Tilak Raj Gandhi vs Union Of India & Ors.
2011 Latest Caselaw 2771 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI


+             WRIT PETITION (CIVIL) NO. 4107/2010
                                AND
               CM APPL. NOS. 8159/2010 & 13311/2010

                                      Date of Decision: May 24, 2011


       TILAK RAJ GANDHI                     ..... Petitioners
                      Through     Mr. Anil Sapra, Sr. Advocate
                      with Mr. Rajesh Baweja, Advocate

                      versus

       Union of India & Ors.                    ..... Respondent
                         Through     Mr. A.S.Chandiok, ASG with
                         Mr. D.S.Mahendru, Ms. J.J.Sarkar,
                         Advocates
                         Mr. Prashant Bhushan, Advocate for the
                         intervener.


       CORAM:
       HON'BLE MR. JUSTICE SUDERSHAN KUMAR MISRA

1.     Whether Reporters of local papers may be allowed to see the
       judgment? Yes

2.     To be referred to the Reporter or not? Yes

3.     Whether the judgment should be reported in the Digest? Yes


SUDERSHAN KUMAR MISRA, J.

1. The matter was reserved after arguments on the

question of maintainability of this petition before this Court were

concluded.

2. The petitioner, Mr. T.R. Gandhi, has invoked the

extraordinary jurisdiction of this court under Article 226 of the

Constitution of India praying, inter alia, that a communication dated

18th February 2010 stating that the Appointments Committee of the

Cabinet has not approved the proposal for appointment of the

petitioner as the Director (Finance) of the BSNL, and has issued

further directions for initiation of the process afresh, be quashed.

He has also prayed that mandamus be issued to the respondents to

appoint him to the post of Director (Finance), and the selection

process for that post, which has been initiated by the respondents,

be stopped.

3. The matter is still at the preliminary stage pursuant to a

notice to show cause issued by this Court. A preliminary objection

has been raised by the respondents with regard to the

maintainability of this petition. It is urged that the scope of the

dispute raised by the petitioner falls squarely within the jurisdiction

of the Central administrative Tribunal in terms of The Administrative

Tribunals Act 1985, and therefore, this court ought not to exercise

jurisdiction in the matter. On November 15, 2010, counsel for the

respondent categorically stated that pursuant to a notification

issued on 31st of October 2008, under section 14 (2) of the

Administrative Tribunals Act, 1985, the Central Administrative

Tribunal is vested with jurisdiction on this matter. This objection

was recorded by this Court on 15th November, 2010 as follows;

"in addition, counsel also states that the respondents are seriously pressing their objections with regard to the maintainability of the petition before this court in view of their stand that the matter falls under the jurisdiction of the Central Administrative Tribunal pursuant to a notification issued on 31st of October 2008, under section 14 (2) of the administrative tribunals act, 1985."

4. In response, petitioner's counsel stated that

notwithstanding the fact that a notification has been issued under

section 14 (2) Of the Administrative Tribunals Act, this Court should

not decline the matter because no specific stand has been taken by

the respondent to the effect that the appointment to the post in

question falls under section 14 (3) of that Act. According to counsel

for the petitioner, the mere issuance of a notification under section

14 (2) does not and cannot bring into play provisions of section 14

(3). In other words, the stand of the petitioner is that the objection

to the exercise of jurisdiction by the writ court raised specifically by

counsel for the respondent at the bar, and duly recorded by the

court whilst the matter is at a preliminary stage, does not constitute

sufficient Traverse on the issue of jurisdiction.

