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PETITIONER: B.S. MINHAS

       Vs.

RESPONDENT: INDIAN STATISTICAL INSTITUTE & ORS.

DATE OF JUDGMENT19/10/1983

BENCH: MISRA, R.B. (J) BENCH: MISRA, R.B. (J) BHAGWATI, P.N.

CITATION:  1984 AIR  363            1984 SCR  (1) 395  1983 SCC  (4) 582        1983 SCALE  (2)574  CITATOR INFO :  R          1986 SC1571  (57)  RF         1991 SC1173  (5)

ACT: Constitution of India. Articles 12 and 32.      Indian Statistical Institute-A society registered under the Societies  Registration Act-Financed  and controlled  by Central Government-Whether  ’other authority’ within meaning of Article  12-Whether amenable  to writ  jurisdiction under Article 32. Civil Service      Indian  Statistical  Institute-Director-Vacancy  of-Bye law No.  2 of  Institute require  vacancy to  be  publicised before  recruitment-Whether   obligatory  for  Institute  to follow  the   bye-law-No  minutes   of  selection  committee maintained or  circulated amongst  members-Selection whether valid.      Indian Statistical  Institute Act 1959 Ss 4, 5, 6, 7, 9 and 12.      Indian  Statistical   Institute-Institute  of  National Importance-Whether ’other  authority’ within  the meaning of Article 12 of the Constitution.

HEADNOTE:      The Indian  Statistical Institute  was registered under the Societies  Registration Act,  and governed by the Indian Statistical Institute  Act,  1959.  Its  control  completely vested in  the Union  of India,  respondent  no.  5  in  the appeal. The  Institute had been declared as an ’Institute of National Importance.      The chief  executive body  of  the  Institute  was  the Council, respondent  no. 2  which consisted of 25 members of whom three  were representatives  of the Central Government. The Council  was headed  by a  chairman who  was elected. In order  to   discharge  the   administrative   and   academic responsibility of  the Institute a Director was appointed by the Council. Respondent no. 4 was appointed as a Director.      The petitioner  in his  Writ  Petition  challenged  the appointment of  respondent no. 4 on the ground that he was a person] of  much higher  academic and  other accomplishments and far superior to the said respondent. 396

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    In the  Writ Petition  it was  contended: (i) Bye-law 2 expressly requires  that the  vacancy of Directorship should be suitably  publicised but in the present case no publicity whatsoever  was   given  to  the  vacancy  of  Directorship. Publicity was  necessary if  the appointment  was to be fair and free from partiality and that many were not aware of the vacancy of  the post  of Director  till the  actual order of appointment was  made. (ii)  He was  eminently suitable  for being  appointed   to  the  post  in  view  of  the  various contributions in  the field  of his work and the active part played by  him in  resolving the  administrative problems of the Institute,  and (iii)  no bio-data  or  information  was placed before  the Council  which under the bye-laws was the appointing authority  to enable  the members  to  gauge  the comparative suitability of various candidates.      The petition  was resisted on behalf of respondent Nos. 1 and  2 by contending: (i) the petition is not maintainable under Article  32 of  the Constitution as respondents Nos. 1 and 2  are not  ’state’  or  ’other  authority’  within  the meaning of  Art. 12  of the Constitution. (ii) Even assuming that there has been a violation of bye-law 2 no writ can lie to correct  the same as the alleged bye-law has no statutory basis inasmuch  as the  Institute has  been declared  as  an Institution of  National Importance’, the bye-laws not being statutory the respondents are under no obligation to observe the procedure  Laid down  therein, and  (iii) the petitioner was duly and properly considered for selection to the post.      Allowing the writ petition, ^      HELD: (i) The order of appointment dated August 3, 1979 of Respondent  No. 4  as the Director of Respondent No. 1 is quashed and  set aside.  Before Respondent No. 1 proceeds to select a  new Director,  it will comply will the requirement of bye-law  2 by giving suitable publicity to the vacancy in the office or Director. [413 F]      (ii) There  can be no doubt that respondent No. 2 is an ’authority’  within   the  meaning  of  Article  12  of  the Constitution and,  therefore, the writ petition filed by the petitioner is competent and maintainable. [409 G]      In the instant case, the money required for funding the Institute is provided entirely by the Central Government and even if any other moneys are to be received by the Institute it can  be done  only  with  the  approval  of  the  Central Government, and  the accounts  of the Institute have also to be submitted  to the Central Government for its scrutiny and satisfaction. The  Society has to comply with all directions as may  be issued  by the Central Government. The control of the Central Government is deep and pervasive and, therefore, it is  an instrumentality  of the  Central Government and as such is  an ’authority’  within the meaning of Article 12 of the  Constitution.   It  is,   therefore,  subject   to  the constitutional obligations  under Articles  14 and 16 of the Constitution. [408 C-D]      Ajay Hasia  etc. v. Khalid Mujib Sehravardi & Ors. etc. [1981] 2 SCR 79 referred to 397      2. (i) It is obligatory on the part of respondent No. 1 to follow the bye-laws for the bye-laws have been framed for the conduct of its affairs to avoid arbitrariness. [410 G]      (ii) Compliance with bye-law 2 seems to be necessary in the name  of fair-play.  If  the  vacancy  in  the  post  of Director had  been publicised  as contemplated by bye-law 2, all the  persons eligible  for the post may have applied and in that  case, the  field of  consideration would  have been enlarged and  the selection  committee or  the Council would

