Cen.Elect.Supply Utility of Odisha Vs Dhobei Sahoo .

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Reportable IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9872 OF 2013 (Arising out of Special Leave Petition (C) No. 16112 of 2012)

Central Electricity Supply Utility of Odisha ......Appellant

Versus Dhobei Sahoo & Ors. .....Respondents

WITH

CIVIL APPEAL NO. 9871 OF 2013 (Arising out of Special Leave Petition (C) No. 15870 of 2012)

Bijaya Chandra Jena …Appellant

Versus

Dhobei Sahoo and others … Respondents

J U D G M E N T

Dipak Misra, J.

Leave granted in both the special leave petitions.

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2. Assailing the judgment and order dated 28.3.2012

passed by the High Court of Orissa, Cuttack in

WP(C) No. 23268 of 2011 whereby the Division

Bench has quashed the appointment of the

respondent No. 5 herein and further directed the

present appellant to recover the amount paid to

the 5th respondent towards honorarium, in a public

interest litigation preferred by the 1st respondent,

the present appeals, one by the Central Electricity

Supply Utility of Odisha (CESU) and the other by

the affected person have been preferred, by

special leave. The factual matrix and the bedrock

of challenge being similar we shall state the facts

which are requisite to understand the controversy.

However, the description of the parties shall be in

accordance with their rank ascribed to them in the

appeal preferred by CESU.

3. The appellant-CESU has been created under

Section 22 of the Electricity Act, 2003 (for brevity,

“the Act”) passed by the Orissa Electricity

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Regulatory Commission (for short “the

Commission”). CESU is a deemed licensee under

the Act for the distribution of electricity in the

Central Zone of Odisha. It is necessary to state

here that on 1.4.1996 Orissa Electricity Reforms

Act, 1995 came into force providing for

restructuring of the Electricity Sector in the State

of Odisha. Thereafter, Orissa Electricity Reform

(Transfer of Undertakings, Assets, Liabilities,

Proceedings and Personnel) Scheme Rules, 1996

came into existence and on that base a newly

constituted, wholly owned Company of the

Government of Orissa, namely, Grid Corporation of

Orissa Limited (GRIDCO) was vested with the

Transmission, Distribution and Retail Supply

functions of the erstwhile Orissa State Electricity

Board. On 1.4.1999 by virtue of Orissa Electricity

Reform (Transfer of Assets, Liabilities, Proceedings

and Personnel of Grid Corporation of Orissa

(GRIDCO) to Distributions Companies) Rules, 1998,

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the distributions and retail Supply functions of

GRIDCO were vested with in four newly

constituted Distribution Companies out of which

one was Central Electricity Supply Company of

Orissa Limited (CESCO) which was given the

responsibility of Distributions Undertakings of the

Central Zone and to carry out them, granted a

license for distribution of electricity by the

Commission. Be it noted, 51% Shareholding and

Management of CESCO vested in a private

Company, namely, AES Orissa Distribution Pvt.

Ltd. (AESODPL) and the balance 49% was held by

GRIDCO. After coming into force of the Act on

10.06.2003 the said arrangement continued as

there was nothing inconsistent with the new

legislation. On 26.2.2005 as management of

AESODPL abandoned the management of CESCO,

the license granted in favour of CESCO was

revoked by the Commission under Section 19 of

the Act w.e.f. 1.04.2005. On 2.04.2005 an

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Administrator was appointed by the Commission

for management and control of CESCO.

4. As the factual matrix would further unfurl on

8.9.2006 the Commission initiated the process for

sale of utility of CESCO under Section 20 of the

Act. However, as the Utility could not be sold, by

order dated 8.9.2006 the Commission created a

new Utility, namely, CESU and formulated Central

Electricity Supply Utility of Orissa (Operation and

Management) Scheme, 2006 (hereinafter referred

to as “the Scheme”) for Operation and

Management of CESU. On 5.5.2007, the Scheme

was amended by the Commission. Clause 5 of the

Scheme defined the powers and functions of the

Chairman, CEO (CEO), Chief Finance Officer (CFO)

and Chief Operating Officer (COO). On 31.10

2007, one S.K. Dasgupta was appointed as CEO of

CESU with a financial package of Rs. 22 lakhs per

annum. On 31.3.2010, respondent No. 5, who had

earlier served as Chairman and Managing Director

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of GRIDCO as well as Member of the Commission

from 2001 to 2006 and had forty-five years of

experience in the electricity sector was nominated

as member as well as Chairman of the

Management Board and of CESU without any

remuneration. The Chairman was only entitled to

sitting fee of Rs. 2000/- per meeting.

5. As the chronology of events would depict, Mr. S. K.

Dasgupta resigned from the post of CEO on

8.8.2010 and on 10.8.2010 he was relieved.

Keeping in view the smooth functioning of CESU,

the Commission decided to entrust the function,

duties and responsibilities of CEO to the 5th

respondent with immediate effect until further

orders or until alternative arrangements were

made by the Commission. It was mentioned in the

order dated 10.8.2010 that the 5th respondent

would enjoy all the perquisites/facilities as was

being given to the CEO except the monthly

emoluments. It was also observed that the

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Commission would take a view later on regarding

the desirability of giving an honorarium to the

Chairman. On 12.11.2010, the Scheme was again

amended and a new Clause was inserted as

Clause 4 (ix) and it was 6th Amendment to the

Scheme. On that day itself the Commission fixed

consolidated honorarium of Rs. 70,000/- per month

for the 5th respondent.

6. After these developments, the respondent No. 1

and another filed a public interest litigation, WP

(C) No. 23268 of 2011, on 26.8.2011 praying for

issue of writ of “quo warranto” for quashing of the

order of the Commission entrusting the functions

of CEO of the CESU to the 5th respondent. It was

contended before the High Court that CESU was a

Government owned company and it had become a

rehabilitation centre for retired persons and

deadwoods at the cost of public money; that the

Orissa State Electricity Board vide Office Order

dated 30.8.1961 had adopted the service

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conditions of Government servants and GRIDCO

vide its Office Order dated 25.4.1996 had adopted

the regulations relating to service and allied

matters for the employees of the Board

transferred to GRIDCO; that asking the Chairman

of the Board of Management of CESU to remain in-

charge as CEO was contrary to the Scheme as

amended upto 2010 vide notification dated

12.11.2010; that the appointment of the 5th

respondent was contrary to Regulation 13(1)(2)(3)

of GRIDCO Officers’ Service Regulations which

provide for appointment to grades above E-9 shall

be on a contract basis initially for a period of three

years and renewable thereafter for such period(s)

as the Board for the Committee of the Board may

prescribe until the Officer attains the age of

superannuation as provided in these Regulations;

and that the third respondent was appointed

contrary to law and, therefore, his appointment

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should be quashed and the salary drawn by him

should be recovered.

