Ghanshyam Singh vs Union Of India And Ors.
1990 Latest Caselaw 122 Del

JUDGMENT

Charanjit Talwar, J.

(1) The petitioner Shri Ghanshyam Singh was nominated as a Director on the Board of Directors of Indian Farmers Fertilizer Cooperative Limited (for short 'IFFCO') by the Government ofIndia by a letter of 30/03/1988. The nomination was made under Bye-law No. 33 of IFFCO. It was to take effect from 31/03/1988 when theBoard was to be re-constituted. The nomination was not for affixed Period but "valid until further orders". In partial modification of the letter dated 30/03/1988, the Government of India by letter dated the 1 9/12/1989 nominated Shri Satbir Singh Kadiyan, Member, Legislative Assembly of the State of Haryana (respondent No. 3 herein) on the said Board of Directors in place of the petitioner herein. The letter was to take effect immediately and the nomination as in the case of Shri Ghanshyam Singh, was until further orders". That letter is Annexure. 4 to the writ petition. The said respondent assumed office as Director of 1FFCO w.e.f. 20/12/1989 vice the petitioner herein and a circular to that effect was issued by the1FFCO on 20/12/1989 (Annexure. 5 to the writ petition). These two orders are impugned in the writ petition on various grounds.

(2) One of the grounds taken in the writ petition is passed on alleged male fides of respondent No. 4. The averments in this respect are contained in paragraphs 29 to34of the. writ petition. During arguments, Mr. D.D.Thakur learned counsel. for the petitioner submitted that the plea of the petitioner is not that the Government or respondent No. 4 Shri Devi Lal were actuated either by spite or ill-will against him. But he was imputing malice in its legal sense against respondent No. 4. His case is that assuming respondent No. 4 has acted in a legitimate exercise of power but infact he has not acted bonafide inasmuch as while pursuing a legitimate aim, his motive was to save the Haryana Ministry headed by his son.

(3) One has to agree with Mr. Thakur that in a case where mala fides stand proved, the order of the Government or of a Minister cannot be allowed to stand.

(4) To examine the plea whether mala fides, as urged, that is to say,malice in its legal sense has been established, the averments in paragraphs 29to 34 may be noticed. The petitioner in support of those averments relies ona number of press clippings. "29.That the respondent No. 4 Shri Devi Lal before the elections of Parliament held in November, 1989 was holding the office of Chief Minister of Haryana. Over a period of time the electorate of Haryana got disillusionment with the performance of the Government headed by respondent No. 4 Shri Devi Lal and they responded to the antigovernment feeling in Haryana. The first reflection of disillusionment was visible when Shri Tiyab Hussan, Member of Legislative Assembly of Haryana belonging to the Janata Dal, Shri Devi Lal group resigned from the party and joined Congress (1). In the meantime, elections of the Parliament declared and respondent. No. 4 Shri Devi Lal started propagating that he would seek fresh mandate of the people after Parliamentary elections. The parliamentary elections commenced and during the course of election, four ministers, namely S/Shri K.R. Punia.Hari Singh, Parmanand and Laxman Dass Kambod .and five MLA resigned from the Government and raised a banner of revolt. The election results were declared. They remained favorable for Janata also far Northern States were concerned, but were not encouraging so Far Haryana was concerfedas4outofl0seats won by Congress (1) with huge margin. The trend of voting in Haryana left no illusions in the mind of respondent No. 4 Shri Devi Lal about his deteriorating popularity in Haryana. He backed out his statement made during The elections that he would seek fresh mandate from the people.30. That, however. Shri Devi Lal, respondent No. 4 was appointed as Deputy Prime Minister in the new Government and besides Deputy Prime Minister, he is also given charge of the Agriculture Ministry Of which fertilizers is one of the departments. Simultaneously, his Son Shri 0m Prakash Chautala was appointed as Chief Minister of Haryana.31. Sensing that members of Legislative Assembly in Haryana are in process of revolting situation in Haryana rendering the Chief Minister unstable, the respondent No. 4- Shri Devi Lal resorted to a policy of appearing and favoritism so that his son Shri Om ParkashChautala may continue comfortably and there may not be further defection or desertion from the party and those who could not be accommodated in the councils of Ministers or otherwise in the State of Haryana were sent by the Chief Minister Shri 0m Prakash Chautala to his Father Shri Devi Lal, respondent No, 4 for being accommodated in one or the other assignment under the Ministry of Agriculture Of which Shri Devi Lal is in-charge.32. That with a view to appease and give favors to MLA. sent to the Centre, respondent No. 4 had nominated Shri Udaibhan, Mla as Chairman of one of the national level Multi-State Co-operative Societies known as Krishak Bharti Co-operative Limited, which is also involved in the production and distribution of the fertilizers.33. That similarly the respondent No. 4 with a view to give favors to other Mla respondent No. 3 Shri Satbir Singh Kadiyan who became Mla for the first time has tried to nominate in place of the petitioner who has been functioning as Chairman of respondent No. 2 and has got passed an order by respondent No. 1 nominating the respondent No. 3 as Director in place of petitioner. A Photostat copy of the order dated 19.12.89 is annexed as Amexure 4 of this writpetition.34. That as far as the petitioner's knowledge is concerned, ShriKadian, respondent No. 3 is neither a Co-operator nor has ever been involved in the co-operative movement either in the State of Haryana or anywhere else. He is appointed/nominated only to accommodate Him in the Central Government as a part of appeasement and favoritism."