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have had  a much  larger field from which to choose the best available reason  and that  would have  removed all doubt of arbitrariness from  the mind of those eligible for the post. [411 B]      Ramana  Dayaram   Shetty   v.   International   Airport Authority of  India (1979)  3 SCR 1014; Viteralli v. Seton 3 Law Fd.  Second Series 1012; A.S. Ahluwalia v. Punjab [1975] 3 SCR 82; Sukhdev v. Bhagatram [1975] 3 SCR 619 referred to.      (iii) In the case of appointment of a Director, bye-law 2 clearly  provides for publicity, the object being that all concerned may know about the vacancy and either applications or recommendations may be made for the post and the names of the eligible  candidates may be brought before the selection committee for its consideration. [412 H-413 A]      (iv) It  is not  suggested that  appointments to  every post must  be made only after advertising or publicising the vacancy. That  would not be right, for there are quite a few posts at  the top  level as  for example  Commander of Armed Forces or  the Chief  Justice or  the Judges  of the Supreme Court or  the High  Court, which cannot be and should not be advertised or  publicised, because  they are posts for which there should  be no  lobbying nor should any applications be allowed to be entertained. [411 C-D]      (v) It  is not  for the  Court to  determine who is the superior of  the two  candidates and who should be selected. It is  for the  authorities concerned to select from amongst the available  candidates.  The  members  of  the  selection committee as  also the  members of  the Council were eminent persons and  they may be presumed to have taken into account all relevant  considerations before  coming to a conclusion. But in  the absence  of publicity as contemplated by bye-law 2, it  cannot be  said that all other qualified persons like the  petitioner   were  also  considered  by  the  selection committee for appointment, in the absence of any application by them  for the  post or  any recommendation of them by any other authority or individual. [412 C-E]      3. It  is always  desirable that  in public  bodies the minutes of  the proceedings  regarding selection  should  be properly maintained  in order  to obviate  any suspicion  or doubt and  such minutes  along with  the relevant  documents should be  placed before  the final authority entrusted will the task of selection for appointment. [412 A]      In the instant case, there is nothing on record to show that the  Council was  at any time informed as to what names had been  considered by  the selection committee or that the names of  the petitioner  had been considered but respondent No. 4 was found superior. [411 H] 398

JUDGMENT:      ORIGINAL JURISDICTION: Writ Petition No. 1519 of 1979.       (Under article 32 of the Constitution of India )      V.M. Tarkunde,  P.H. Parekh  and Miss  Caprihan for the Petitioner      R.R. Garg, L.R. Singh and Gopal Singh for Respondents 1 & 2.      D.P.  Singh,   L.R.  Singh  and  Mr.  Gopal  Singh  for Respondents 3 & 4.      Harbans Lal and G.S. Narain for Respondent No. 5.      Miss A.  Subhashini, C.V. Subba Rao and R.N. Poddar for the Union of India.      The Judgment of the Court was delivered by      MISRA J.:  By the  present petition under Article 32 of