7. The aforesaid contentions were resisted by the

Commission contending, inter alia, that the

Commission had not appointed the 5th respondent

as CEO of CESU but had assigned the functions,

duties and responsibilities till an alternative

arrangement was made by the Commission and

the said arrangement was purely ad hoc in nature;

that CESCO Officers’ Service Regulations had been

adopted by CESU but not that of GRIDCO Officers’

Service Regulations; that the 5th respondent was

the Chairman of CESU in view of his bright

engineering career and vast experience in the

distribution sector and there has been no violation

of any of the provisions of Orissa Service Code and

Pension Rules; that the said temporary

arrangement had been made by the Commission

only for the interest of utility and larger interest of

the public and consumers and CESU; that the

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Commission had given the 5th respondent a

consolidated honorarium of Rs.70,000/- per month

whereas his predecessor CEO was getting a total

salary of Rs.1,67,284/-; and that the Commission

asking the 5th respondent to remain in-charge as

CEO was not violative of any rules or regulations.

8. A counter affidavit was filed by the CESU and the

5th respondent contending that a Public Interest

Litigation of the present nature was not

maintainable and in any case the Commission’s

handing over the charge of as CEO to the 5th

respondent would not be found fault with.

9. The High Court referred to the maintainability of

the writ petition and came to hold that as the post

of the CEO, CESU, had not been filled in

accordance with the Service Regulations of

GRIDCO, the challenge to the effect that the

Chairman being higher in rank than the CEO could

not have been asked to discharge the function of

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CEO and granting honorarium of Rs.70,000/- in

addition to his usual perquisites, a writ of quo

warranto would lie. Thereafter, the High Court

proceeded to scrutinize the order passed by the

Commission asking the 5th respondent to discharge

the functions of CEO as a temporary measure and

opined that it has to be construed as an

appointment and the person concerned was not

suitable to hold the post as the service regulations

do not provide for the same. The High Court

referred to clause 4(iv) and clause 5 of the

Scheme and the impugned order dated

12.11.2010 whereby the 5th respondent, Mr. Jena,

was given Rs.70,000/- per month as a consolidated

honorarium in addition to the usual perquisites

being enjoyed by the CEO like telephone, vehicle,

travelling allowances excluding the house rent and

opined ascribing certain reasons that the said

appointment was illegal and, accordingly, quashed

the same. The High Court further directed for

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recovery of the amount from the 5th respondent. It

is also apt to note here that the High Court

directed that the Commission shall immediately

take steps to fill up the post of CEO within a period

of two months from the date of receipt of the copy

of the judgment and the Chairman shall not be

allowed to function till filling up of the post of CEO

and some other responsible officer of CESU shall

act as in-charge CEO.

10. At this stage, we think it apposite to summarise

the principal reasons which have been ascribed by

the High Court while setting aside the order

whereby the 5th respondent was asked to function

as CEO and given the consolidated honorarium:

(i) The Commission has acted illegally and arbitrarily

in appointing the Chairman as the CEO, who is also

one of the Members of the Board Management of

CESU.

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(ii) On reading of all the relevant clauses it is very

clear that the Chairman of the CESU is required to

supervise the smooth functioning of the CESU and

CEO is to act under the control of the Chairman.

That being the position and the opp. party no. 3,

who is a retired officer and the Chairman of CESU

could not have been appointed as CEO.

(iii) If the post of CEO in the organization falls vacant

in view of the urgency of either temporary

appointment can be made or in charge

arrangement can be made for temporary period,

but the same power could not have been

conferred upon the Chairman as the Chairman is

required to supervise and control the function of

officers of the Board as well as in the Organization

and, therefore, his appointment as CEO by way of

an alternative arrangement is contrary to Clause 5

of the Scheme.

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(iv) It is not legally correct on the part of the

Commission to appoint the Chairman as the CEO,

which is contrary to the service regulations and

the 5th respondent should not have been allowed

to function as the CEO having regard to the nature

of powers and functions required to be discharged

by the Chairman, for CEO is under the control and

supervision of the Chairman. As the 5th respondent

cannot supervise his own work there is violation of

principles of natural justice as he cannot find out

his own defects and discharge his responsibilities.

(v) The Commission has acted in violation of service

regulations and hence, it is case of abuse of

power. That apart, propriety demanded that the

5th respondent should not have entrusted with the

additional charge of CEO.

(vi) The appointment being contrary to the guidelines

framed by CESU, the 5th respondent becomes an

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usurper to the public office and hence, his

appointment deserved to be quashed.

11. We have heard Mr. P.P. Rao, learned senior counsel

for Central Electricity Supply Utility of Odisha, Mr.

M.G. Ramachandran, learned counsel for Bijay

Chandra Jena, Respondent No. 1 in person assisted

by Mr. Aparajit Ninawe, learned counsel, and Mr.

Rutwik Panda, learned counsel for respondent No.

4 in both the appeals.

12. Calling in question the defensibility of the

judgment Mr. Rao, learned senior counsel, has

advanced the following contentions: -

(a) In relation to a service matter a public

interest litigation is not maintainable except as

far as it relates to a writ of quo warranto and in

the case at hand, the High Court has failed to

understand the implications of the writ of quo

warranto and has not only entertained the PIL in

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the garb of a writ of quo warranto but further

proceeded to direct recovery of the amount paid

to the Chairman of the Commission while

functioning as a CEO which is beyond the scope

of a PIL.

(b) A writ of quo warranto cannot be

issued unless there is violation of statutory

provisions and in the case at hand, in the

absence of any statutory provision, and regard

being had to the amendment of the Scheme

made on 12.11.2010 wherein sub-clause (ix)

has been incorporated in clause 4 enabling the

Commission to allow the Chairman to discharge

the functions and responsibilities of both the

posts, the arrangement could not have been

unsettled by the High Court.

