Full Judgment Text
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CASE NO.:
Appeal (civil) 4992 of 2001
PETITIONER:
THE MEGHALAYA STATE ELECTRICITY BOARD & ANOTHER
Vs.
RESPONDENT:
SHRI JAGADINDRA ARJUN
DATE OF JUDGMENT: 02/08/2001
BENCH:
M.B. Shah & Doraiswamy Raju
JUDGMENT:
Shah, J.
Leave granted.
This appeal has been filed by the Meghalaya State Electricity
Board (MSEB for short), a board duly constituted under Section 5 of
the Electricity (Supply) Act, 1948, (hereinafter referred to as the
Electricity Act) challenging the judgment and order dated 22.7.1999
passed by the Division Bench of High Court of Gauhati, Bench at
Shillong in Writ Appeal No.19 (SH) of 1998. By the impugned
judgment, the High Court set aside the judgment of learned Single
Judge dismissing the writ petition filed by the respondent employee
challenging an order dated 24.7.1997 of compulsory retirement from
service. The learned Single Judge dismissed the writ petition filed by
the respondents by order dated 10.8.1998 by holding that the MSEB
had not framed any regulations regulating the service conditions of its
employees and had instead adopted the Assam State Electricity Board
(General Conditions of Service) Regulations, 1960 by passing a
resolution on 17.5.1975. Similarly, it was also open to the Board to
adopt the provisions of FR 57(b) of the Meghalaya Fundamental
Rules for compulsory retirement by passing resolution. He further
held that it was clear in the Office Memorandum dated 6.10.1989 of
the MSEB that the said Board has adopted the orders contained in the
Office Memorandum dated 21.7.88 of the Government of Meghalaya,
Personnel & AR (A) Department, for compulsory retirement of its
employees in accordance with FR 57(b) of the FR & SR, 1984. The
learned Judge also held that the respondent had not made out any case
of mala fide and there was no evidence of arbitrariness. For this he
himself perused the service records of the respondent herein and
found that he had been given the lowest grading of D, his
performance had not been satisfactory and that he had become a dead-
wood for the organisation.
In appeal, the Division Bench of the High Court reversed the
judgment by holding that MSEB had no authority or power to
compulsorily retire its employees prior to the coming into force of the
MSEB (Discipline and Appeal) Regulations 1996 which were
published in the Gazette on 1.9.1997. The Court held that prior to this
date, there was no provision for compulsory retirement except by way
of major punishment. The Court further held that office memo of the
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MSEB dated 10.5.1989 only adopts the procedure prescribed by the
Government of Meghalaya by office memo dated 21.7.1988. The said
memo does not vest any power in the Government to compulsory
retire its employees.
Mr. Bhattacharjee, learned counsel appearing on behalf of the
respondent supported the impugned order passed by the High Court
by submitting that the MSEB has not adopted FR 57(b) which
empowers the Government to compulsorily retire its employees at the
age of 50 years or after completion of 25 years of service. He also
submitted that without framing any regulations, only by passing
resolution, the MSEB cannot lay down the service conditions of its
employees.
For appreciating this contention, we would first refer to the
resolution No.6 dated 10.5.1989 passed by the MSEB which reads
thus:-
Resolution No.6 (10.5.1989)The Board went
through the Govt/s O.M. No.PER.218/75/106dated
21.7.1988 concerning the premature retirement of Govt.
servants under F.R.57(b). All the members of the Board
agreed that the Govt.s order are based on sound policy
and felt that the same should be implemented in the
MSEB. Accordingly, the members decided to adopt the
above O.M. with changes in the names of the members of
the Review Committee. The Board should have its own
Committee to be constituted by the Chairman of the
Board.
The review should be carried out immediately. The
Review Committee is constituted.
Thereafter, Office Memo dated 6.10.89 was issued by the
MSEB adopting the Office Memo dated 21.7.88 of the Govt. of
Meghalaya which reads as under:-
The question of retiring a Boards employee by
giving him/her notice not less than 3 months in writing or
3 months pay and allowances in lieu of such notices after
he/she has attained 50 years of age or has completed 25
years of service, whichever is earlier, if it serves the
interest of the Board has been under consideration for
some times. The Board in its meeting held on the 10th
May, 1989 after a very careful consideration decided to
adopt the orders contained in the Govt. of Meghalaya,
Personnel & A.R. (A) Departments Office memorandum
No. PER.218/75/106 dated 21.7.88, a copy of which is
enclosed and to come into force with immediate effect.
