Delhi High Court
Sanjay Kumar vs Union Of India Through The ... on 20 December, 2021
IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment delivered on: December 20, 2021
+ W.P.(C) 6041/2021, CM Nos. 19109/2021 & 27059/2021
SANJAY KUMAR
..... Petitioner
Through: Mr.Vinay Garg, Sr. Adv. with
Mr.Mritunjay Kr. Singh, Mr.Pawas
Kulshresth, Mr.Parv Garg,
Mr.Karandeep Singh Rekhi and
Ms.Ranjana Tiwary, Advs.
versus
UNION OF INDIA THROUGH THE SECRETARY & ORS.
..... Respondents
Through: Mr. Asheesh Jain, CGSC with
Ms. Mukula Sharma &
Mr. Jatin Puniyani, GP for UOI
Mr. Raman Kapur, Sr. Adv. with
Mr. Varun Kapur, Adv. for R-3 &
R-5
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
JUDGMENT
V. KAMESWAR RAO, J
1. This petition has been filed with the following prayers:-
"(i) Issue a writ of certiorari and/or any other
appropriate writ, order and/or directions for
quashing/setting aside the impugned letter dated
12.06.2021 issued by the Respondent No. 4 on behalf
of the Respondent No. 2 and the letter dated
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23.06.2021 by the Respondent No. 3 and all
consequential proceedings emanating therefrom as
illegal, unconstitutional, null and void.
(ii) Issue a writ of certiorari and/or any other
appropriate writ, order and/or directions and restrain
the Respondent No.3 from taking or initiating any
action against the Petitioner in scheduled COA
Meeting dated 02.07.2021.
(iii) Award suitable compensation for causing mental
and physical harassment to the petitioner.
(iv) Pass any other or further order which this
Hon'ble Court may deem fit and proper in the interest
of justice"
2. The petitioner in the present petition is the Executive
Director-cum-Secretary ('EDCS', for short) at the Carpet Export
Promotion Council ('CEPC', for short and respondent No. 3 herein)
and is seeking to quash and set aside the letter dated June 12, 2021
issued by the Development Commissioner (Handicrafts), Ministry of
Textiles, Government of India (respondent No. 2 herein), and the letter
dated June 23, 2021 by the respondent No.3 whereby the petitioner has
been issued a Show Cause Notice and suspended from the post of
EDCS.
3. The petitioner applied for the post of EDCS at respondent
No. 3/CEPC following advertisements dated August 30, 2017, August
31, 2017 and September 03, 2017. Thereafter, the petitioner along with
other candidates was shortlisted and called for interview on January 14,
2017 by the Selection Committee. After interview, the Selection
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Committee empanelled the petitioner at Serial No. 2 for further
consideration. Vide letter dated November 21, 2017, the respondent
No. 3 sought approval from respondent No. 2 with regard to
engagement of the petitioner as EDCS on a probation of one year.
Consequently, the respondent No. 2, vide letter dated November 27,
2017, conveyed to respondent No. 3 that it had been directed to
communicate approval of the Competent Authority for engagement of
the petitioner as EDCS in the respondent No. 3 on a probation of one
year as per the Service and Recruitment Rules in pursuance of the
powers conferred under Article 40(6) of the Article of Association
('AOA', for short) of the respondent No. 3. On November 28, 2017,
the petitioner received a letter from the respondent No. 3 regarding his
engagement as EDCS on probation for a period of one year in the 7 th
CPC Pay Matrix Level 12, i.e., ₹78800/- to ₹2,09,200/- plus allowances
as admissible under the rules of respondent No. 3. Subsequently he was
appointed to the said post of EDCS vide order December 01, 2017. The
said order also entailed that during the probation period, the petitioner's
work shall be assessed and that his services could be terminated at any
time if his work and conduct was found unsatisfactory. Pursuant to this
order of appointment, the petitioner joined his services on January 01,
2018.
4. It is stated that vide order dated February 01, 2018, the
respondent No. 3 decided to re-fix the pay of the petitioner from
₹78,800/- to ₹88,700/- in the Index-5 of the 7th CPC Pay Matrix Level
12, w.e.f. January 01, 2018. Thereafter, vide letters dated December 28,
2018 and July 22, 2019, respondent No. 3 intimated the petitioner that
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the Committee of Administration ('COA' for short) of CEPC had
extended his probation period for six months, i.e. from January 01,
2019 to June 30, 2019 and subsequently for a further six months, i.e.,
from July 01, 2019 to December 31, 2019 respectively on the same
terms and conditions. According to the petitioner, the COA authorised
the Chairman of the respondent No. 3 to decide the matter regarding the
regularisation of services of the petitioner as EDCS, in consultation
with the officials of respondent No. 2 w.e.f January 01, 2018 as per the
approved pay scale of EDCS at Level 13 Pay Matrix of 7 th CPC plus
usual allowances as admissible to the employees. Thereafter, the
respondent No. 3 passed an order whereby the services of the petitioner
as EDCS got confirmed w.e.f. January 01, 2018 in the said pay scale,
with financial benefits extended from April 01, 2020.
5. It is stated that the tenure of the then Chairman of respondent
No. 3 was due to expire on June 17, 2021, since he had taken charge on
June 18, 2019 for a term of two years. Due to the outbreak of COVID-
19 pandemic and the consequential lockdown, the petitioner vide letter
dated May 18, 2021 requested the respondent No. 2 to grant extension
of tenure to the then Chairman and postpone the elections till the
situation attained normality. Further, vide letter dated May 24, 2021,
the then Chairman of respondent No. 3 informed the respondent No. 2
regarding confirmation of services of the petitioner as EDCS and that
the said confirmation order dated May 18, 2021 has been duly issued to
the petitioner. However, vide letter dated June 12, 2021, the respondent
No. 4 on behalf of the respondent No. 2, directed to discharge the
petitioner from the post of EDCS with immediate effect and to initiate
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fresh process to appoint a new EDCS. It is stated that the said letter was
issued overlooking the Office Order bearing File No. 8/5/2017-EP
issued by the respondent No. 1 in August 2020 wherein it was stated
that in consonance with the vision of 'Minimum Government and
Maximum Governance', all Executives Directors of Textiles Export
Promotion Councils, if posted/nominated with the approval of the
Government, stood withdrawn. It was further directed through the said
Office Order that respective Councils may appoint their own Executive
Directors, meaning thereby that the Government shall not interfere with
the services of such officials of the Councils, be it in matters of
appointment, removal, suspension or termination. Furthermore, vide
letter dated June 14, 2021, the respondent No. 4 required the then
Chairman of the respondent No. 3 to submit a compliance report on the
action taken in respect of removal/discharge of the petitioner and the
initiation of the process for appointing a new EDCS. The then
Chairman of the respondent No.3 thought it prudent to discuss the issue
in the impending meeting of the COA. In the 186 th meeting of the COA
held on June 15, 2021, the issue relating to confirmation of services of
the petitioner was discussed. Resultantly, the COA appreciated the
decision and ratified the same unanimously and also deliberated upon
the letter dated June 12, 2021 sent by the respondent No. 2 for
discharge of the petitioner. The COA unanimously advised the then
Chairman of the respondent No. 3 to reply to respondent No. 2 that the
letter dated June 12, 2021 was issued in violation of law and the powers
vested under the Memorandum of Association ('MOA', for short) and
AOA of the respondent No. 3.
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6. Accordingly, the then Chairman of the respondent no. 3
issued letter dated June 16, 2021 to the respondent No. 4 and expressed
his displeasure that the letter dated June 12, 2021 was received open
and copies of the same had already been circulated amongst the Press
and WhatsApp group of staff members of respondent No. 3. He also
stated that he has documentary evidence to show that the envelope
containing the said letter was handed over to some unauthorised
persons who misused the same for their ulterior motives and thereafter,
passed instructions as per their whims and fancies. The relevant issues
discussed in the said letter are as follows:
a) The respondent No. 4 was requested to conduct an enquiry
at the earliest qua the open cover and its inappropriate
delivery.
b) The respondent No 4 was informed that the powers for
taking action in relation to removal/discharge of the services
of the petitioner vested only with the COA of respondent No.