(5) Shri Devi Lal, respondent No. 4, against whom the above allegations have been made, has filed an affidavit in his personal capacity. He Has controverter each of the above averments in paragraphs 5 to 9 of his affidavit.Those paragraph read as under : "5.In reply to para 29 of the Writ Petition, it is submitted that the respondent No. 4 remained undisputed leader of the Janta Dal-BJP MLA and remained as a Chief Minister of Haryana up to forenoon of 2/12/1989. That the change of group or party by An isolated MLA does not reflect on the popularity of the leader of the House.The recent Parliament Elections beyond doubt proved, the Popularity of Respondent No. 4 in Haryana and whole of the Northern India.The allegations made in the para are mischievous and false having no relevance with this case. The four ministers resigned from the Ministries they anticipated their sack from the Ministry and from Party as well for anti-party activities.6. Para 30 of the writ petition, needs no reply and it is submitted that Shri 0m Prakash Chautala was appointed the Chief Minister of Haryana as he was elected as the Leader of Haryana Janta Dal Legislative party.7. In reply to para 31 of the writ petition, it is submitted that the allegations made in that para are mischievous and false. There is no substance in the allegation of the petitioner and there is no question of any revolt by the member of the Legislative Assembly of Haryana and the present Ministry in Haryana headed by Shri 0m Prakash Chautala.8. The contents of paras 32 and 33 are baseless, false, concocted and are denied. It is submitted that the decision has been taken by the Government in accordance with the provisions of the Act and bye-laws of the Kribhco And IFFCO. 9. In reply to para 34 of the writ petition, it is submitted that the respondent No. 3 is a Law Graduate and had been practicing Advocate.He had been associated with the co-operative movement since 1972and was associated with Haryana Co-operative Land Development Bank from 1972 and 1984 as a Land Valuation Officer. He remained as an elected delegate of the Cooperative Societies of the representative General Body of 2nd Respondent (IFFCO) for two consecutive terms from 1983 to 1988."

(6) Mr. Thakur's argument is that bad faith on the part of respondent No. 4 can only be established by circumstantial evidence as in the present case it is well-nigh impossible to establish the state of that respondent's mind.According to him, the press clippings and show that the resignations of three ministers in the middle of November, 1989 of Haryana Government had caused a big set back to the Janata Dal on the eve of Lok Sabha elections and that thereupon the then Chief Minister of that State had threatened to dissolve the Honse. It is urged that there was a revolt in the party but the threat of dissolution of the State Assembly was called off after the general elections in November, 1989. However, on the appointment of respondent No. 4 as the deputy Prime Minister of India, he appointed his men to various central organisations with the sole aim of preventing the ruling party legislators of the Haryana State from revolting. Mr. Thakur has read out the press clippings to us. The emphasis was on a press report dated the 11/12/1989 appearing in the Tribune of 13/12/1989 wherein it had been stated as follows : "THE move is aimed at preventing ruling party legislators from joining the Janhit Morcha formed yesterday by Mr. Kirpa Ram Poonia and the eight Janta Dal legislators expelled recently from the party."

In the same report, it was pointed out that "the Union Agriculture Minister can offer powerful positions to persons of his choice. The Chairman of A number of corporations and Boards under the Ministry are nominated by the Agriculture Minister." Respondent No. 4 is handling that portfolio.