In line with the orders above, a Review Committee is
constituted to consist of the following members:
1. Chairman, M.S.E.B. - Chairman of the Committee
2. Chief Accounts Officer)
3. Chief Engineer (E) ) Members. The Chief
4. Chief Engineer (C) ) Personnel Officers shall
5. Chief Personnel Officer) also act as Member-Secy.
In order to ensure that the review is carried out regularly,
all the Heads of offices are required to maintain a register
of the Boards employees who are due to attain the age of
50 years or are due to complete 25 years service, as the
case may be. The register should be scrutinised at the
beginning of every quarter and the review undertaken
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according to the following schedule:
Quarter in which Cases of Govt. servants who have
review is to be attained fifty years of age or completed
made twenty five years of service, as the
case may be, in the quarter indicated
below to be reviewed.
1. Jan.to March October to December of the previous
year.
2. April to June January to March of the same year.
3. July to Sept. April to June of the same year
4. Oct. to Dec. July to September of the same year.
All the Heads of Offices are also required to ensure a
regular submission of a quarterly report of cases
requiring decision in the matter of premature retirement
to the Member Secretary of the Review Committee with
a copy to his superior Officer and the Head of the
Department concerned. Even if there is no case for
consideration of such employees, a Nil report should be
submitted.
The above instructions should be strictly adhered to.
Sd/-
(Smt. L. Phookan)
Secretary, 6.10.89.
It is thus clear that what has been adopted in connection with
compulsory retirement is the Office Memo dated 21.7.88 of the Govt.
of Meghalaya. 1984. A close reading of the Office Memo dated
21.7.88 indicates that in the light of the power vested in the
Government under F.R. 57(b) of the Meghalaya FSR, 1984, the
Government constituted a Review Committee to consider the cases of
premature retirement of Govt. servants under F.R. 57(b). Relevant
part of the Office Memo dated 21.7.88 reads as under:-
Sub: Premature retirement of Government servants
under F.R. 57(b).
The undersigned is directed to say that under F.R.
57(b) of the Meghalaya Fundamental & Subsidiary
Rules, 1984, the appropriate authority may, if he is of
the opinion that it is in the public interest to do so, retire
a Government servant by giving him notice of not less
than three months in writing or three months pay and
allowances in lieu of such notice after he has attained
fifty years of age or has completed twenty-five years of
service, whichever is earlier. The term appropriate
authority referred to above means the authority which
has the power to make substantive appointment to the
post or service from which the Government servant is
required to retire.
The above rule, commonly referred to as the rule
of premature retirement, is based on sound policy and is
meant to subserve public interest. The object of the
above rule is to weed out (1) Govt. servants of doubtful
integrity; (2) Govt. servants who have outlived their
utility and have become inefficient or ineffective; and (3)
Govt. servants whose physical and mental condition is
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such as to make them incapable of further satisfactory
service.
In order to achieve the objective mentioned above,
the State Govt. is pleased to constitute a Review
Committee for each and every department of the Govt. to
consider the cases of premature retirement of Govt.
servants under FR 57(b) as recommended by the
Appointing Authority on the basis of C.R. dossiers and
other reports/documents made available to it, and
consisting of the following officers:
1. Shri J.M. Phira, I.A.S. Chairman
2. Shri H.N. Mookherjee, I.A.S ... Member
3. Shri W.M.S. Pariat, IAS Member.
4. Special Secretary/Secretary/
Addl. Secretary of the
Deptt. Concerned.
Where the appointing authority is satisfied that a
Govt. servant who has attained fifty years of age or has
completed twenty-five years service has ceased to take
any interest in his work or has become ineffective or
inefficient or whose physical or mental condition is such
as to make him incapable of further service or whose
integrity is in doubt, such persons should be considered
for premature retirement under F.R. 57(b). A list of such
persons with their service records and character Rolls
together with the recommendation of the Appointing
Authority that they may be prematurely retired under
F.R. 57(b) should be sent to the Member Secretary of the
Review Committee of the Department for the purpose of
placing of such cases for consideration of the Review
Committee. The Special Secretary/ Secretary/Addl.
Secretary of the respective Deptt. (in his capacity as
Member Secretary) should ensure that such cases are
placed before the Review Committee for consideration as
early as possible. Since premature retirement is sought to
be made purely in public interest, the Review Committee
should not have any hesitation in deciding such cases on
merits.