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the Constitution  the  petitioner  seeks  to  challenge  the appointment of  Shri B.P. Adhikari, respondent No. 4, as the Director of the Indian Statistical Institute, respondent No. 1.      The  Indian   Statistical  Institute   is   a   Society registered under  the  Societies  Registration  Act.  It  is governed by  the  Indian  Statistical  Institute  Act,  1959 (hereinafter  referred   to  as   ’the  Act’).  Its  control completely vests in the Union of India, respondent No. 5. It is wholly  financed by the Union of India. All the functions of the Institute are controlled by the Union of India, as is evident from  the various  provisions of the Act. Under s. 8 of the  Act the  annual work programmes of the Institute and the general  financial estimates in respect of such work are settled by  committees appointed  by the  Central Government and the Institute obviously cannot undertake any research or training programmes  without the  approval  of  the  Central Government. The Institute carries on an integrated programme of  training,   teaching  and  research  in  statistics  and application of  statistical techniques in other disciplines. The Institute  has  been  declared  as  an  ’Institution  of National Importance’  under the  Act. Under  s. 4 of the Act the Institute  has been  empowered to grant such degrees and diplomas in statistics as may be determined by the Institute from time to time. In accordance with the provisions of s. 5 of the  Act the  Central Government pays to the Institute in each financial  year such  sums of  money as  the Government considers 399 necessary by  way of  grant. Loan or otherwise to enable the Institute to  discharge efficiently  its functions including research,  education,   training,  project   activities  and statistical  work   relating  to   planning   for   national development. Section.  6 of  the Act  deals  with  audit  of accounts of  the Institute by auditors duly qualified to act as auditors  of companies  under the Companies Act, 1956 and selected by  the Central  Government after consultation with the Comptroller  and Auditor-General  of India. Section 7 of the Act  restricts the  powers of  the Institute  to  alter, extend or  abridge its  memorandum or  rules and regulations and to  sell or  otherwise dispose  of its property acquired with the money specifically provided for such acquisition by the Central  Government except with the previous approval of the Central  Government.  Section  9  empowers  the  Central Government  to  constitute  a  committee,  inter  alia,  for reviewing and  evaluating the work done by the Institute and the  progress   made  by  it  as  also  advising  Government generally on  any matter which in the opinion of the Central Government is  of importance  in connection with the work of the Institute.  Section 11  of the  Act empowers the Central Government to  issue directions to the Institute. Section 12 authorises the Central Government to assume control over the Institute under certain extreme circumstances.      The  Institute   receives  grants   from  the   Central Government to meet almost the entire expenditure on its plan and non-plan  activities. The  chief executive  body of  the Institute is the Council, respondent No. 2, consisting of 25 members  including  three  representatives  of  the  Central Government. The Council is headed by the Chairman elected to that position  by the  Council by  a  simple  majority  from amongst the  names proposed  by the  President or members of the Council.  The election of the Chairman of the Council is governed by bye-laws of the Institute.      The initial  appointment  to  carry  out  research  and teaching work  is to the post of professor. The next post in

