Delhi High Court
Sushil Muhnot vs Union Of India & Anr. on 21 August, 2017
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 8844/2016
% Reserved on: 15th May, 2017
Pronounced on: 21st August, 2017
SUSHIL MUHNOT ..... Petitioner
Through: Mr.Bishwajit Bhattacharyya, Sr.
Advocate with Mr.Chandrachur Bhattacharyya,
Advocate
versus
UNION OF INDIA & ANR. ..... Respondent
Through: Ms.Shivalakshmi, CGSC with Mr.Sriram
Krishna and Mr.Ruchir Ranjan, Advocate for
respondent no.1
Mr.V.K. Gupta, Advocate for respondent no.2
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MS. JUSTICE PRATHIBA M. SINGH
SANJIV KHANNA, J.
Sushil Muhnot, has filed the present writ petition for quashing the
letter dated 26th September, 2016 issued by the Government of India,
Ministry of Finance, removing him from the post of Chairman & Managing
Director of the Bank of Maharashtra with immediate effect in exercise of
power conferred under sub-clause 4 of Clause 8 of the Nationalized Banks
(Management and Miscellaneous Provisions) Scheme, 1970.
2. The petitioner had also challenged the constitutional validity of sub-
clause 4 of Clause 8 of the Nationalized Banks (Management and
Miscellaneous Provisions) Scheme, 1970 („scheme‟ for short), being arbitrary
and ultra vires to Article 14 of the Constitution, but has not pressed this
challenge, as recorded in our order dated 15th May, 2017.
3. The petitioner was appointed as Chairman-cum-Managing Director of
the Bank of Maharashtra („bank‟ for short) on 9th November, 2013. On the
basis of some complaints regarding occupation of two rent free official
accommodations and exorbitant expenditure on renovation, a letter /notice
dated 7th January, 2016 was written to the petitioner seeking comments. The
petitioner submitted his comments vide communication dated 22 nd January,
2016.
4. Not satisfied, the respondents - Union of India served a show cause
notice dated 7th March, 2016 stating that having regard to the serious nature
of the case, the petitioner should show cause, within ten (10) days, as to why
action of removal from service should not be taken against him under sub-
clause 4 of Clause 8 of the Scheme. Memorandum of irregularity was
enclosed. The petitioner responded to this notice, denying the allegation vide
reply dated 2nd April, 2016. As noticed above, the service of the petitioner
was terminated as he was removed vide impugned order dated 26 th
September, 2016, which has been challenged in the present writ petition.
5. The sole and the only contention raised before us relates to the
procedure prescribed under sub-clause 4 of Clause 8 of the Scheme and its
alleged violation. In order to understand the contention and decide the same
we would first refer to the relevant portion of sub-clause 4 of Clause 8 of the
Scheme, which reads as under:
"8. Term of office and remuneration of a whole-time
Director including Managing Director - (1) A whole-time
Director including the Managing Director shall devote his
whole-time to the affairs of the Nationalized Bank and shall hold
office for such terms not exceeding five years as the Central
Government may, after consultation with the Reserve Bank,
specify and shall be eligible for re-appointment.
(1-A) Notwithstanding anything contained in sub-clause (1), the
Central Government shall have the right to terminate the term of
office of a whole-time Director, including the Managing
Director, at any time before the expiry of the term specified
under that sub-clause by giving to him a notice of not less than
three months, in writing or three months salary and allowances
in lieu of notice; and the whole-time Director, including the
Managing Director, shall also have the right to relinquish his
office at any time before the expiry of the term specified under
that sub-clause by giving to the Central Government notice of
not less than three months in writing.
xxxxx
(4) The Central Government may, if it is satisfied that it is
expedient in the interests of the nationalized bank so to do,
remove a whole time Director, including the Managing Director,
from office:
Provided that no such removal shall be made except after -
(a) consultation with the Board, and
(b) giving a reasonable opportunity to the whole-time Director
including the Managing Director of showing cause against
the proposed action."