3. In the said letter reference was drawn towards Article 40 of
the AOA that deals with Powers of the COA. It was reiterated
that as per Article 40(b)(6) the AOA, the COA has been
entrusted with the powers to appoint, remove or suspend
employees. It was also stated that only in the case of
appointment/removal of EDCS or any other officer equivalent
thereto that prior approval of the respondent No. 1 was
required to be obtained by the COA.
c) The respondent No. 4 was informed that the petitioner
joined as EDCS on January 01, 2018 on probation till January
01. 2019, after which, his probation was extended till January
2020. Accordingly, an Office Order with respect to
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confirmation of services of the petitioner as EDCS was issued
by the respondent No. 3.
d) With regard to action taken for discharging the petitioner
from the post of EDCS, it was also submitted that AOA did
not permit him to remove, dismiss or reduce in rank any
employee of the respondent No. 3, unless so authorised by the
COA after holding an inquiry into the allegation against such
employee. During such inquiry, the employee must be
informed of the charges against him and given a reasonable
opportunity of being heard in respect of those charges and
where it is proposed, after such inquiry, to impose on such
employee any such penalty, such employee has to be given a
reasonable opportunity of making representation against the
penalty proposed.
e) It is only when the acts of the employee are found to be in
derogation to the objects (as provided in the MOA/AOA) of
the respondent No. 3 that an inquiry may be initiated by COA
with prior approval of the Central Government and the
Ministry of Commerce/Textiles.
f) It is only in matters of public interest that the Ministry of
Textiles/respondent No. 1, shall have the power to issue
directives to the respondent No. 3, which it shall be bound to
follow as warranted under Article 75 of the AOA. It was
implicit from bare perusal of Article 75 of the AOA that
respondent No. 1 has no power to issue directives to the
respondent No. 3 in matters that are not connected with public
at large or qua internal dispute relating to functioning of the
respondent No. 3.
g) Lastly, the respondent No. 4 was requested to withdraw
directions issued vide letter dated June 12, 2021.
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7. On June 17, 2021, the respondent No. 4 declined the request
for extension of the tenure of the then Chairman of respondent No. 3
and directed him to relinquish his charge and the respondent No. 5,
who was the present Chairman of the respondent No.3, Vice Chairman
at the time, was directed to take charge as the new Chairman of
respondent No. 3. It is stated that the respondent No. 5 had already
completed his two-year tenure as the Vice Chairman on February 15,
2019. Immediately on taking charge as the Chairman, the respondent
No. 5 directed the petitioner to convene a meeting of the COA through
physical-cum-virtual mode on July 02, 2021, though a recent meeting
of the COA was convened on June 15, 2021. He also directed the
petitioner to include the issue pertaining to appointment of a new
EDCS, as an agenda in the Notice for the said meeting. It is stated that
instead of waiting for the outcome of the proposed meeting of the COA
scheduled to take place on July 02, 2021, the respondent No. 5 vide
email dated June 23, 2021 sought permission and consent of the
members of the COA to issue a show cause notice and suspend the
petitioner from his post. Without waiting for any response/consent, the
respondent No. 5 vide letter dated June 23, 2021, issued the show cause
notice and suspended the petitioner from his post with immediate
effect. It is stated that the petitioner accepted the letter under protest.
8. It is also stated that majority of the members of the COA
strongly objected to the act of the respondent No. 5 and stated that the
letter dated June 23, 2021 should not have been issued without waiting
for their response/consent, particularly when the meeting of the COA
was to convene on July 02, 2021 to discuss the same issue. Therefore,
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the petitioner requested respondent No. 5 and respondent No. 3 that he
be allowed to discharge his duties as the EDCS till a decision in this
regard is taken by the COA in the meeting scheduled to take place on
July 02, 2021. However, the respondent No. 5 has not acceded to the
said request.
9. A counter affidavit has been filed on behalf of the respondent
Nos. 3 and 5, wherein, at the outset, an issue of maintainability of this
writ petition has been raised. It is contended that the respondent No. 3
is not a State as envisaged by Article 12 of the Constitution of India.
Even if the respondent No. 3 is held to be performing public duty and is
amenable to writ jurisdiction of this Court, only those decisions of the
respondent No. 3 which have a public element can be judicially
reviewed. It is contended that the impugned action is essentially of a
private character and as such the petition is not maintainable on merits
and is liable to dismissed.
10. That apart, it is stated that under Article 75 of the AOA of
respondent No. 3, the Central Government in the Ministry of
Commerce/Textiles has power to issue directions to the respondent No.
3 in public interest relating to its functioning. Further, under Article 40
(6) of the AOA, the COA comprising of 18 members including the
Chairman and Vice Chairman, three government nominees and the
Member Secretary (EDCS), has power to remove or suspend
employees provided that appointment or removal of the EDCS/ Deputy
Director or Assistant Director or any other officer equivalent thereto
has to be with the prior approval of the Central Government. It is also
stated that the prior approval so mentioned would be that of the
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Secretary of the concerned Ministry, being the Administrative head. A
letter dated December 26, 2008 issued by the respondent No. 1
approving the appointment of a former EDCS has been annexed to the
affidavit to show that the approval of the Central Government is
required under Article 40 (6) of the AOA.
11. That apart, it is stated that the petitioner was appointed on
probation for a period of one year w.e.f. January 01, 2018 after
interview and selection with the approval of the Central Government.
Thereafter, vide letter dated December 28, 2018, the probation period
was extended by 6 months up to June 30, 2019 and vide letter dated
July 22, 2019, it was extended by another 6 months up to December 31,
2019 by respondent No.3. It is averred that these two extensions of six
months each of probation period of the petitioner did not have any
approval under Article 40(6) of the AOA from the Central Government.
The petitioner neither apprised the COA of this fact nor put up the same
in the agenda of the subsequent meetings and continued as EDCS
without the approval envisaged under Article 40(6). It is also stated that
certain members of the COA raised objections about the minutes of the
181st and 182nd meetings of the COA, to which no action was taken by
the petitioner as mandated by Article 54 of the AOA.
12. A meeting of the COA was called by the petitioner on June
15, 2021 which was objected to by 9 out of 17 Committee Members, as
it was being held in physical mode during the situation that was
prevailing due to the pandemic and also because Article 43 of the AOA
was violated by the petitioner, as he had not sent the agenda of the
meeting in the specified time.
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13. In response to the statement of the petitioner that the
respondent No. 2 had, vide letter dated May 18, 2021 directed the then
Chairman of the respondent No. 3 to confirm the services of the
petitioner, it is submitted that the present Chairman/respondent No. 5
vide letter dated June 29, 2021 enquired to the respondent No. 2
whether they had issued the letter dated May 18, 2021. In reply thereto,
the respondent No. 2 stated that as per official record, no such letter
was issued by them. On June 12, 2021, the respondent No. 2 issued a
letter to the then Chairman of the respondent No. 3 under Article 75 of
the AOA for immediate discharge of the petitioner from the post of
EDCS and further to initiate the process to appoint a new EDCS.
14. That apart, it is stated that various complaints against the
functioning of the petitioner as EDCS were received from exporters,
the staff of respondent No.3, as well as a Member of Parliament (Lok
Sabha) from Bhadohi, U.P. -a major carpet producing area.
15. On June 16, 2021, i.e., the next day after the meeting of the
COA, the petitioner withdrew ₹4,19,353/- from the Council and
transferred the same to his personal bank account without the minutes
of the meeting being approved by the COA or getting approval as per
Article 40(6) from the Ministry of Textiles. All essential official mails,
bank signatory etc. were in the hands of the petitioner. All these facts
were placed before the respondent No. 5 who took over as Chairman
w.e.f. June 18, 2021. In view of the above mentioned aspects, the
conduct of the petitioner and the letter dated June 12, 2021 containing
directions under Article 75, the respondent No. 5 issued show cause
notice to the petitioner on June 23, 2021 and placed him under
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suspension after obtaining consent of the majority members of the
COA and called upon him to furnish his reply within 15 days.
16. Thereafter a meeting of the COA was called on July 02, 2021
in which 15 Committee Members including the Chairman were present.
Nine Committee Members including the Chairman/respondent No. 5
re-affirmed their approval to the show cause notice and the suspension
order, whereas six Committee Members said that since the matter is
sub-judice, consequent to the filing of this petition, they would not
comment on the same. After detailed discussions, the COA authorised
the Chairman to take any decision in the matter as per rules and if need
be, concurrence of the Committee Members may be obtained by email.