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the hierarchy  is of  Research professor  and the highest in the hierarchy  is the  post of  Distinguished scientist.  In order  to   discharge  the   administrative   and   academic responsibilities  of   the  Institute,   a  Director,   with distinctive administrative and academic acumen, is appointed by the  Council, respondent  No. 2.  Shri  B.  P.  Adhikari, respondent No.  4, was  appointed as  the  Director  of  the Institute by  an order dated 3rd August, 1979. This order of appointment has been challenged by the petitioner on various grounds. 400      According to  the petitioner  he  was  a  Distinguished Scientist of  the Institute  at the  relevant time. To start with, he  was appointed  to the  post of  Economist  in  the Indian Statistical  Institute on  1st  October,  1962  on  a monthly pay  of Rs.  1000/- in the time scale of RS. 750-50- 1250 plus  special pay of Rs. 350/- per month. Within a year he was  promoted as Professor in the time scale of Rs. 1000- 50-1500 with a starting pay of Rs 1400/- per month, and from 1st October,  1967 he  had been holding the post of Research Professor in  the time  scale of  Rs. 1600-100-1900.  On 1st January 1968  he was  made officer-in-Charge  and. entrusted with all technical matters, administration and developmental plans relating to planning and regional survey units special training in Delhi. He was given a allowance of Rs. 200/- per month over  and above  the pay in the time scale of Research Professorship. The  petitioner has  been responsible  during the period  1962-1974 for  the  creation  and  promotion  of several  new  activities  of  respondent  No.  1  in  Delhi. Specialised training  in National  Planning and Econometrics for M.  Stat. (2nd  Year) trainees  of respondent  No. 1 was started in  Delhi under  the direction of the petitioner. In August 1974  the petitioner  was designated  as Head  of the Delhi Centre  and was  also  appointed  to  the  Institute’s Committee of  Administration. On  12th  March  1976  he  was elevated to  the position  of ’Distinguished Scientist’ with pay of  Rs. 3000/- per month plus allowances. The petitioner has  held   responsible  positions  as  Visiting  Professor, Fellow, Chairman,  Consultant, Research  Associate, Lecturer etc. in  various Universities  in India  and in  the  United States of  America and  England. He has been a member of the planning Commission,  Government of  India from January 1971 to December, 1973 and he has also been a member of the Sixth Finance Commission  from July  1972  to  October  1973.  The petitioner’s work has been acclaimed in the international as well  as  national  spheres.  His  work  is  rated  high  as evidenced by  the award  of Dadabhai  Nauroji Memorial Prize for Economics  in 1974  and the  Jawaharlal  Nehru  Memorial Fellowship  in   1975.  In   1976  the  petitioner  had  the distinction of  presiding over  the annual conference of the Indian Society of agricultural Economics. People abroad have also conferred recognition on the petitioner.      The   petitioner’s    scientific   output    has   been substantial. He  has been  active in  research  and  he  has published books.  Of importance  on Theory  of International Trade, Scheduling the operations of Multipurpose Reservoirs, Indian  Planning,   Planning   and   the   Poor   etc.   His contributions in  the form of articles in collaboration with Indian 401 and  foreign  economists  have  been  published  in  several journals in  India and  abroad. One of his co authors, Prof. Arrow is  a Nobel  Laureate. At  present the  petitioner  is engaged in research on the following subjects:      1.   Growth, Poverty and Basic Need, Development Policy

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         in Sri Lanka, Kerala and Punjab.      2.   Inter-Regional Comparisons  of Agricultural Growth           and Development in South Asia in the post-colonial           period.      It is  claimed that  a comparative  evaluation  of  the achievements of  the petitioner with those of respondent No. 4 clearly  shows the  superiority  of  the  petitioner  over respondent No.  4. Respondent No. 4 had joined the Institute as Professor  in the  pay scale  of  Rs.  750-1250.  He  was appointed in Delhi and was incharge of the evening course in Introductory Statistics. He served in Delhi for about a year and then  went to  Calcutta and  continued as professor from 1961 to  1974. In  contrast, the petitioner had started at a higher salary  of Rs.  1000 p.m. plus a special pay of Rs 50 p.m. The  petitioner had  been promoted to the higher rot of Research Professor on 1st October, 1967 in the time scale of Rs.1600-100-1900 while respondent No. 4 had been promoted to the post  of Research  Professor only  in 1974. At that time respondent No.4’s appointment as Research professor had been objected to  as he  had not  published any  technical  paper since his  joining the Institute in 1961. The petitioner was senior to  respondent No  4 as  he had been appointed to the higher post  of Research  Professor earlier  than respondent No.4. On  12th March 1976 the petitioner was promoted to the position of  a Distinguished  Scientist. The  petitioner  is senior to  respondent No.  4 and all other scientists of the Institute. The  petitioner’s elevation  to the  position  of Distinguished Scientists  came much  earlier  than  that  of respondent No.  4.  The  petitioner  has  been  holding  the position of  Distinguished Scientist  since 12th  March 1976 while respondent  No. 4  was not  a Distinguished  Scientist till his  impugned appointment  as Director. Respondent No.4 has won  no laurels in his sphere of work and his scientific output has  been negligible.  Thus, from  all  accounts  the petitioner was  more qualified  and his  achievements in all spheres were  much higher  than those of respondent No. 4 or for the matter of that, than those of any other scientist of the Institute. 402      The Institute has an academic council consisting of the following members among others:      "1.  All   Professors,    Research    Professors    and           Distinguished Scientists.      2.   ........      3.   ........      4.   ........      5.   .........      6.   ........      7.   Director (as Chairman of the academic council)." The Institute is governed by its memorandum, regulations and bye Laws  in the  conduct of its affairs. Bye-law 2 provides the procedure for the appointment of a Director. It reads:           "The appointment  of the Director shall be made by      the Council  on the  recommendation made by a Selection      Committee consisting of      (i) Chairman of the Council (as Chairman),      (ii) Two experts approved by the Council.      Before recruitment  the Vacancy for Directorship should      be suitably Publicised."      In the  meeting of  the Council,  respondent No.  2, on 16th April,  1979, Shri  P.N. Haksar,  respondent No. 3, the Chairman, reported  about the  absence of  the Director  and other allied  matters  and  invited  the  attention  of  the members’ to  the fact  that the  Director of  the Institute, Prof. G.  Kallianpur is  unable to  devote full  time to the

