Tata Engineering and Locomotive Co. Ltd. v. State of Bihar, AIR 1865 SC 40, D. R. Gurushanthappa v. Abdul Khuddus Anwar, AIR 1969 SC 744 and Prafulla Kumar Sen v. Calcutta State Transport Corporation, AIR 1963 Cal 116, all of which it is not necessary to discuss. The learned counsel however lays stress on a Single Bench judgment of the Calcutta High Court reported as Ranjit Kumar Chatterjee v. Union of India, AIR 1969 Cal 85. A distinction is brought out by Basu, J. between the executive functions of the President of India under the Constitution and some other functions not attributable to any provisions in the Constitution but exercised in his personal capacity, for example, as under Articles of Association of a Company. The question that required decision in that case was whether the post of a Chief Superintendent held by Ranjit Kumar in Hindustan Steel Limited which is exclusively a Government company could be said to be a civil post under the Union of India within in the meaning of Art. 311 of the Constitution so as to attract Clause (2) thereof. Following Supreme Court judgments in Valjibhai v. State of Bombay, AIR 1963 SC 1890 and Andhra Pradesh State Road Transport Corporation, AIR 1964 SC 1486 (supra), it was observed by the learned Judge that it could not be held that when a statutory Corporation exercises statutory power it is identified with the Government or a Government department no matter entirety of the capital is subscribed by the Government or the company is controlled and run almost as a Government department. The employee of the Corporation which has a separate legal entity was held not to be an employee of the Government so as to claim protection of Art. 311 of the Constitution.
The ratio of this case except for supporting the view that the Corporation and the State are two separate legal entities goes against the petitioner so far as application of Art. 311 of the Constitution is concerned. It is now a well accepted proposition which brooks no controversy that a Corporation and a State are beyond doubt two distinct entities no matter that the Corporation is owned or controlled by the State and that conduct of business in the Corporation will be regulated according to its Articles and the statute creating the same and that an authority not envisaged in the Articles or the statute can exercise no powers in regard to affairs of the Corporation. The fallacy of the argument of the learned counsel, however, lies in this that he seems to think that the Governor who is virtually the only shareholder of the Corporation in which the funds of the State are invested has to act in his individual capacity and that since his name appears in the Articles as such he has ceased to be the repository of the executive power of the State. The functions performed by him in the matter of trade or business intended to be arrayed on by the State Government by creating a Corporation are in fact the executive functions of the State in the exercise whereof he has to be aided and advised by his counsel of Ministers and it cannot be said to be a function which is required under the Constitution to be discharged in his discretion. In the circumstances in which the instant corporation was created, the funds of the State invested and shares allotted to different officers in order to satisfy the conditions necessary to promote a company with the overriding power given to the Governor to nominate the Directors or a Managing Director and to remove them from time to time, no room for doubt is left that the Governor is to be deemed to be exercising only the executive power of the State when he is transaction business as a shareholder of the Company. In other words, it is the State that is exercising its executive functions through and in the name of the Governor. As a matter of fact, the petitioner himself was appointed as a Managing Director by an order of the State Government authenticated in the name of the Governor and not that the latter in his own discretion appointed him as such. The exercise of powers by the State Government in the name of the Governor for the conduct of the business of the Corporation is not in any way repugnant to or in conflict with the Articles or any provision of the Indian Companies Act under which the Corporation was formed. It depends on the nature of each Corporation and its Articles as to whether a State Government can in a particular case exercise an authority or not. A Corporation could be created where the Governor does not figure, but when the control has been specifically given to him as in the present case, the obvious intention, in my opinion, in creating the Corporation was that it was the State Government alone which was to exercise that control. Any other interpretation, will lead to preposterous consequences. In a democratic set up where the Constitution visualises a welfare State and the elected representatives of the people are to exercise executive power though authenticated in the name of the Governor, many schemes relating to trade or business may have to be pursued in the interests of the society, and it is the elected representatives alone who are in a position to decide whether to carry on any trade or business and through whom or to what extent to make, modify or alter any such schemes. An officer made a Director in the Corporation and at one time though to be suitable for the job, might turn out to be a misfit. It could not possibly be intended that the State Government having once promoted a company with the name of the Governor appearing therein and in whose name alone all executive power under our Constitution is to be exercised, has to walk out and leave control of its entire funds and development of trade or business to the Governor acting in his individual judgment unguided and unaided by the Council of Ministers. I am, thus of the considered view that the State Government was competent to exercise powers under the Articles and remove the petitioner from his post as Managing Director and also to cancel his nomination as a Director of the Corporation. In this view of the matter, validity of the impugned orders, Annexures 'G' and 'H' cannot be challenged.