(7) Mr. Thakur in support of his submission that no direct evidence of mala fide can be expected as it is not possible for the petitioner to establish the state of mind of that respondent, relies heavily on Partap Singh v. State of Punjab Mr 1964 Sc 72. In paragraph 8 of the reported judgment,Ayyanagar, J speaking for himself and S.K. Das and K. Subba Rao, Jj held that :- "(8)Doubtless, he who seeks to invalidate or nullify any act or order must establish the charge of bad faith, an abuse or a misuse by Government of its powers. While the indirect motive or purpose, or bad faith or personal ill-will is not to be held established except on clear proof thereof, it is obviously difficult to establish the state of aman's mind, for that is what the appellant has to establish in this case,though this may sometimes be done (See Edgington v. Fitzmaurice (1884) 29 Ch D 459. The difficulty is not lessened 'when one has to establish that a person in the position of a minister apparently acting in the legitimate exercise of power has in fact, been acting mala fade-in the sense of pursuing an illegitimate aim. We must, however, demur to the suggestion that, mala fide in the sense of improper motive should be established only by'"direct evidence that is that it must be discernible from the order impugned or must be shown from the nothings in the file which preceded the order. If bad faith would vitiate the order, the same can, in our opinion, be deduced as a reasonable and inescapable inference from proved facts."

(8) Mr. V.P. Singh, learned counsel for respondent No. 4, however,contests the proposition. It is his plea that in the state of pleadings in the present case, it must be held that the petitioner has failed to establish or prove mala fides as alleged, i.e. malice in the legal sense. He has also relied ona five-Judges Bench decision of the Supreme Court in support of thisargument. We may note that counsel have cited very many authorities in support of their rival contentions.

(9) In E.P.Royappa v. State of Tamil Nadu , it has been held that the burden of establishing the ground based on mala fid exercise of power, is very heavy on the persons who allege it. The court has held that: "THE court would, therefore, be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave and they are made against the holder of an office which has a high responsibility in the administration."

We may quote to our advantage, paragraphs 90 to 92 of the judgment : "90.We may now turn to the ground of challenge based on mala fideexercise of power. The petitioner set out in the petition various incidents in the course of administration where he crossed the path of the second respondent and incurred his wrath by inconvenient and uncompromising acts and nothings and contended that the secondrespondent, therefore, nursed hostility and malus animus against the petitioner and it was for this reason and not on account of exigencies of administration that the petitioner was transferred from the post of Chief Secretary. The incidents referred to by the petitioner, if true,constituted gross acts of mal-administration and the charge leveled against the second respondent was that because the petitioner in the course of his duties obstructed and thwarted the second respondent in these acts of mal-administration, that the second respondent was annoyed with him and it was with a view to putting him out of the way and at the same time deflating him that the second respondent transferred him from the post of Chief Secretary. The transfer of the petitioner was, therefore, in mala fide exercise of power and accordinglyinvalid.91. Now, when we examine this contention we must bear in mind two important considerations. In the first place, we must make it clear despite a very strenuous argument to the contrary, that we are not called upon to investigate into acts of mal-administration by the political Government headed by the second respondent. It is not within our province to embark on a far flung inquiry into acts of commission admission charged against the second respondent in the administration of the affairs of Tamil Nadu. That is not the scope of the inquiry before us and we must decline to enter upon any such inquiry. It is one thing to say that the second respondent was guilty of misrule and another to say that he had malus animus against the petitioner which was the operative cause of the displacement of the petitioner from the post of Chief Secretary. We are concerned only with the latter limited issue,not with the former popular issue. We cannot permit the petitioner to side track the issue and escape the burden of establishing hostility and mauls animus on the part of the second respondent by directing our attention to incidents of suspicious exercise of executive power. That would be nothing short of drawing a red herring across the trial. The only question before us is whether the action taken by the respondents includes any component of mala fides: whether hostility and mauls animus against the petitioner were the operational cause of the transfer of the petitioner from the post of Chief Secretary.92. Secondly, we must not also overlook that the burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demands proof of a high Order of credibility. Here, the petitioner, who was himself once the ChiefSecretary, has flung a series of charges of oblique conduct against The Chief Minister. That is in itself a rather extraordinary and unusual occurrence and if these charges are true, they are bound to shake the confidence of the people in the political custodians of power in the State and, therefore, the anxiety of the Court should be all the greater to insist on a higher degree of proof. In this context it may be noted that top administrators are often required to do acts which affect others adversely but which are necessary in the execution of their duties. These act may lend themselves to misconstruction and suspicion as to the bona fides of their author when the full facts and surrounding circumstances are not known. The court would, therefore, be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations of an gave and they are made against the holder of an office which has a high responsibility in the administration. Such is the judicial perspective in evaluating charges of unworthy conduct against ministers and other highauthorities, not because of any special status which they are supposed to enjoy, nor because they are highly placed in social life or administrative set up-these considerations are wholly irrelevant in judicialapproach, but because otherwise, functioning effectively would become difficult in a democracy. It is from this stand-point that we must assess the merits of the allegations of mala fides made by the petitioner against the second respondent."