5. I do not agree. Section 14 of the Administrative

Tribunal's Act 1985 falls in chapter 3 of that act and is titled,

"jurisdiction, powers and authority of the Central Administrative

Tribunal". Subsection 2 of section 14 states as follows;

"(2) the Central government may, by notification, apply with effect from such date as may be specified in the notification the provisions of subsection (3) to local or other authorities within the territory of India or under the control of the government of India and to corporations or societies owned or controlled by government, not being a local or other authority or corporation or society controlled or owned by a State government:"

A reading of the above makes it obvious that it is open to the

Central government to issue a notification directing the application

of section 14 (3) to the entities mentioned in section 14 (2). This is

exactly what the government has done, and it is precisely such a

notification which is being relied upon by the government to oust

the jurisdiction of this court. It follows therefore that, the objection

to the exercise of the jurisdiction of this court on the basis of the

notification issued by the government under section 14 (2) has

been adequately raised, and it was not necessary for the

respondent to have further specifically stated that, pursuant to the

aforesaid notification under section 14 (2), the provisions of section

14 (3) will apply, and that jurisdiction of the court ought not to be

exercised for that reason. The nature of the objection to the

exercise of jurisdiction by this Court, as well as its scope and

content, are obvious and, to my mind, the counsel for the petitioner

is being hyper technical and fails to persuade this court to reject the

petitioners objection on such a ground.

6. Counsel for the petitioner has then taken another

approach. He submits that the appointment to the post of Director

(Finance) in the BSNL, with which these proceedings are concerned,

is not contemplated under section 14 (3) of the Act because it does

not amount to a, "recruitment", and therefore, notwithstanding the

aforesaid notification under section 14 (2) of the Act, the Tribunal

has acquired no jurisdiction in the matter under Section 14 of the

Central Administrative Tribunals Act.

7. In this context, it is his case that since the recruitment

rules of the BSNL are silent with regard to the appointment to the

post in question, of Director (Finance), in that organization, and do

not contemplate appointments to the Board of Directors, therefore,

any appointment to the post of a Director, including that of Director

(Finance), would not amount to a recruitment under section 14 (3).

According to him, since the extant recruitment rules apply only to

recruitment of employees below the level of the Board of Directors;

therefore, the appointment of only these employees can be said to

be a "recruitment", of the type contemplated under section 14 (3)

of the Administrative Tribunals Act.

8. The organization in respect of which relief is sought by the

petitioner is, admittedly, a government company incorporated under

the Companies Act, 1956. Its entire shareholding is held by the

President of India. The power to appoint persons to carry out

different functions in that company emanates from its Memorandum

and Articles of Association. Depending upon the class of persons to

be appointed, two different methods of appointment have been

prescribed by the Articles of Association. Article 111 which

empowers the President of India to appoint and remove Directors is

as follows:

"111. PRESIDENT OF INDIA‟S POWERS TO APPOINT AND REMOVE DIRECTORS

(i) to appoint whole-time or part-time Chairman, whole-time Managing Director(s) or whole-time Chairman- cum-Managing Director and other whole time Directors;

(ii) to appoint the Directors representing the Government of India;

              (iii)   to   appoint   non    official   part-time
                      Directors;
              (iv)    to remove any Director including the
                      Chairman     or    the  Chairman-cum-
                      Managing Director or Managing Director,
                      if any from office at any time in his
                      absolute discretion;
              (v)     to fill any vacancy in the office of
                      Chairman,     Chairman-cum-Managing


                       Director,     Managing     Director   or
                      Director(s)    caused     by     removal,
                      resignation, death or otherwise;
              (vi)    to determine the tenure of office for the
                      Directors so appointed from time to time.

The Directors appointed by the President shall hold office until removed by him or until their resignation, retirement, death or otherwise."

Similarly, article 143(17) vests the following powers in the

Board of Directors to appoint employees, "below the board level";

"143. SPECIFIC POWERS GIVEN TO BOARD

xx xx xx

(17) to create and windup posts, to appoint persons there to and at their discretion to move or suspend all employees below the board level by whatever designation they are called viz., Chief General managers, managers, secretaries, assistants, supervisors, clerks, agents and servants are permanent, temporary or special services as they may from time to time thinks it, and to determine their power and duties and fix their salaries or monuments or remuneration, and to require security in such instances and to such amount as they may think fit."

From the above, it emerges that while article 111 envisages

the appointment of the Chairman, and other Directors, by the

President of India; article 143 (17) empowers the Board of Directors

to appoint all persons in the company, "below the Board level".

