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PETITIONER: FERTILIZER CORPORATION OF INDIA LTD.

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT:       19/02/1996

BENCH: SINGH N.P. (J) BENCH: SINGH N.P. (J) VERMA, JAGDISH SARAN (J) BHARUCHA S.P. (J)

CITATION:  1996 SCC  (3) 325        JT 1996 (2)   410  1996 SCALE  (2)315

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T N.P. SINGH.J.      This appeal  has been filed on behalf of the Fertilizer Corporation of  India Ltd.  (hereinafter referred  to as the ‘Corporation’)  for   setting  aside   the  judgment   dated 24.9.1990 of the High Court by which the writ petition filed on behalf  of respondent No. 4, Shri D.K. Jain, (hereinafter referred to  as the  ’respondent’) has  been allowed  and  a direction has  been given  to the  appellant Corporation  to take  back  the  said  respondent  in  service  as  Director (Finance) w.e.f.  20.4.1986. A  further direction  has  been given that  in case  the  post  of  Director  (Finance)  had already been  filled up  by some  other incumbent and it was not possible) to appoint the the respondent against the said post, then he should be appointed in another equivalent post with all consequential benefits.      The respondent  joined the  Indian Audit  and  Accounts Service in  the year 1958 and was holding a substantive post in junior  administrative grade  of Rs. 1500-100-3000 w.e.f. 15.7.1982. While the respondent was working as Joint Adviser (Finance), Bureau  of Public Enterprises Selection Board for the   post of  Director (Finance) for the Corporation. By an order dated  8.6.1982 issued  by the  Government  of  India. Ministry  of   Petroleum,  Chemicals   and  Fertilizers  the respondent was  appointed as  Director (Finance) of the said Corporation.      Article 66  of the  Articles   of  Association  of  the Corporation which  provides for  the appointment of Director says:      "66.(1) The  Directors representing      the Govt. shall be appointed by the      President  of  Directors  shall  be      appointed by the President of India      in consultation  with the  Chairman

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    of the Board of Directors and shall      be  paid   such   salary   and   or      allowance as the President of India      in consultation  with the  Chairman      of the Board of Directors and shall      be  paid   such   salary   and   or      allowance as the President may from      time to time determine.      (2) All  the Directors  except  the      Managing    Director,     Executive      Director/s      and      Functional      Director/s shall  retire at the end      of their  term, not exceeding three      years  from   the  date   of  their      appointment. The Managing Director,      Executive Director/s and Functional      Director/s    shall    retire    on      his/their  ceasing   to  hold   the      office of  the  Managing  Director,      Executive Director/s and Functional      Director/s.  A   retiring  Director      shall   be    eligible   for    re-      appointment.      (3) The  President shall  have  the      power  to   remove   any   Director      including   the    Chairman,    the      Managing    Director,     Executive      Director/s      and      Functional      Director/s from  office at any time      and in his absolute discretion.      (4) The  President shall  have  the      right to  fill any  vacancy in  the      office  of  a  Director  caused  by      retirement,  removal,  resignation,      death or otherwise." The respondent  after having  been appointed  as Director on the Board  of the Corporation was also appointed in terms of Article 69 of the Articles of Association of the Corporation as Director  (Finance) of  the said Corporation for a period of five  years  or  till  the  age  of  his  superannuation, whichever was earlier.      Pursuant to  the aforesaid order, the respondent joined the Corporation  on 17.7.1982.  On 12.11.1984  another order was issued  by the Government of India, Ministry of Industry (Department of  Industrial Development)  in respect  of  the said respondent  saying that  the President had been pleased to  appoint  the  said  respondent  who  was  then  Director (Finance) of  the Corporation  as Director  (Finance) of the Cement Corporation  of India Ltd. for a period of two years. The relevant part of the order is as follows:                    "ORDER.      In pursuance  of Article  95(a) and      (b) of  the Articles of Association      of the  Cement Corporation of India      Limited, the  President is  pleased      to  appoint   Shri  D.K.  Jain,  at      present     Director     (Finance),      Fertilizer  Corporation   of  India      Limited  as   Director   (Finance),      Cement Corporation of India Limited      for a  period  of  two  years  with      effect from  the  date  he  assumes      charge  of  the  post  of  Director      (Finance) in the Cement Corporation      of India Limited."