6. Clause (1) states that the whole-time Director, including Managing
Director, shall hold office for the term not exceeding five years, as the
Central Government may after consultation with the Reserve Bank shall
specify and he/she is also eligible for re-employment. Under Clause (1-A)
the Central Government has a right to terminate the term of office of a whole-
time Director, including Managing Director, at any time before the expiry of
the term specified by giving him notice of not less than three months in
writing or three months salary or allowance in lieu of notice. Similarly, right
has been given to a whole-time Director or Managing Director to relinquish
the office by giving notice of not less than three months in writing. We have
referred to the aforesaid clause, as it indicates and shows the nature and
character of appointment.
7. Under Sub-Clause 4, the Central Government can remove a whole-
time Director including Managing Director, if it is satisfied that it is
expedient in the interest of the bank. As per the proviso in clause (b) this
power with the Central Government requires reasonable opportunity to show
cause against the proposed action to the whole-time Director including
Managing Director. This condition in the proviso has been satisfied as show
cause notice was issued pointing out the proposed action and seeking a reply.
8. The proviso in clause (a) states that removal shall not be made except
after consultation with the Board. The contention of the petitioner is that
there was no „consultation‟ with the Board, as required by clause (a) to the
proviso and therefore there was a violation of sub-Clause 4 of Clause 8.
9. To appreciate the contention, we would notice the relevant facts. It is
accepted that the Union of India had written a letter dated 22 nd April, 2016 to
the Board of the Bank i.e. the Bank of Maharashtra, referring to the condition
laid down in clause 8 (4) of the Scheme. This letter refers to the
complaint/issue forwarded to the Board for consideration. It was requested
that the entire matter be placed before the Board at the earliest while ensuring
that when the Board was convened and discussed the matter, the petitioner
does not participate. After this letter, the bank had responded vide letters
dated 13th May, 2016 and 24th May, 2016.
10. In the Board of Directors meeting held on 4 th June, 2016, the issue was
considered. The Chairman and Managing Director, i.e. the petitioner, did not
participate. In this meeting based upon the letter received from the
Government of India, documents were presented before the Board. Detailed
deliberations took place on the agenda and thereafter point-wise observations,
findings, and comments were recorded by the Board on the Government
queries/references. For the sake of convenience and completeness, the same
is reproduced below:
"
Government Query / Reference Board Comments
1. GOI letter dated 22nd April, 2016 received from Department of
Financial Services
(a) Para 3(i) Shri Sushil Muhnot As per documents pursued,
occupied two rent free official residences including a "Note to Purchase
from May, 2014 to May, 2015 in Committee" headed by General
contravention of his entitlement of one Manager at Mumbai Zonal
rent free accommodation. Office, dated December 31,
2013, the bank had decided to
convert the Fourth Floor of
Gadkari Chowk premises at
Dadar, Mumbai, to CMD‟s
residence. The CMD in his
letter dated January 22, 2016 to
DFS, has also stated that his
family shifted to the said
premises in May, 2014. As per
bank‟s internal document dated
June 5, 2015, the Gadkari
Chowk premises was allotted
to CMD as residence and
Mahbank House Pune was
made Guest House. As per
other documents on record, the
Mahabank House was the
residence of successive CMDs
since its purchase till being
converted as a Guest House.
The CMD has since authorized
the Bank in October, 2015 for
deduction of Rs.500 per month
from April 2014 for the use of
Guest House at Mumbai and
Pune. The bank documents
also state that the Gadkari
Chowk, (4th floor) House
premises was being used as a
Guest House even as late as in
March, 2015.
The actual date of conversion
of the use of either premises is
not ascertainable with certainty
as different documents are
conflicting.
(b) Para 3 (ii) Conversion of guest house As per item no.5 of Terms and
into official residence of the CMD and Conditions of Appointment of
vice versa was not done with the Whole Time Directors of
approval of Competent Authority which Public Sector Banks, "The type
of accommodation, its
was the Board. purchase price / rent is to be
approved by the Board of
Directors of the Bank."