Different processes for effectuating these powers have also been

put in place. Indisputably, the process for appointment of a

Director of the company envisages, inter alia, an examination of,

and selection from, the recommendations made by the Public

Enterprises Selection Board (PESB), by the Appointments

Committee of Cabinet, before the matter is put up to the President

of India for making the appointment. For making all other

appointments below the Board level in the exercise of the power

conferred by article 143 (17), the Board of Directors have put in

place certain rules called the, "recruitment rules".

9. To my mind, learned counsel for the petitioner quite

misunderstands the matter. Merely because the methodology put

in place by the Board of Directors for exercising its powers under

article 143(17) for appointing personnel to posts below the Board

level, has been given the nomenclature, "recruitment rules" by the

Board itself, does not, and cannot mean that the appointment of

persons to posts at the level of the Board of Directors of the

company, for which a different methodology is envisaged under the

Articles of Association of the Company, is not a recruitment, "to

any...post in connection with the affairs of such .... Corporation...", as

envisaged under section 14(3) of the Administrative Tribunals Act. I

also notice that the expression, "recruitment" has not been defined

either under the Administrative Tribunals Act, 1985, or even by the

Memorandum and Articles of Association of the BSNL. The ordinary

meaning of the word, "recruit", when employed as a noun , is as

follows;

"n. A new member of a society or organisation."

The word, "recruitment", is also a noun that has been

accorded the same meaning.

(See the concise Oxford dictionary of current English eighth

edition). In fact, the word recruitment is an abstract noun defining

the act of recruiting.

10. Significantly, the Articles of Association of the company,

which constitute the regulations for the management of the

company, do not mention the word, "recruitment" anywhere. They

simply provide two channels for the appointment of two types of

personnel in the company. While the Chairman and Board of

Directors are appointed by the President of India, personnel below

the Board of Directors are appointed by the Board itself. There is

nothing in the Articles of Association of the company to suggest that

any appointment being made by the President of India to the Board

of Directors is not a consequence of recruitment as envisaged by

section 14 (3) of the Administrative Tribunals Act. As a matter of

fact, both article 111, which empowers the President of India to

appoint the Chairman and Directors of the company; as well as

article 143 (17), which empowers the Board of Directors to appoint

persons below the board level, use same expression while granting

the requisite power. In both cases, the words employed are, "to

appoint". The expression, "to appoint", is a transitive verb meaning,

"assign a post or office to (appointed governor; appoint him to

govern; appointed to the post)"--- see concise Oxford dictionary of

the English language eighth edition. Significantly, there is no other

power conferred by the Articles of Association on anyone to select

or recruit persons for carrying out the functions of the company.

Consequently, if the literal dictionary meaning were to be accorded

to the expression, "to appoint", it would amount to both the Board,

as well as the President of India, being empowered to assign posts

to persons in the Company without the power to first employ any

process for their selection and recruitment. This was obviously not

the intent of the Articles of Association, which must be read

meaningfully and holistically. Therefore, the expression, "to

appoint" employed by the articles of the company qua both the

directors; as well as persons, "below the board level", must be

taken to mean the entire process from selection and recruitment

right upto appointment. At the same time, there is nothing to

suggest, and indeed learned counsel for the petitioner has been

unable to cite any precedent to show, that the expression,

"recruitment", has been used in section 14(3)(a) of the

Administrative Tribunals Act, 1985, in any restricted sense. In fact,

his entire argument has been confined to the submission that any

appointment to the Board of Directors cannot be said to be a

"recruitment" as envisaged under section 14(3) because the

recruitment rules adopted by the Board of Directors for exercising

their powers to appoint personnel below the Board of Directors in

terms of article 143 (17) of the Articles of the company, do not

apply to the appointment of a director of that company.

11. While it is true that sometimes in service law, the

expression, "appointment" and "recruitment" are not synonymous

and may have different meanings in the sense that whilst a

recruitment may signify selection of a person, the word,

"appointment" could mean the actual posting of a person to a

particular office; however, that is not the case here. In the instant

case, what has arisen for consideration is the true scope and

meaning of the language employed by the Articles of Association of

BSNL empowering, the President of India to appoint persons as

Directors, and the Board of Directors to appoint other persons to

carry out the functions of the company, "below the Board level".