(c) The High Court has failed to

appreciate that the appointing authority has the

inherent power to make an interim arrangement

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when the post falls vacant pending selection

and appointment of another eligible and

suitable candidate to the post and in similar

analogy giving additional charge of the post to a

superior officer is not contrary to the public

policy or against the interest of the institution.

(d) The High Court has fundamentally

misconstrued the provisions under the Act,

Regulations and the Scheme and has

erroneously opined that the Chairman, who was

holding the additional charge, had usurped the

position despite being eligible, qualified and

experienced.

(e) The conclusion that the Chairman,

who was age barred for holding the post of CEO,

should have been treated to be disqualified to

hold the post, is both fallacious on facts and

erroneous in law. There is no statutory provision

prescribing the age. That apart, the policy

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decision and the advertisement do not curtail

the power/authority of the Commission to make

any appropriate temporary arrangement, more

so, when it is so permissible under the Scheme.

13. Mr. Ramachandran, learned counsel, while

reiterating the submissions made by Mr. P.P. Rao,

further submitted that when the Chairman had

performed the duties of the CEO, there was no

justification to direct for recovery of the sum, for it

is unknown to service jurisprudence and in certain

circumstances amounts to beggary which is

enshrined under Article 23 of the Constitution of

India. The learned counsel would contend that Mr.

Jena who has earned his reputation in his own

field, despite the said order, had intimated CESU

that he would not function and he is not

functioning in praesenti.

14. Mr. Sahoo, appering in person and Mr. Aparajit

Ninawe, learned counsel, who assisted him,

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submitted that the verdict of the High Court is

absolutely flawless and relying on the additional

affidavit it has been put forth that the post of CEO

in CESU is a selection post which should have

been filled up through a public advertisement as

per the procedure of selection and, therefore, Mr.

Jena could not have been allowed to hold two

posts, namely, the Chairman of CESU as well as

the CEO. It is further contended that there is a

policy decision for filling up of posts for senior

positions in CESU and that being the position,

appointment of Mr. Jena is vitiated. The said policy

decision has been emphatically placed reliance

upon to highlight the factum of age which was 55

years in 2007. It is also asserted in the affidavit

that the age limit has been enhanced to 60 years

in the year 2012 but by the time Mr. Jena was

asked to take over the charge he was more than

69 years and, hence, he was ineligible to hold the

post.

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15. Before we advert to the aforesaid submissions

and the legal substantiality of the order passed by

the High Court, we may refer to certain authorities

that throw light on the duty of the Court while

dealing with a writ of quo warranto. In The

University of Mysore v. C.D. Govinda Rao and

another1, Gajendrakadkar, J. (as his Lordship then

was) speaking for the Constitution Bench, has

stated thus: -

“Broadly stated, the quo warranto proceeding affords a judicial enquiry in which any person holding an independent substantive public office, or franchise, or liberty, is called upon to show by what right he holds the said office, franchise or liberty; if the inquiry leads to the finding that the holder of the office has no valid title to it, the issue of the writ of quo warranto ousts him from that office. In other words, the procedure of quo warranto confers jurisdiction and authority on the judiciary to control executive action in the matter of making appointments to public offices against the relevant statutory provisions; it also protects a citizen from being deprived of public office to which he may have a right. It would thus be seen that if these proceedings are adopted subject to the conditions recognized in that behalf, they tend

1

AIR 1965 SC 491

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to protect the public from usurpers of public office; in some cases, persons not entitled to public office may be allowed to occupy them and to continue to hold them as a result of the connivance of the executive or with its active help, and in such cases, if the jurisdiction of the courts to issue writ of quo warranto is properly invoked, the usurper can be ousted and the person entitle to the post allowed to occupy it. It is thus clear that before a citizen can claim a writ of quo warranto, he must satisfy the court, inter alia, that the office in question is a public office and is held by usurper without legal authority, and that necessarily leads to the enquiry as to whether the appointment of the said alleged usurper has been made in accordance with law or not.”

[Emphasis supplied]

16. In High Court of Gujarat and another v.

Gujarat Kishan Mazdoor Panchayat and

others2 S.B. Sinha, J., in his concurring opinion,

while adverting to the concept of exercise of

jurisdiction by the High Court in relation to a writ

of quo warranto, has expressed thus: -

“22. The High Court in exercise of its writ jurisdiction in a matter of this nature is required to determine at the outset as to whether a case has been made out for issuance of a writ of certiorari

2

(2003) 4 SCC 712

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or a write of quo warranto. The jurisdiction of the High Court to issue a writ of quo warranto is a limited one. While issuing such a writ, the Court merely makes a public declaration but will not consider the respective impact of the candidates or other factors which may be relevant for issuance of a writ of certiorari. (See R.K. Jain v. Union of India3, SCC para 74)

23. A writ of quo warranto can only be issued when the appointment is contrary to the statutory rules. (See Mor Modern Coop. Transport Society Ltd. v. Financial Commr. & Secy. To Govt. of Haryana4.)

[Underlining is ours]

17. In Centre for PIL and Another v. Union of

India and Another5, a three-Judge Bench, after

referring to the decision in R.K. Jain (supra), has

ruled thus: -

“64. Even in R.K. Jain case, this Court observed vide para 73 that judicial review is concerned with whether the incumbent possessed qualifications

3

(1993) 4 SCC 119

4

(2002) 6 SCC 269

5

(2011) 4 SCC 1

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for the appointment and the manner in which the appointment came to be made or whether the procedure adopted was fair, just and reasonable. We reiterate that the Government is not accountable to the courts for the choice made but the Government is accountable to the courts in respect of the lawfulness/legality of its decision when impugned under the judicial review jurisdiction.”

18. From the aforesaid exposition of law it is clear as

noon day that the jurisdiction of the High Court

while issuing a writ of quo warranto is a limited

one and can only be issued when the person

holding the public office lacks the eligibility criteria

or when the appointment is contrary to the

statutory rules. That apart, the concept of locus

standi which is strictly applicable to service

jurisprudence for the purpose of canvassing the

legality or correctness of the action should not be

allowed to have any entry, for such allowance is

likely to exceed the limits of quo warranto which is

impermissible. The basic purpose of a writ of quo

warranto is to confer jurisdiction on the

constitutional courts to see that a public office is

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not held by usurper without any legal authority.

