JUDGMENT
S.B. Sinha, J.
1. The petitioner, an officer of the Bihar State Export Corporation Limited (respondent No. 2) seeks for issuance of an appropriate writ for quashing a memo dated 7.4.1989, as contained in Annexure-1 to the writ application, whereby and whereunder the petitioner was informed that he would be holding the rank of Assistant Branch Manager with effect from the date of his appointment and was further directed to return the sum of Rs. 38,102.50 paise in instalments as mentioned therein.
2. The facts of this case are not much in dispute.
3. The petitioner was appointed as technical officer of the Export Inspections Council of India. On and from 2.7.1983, the petitioner was sent on deputation to the respondent No. 2 as it appears from letter dated 2nd July, 1973 issued by the Industries Department of the State of Bihar. It appears that the State of Bihar communicated a decision to appoint a petitioner in the post of Senior Export Executive-I. It was further directed that if the same was not possible and the vacancy may be filled by direct recruitment. The aforementioned fact appears from a letter dated 2nd July, 1983 issued by the State of Bihar to the Chairman-cum-Managing Director (respondent No. 2) which is contained in Annexure-2 to the writ application. From a letter dated 22nd August, 1983 it appears that the petitioner was deputed to the respondent No. 2, the corporation, in the scale of pay of Rs. 1350-2000 and other allowances admissible to him, for a period of two years. From a letter dated the 8th November, 1983, as contained in Annexure 4 to the writ application, it appears that the Export Council of India also conveyed to respondent No. 2 that it had no objection to allow Sri Narain to draw the aforesaid scale of pay of Rs. 1350-2000, which scale of pay is attached to the post of Senior Export Executive-I. By another letter dated 23rd January, 1984, the Export Inspection Council of India also communicated that it had do objection if the petitioner was absorbed permanently in the respondent No. 2 corporation subject to the conditions mentioned therein. By a letter dated 3rd February, 1984, which is contained in Annexure-6 to the writ application, Sri R.R. Prasad, the then Chairman-cum-Managing Director of respondent No. 2 brought to the notice to the Industrial Department, Govt. of Bihar, the proposal of respondent No. 2 to confirm the services of the petitioner in the post of Senior Export Executive-I. By a letter dated 29th/30th March, 1984, the State of Bihar, as contained in Annexure-7 to the writ application, in reply to the respondent No. 2’s aforementioned letter dated 3rd February, 1984, conveyed to respondent No. 2 that the Industries Department had no objection to the absorption of the petitioner in the respondent-Corporation. However, it was stated therein that with regard to the payment of pay scale etc. a final decision may be taken with the approval of the Board of Directors, Industries Department and the Bureau of Public Enterprises. Thereafter, the proposal to absorb the petitioner permanently was placed in the meeting of the Board of Directors on 30th November, 1984 and the Board approved the said proposal. By a letter dated 21.12.1984, as contained in Annexure-9 to the writ application, the petitioner was directed to be absorbed as Senior Export Executive-I with effect from 30.11.1984. It was contended therein that, however, the pay and emoluments payable, which had been fixed by the Accountant General, Bihar, and approved by the Board of Directors, would be admissible to the petitioner after obtaining the approval thereof by the Bureau of Public Enterprises, Bihar, Patna.
4. It appears from a letter dated 25th August, 1987, issued by the Deputy Secretary, Industries Department, State of Bihar, that the Industries Department of the State of Bihar accorded approval of the scale of pay admissible to the petitioner in terms of the decision of the Board of Directors i.e. the scale of pay of Rs. 1340-1000 with the basic pay of Rs. 1925 payable from 1.12.1984. From an office order dated 9.11.1957 it appears that respondent No. 8 fixed the scale of pay of the petitioner of Rs. 1350-2000 with the initial basic pay of Rs. 1925 per month. To the utter surprise of the petitioner, however, the Board of Directors of the respondent No. 2 in its 37th meeting held on 1st October, 1988 decided to reduce the scale of pay of the petitioner from Rs. 1350-2000 to Rr. 1000-1820 and gave him the post of Assistant Branch Manager, instead of Marketing Manager, which was the lower in rank to the post of Senior Export Executive The petitioner thereafter filed a writ application in this Court challenging the aforementioned decision of the Board of Directors being C.W.J.C. No. 7905 of 1988 and the said order was quashed by a Division Bench of this Court by an order dated 17.2.1989, as contained in Annexure-1 to the writ application. By reason of the aforementioned order this Court directed the respondent No. 2 to give to the petitioner reasonable opportunity to show cause and to decide the case by passing a speaking order and in accordance with law.