(10) Mr. Singh submitted that in fact the case of the petitioner is based only on conjectures. He pointed out that it was open to the petitioner to have filed an affidavit of any of the three ministers of the Haryana Government who resigned or of any M.L.A. who was wanting to revolt, as suggested in the press clippings.

(11) It may be noticed that one of the ministers, who stated to have resigned because of disillusionment with the policies of respondent No. 4 was Shri Tiyab Hussain,MLA of Haryana. It is stated that he resigned from the Janata Dal and joined another political party viz., Congress-1. Even Shri TiyabHussain's affidavit in support of the contention that he had left the Janata Dal has not been filed. In case the allegation was true, the affidavit of Shri TiyabHussain could have been obtained and filed.

(12) His further argument was that as per the pleadings what has been alleged is not merely malice in its legal sense but mala fide on facts, i.e.,malus. The petitioner has completely failed to prove those allegations. He submitted that the petitioner has not given any particulars of those allegations. It was not even obligatory for the respondent to deal with those at all,yet respondent No. 4 has filed his own affidavit and denied in details The allegations in his reply.

(13) Now turning to the averments contained in paragraphs 29 to 34as quoted above to assess whether those amount to malice in law or mala fid son facts. or it is a rolled up plea containing both. .In our view paragraph 29of the writ petition contains the assessment of the petitioner about the situation in Haryana at; the relevant period. According to him, four ministers had resigned from the Haryana Government because of disillusionment with performance of the Government headed by respondent No. 4. We agree withMr. V.P. Singh that to accept that averment, it was necessary for the petitioner lo have filed atleast affidavit of one of them.

(14) Paragraph 30 states the factual position that after the general elections, respondent No. 4 Shri Devi Lal was appointed as Deputy Prime Minister of India and also given the charge of Agriculture Ministry, and hisson.Shri O.P.Chautala was appointed as Chief Minister of Haryana in hisplace.

(15) Paragraph 31 states that to halt the process of revolt against the the Chief Minister of Haryana, respondent No. 4 resorted to the policy of appearing so that his son could continue comfortably and further to accommodate those MLAs who were thinking of defecting or deserting the party, he accommodated them on the asking of his son. This again is merely an assessment of the situation by the petitioner. Mr. V.P. Singh has termed it as a pure conjecture on the petitioner's part.

(16) In paragraph 32 it is averred that with a view to appease and give favors to MLAs sent by the Chief Minister of Haryana to the Centre, Shri,Devi Lal, respondent No. 4 nominated one Shri Udai Bhan as Chairman of amulet-State Co-operative Society known as Krishan Bharti Cooperative Limited (KRIBHCO). In reply to that para, respondent No. 4 has submitted that its concerns are baseless, false, concocted and that the decision of the Government was in accordance with the provisions of the Act and bye-laws of the societies concerned.

(17) In view of the fact that Shri Udai Bhan has. not filed any affidavit in support of the contention, it can be said that the allegation amounts to a conjecture in the eyes of law. Similarly the allegation in paragraph 33 that with a view to give favor to other Mla, respondent No. 3 Shri S.S. Kadian,who became Mla for the first time", respondent No. 4 has nominated him in place of the petitioner, amounts to a conclusion by the petitioner. Further inparagraph 34 it is submitted that Shri Kadian is neither a "Co-operator" nor has he even been involved in the cooperative movement. His nomination is thus only to accommodate him.

(18) As noticed, respondent No. 4 has denied this allegation. According to him Shri Kadian is a Law Graduate and has been associated with the cooperative movement since 1972. He was associated with Haryana Cooperative Land Development Bank from 1972 to 1984 as a land Valuation Officer.It has further been averred by him the Shri Kadian was an elected delegate of Cooperative Society of the Representative General Body ofIFT'CO for two consecutive terms from 1983 to 1988. Thus the averment inparagraph 34 that Shri Kadian has no experience in the cooperative movement,stands falsefied. It can even be said that it is reckless.