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Institute.  The   Council  felt  that  since  the  Institute required full  time attention  it was  desirable that  Prof. Kallianpur should  be requested  to continue  in the post of Director on  a whole time basis. The Chairman was authorised to write  to the Director conveying the views of the members and after  getting a response from Prof. KallianPur, to take further action. In case Prof. Kallianpur resigned, 403 the Chairman  was authorised  to accept  his resignation and then to  set up  a committee  consisting  of  the  following members  to  select  a  suitable  person  for  the  post  of Director:      1. Shri P.N. Haksar, Chairman.      2. Prof. Bhabatosh Datta.      3. Prof. S.S. Shrikhande.      4. Prof. M.S. Narasimhan.      5. Dr. R Ramanna. Subsequently another meeting of respondent No. 2 was held on 3rd August,  1979 in  which the Chairman reported that Prof. Kallianpur  had   resigned  from  the  Directorship  of  the Institute with effect from 30th June, 1979 and regarding the appointment  of  the  new  Director  of  the  Institute  the Chairman reported  that the  selection committee,  which had been constituted  by the  Council in  its meeting on 16th of April, 1979  had unanimously  recommended the appointment of respondent No.  4 as  Director of the Institute. The Council approved the  recommendation of  the selection committee and it also  approved the terms and conditions of appointment of respondent  No.   4  as   Director.  One  of  the  terms  of appointment of respondent No. 4 was that he should be in the substantive position  of a  ’Distinguished Scientist’ in the Institute on a monthly salary of Rs. 3000.      When the  petitioner came to know about the appointment of respondent No.4 to the post of Director he felt aggrieved and met  respondent No.3,  the Chairman of the Council, Shri P.N. Haksar and expressed his deep unhappiness at the choice of the  new Director  of  respondent  No.1.  On  getting  no favourable response  from  respondent  No.3  the  petitioner tried to  approach the  other  members  of  the  Council  to indicate  his  resentment  at  the  alleged  illegality  and arbitrariness in  the appointment  of respondent  No.4.  The petitioner  addressed   a  letter  to  Shri  N.  Srinivasan, Secretary to  respondent No.2,  wherein he  referred to  the circular dated  4th  August,  1979  which  he  had  received intimating him  about the  appointment of respondent No.4 as Director of  respondent No.1.  By this letter the petitioner pointed out  to the  Secretary that the appointing authority had not  observed the  rules and regulations and bye-laws of the 404 Institute as  laid down in the memorandum of association and had also  violated the  provisions of Arts. 14 and 16 of the Constitution. He  also pointed  out that  the vacancy of the post of  Director had  not been  publicised and he being the seniormost researcher  working as Distinguished Scientist of the Institute  was not given an opportunity to apply for the same. He  also pointed out the arbitrary manner in which the appointment of  respondent No.4  had been made, and he urged the Institute to rectify the error failing which he might be obliged  to  take  legal  action.  The  petitioner  likewise addressed a  letter to  another member of the Council, Prof. R.P. Bambah, who was a Professor of Mathematic in the Centre for advanced  Studies, Punjab  University and was one of the two Scientists  co-opted by  the Council.  The petitioner in his  letter   to  Prof.  Bambah  complained  that  with  the