Different views have been
expressed, in this context, as to
whether conversion of guest
house into CMD residence and
vice versa requires Board
approval. Some members felt
that there is no such policy and
as such the approval given by
GM in charge of Corporate
Services is in order. In this
view, for reutilization of
existing premises from one use
to another, there is no need for
Board approval, as per
prevalent practice.
In another view, as the Terms
and Conditions of
Appointment of Whole Time
Directors requires that "type of
accommodation" requires
Board approval, and as type of
accommodation also refers to
location, size, flat / bunglow,
etc., the Board‟s approval
should have been taken for not
only converting the Guest
House into CMD bungalow
and vice versa, but also for
shifting the CMD residence to
Mumbai. It was also felt that it
is not unusual not to have a
policy for converting use of
premises, and that in the
absence of an explicit policy,
the bank should have put up
the matter to the Board.
(c) Para 3 (iii) During 2014, a sum of The expenditure incurred for
Rs.65,70,292/- was spent on renovation renovation of Gadkari Chowk
of his official residence at Gadkari premises was Rs.65.70 lakh in
Chowk, Mumbai and Rs.41.62 Lacs on the financial year 2014-15.
renovation of Mahabank House, Pune. The expenses incurred for
These were very high expenditures. renovation of Mahabank
House, Pune, was Rs.41.62
lakh in the year 2014.
As per detailed information
submitted by the bank, the
expenditure incurred for
renovation of CMD‟s residence
at the Gadkari Chowk premises
was only Rs.38.70 lack out of
the total Rs.65.70 lakh, the
remaining amount having been
spent on the common area
outside the building and for the
rest of the building.
(d) Para 3 (iv) The Board‟s agreement or Please see below for detailed
otherwise with all the facts and para-wise comments.
conditions in the letters dated 07.03.2016
and 02.04.2016 referred to in para 2 of
this reference.
(e) Para 3 (v) Any other issue relevant to The bank has submitted copy
of the minutes of a Board
the case. meeting held in the year 1990
regarding formation of a
committee to hold negotiations
for purchase of a residential
quarter for the CMD of the
bank in Mumbai. However, it
is not known why the matter
was not pursued further.
2. Department of Financial Services Memorandum dated 07.03.2016
(a) The Central Government vide letter No comment required
of even no. dated 07.01.2016 sought
comments of Shri Sushil Muhnot, CMD,
BoM on the occupation of two
residences by him, one in Mumbai and
the other in Pune in contravention of the
Terms and Conditions of Appointment of
Whole Time Directors of Public Sector
Banks.
(b) The reply given by Shri Sushil Please see comments at 1(a)
Muhnot vide letter No.AX1/CMD and 1(c).
/23/2015-16 was examined. After
examination; this appears to be a case of
CMD having occupied two official
residences from May, 2014 to May, 2015
and huge amounts spent on renovation of
the residence in Mumbai.
(c) Having regard to the serious nature No comments required.
of this case, it is proposed to take action
against Shri Sushil Muhnot under Rule
8(4) of The Nationalized Banks
(Management and Miscellaneous
Provisions) Scheme 1970/1980. Shri
Sushil Muhnot is hereby given an
opportunity to show cause within 10
days of receipt of this memorandum as to
why the proposed action of removal from
service under Rule 8(4) should not be
taken against him.
3. CMD Letter dated April 2, 2016 to Department of Financial
Services
(a) I wish to thank the Government for No comments required.
considering extension of time to reply, as
March being the year end, is a crucial
period for profitability and balance sheet
of the Bank. Incidentally, our
profitability has been relatively better
than several Banks in the last nine
months, despite the RBI mandated AQR
provisioning.