5. Thereafter, a show cause notices were issued to him by the Chairman-cum-managing Director of the respondent No. 2, by notices dated 23.2.1989 and 2.3.1989, as contained in Annexures 17 and 17-A to the writ application. Pursuant to the aforementioned notices the petitioner showed cause. By reason of an office order dated 7.4.1989, the impugned order, which is contained la Annexure-1 to the writ application, was issued.
6. A counter affidavit has been filed on behalf of the respondent No. 2 wherein, inter alia it was urged that the petitioner was drawing the salary of Rs. 550-900 in his parent department and the purported proposal to absorb him in the scale of pay of Rs 1350-2000 was done by Sri R.R. Prasad, the then Chairman-cum-Managing Director of respondent No. 2 by way of an act of nepotism and or favouritism. It has further been contended that the decision to put the petitioner in the scale of pay of Rs. 1000-1820 was taken in view of the directions given in this behalf by the Beareau of Public Enterprises, It was further alleged that full facts had not been placed before the Board of Directors. It has further been alleged that the petitioner had been allowed to handle his own ills in the matter of making communication to the Industries Department, Accountant General of Bihar and other authorities, who had vital roles to play in the matter of absorption of the petitioner in the respondent No. 2 corporation. It has further been averred in the counter-affidavit that the petitioner was appointed against a reserved post, which was illegal. It was further alleged that the agenda of Item No. 33/22, which was placed before the Board of Directors on 30th November, 1984, was manipulated and a misleading one. It has further been asserted that in the matter of fixation of pay the recommendation of the Accountant General was brushed aside.
7. Before proceeding with the case further it may be stated that although along with the original writ application, a copy of the reserved order dated 7.4.1989 issued by the Chairman-cum-Managing Director of respondent No. 2 was not annexed, the same was purported to have annexed with a supplementary affidavit. It appears from the records of the case that a copy of the said affidavit was served upon the other side and the same was also filed in the Court, However, the said supplementary affidavit appears to have been misplaced. In this situation, the learned Counsel for the petitioner has placed on record a true copy of the supplementary affidavit which contains the aforementioned reasoned order passed by the Chairman-cum-Managing Director of the respondent No. 2.
8. Mr. Jawed Anwar, the learned Counsel appearing on behalf of respondent No. 2. has also placed on records a copy of the aforementioned order dated 7th April, 1989. Mr. Chandramauli Prasad, learned Counsel appearing on behalf of the petitioner, submitted that the impugned order is wholly illegal and without jurisdiction in as much as the petitioner was validly appointed in the post of Senior Export Executive in the scale of pay of Rs. 1350-2000, the Board of Directors could not have reduced his scale of pay as also the rank. According to the learned Counsel, reduction in the rank as also in scale of pay h permissible only in case of such employee, who had been promoted which is not applicable in this case. The learned Counsel in this connection has relied upon the decision of the Supreme Court in Hussain Saran Saheb Kaladgi v. State of Maharashtra .
9. The learned Counsel appearing on behalf of the petitioner further submitted that no illegality was committed by the Board of Directors in appointing the petitioner in the post of Senior Export Executive in the scale of pay of Rs. 1350-2000, which was commensurate with the direction of the Accountant General, Bihar, as contained in Annexure-B to the counter-affidavit and as the same was also approved by the Industries Department of the State of Bihar, as is evident from Annexure 12 to the petition, the learned Counsel submitted that once the Board of Directors of the respondent No. 2 passed a resolution appointing the petitioner in a particular scale of pay, it had no jurisdiction to resile from the said decision. The learned Counsel further submitted that the Corporation fixed the pay of the petition nor in the aforesaid pay scale according to the recommendation of A.G. Bihar (Annexure-B).
10. From a perusal of the purported reasoned order dated 7th April, 1989 it appears that the Chairman-cum-Managing Director had taken into consideration various nothings in the file without giving an opportunity to the petitioner to know the contents thereof and as such the said purported order is wholly illegal and without jurisdiction when violative of the principles of justice. The learned Counsel, in this connection, placed strongly reliance upon a decision of this Court in Ambika Devi v. State of Bihar and Ors. .