15. Apart from the question whether the State Government could validly exercise powers exercisable by the Governor under the Memorandum and Articles of Association of the Corporation, there is yet another approach to the matter. The petitioner was on deputation to foreign service with the Corporation. He could at any time be recalled by the State Government and the impugned orders Annexures 'G' and 'H' of the so-called reversion from the post of a Managing Director and simultaneous cancellation of his nomination as Director to all intents and purposes amounted only to a recall of the petitioner from foreign service back to his parent department. It has been held by a Full Bench of this Court in Sohan Singh v. State of Punjab, 1970 Ser LR 291 = (AIR 1970 Punj 322) that a Government Servant sent on deputation under Rule 10. 2 of the Punjab Civil Service Rules, Vol. I, Part I, dies not get an indefeasible right to insist that he could not be recalled and that the Government retains full and effective control over its employee. The mere fact that the officer on deputation was getting more emoluments and enjoying higher status could not stand in the way of the Government exercising its control over its employee and recalling him to the parent department even though the period of deputation had been specified and recall causes loss in emoluments to the officer. The case of the petitioner is fully conversed by the Full Bench decision and he can have no legitimate grievance against his recall to the parent department. It makes no difference if the State Government in exercising the power duly vested in it by law quotes a wrong provision inasmuch as it purports to act under the Articles though it could have exercised the same power without reference to them. What has to be seen is whether the State Government had the jurisdiction to withdraw the petitioner from foreign service and this jurisdiction is unchallengeable.
16. Recall of the petitioner is also challenged on the ground of mala fides of respondent 8 who is alleged to have misled the Chief Minister. The Chief Minister has filed an affidavit in reply stating on solemn affirmation that a note dated 3rd July, 1968, was put up to him by Shri R. I. N. Ahuja, who was then Secretary to Government , Industries Department. This note related to the desirability of retaining the petitioner as Managing Director of the Corporation and the suggestion was that it was not in the interest of the latter to continue the petitioner as its Managing Director. It is stated by the Chief Minister that he examined the note and all connected files carefully and it was only when he was satisfied that it was not in the interest of the Corporation to retain the petitioner any more as its Managing Director that he made an order on 10th August, 1968, directing that the petitioner be reverted to his parent department, that is, Haryana Civil Secretariat. The Chief Minister has affirmed that he satisfied himself on the merits of the case and was not led away by his Secretary. I have looked into the note on the executive file. It is true that Shri Ahuja pointed out in his note the circumstances in which the petitioner was appointed as Joint Director Industries and also mentioned that his appointment had been criticised by the Establishment Board set up to examine the cases of favouritism of late S. Partap Singh Kairon. Reference was made in the note to the fact that Shri Ahuja had formed an impression that the petitioner was concerned in some shabby deals. Be that as it may, the order reverting the petitioner from the Corporation was passed by the Chief Minister and the petitioner at no stage alleged mala fides against him. Mala fides, if any, of respondent 8 could not influence the Chief Minister who passed the order as he thought fit and this Court cannot sit in appeal over the exercise of discretion by the State Government if it otherwise had jurisdiction to pass such an order.