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    The Chairman  and Managing  Director of  the appellant- Corporation issued an order on 22.11.1984 saying:           "On   his    appointment    as      Director (Finance)  in  the  Cement      Corporation   of   India      Ltd.,      notified    vide     Ministry    of      Industry’s  Order  No.10-16/84-Com.      dated  12th  November,  1984    and      subsequent request  from  the  same      Ministry for  his early  release as      per   their   letter   dated   17th      November, 1984  and  the  clearance      given by  the Ministry of Chemicals      and  Fertilizers,   it   has   been      decided to  release Shri D.K. Jain,      Director  (Finance)    with  effect      from    24th     November,     1984      (Forenoon).           He is advised to hand over the      charge of   his  office to  Shri S.      Padmanabhan,  Dy.  General  Manager      (Finance), who would look after the      work of  Finance Division,  in  the      Corporate  Office,   until  further      orders."      It may  be mentioned  that before  the aforesaid  order dated 22.11.1984  was issued  by the  appellant  Corporation releasing the  respondent w.e.f.  24.11.1984 the  respondent had addressed a letter on 15.11.1984 to Shri Iyer, Director, Government of  India, Ministry  of Industry  (Department  of Industrial Development) saying that he had been appointed in June 1982 as Director (Finance) in the appellant-Corporation and his  tenure had  been fixed  at five  years, as such his appointment for two years in the Cement Corporation of India shall be  a distinct  disadvantage to him, and a request was made:           "In View  of  above,  I  would      request that my term of appointment      in the  Cement Corporation of India      Limited be  kept at five - years so      that  I   may  not  be  denied  the      benefit which was conferred earlier      by the  Government at  the time  of      appointment   in   the   Fertilizer      Corporation of  India Limited  more      so  when   I  am  not  gaining  any      monetary advantage  in joining  the      Cement   Corporation    of    India      Limited......."      On 3.12.1984 yet another order was issued in respect of respondent by the appellant-Corporation saying:           "Further  to   Memo  of   even      number dated  23rd  November,  1984      and as requested by Shri D.K. Jain,      Director (Finance)  he  will  stand      relieved from  the services  of the      Corporation as  Director  (Finance)      with effect  from the  afternoon of      5th December, 1984.           Shri Jain  is advised  to hand      over  the   charge   to   Shri   S.      Padmanabhan,  Dy.  General  Manager      (Finance) Padmanabhan,  Dy  General      Manager    (Finance).     Provident      Fund/E.L. will  be settled  as  per

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    rule of the Corporation.                   (P.L. KUKREJA)            Chairman & Managing Director"      On 5.12.1984  the respondent relinquished the charge of the post  of Director (Finance) of the appellant-Corporation saying:           "I   hereby   relinquish   the      charge  of  the  post  of  Director      (Finance)  FCI with effect from the      afternoon of  5th December, 1984 to      take up  my assignment  as Director      (Finance),  Cement  Corporation  of      India.There  are  no  papers  which      need to  be handed  over as all the      related files are in the respective      sections and departments.                             Sd/                        ( D.K. Jain )                      Director (Finance)" He assumed the charge of the post of Director (Finance) in Cement Corporation of India on 6.12.1984.      Unfortunately by an order dated 20.1.1986 issued by the Government of  India, Ministry  of Industry  (Department  of Public Enterprises) the respondent was removed from the post of Director  (Finance) in  the Cement  corporation of India. The aforesaid order said:                    "ORDER           WHEREAS the  President  is  of      the  opinion  that  it  is  in  the      public interest to do so;           NOW, THEREFORE, in exercise of      the  powers  conferred  by  Article      95(d)   of    the    Articles    of      Association of  Cement  Corporation      of India  Limited, New  Delhi,  the      President is  pleased to  terminate      forthwith the services of Shri D.K.      Jain as  Director  (Finance) in the      Cement Corporation of India Limited      and also  remove him forthwith from      the Board  of Directors of the said      Corporation.           The   President   is   further      pleased to  decide that  Shri  D.K.      Jain will be paid three months’ pay      and allowances, as admissible under      the rules  of the  corporations  in      lieu  of   the  period   of  notice      prescribed in  para  1(1)  of  this      Ministry’s   letter   No.10(18)/84-      Com., dated the 4th February, 1985.           By order  and in  the name  of      the President.                  Sd/- E.V.L. Prasada Rao            Under  Secretary to the Govt.                          of India"      The  respondent   addressed   a   communication   dated 17.4.1986  to  the  Secretary,  Department  of  Fertilizers, Ministry of  Agriculture saying that he had received a reply from  the  appellant-Corporation  vide  their  letter  dated 14.4.1986 that  his employment  with  that  Corporation  had ceased immediately  on  respondent  being  relieved  on  the afternoon of  5.12.1984 consequent  to  his  appointment  as Director (Finance)  in the  Cement Corporation of India. The respondent made  a grievance  in the  said letter  that  the