While dealing with the writ of quo warranto

another aspect has to be kept in view. Sometimes

a contention is raised pertaining to doctrine of

delay and laches in filing a writ of quo warranto.

There is a difference pertaining to personal

interest or individual interest on one hand and an

interest by a citizen as a relator to the court on the

other. The principle of doctrine of delay and

laches should not be allowed any play because the

person holds the public office as a usurper and

such continuance is to be prevented by the court.

The Court is required to see that the larger public

interest and the basic concept pertaining to good

governance are not thrown to the winds.

19. Mr. P.P. Rao, learned senior counsel, has

commended us to the decision in Hari Bansh Lal

v. Sahodar Prasad Mahto and others6, where

6

(2010) 9 SCC 655

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the learned Judges referred to the principles laid

down in Duryodhan Sahu (Dr.) v. Jitendra

Kumar Mishra7 Ashok Kumar Pandey v. State

of W.B.8, B. Singh (Dr.) v. Union of India9,

Dattaraj Nathuji Thaware v. State of

Maharashtra10 and Gurpal Singh v. State of

Punjab11 and expressed the view thus: -

“The above principles make it clear that except for a writ of quo warranto, public interest litigation is not maintainable in service matters.”

20. Ordinarily, after so stating we would have

proceeded to scan the anatomy of the Act, the 7

(1998) 7 SCC 273

8

(2004) 3 SCC 349

9

(2004) 3 SCC 363

10

(2005) 1 SCC 590

11

(2005) 5 SCC 136

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Rules, the concept of the Scheme under the Act

and other facets but we have thought it imperative

to revisit certain authorities pertaining to public

interest litigation, its abuses and the way

sometimes the courts perceive the entire

spectrum. It is an ingenious and adroit innovation

of the judge-made law within the constitutional

parameters and serves as a weapon for certain

purposes. It is regarded as a weapon to mitigate

grievances of the poor and the marginalized

sections of the society and to check the abuse of

power at the hands of the Executive and further to

see that the necessitous law and order situation,

which is the duty of the State, is properly

sustained, the people in impecuniosity do not die

of hunger, national economy is not jeopardized;

rule of law is not imperiled; human rights are not

endangered, and probity, transparency and

integrity in the governance remain in a constant

state of stability. The use of the said weapon has

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to be done with care, caution and circumspection.

We have a reason to say so, as in the case at hand

there has been a fallacious perception not only as

regards the merits of the case but also there is an

erroneous approach in issuance of direction

pertaining to recovery of the sum from the holder

of the post. We shall dwell upon the same at a

later stage.

21. As advised at present, we may refer to certain

authorities in the field in this regard. In Bandhua

Mukti Morcha v. Union of India and others12,

Bhagwati, J., (as his Lordship then was) had

observed thus: -

“When the Court entertains public interest litigation, it does not do so in a caviling spirit or in a confrontational mood or with a view to tilting at executive authority or seeking to usurp it, but its attempt is only to ensure observance of social and economic rescue programme, legislative as well as executive, framed for the benefit of the have-nots and the handicapped and to protect them against

12

AIR 1984 SC 802

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violation of their basic human rights, which is also the constitutional obligation of the executive. The Court is thus merely assisting in the realization of the constitutional objectives.”

22. In Dr. D.C. Wadhwa and others v. State of

Bihar and others13, the Constitution Bench, while

entertaining a petition under Article 32 of the

Constitution on behalf of the petitioner therein,

observed that it is the right of every citizen to

insist that he should be governed by laws made in

accordance with the Constitution and not laws

made by the executive in violation of the

constitutional provisions. It has also been stated

therein that the rule of law constitutes the core of

our Constitution and it is the essence of rule of

law that the exercise of the power by the State

whether it be the legislature or the executive or

any other authority should be within the

constitutional limitation and if any practice is

adopted by the executive which is in flagrant

13

AIR 1987 SC 579

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violation of the constitutional limitations, a

member of the public would have sufficient

interest to challenge such practice and it would be

the constitutional duty of the Court to entertain

the writ petition.

23. In Neetu v. State of Punjab and others14, the

Court has opined that it is shocking to note that

Courts are flooded with large number of so called

public interest litigations where even a minuscule

percentage can legitimately be called as public

interest litigation. Commenting on entertaining

public interest litigations without being careful of

the parameters by the High Courts the learned

Judges observed as follows: -

“Though the parameters of public interest litigation have been indicated by this Court in large number of cases, yet unmindful of the real intentions and objectives. High Courts are entertaining such petitions and wasting valuable

14

AIR 2007 SC 758

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judicial time which, as noted above, could be otherwise utilized for disposal of genuine cases.”

Thereafter, giving a note on caution, the Court stated: -

“Public interest litigation is a weapon which has to be used with great care and circumspection and the judiciary has to be extremely careful to see that behind the beautiful veil of public interest an ugly private malice, vested interest and/or publicity seeking is not lurking. It is to be used as an effective weapon in the armoury of law for delivering social justice to the citizens.”

24. In State of Uttaranchal v. Balwant Singh

Chaufal and others15, this Court adverted to the

growth of public interest litigations in this country,

and the view expressed in various PILs and the

criticism advanced and eventually conceptualized

the development which is extracted below: -

“We deem it appropriate to broadly divide the public interest litigation in three phases:

• Phase I. – It deals with cases of this Court where directions and orders were passed primarily to protect fundamental rights under Article 21 of the marginalized groups and sections of the

15

(2010) 3 SCC 402

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society who because of extreme poverty, illiteracy and ignorance cannot approach this Court or the High Courts.

• Phase II. – It deals with the cases relating to protection, preservation or ecology, environment, forests, marine life, wildlife, mountains, rivers, historical monuments etc. etc.

• Phase III. – It deals with the directions issued by the Courts in maintaining the probity, transparency and integrity in governance.”

25. In Bholanath Mukherjee and others v.

Ramakrishna Mission Vivekananda

Centenary College and others16, it has been

laid down that public interest litigation would not

be maintainable in service law cases.