(19) Applying the parameters laid and keeping in view the caution given to the courts in Royappa's case (supra), the allegations in paragraphs29 to 30 which do not amount to personal hostility but hostility of some other MLAs/Ministers towards respondent No. 4, cannot be read either as malice in law or malus animus on facts. The averments in paragraph 30 are just a statement of facts; in paragraph 31 those amount to conjectures by the petitioner. The only allegations of misuse of power by respondent No. 4 are inparagraphs 32 & 33. It is stated that in the legitimate- exercise of power, he has acted in bad faith. But those allegations have to lie held to be not established as they not only lack particulars but also proof.

(20) As noticed above, paragraph 34 is factuality wrong.

(21) Thus the averments in the said paragraphs, i.e., 29 to 34 of the petition, in our view cannot be made the basis even for alleging, as has been done byMr. Thakur, that the impugned action is actuated by malice in its legal sense.As we have noticed, during arguments he gave up the plea that respondent No.4or the Government of India were either actuated by spite or ill-will against the petitioner. The allegations of improper motives in paragraphs 32 and 33even if taken to constitute malice in law, cannot succeed as no particular or evidence has been furnished in support. A mere allegation that respondent No. 4 was actuated by improper motive based on surmises contained in a few press clippings, cannot be made basis of investigation by the court, .in the facts and circumstances of the case, the improper motives cannot be said to be discernible in present case. The ration of Partap Singh's case (supra) as quoted above, is not applicable.

(22) This contention has no force and is rejected.

(23) The other challenge is to the vires of Section 41(3) of the Multi State Co-operative Societies Act, 1984. Under that provision, a person nominated by the Central Government or the State Government on the Board of A Society covered under the Act, holds office during the pleasure of the respectiveGovernment. Section 41 reads as under : "41(1) Where the Central Government or a State Government has subscribed to the share capital of a multi-State Cooperative Society or has guaranteed the repayment of principal and payment of interest on debentures issued by a multi-Stat Cooperative Society or has guaranteed the repayment of principal and payment of interest on loans and advances to multi-Stat Cooperative Society, the Central Government or the State Government in this behalf, as the case may be, or any Person authorised by the Central Government or the State Government,shall have the right, to nominate on the hoard such number of persons as may be prescribed.(2) The bye-laws of a multi-State Cooperative Society may provide for the nomination of person", in excess of the limits prescribed under sub-section (1).105(3) A person nominated under this section shall hold office during the pleasure of the Govt., by which he has been so nominated."

(24) The argument is that the nomination under Section 41 amounts to an appointment as it is section of a person to an office. The office ofa Director being a public office, it is deemed to have an element of continuity and at any rate the bye-laws of the Society provide for a fixed period, therefore, the provision whereby that Director holds office during the pleasure of the Government under sub-section (3) of Section 41 of the Act, is ultra viresArticles. 14 and 16 of the Constitution.

(25) The argument. proceeds on the basis that from the inception of the Iffco since 1967, the nomination of Directors by the Central Government has been for the full period of three years which is the term of office of the elected members of the said Board. As per the bye-laws, the term of Office of the members of the Board who are nominees of the Government has to be indicated from time to time and keeping that mandate in view, so goes theargument, the persons nominated have been permitted to continue for three years or even for two terms, i.e., six years. Mr. Thakur's reliance is on bye-law No. 33(3) and 34 of the IFFCO. Bye-law No. 33 reads as under :3, The Board of Directors of Iffco shall consist of : (I)President or one nominee each of the Apex Cooperative Marketing Federation in a State wherefrom all Cooperatives have paid Not less than Rupees one crore to the share capital of IFFCO.(ii) Five Directors to be elected by the General Body;(iii) Not more than five persons to be nominated by the Governmentof India;(iv) Managing Director of the National Cooperative DevelopmentCorporation:(v) The Managing Director, Finance Director and Marketing Director of Iffco (all ex-officio).(vi) The Financing agency or agencies, if any, providing long-term credit to Iffco shall also be eligible to nominate one Directoreach.(vii) The Board of Directors shall co-opt an additional nominee from each of the State wherefrom all the Cooperatives have paid Not less. than Rs. 10 crores to the share capital of IFFCO;(viii) A nominee of National Cooperative Union of India;"

Bye-law No. 34 is to the following effect : "34(i) The term of office of the elected members of the Board of Directors shall be 3 years provided, however, that if for any unavoidablereason, fresh elections are not held before the expiry of theirterm, they shall continue to hold office for a further period of One year or till the elections are held, whichever is earlier:(ii) The term of office of the .members of the Board who are Nominees of the Government or Institutions shall be as indicated from Time to time by the Government or the concerned Institutions;(iii) The term of office of a Director co-opted under clause (vii) Of bye-law No. 33 shall be co-terminus with the elected members of the Board."