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appellant-Corporation had  not created  a Permanent post for his permanent  absorption. In  that  connection,  respondent said: ’           "It  may  please  be  recalled      that  my  permanent  absorption  in      Fertilizer Corporation of India was      a material  condition precedent  to      my appointment with the corporation      and retirement  from Indian Audit &      Accounts    Service.    This    was      stipulated both  by me and my cadre      authority, i.e.  the Comptroller  &      Auditor General  of  India  through      various letters on the subject both      before and  after  my  joining  the      Corporation in July, 1982."      Our attention was drawn to a communication dated 10.6.1983 addressed  by Under Secretary to the Government of India to  the  Comptroller  and  Auditor  General  of  India referring to  the Sanction of the President to the permanent absorption of the respondent in the appellant-corporation in public interest  w.e.f. 17.7.1982.  In  this  connection,  a reference was  also made  on behalf  of the  respondent to a notification  dated   21.6.1983   issued   by   the   Asstt. Comptroller and Auditor General saying:           "Consequent upon his permanent      absorption   in    the   Fertilizer      Corporation  of   India   Ltd.   (A      Central Public Sector Undertaking),      New Delhi, in public interest, with      effect from  17th July,  1982 A.N.,      Shri D.K.  Jain, I.A.  &  A.S.,  is      deemed   to   have   retired   from      Government Service with effect from      the same  date in  terms of Rule 37      of  the   Central  Civil   Services      (Pension) Rules, 1972." When the  appellant-Corporation refused  to  take  back  the respondent to  the post  of Director  (Fiance) on the ground that after  the said  respondent had  been relieved from the said post  as desired  by him,  there was no question of his continuing on  the said  post, the  respondent filed  a writ petition before  the  High  Court.  That  writ  petition  as already mentioned  above was allowed by the High Court and a direction was  given to  the appellant to take back the said respondent  in   service  as   Director   (Finance)   w.e.f. 20.4.1986.      According to  the appellant-Corporation,  the claim  of the respondent that he had been appointed on permanent basis in the  Corporation is  not borne  out from  records of  the Corporation  and  the  said  claim  has  been  made  by  the respondent only  after the  said respondent was removed from the post  of Director (Finance) of the Cement Corporation of India. It  was pointed  out that  the  respondent  had  been appointed by the appellant-Corporation for a fixed tenure of five years  and there  was no question of his being absorbed on permanent  basis in  the  Corporation.  Even  before  the expiry of  the said  period of five years, the respondent of his own volition left the service of the Corporation to join the Cement  Corporation of  India. tn this background, after his removal  from the Cement Corporation of India, there was no question  of the  respondent  coming  back  to  appellant Corporation to  join the  post of  Director (Finance) or any equivalent post.      There is  no dispute  that at  no stage  any order  was