26. In Duryodhan Sahu (supra), a three-Judge,

Bench posed a question whether the

administrative tribunals constituted under the

Administrative Tribunals Act, 1985 can entertain a

16

(2011) 5 SCC 464

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public interest litigation. A post of lecturer was

created in a Government Medical College

recognized by the Medical Council of India and the

State Government requested the Public Service

Commission to recommend a suitable candidate

from the reserved list. At that stage, a third party

described himself as the Secretary of a particular

Surakhya Committee, filed an original application

for quashing the Government order creating the

post of the teacher. A grievance was also put

forth that the post was not advertised. The

tribunal restrained the appointment of the

beneficiary, the appellant before this Court. The

learned Judges opined that the administrative

tribunal constituted under the said Act cannot

entertain a public interest litigation at the

instance of a total stranger. While so stating the

three-Judge Bench opined that as the prayer was

for quashment of the creation of post itself and

preventing the authorities and for preventing the

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Government from appointing any candidate as

Lecturer, the prayer would not come in the sphere

of quo warranto.

27. Thus, from the aforesaid authorities it is quite

vivid that the public interest litigation was initially

evolved as a tool to take care of the fundamental

rights under Article 21 of the Constitution of the

marginalized sections of the society who because

of their poverty and illiteracy could not approach

the court. In quintessence it was initially evolved

to benefit the have-nots and the handicapped for

protection of their basic human rights and to see

that the authorities carry out their constitutional

obligations towards the marginalized sections of

people who cannot stand up on their own and

come to court to put forth their grievances.

Thereafter, there has been various phases as has

been stated in Balwant Singh Chaufal (supra).

It is also perceptible that court has taken note of

the fact how the public interest litigations have

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been misutilized to vindicate vested interests for

the propagated public interest. In fact, as has

been seen, even the people who are in service for

their seniority and promotion have preferred

public interest litigations. It has also come to the

notice of this Court that some persons, who

describe themselves as pro bono publico, have

approached the court challenging grant of

promotion, fixation of seniority, etc. in respect of

third parties.

28. Regard being had to the aforesaid enunciation of

law relating to two spheres, namely, issue of a

writ of quo warranto and the directions which are

justified to be issued in a public interest litigation

in the said context, we shall proceed to scrutinize

the legal substantiality of the judgment of the

High Court.

29. At this stage, it is necessary to understand the

Scheme framed by the State Commission as per

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the provisions of Section 22 of the Act. As stated

earlier, CESU was constituted by an order dated

8.9.2006 passed by the Commission. The Scheme

was amended from time to time vide notifications

dated 13.10.2006, 5.5.2007, 31.10.2007,

6.9.2008, 2.8.2010, 12.11.2010, 5.9.2011,

31.3.2012 and 17.9.2012. As per the Scheme a

CEO is to be appointed on the basis of a regular

advertisement published in the newspaper and

the advertisement prescribes the qualification and

other criteria to be satisfied by an applicant

aspirant to the post of CEO. The service

conditions of the CEO are decided by the State

Commission taking into consideration the situation

prevalent as per the resolution and orders passed

by the State Commission from time to time and

the said selection, is to be made in a transparent

manner. It is the stand of the appellant that Mr.

Jena was not appointed as CEO in accordance with

the procedure. It is to be noted that he was

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functioning as the Chairman of CESU. Sub-clause

(iv) of clause 4 of the amended Scheme dated

31.10.2007 may be reproduced with profit: -

“The CEO, CFO, COO and CCO should not hold any other posts/office during their tenure in the CESU. The terms of office, emoluments and conditions of service of CEO, CFO, COO and CCO shall be such as to be decided by the Commission by order issued under this Scheme. The Commission may extend their tenure for a further period, as it thinks fit.”

29. Clause 5(ii) of 2007 Scheme enumerated the

powers and functions of the CEO. Clause 5 was

amended and thereafter on 12.11.2010 further

amendment was brought in. The amendment, inter

alia, substituted clause 4(iv). The following was

added to the existing clause 4 as clause 4(ix): -

“Whenever needed, the power, functions and responsibilities of Chairman and CEO can be discharged by one person, designated as Chairman-cum-CEO.”

30. At this stage, it may be noted with profit that

the Commission vide letter dated 29.12.2007 had

communicated to the CESU about the terms and

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conditions for appointment of CEO. It reads as

follows: -

“1. Chief Executive Officer:

The Scale of Pay of the Chief Executive Officers is fixed at Rs.18,400-500-22,400/-. The Basic Pay of Shri Dasgupta joining in the post of Chief Executive Officer is fixed at Rs.22,400/- per month. Besides above, he is entitled to Dearness Pay and DA at the current rate allowed by the State Government. The cost to the Company per month includes the House Rent Allowances, Medical Allowances, Books, Periodical and Telephone Allowances, Attendant’s Allowances, LTC and personal Pay. Besides above, as Chief Executive Officer would be entitled to Leave Salary Contribution, Contributory Provident Fund, Service Gratuity as applicable to the post, which are included in the cost to Company.

The Chief Executive Officer is entitled to Conveyance Allowance of Rs.20,000/- per month for vehicle hired/owned by him along with the driver’s pay + reimbursement of the cost of fuel for official duty beyond the local duty

Or

He is entitled to a vehicle provided by the CESU along with five liters of fuel per day for personal use. The option is to be exercised by the incumbent.

The personal Pay includes the Management Allowances allowed to the post of Chief Executive Officer which is the monthly pay out of Medi-claim Insurance Premium and the Life Insurance

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Premium. As such all Medical Expenses shall be borne by him. The Personal Pay shall be linked to the performance of the Chief Executive Officer.

As negotiated at the time of interview the appointment of Shri Swapan Dasgupta as CEO in CESU is initially for a period of four years on Contract Basis, which can be extended for one year depending on the necessity of the organization, performance and usefulness of the officer and the cost to company shall be limited to 10% over and above his present entitled in CESC, Kolkata.

The Contract can be terminated on either side by three months notice or by payment/deposit of three months’ emoluments in lieu of notice.”

31. When Mr. Swapan Dasgupta was appointed as

CEO, the conditions of appointment were – annual

package of Rs.22 lakhs with certain perquisites.