(26) To appreciate the rival contentions, it may be noticed that the membership of Iffco is not open to general public. No individual in his personal capacity can become its member. The membership as per bye-lawNo. 4 is open to cooperative societies of various categories namely. National,State, District, Regional and primary cooperative societies. Apart from these cooperative societies/federations, the membership is also open to National Cooperativec Development Corporation and the Government of India.

(27) Its general body consists as per bye-law No. 23 of "(1) Members of the Board of Directors, (2) one delegate from each of the member societies holding shares of the value of Rs. 1 lakh and above; and (3) delegates to be elected from amongst the representatives of member societies (other than members holding shares of the value of Rs. I lakh and above) in each State/Union Territory at the rate of one delegate for every 200 societies or partthereof: provided, however, the maximum number of such delegates from any State/Union Territory shall not exceed 25." Only five Directors have to beelected by the General Body. Apart from the five nominees of the Government of India and one of the National Cooperative Union of India, all the other Directors are nominees or representatives of the cooperative societies and become Directors by virtue of their official positions held in their parentorganisation. It is clear that every member of the Board of Directors is a nominee or representative of one or the other institution including the Government. Unless a person occupies a given official/representative position or is a nominee, he cannot become member of the Board. The underlying principle is that the Board is to consist of representatives of various cooperative societies federations/institutions and the Government. The Government we may note, have a huge financial stake in it. It is true that the term Of office of the elected members of the Board of Directors is for three years And is extendable by another year under bye-law No. 34(1). It is further correct that under bye-law No. 34(2), the term of office of the members of the Board,who are to be nominated, is to be indicated from time to time. But the question is whether under the scheme of the Act, the Rules and the bye-laws,the nominees of the Central Government who are appointed to the office ofa Director, ipso facto become employees of the State by virtue of thatcapacity? Mr. Thakur assumed that fact and urged that such an employments not liable to be terminated at the whim or fancy of a Minister. Thus provision permitting it viz., sub-section (3) of Section 41 of the Act is arbitrary and liable to be struck down.

(28) The learned Additional Solicitor General on behalf of the Union of India, respondent No. 1 herein, however, refuted the contention. He submitted that the nomination of the petitioner was till further orders and created no right. It was at the pleasure of the Government and, there fore the Government has the inherent power to recall or revoke that order at itspleasure. Mr. K.K. Venugopal, learned counsel for respondent No. 2 (IFFCO)submitted that in the present case, the impugned order whereby respondent No. 3 was nominated as a Director is an order under sub-section (1) of Section 41 as the appointment of the petitioner was till further orders According to him, the order cannot be read as having been passed under sub-section (3) of Section 41. Ill any case it was submitted by both these counsel that the provision does not suffer from vice of arbitrariness. Neither Article 16 nor Article 14 of the Constitution can be evoked by a nominee whose nomination has been recalled or who has been superseded by anothernominee.

(29) The basis of Mr. Thakur's argument, as noticed above, is that the petitioner was deemed to be in employment of the State for a fixed termite east of three years. He has taken us through the earlier orders by the Government of India nominating various persons as Director at differenttimes. His argument is that although in all those orders, the nomination was valid till further orders, but it was to take effect from the date the Board of Directors was to be re-constituted in terms of bye-law No. 33. Its term being of three years, therefore, all the earlier nominees, atleast those whonon-officials, were permitted to continue for the full term. In one case he has pointed out that the nominated Director after the expiry of the term was denominated and was allowed to continue for another three years. His cases that the said practice read with orders indicating that the nomination is to take effect from the date of re-constitution of the Board, show that the petitioner was also appointed for a period of three years as a Director. It was further submitted that as a Director of Iffco, he held a public office,the termination of which without a cause, has to be held to be illegal and accordingly the provision permitting such a termination at pleasure without laying down any guidelines has to be held to be arbitrary and hence ultra virus Articles 14 and 16 of the Constitution.