(b) Historically, the Bank has had a The Board has not come across
Corporate Office at Mumbai to cater to any evidence to the contrary.
the substantial Mid and Large Corporate
portfolios, comprising over 55% of the
Bank‟s total advances, apart from IBA
Management Committee and its SME
related meetings (being member and now
Honorary, Secretary), RBI meetings,
SLBC and other State Government
meetings (being Lead Bank of
Maharashtra), IBPS and NIBM meetings
(as Committee/ governing board
member), product launches, seminars
and conferences etc. This normally
involves Chairman‟s presence in
Mumbai for about 6-7 working days in a
month.
(c) In view of this need for regular stay at Please see comments to item
Mumbai, the Bank‟s earlier CMD, Nos.1(a) and (b) above.
having a residence in Pune had a full flat
as dedicated guest house in Mumbai. In
my case the residence and guest house
location were proposed to be
interchanged as I wanted to be
transparent with regard to my family
staying in Mumbai.
(d) This arrangement has saved the Bank No comment.
the cost of staying in a Star Hotel at
Mumbai, where a lot of the Bank‟s
business is done. Further, I have never
charged any halting allowances for my
stay at Mumbai since joining the Bank.
(e) The same situation of having a No comment.
residence and also having a CMD guest
house at Mumbai exists for all Banks like
Allahabad Bank, Corporation Bank, IOB,
PNB etc. as they do not have their Head
Office in Mumbai, the financial Capital.
Our Bank is no exception to this.
(f) As regards occupation of two Please see comments to 1(a)
residences for the period May 2014 to and (b) above.
May, 2015, I wish to submit that the
Bank, historically, did not have any
policy to formally allocate residence /
convert residence to guest house or vice
versa and the same was accomplished
through verbal instructions. In case,
verbal instructions are acceptable then
the respective conversion of Mumbai and
Pune properties as submitted in my
earlier letter of January 22, 1016 may be
accepted of kind consideration.
(g) However, there is a genuine feeling No comment.
that verbal instructions for converting
Mumbai guest House to residence and
similarly converting Pune residence to
Guest House may not be treated as valid
in the banking set up.
(h) Therefore, a formal allotment order No comment.
was issued on June 5, 2015 (copy
attached) covering all WTDs starting that
"Following allotment of Residential
quarters/ Guest House is made for which
the details are as under"
Sr. Particulars Whether Proposed
No. on Rent
or
owned
by Bank
1 Mahaank Owned Guest
House, by Bank House for
Prabhat the
Road, Pune- Directors
4 of the
Bank as
well as for
the
visiting
guests
2 Saptashringi Owned Residence
Bunglow, by Bank for
Pune Executive
Director
Shri
Gupta.
201, for
Shreyas Executive
August, Director
Bhosale Shri
Nagar, Pune Athmaram
4 Gadkari Owned Residence
Chowk, by Bank of
Shivaji Hon‟ble
Park, CMD
Dadar,
Mumbai
(i) I, therefore, accept the government No comment.
comment that the Pune house was
officially converted to guest house vide
Bank‟s allotment letter of June 5, 2016
as validated by memorandum
No.8/5/2015 vig. Dated March 7, 2016
(j) However, in the very same allotment Please refer comments at 1(a)
letter of June 5, 2016 mentiond above the above.
Mumbai Guest House was officially
converted to Chairman‟s residence. I
appeal to the government that where one
part of the allotment letter pertaining to
Pune house conversion to Guest House at
serial no.1 is accepted, the other part at
serial no.4 relating to the conversion of
Mumbai guest house to residence, done
in the same letter, be also accepted.
(k) Since, the Bank officially converted Please refer comments at 1(a)
(a) Pune erstwhile CMD residence to above.
Guest House and simultaneously (b)
Mumbai Guest House to CMD residence
vide the same office order dated June 5,
2016, I did not occupy two residences, at
any time, as one was guest house and the
other a residence.