17. The next question that arises for consideration is as to whether the petitioner on his recall from foreign service was entitled to be posted as Joint Director Industries which post he initially held in the year 1963 before being sent on deputation to foreign service. The history of service of the petitioner has already been stated above and a few facts are necessary to be recapitulated in order to resolve this question. the petitioner was in the Secretariat Service as Secretary to a Minister and from there selected as Joint Director of Industries (Rural Industrialisation) on 11th February, 1963. He was given the salary in the senior scale of I. A. S. with a special pay of Rs. 100/- p. m. It is stated by him in the writ petition that his promotion and appointment of Joint Director was on regular basis in order to absorb him permanently in the Industries Department and that he was sent on deputation to the Punjab Export Corporation on foreign service within six months of his joining as Joint Director. According to his averments, he was holding the substantive post of Joint Director before proceeding on foreign service. Respondent 8 who was at the relevant time Secretary to Government, Industries Department, filed an affidavit in reply both on his behalf and on behalf of respondents 3 and 6. In reply to para 9, he admitted most of the facts and stated that 'the post of Joint Director (Rural Industrialisation) was created on a permanent basis' and that the petitioner, at no stage prior to the re-organisation in the year 1966, was appointed to the said post substantively. The affidavit was supported to have been sworn as true on the basis of knowledge that the respondent derived from the necessary records. The petitioner was the first incumbent of a newly sanctioned post of Joint Director (Rural Industrialisation) in the senior scale of I. A. S. and he was appointed to that post on 12th February, 1963, as per Gazette notification Annexure 'A'. Under the directions of the Central Government, projects for small industries in rural areas were taken in hand by the State Government and different posts were being created for that purpose. As a matter of fact, letter No. 33-2IBI-63/282, dated 7th January, 1963, addressed by Secretary, Industries Department, to the Director of Industries, Punjab, filed by the respondents as Annexure R. 3/9, shows that after the matter have been processed through the Finance Department, sanction was actually granted on 7th January, 1963. The document, which is in the nature of office noting, produced by the respondents as Annexure R-3/4, shows that it was a temporary post initially sanctioned upto 29th February, 1964, as per order Annexure R-3/17 filed by the State Government, respondent. Since the post was temporary till 12th October, 1966, the appointment of the petitioner as Joint Director was bound to be considered in an officiating capacity. Respondent 8 in his first affidavit stated that the post created was permanent though in a supplementary affidavit dated 13th October, 1969, he took a different stand. In the second affidavit it was stated by this respondent that on examination of the relevant record then brought to his notice, it transpired that his previous statement in reply to the writ petition wherein he had affirmed that the post was permanent was not correct. The explanation given for the contradictory statement as that some of the records were not available to him when he filed the first affidavit. According to this later affidavit, the post of Joint Director was of a temporary character. A copy of the particulars of service of the petitioner as taken from the office of the Accountant General, Punjab, Simla, has been filed as Annexure R-3/16 and this too shows that the appointment of the petitioner was an officiating one. In my opinion, this was the only correct position and the petitioner must be deemed to be holding the post of an officiating Joint Director when he was sent on deputation to foreign service. The post being temporary, the petitioner could not hold the same on permanent basis. The file relating to creation of the post and appointment of the petitioner was not traceable and in the affidavit filed on behalf of the State of Haryana, it was said that the same was with the Punjab Government and had not been received at the time of re-organisation in the year 1966. It was with great difficulty and under two orders passed by this Court that the Punjab Government produced the file through its Advocate-General. I have looked into it and there is nothing to indicate that the Administrative Department wanted the post only for a short period or that the petitioner was not intended to be appointed substantively against that post. The personal filed of the petitioner shows that late S. Partap Singh Kairon, the then Chief Minister of Punjab, was keen to give promotion to the petitioner and in the confidential remarks recorded on 17th March, 1962, it was stated by him that the petitioner had been recommended to the post of I. A. S. but could not be absorbed there for want of field experience etc. but the Chief Minister felt like giving him an equivalent post which according to him, the petitioner deserved. Whatever might be the opinion of the Establishment Board or of any of the respondents about the desirability of initial appointment of the petitioner as Joint Director, or the reasons that led to his appointment, the fact remains that he was appointed as such and we have to recognise his appointment. When he proceeded on deputation to the Punjab Export Corporation which was the company registered under the Indian Companies Act, the Director of Industries made a recommendation, as can be seen from Annexure R-3/14, that he lien of the petitioner as Joint Director be retained. The terms and conditions of his deputation job as Managing Director of the Corporation included amongst other things that he was to be allowed to continue to draw the salary of a Joint Director with 20 per cent of the deputation pay of such office. As regards lien, the view taken by the Administrative Department was that the lien could be retained only on a substantive post but in view of the recommendation of the Director of Industries, the petitioner might be allowed to have formal claim for reappointment as Joint Director (Rural Industrialisation) on his return from deputation if by then the aforesaid post continued to exist. The appointment of the petitioner as Managing Director of the Corporation required the approval of the Central Government under Section 269 of the Indian Companies Act, 1956, and while granting the same it was again specifically stated that the petitioner would be entitled to deputation allowance of 20 per cent of his pay as Joint Director (Rural Industrialisation) and that benefit of special pay of Rs. 100/- per month which the petitioner was drawing as Joint Director would be allowed. In the background of these facts, there is no manner of doubt that the petitioner went on deputation to foreign service from the officiating post of a Joint Director, and continued to hold that status and draw his increments in the post of Joint Director throughout his tenure of foreign service. No separate statutory rules existed relating to Class I Service in the Industries Department though Punjab Industrial Service was one of the State Services in existence as is to be seen from the list of State Services given in the Schedule to Rule 14. 