(30) Mr. Thakur cited very many authorities in support of hiscontention; the first case cited is reported in Air 1957 Patna at page 617(Sukhnandan Thakur v. State of Bihar). In the said case, the petitioner Sukhnandan Thakur had challenged his termination as a Supply Inspector of the Supply and Price Control Department at Muzzaffarpur as being Volatile of Article 16 of the Constitution. It transpired during the hearing that the termination was ordered in view of the Government circular to abolish some posts of Supply Inspector and to further reduce the inspectorate staff employed under the Supply Department, it had been stated in that circular that some of the Inspectors retained even though junior in service were being retained for their being political sufferers, members of scheduled tribes and scheduled castes and disabled persons. It was observed by a learned Single Judge of that Court that the dictionary meaning of the word "employment" namely, occupation,business; that which engages the head or hands as agricultural employment or mechanical employment, could be used in the facts of the case and the petitioner when he catered office (as a temporary hand) could contend that he was in employment which has an element of continually of the engagement and thus it was to be accepted that the rule of equality of opportunity as laid down under Article 16(1) of the Constitution was applicable.

(31) On the basis of the said authority, Mr. Thakur wants us to hold that the petitioner's nomination as a Director till further orders was an employment under the Government. He has equated "employment" with"appointment". He says that necessarily the word 'employment' has anelement of continuity of engagement. In the petitioner's case also that element was present when he entered upon his office. That element of continuity having been broken without a show cause notice, the impugned action has to be held to be bad.

(32) The second authority cited by Mr. Thakur is a well known case ofS.G. Jaisinghani v. Union of India, . Ramaswami, J speaking for the court held therein that :108 "THE absence of arbitrary power is the first essential of the rule Of law upon which our whole constitutional system is based. In a system governed by rule of law, discretion, when conferred upon executiveauthorities, must be continued within clearly defined limits. The rule Of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where heis.if a decision is taken without any principle or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law..."

(33) The argument based on this authority and two other cases(0 .P. Bhandari v. Indian Tourism Development Corporation Limited Ii and Sr. Superintendent of Post Office v. Izhur Hussain ) is that sub-section (3, of Section 41 of the Act cannot co-exist with Articles 14 and 16 of the Constitution and must. therefore, die.

(34) In Jaisinghani's case (supra), the appollant,.a Class-I officer of Income-tax Service had challenged the validity of the seniority rules 0.P.Bhandari, appellant in the second case () was an employee of a Corporation which was a State within the parameters of Article 12 of the Constitution. His services were terminated in exercise of powers under Rule 31(5) of the relevant rules on giving pay for three months in lieu of three months' notice. In-Sr. Superintendent of Post Office v. Izhar Hussain(supra), the respondent had joined the Post and Telegraph Departments a Clerk on 4/06/1935. The Director, Postal Services by order dated 21/04/1970 retired him from service under R. 2(2) of the Pension Rules.Izhar Hussain challenged the order of retirement. A Division Bench of the Allahabad High Court accepted the petition and declared the rule as invalid.The Supreme Court dismissed the appeal filed by the Sr. Superintendent Of Post Office and Others.

(35) We are of the view that the contention of Mr.. Thakur that the nomination of the petitioner as Director be construed as an 'employment'under the Government although attractive, is to be rejected. Even if the nomination is to be equated with the word 'appointment', it cannot be held that it was an 'employment' under the Government. The scheme of the Act and the Rules/Bye-laws negatives that contention. The case law cited byMr. Thakur on this aspect has no application. We agree with the counsel forthe respondents that the exercise of power nominal ting respondent No. 3 in place of the petitioner herein was to be made on subjective satisfaction only As we have noticed, it is not the case of the petitioner that respondent No "4had any personal ill-will or spite against him. The order of 30/03/1988whereby the petitioner was appointed and the second order dated the 1 9/12/1989 whereby respondent No. 3 was appointed in his place, were passed in exercise of power which is not open to judicial review excepting of course For mala fides, which as we have held is .absent in this case.

