Food
Corporation of India & Ors Vs. Bhanu Lodh & Ors [2005] Insc 136 (24 February 2005)
K.G.
Balakrishnan & B. N. Srikrishna
(Arising
out of SLP (C) Nos. 9016 - 9018 of 2004) with Special Leave Petition (C) No.
11475 of 2004 SRIKRISHNA, J.
Leave
granted in Special Leave Petition (Civil) Nos. 9016-9018 of 2004. These appeals
are directed against the common judgment of the Division Bench of the Gauhati
High Court in Writ Appeals Nos. 78/2002, 79/2002 and 102/2002.
The
material facts relevant for deciding the present appeals lie in a narrow
compass. The appellants in the appeals arising out of Special Leave Petition
(C) Nos. 9016-9018 of 2004 are the Food Corporation of India (hereinafter referred to as the
'FCI'), its officers and the Union of India. The respondents in these appeals
are the employees of the FCI, who were candidates for direct recruitment to
certain posts. The petitioner in Special Leave Petition (C) No. 11475 of 2004
is one more such candidate of the FCI, and the Union of India, FCI and its
officers are the respondents in the said special leave petition.
Statutory
Provisions:
The
FCI was established by the Food Corporations Act, 1964 (hereinafter referred to
as 'the Act'), which was brought into force with effect from 17th December, 1964. As the preamble of the Act
indicates, this is a Corporation established "for the purpose of trading
in foodgrains and other foodstuffs and for matters connected therewith and
incidental thereto".
Section
13 of the Act declares that "it shall be the primary duty of the
Corporation to undertake the purchase, storage, movement, transport,
distribution and sale of foodgrains and other foodstuffs". For the purpose
of carrying on the business assigned to it under the Act, FCI had been invested
with the power of management of the Corporation and the authority to employ
such officers and employees as may be required for the efficient carrying out
of its statutory work. Section 6 of the Act deals with the management of the
Corporation and provides as under:
"Management
---
(1)
The general superintendence, direction and management of the affairs and
business of the Corporation shall vest in a board of directors which may
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation under this Act.
(2)
The board of directors, in discharging its functions, shall act on business
principles having regard to the interests of the producer and consumer and
shall be guided by such instructions on questions of policy as may be given to
it by the Central Government.
(3) If
any doubt arises as to whether a question is or is not a question of policy,
the decision of the Central Government thereon shall be final." Section 12
of the Act deals with the power of the Central Government to employ officers
and other employees of Corporation and reads as under:
"Officers
and other employees of Corporation ---
(1)
The Central Government shall, after consultation with the Corporation, appoint
a person to be the Secretary of the Corporation.
(2) Subject
to such rules as may be made by the Central Government in this behalf, the
Corporation may appoint such other officers and employees as it considers
necessary for the efficient performance of its functions.
(3)
The methods of appointment, the conditions of service and the scales of pay of
the officers and other employees of the Corporation shall---
(a) as
respects the Secretary, be such as may be prescribed;
(b) as
respects the other officers and employees, be such as may be determined by
regulations made by the Corporation under this Act." Section 12A of the
Act empowers the Central Government to transfer certain types of Government
employees, serving in the Department of the Central Government dealing with
food or any of its subordinate or attached offices, to the FCI. Section 45 of
the Act invests power in the FCI to make regulations "not inconsistent
with this Act and the rules made thereunder, to provide for all matters for
which provision is necessary or expedient for the purpose of giving effect to
the provisions of this Act." Under sub section (2)(a) of Section 45 such
regulation may provide for "the methods of appointment, the conditions of
service and the scales of pay of the officers and employees of a Food
Corporation." In exercise of its power under Section 45, the FCI has
framed regulations styled as the "Food Corporation of India (Staff) Regulations, 1971."
Facts:
During
the period 6 to 12 November, 1993 the FCI issued an advertisement for direct
recruitment to the posts of Joint Managers/Deputy Managers in the Corporation.