5 of the Punjab Civil Services Rules, Vol. I, Part. I. it was only on 31st October, 1966, on the eve of reorganisation of the erstwhile State of Punjab when the State was under the President's rule that Punjab Industrice Service (State Service) Class I Rules were promulgated by the President of India under Art. 309 of the Constitution. They are published in Punjab Gazette of December 2, 1966. Three posts of Joint Director-cum- Additional Controller of Stores are shown to form part of the Service and this beyond any doubt, included the post of Joint Director (Rural Industrialisation), which was made permanent on 12th October, 1966. The cadre strength of Industries Department, as it stood on 1st March, 1959, included two posts of Joint Directors, one permanent and one temporary, as is apparent from the office memorandum dated 30th July, 1966, issued by the Secretary to Government Punjab, Industries Department, in view of the ex post facto sanction granted by the President of India on the recommendation of the Cadre Committee. A cyclostyled copy of this circular was produced in the course of arguments and placed on record as Annexure II. The subsequent post of Joint Director created on 12th February, 1963, to which post the petitioner was appointed has, therefore, to be treated a part of the cadre by virtue of Note 3 to Rule 4. 21 of the Punjab Civil Services Rules, Vol. I, Part I, Rule 4. 21 and Note 3 may be reproduced hereunder for facility of reference:-
'4. 21. When a temporary post is created which will probably be filled by a person who is already a Government servant, it pay shall be fixed by the competent authority with due regard to -
(a) the character and responsibility of the work to be performed ; and
(b) the existing pay of Government servants of a status sufficient to warrant their selection for the post
Note 1. - * * *
Note 2. -` * * *
Note 3. - (1) Temporary posts may be divided into two categories, viz. , posts created to perform the ordinary work for which permanent posts already exist in a cadre, the only distinction being that the new posts are temporary and not permanent, and isolated posts created for the performance of special tasks unconnected with the ordinary work which a service is called upon to perform. An example of the latter type of post would be a post on a Commission of enquiry. A distinction by stick verbal definition is difficult, but in practice there should be little difficulty in applying the distinction in individual cases. The former class of posts should be considered to be a temporary addition to the cadre of a service whoever may be the individual appointed to the post; while the latter class of temporary posts should be considered as unclassified and isolated ex-cadre posts.
(2) Temporary posts which by this criterion should be considered as temporary additions to the cadre of service should be created in the time-scale of the service, ordinarily without extra remuneration. Incumbents of these posts will, therefore, draw their ordinary time-scale pays. If the posts involved decided increases in work and responsibility in comparison with the duties of the parent cadre generally, it may be necessary to sanction a special pay in addition. Such special pay may only be allowed with the approval of the competent authority.
(3) For isolated ex-cadre posts, it may occasionally be desirable to fix consolidated rates of pay. Where, however, the post is to be held by members of a service, it will ordinarily be preferable to create the post in time-scale of the holder's service. The observations contained in paragraph 2 above will apply with equal force to the grant of special pay over and above the ordinary time-scale. '
We find from Annexure II that permanent and temporary posts of Joint Director were already in existence in the service since the year 1959. The main object of Industrial Service in the State was to develop industry whether in urban or rural areas. In the year 1962 and thereafter, Central Government, insisted for greater attention by the State Governments to develop industry in rural areas and for that sake it became necessary for the State Government to create a new post of a Joint Director in the year 1963, of which the State Government was the best judge. The post so created was a temporary one within the meaning of Rule 2. 58 of the Punjab Civil Services Rules, Vol. I, Part I, and it was initially sanctioned for one year, though renewed from time to time and held by the petitioner in an officiating capacity. It could not possible be said to be an isolated post created for the purpose of some special task and unconnected with the ordinary work which a service was called upon to perform. According to the above quoted note 3 to Rule 4. 21, temporary posts may be divided into two categories, namely, those created to perform the ordinary work for which permanent post already exists in a cadre and isolated poses unconnected with the ordinary work of the service. In my opinion, the post of Joint Director was one created only to perform the ordinary work of the service and though temporary it was an addition to the cadre of service forming part thereof, no matter which individual was appointed to the post. Cadre in a service can consist of both permanent and temporary posts. Cadre as defined by Rule, Vol. I. Part I, means only the strength of a service or a part of a service sanctioned as a separate unit and not that it must be comprised of permanent posts only. The contention of the learned counsel for the State that the temporary post of a Joint Director was an ex-cadre post has, therefore, no substance.