(36) Other reasons for coming to this conclusion are as follows :(1) The initial nomination of the petitioner herein and for that matter nomination of any official or non-official on the Board of Directors was at the will of the Government. The Government haven inherent power to revoke the same as per Section 16 of the General Clauses Act. A Division Bench of this Court in Bur Council of Delhi v109The Bar Council of India, held that an elected office which is held at pleasure, the holder can be removed at will without showing any cause unless there is a provision in the rules or bye-laws laying down that he can be removed only for a cause. Setting aside the decision of the Bar Council Of India that a rule cannot be made under Section 5 of the Advocates Act for the removal of the Chairman of the Bar Council, it was, inter alia.held in paragraph 12 of the reported judgment that: "THE view of the Bar Council of India is on the other hand based on the very silence of the statute on this point. We are of the opinion that such silence indicates that the common law regarding the removal of the holder of an office remains unchanged. The statute does not, therefore, have to say that the Chairman of the State Bar Council would be removable by are solution of no-confidence. The reason is that such power of removal is inherent in the Bar Council which elects its Chairman.The power of given to the State Bar Council to elect its Chairman is the codification of only a part of the common law. Such codification docs not change the other part of common law which implies in the State Bar Council the power to remove the Chairman so elected. Just as rules can be made under Section 15 to carry Out the expressed power of the Bar Council to elect the Chairman, It would appear that rules may also be made to carry out the implied power of the State Bar Council to remove the Chairman.The two powers are inseparable in common law. They can be separated only by a statutory intervention. So long as this is notdone, they would remain connected with each other even though only one of the power, namely, the power of election has been made statutory while the ether power, namely, the power of removal has been left to be implied. If such a power is not implied,the mere codification of the power to elect would result in a change in the common law. There is no warrant for implying sucha change. On the contrary, the construction of the statue in the light of the common law implies such a power in the State BarCouncil."

(37) We are bound by the principles of !aw enunciated in the saiddecision. In our view even in the absence of sub-section(3) of Section 41 a nomination till further orders is liable to be revoked under Section 41(1) itself.The Government is vested with inherent powers to do so (See Air 1950 FC140 Kutoor Vengayil Rayarappan Nayanar v. Kutoor Vengayil Madhavi Amma and Others and , M/s Heckett Engineering Co .v .TheirWorkmen.

(38) It has been held by the Supreme Court in life Insurance Corporation of India v. Escorts Limited that every share-holder(be it a Corporation which is an instrumentality of the State) has the same right as that of other shareholders to move a resolution to remove some Directors and appoint others in their places. It was held that the Lic of India cannot be restrained from doing so nor is it bound to disclose the reasons for moving the resolution. It was further held that Article 14 cannot be construed as a charter for judicial review of State actions "and to call upon the State to account for its actions in its manifold activities by slating reasons for suchactions."110(2) The argument that the petitioner having been elected as Chairman by the Board of Directors of Iffco, his term of office at any rate is co-terminus with the term of the elected members of the Board and, therefore, he is to continue till 30/03/1991 as aChairman, is also to be negatived. Mr. Thakur relies on Bye-law No.44(A) in support of this submission. The bye-law reads as under : "44A.The term of office of the Chairman and Vice-Chairman shall be co-terminus with the term of the elected members of the Board. In case of any vacancy within this period, the Board shall fill up the vacancy through re-election for the Un expired term of the Board."

(39) The contention is that even if the petitioner is no longer aDirector, he has to continue as Chairman. This contention is also unacceptable. It is axiomatic that a Chairman has to be a Director. The above byelaw cannot be read out of context. The underlying idea of the above quoted bye-law is that a Director who has been elected as a Chairman, shall remain Chairman for the term of the elected members of the Board but if he ceases to be one by virtue of bye-law No. 38 or on his resignation as a Director or for any other reason, he cannot be held to be continuing as a: Chairman. It is unnecessary to further analyze the contention as we are of the view that the petitioner's nomination as a Director cannot be deemed to be for a fixed period of three years, i.e., co-terminus with the term of the elected members of the Board, nor can we be asked to restrain the Government from recalling hisnomination.

(40) The counsel for the parties have been heard at length at the preliminary stage. In the view which we are taking it is unnecessary to notice all the authorities cited by the learned counsel. We are of the opinion that it cannot be held that respondent No. 4, Shri Devi Lal was actuated by malafide as alleged or at all. We further hold that the petitioner cannot be deemed to have been nominated for a fixed term as a Director of IFFCO. The challenge to sub-section (3) of Section 41 of the Multi-Stale Cooperatives Societies Act, 1984 is also misplaced.

(41) The petition is dismissed in liming and the interim orders arevacated. No order as to costs.