(l) As regards expenditure incurred, the Please refer comments at 1(c)
Gadkari Chowk, Dadar a dilapidated above.
property of Bank, acquired decades back,
comprising of 5 floors (Ground + 4
floors) and includes a Branch, a floor of
old tenants and balance for Bank‟s guest
house. It may be seen from the total
expenditure of Rs.38.70 lakhs incurred
on 4th Floor Gadkari Chowk (as per
details provided in Annexure) the
expense on repairs and renovation
(electrical and civil) itself was Rs.25.50
lakhs while the creation fo kitchen (as
the same was not there) costed of Rs.7.25
lakhs. This expenditure has helped to
improve the life and upkeep of the
Bank‟s property.
(m) I wish to respectfully submit that Please refer comments at 1(a)
both the conversions i.e. (a) Mahabank above.
House, Pune from residence to Guest
House and (b) Gadkari Chowk (4th floor)
from Guest House to Residence
happened on the same date through the
same official order of June 5, 2016, I did
not occupy two residences at any time.
(n) As regards expenditure incurred at Please refer comments at 1(c)
4th Floor, Gadkari Chowk, Dadar the above.
same was mainly towards civil &
electrical repairs & renovation and
creation of kitchen which has helped
improve the life and upkeep of the old
property.
"
11. It is noticed from the aforesaid minutes that the Government of India's
letter dated 22nd April, 2016 on different issues were considered separately
and Board had given their comments on different aspects. With regard to
paragraph (a) of the Memorandum dated 7th March, 2016 issued by the
Department of Financial Services, no comments were offered. However, with
regard to paragraph (b) reference was made to the comments made in respect
of paragraphs 1(a) and 1(c) of the Government of India letter dated 22nd
April, 2016. On the question of serious nature of the case and proposed
action mentioned in letter dated 7th March, 2016, it was observed that „no
comments‟ were required.
12. Counsel for the petitioner has also drawn specific reference to the
aforesaid minutes as also the Board‟s comments on paragraph 3(iv) of the
Government of India letter dated 22nd April, 2016. In fact, it was pointed out
that the comments were to be found in the paragraphs below.
13. In view of the comments given by the Board it is submitted by the
petitioner that there was a failure of 'consultation' and thus the order of
removal dated 26th September, 2016 violates sub-clause 4 of Clause 8 of the
Scheme. The contention was that the Board's failure to comment or 'no
comments' negates the consultation requirement. Our attention was drawn to
the Judgment of the Supreme Court in State of Gujarat and Anr. Vs. Gujarat
Revenue Tribunal Bar Association and Another (2012) 10 SCC 353, in
which, while considering the expression „consultation‟, the Supreme Court
had observed as under:
"34. The object of consultation is to render the consultation
meaningful to serve the intended purpose. It requires the
meeting of minds between the parties involved in the process of
consultation on the basis of material facts and points to evolve a
correct or at least satisfactory solution. If the power can be
exercised only after consultation, consultation must be
conscious, effective, meaningful and purposeful. It means that
the party must disclose all the facts to other party for due
deliberation. The consultee must express his opinion after full
consideration of the matter upon the relevant facts and
quintessence. (Vide Union of India v. Sankalchand Himatlal
Sheth [(1977) 4 SCC 193 : 1977 SCC (L&S) 435 : AIR 1977 SC
2328] , Subhash Sharma v. Union of India [1991 Supp (1) SCC
574 : AIR 1991 SC 631] , Justice K.P. Mohapatra v. Sri Ram
Chandra Nayak [(2002) 8 SCC 1] , Gauhati High
Court v. Kuladhar Phukan [(2002) 4 SCC 524 : 2002 SCC
(L&S) 555] , High Court of Judicature of Rajasthan v. P.P.
Singh [(2003) 4 SCC 239 : 2003 SCC (L&S) 424 : AIR 2003 SC
1029] , Union of India v. Kali Dass Batish [(2006) 1 SCC 779 :
2006 SCC (L&S) 225] and Andhra Bank v. Andhra Bank
Officers [(2008) 7 SCC 203: AIR 2008 SC 2936])"
14. Reliance was placed upon Constitution Bench decision in Union of
India Vs. Sankalchand Himatlal Sethi and Anr. (1977) 4 SCC 193 in which
it has been observed:
"38. In Words and Phrases (Permanent Edn., 1960, Vol. 9, p. 3)
to "consult" is defined as "to discuss something together, to
deliberate". Corpus Juris Secimdum (Vol. 16-A, Edn. 1956, p.