11. Mr. Jawed Anwar, the learned Counsel appearing on behalf of respondent No. 2, on the other hand, submitted that from a perusal of the letter of appointment issued to the petitioner, as contained in Annexure-9 to the writ application it would appear that the fixation of scale of pay of the petitioner was a conditional one to the effect that the same would be subject to the approval of the Bureau of Public Enterprises and the Bureau of Public Enterprise by its letter dated 30th September, 1988, as contained in Annexure-P to the counter-affidavit, gave its approval for absorption of the petitioner in the scale of pay of Rs. 1000-1820 only and thus the Board of Directors had no other option but to put the petitioner in the said scale of pay. The learned Counsel further submitted that the Dy. Secretary of the State of Bihar in issuing the letter dated 25.8.1987 exceeded its jurisdiction in as much as he being only an officer of the State of Bihar have no jurisdiction to approve the proposal of absorption of the petitioner as also to direct fixation of his scale of pay. The learned Counsel further submitted that the said letter apparently contains an error in view of the fact that although therein it was mentioned that in the matter of absorption of the petitioner as also fixation of his scale of pay, the Bureau of Public Enterprises has been consulted the said fact does not appears to be correct.
12. It appears that the entire action after passing of the order of this Court in C.W.J.C. No. 7905 of 1988 was talcum by the Chairman-cum-managing Director of the responded No. 2. Unfortunately the earlier decision of the Board of Directors being Item No. 37/17 of the proceeding of the 37th meeting of the Board of Directors held on 1st October, 1983 is not on record, although the said order was annexed in the aforementioned writ application as Annexure-15 thereof. It is neither doubt nor in dispute that the respondent No. 2 is ‘State’ within the meaning of Article 12 of the Constitution of India. It is further not in dispute that the respondent No. 2 being a company incorporated under the companies Act ; its affairs are to be managed by the Board of Directors. From the facts stated hereinbefore, it is evident that the matter in relation to the permanent absorption of the petitioner had to be placed before the Board of Directors in its meeting dated the 30th November, 1984 and the petitioner could be absorbed permanently only upon the acceptance of the said proposal by the Board of Directors. Mr. Jawed Anwar, when questioned could not dispute that the Board of Directors was the appointing authority of the petitioner. By reason of the aforementioned order dated 17.2.1989, a division Bench of this Court in C.W.J.C. No. 7905 of 1988 while quashing of the decision of the Board of Directors held is its 37th meeting on 1st October, 1988, passed the following order:
We heard the learned Counsels for both the parties at some length. We do not propose to go into the merits of this case at this stage. We find some substance in the argument of Sri Basudeo Prasad that before passing the impugned resolution, as contained in Annexure-15 the petitioner should have been given an opportunity to show cause After all the Board had passed certain resolution earlier and the petitioner had started drawing salary of Rs. 1925 when this was sought to be withdrawn the Rules of Natural Justice required that the petitioner should have been given at least an opportunity in his case. In view of the matter, we feel that the matter should go back to the respondent-Corporation for a fresh decision. Impugned resolution of the Board, as contained in Annexure-15, is accordingly, quashed and we give the following direction to the respondent-Corporation in this Case. The petitioner should be given a notice within 2 weeks from today, asking him to show cause as to why the benefits, if any, given to him consequent upon the earlier Board’s resolution, contained in Annexure-8, he not withdrawn. Petitioner shall file his show cause within two weeks from the receipt of the said notice. The Corporation (Respondent) shall consider the show cause of the petitioner and decide the case within one month thereafter, by a reasoned order.
We wish to make it clear that this will not be in the nature of any departmental proceeding. It will only be a show cause notice giving the petitioner a reasonable opportunity to show cause. The learned Counsels have also taken notice of this fact. If the petitioner does not file his show cause within 2 weeks from the receipt of the notice by him the Respondent Corporation shall be entitled to proceed ex-parte and decide the case and pass any appropriate order in accordance with law.
We hope that the petitioner will receive the show cause notice from the office of the Corporation within the appointed time. It is further agreed that the copy of the show cause shall also be served upon the learned Counsel for the petitioner. Similarly a Copy of the show cause should be served upon Mr. Jawed, learned Counsel for the respondent-Corporation, by the petitioner or his counsel within the time fixed.
During this period of 8 months the petitioner shall continue to get salary which he was getting on 30th September, 1988. No recovery shall be made from the petitioner during this period. All these payments shall be subject to the final decision which the Board shall ultimately take. No arrear shall be paid to the petitioner during this period.
12. From the impugned office order as contained in Annexure-1 to the writ application as also the reasoned order dated 7.4.1989 passed by the Chairman-cum-Managing Director, it is evident that the Managing Director himself took a decision as against the petitioner, inter alia, on the ground that it was act possible to convene the (illeg) the Board of Director within such time limit and as such the order was passed in anticipation of approved by the Board. In my opinion, this Court in the earlier writ application while directing the Corporation to give an opportunity to the petitioner, meant that such an opportunity should be given by the Board of Directors. Nothing has been brought on the record in show that the Managing Director was empowered by any resolution of the Board of Directors of issue the notice to show cause to the petitioner and pass an order in anticipation of the approval of the Board of Directors.