During the period 26th
August, 1994 to 19th July, 1995, the process of recruitment for the
post of Joint Manager was completed and the select list of the candidates was
finalized with the approval of the Executive Committee of the Board of
Management of the FCI. On 21st August, 1995
the Government of India, Ministry of Food, issued a directive, purportedly in
exercise of its power under Section 6(2) of the Act. The said directive is of
some importance and needs to be reproduced:
"No.
12-6/95-FCI, Government of India Ministry of Food Procurement And Distribution
New Delhi dated the 21st August, 1995 O R D E R In exercise of the powers
conferred by Section 6(2) of the Food Corporation Act, 1964, the Central
Government is pleased to issue/reiterate the following policy instructions to
the Food Corporation of India:-
i.
There shall not be any creation/upgradation of posts of any level except where
completely unavoidable, New Divisions/offices or reorganization etc., shall not
be not up/done unless absolutely essential: Even in such cases, matching saving
should be provided by surrender of posts in the same group or of posts in the
immediate lines of promotion. In such cases, specific prior approval of the
Board of Directors and of the Government shall be taken.
ii.
The existing vacancies shall not be filled up by fresh recruitment. If,
however, for specific operational reasons filling up of any vacant post is
considered absolutely essential, prior approval of the Board and the Government
shall be obtained.
iii.
FCI shall not arrive at any understanding with Staff Association in regard to
restructuring of cadres, revision of pay scales, including introduction of new
promotion policy and grant for new allowances, etc, unless approval for the
same has been obtained from the Board of Directors and the Government.
iv.
FCI will not restructure cadre/revise pay scales, grant new/revise existing
allowances or change other service conditions of its officers and staff without
obtaining prior approval of the Board of Directors and the Central Government.
v. FCI
shall obtain prior approval of the Central Government in fresh construction
proposals/fresh schemes which may have components of non-recurring financial
expenditure of more than Rs. One Crore or recurring annual expenditure of more
than Rs. Twenty five lakh.
Note Paras
(i), (ii) and (iii) above are in continuation of Ministry instructions
contained in D.O. Letter No. 18- 11/90 FCI dated 5.9.90 Sd/- (Surendra Kumar)
Joint Secretary (FP & D) Shri Prabhat Kumar, Chairman, Food Corporation of
India, 16-20, Barakhamba Lane, New Delhi 110001." While the recruitment
process for direct recruitment to the post of Deputy Managers was still being
carried on, a number of complaints were received by the Government of India
with regard to the manner in which direct recruitment of departmental
candidates was being done by excessive relaxation of the maximum age. Several
reports by the Executive Director (Vigilance) were made in this regard. Several
complaints were also received with regard to irregularities/anomalies committed
during recruitment exercise. It was found that, though the maximum age
prescribed under the Recruitment Rules was 35-40, departmental candidates of
age 52-53 years were proposed to be appointed for the posts. Considering all
these factors, the Government of India issued a second directive dated November 6, 1995 imposing a complete ban on the
recruitment process, and declared the recruitment process to be treated as null
and void for flagrant violation of the recruitment regulations for the said
post. The said directive dated 6th November, 1995 reads as under:
"Joint
Secretary Government of India Ministry of Food Krishi Bhawan, New Delhi-110001.
D.O.
No. 10-4/95-FCI November 6, 1995 Dear Shri Asthana, The issue relating to
direct recruitment to the post of Deputy Manager (Genl.), Joint Manager
(Accounts), Joint Manager (Genl.), Deputy Manager (PF/& OP), Deputy Manager
(CC) Deputy Manager (Accounts) and Deputy Manager (Legal) in the Food
Corporation of India on the basis of advertisement in November, 1993 was
engaging the attention of the Ministry for quite some time. In this connection,
letters received from Executive Director (Vigilance) bearing numbers Vig.