18. Chapter X of the Punjab Civil Service Rules, Vol. I, Part I, deals with Foreign Service and rule 10. 5 provides that a Government servant transferred to foreign service remains in the cadre or cadres in which he was included whether in a substantive or officiating capacity immediately before his transfer. No doubt, the substantive appointment of the petitioner before he was promoted as Joint Director was in the Secretariat Service but immediately before his transfer to foreign service he was holding in a officiating capacity a post which fell in the cadre of the Industries Service Class I. During his absence on foreign service he must, therefore, be held to have continued to remain in the cadre of Industries Service. As long as the petitioner remained on foreign service, in addition to the special pay and 20 per cent deputation allowance he earned increments in the scale of pay of a Joint Director. It was the Industries Department alone which for the period of absence of the petitioner on foreign service could be treated as the parent department from which the petitioner came on deputation unless he was by a special order of the competent authority reverted from the officiating post of a Joint Director to that of his substantive post of Secretary to a Minister. On his reversion from foreign service, the petitioner was, thus, entitled to go back to the post of an officiating Joint Director in the Industries Department in the same scale of pay which he was drawing before he went on foreign service. He would, of course, still be an officiating Joint Director and could be reverted to a substantive post in the Secretariat Service by the competent authority in accordance with law. Mr. Kuldip Singh has, in this connection, invited my attention to Bidhu Bhusan Majumdar v. Chief Engineer Govt. of West Bengal, AIR 1958 Cal 623. Bidhu Bhusan, an Overseer, was a confirmed official. He was promoted and appointed temporarily as a Sub Divisional Officer and from that post he was transferred to another department. There were alleged to be various complaints against him and he was reverted to his substantive post of an Overseer though on deputation he was holding the post a Sub Divisional Officer. He challenged the order of his reversion in the High Court, Sinha, J. was of the view that Bidhu Bhusan was an officiating Sub Divisional Officer when sent on deputation and would, therefore, continue to hold the same post on reversion from deputation until and unless he had been reverted by the proper authority to his substantive post as an Overseer. I am in respectful agreement with the view taken by the learned Judge of the Calcutta High Court and in the case before us there is also the statutory provision contained in Rule 10. 5 of the Punjab civil Services Rules Volume I, Part I, which too irresistibly leads to the conclusion that the petitioner was entitled on reversion from deputation on foreign service to be posted back to his original post which he left. The learned Additional Advocate-General has not been ale to point out any order of the State Government reverting him from the post of an officiating Joint Director. The State Government seems to have been under the impression that since the petitioner held permanent substantive post of a Secretary to Minister, it was that post to which he was to be reverted and that it was of no significance that the petitioner had for above five months held the post of a Joint Director before being sent on deputation. It failed to appreciate that a promotion had been given to the petitioner inasmuch as he was appointed as an officiating Joint Director and that status and salary of that post he was allowed to retain so long as he remained on deputation. The argument raised before me is that the petitioner had not acquired any right to hold a post to which he was appointed in an officiating capacity. The contention may be well-founded but it is only for the competent authority to decide whether to revert him from that post or not.