1242) also says that the word "consult" is frequently defined as
meaning "to discuss something together, or to deliberate".
Quoting Rollo v. Minister of town and Country Planning [(1947)
2 All ER 946] and Fletcher v. Minister of town and Country
Planning [(1943) 1 All ER 13 CA] Stroud's Judicial
Dictionary (Vol. 1, Third Edn., 1952, p. 596) says in the context
of the expression "consultation with any local authorities" that
"consultation means that, on the one side, the Minister must
supply sufficient information to the local authority to enable
them to tender advice, and, on the other hand, a sufficient
opportunity must be given to the local authority to tender
advice". Thus, deliberation is the quintessence of consultation.
That implies that each individual case must be considered
separately on the basis of its own facts. Policy transfers on a
wholesale basis which leave no scope for considering the facts
of each particular case and which are influenced by one-sided
governmental considerations are outside the contemplation of
our Constitution."
15. It is obvious that the respondents have contested the said submission
and submitted that in this case consultation had taken place and there was no
procedural error in compliance with the requirements of sub-clause (4) of
Clause 8. The consultation was made in compliance with clause (b) to the
proviso.
16. The word „consultation‟ can have diverse and different meaning and
has to be interpreted when used in the Constitution, statutes, etc. in
accordance with the legislative intent. G.P. Singh in the Principles of
Statutory Interpretation (13th Edition 2012 at page 3) has observed that words
in any language are not scientific symbols having any precise or definite
meaning, and language is but an imperfect medium to convey one‟s thought.
It is impossible even for the most imaginative legislature to forestall
exhaustive situations and circumstances that may emerge after enactment,
where the application is gone for. Words and phrase are symbols that
stimulate mental references to referents. Further, words of any language are
capable of referring to different referents in different context and times. The
words and phrases, therefore, take colour and character from the context and
the times and speak differently in different context and times. [See Municipal
Corporation, Delhi Vs. Mohd. Yasin, (1983) 3 SCC 229].
17. In the present context, we would observe that the word „consultation‟
in sub-clause 4 of Clause 8 requires the Government of India to take opinion
and comments of the Board in respect of the proposed action. In this way,
the Central Government has the benefit of the opinion and comments of the
Board before it makes the final call whether or not to take the proposed
action. Comments of the Board would be relevant and important. It would
help and assist the Central Government make the decision. Contextually,
therefore, the word „consultation‟ in this regard would mean furnishing
information and details to the Board to enable them to give their opinion or
comments.
18. Supreme Court in Andhra Bank Vs. Andhra Bank Officers &
Another (2008) 7 SCC 203, has observed that the word 'consultation' can
have a different connotation in a different context, but when one authority is
required to consult the other, such consultation must be meaningful, and it
must mean conscious and effective consultation.
19. In Indian Administrative Service (SCS) Association Vs. Union of
India 1993 (Suppl.1) SCC 730 while referring to the term 'consultation'
between the Central Government with the State Government for making
amendments to the service rules it was held:
"26. The result of the above discussion leads to the following
conclusions:
(1) Consultation is a process which requires meeting of
minds between the parties involved in the process of
consultation on the material facts and points involved to
evolve a correct or at least satisfactory solution. There should
be meeting of minds between the proposer and the persons to
be consulted on the subject of consultation. There must be
definite facts which constitute the foundation and source for
final decision. The object of the consultation is to render
consultation meaningful to serve the intended purpose. Prior
consultation in that behalf is mandatory.
(2) When the offending action affects fundamental rights
or to effectuate built-in insulation, as fair procedure,
consultation is mandatory and non-consultation renders the
action ultra vires or invalid or void.