21(54)/95 dated 27th March, 1995, 5th May, 1995, 28th June, 1995 and from
Manager (PE) No. 12-1/95-PP dated 12th June, 1995 and No. 1-6/95-RP.1 dated
25th July, 1995 are relevant. The intervention in the recruitment process was
as a sequel to a number of complaints from various quarters, including from
staff Body of the Corporation relating to irregularities/anomalies committed
during the recruitment exercise.
2.
Having regard to the views/facts furnished by the Corporation, established
violation of Recruitment Rules and in the interest of fairness and equity and
Government has decided that the whole direct recruitment process in respect of
the aforesaid categories/number of posts be treated as null and void because of
flagrant violations of the Recruitment Regulations of the concerned posts, For
example, departmental candidates of age 52-53 years were proposed to be
appointed when the maximum age prescribed under Recruitment Rules is 35/40
years. It would be desirable to follow the Recruitment Regulations more objectively.
3. The
FCI may separately approach the Ministry for clearance for making direct
recruitment to specified number/category of posts as required under the
Directives dated 21st
August 1995, with full
justification.
With
regards, Yours Sincerely, Sd/- (Surendra Kumar) Shri Prabhat Kumar, Chairman,
Food Corporation of India, 16-20, Barakhamba Lane, New Delhi-110001."
Though, as a consequence of the said directive, the FCI did not further process
for the selection for the posts of Deputy Managers, which had not yet been
approved by the Executive Committee of the Board of FCI, the process was
carried further in the case of selection to the posts of Joint Managers, these
had already been approved, and the number of such posts was about seven. The
freeze put on the appointment of departmental candidates resulted in a spate of
litigation. The officers/employees in Andhra Pradesh region moved the High
Court of Judicature, Andhra Pradesh by writ petition No. 18960 of 1994
challenging the action by the Central Government as beyond the purview of
Section 6 of the Act. The learned Single Judge of the Andhra Pradesh High Court
dismissed the writ petition by taking the view that the directives were very
much within the ambit and scope of Section 6 of the Act. A Letters Patent
appeal thereagainst was also summarily dismissed. A similar view was also taken
by the learned Single Judge of the Jammu & Kashmir High Court, though we
are informed that a writ appeal filed there is pending disposal.
The
present respondent-employee filed writ petition No. 414 of 1999 before the Gauhati
High Court impugning the directives issued by the Central Government. The only
question which appears to have been pressed for decision before the learned
Single Judge was:
"Whether
the Government of India has any lawful authority to interfere with the internal
administration of FCI, particularly relating to the matter regarding internal
management viz appointment and service of its staff ?" After considering
the arguments addressed to him, the learned Single Judge came to the conclusion
that the power of the Central Government under sub-sections (1) and (2) of
Section 6 of the Act was confined to policy decisions concerning the business
of the Corporation. The learned Single Judge came to the finding:
"On
careful perusal of the afore quoted sub-section (1) and (2) of Section 6 of FC
ACT, 1964 it appears that so far policy decision is concerned regarding the
business of the Corporation which obviously includes procurement storage,
distribution, sale of the food grains/food stuff, the Central Government has
undoubtedly power to give policy directions but so far internal management of
its staff is concerned which includes appointment, promotion, transfer of the
staff and employees of the Corporation the Central Government has nothing to
say." Three writ appeals, two by the Union of India and one by an
employee-Bhanu Lodh, were carried against the judgment of the learned Single
Judge. The Division Bench of the High Court agreed with the learned Single Judge
with regard to the nature of the power of the Central Government under Section
6(2) of the Act. The Division Bench also was of the view that service matters
of the employees of the Corporation did not fall within the ambit and scope of
the expression, "business principles having regard to the interest of the
producers and consumers" occurring in Section 6(2) of the Act. Hence,
according to the Division Bench, "the Central Government had no power to
issue the impugned directives". On facts, the Division Bench was satisfied
that 39 departmental candidates, who were above the maximum age limit of 40
years, were included in the select list for the post of Deputy Manager (Genl. Admn.)
contrary to the Recruitment Regulations. The Division Bench directed the FCI to
exclude the 39 specified candidates from consideration, and consider the other
employees who qualified for appointment to the 34 posts of Deputy Manager (Genl.