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appointment of  respondent No.  4 the  Directorship and  his simultaneous  designation   to  the  post  of  Distinguished Scientist, the  council had subverted the academic standards of the  Institute and  violated the rules and regulations as contained in  the memorandum  of  association  as  also  the various  provisions   of  the   Constitution.  Further,  the appointment was  arbitrary inasmuch  as it  was without  any regard to the claims of senior and better known professional persons. He  appealed to Prof. Bambah to upheld the academic integrity of the Institute and initiate corrective action to rectify  the   wrong   and   rescue   the   Institute   from manipulations of  unprincipled people.  A similar letter was addressed by  the  petitioner  to  Shri  S.C.  Bhattacharya. Director, Bose  Institute, Calcutta,  on 31st  August, 1979, another member  of the Governing Council of respondent No.1, who was  one of  the  four  representatives  of  the  Indian National Science  Academy.  He  also  wrote  to  Prof.  P.V. Sukhatme, Professor  of Biometry  in Pune,  who was  also  a distinguished member  of the  Council. He  was  awarded  the Padma  Bhushan  and  also  held  the  post  of  Director  of Statistics Division  of Food and Agriculture Organisation. A Similar letter  was addressed  by him  to Shri Subimal Dutt, President  of   respondent  No.   1,  reiterating  the  same grievances. Similar letters dated 30th and 31st August, 1979 were  addressed   to  Dr.   K.C.  Seal,   Director,  Central Statistical Organisation  Government of  India and  to  Shri Kirpa   Narain,   Secretary,   Department   of   Statistics’ Government of India.      It may be pointed out that the members of the selection Committee and  the members  of the  Council are  all men  of eminence and highly qualified persons. 405      Prof. S.C.  Bhattacharya by  his letter  dated  5th  of September,  1979   replied  that   the   contents   of   the petitioner’s letter  were disquieting.  He also  stated that respondent No.4  had been identified as a suitable person by a group  of eminent  people  and  on  the  basis  of  advice received  from   them  the  Council,  respondent  No.2,  had approved the  appointment of  respondent No.4.  the further. stated that  he was  not making  any further comments in the matter at  this stage.  He was  unaware of  respondent  No.4 having been  designated as  Distinguished Scientist  by  the Council in  the meeting  of  3rd  August,  1979.  Regard  in appointment he  further said that no report of the selection committee had  been circulated to the members of the Council but the  announcement was made orally by the Chairman. Since it was  difficult to  hear every word of the Chairman at the meeting he  had assumed  that the terms of appointment would be those ordinarily prescribed for the post of Director.      Prof Sukhatme  in  his  reply  said  that  he  had  not realised the  grave issues  which such  an appointment could raise. He  wanted, however,  to assure  that  there  was  no intention on their part to subvert the academic standards of the Institute.  He assured  the petitioner  that he would be writing to the Secretary on the Council to know what was the procedure  tor   appointing  a   person  to   the  post   of Distinguished Scientist  and whether  the same  should  have been  explained   to  the   Council  before   adopting   the resolution.      Prof. R.P.  Bambah on  22nd  September,  1979  wrote  a letter  to  Shri  P.N.  Haksar  submitting  his  resignation presumably in protest against what had happened in regard to the appointment  of respondent  No. 4 as the Director of the Institute. In  his letter he stated that he had not received any  official   bio-data  or   information   regarding   the