17. It is further averred that the decision of the COA taken in the
meeting held on June 15, 2021, apart from being in violation of Article
43 and 40 (6) of the AOA, was based on the alleged letter dated May
18, 2021, the existence of which the respondent No. 2 has denied.
18. A counter affidavit has also been filed by the respondent
Nos. 1, 2 and 4 wherein it is stated that the contentions of the petitioner
that the letter dated June 12, 2021 issued by the respondent No. 4 is in
violation of the AOA of respondent No. 3 and that the power to
remove, suspend or terminate the petitioner lies with the COA, are
misconceived. In this regard, it is stated that as per Article 75 read with
Article 76 of the AOA, the respondent Nos. 1, 2 and 4 have been vested
with the powers to issue directions to respondent No. 3 as to its
functioning in various matters, especially in public interest and to
ensure that the respondent No. 3 complies with such directions. Further,
the said respondents also have the power to call for such reports,
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returns and other information with respect to the property and other
activities of the Council as may be required from time to time.
19. It is further stated that the power of the COA as per Article
40(6) of the AOA of respondent No. 3 to appoint or remove the
EDCS/Deputy Director or Assistant Director, or any other officer
equivalent thereto can be exercised only with the prior approval of the
Central Government in the Ministry of Commerce/ Textiles.
20. That apart, it is submitted that the reasons which prompted
the issuance of the letter dated June 12, 2021 were the various
complaints being received in the office of the respondent Nos. 1, 2 and
4, pointing out certain discrepancies being carried out by the petitioner
in his official capacity. Some of the complaints alleging serious
irregularities, contravention of bye-laws, gross misconduct including
irregularities in the expenses being incurred by the Council, tenders not
being called for as per specified Rules and norms and instead making
purchases from friends and acquaintances out of the expenses of the
Government and the funds of carpet exporters, no permission being
taken from the Committee before making cash withdrawals,
irregularities in the appointment of new employees etc., warranted
detailed inquiry into the affairs of the Respondent No. 3.
21. It is stated that the appointment of the petitioner as EDCS on
probation for a period of one year was given effect only with the
approval of the respondent Nos. 1, 2 and 4 and likewise the extension
of probation period and/or confirmation has to be approved by the said
respondents under Article 40 (6) of the AOA. However the two
extensions granted to the petitioner by the respondent No. 3, i.e., on
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December 28, 2018 and July 22, 2019, was without any such approval,
thereby rendering the extensions a nullity. It is contended that if that be
so, the stand of the petitioner that his services stood confirmed by the
respondent Nos. 1, 2 and 4 does not hold any ground.
22. It is further stated that since the petitioner's response to the
show cause notice/charge memo dated June 23, 2021 and the
proceedings initiated pursuant thereto by the respondent No. 3 are still
pending, to avoid any prejudice being caused to the petitioner in any
pending proceedings, some material and information in the knowledge
of the respondent Nos. 1, 2 and 4, have not been filed with the affidavit.
However, it is stated that the same shall be placed before this Court in a
sealed cover subject to any order in that regard.
23. A rejoinder has been filed on behalf of the petitioner against
the counter affidavits filed by the respondents wherein the contentions
set forth in the Writ Petition have been reiterated. Additionally, it is
stated that in view of the decisions of the COA, the respondent No. 2/
Development Commissioner (Handicrafts), the Chairman of the
Appointment Committee of EDCS and the Chairman of the respondent
No. 3 discussed the matter on May 17, 2021 and after evaluating the
performance of the petitioner decided to confirm his services.
Thereafter, vide letter dated May 18, 2021, respondent No. 2 set out an
advisory to respondent No. 3 to issue office order in relation to
confirmation of the services of the petitioner as EDCS in the
respondent No. 3. The said Order dated May 18, 2021 and Note-sheet
dated May 17, 2021 was sent by the respondent No. 2/Development
Commissioner (Handicrafts) as attachment through his official email
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adress to the then Chairman of the respondent No. 3 on his official as
well as personal email IDs on May 18, 2021 at 01:30 PM. After receipt
of the said email with attached Order & Note-sheet, the then Chairman
of respondent No. 3 forwarded the same to the Consultant of
respondent No. 3 for issuance of Order dated May 18, 2021 under his
digital signature. It is stated that the records including email and the
attachments are in custody of the respondent No. 3 in electronic form.
24. It is stated that the respondent No. 5 had sent emails on June
23, 2021 to the members of COA seeking their permission to issue
show cause notice to the petitioner. However, he did not wait for the
consent of all the members, as only six members had responded before
he issued the show cause notice on the same day at 6 PM. That apart, it
is stated that nine members of the COA, through their emails had
advised the respondent No. 5 not to issue show cause notice to the
petitioner till the meeting of the COA scheduled on July 02, 2021.
25. It is also stated that a letter dated April 09, 2021 was sent by
the respondent No. 5 to the Minister of Textiles to influence the
respondent No. 1 and dislodge the petitioner from his post. It is alleged
that the respondent No. 5 along with some others have been meeting
with some Members of Parliament to lobby and persuade the Minister
of Textiles to discharge the petitioner from his post.
26. It is averred that the reply of the respondent No. 4, to the
query of the respondent No. 5 dated June 29, 2021, was sent in mala
fide and without any consultation with his superior officer, i.e.,
respondent No. 2. It is stated that the said reply was sent from his
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personal email address, even though the query was sent by the
respondent No. 5 from his official email address.
27. It is submitted that the respondent No. 3, having been set up
and being provided funds by the respondent No. 1, the employees of
the respondent No. 3 are entitled to the safeguards under the provisions
of Articles 309, 310 and 311 of the Constitution of India. The
respondents have failed to follow the procedures laid down under the
AOA of the respondent No. 3 and the Service Rules where under, it
was incumbent on the respondents to hold an inquiry into the the
allegations against the petitioner. That apart, it is stated that the
allegations made in the impugned orders do not fall within the
definition of 'misconduct' as defined under Rule 17 of the Service
Rules. It is stated that the major penalty of removal or dismissal from
the service in terms of Rule 18 of the Service Rules can only be
awarded in a case in which the charge of acceptance from any person of
any gratification has been proved against the delinquent official in a
Departmental Enquiry.
28. An additional affidavit has been filed on behalf of the
petitioner wherein it is alleged that the respondent No. 5 had instructed
the officiating EDCS to state that no order was passed on May 18,
2021, consequent to which it is stated in the counter affidavit filed on
behalf of respondent Nos. 3 and 5 that no order/letter dated May 18,
2021 exists.
29. That apart, the petitioner through his counsel filed an RTI
application seeking information regarding the following documents:-
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i. A copy of the letter dated May 18, 2021 issued by respondent No. 2
regarding confirmation of services of the petitioner as EDCS.
ii. A copy of the email through which a copy of letter dated May 18,
2021 was sent by respondent No. 2 to the then Chairman of respondent
No. 3.
iii. A copy of the email/letter issued by respondent No. 2 indicating
receipt of the letter dated June 16, 2021 sent by the then Chairman of
respondent No. 3.
iv. A copy of email/letter showing reply sent by respondent No. 2 to the
letter dated June 16, 2021 sent by the then Chairman of respondent No.
30. The respondent No. 4 provided the information sought along
with a copy of the letter dated May 18, 2021 issued by the respondent No.
2 and the letter dated June 16, 2021. It is the case of the petitioner that the
Noting dated May 17, 2021 and the letter dated May 18, 2021 confirming
his service was in the records of respondent No. 3, when the respondent
No. 5 along with the Officiating EDCS, with mala fide, sought
information from respondent No. 4 qua the same on June 19, 2021. The
respondent No. 4 acted in connivance with the respondent No. 5 and the
officiating EDCS to conceal the existence of the letter dated May 18,
2021.
SUBMISSIONS
31. Mr. Vinay Garg, learned Senior Counsel appearing on behalf of
the petitioner has submitted that the respondent No.3 is a non-profit
making Company, set up by the respondent No.1 in 1982 under the
relevant provisions of the Companies Act, 1956, and has three
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Government Nominees in the COA, who regularly appear in its meetings.