Admn.) from the select list and in accordance with law.
Being
aggrieved, the Food Corporation of India is in appeal before us in civil
appeals arising out of Special Leave Petition Nos. 9016-9018 of 2004.
Special
Leave Petition No. 11475 of 2004 appears to have been filed by Bhanu Lodh only
to canvass some of the points taken in the writ appeal, on the ground that they
were not considered in the judgment. The petitioner, in this case, was a person
whose name appears at Sl. No. 53 of the select list and was hopeful of being
appointed to one of the 34 vacancies, consequent upon the exclusion of 39 candidates
from the select list.
Contentions:
We may
first dispose of the contention raised by Mr. Sanjay Parikh, learned counsel
for the petitioner in Special Leave Petition (Civil) No. 11475 of 2004. Having
perused the judgment of the learned Single Judge in the writ petition, we find
that the only question which was argued before the learned Single Judge was the
one which we have extracted hereinbefore. No other point seems to have been
addressed to the court. A perusal of the judgment in the writ appeal also
supports this view. In the face of this record, it is not possible to accept
the contention of the learned counsel for the petitioner that any other
arguments were addressed. We must accept as correct the facts as obtaining from
the judgment of the High Court, which cannot be controverted by the averments
made in present special leave petition, nor by the statement made across the
Bar. We are, therefore, not in a position to accept that any contention other
than the contention placed before the High Court was urged before the High
Court. (See the observations of this Court in Para 4 in the judgment of State
of Maharashtra v. Ramdas Shrinivas Nayak and Anr. . The only contention which
appears to have been urged and examined by the High Court pertained to the
power of the Central Government to issue direction under sub section (2) of
Section 6 of the Act, which have the effect of putting an embargo on the direct
recruitment of employees.
In our
view, the words of sub section (2) of Section 6 of the Act are very material
and direct that the Board of Directors in discharging its functions "shall
act on business principles" having regard to the "interests of the
producer and consumer" and shall be guided by "such instructions on questions
of policy" as may be given to it by the Central Government. First, the
expression "business principles" is one of widest import. We see no
reason as to why the policy of recruitment of officers/staff, which would
obviously have serious financial impact on the Corporation, is not subsumed
under this expression. Secondly, the Board of management is required to have
regard to the interest of the 'producers and the consumers', and not merely of
the officers and employees of the FCI. Finally, the Board is required to
discharge all its functions and be guided by the instructions on questions of
policy, which may be given to it by the Central Government.
Questions
of policy could be, not only with regard to the organization of the FCI, its
management and function, but also with regard to its employment policy,
recruitment and many other details which would, in the long run, affect the
interests of the consumers/producers for whom alone the FCI is established
under the Act. Testing it on this anvil, we find no difficulty in holding that
the directive dated 21st August, 1995 followed by the directive dated 6th
November, 1995 are well within the ambit of sub section (2) of Section 6 of the
Act. The directive dated 21st August, 1995 indicates that the policy was not to
have any creation/ upgradation of posts of any level except where completely
unavoidable. The policy was that "the existing vacancies shall not be
filled up by fresh recruitment", and that there shall be no further
revision in the conditions of service without the prior approval of the Central
Government. The policy directive issued on 6th November, 1995 was a sequel and
highlighted something being done contrary to the Regulations.