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scientific  contribution  of  respondent  No.  4  and  other available candidates  for the post of Director to enable him to form  his own judgment. He said that he presumed that the scientific contribution  of respondent  No. 4 must have been high enough to warrant his holding the post of Distinguished Scientist.  He  also  expressed  the  view  that  since  the committee consisted  of eminent scientific working under his guidance, he had presumed that all relevant factors had been taken into  consideration regarding  the appointment  to the post of  Director,  including  the  quality  of  candidate’s scientific contribution,  in coming  to a  decision. In  the circumstances he  has constrained to resign from the Council since he  had not displayed due diligence in the performance of his function as member of the Council. 406      The petitioner  likewise received  a  letter  from  the Chairman in A which he did not deny the allegation contained in the  petitioner’s letter dated 13th August, 1979 that the vacancy in  the post of Director of respondent No. 1 had not been publicised.      Another  meeting  of  the  Council  was  held  on  19th October, 1979  and in  this meeting  Prof. Raja Ramanna, Dr. S.C. Bhattacharya and Dr. P.V. Sukhatme were not present and Dr.  Bambah   had  resigned   on   22nd   September,   1979. Nonetheless, the proceedings of the meeting of 19th October, 1979 do  not allude  to Dr.  Bambah’s resignation.  In  this meeting the  letter of the petitioner was considered, copies of which  had been circulated to the members earlier and the Council decided that no action was necessary in the matter.      Shri  V.M.   Tarkunde  appearing   for  the  petitioner challenges the  appointment of  respondent No.  4 on various grounds:      1.   (a)  Bye-law 2 expressly requires that the vacancy                of  the   Directorship  should   be  suitably                publicised  but   in  the   present  case  no                publicity whatsoever was given to the vacancy                of Directorship.           (b)  Even apart  from the  bye-law, publicity  was                necessary if  the appointment  was to be fair                and free from partiality.           (c)  The petitioner  and many others like him were                not aware  of the  vacancy  of  the  post  of                Director till the actual order of appointment                of respondent No. 4 was made.      2.   The petitioner  was eminently  suitable for  being           appointed to  the post of Director keeping in view           his various contributions in the field of his work           and the active part played by him in resolving the           administrative problems of the Institute.      3.   No bio-data  or information  was placed before the           Council  which   under  the   bye-laws   was   the           appointing authority of the Director to enable the           members to  gauge the  comparative suitability  of           various candidates  for the  post of  Director. No           facts  relating   to  the  other  candidates  were           presented before the 407           selection committee by the Chairman. As such there           was no  application of mind by the members of, the           Council, since  no report was circulated regarding           the recommendation of the selection committee, and           the members  of the  Council took  it for  granted           that all was well.      Shri R.K.  Garg appearing  for respondents Nos. 1 and 2 resisted the petition on the following grounds:

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         (i)  that the  petition is  not maintainable under                Art. 32  of the  Constitution  as  respondent                Nos.  1   and  2  are  not  ’state  or  other                authority’ within  the meaning  of Art. 12 of                the Constitution.           (ii) (a) Even assuming, though not conceding, that                there has  been a  violation of  bye-law 2 no                writ can  lie to  correct  the  same  as  the                alleged  bye-law   has  no   statutory  basis                inasmuch  as   by  the   Indian   Statistical                Institute Act,  1959 Parliament only declared                the Indian  Statistical Institute, respondent                No.  1   as  an   institution   of   national                importance and  if it  has made bye-law 2 for                its guidance,  such bye-law cannot be said to                have any statutory force.                (b) The  bye-laws  not  being  statutory  the                respondents  are   under  no   obligation  to                observe the  procedure laid  down in the bye-                laws.          (iii) In any  case  the  petitioner  was  duly  and                properly considered for selection to the post                of Director  and,  therefore,  he  could  not                possibly make  any grievance  about violation                of bye-law 2.      In view  of the  contentions raised  by the counsel for the parties  the first  question that falls to be considered is whether the writ petition is maintainable.      Article 12  of the Constitution defines ’State’ for the purposes of Part III of the Constitution. It reads: 408           " 12.  In this  part, unless the content otherwise      requires,  "the  state"  includes  the  Government  and      Parliament  of   India  and   the  Government  and  the      Legislature of  each of  the States  and all  local  or      other authorities  within the  territory  of  India  or      under the control of the Government of India."      The learned  counsel for  the petitioner, Shri Tarkunde has contended  that having  regard to  the provisions of the Act and  the memorandum  of association,  the composition of respondent  No.   1  is  dominated  by  the  representatives appointed by  the Central Government. The money required for running the  Institute is  provided entirely  by the Central Government and  even if  any other moneys are to be received by the  Institute it  can be  done only with the approval of the Central  Government, and  the accounts  of the Institute have also  to be submitted to the Central Government for its scrutiny and  satisfaction. The  Society has  to comply with all  such  directions  as  may  be  issued  by  the  Central Government. The  control of  the Central  Government is deep and pervasive  and, there fore, to all intents and purposes, it is  an instrumentality  of the  Central Government and as such is  an ’authority’ within the meaning of Art. 12 of the Constitution.   It    is,   therefore,    subject   to   the constitutional obligations  under Arts.  14 and  16  of  the Constitution. Reliance  was placed  upon Ajay  Hasia etc. v. Khalid Mujib  Sehravardi &  Ors. etc. The Constitution Bench in that  case took,  the view  that  the  expression  ’other authorities’ in  Art. 12  must be  given a broad and liberal interpretation, where  constitutional fundamentals  vital to the maintenance  of human rights are at stake and functional realism and  not facial  cosmetics must  be  the  diagnostic tool, for constitutional law must seek the substance and not the form  The Court  pointed  out  the  Government  may  act through the  instrumentality or  agency of juridical persons