Admittedly, both the methods envisage a process of selection.

Although, only the process evolved by the Board of Directors, for

employing persons below the Board level, has been given the

nomenclature, "Recruitment Rules", while the process of

appointment of Directors by the President of India, has not,

nonetheless, keeping in mind the scope and object of the Articles of

Association of the company, which have also been examined in the

preceding paragraphs, both processes are concerned with

recruitment in the sense contemplated under section 14(3) of the

Administrative Tribunals Act. In other words, in the case at hand,

as soon as someone is appointed by being assigned a post or office,

he becomes a member of the organisation and can be said to have

been duly recruited to that organization, thus satisfying the test of

section 14 (3)(a) of the Act which confers jurisdiction on the

Tribunal in relation to, "recruitment, and matters concerning

recruitment, to any service or post in connection with the affairs of

such... Corporation...". Admittedly, the Central government has in

fact issued a notification under section 14 (2) of the administrative

tribunals act, 1985 applying the provisions of subsection (3) of

section 14 of that Act to the BSNL. As a result, and for all the

aforesaid reasons, recruitment and matters concerning recruitment

to any post in connection with the affairs of the BSNL shall fall

within the jurisdiction of The Central Administrative Tribunal. This

would also include the post of a director in that organisation.

12. The third line of argument adopted by the learned

counsel for the petitioner in support of his plea that the matter does

not come under jurisdiction of the Tribunal under section 14 (3) of

the Administrative Tribunals Act, 1985, is that even the respondent

does not consider appointment to the post of Director (Finance),

which is the subject matter of the instant petition, to be a

recruitment, and therefore, the respondents cannot be heard to

claim that the matter is covered under section 14 (3). The factual

basis on which learned counsel rests this plea is a request for

information under the Right to Information Act moved by the

petitioner on 21st January 2011 and again on 2nd February 2011.

The information sought, and the response thereto, have been filed

by the petitioner in court on 17th February 2011. To appreciate this

in the correct perspective it is necessary to keep in mind that the

petitioner had moved this Court on 3rd June 2010 and, in the

hearing on 15 November 2010 respondents counsel made it clear

that he is seriously pressing his objections with regard to the

maintainability of the petition on the ground that jurisdiction lies

with the Central Administrative Tribunal in terms of Section 14 of

the Administrative Tribunals Act. It is this that appears to have

prompted the petitioner to move those applications under the Right

to Information Act to buttress his case on the issue of

maintainability. In his first query on 21 January 2011, the

petitioner requested for the following information;

"(i) Does the Govt. has issued any Notification/Order/Policy

that Public Enterprises Selection Board is a „Recruitment

Agency‟.

(ii) If so, a copy of the said Notification/Order/Policy may

be provided.

(iii) Does the Government has issued any Order/Policy that

Functional Directors on the Board of a Govt. Company

can be appointed by way of „Recruitment‟.

(iv) If so, a copy of „Recruitment Rules‟ for appointment of

Functional Directors on the Board of Govt. Company

may be provided.

(v) Please provide a copy of Order/Policy/Guidelines under

which it can be stated that Meeting held in PESB in

February 2009 for selection for the post of Director

(Finance), BSNL was a case of appointment by

„Recruitment‟."

In his second request, the petitioner sought the following

information;

"i) Are the Functional Directors on the Board of a Public

Sector Undertaking/Government Company appointed by

way of recruitment.

       ii)     Name    of   persons   who       have   been    appointed      as

               Functional Director         in      a        Public       Sector

               Undertaking/Government            Company       by     way     of

               recruitment in the year 2009 & year 2010.

iii) Whether proposal received by DOP&T from DOT in the

year 2009 for my appointment as Director (Finance),

BSNL (which was not approved by ACC) was a case of

appointment by recruitment?"

13. In response to both these communications, which has

been given by an Under Secretary to the Government of India in his

capacity as the CPIO appointed under the Right to Information Act,

the respondent has pointed out that there are no Recruitment Rules

in place for appointment of Directors on the Board of the company.