While
the maximum age prescribed under the Recruitment Rules is 35/40 years for the
concerned posts, departmental candidates in the age of 52-53 years were
proposed to be appointed. Even assuming that there is a power of relaxation
under the Regulations, we think that the power of relaxation cannot be
exercised in such a manner that it completely distorts the Regulations. The
power of relaxation is intended to be used in marginal cases where
exceptionally qualified candidates are available. We do not think that they are
intended as an 'open Sesame' for all and sundry. The wholesale go by given to the
Regulations, and the manner in which the recruitment process was being done,
was very much reviewable as a policy directive, in exercise of the power of the
Central Government under Section 6(2) of the Act. That is the reason why by
Paragraph 3 of the communication dated 6th November 1995, the Central
Government said "the FCI may separately approach the Ministry for
clearance for making direct recruitment to specified number/category of posts
as required under the Directives dated 21st August, 1995, with full
justification." In our view, there is no manner of doubt that the two
directives in question were clearly within the power of the Central Government
under Section 6(2) of the Act. In Shankarsan Dash v. Union of India a
Constitution Bench of this Court laid down that there is no absolute right in favour
of a candidate whose name is included in the selection list to be appointed.
Said, the Constitution Bench, (vide para 7):
"It
is not correct to say that if a number of vacancies are notified for appointment
and adequate number of candidates are found fit, the successful candidates
acquire an indefeasible right to be appointed which cannot be legitimately
denied. Ordinarily the notification merely amounts to an invitation to
qualified candidates to apply for recruitment and on their selection they do
not acquire any right to the post. Unless the relevant recruitment rules so
indicate, the State is under no legal duty to fill up all or any of the
vacancies. However, it does not mean that the State has the licence of acting
in an arbitrary manner. The decision not to fill up the vacancies has to be
taken bona fide for appropriate reasons. And if the vacancies or any of them
are filled up, the State is bound to respect the comparative merit of the
candidates, as reflected at the recruitment test, and no discrimination can be
permitted. This correct position has been consistently followed by this Court,
and we do not find any discordant note in the decisions in State of Haryana v. Subhash
Chander Marwaha , Neelima Shangla v. State of Haryana , or Jatendra Kumar v.
State of Punjab ." Merely because vacancies are notified, the State is not
obliged to fill up all the vacancies unless there is some provision to the
contrary in the applicable rules. However, there is no doubt that the decision
not to fill up the vacancies, has to be taken bona fide and must pass the test
of reasonableness so as not to fail on the touchstone of Article 14 of the
Constitution. Again, if the vacancies are proposed to be filled, then the State
is obliged to fill them in accordance with merit from the list of the selected
candidates. Whether to fill up or not to fill up a post, is a policy decision,
and unless it is infected with the vice of arbitrariness, there is no scope for
interference in judicial review. (See in this Connection: Government of Orissa
v. Haraprasad Das and Ors. and State of Orissa and Ors. v. Bhikari Charan Khuntia and Ors.).
The
learned counsel for the respondents, however, strenuously urged that even
assuming the directives issued by the Central Government were well within the
parameters of Section 6(2) of the Act, there was arbitrariness writ large in
the action of the Central Government and, therefore, there was justification
for judicial interference. It is pointed out that the posts of Joint Manager
(Accounts), and Joint Manager (Gen. Admn.) were filled, despite the two
directives. This amounts to discrimination in the recruitment process,
according to the learned counsel for the respondents, and, therefore, falls within
the exception indicated by the Constitution Bench. Learned counsel for the
respondents also placed reliance on Rakesh Ranjan Verma and Ors. v. State of
Bihar and Ors. and Real Food Products Ltd. and Ors. v. A.P. State Electricity
Board and Ors., to contend that, in similar circumstances, under the provisions
of the Electricity (Supply) Act, 1948, containing similar provisions, this
Court had interdicted interference by the State Government.
We may
dispose of the contention based on discrimination first. In the first place,
this question does not appear to have been canvassed before the High Court,
irrespective of whether it was raised in the pleadings or not.
Secondly,
the contention is wholly misplaced. The discrimination, if any, can only arise
as between the persons who are similarly, if not identically situated. It is
not possible for the candidate for Deputy Manager's post to claim that he had
been discriminated because a Joint Manager had been appointed, for there is
nothing common between these two posts. It is perfectly valid for the employer
to fill up one category of posts and decline to do so the other for various
business reasons. The argument of discrimination is without basis or merit.