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issued by the appellant-Corporation absorbing the respondent in the  service of  the Corporation  on permanent basis. The only  order   which  issued   in  respect   of  respondent’s appointment  under   Article  66(1)   of  the   Articles  of Association of the Corporation on 8.6.1982 said in clear and unambiguous words  that the appointment of the respondent as Director (Finance)  was for  a period  of five years or till the age of superannuation, whichever was earlier. This order was never modified or substituted at any stage. The Stand of the appellant-Corporation  appears to  be that merely on the basis of  notification  issued  on  21.6.1983  retiring  the respondent from  the Government  service  w.e.f.  17.7.1982, saying "consequent  upon his  permanent  absorption  in  the Fertilizers Corporation of India Limited", it cannot be held that the  respondent had been absorbed in the Corporation on permanent basis.  Any such  statement  in  the  notification issued by  the Assistant  Comptroller  and  Auditor  General shall be  of no  consquence so far the appellant-Corporation was concerned.      It is  unfortunate that  the respondent  for his better prospects in  life stepped  out from  service of the Central Government to  the service  of the appellant-Corporation and then to  the Cement  Corporation  of  India.  But  the  fact remains that  in this  process, he has landed in a situation where he  cannot claim  that  either  he  continued  in  the service  of   the  Central   Government  or   the  appellant Corporation till  the date  of his  superannuation. Not only the order  of appointment of the respondent by the President in  the   appellant-Corporation  is   clear,  specific   and unambiguous regarding  his five  years term,  the respondent has also  understood it  in the  same manner.  After he  was removed  from  the  Cement  Corporation  of  India,  in  his aforesaid communication  dated 17.4.1986  to the  Secretary, Department of Fertilizers, Ministry of Agriculture he said:           "....This indicates  that  the      Fertilizer  Corporation   had   not      created   a   permanent   post   to      accommodate my  lien consequent  to      my permanent  absorption with  them      in terms  of Ministry  of  Finance,      Government of  India  letter  No.A-      39020/14/83-EC  dated   10th  June,      1983,     conveying     President’s      sanction to that effect. If that be      so my deemed retirement from Indian      Audit   &   Accounts   Service   as      notified  by  the  Comptroller  and      Auditor General  of  India  through      Notification        No.3740/GE.I/J-      13/P.F.Pt.III dated 21st June, 1983      was not  covered by  the rules  and      regulations and  therefore,  ultra-      vires." In other  words, in  the aforesaid  communication he claimed that his  resignation from  the Indian  Audit  and  Accounts Service itself was ultra-vires and he shall be deemed to be continuing in  the said  service after  his removal from the Cement Corporation  of India.  In this background, according to us,  it is difficult to hold merely on basis of aforesaid notification  dated   21.6.1983  issued   by  the  Assistant Comptroller and Auditor General saying that "consequent upon the  permanent   absorption  of   the  respondent   in   the Fertilizers Corporation  of India"  that the  respondent had been permanently  absorbed in the appellant-Corporation. For the Permanent  absorption of  the respondent, the appellant-

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Corporation had  to issue  an order  or notification to that effect. That finding cannot be recorded by a court merely on basis of some correspondence or order or notification issued by others.      The counsel  appearing on behalf of respondent referred to different  communications addressed by the respondent for his permanent  absorption. A  reference was  also made  to a communication dated  4.5.1983 addressed by the respondent to the Comptroller  and Auditor  General of  India in  which he said that he was giving his consent for Permanent absorption in the Corporation effective from 17.7.1982 and similarly he was agreeing for termination of his lien in the Indian Audit & Accounts  Service from that date. Reliance was also placed on the  aforesaid notification dated 21.6.1983 issued by the Assistant Comptroller  and Auditor General which has already been referred  to above  in which  it  has  been  said  that "consequent upon  permanent absorption  in  the  Fertilizers Corporation of India" the respondent shall be deemed to have retired from  the Government  service. According  to us what the respondent desired and how the Assistant Comptroller and Auditor General  understood in respect of appointment of the respondent in the appellant-Corporation shall not be binding on  the  appellant-corporation.  The  question  whether  the respondent was  appointed on permanent basis or was absorbed at any stage by the appellant-Corporation on permanent basis has to  be traced and found out on basis of orders issued by the appellant-Corporation.  It is  an admitted position that no such  order has  been issued by the appellant-Corporation at any stage.      Apart from  that, before  the expiry  of period of five years for  which the  respondent had  been appointed  by the appellant-Corporation,  respondent   of  his  own  left  the appellant-Corporation and  at his  request and as desired by him he  was relieved  from the  service of  the Corporation. Thereafter there was no occasion for the respondent to claim the post of Director (Finance) in the appellant-Corporation. The High Court has missed the real issue involved and was in error  in   issuing  writ  of  mandamus  on  the  appellant- Corporation to  take back  the said respondent in service as Director (Finance) w.e.f. 20.4.1986.      Accordingly the  appeal is  allowed. The  order of  the High Court  is set  aside. In the facts and circumstances of the case, there shall be no order as to costs.