The primary source of funds of the respondent No. 3 is the grants received
from the respondent No.1. Being a Government company, it enjoys
monopoly in the activities related to trade of carpet and its promotion in
India. The respondent No. 1 exercises control, actual as well as pervasive,
over the affairs of the respondent No. 3 and hence, is amenable to the writ
jurisdiction of this Court. Relevant provisions of the MOA and the AOA
as pointed out by Mr. Garg, are reproduced as under: -
"3A Main objects to be pursued by the Company on its
incorporation to support, protect, maintain, increase and
promote the export of hand knotted carpets, woollen druggets
and floor coverings by such methods as may be necessary or
expedient." (Pg. 54 of writ petition).
3.A.(i) (a): To undertake market studies in foreign countries
regularly as well as on ad-hoc basis.
(b) To send out trade delegation/sales-cum-study teams to
foreign countries.
(c) To collect statistic and other information regarding the
manufacture of trade in handmade carpets and floor coverings
manufactured in various countries.
(f) To act as Registering Authority, if so decided by the
Government.
(h) To lay down standards of quality and packing in respect of
handmade carpets and floor coverings intended for export. (Pg.
54-55 of the Writ Petition).
3.A.(ii) To enunciate just, equitable principles to govern the
trade in handmade carpet and floor coverings and to set up a
code of codes of practices for the general guidance of exporters
and manufactures and further to simplify transactions relating
to the export of handmade carpets and floor coverings. Pg. 56
of the Writ petition).
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5.3 Except with the previous approval of the Central
Government, no remuneration or other benefit in money or
money's worth shall be given by the Council to any of its
members, whether officers or servants of the Council or not,
except payment of out-of-pocket expenses, reasonable and
proper interest on money lent, or reasonable and proper rent on
premises let to the Council.
5.4 Except with the previous approval of the Central
Government, no member shall be appointed to any office under
the Company which is remuneration by salary, fees or any other
manner nor accepted by sub-clause (3).
5.6 Any addition, alteration, modification or removal of any
clause in these Memorandum of Association and Rules and
Regulations or dissolution of the Council shall not be made
except by the Council in General Meeting and shall become
operative only if and after the Government of India in the
Ministry of Commerce/Textiles and Regional Director,
Company Law Board, approve the same in writing." Pg. 58-59
of writ petition).
Articles of Association (AoA):
Article 14: All Council members other than Government
Nominees will have to pay w.e.f. 1st April, 2016 an Entrance
Fee of Rs.2,000.00 (one time) and Annual Membership
Subscription........."
Article 22 of the AOA prescribes for composition of COA which
includes Govt. representatives shall include the following: -
i. Chairman 1
ii. Vice-Chairman 1
iii. Elected Members 18 (Including Chairman & Vice-
Chairman)
iv. Government Nominees- 3
v. Member Secretary 1 (Executive Director- cum- Secretary)
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Article 40(b) (6): to appoint and at its direction remove or
suspend employees, officers, clerks, agents servants whether
permanent, temporary or special as it may, from time to time,
think fit and to determine their powers and duties and fix
salaries or emoluments and to require securities in such
instances and to such amount as it may deem fit, provided that
the appointment or removal of Executive Director-cum-
Secretary/Deputy Director or Assistant Director, or any other
officer equivalent thereto shall be with the prior approval of the
Central Government in the Ministry of Commerce/Textile. (Pg.
76 of writ petition).
Article 65: A certified true copy of the account and auditors
report shall be forwarded to the Government. (Pg. 85 of writ
petition)
Article 75: The Central Government in the Ministry of
Commerce/Textile shall have powers to issue directives to the
Council, in public interest from time to time relating to the
functioning and properties of the Council. The Council shall be
carrying out those directives faithfully.
Article 76: The Government will have the power:
i) To give directions to the Council as to the exercise and
performance of its function in matters involving national public
interest and to ensure that the council gives effect to such
directions.
ii) To call for such reports, return s and other information with
respect to the property and other activities of the Council as
may be required from time to time.
iii) To approve the council's revenue and capital budget i.e.
Revised Estimates and Budget Estimates, and
iv) To approve agreements involving foreign collaboration, if
any, proposed to be entered into by the Council."
To buttress his arguments, Mr. Garg has referred to the
Judgments of the Supreme Court in the cases of Ajay Hasia v. Khalid Mujib
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Sehravardi, (1981) 1 SCC 722 and Pradeep Kumar Biswas v. Indian
Institute of Chemical Biology, (2002) 5 SCC 111.
32. He would submit that the COA, in its 181st meeting authorised
the Chairman of the respondent No. 3 to take a call in the matter regarding
regularisation of the services of the petitioner and the fixation of his salary
as per approved service rules in consultation with respondent No. 2. Again
in the 182nd meeting, the COA ratified the minutes of the 181st meeting and
reiterated that the decision about the regularisation of the petitioner could be
finalised under all circumstances by June 2020. Chairman of the respondent
No. 3 held a videoconference meeting and after evaluating the performance
of the Petitioner decided to confirm his services on May 17, 2021.
Thereafter, respondent No. 2 set out advisory to respondent No. 3 to issue
office order in relation to regularisation of the services of the petitioner
through email on May 18, 2021, which included DO letter No.
DC(HC)/Misc./CEPC/2021-22 and Note-Sheet dated May 17, 2021. After
receipt of the said email from respondent No. 2, the respondent No. 3 passed
an order whereby the services of the petitioner as EDCS got confirmed w.e.f.
January 01, 2018 as per the approved Pay Scale with financial benefits
extended from April 01, 2020. Vide letter dated May 24, 2021, the then
Chairman of respondent No. 3 informed respondent No. 2 regarding
confirmation of services of the petitioner as EDCS. Subsequently, in its 186 th
meeting, the COA appreciated the above said decision of confirmation of
services of the petitioner and ratified the same unanimously. It is submitted
by Mr. Garg that Rule 13 of the Service Rules, does not provide powers to
extend probation period. It only talks about the powers of the competent
authority to terminate during the probationary period. Reliance has been
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placed on the Judgment of the Supreme Court in the case of Jaswantsingh
Pratapsingh Jadeja v. Rajkot Municipal Corporation, (2007) 10 SCC 71,
to contend that if the period of probation could not have been extended, he
will be deemed to have been confirmed on expiry of the period of probation.
33. He would also submit that the directive dated June 12, 2021 of
the respondent No. 4 acting on behalf of respondent No. 2, to discharge the
petitioner from his post, was issued overlooking the fact that respondent No.
2 had issued advisory to respondent No. 3 to regularise the service of the
petitioner vide email dated May 18, 2021. The said letter dated June 12,
2021 was issued with mala fide, as is evident from the fact that it was
dispatched with an unauthorised person in an open envelope with
'confidential' endorsed on it. It is assured that the said letter was issued
without appreciating the service Rules and recording reasons as to why such
directions regarding discharge of the petitioner were being issued. Reliance
has been placed on the Judgment of the Supreme Court in the case of Union
of India v. Mohan Lal Kapoor, (1973) 2 SCC 836 and Kranti Associates
Pvt. Ltd. & Anr. v. Masood Ahmed Khan & Ors, (2010) 9 SCC 496 to
contend that reasons must show application of mind by authorities in
arriving at a particular conclusion.
34. He would also state that on June 23, 2021, the petitioner had
sought permission of the respondent No.5 to initiate action against Mr.
Mahavir Pratap Sharma, former Chairman of respondent No. 3 and lodge an
FIR against one Mr. Raja Sharma, as decided by the COA in the 186th
meeting dated June 15, 2021. Immediately thereto, the respondent No.5
issued the show cause notice and placed the petitioner under suspension.
Even though the respondent No. 5 sent emails to the members of the COA,
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only six members responded to it, that too without application of mind,
before the show cause notice was issued. He has placed reliance on the
Judgments of the Supreme Court in the cases of Bahadursinh Lakhubhai
Gohil v. Jagdishbhai M. Kamalia and Ors.,(2004) 2 SCC 65 and Zenit
Mataplast Private Limited v. State of Maharashtra and Ors., (2009) 10
SCC 388 to contend that the hasty manner in which the petitioner was
suspended would demonstrate mala fide on part of the respondents. It is
submitted that the show cause notice and the order of suspension of the
petitioner was issued in an arbitrary manner without any reasonable ground
and in a vindictive abuse of power. In this regard, he has relied upon the
Judgments of the Supreme Court in the cases of State of Orissa v. Bimal
Kumar Mohanty, (1994) 4 SC 126; Union of India v. Ashok Kumar
Aggarwal, (2013) 16 SCC 147 and Rajneesh Khajuria v. Wockhard Ltd.