13. Mr. Jawed Anwar submitted that this course of action had been taken by the Chairman-cum-Managing Director, in view of the peculiar circumstance of the case, namely, the time schedule fixed by this Court during which period it was not possible to convene a meeting of the Board of Directors.
14. If the Chairman-cum-Managing Director of respondent No. 2 Corporation, has no jurisdicion to consider the show cause filed by the petitioner alone pursuant to the decision by this Court as also in view of the fact that the appointing authority of the petitioner was the Board of Directors of the respondent No. 2. the Corporation and also in view of the fact that even the earlier resolution, which was the subject matter of the aforementioned C.W.J.C. No. 7905 of 1988, was passed by the Board of Directors and not by the Chairman-cum-Managing Director himself, it was the Board of Director alone who was, thus, entitled to take appropriate action after taking into consideration the show cause filed by the petitioner. If the Corporation felt that it was not possible for it to complete the proceedings within the time schedule fixed by this Court, in view of the difficulties in convening the meeting of the Board of Directors it could approach this Court for extension of time but thereby on that pretext the Chairman-cum-Managing Director could not have usurp the jurisdiction which he did not have further, as noticed hereinbefore even no document has been placed on records for the purpose of showing that even subsequently the Board of Directors ratified the impugned order dated 7th April, 1989.
15. In this view of the matter, in my opinion, the impugned order having been passed by an authority, who is not competent to do the same, cannot be sustained.
16. Further, in this situation, in my opinion, the Board of Directors of respondent No. 2 should consider the matter afresh and pass an appropriate order.
17. There cannot be any doubt that if some benefit has been obtained by the practising fraud or in total disregard of law the same can be recalled. It is further (illeg) law that a mistake committed by an employee can b” rectified.
18. It is also well settled that a conditional order takes its effect only upon fulfilment of the conditions precedent mentioned therein. From a perusal of the counter-affidavit filed on behalf of respondent No. 2 it is evident that several serious allegations have been made as against the petitioner and as also the then Chairman-cum-Managing Director of respondent No. 2. If the said allegations are correct, the respondent No. 2 will be free to take any action as against the officers responsible therefor including the petitioner, but the same has to be done in accordance with law. Further as indicated abvoe, Mr. Jawed Anwar, the learned Counsel appearing on behalf of the respondent No. 2, not only questioned the authority of the Deputy Secretary of the Industries Department to issue the letter dated 25.8.1987, as contained in Annexure-l2 of the writ application but also contended that prior to the issuance of the said letter, the Bureau of Public Enterprises was not consulted, which according to the learned Counsel, would be evident from Annexure-P to the counter-affidavit. In such a situation, in my opinion, the Board of Directors, Industries Department and the Bureau of Public Enterprises should check up their records so that the truth may come out.
19. It further appears, from a perusal of the reasoned order passed by the Chairman-cum-Managing Director, that he referred the various files in order to come to a conclusion that various malpractices have been performed by various authorities at different stages including the then Chairman-cum-Managing Director as also the petitioner. In ,view of the seriousness of the allegations made in the reasoned order dated 7th April, 1989 as also in the counter affidavit, in my opinion, the petitioner must be held to be entitled to peruse the relevant records upon which the respondent No. 2 intends to rely upon, so that, if considered necessary, the petitioner may file an additional show cause. As the petitioner is now aware of the details of the records upon which respondent No. 2 intends to rely upon, it would open to the petitioner, if he so desires, to file a representation before the Chairman-cum-Managing Director of respondent No. 2, Corporation. In order to enable him to peruse the relevant files and in that even such an opportunity would be granted to him in order to comply with the principles of natural justice. It is well known that the doctrine of audi alteram pattern requires disclosures of materials which may be used against a deliquent officer. In the peculier circumstances of this case, in my opinion, liberty should also be given to respondent No. 2, if he so desires, to amend the show cause notices as contained in Anncxures 17 and 17A of the writ application, keeping in view on the decision of the Supreme Court in Hussain Sasan Saheb Kaludgi v. State of Maharashtra .
20. In the result, this writ application is allowed, the impugned office order dated 7th April, 1989, as contained in Annexure-1 to the writ application is quashed and the Board of Directors of respondent No. 2 is, hereby, directed to consider the matter afresh keeping in view of the observations made hereinbefore as also the order passed, by this Court in the earlier writ application, as contained in Annexure-16 to the writ application. As the fate of the petitioner is hanging fire for a long time it is desirable that the matter should come to an end expeditiously and positively within a period of two months from today. In the facts and circumstances of the case, the parties shall bear their own costs In the meantime status quo as obtaining today shall be maintained in view of the order passed in the earlier writ petition.