19. Officiating pay of the petitioner as Joint Director is also protected by the directive issued by the Central Government, Ministry of Home Affairs, to the Chief Secretary to Government, Haryana, a copy whereof has been filed as Annexure 'P' with the writ petition. Proviso to Section 82(6) of the Punjab Reorganisation Act, 1966, guarantees continuity of service to every Government servant by laying down that conditions of service applicable immediately before the appointed day to the case of any person shall not be varied to his disadvantage except with the previous approval of the Central Government. The object of this solitary provision is to secure a fair and equitable treatment to a Government servant who should not be made to suffer because of the reorganisation of a State, and a newly created State should not be permitted to get rid of an employee allocated to that State or change the conditions of his service to his disadvantage. The said directive, which is issued in exercise of the statutory powers vested in the Central Government, enjoins upon the newly created States that where an officer had officiated continuously on a particular scale of pay or would have officiated on that scale for a period of three years immediately before 1st November, 1966 but for proceeding on deputation, the scale of pay on which he had so officiated should be protected as if it was the scale of pay drawn in his substantive capacity. The petitioner was appointed officiating to a temporary post from where he was sent on deputation but it was a promotion given to him which the Government at that time though he was entitled to. The post continued in the cadre and there is no material brought on the record which could show that he would not have continued in that post if he had not proceeded on deputation. He was appointed to the post on 12th February, 1963, and the reorganisation took place on 1st November, 1966. It was a period of more than three years and the case of the petitioner is fully covered by the directive. As long as he remained on deputation it was the salary of the Joint Director that he was getting and was always considered to hold that status. In these circumstances, it must be held that the petitioner would have continued as a Joint Director for more than three years if he had not been sent on deputation and after reorganisation he is entitled to continue to draw the salary of that post till he is reverted from that post in accordance with law. It is, of course, open to the Government at any time to consider the question of reversion of the petitioner from the post of an officiating Joint Director.
20. The main ground of attack directed against the appointment of respondent 9 as Deputy Principal Secretary to the Chief Minster is that the petitioner was not considered though he was senior to him and in the same cadre. The omission of the Government, according to the petitioner, denied to him his fundamental right of equality of opportunity in the matter of appointments and promotions of Government servants as guaranteed by Art. 16 of the Constitution. The submission is that the post was in fact created for respondent 9, and the petitioner had been superseded by the State Government because of the manoeuvres and mala fide action of respondent 8 who, it is alleged influenced the decision of the Chief Minister by giving a false and baseless adverse confidential report as Chairman of the Corporation. No mala fides have been alleged against the Chief Minster who was the appointing authority. The stand taken up by the State Government is that the post of a Deputy Principal Secretary was a newly created and an ex-cadre post the appointment to which lay in the discretion of the Government and the petitioner had no right thereto though in the instant case he was considered before respondent 9 was actually appointed to that post.
It is stated in the affidavit of the Chief Secretary, respondent, that the Commission approved the name of respondent 9 and rejected that of the petitioner after taking into account not only the adverse confidential report given by respondent 8 for a short period from 26th October, 1967 to 31st March, 1968, but also the other confidential reports and the personal file of the petitioner. the undisputed facts as they appear from the pleadings of the parties and the executive files are that the Chief Minister was of the view that it was unnecessary to have the posts of a Superintendent and a Secretary in his Secretariat and that in lieu of both of them he should have one Deputy Principal Secretary only. He accordingly abolished the posts of the Superintendent and the Secretary and appointed respondent 9 on 12th June, 1968, as his Deputy Principal Secretary. This respondent was given the additional work of office supervision as well which earlier to that used to be done by the Superintendent. The Finance Department alter gave its approval to the creation of a new post and it kept the post of the Secretary in abeyance while abolished the post of a Superintendent of the Chief Minster's Secretariat. Respondent 9 was appointed on a temporary basis to this post. By an order of the Governor passed on 17th July, 1968, Annexure R-4/4, the post of a Deputy Principal Secretary to the Chief Minister in the grade of Rs. 1250-50-1500 1250-50-1500 was created on a temporary basis from 12th June, 1968, upto 28th February, 1969, by holding in abeyance the post of Secretary to the Chief Minister in the grade of Rupees 800-40-1000.
A reference was made in this notification to the fact that the post of a Superintendent in the Chief Minister's Secretariat had already been abolished. On the next day, another notification, Annexure R-4/5, was issued by the Governor whereby respondent 9 was appointed to the newly created post on a purely temporary basis. It was specifically stated in this notification that the promotion was to be provisional till the allocation of the various services of the erstwhile State of Punjab had been finalised. The Chief Minster then desired that the post be made permanent and suggested that respondent 9 who was already holding the post on a temporary basis be confirmed in that post whenever it was made permanent. As a matter of fact the respondent had been making representations to the Governor asking for higher grade of pay because of his outstanding performance in various assignments including that of officer on Special Duty to the Governor, Haryana, after dissolution of the Ministry for some time. The matter was again referred to the Finance Department which accorded the necessary sanction to the conversion of the temporary post of Deputy Principal Secretary into a permanent one by permanently abolishing the post of a Superintendent and keeping in abeyance the post of Secretary to the Chief Minister. The Chief Minister seemed to carry the impression that he could appoint respondent 9 without referring the matter to the Public Service Commission but when the office pointed out to him that such an appointment could not be made without the approval of the Public Service Commission he agreed to the suggestion with the result that in accordance with normal practice followed by the State Government in the matter of promotions in different departments names of first three persons from amongst Secretaries to Ministers in the order of the seniority, along with their personal files, were sent to the Public Service Commission for consideration. When the first reference was made on 2nd August, 1968, the petitioner was working as Managing Director of the Corporation with a higher grade of pay. It was suggested to the commission that he was likely to continue to officiate in the higher grade and in that view of the matter he was not being considered for the post of the Deputy Principal Secretary. The adverse confidential report as made by respondent 8 was in existence at this time but the Administrative Department while making a reference to the Commission does not seem to have been aware of the same.