(2020) 3 SCC 86.
35. Mr. Garg further submitted that the respondent No. 5 issued the
show cause notice and suspension order as a result of his grudge and
personal bias against the petitioner. Reliance in this regard has been placed
on the Judgments of the Supreme Court in the cases of S. Parthasarathi v.
State of Andhra Pradesh, (1974) 3 SCC 459; Ranjit Thakur v. Union of
India and Ors., (1987) 4 SCC 611; Kumaon Mandal Vikas Nigam Ltd. v.
Girja Shankar Pant and Ors., (2001) 1 SCC 182 and State of Gujarat and
Anr. v. Justice R. A. Mehta (Retd.) and Ors., (2013) 3 SCC 1. That apart,
the respondents have failed to follow the procedure laid down under the
AOA and the Service Rules where under, it was incumbent upon the
respondents to hold an inquiry into the allegations, if any, against the
petitioner for committing breach of any rules. It is also stated that the
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petitioner was entitled for subsistence allowance; however, no such
subsistence allowance has been paid by the respondent Nos. 3 and 5 to
petitioner from June 23, 2021. That apart, the salary for the period from June
01, 2021 to June 23, 2021 was also not paid to the petitioner. Reliance in this
regard has been placed on the Judgment of the Supreme Court in the case of
Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. and Anr., (1999) 3 SCC
36. Mr. Garg has contested the allegation of the respondent Nos. 3
and 5 that a sum of ₹4,19,353/- was wrongfully transferred to the account of
the petitioner. He would submit that the amount was transferred to the
account as arrears, and the same was discussed in the meeting of the COA
held on July 02, 2021 in the presence of respondent No. 5. It is further stated
that the respondent No. 5 had also tried to harass the petitioner in the past,
by serving a legal notice dated November 18, 2020, whereby baseless and
fictitious allegations were made against him. However, after the petitioner
had duly responded to the said notice through his Counsel, no further action
was taken by the respondent No. 5.
37. Mr. Raman Kapur, learned Senior Counsel appearing on behalf
of the respondent Nos. 3 and 5 would state that the respondent No. 3 is not
amenable to the Writ Jurisdiction of this Court, as:-
(i) No funds are provided by Central Government, except for
projects / fairs etc, for running of the respondent No. 3; it is run
from the contributions by export members and its own
resources.
(ii)None of its employees are appointed by the Government and
are entitled for pensionary benefits or CGHS facility.
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(iii) All employees are paid salary and allowances from the
resources of the respondent No. 3 and no government
accommodation is provided to them.
(iv) There are no Government nominees in the Committee of
Administration.
38. That apart, he has relied on the Judgment of the Supreme Court
in K.K. Saksena v. International Commission on Irrigation and Drainage
and Ors., Civil Appeal No. 11499/2014 decided on December 18, 2014,
wherein the challenge was to termination of an employee of the respondent
therein to contend that even if a body performing public duty is amenable to
writ jurisdiction, all its decisions are not subject to judicial review. Only
those decisions which have public element therein can be judicially
reviewed under writ jurisdiction. It is submitted that no mandamus could be
issued in this case, as the impugned action of issuance of show cause notice
and suspension order does not involve an element of public law and no
public law rights have accrued in favour of the petitioner, which have been
infringed. It is his contention that therefore, the petition is liable to be
dismissed.
39. Mr. Kapur would also submit that no reply has been filed by the
petitioner to the show cause notice, which was to be done within 15 days of
its issuance and meanwhile he has been placed under suspension till such
time he submits his reply for consideration of the competent authority to
decide a suitable action. It is stated that the present petition is premature as it
is settled law that the Court may not interfere at the stage of issuance of
show cause notice and leave it to the authorities to decide the same.
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40. He has also submitted that the composition of the COA is set
out in Article 22 of the AOA, and there are no government nominees in the
same. As per Article 24.3 of the AOA, there is no election to the office of
the Chairman as he/she is appointed via the Vice Chairman route and the
tenure of the Chairman is fixed for a period of two years. There is no bar to
re-election, but there has to be a gap of four years. On the expiry of term of
Chairman, the Vice Chairman shall automatically become the Chairman.
The elections to the retiring members of the COA were postponed by the
decisions taken at the 35th, 36th and 37th Annual General Meetings of the
respondent No. 3 due to involvement in various export promotion events and
amendments to the Election Rules which required approval of the
Government of India in Ministry of Textiles and by the Registrar of
Companies. It was decided in the said meetings that existing members of the
COA would function and discharge their powers under Para 3A VII of the
Election Rules, which provides that the members of the COA shall be
deemed to continue in office until their successors are elected. However, the
Central Government, vide letter dated June 18, 2019 under Article 75 of the
AOA directed the then chairman Mr. Mahavir Pratap Sharma, to relinquish
charge of Chairman with immediate effect as his tenure was completed in
December 2018, and Mr. Siddh Nath Singh the then 1st Vice Chairman to
take over charge of the Chairman. It is pointed out that earlier there were 2
Vice Chairmen but after amendments to MOA, AOA and Rules there is only
one Vice Chairman in the respondent No. 3. Thereafter, since tenure of Mr.
Siddh Nath Singh came to an end on June 17, 2021, the Ministry of Textiles,
Government of India, vide letter dated June 17, 2021 under Article 75 of the
AOA, directed Mr. Siddh Nath Singh to relinquish his charge from the post
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of Chairman and Mr. Umar Hameed, respondent No. 5, being 2nd Vice
Chairman was directed to take over as Chairman and after taking charge, to
conduct elections for the post of Vice Chairman along with retired/retiring
COA members in accordance with amended AOA and Election Rules.
Elections have since been held and members elected have assumed their
respective offices. It is stated that therefore, the respondent No. 5 continued
as Vice Chairman under the Rules and was rightly appointed as Chairman of
respondent No. 3.
41. Mr. Kapur submitted that under Article 40(6) of the AOA, the
appointment or removal of EDCS/Deputy Secretary or Assistant Director or
any other officer equivalent thereto by the COA shall be with the prior
approval of the Central Government in the Ministry of Commerce/Textiles.
Reference is made in this regard to the appointment of a previous EDCS,
Mr. Shiv Kumar Gupta vide letter dated December 26, 2008 whereby the
approval of the Central Government in the Ministry of Textiles was
conveyed.
42. As per the Schedule to the Service Rules, composition of
Departmental Promotion/Selection Committee is provided. Insofar as
selection/promotion of EDCS is concerned, the specified composition of the
selection committee/DPC is of 4 members, i.e.,
(i) The Chairman, CEPC, who is the Chairman of the DPC,
(ii) Joint Secretary in the Ministry of Textiles/Office of Development
Commissioner (Handicrafts),
(iii) Any one of the Vice Chairmen of CEPC/ Member of the COA and
(iv) Official of Central / State Government representing SC/ ST.
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It is stated that the petitioner was selected for appointment on
probation in terms of the said Schedule, and approval of the Central
Government under Article 40(6) of the AOA was also conveyed to the
respondent No. 3 vide letter dated November 27, 2017. Pursuant to the
approval so accorded by the Central Government, the petitioner was
appointed as EDCS of the respondent No. 3 vide letter dated November 28,
2017 on probation for period of one year w.e.f. January 01, 2018 with a clear
stipulation that his work and service will be assessed and if it is not found
satisfactory, his services could be terminated at any time by the Appointing
Authority. In this regard, Mr. Kapur has placed reliance on the Judgments of
the Supreme Court in the cases of G.S. Ramaswamy and Ors. v. Inspector-
General of Police, Mysore, AIR 1966 SC 175 and Mohd. Salman v.