(3) When the opinion or advice binds the proposer,
consultation is mandatory and its infraction renders the action
or order illegal.
(4) When the opinion or advice or view does not bind the
person or authority, any action or decision taken contrary to
the advice is not illegal, nor becomes void.
(5) When the object of the consultation is only to apprise
of the proposed action and when the opinion or advice is not
binding on the authorities or person and is not bound to be
accepted, the prior consultation is only directory. The
authority proposing to take action should make known the
general scheme or outlines of the actions proposed to be
taken be put to notice of the authority or the persons to be
consulted; have the views or objections, take them into
consideration, and thereafter, the authority or person would
be entitled or has/have authority to pass appropriate orders or
take decision thereon. In such circumstances it amounts to an
action "after consultation".
(6) No hard and fast rule could be laid, no useful purpose
would be served by formulating words or definitions nor
would it be appropriate to lay down the manner in which
consultation must take place. It is for the Court to determine
in each case in the light of its facts and circumstances
whether the action is "after consultation"; "was in fact
consulted" or was it a "sufficient consultation".
(7) Where any action is legislative in character, the
consultation envisages like one under Section 3(1) of the Act,
that the Central Government is to intimate to the State
Governments concerned of the proposed action in general
outlines and on receiving the objections or suggestions, the
Central Government or Legislature is free to evolve its policy
decision, make appropriate legislation with necessary
additions or modification or omit the proposed one in draft
bill or rules. The revised draft bill or rules, amendments or
additions in the altered or modified form need not again be
communicated to all the concerned State Governments nor
have prior fresh consultation. Rules or Regulations being
legislative in character, would tacitly receive the approval of
the State Governments through the people's representatives
when laid on the floor of each House of Parliament. The Act
or the Rule made at the final shape is not rendered void or
ultra vires or invalid for non-consultation.
27. The proposal for amending the New Seniority Rules in the
draft was only for inviting discussion and suggestions on the
scope and ambit of the proposed law and the effect of the
operation of the First Amendment Rules. Keeping the
operational effect in view, the proposed amendment could be
modified or deleted or altered. The Central Government is not
bound to accept all or every proposal or counter-proposal.
Consultation with the Ministry of Law would be sufficient.
Thereby the Central Government is not precluded to revise the
draft rules in the light of the consultation and advice. The
Central Government had prior consultation with the State
Governments concerned and the Law Department."
20. In the background of the present case when we refer to the aforesaid
minutes of the Board of Directors, it cannot be said that 'consultation' with
the Board was absent or the procedure as mandated by the proviso clause (b)
was violated. The Board had given its comments, in whatever manner it had
felt necessary. It has not repeated the comments and at certain places
observed that no comments were required. This is not a case wherein the
consultative process was not initiated or that the matter was not put to the
Board for its opinion and comments. The Board had considered different
issues and had tendered its opinion. Remarks such as 'No comment' are also
comments and could form part of the consultative process, depending on the
facts of each case. Clause 8 sub-clause 4 empowers and confers the power on
the Central Government to remove a whole time Director including the
Managing Director. This power is not conferred on the Board. The primacy
of the Central Government, keeping in view the nature of the post, is
apparent and obvious. Consultation clause in the proviso ensures that views
of the Board should be ascertained and examined before the opinion and
decision of the Central Government is taken. No particular format or method
of consultation is prescribed. We do not think, in the context of the present
case, it can be urged and accepted that there was failure to consult or the
decision taken by the Government of India under sub-clause 4 of Clause 8 is
vitiated and bad for want of consultation.
21. We wish to also record and state that this judgment only records and
deals with the contentions raised and argued by the petitioner. This judgment
does not deal with any other issue, not raised and argued.
22. In view of the aforesaid discussion, we do not find any merit in the
present writ petition and the same is accordingly, dismissed. There would be
no order as to costs.
(SANJIV KHANNA)
JUDGE
(PRATHIBA M. SINGH)
JUDGE
AUGUST 21st, 2017
ssn