After Mr. Dasgupta submitted his letter dated

9.8.2010 requesting the Commission to relieve him

from the post of CEO, the Commission decided to

relieve him with effect from that date. Thereafter on

10.8.2010 the Commission passed the following

order: -

“At present, Shri B.C. Jena, Chairman, CESU Management Board is closely monitoring the overall functioning of CESU as per para 5 of the

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FIFTH Amendment to the Central Electricity Supply Utility of Orissa (Operation and Management) Scheme, 2006 notified by the Commission vide Notification No. CESU(O&M)/4590 dtd. 03.8.2010. It has been stipulated that the Chairman shall guide, advise and have overall superintendence and control over the CEO, CFO, COO, CCO, CPIO, Sr. G.M. (HR) and CVO for smooth and efficient functioning of the CESU. Since it will take quite some time for the selection of a CEO to make alternative arrangement, the Commission shall have now decided that the function, duties and responsibilities of CEO, CESU shall be discharged by Shri B.C. Jena, Chairman, CESU Management Board until further orders or until alternative arrangement is made by the Commission. This order will be effective from 10.8.2010.

Shri Jena will enjoy all the perquisites/ facilities as was being given to the CEO except the monthly emoluments. The Commission would take a view later on regarding the desirability of giving an honorarium to the Chairman, CESU Management Board for enabling him to discharge his duties and responsibilities as a CEO over and above the responsibilities of Chairman and his other current assignments, if any.”

32. We may also note with profit that a policy

decision had been taken for preparing an

advertisement for appointment of the CEO at the

time of Sengupta’s appointment. It provided for

filling up of senior positions for CESU. It stipulated

that the tenure of appointment would be for a period

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of three years and extendable thereafter depending

upon the performance and the maximum age limit of

the candidate shall not exceed 55 years as on

1.9.2007. The qualification that was required was

that the CEO shall be a person with drive and

initiative and shall be in overall charge of

engineering, finance, commerce,

corporate/regulatory affairs and general

management. He should at least possess a degree

in electrical engineering. An added qualification of

MBA/CA/FICWA from a reputed University was

desirable. It was also stipulated that service

experience of about 15-20 years of which at least 5

years was a must for top managerial position.

33. Mr. Sahoo has brought on record an

advertisement for filling up the post for the period

2007-08. The advertisement dated 26.5.2012 has

also been brought on record. True it is, it is after the

judgment of the High Court and it reads as follows: -

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“The Chief Executive Officer shall be a person with initiative a drive. He will be in overall charge of engineering, finance, commerce, corporate/ regulatory affairs and general management of the utility. This is a Board level position and he should at least possess a professional degree in Engineering or Management or Accountancy or Law from a reputed University. He should have at least 10 years experience in senior level managerial position in a large organization.”

34. It also stipulates that the tenure of appointment

would be for a period of two years and extendable

thereafter depending upon the performance of the

candidate and the requirement of the organization

and the applicant should not be more than 60 years

of age as on 1.4.2012.

35. In this backdrop it is to be seen whether the

action of the authority requiring the Chairman to

remain in-charge of the CEO or to function as CEO

comes within the scope and ambit of writ of quo

warranto. We have already stated the principles

relating to exercise of jurisdiction of the court to

issue a writ of quo warranto. When a writ of quo

warranto is filed, it is the obligation of the relator to

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satisfy the court that the office in question is a

public office and is held by the usurper without the

legal authority. It is the duty of the court to see

whether the appointment has been made contrary to

the statutory rules. Issue of institutional integrity

has also to be taken into consideration when a post

is filled up and that is where the manner in which

the appointment came to be made or whether the

procedure adopted was fair, just and reasonable are

required to be seen. On a perusal of the reasons

adopted by the High Court it is perceptible that it

has paved a different path. It has given emphasis

on the role of the Commission, the functionism of

CESU, the control of the Chairman on the CEO, the

violation of the principles of natural justice, the

nature of appointment, the abuse of power by the

Commission and the violation of the regulations in

such appointment. In our opinion, most of the

reasons that have been given by the High Court are

totally unrelatable to the sphere of issue of writ of

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quo warranto. We are only required to see whether

the Commission had the authority to make any

temporary arrangement and whether the 5th

respondent was eligible for the said purpose. To

understand the said facet, we have to refer to

certain provisions of the Act which encapsulate the

basic map of the functions of the licensees and the

utility service. Section 19 of the Act deals with

revocation of licence of a licensee. Section 20

provides for sale of utilities of licensees. It

prescribes the procedure and the arrangements to

be made by the Commission. Till the licence is sold,

the Commission has been authorised to make

interim arrangements. It has been conferred the

power to appoint Administrator of the utility. Section

22 takes care of the situation where no purchase

takes place, that is to say, when the utility is not

sold in the manner provided under Section 20 or

Section 24. We think it necessary to reproduce

Section 22 of the Act: -

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“22.Provisions where no purchase takes place. – (1) If the utility is not sold in the manner provided under section 20 or section 24, the Appropriate Commission may, to protect the interest of the consumers or in the public interest, issue such directions or formulate such Scheme as it may deem necessary for operation of the utility.

(2) Where no directions are issued or Scheme is formulated by the Appropriate Commission under sub-section (1), the licensee referred to in section 20 or section 24 may dispose of the utility in such manner as it may deem fit.

Provided that, if the licensee does not dispose of the utility, within a period of six months from the date of revocation, under section 20 or section 24, the Appropriate Commission may cause the works of the licensee in, under, over, along or across any street or public land to be removed and every such street or public land to be reinstated, and recover the cost of such removal and reinstatement from the licensee.”

From the aforesaid provision, it is limpid that the

Commission has been conferred power to formulate a

Scheme or issue directions in the public interest so that

operation of the utility service is not put to hazard.

36. In the case at hand, as has been stated earlier,

the utility service came into existence after

formulation of a Scheme. The Scheme has been

amended from time to time. The High Court has

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referred to clause 4(iv) and clause 5 of the Scheme.

We think it appropriate to reproduce clause 4(iv) and

clause 5 of the Scheme as reproduced by the High

Court: -

“(iv) The CEO, CFO and COO should not hold any other posts/office during their tenure in the CESU. The terms of office, emoluments and conditions of service of CEO, CFO and COO shall be such as to be decided by the Commission by order issued under this Scheme. The Commission may extend their tenure for a further period, as it thinks fit.”

xxx xxx xxx

Clause 5 :

“(i) Chairman

(a) He shall preside over all Board Meetings.

(b) He shall guide, advise and have overall superintendence and control over the CEO, CFO and COO for smooth and efficient functioning of the CESU.

(c) He shall decide all the matters referred to him by the Board.

(d) He shall discharge all other duties assigned by the Commission under the Scheme.