Committee of Management and Ors., Civil Appeal No(s). 6601-6602 of
2020, decided on September 08, 2011. He has also relied upon the
Judgments of the Supreme Court in the cases of Kedar Nath Bahl v. The
State of Punjab and Ors., (1974) 3 SCC 21 and Head Master, Lawrence
School, Lovedale v. Jayanthi Raghu and Anr., Civil Appeal No. 2868 of
2012 decided on March 16, 2012, to contend that when a person is appointed
to any post on probation, it does not follow that at the end of the probation
period he obtains automatic confirmation.
43. It is submitted that the two extensions in the probationary
period granted to the petitioner vide letters dated December 26, 2018 and
July 22, 2019 were without the mandatory approval of the Central
Government under Article 40 (6) of the AOA. The question of regularisation
of the services of the petitioner was taken up in the 181 st and 182nd meetings
of the COA where some members raised objections to the recording of the
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minutes of the meetings regarding regularisation of services of the petitioner
as the same had not been recorded as per the actual discussions in the
meetings and it was opined that the appointment should be as per Service
Rules. It was decided in the COA meetings that 1-3 months time period be
given to petitioner to improve his quality of work and that the question
regarding his confirmation will be decided in the next meeting. It was further
stated in the said objections that the COA never accorded any powers to the
Chairman to take any decision in the matter; it was kept pending for next
COA meeting. As per Article 54 of the AOA, objections on the COA
minutes made by any Committee member are to be recorded and placed
before the next COA meeting. However, the petitioner failed to comply with
the same and the above objections were not placed before the Committee in
the subsequent meetings.
44. Mr. Kapur also submitted that as the tenure of the then
Chairman of the respondent No. 3 was coming to an end on June 17, 2021,
the petitioner, along with the then Chairman, in a hurry, was trying to get his
services regularised. On May 17, 2021, the then Chairman had a virtual
meeting with the respondent No. 2 and subsequently, a self proclaimed two-
member Committee namely the Appointment Committee for EDCS, CEPC
was formed, wherein the respondent No. 2 was made the Chairman, with the
only other member of the said Committee being the Chairman of respondent
No. 3. It is stated that it is not known as to who formed/constituted the
Committee, and that the composition of the said Committee was not in
conformity with the Schedule specified in the Service Rules. The said
Committee decided to regularise the services of the petitioner and
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accordingly, respondent No. 2 directed the then Chairman of the respondent
No. 3 to issue an office order in this regard.
45. It is further submitted that the respondent No. 5, after taking
over as Chairman of the respondent No. 3, sent an e-mail dated June 29,
2021 to the respondent No. 4/Assistant Director, Office of Development
Commissioner (Handicrafts), pointing out that the present writ petition had
been filed and enquiring if such a letter regarding the confirmation of
services of the petitioner had been issued and dispatched by office of the
respondent No. 2. This enquiry was necessitated by the fact that the letter
dated May 18, 2021 in the office of the respondent No. 3 neither had any
dispatch number nor did petitioner make it part of the agenda issued on June
03, 2021 for the COA meeting of June 15, 2021. In reply to the said query,
vide email of the same date, the Office of the respondent No. 2 wrote back to
respondent No. 5 that as per their official record, no such letter had been
issued regarding the said matter. Subsequently, respondent Nos. 1, 2 and 4 in
reply to the RTI application made on behalf of the petitioner, clarified that
the the letter dated May 18, 2021 was issued by the respondent No. 2 to the
then Chairman of respondent No. 3 for placing the same in the upcoming
meeting of the COA and was sent via the personal section of the respondent
No. 2, through his Government email address. It is stated that the letter was
to be put up to the Ministry of Textiles after COA recommendation.
Meanwhile the file of the petitioner was called by the Ministry of Textiles
and it was directed to discharge the petitioner from the post of EDCS and
initiate fresh process for the appointment of a new EDCS. The same was
conveyed to the respondent No. 3 vide letter dated June 12, 2021. It is the
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submission of Mr. Kapur that therefore, the communication dated May 18,
2021 became null and void.
46. That apart, on June 16, 2021, i.e., after the meeting of the COA
on June 15, 2021, the petitioner withdrew a sum of ₹4,19,353/- and
transferred the same to his personal account. Further it is stated that on May
31, 2021, he took salary for the month of May, 2021 at higher scale at
₹1,89,645/- i.e. with excess amount of approximately ₹53,000/-. The
petitioner did not inform the COA of this excess withdrawal of salary, in the
meeting of June 15, 2021. It is submitted that he withdrew the above amount
since tenure of then Chairman was coming to end on June 17, 2021. Various
complaints were also being received against the petitioner including one
from the Member of Parliament from Bhadohi, the place with the largest
production of handmade carpets. Mr. Kapur would submit that keeping in
view all the aspects and conduct of the petitioner and letter dated June 12,
2021 of the Central Government containing directions under Article 75 of
the AOA of respondent No. 3, the respondent No. 5 issued show cause
notice to petitioner dated June 23, 2021 and placed him under suspension
after obtaining consent of the majority of members of COA and called upon
petitioner to furnish his reply within 15 days from date of issue of the show
cause notice, which, till date, the petitioner has not done. Further, the issue
was placed before the COA meeting held on July 02, 2021, where, out of 15
members, 9 members who had sent their concurrence for the action proposed
against the petitioner, reiterated and re-affirmed their approval to the show
cause notice and suspension, whereas 6 members abstained from
commenting, as the matter was sub-judice. After detailed discussion, the
COA authorised the respondent No. 5 to take any decision in this regard. He
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further submitted that the respondent No. 5 has, as the duly appointed
Chairman, with the consent of the majority members of the COA, rightly
issued the show cause notice dated June 23, 2021 and placed the petitioner
under suspension.
47. Mr.Asheesh Jain, learned CGSC, would submit that the
contention of the petitioner that the respondent Nos. 1, 2 and 4 do not have
the power to remove the petitioner from service and that the issuance of the
letter dated June 12, 2021 by the respondent No. 2 is in violation of the
AOA, is bereft of merits. It is submitted that under Article 75 r/w Article 76
of the AOA of respondent No. 3, the respondent Nos. 1, 2 and 4 have been
vested with wide powers to regulate the functioning and issue directives to
the respondent No. 3 especially in public interest with further powers to
ensure the implementation of such directions. Further, they also have the
power to call for such reports, returns and any other information with respect
to the respondent No. 3, and therefore, there is no valid ground to challenge
the legality and validity of the letter dated June 12, 2021. The relevant
provisions of the AOA and MOA of the respondent No. 3, along with the
Service Rules, which are submitted by Mr. Jain in support of his contentions,
are reproduced below:-
"Memorandum of Association (Ann. P-2 at pgs. 54-59):
• Clause 3 (A)(i)(l): CEPC has to make recommendation to the
government seek action against wilful or negligent acts of the
manufacturer. (Pg.55)
• Clause 3 (A)(ix): CEPC cannot dispose of properties
purchased with government grants. (Pg.57)
• Clause 3 (A)(xii): CEPC can invest moneys only in the banks
approved by the Government. (Pg.57)
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• Clause 4: The objectives of the Council would extend to whole
of India and entire world subject to Government Policy in force
from time to time. (Pg. 58)
• Clause 5(3): Without approval of the Government, no
remuneration or other benefits in money or money's worth shall
be given to any of the member whether officers or servants. (Pg.