In order...quarter.
Sd/- V. Ramakrishnan
Chief Secretary to the Govt. of
Meghalaya
The aforesaid Government Memorandum begins with the
subject Premature retirement of Government servants under FR
57(b). By passing a resolution, MSEB has adopted the said Memo.
This would mean that MSEB has adopted power and procedure for
compulsory retirement. Further, the Government Memo itself
provides that where appointing authority is satisfied that a
Government servant who has attained 50 years of age or has
completed 25 years service and has ceased to take any interest in his
work or has become ineffective or inefficient or whose physical or
mental condition is such as to make him incapable of further service
or whose integrity is in doubt, such person should be considered for
premature retirement under FR 57(b). Once that part of the
Government Memo is adopted by the MSEB, it would be totally
unjustifiable to hold that the MSEB has not adopted the power of
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compulsory retirement as provided in FR 57(b). It appears that the
High Court has not completely referred to the aforesaid Government
Memo. Further, the resolution no.6 quoted above specifically
mentions that all the members of the Board agreed that the
Governments order concerning the pre-mature retirement of
Government servants under F.R.57 (b) is based on sound principles
and felt that the same should be implemented in the MSEB and it was
decided to issue office memo accordingly and to constitute a review
committee. Hence, in our view, the reason given by the High Court
that the MSEB has not adopted the power of compulsory retirement
by passing the aforesaid resolution is without referring the resolution
passed by the Board and the office memo issued by the government.
Further, it is to be stated that MSEB in its meeting held on
21.3.1975 decided to adopt A.S.E.B. (General Conditions of Service)
Regulations, 1960 of the old Assam State Electricity Board. That
would mean that MSEB has not framed its regulations but by passing
a resolution it had adopted the regulations framed by the ASEB. The
said Regulations admittedly did not contain provision for compulsory
retirement of its employees at the age of 50 years or after completion
of 25 years of service. Hence, the Board by passing a resolution no.6
has adopted the powers of pre-mature retirement of its employees.
Adoption of the regulations framed by the ASEB containing other
service conditions was by passing a resolution by the Board. Same
procedure was adopted by the Board in adopting the provisions for
compulsory retirement. Therefore, it cannot be said that the Board
has framed any regulation which is contrary to regulations framed
under Section 79 of the Act.
Learned counsel Mr. Bhattacharjee next contended that in
absence of any regulation framed by the MSEB under Section 79(c) of
the Electricity Supply Act governing the service conditions of its
employees or for compulsory retirement before superannuation, it was
not open to the MSEB to issue the impugned order and that service
conditions could not be prescribed by the Board by passing resolution.
For appreciating this contention, we would refer to Sections 15 of the
Electricity Act which reads as under: -
15. Appointment of staffThe Board may
appoint a Secretary and such other officers and
employees as may be required to enable the Board to
carry out its functions under this Act:
Provided that the appointment of the Secretary
shall be subject to the approval of the State
Government.
Further, Section 78 (A) provides that in discharge of its function, the
Board shall be guided by such directions on questions of policy as
may be given to it by the State Government. Section 79 empowers the
Board to make regulations. Relevant part of Section 79 reads thus:
79. Power to make regulationsThe Board
may by notification in the Official Gazette make
regulations not inconsistent with this Act and the rules
made thereunder to provide for all or any of the
following matters, namely:-
(a) (b)
(c) the duties of officers and other employees of the
Board, and their salaries, allowances and other
conditions of service;
(d) (k) .
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Provided that regulations under clauses (a) (d) and
(jj) shall be made only with the previous approval of the
State Government and regulations under clauses (h) and
(i) shall be made with the concurrence of the Authority.
As per section 79(c), MSEB may frame regulations not
inconsistent with the provisions of the Act and the Rules providing for
the duties of officers and other employees of the Board and their
salary, allowances and other conditions of service. It is to be stated
that this is an enabling provision. The MSEB may frame regulations
as provided in section 79 (c) of the Act, but in the absence of any
regulations, the MSEB can lay down service conditions by
administrative order/instructions. Section 15 of the Act empowers the
Board to appoint its employees as may be required to enable the
MSEB to carry out its functions under the Act except the Secretary
who is to be appointed with previous approval of the State
Government. The power to lay down service conditions by
regulations is expressly conferred upon the MSEB, so it has power to
prescribe service conditions. Section 78A also provides that except on
question of policy for which the State Government has issued
directions, the Board is entitled to discharge its functions prescribed
under the Act which would include appointment of staff to enable it to
carry out its functions and also lay down service conditions. Hence, if
there are no rules or regulations pertaining to service conditions of its
employees, same could be prescribed by administrative order and such
power of the employer which is a statutory corporation would be
implied.