(ii) Chief Executive Officer (CEO)

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Subject to overall supervision, control and delegation of power by the Management Board and directions of the Commission –

(a) He shall act as Chief Executive and Chief Spokesman of the CESU.

(b) He shall manage the day-to-day affairs and management of CESU and shall represent the CESU before the Commission and other Authorities.

(c) He shall carry out and implement the orders and directions issued by the Commission to the CESU.

(d) He shall carry out and implement the resolutions/decisions taken by the Management Board.

(e) In consultation with the Management Board, he shall design and implement the organizational structure and management of the CESU.

(f) In the name and on behalf of the CESU, he shall enter into contract with all external agencies and take loans from funding/financial institutions.

(g) On behalf of the CESU, he shall discharge all its statutory/regulatory requirement and obligations.

(h) Any other function as may be assigned by the Commission or the Management Board from time to time under the Scheme.

(i) The CEO shall report to the Chairman.”

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37. After reproducing the same the High Court has

opined thus: -

“On reading of all the aforesaid relevant clauses it is very clear that the Chairman of the CESU is required to supervise the smooth functioning of the CESU and Chief Executive Officer is to act under the control of the Chairman. That being the position and the opp. party no. 3, who is a retired officer and the Chairman of CESU could not have been appointed as Chief Executive Officer. If the post of Chief Executive Officer in the Organization falls vacant in view of the urgency of either temporary appointment can be made or in charge arrangement can be made for temporary period, but the same power could not have been conferred upon the Chairman as the Chairman is required to supervise and control the function of Officers of the Board as well as in the Organization, therefore his appointment as Chief Executive Officer as an alternative arrangement is contrary to Clause 5 of the Scheme referred to supra. The powers and functions of the Chief Executive Officer have been extracted above. Further, as could be seen from the impugned order, the appointment in question is styled as temporary in nature. If the post falls vacant, it is the duty of the Commission to see that the post is filled up by following the service regulations.”

38. Thereafter, the High Court has referred to the

resolution dated 12.11.2010 by which the

Commission had allowed Mr. Jena to continue as

Chairman-cum-CEO to discharge the duties and

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responsibilities until further orders and was

extended the benefit of consolidated honorarium of

Rs.70,000/- per month in addition to the usual

perquisites as enjoyed by the CEO. After so stating,

the High Court has proceeded to express thus: -

“24. The contention urged on behalf of opp. party no. 2-Secretary, OERC is that only temporary arrangement has been made fixing a monthly honorarium of Rs.70,000/- which is payable to the Chief Executive Officer. It is unknown to the service jurisprudence that an employee/officer who is put in charge of another office or post in addition to his own duty is to be granted honorarium. The same is totally impermissible in law. On reading Annexures-3 & 5, we are of the view that it is not legally correct on the part of the Commission to appoint the Chairman as the Chief Executive Officer, which is contrary to the service regulations. opp. party no. 3 should not have been placed on temporary arrangement as the Chief Executive Officer having regard to the nature of powers and functions required to be discharged by the Chairman who has been put in charge of the Chief Executive Officer who is under the control and supervision of the Chairman. He cannot supervise his own work which is the violation of principle of natural justice. He cannot find out his own defect and discharge his responsibilities.

25. Therefore, we are of the view that the Commission has acted illegally and in violation of service regulations placing the opp. party no.3 in the post of Chief Executive Officer and further granting him honorarium w.e.f. 11.08.2010 vide

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letter dated 12.11.2010 under Annexure-5, which is a clear case of abuse of power of the Commission and the said appointment order is without authority of law and opp. party no.3 should not have been entrusted with the duties, functions and responsibilities of the CEO while functioning as Chairman of CESU. Therefore, we are of the view that both Annexures-3 & 5 are liable to be quashed and the same are accordingly quashed and a writ of quo warranto is issued forthwith as the opp. party no.3 is not competent to hold the post of Chief Exeucitve Officer of CESU.”

39. We have reproduced the order in extenso

because we are of the considered opinion that the

reasons are flawed. The Commission has the power

under the Scheme to give additional charge of CEO

to the Chairman. The Scheme is framed by the

Commission. The whole thing is controlled by the

language used in the Scheme. The High Court,

instead of appreciating the eligibility of the 5th

respondent, has adverted to the concept of internal

administration of CESU, that is, CEO is required to

report to the Chairman and if the Chairman remains

in charge, his actions may go without scrutiny. The

assumption in this regard is not correct. The Board

has the overall power of supervision and

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management. That apart, the power is vested with

the Commission to do so under the Scheme. The

High Court has also referred to certain provisions

about the regulations. Needless to emphasise, the

said regulations operate in a different field

altogether and have nothing to do with any

appointments under the Scheme. The only thing

which has been highlighted by the 1st respondent is

that it was accepted by the High Court that he was a

retired officer and was appointed as Chairman and

further was asked to remain in charge of CEO and

was given some honorarium, which is impermissible.

In fact, what is submitted is that he becomes an

appointee in respect of two posts which the law does

not countenance. The said submission suffers from

a fundamental fallacy. The Chairman of CESU is a

honorary post. He was getting sitting fees for

attending the meetings. He was not even given a

fixed honorarium. Therefore, to conclude that he

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was holding two posts and drawing salary for both

the posts is factually incorrect.

40. The whole thing has to be scrutinized from the

point of view of power. Suitability or eligibility of a

candidate for appointment to a post is within the

domain of the appointing authority. The only thing

that can be scrutinized by the Court is whether the

appointment is contrary to the statutory

provisions/rules. In Hari Bansh Lal (supra) the

Court took note of the stand of the Law Officer of

Jharkhand State Electricity Board and commented on

the somersault in the stand made by the State and

thereafter proceeded to note that the appellant Hari

Bansh Lal had retired in 1985 and there is no

prescription for upper age limit for appointment as

Member or Chairman of the Board. The Court took

note of the encomiums by the Electricity Board and

the State Government before the High Court.

Eventually, the learned Judges opined thus: -

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“43. Though, in the PIL, the writ petitioner has mentioned the age of Mr. Lal as 90, it is factually incorrect and Mr Lal himself swore an affidavit and asserted and it is not disputed by the State that he is 84 as on date and according to him, he is hale and healthy. We have already reproduced the stand of the State Government before the High Court about his qualification and service rendered as Member and Chairman in the State Electricity Board.”

xxx xxx xxx

“45. Taking note of all these relevant factors and of the fact that admittedly, there is no age-limit prescribed in the rules for appointment to the post of Chairman and also with regard to the stand of the State Government about the qualification as well as good service rendered by the appellant, we feel that in the event of quashing the High Court’s order, he should be allowed to continue as Chairman of the Electricity Board.”