58)
• Clause 5(4): without previous approval of the Central
Government, no member shall be appointed to any office under
the Company which is remuneration by salary, fees or any other
manner not accepted by sub-clause (3) to Clause 5. (Pg.58)
• Clause 5(6): Any addition, alteration, modification or removal
of any clause in MoA and Rules and Regulations or dissolution
of Council will become operative only when approved by
Ministry of Textiles in writing. (MoA & AoA which is
considered as the constitution of a Company cannot be altered,
amended without approval of CG only shows wide ambit of
powers of CG over the Council) (Pg.58 & 59)
Articles of Association (Ann. P-2 at pgs. 60-87):
• Article 3(b): No alteration, addition of Rules and Regulations
or bye-laws and no rescission, alteration or addition to MoA is
permitted unless permitted by Ministry of Textiles. (Pg.61)
• Article 21: there will always be 3 nominated persons by the
Central Government in COA. (Pg. 66)
• Article 40(1)(e): The bye-laws with respect to Executive
Director i.e. conditions of service, appointment, promotion
and dismissal, grant of pay, allowance, pension are effective
of approved by the Ministry of Textiles. (Pg.74)
• Article 40(6): Appointment or removal of Executive Director
shall be with prior approval of Central Government in the
Ministry of Textiles. (Pg. 76)
• Article 40(9): COA can set up regional offices only with prior
approval of Ministry of Textiles. (Pg. 76)
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• Article 61: Accounts of the Council shall be audited every
year by Auditor appointed by Council with the concurrence of
the Government. Even remuneration of Auditors has to be fixed
by the Council with concurrences of the Government. (Pg.84)
• Article 65: Certified true copy of the accounts shall be
forwarded to the Government. (Pg. 85) ·
• Article 72: (a) Current account of council shall be kept in a
bank approved by the Government for keeping the monies at the
disposal of the Council. (b) Funds · not required for current
expenditure may be placed in fixed deposit with bank approved
by the Government. (Pg.86)
• Article 74: Any change, alteration or modification of AoA will
become effective only on approval of the Ministry of Textiles.
(Pg.86-87)
• Article 75: Ministry of textiles shall have power to issue
directives to the Council, relating to the functioning and
properties of the Council which the Council is bound to follow.
(This Article is inclusive in nature) (Pg. 87)
• Article 76: Ministry of textiles shall have power to give
directions to Council as to exercise and performance of its
functions, call for reports, returns, approve revenue and capital
budget, and approve foreign agreements. (Pg.87)
Service Rules (Ann. P3 at pgs. 88-103):
• Clause 3(k): CoA can appoint, remove, promote Executive
Director only with approval of office of DC and Ministry of
textiles. (Pg. 89)
• Clause 17: Instance of misconduct by-the Petitioner. (Refer to
sub-Clause 1, 2, 3, 4, 5, 12, 14, 19) (Pg. 93-95)"
Mr. Jain would state that the petitioner is attempting to read a
few provisions of the AOA, MOA and Service Rules in isolation, but to
understand the ambit of powers of the respondent Nos. 1, 2 and 4, the
aforementioned provisions are to be read together.
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48. It is also submitted that numerous complaints were received
against the petitioner pointing out discrepancies being carried out by him in
official capacity such as irregularities, contravention of bye-laws, gross
misconduct, irregularities in the expenses being incurred by the Council,
tenders not being called for as per specified Rules and norms, purchases
being made from friends and acquaintances out of the expenses of the
Government, no permission before cash withdrawals etc. Further, the
issuance of communication dated June 12, 2021 was necessitated by the fact
that upon looking into the complaints/representations received by the
respondents, it was discovered that the petitioner's probation was extended
twice by respondent No. 3 on December 28, 2018 and July 22, 2019 without
any prior approval of the Central Government, thereby rendering such
extensions a nullity, being violative of Article 40(6) of the AOA. This was
also contrary to the procedure being followed in the case of previous
Executive Directors. In view of the aforesaid complaints being received
against the petitioner, there was no alternative but to issue directions for
conducting independent inquiry in the case of the petitioner in accordance
with law.
CONCLUSION
49. Having heard the learned counsels for the parties, the issue
which arises for consideration is whether the action of the respondent No.3
in suspending the petitioner and also issuing a show cause notice calling
upon him to reply to the same for taking further action is liable to be set
aside.
50. The petitioner was appointed as EDCS in the respondent No.3
Organisation. The appointment letter stipulated that he is on probation for a
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period of one year. There is no dispute that the probation of the petitioner
was extended for a period of six months from January 01, 2019 to June 30,
2019. The same was also further extended for the period July 1, 2019 to
December 31, 2019.
51. It is the case of the petitioner that the COA has authorised the
Chairman of the respondent No.3 to take a decision on the regularisation of
the services of the petitioner which resulted in his confirmation with effect
from January 01, 2018.
52. Mr. Kapur has taken an objection with regard to the
maintainability of the writ petition on the ground that the respondent No.3 is
not amenable to the writ jurisdiction under Article 226 of the Constitution of
India being not an "other authority" within the meaning of Article 12 of the
Constitution of India and also as respondent No.3 is not discharging public
function. This submission of Mr. Kapur is opposed by Mr. Garg by stating
that the Regulation 40(b)(6) of the AOA, which has been reproduced above
clearly stipulates that appointment / removal of any EDCS/Deputy Director
or Assistant Director, or any other officer equivalent thereto shall be with the
prior approval of the Central Government in the Ministry of Commerce /
Textile. He has also submitted that in this case even the impugned letters
have been issued pursuant to the directives of the respondent No.4 on behalf
of respondent No.2 / Development Commissioner (Handicrafts). In other
words, if the impugned action is on the dictates of the respondent No.2, there
cannot be any doubt that the present petition is maintainable.
53. On this submission of Mr. Garg, Mr. Kapur would submit that
even assuming the respondent No.3 is amenable to the writ jurisdiction of
this Court, surely the relief that is being prayed for by the petitioner does not
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involve and is not relatable to any public duty / function and as such the writ
petition shall not be maintainable. In support of his submission, he has
relied upon the Judgment of the Supreme Court in K. K. Saksena (supra).
54. I am not in agreement with the submission of Mr. Kapur for the
simple reason, the Regulation 40(b)(6) of the AOA is very clear inasmuch as
the appointment or removal of the EDCS, i.e., the position held by the
petitioner shall be only with the approval of the Central Government, in the
Ministry of Commerce / Textiles. In this case the appointment of the
petitioner is with the approval of the respondent No.2 in the Ministry of
Textiles by giving reference to Regulation 40(b)(6) and also it is the
respondent No.2 that has directed the respondent No.3 to terminate the
services of the petitioner, which triggered the impugned order.
55. That apart, clauses 5.3 and 5.4 of the MOA which I have
reproduced above do also reveal that the appointments of officers in
respondent No.3 organisation shall take place with the approval of the
Central Government.
56. If that be so, the present writ petition shall be maintainable as
the respondent No.2 has to justify its directives to the respondent No.3 for
taking a particular action against the petitioner herein. Reliance placed by
Mr. Kapur on the case of K. K. Saksena (supra) has no applicability in the
facts of this case. In the said case, the appellant therein was appointed to the
post of Secretary in the respondent Organisation. Thereafter, his services
were terminated on the ground that the same were no longer required. In the
said case, there was no stipulation like the Regulation 40(b)(6) in the instant
case, which governed the appointment of the appellant K. K. Saksena in the
respondent Organisation therein.
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57. Though Mr. Garg has also relied upon the Judgments of Ajay
Hasia & Ors. (supra) and Pradeep Kumar Biswas & Ors. (supra), in view
of my aforesaid conclusion, this Court is not required to refer to those
Judgments. This I say so, for a decision on the objection raised by Mr.
Kapur, Article 40(b)(6) is a complete answer. This plea of Mr. Kapur is
rejected.
58. Having held that the present petition filed by the petitioner is
maintainable under Article 226 of the Constitution of India, the submissions
of Mr. Garg on merit are the following:
1) Rule 13 of the Service Rules does not provide the powers to
extend the probation period.
2) If the period of probation cannot be extended then the
petitioner's appointment is deemed to be confirmed on the expiry of
probation.
3) The services of the petitioner have been regularised after the
approval given by respondent No.2. The respondent No. 5 in its
counter-affidavit has concealed the existence of the letter dated May 18,
2021 by which directives were issued to the respondent No.3 to
regularise the services of the petitioner. It is only in an application filed
under the RTI Act that such a communication has been disclosed.
4) The impugned communication dated June 12, 2021 of
respondent No. 4 on behalf of respondent No. 2 to discharge the
petitioner from his post is overlooking the fact that respondent No.2 has
issued directive to respondent No.3 to regularise the services of the
petitioner.
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5) The action is mala fide as, on June 23, 2021, the petitioner had
sought permission of respondent No.5, i.e., the new Chairman to initiate
action against the former Chairman of respondent No. 3, as decided by
COA in its meeting on June 15, 2021 and it is on the same day that the
show-cause notice incorporating the suspension of the petitioner has
been issued which shows the decision of the respondent No.5, was in a
hasty and arbitrary manner.