It has also taken the position that the directors on the Boards of

Government Companies are merely selected and not recruited. Be

that as it may, to my mind, these responses do not further the case

of the petitioner as regards maintainability, which is to be tested

from the standpoint of the scope and application of section 14 (3) of

the Administrative Tribunals Act. The real issue to be answered is

not whether the respondents treat the appointment of directors

envisaged under the Articles of Association of BSNL as a

recruitment. It is whether the appointments being made in terms of

those articles to various posts under the company, fall within the

purview of the expression, "recruitment", employed in Section 14

(3) of the Administrative Tribunals Act. Whatever may be the

understanding of the expression, "recruitment", of the respondents

themselves in the matter, that cannot be taken to define or whittle

down or in any way restrict the scope of that expression under

Section 14 (3) of the Act. I might also add that this is purely a

matter of judicial interpretation, and the responses of the CPIO of

the respondents under the Right to Information Act to the aforesaid

information sought by the petitioner would also not create any

estoppel preventing the respondents from raising this issue before

the court. It was for the petitioner to demonstrate, either through

precedent, or by way of systematic logical reasoning, that the

expression, "recruitment", has been employed by the Legislature in

Section 14 (3) of the Act in a specific or restricted sense to exclude

any appointment made to a post by employing a method of

selection to which the appellation, "recruitment" or "recruitment

rules", has not been given. This he has failed to do. In that view of

the matter, this contention of the petitioner's counsel must also be

rejected, particularly in the light of the aforesaid discussion and the

conclusions reached with regard to the scope and application of

section 14 (3) of the Central Administrative Tribunals Act in the

preceding paragraphs.

14. At this juncture, I might notice one more aspect of the

matter. On 25th August 2010, whilst preliminary arguments were

being addressed, counsel for the petitioner pressed for interim

orders to restrain the respondent from proceeding with the selection

process after the respondents informed the court that interviews for

selecting candidates for the post in question were to be held the

next day. After a small hearing, and with the consent of counsel for

the respondent, this court ordered as follows; "let the interview be

conducted as per schedule fixed, however, no final appointment to

the post of director (Finance) be made by the respondent no.3".

Thereafter, whilst addressing arguments on the preliminary

objection regarding maintainability, the learned Additional Solicitor

General of India pointed out that a regular appointment to the post

in question is vital to the functioning of BSNL. This court recorded

his submissions thus, "..... However, Mr Chandhiok, learned ASG,

who appears for the respondent, states that the appointment in

question, which is of the Director (Finance) in the BSNL is vital to

the functioning of the enterprise which has a turnover of more than

32,000 crores. He states that due to a number of developments,

matters concerning the functioning of this organisation are agitating

the nation, and concern has been expressed at various fora,

including the Parliament. Furthermore, vital decisions with regard to

various processes including the adaptation of new and diverse

technologies are being actively considered, but the progress of

decision making with regard to those technologies and their

financial impact has been seriously undermined because of the lack

of a Director (Finance). He further submits that in terms of the

interim orders passed on 25th of August 2010, the necessary

interviews for the selection of the new incumbent have been

completed, however, no final appointment to the post of Director

(Finance) has been made. He submits that under the circumstances,

the respondents be permitted to complete the process of

appointment and to appoint somebody so that the functioning of

BSNL does not suffer." It was in keeping with the urgent necessity

expressed by him that, before concluding his arguments on

maintainability, Mr. Chandhiok expressed his willingness to agree to

a consent order permitting the petitioner to withdraw the petition

and to approach the Central Administrative Tribunal in a time bound

manner, provided the respondents are permitted to proceed with

the appointment, subject to any further orders that might be passed

by the Tribunal in case the petitioner were to approach that forum

within the time granted. This was rejected by counsel for the

petitioner.