Learned
counsel for the respondents relied on Union of India and Ors. v. Rajesh P.U., Puthuvalnikathu
and Anr. . That was a judgment in which the selection process was held vitiated
on account of wide spread infirmities in the written examination. However, it
was found that the infirmities did not affect 31 candidates who were declared
successful for appointment. In the peculiar facts and circumstances, this Court
held that the situation was not one of 'all or none', and the selection of 31
candidates need not have been set aside. We do not see how this judgment can be
of any help in advancing the argument of the learned counsel.
Rakesh
Ranjan Verma (supra) was a case with respect to exercise of the power under
Section 78-A of the Electricity (Supply) Act, 1948, which was reproduced in Para 9 of the report. We notice that sub section (1) of
Section 78-A merely states, "in the discharge of its function, the Board
shall be guided by such directions on questions of policy as may be given to it
by the State Government". This is a far cry from the phraseology used in
sub section (2) of Section 6 of the Act, which we have reproduced. On facts,
therefore, the situation is quite distinguishable and this authority does not
help in determining the ambit or scope of a directive under Section 6(2) of the
Act.
Real
Food Products Ltd. (supra) also arose in connection with Section 78-A of the
Electricity (Supply) Act, 1948. In this context, it was held that where the
direction of the State Government was to fix a concessional tariff for
agricultural pump-sets at a flat rate per H.P., it does relate to a question of
policy which the Board must follow. However, in indicating the specific rate in
a given case, the action of the State Government was held to be in excess of
the power of giving a direction on the question of policy, which the Board, if
its conclusion be different, was not obliged to be bound by. We do not think
that any principle, as canvassed, can be founded on the ratio of this judgment.
Learned
counsel for the respondent contended that the directives issued by the
appellants and their action in putting a freeze on the process of direct
recruitment of candidates to the Deputy Manager's post was in contravention of
the Food Corporation of India (Staff) Regulations, 1971.
The
contention is that, although Regulation 7(2) requires all appointments to be
made only if a person satisfies the qualifications and is within age limit
prescribed, there is a power of relaxation vested in the Board, which may by
order relax any of the provisions of the Recruitment Rules contained in
Appendix I, if in their opinion it is necessary or expedient so to do. The
learned counsel contend that the Board was therefore the only authority to
arrive at the opinion that it was necessary and expedient to relax the maximum
age limit, and in doing so the Board had absolute discretion and it was not
open to the Central Government to interfere with such discretion by the so
called exercise of its powers under section 6(2) of the Act. For this reason
also, counsel contends that the action of the appellants is liable to be
faulted.
In our
view, the contention is without merit. In the first place, section 45 of the
Act makes it clear that the power of the Food Corporation of India to frame
regulations under the Act is subject to the general restriction that the
regulations are not inconsistent with the Act and the Rules made thereunder.
Section 6(2) is a provision of the Act itself which empowers the Central
Government to issue directives and bind the Board of Directors of Food
Corporation to comply with such directives. Hence, it is not possible to read
any regulation framed under section 45 as inconsistent with or overriding a
directives or instruction validly given by the Central Government to FCI under
section 6(2) of the Act. Apart therefrom, we are not able to appreciate the
argument that the power of the Board of Directors to relax the prescribed age
limit can be exercised in such an unreasonable manner as to distort the
regulation itself. As we have noticed, the relaxation could not have been done
for the benefit of persons who were over-aged by about 15 years. For both
reasons, the contention fails.
Conclusion:
In the
result, we allow the appeals arising out of special leave petition Nos.
9016-9018 of 2004. The impugned common judgment and Order dated 23rd February,
2004 of the High Court of Gauhati in Writ Appeal Nos. 78, 79 and 102 of 2002 is
set aside and the corresponding writ petitions are dismissed.
Consequently,
Special Leave Petition No. 11475 of 2004 and the impleadment applications are
dismissed.
In the
circumstances of the case, there shall be no order as to costs.
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