6) That even the show-cause notice has been issued without
waiting for the consent of all the members as only six members had
responded to the proposal.
7) Nine members of the COA through e-mails have advised
respondent No. 5 not to issue the impugned show-cause notice to the
petitioner till the meeting of the COA till July 2, 2021.
8) New Chairman who was Vice-Chairman as on April 9, 2021
had sent a letter to the Minister of Textiles for discharging the
petitioner. It shows that the action against the petitioner was a forgone
conclusion much prior to the confirmation / suspension and issuance of
show-cause notice to the petitioner.
9) Even the reply of respondent No. 4 to the query of respondent
No. 5 dated June 29, 2021 was sent in a mala fide manner without
consultation with the respondent No.2.
10) The petitioner is entitled to the safeguards akin to the
provisions of Article 310 and 311 of the Constitution of India.
11) The impugned orders do not fall within the category of
misconduct as defined in Rule 17 of the Service Rules to result in an
extreme decision of discharge of the petitioner from the services.
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59. From the above, it is clear that vide letter dated May 18, 2021,
the services of the petitioner were confirmed. The letter dated May 18, 2021
reads as follows:-
"As per decision taken by the Appointment Committee for ED-
Secretary, CEPC & D.O. letter No. DC(HC)/Misc./CEPC/2021-
22 dated 18th May, 2021, received from Development
Commissioner (Handicrafts), 0/o. the DC(H), New Delhi, the
services of Shri Sanjay Kumar, Executive Director-cum-Secretary,
CEPC is hereby confirmed w.e.f. 1st January, 2018 as per the
approved Pay Scale of Executive Director-cum-Secretary, CEPC
at Level 13 Pay Matrix of 7 CPC (Rs. 1 ,23,100 -3% -2, 15,900)
plus usual allowances as admissible to the employees of the
Council under the rules of the Council from time to time but
financial benefits will be extended from 1st April 2020 onwards."
60. At this stage, I may state, it was the stand of Mr. Kapur that in
view of the letter dated June 12, 2021 the communication / order of May 18,
2021 has become null and void. I am unable to accept such a stand as,
pursuant to the communication dated May 18, 2021 of respondent No.2
communicating the decision to regularise the service of the petitioner, the
services of the petitioner were regularised by the respondent No.3 by issuing
an order, which I have already reproduced above. A subsequent
communication cannot undo an action which has attained finality. The plea
of Mr. Kapur, the extension of probation of the petitioner on two occasions
was without approval of the respondent No.2, would have no bearing on
order regularising the services of the petitioner, being a subsequent event
which has not been recalled. Further the communication dated June 12, 2021
does not even call upon the respondent No.3 to recall the order dated May
18, 2021. If that be so, the reliance placed by Mr. Kapur on the cases of
G.S. Ramaswamy (supra), Mohd. Salman (supra), Kedar Nath Bahl
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(supra) and Head Master, Lawrence School, Lovedale (supra) to contend
that, when an employee is on probation, his services can be terminated on
the ground of unsatisfactory service, have no applicability as the said
judgments are only applicable when the employee is on probation, which is
not the case here.
61. Mr. Garg is justified in stating that the petitioner being a
confirmed regular employee, any action for any misconduct (as seen from
show cause notice) shall have to be taken in terms of the Rules governing
the service conditions of the employees.
62. The case of Jaswantsingh Pratapsingh Jadeja (supra) on
which reliance has been placed by Mr. Garg to contend that the Rule 13 of
the Service Rules does not provide for extension of probation period and as
such, the petitioner's appointment is deemed to be confirmed, would be
inconsequential in view of my above conclusion.
63. In the facts of this case, the plea of Mr. Garg is that the
impugned action of the respondents is mala fide. In this regard he would
submit that the consent of all the members of the COA has not been taken
inasmuch as only consent of six members has been taken and other nine
members have advised the respondent No.5 not to issue the impugned show
cause notice to the petitioner till the meeting of COA on July 02, 2021. That
apart, the new Chairman had on April 09, 2021 while holding the post of
Vice Chairman of the respondent No.3 had written letter to Minister of
Textiles seeking discharge of the petitioner.
64. Mr. Garg, may be within his right to allege mala fide with
regard to the impugned action, but the fact remains that the impugned
communication dated June 23, 2021 which is a show cause notice, by which
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the petitioner has been called upon to reply to the same to enable the
respondent No.3 to take further action in the matter is not a final decision.
In fact, the petitioner has not even submitted his reply to the show-cause
notice. Based on the reply of the petitioner, the respondent No.3 may revoke
the suspension and withdraw the allegations or it can be, the respondents
may take action in accordance with the rules.
65. Mr. Kapur is justified in stating that the present petition, at least
to the extent of further action (not suspension) is premature, as no final
decision has been taken by respondent No.3. Appropriate shall be that the
petitioner should reply to the show cause for the consideration of the
concerned authority. He can take all pleas available to him, both on facts
and in law including the plea of mala fide in his reply to the show cause
notice. On a consideration of the reply submitted by the petitioner if the
competent authority intends to take any action, the same has to be
necessarily in accordance with law/Service Rules being a confirmed
employee who gets the protection of the Service Rules governing the
organisation. In this regard, I may refer to the judgment in Kamal Nayan
Mishra v. State of Madhya Pradesh and Ors., (2010) 2 SCC 169 wherein in
paragraph 17 it is stated as under:
"xxx........ But once a probationer is confirmed in the post, his
position and status become different as he gets the protection of
Article 311. ....... xxx"
66. Now coming to the decision of the respondent No.3 to suspend
the petitioner, it is not the case of the petitioner that no such power exists
under the Rules to suspend the petitioner. In fact, Rule 19 of the Service
Rules state as under:
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"An employee of the Council under suspension or deemed to have
been placed under suspension by an order of the appointing
authority shall be entitled to the following payments. ...xxx "
The above Rule clearly contemplates the power of the
appointing Authority to place an employee under suspension.
67. The related plea of Mr.Garg with regard to suspension, is that
the petitioner is not being paid the subsistence allowance. Mr.Kapur sought
to justify the non-payment of the subsistence allowance on the ground that
the petitioner has transferred an amount of ₹4,19,353/- to his account
without permission from respondent Nos.1, 2 and 4. He has also stated, an
excess amount of approximately ₹53,000/- has been received by the
petitioner which need to be adjusted against the subsistence allowance.
68. Since an issue has been raised by the parties whether the
amounts of ₹4,19,353/- and ₹53,000/- can be adjusted against the
subsistence allowance, appropriate shall be, the petitioner shall justify the
transfer of the said amounts to his account in his representation to be
submitted within a period of two weeks from today on which the
respondents shall take a decision. If it is held that the amounts transferred by
the petitioner to his account was justified, then the arrears of subsistence
allowance shall be computed by the respondent No. 3 within one week
thereafter and be paid to the petitioner immediately. It shall be continued to
be paid to the petitioner as long as he is under suspension.
69. If the amounts could not have been transferred by the petitioner
to his account then the amounts be treated to have been rightly adjusted
against the subsistence allowance. The respondent No.3, after complete
adjustment of ₹4,19,353/- and ₹53,000/-, shall continue to pay the
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subsistence allowance to the petitioner, under the rules till such time he is
under suspension.
70. The Judgments relied upon by Mr.Garg in the cases of
Bahadursinh Lakhubhai Gohli (supra), Zenit Mataplast Private Ltd.
(supra), State of Orissa (supra), Union of India v. Ashok Kumar Aggarwal
(supra) Rajneesh Khajuria (supra), S. Parthasarathi (supra), Ranjit
Thakur (supra), Kumaon Mandal Vikas Nigam Ltd. (supra) and State of
Gujarat and Anr. (supra) to demonstrate mala fide and bias on part of the
respondents need not be gone into in view of above. With the aforesaid, the
petition is disposed of. No costs.
CM No. 27059/2021
71. This application is filed by the petitioner under Section 340 r/w
Sections 195 and 197 of the Cr.P.C. for taking action against the respondent
No.3. In the facts of this case, this Court is not inclined to consider the
application. The same is closed.
CM No. 19109/2021
72. In view of my decision above, the application has become
infructuous and is dismissed as such.
V. KAMESWAR RAO, J
DECEMBER 20, 2021/aky/jg
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