15. The issue of interim protection, if any, to be afforded to

the petitioner assumes some significance in the light of the stand

taken by counsel for the petitioner refusing the offer of counsel for

the respondents. Two grounds on which the High Court can refuse

to entertain a matter under Article 226 of the Constitution of India

are relevant here. These are, either the existence of an equally

efficacious, alternative remedy, available to the petitioner or that it

has no jurisdiction to entertain the matter. In the former case, it is

not as if the Court has no jurisdiction to entertain the matter, it only

declines to entertain it on the basis of certain well settled principles

which have crystallized into a self imposed restraint in granting

access to what is known as an extra ordinary remedy. In other

words, although the power is there, its exercise is declined on

certain principles. In the other case, where the jurisdiction is not

available at all, there is no question of declining the exercise of the

power for any other reason such as the availability of an alternative

remedy. Often, when it is demonstrated by the respondent that an

equally efficacious remedy is available to the petitioner, in

appropriate cases, the Court affords some interim protection to the

petitioner, whilst granting him time to approach the appropriate

forum; however, such an order cannot be passed even by a writ

court, if it were to conclude that jurisdiction itself is not available.

16. Under the Administrative Tribunals Act, 1985, whilst

Section 14 of the Act empowers the Central Administrative Tribunal

in respect of certain matters, Section 28 of that Act expressly bars

the exercise of any jurisdiction by this Court in relation to matters

which come under the purview of the Central Administrative

Tribunal. The scope and application of Section 28, as well as the

validity thereof, has been the subject matter of a decision by the

Supreme Court in L.Chandra Kumar Vs. Union of India & Ors.

(1997) 3 Supreme Court Cases 261. By that decision although, the

Supreme Court has, in effect, watered down section 28 by holding,

inter alia, that to the extent it divests the High Courts of their

jurisdiction under Article 226 of the Constitution, it is

unconstitutional because the power of judicial review vested in this

Court under Article 226 is an integral and essential feature of the

Constitution constituting part of its basic structure; it has

nevertheless concluded that the Tribunals will continue to act as,

"the only courts of first instance in respect of the areas of law for

which they have been constituted." It has further held, "it will not

be open for litigants to directly approach the High Courts ...... by

overlooking the jurisdiction of the Tribunal concerned." The only

exception under which the High Court may be approached in the

first instance is a case where the very legislation creating a

particular Tribunal itself is challenged, which is not the case here.

The language employed by the Supreme Court in this context

makes the very limited and restricted jurisdiction available to this

Court as a court of first instance, albeit in the exercise of

jurisdiction under Article 226 of the Constitution, explicit, when it

says,

"in all such cases alone, the High Court concerned may be approached directly."

(emphasis added)

17. A reading of the decision of L.Chandra Kumar's case

(supra), in the light of Article 141 of the Constitution of India,

makes it clear, therefore, that there remains an explicit bar on the

High Court being approached directly in this matter, and it is not

merely the availability of an equally efficacious, alternative remedy

that obliges this Court to decline the examination of the petition. In

fact this Court does not have the jurisdiction, as a Court of first

instance, to examine the merits of the matter, even to a limited

extent. It follows, therefore, that while it was always open to the

respondent to offer to make any appointment to the post in

question subject to any further orders that may be passed by the

Tribunal, which may be recorded by this Court as a matter of

consent inter parties; however, once that offer is declined by the

petitioner, the matter must rest there. This is because this Court

does not have the jurisdiction to issue orders granting or even

continuing any interim orders if the matter itself is dismissed for

want of jurisdiction.

18. Under the circumstances, especially in view of the

decision of the Supreme Court in L.Chandra Kumar Vs. Union of

India & Ors. (1997) 3 Supreme Court Cases 261, which has held,

inter alia, that the Central Administrative Tribunal, shall continue to

act like a court of first instance in matters covered under Section 14

of the Administrative Tribunals Act, 1985, and that it will not be

open for the litigants to directly approach the High Court, and

keeping in mind the conclusion I have reached to the effect that the

relief claimed by the petitioner falls within the purview of Section

14(3) of that Act, the writ petition is dismissed as not maintainable

before this Court. Consequently, all pending applications have also

come to an end and interim orders stand vacated.

SUDERSHAN KUMAR MISRA, J.

MAY 24, 2011