After this reference, the petitioner had been recalled from the deputation post in the Corporation on 16th August, 1968, and whatever complaints respondent 8 has about the efficiency or integrity of the petitioner came to the surface in the meantime. The Commission asked for further information and the Deputy Secretary, Secretariat Establishment on 20th September, 1968, sent to the Commission the character rolls of the petitioner and of respondent 9 along with a copy of the unfavourable confidential report given to the petitioner by respondent 8 for the year 1967-68. The Commission was informed that certain cases against the petitioner were under investigation with the Vigilance Department and that till a report was received from that department and final decision taken by the State Department, the question of grant of higher grade to the petitioner had to be kept pending. There was correspondence between the Commission and the Government and the view of the latter was that the petitioner was not fit to be appointed to the responsible post of a Deputy Principal Secretary which required an officer of unimpeachable integrity and calibre.
The Commission ultimately approved the appointment of respondent 9 and the Governor issued an order. Annexure R. 4/5, on 18th July, 1968, appointing him who undoubtedly was next in seniority to the petitioner. whatever might have been the motive with respondent 8 in giving a confidential report adverse to the petitioner, the Government was justified in informing the Commission about the actual state of affairs and the involvement of the petitioner in some cases, well-founded or otherwise, pending against him with the Vigilance Department. The Government was equally justified in expressing its views that it was not possible to give a higher grade of pay to the petitioner at that time when the complaints against him had not been finally disposed of. In these circumstances, it cannot possibly be said that the petitioner was not considered. He was considered though the consideration went against him because of the situation as it existed at the time when the appointment to the post of Deputy Principal Secretary was to be made.
21. The contention of the learned counsel for the petitioner that the post was created for respondent 9 is without substance. The Chief Minister created this post by abolishing the post of Superintendent and keeping the post of a Secretary in abeyance. The abolition of posts was in the discretion of the State Government and no objection could be taken thereto nor to the creation of the post of Deputy Principal Secretary in lieu of these two posts which stood abolished. There were all administrative matters of which the State Government was the best judge, and the petitioner could not make a grievance about it under the law. The incumbent of the post of the Deputy Principal Secretary was required to do the dual work of both the Superintendent and the Secretary and all this was done by the Chief Minister for administrative convenience. It may be that the Chief Minister was anxious to have respondent 9 as his Deputy Principal Secretary but when the office drew his attention that no appointment could be made without the approval of the Public Service Commission, he really agreed. The Commission had three names before it, including that of the petitioner, and final choice of the Commission fell on respondent 9.
22. Mr. Kuldip Singh has invited my attention to a judgment of Tuli, J. Mrs. Davinder Brar Nee Sandhu v. State of Punjab, 1969 Ser LR 613 = (1970 Lab IC 727 (Punj). The facts of that case were quite different. It was a case where the post had been created not in the interest of administrative work but only to accommodate some person supposed to posses outstanding merit. No eligible person was considered and the finding of the learned Judge was that the appointment of the petitioner there was based on favouritism and smacked of arbitrariness. None of these facts are found to exist in the present case. Here, the first three eligible persons in their order of seniority were considered and the petitioner was not appointed because of his shady records. It was a selection and ex-cadre post, as stated by the Chief Secretary in his affidavit, and the petitioner could not claim that he must be appointed thereto whatever might be the opinion of the Government about is integrity or efficiency. In my opinion, Article 16 of the Constitution cannot be invoked by the petitioner in the circumstances of the preset case. I accordingly 9 was quite in order and must be upheld as having been validly made.