41. Keeping the aforesaid opinion in mind, we shall

address to the controversy in the case at hand.

From the factual depiction it is seen that though the

policy and the Scheme provide that the age of the

candidate shall not exceed 55 years as on 1.9.2007,

yet the tenure is extendable thereafter depending

upon the performance. We have referred to the

same only for the purpose that though there is a

maximum age limit at the time of submission of an

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application, yet the term can be extended. It may

be apposite to note here that even if the maximum

age limit is provided for submission of application

and the period of appointment is three years, it is

extendable depending upon the performance.

Having regard to the nature of language used, it is to

be construed that it is a contract appointment to

choose a highly qualified and skilled person. The

extension is also dependant upon performance. No

limit is provided for number of extensions. It would

depend upon the capability, efficiency and suitability

as adjudged by the employer. Needless to say, for

grant of extension the person would not have a

right. Similarly his continuance for the term of three

years will depend upon the nature of appointment

letter issued to him. Thus viewed, we are inclined to

think that the principle stated in Hari Bansh Lal’s

case would get attracted. That apart, there is no

maximum age limit for Chairman. He holds a higher

post and his experience and capability have been

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appreciated by the Commission. It is a well known

principle that the employer can ask an officer to

remain in charge of another office till the said post is

filled up. It is within the permissible authority of the

employer. Under the Scheme the Chairman was not

getting any remuneration. He was only getting

sitting fees. Looking at his ability and efficiency the

Commission thought it appropriate that he should be

given the charge of CEO and accordingly an

honorarium was fixed. Honorarium was not

equivalent to the salary. The High Court has

erroneously opined that it was an appointment. The

5th respondent was not getting two sets of salary.

Thus analysed, we have no hesitation that the

reasons ascribed by the High Court to quash the

arrangement are unacceptable and, accordingly, the

decision on that score deserves to be lancinated and

we so do.

42. We may proceed to state that once we have

dislodged the the decision of the High Court

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whereby it has opined that the Chairman could not

have been allowed to remain in-charge of CEO as a

logical corollary the direction for recovery gets

annulled. But we think it appropriate to add

something. Even in a writ of quo warranto while

declaring that a person is not eligible to hold the

post had rendered service, we are disposed to think,

there cannot be recovery of amount. While

exercising the power for issue of writ of quo

warranto the Court only makes a public declaration

that the person holding the public office is a usurper

and not eligible to hold the post and after the

declaration is made he ceases to hold the office. Till

the declaration is made, the incumbent renders

service and when he has rendered service he cannot

be deprived of his salary. Denial of pay for the

service rendered tantamounts to forced labour which

is impermissible. When an appointment is admitted

and the incumbent functions in the post and neither

suspended nor removed from service, he is entitled

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to get salary, for it is his legal right and it is the duty

of the employer to pay it as per the terms and

conditions of the appointment. The matter may be

different when someone continues after retirement

by a false declaration or misrepresentation.

Recovery of salary would amount to deprivation of

payment while the incumbent was holding the post

and had worked. Asking someone to work and when

his appointment is nullified by issue of a writ of quo

warranto by the Court, we think that neither the

employer can recover the amount nor the Court can

direct for recovery of the same. There has to be

some other reason for denial of payment, recovery

of salary or honorarium. In this context, we may

fruitfully reproduce a passage from People’s Union

for Democratic Rights and others v. Union of

India and others17: -

17

(1982) 3 SCC 235

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“... if a person has contracted with another to perform service and there is consideration for such service in the shape of liquidation of debt or even remuneration he cannot be forced, by compulsion of law or otherwise, to continue to perform such service, as that would be forced labour within the inhibition of Article 23. This Article strikes at every form of forced labour even if it has its origin in a contract voluntarily entered into by the person obligated to provide labour or service (vide Pollock v. Williams18). The reason is that it offends against human dignity to compel a person to provide labour or service to another if he does not wish to do so, even though it be in breach of the contract entered into by him. There should be no serfdom or involuntary servitude in a free democratic India which respects the dignity of the individual and the worth of the human person.”

43. In view of the aforesaid analysis we are of the

resolute opinion that even while issuing a writ of quo

warranto there cannot be any direction for recovery

of the sum. While entertaining a PIL pertaining to a

writ of quo warranto we would add that it is the

obligation of the court to pave the path which are

governed by constitutional parameters and the

precedential set-up. It is to be borne in mind that

laws are commended to establish a society as

18

322 US 4 : 88 L Ed 1095

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required by the paradigms laid down by law. The

courts while implementing law may not always be

guided by total legalistic approach but that does not

necessarily mean to move on totally moralistic

principle which has no sanction of law. We have

been constrained to say so as we find that there is a

temptation to say something in a public interest

litigation which can be construed as the overreach.

It needs no special emphasis to state that

formulations of guidelines or directions issued are

bound to be within the constitutional parameters.

44. The matter may be viewed from the point of

view of the 5th respondent. True it is, his remaining

in-charge of the post of the CEO was called in

question before the High Court in a public interest

litigation wherein a writ of quo warranto was issued.

A judgment can be erroneous but when there is a

direction for recovery of the honorarium, it

indubitably creates a dent in the honour of a person.

Honour once lost may be irredeemable or

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irresuscitable. Mr. Ramachandran has number of

times submitted before us that because of the

humiliation faced, the 5th respondent decided not to

continue in the post of the Chairman also. We have

stated so because we strongly feel that a cautious

approach is requisite while dealing with a writ of quo

warranto.

45. Resultantly, the appeals are allowed and the

judgment and order passed by the High Court is set

aside. In the facts and circumstances of the case

there shall be no order as to costs.

………………………..J. [Anil R. Dave]

………………………..J. [Dipak Misra]

New Delhi; November 01, 2013.

CEN.ELECT.SUPPLY UTILITY OF ODISHA Vs DHOBEI SAHOO .

CEN.ELECT.SUPPLY UTILITY OF ODISHA Vs DHOBEI SAHOO .