Dealing with the similar provisions, this Court in Mysore State
Road Transport Corporation vs. Gopinath Gundachar Char [(1968)
1 SCR 767], U.P. State Electricity Board, Lucknow etc. vs. City
Board, Mussoorie and Others [(1985) 2 SCC 16] and V.
Balasubramaniam and others vs. Tamil Nadu Housing Board and
others [(1987) 4 SCC 738] rejected the contention that the
Board/Corporation has no such power to lay down conditions of
service by passing a resolution. In the case of U.P. State Electricity
Board (supra), the Court dealt with a contention that in the absence of
any regulation framed by the Electricity Board under Section 79(h) of
the Act regarding the principles governing the fixing of Grid Tariffs, it
would not be open to the board to issue the notification fixing the grid
tariffs. Section 46 of the Act provides that a tariff to be known as the
Grid Tariff shall in accordance with any regulations made in this
behalf be fixed from time to time by the Board in respect of each area
for which a scheme is in force. The Court observed that Section 46
does not say that no Grid Tariff can be fixed until such regulations are
made. It only provides that the Grid Tariff shall be in accordance with
any regulations made in this behalf and if there were any regulations,
the Grid Tariff should be fixed in accordance with such regulations
and nothing more. Framing of regulations under Section 79(h) of the
Act cannot be a condition precedent for fixing the Grid Tariff. The
Court also referred to the decision in Gopinath Gundachar Char
(supra) which was a case arising under the Road Transport
Corporation Act, 1950. Under Section 14 of that Act a Road
Transport Corporation was entitled to appoint officers and servants as
it considered necessary for the efficient performance of its functions.
Under Section 34(1) of the Road Transport Corporation Act, 1950 the
State Government had been empowered inter alia to issue directions
to the Road Transport Corporation regarding recruitment, conditions
of service and training of its employees. Under Section 45(2)(c) of
that Act, the Road Transport Corporation was empowered to make
regulations regarding the conditions of appointment and service and
the scales of pay of officers and servants of the Corporation other than
the Chief Executive Officer, General Manager and the Chief Accounts
Officer. No regulations were framed under Section 45(2)(c) of that
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Act. It was contended that the Corporation could not appoint officers
and servants referred to therein or make any provision regarding their
conditions of service until such regulations were made. This Court
rejected the said plea by holding that:
until such regulations are framed or directions
are given, the Corporation may appoint such officers or
servants as may be necessary for the efficient
performance of its duties on such terms and conditions as
it thinks fit.
In case of V. Balasubramaniam (supra) the Court considered
similar provisions of T.N. State Housing Board Act, 1961. Section 16
of the said Act empowered the Board to appoint a Secretary, a
Housing Board Engineer and such other officers and servants as it
considers necessary for the efficient performance of its functions.
Section 17 of the Act provided that the remuneration and other
conditions of service of the said officers and servants of the Board
shall be such as may be prescribed by regulations and Section 161
provided that the Board may by notification make regulations not
inconsistent with the Act and the rules made thereunder, for the
purpose of giving effect to the provisions of the Act. After referring
to the decision in Mysore State Road Transport Corporation (Supra),
the Court held that until appropriate regulations were published by the
Board in accordance with Section 161 of the Act, power could be
exercised by the Board in accordance with its own resolution. The
Court further held that in the absence of clear words, it is difficult to
impute to the legislature the intention that the Corporation would have
no power to appoint officers and servants and fix the conditions of
service unless the regulations under Section 45(2)(c) are framed.
In view of this settled legal position, MSEB which is
empowered to make appointment of its officers and employees and
frame statutory regulations laying down its service conditions, has
power until the regulations are framed, to lay down service conditions
in exercise of its administrative power by passing resolution.
In the result, the appeal is allowed and the impugned order
passed by the High Court in Writ Appeal No.19(SH) of 1998 is
quashed and set aside. There shall be no order as to costs.
.....J.
(M.B. SHAH)
.J.
(DORAISWAMY RAJU)
August 2, 2001.
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