23. The last grievance of the petitioner is about the confidential report and the mala fides of respondent 8. I am afraid the matter of a confidential report is not justifiable. There is no doubt that relations between the petitioner and respondent 8 were quite unhappy. As between them a tug of war seems to have been going on for some time as to who should go abroad to attend international fairs. The explanation of the petitioner was once called for having left the situation without previous permission and he instead of trying to inform the Chairman about the urgency of the situation which compelled him to abruptly leave challenged the authority of the Chairman to ask for any such explanation. Respondent 8, as it appears from the record was rather rash in making accusations with regard to the recording of the minutes of the meetings by the petitioner. Amongst the Board of Directors of the Corporation, there were some who were not supporting the Chairman and the petitioner also at times took a stand which was not correct. I am inclined to believe that the petitioner must have been addressed as a 'dunce' by respondent 8 in one of the meetings as alleged in the writ petition. The petitioner states that, the meeting was attended by Shri P. N. Sahni, Director of Industries, and Shri O. P. Sikand, Shri Sahni has filed an affidavit dated 8th April, 1969, wherein he deposes that respondent 8 never expressed to him the feelings that the petitioner was responsible for his supersession or punishment in the time of late S. Partap Singh Kairon. This affidavit is obviously filed to support respondent 8 in refuting the allegation of the petitioner that the said respondent was inimical to him. the surprising part is that Shri Sahni while claiming to have read the writ petition and particularly the Paras thereof wherein his name is mentioned, has not chosen to make any reference to the allegation that the petitioner was called a 'dunce' by the respondent in is presence in the meeting held on 5th December, 1967. If any such words had not been used, Shri Sahni would have definitely contradicted the petitioner on this point when personal knowledge of matter was being attributed to him. I am constrained to say that the respondent seems to have been rather rash and indiscreet in his attitude towards the petitioner. He has been no less lacking in caution even in the matter of filing affidavits in this Court. He filed three affidavits and in one of them he sated that the post of the Joint Director, Rural Industrialisation, had been created on permanent basis. In a subsequent affidavit, it was deposed by him that on examination of the relevant record then brought to his notice, it transpired that his previous statement that the post was created on a permanent basis for correct. Both these affidavits were supposed to have been sworn by him as true on the basis of information received from records. He could not be having different information from the relevant records at different times. If any record was not available to him at any time it was incorrect to swear to a fact in a routine manner without having satisfied himself that whatever was being stated was really borne out from the records. There is beyond doubt an inconsistency with regard to the nature of the initial appointment of the petitioner as Joint Director in the two affidavits but I do not agree with the counsel for the petitioner was that the respondent deliberately made any false statements and that it was necessary to summon him for being examined and cross-examined as a witness. Be that as it may, he in his position as a Chairman of the Board of Directors of the Corporation and Secretary to Government, Haryana, Industries Department, was entitled to give a confidential report to the petitioner on the basis of the impressions formed by him about the integrity or efficiency of the latter. The mere fact that the relations between the two were not cordial did not take away the right of respondent 8 to give the confidential report. The bald statement of the petitioner that respondent 8 was actuated by malice on account of certain ill-will that he carried since the time of late S. Partap Singh Kairon cannot be accepted at its face value. No circumstances have been pointed not which could reasonably lend support to any such apprehension of the petitioner. this Court cannot sit in appeal over the merits of the confidential report. Moreover, mala fides alleged by the petitioner depend on the disputed question of fact which it is not possible to resolve in these proceedings. The Chief Minister has stated in his affidavit that in regard to the recall of th petitioner from the Corporation, he looked into the files himself and it was after being satisfied that he passed the impugned order of recall from the Corporation. In the matter of appointment of respondent 9 as Deputy Principal Secretary, respondent 8 had no hand except that in references to the Pubic Service Commission, the attention of the latter was drawn by the State Government to the confidential report given by this respondent.
24. Mr. Kuldip Singh did not seriously press the argument about applicability of Art. 311 of the Constitution and rightly so. Recall from foreign service was not a reversion within the meaning of the said Article nor was the recall by way of any punishment. It was in the discretion of the State Government to allow the petitioner to continue on foreign service or not and the period of such service could be terminated at any time.
25. For the foregoing reasons, the writ petition is partly allows as indicated above. In view of the divided success of the parties, I leave them to bear their own costs.
26. Petition partly allowed.