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to carry  out its  functions, since,  with the advent of the welfare State,  its new  tasks have  increased manifold  and such juridical  persons acting  as  the  instrumentality  or agency of  the Government  must therefore  be subject to the same  discipline   of  fundamental   rights  as  the  State. Proceeding further the Court observed:           "It is  undoubtedly true that the corporation is a      distinct juristic  entity with a corporate structure of      its own  and it  carries on  its functions  on business      principles 409      with a certain amount of autonomy whish is necessary as      well as  useful from  the point  of view  of effective,      business management,  but behind  the formal  ownership      which is  cast in  the corporate  mould, the reality is      very  much   the  deeply   pervasive  presence  of  the      Government. It  is really  the  Government  which  acts      through  the   instrumentality   or   agency   of   the      corporation  and   the  juristic   veil  of   corporate      personality worn  for the  purpose  of  convenience  of      management and  administration  cannot  be  allowed  to      obliterate the  true nature-of the reality behind which      is  the  Government.  Now  it  is  obvious  that  if  a      corporation is  an instrumentality  or  agency  of  the      Government it  must be  subject to the same limitations      in the  field of  constitutional law  as the Government      itself, though  in the  eye of  the law  it would  be a      distinct  and   independent  legal   entity.   If   the      government acting  through its  officers is  subject to      certain constitutional  limitations, it  must follow  a      fortiori  that   the  Government   acting  through  the      instrumentality  or  agency  of  a  corporation  should      equally be  subject to  the same limitations. If such a      corporation were  to be  free from the basic obligation      to obey  the  Fundamental  Rights,  it  would  lead  to      considerable  erosion   of  the   efficiency   of   the      fundamental Rights,  for in  that event  the government      would be enabled to over-ride the Fundamental Rights by      adopting the  stratagem of  carrying out  its functions      though the  instrumentality or agency of a corporation,      while retaining control over it."      Having regard to this decision and in view of the facts and circumstances  in the present case there can be no doubt that respondent No.2 is an ’authority’ within the meaning of Art.  12  of  the  Constitution  and,  therefore,  the  writ petition  filed   by  the   petitioner  is   competent   and maintainable and the objection raised by Shri Garg cannot be accepted.      The next  question  that  aries  for  consideration  is whether the  appointment of  respondent No.4  as Director of respondent No.1  is illegal  because of  non-compliance with bye-law 2.  Bye-law 2  does require that before appointment, the vacancy  in the  post of  Director  should  be  suitably publicised. In  the instant  case, it  is admitted  on  both sides that  no publicity  whatsoever was given in respect of the 410 vacancy. The  contention of  Shri Garg, however, is that the bye-law having  no force of statute, non-compliance with its requirement can  not in  any way  affect the  appointment of respondent No.  4 as  Director of  respondent  No.  1.  Shri Tarkunde, however,  contended that assuming that the bye-law is not  statutory, even  so respondent  No. 1  was bound  to comply with  it. In  support of  his contention  he strongly relied upon  Ramana Dayaram  Shetty v. International Airport

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Authority of India. The Court in that case held:           "It is  a well  settled rule of administrative law      that an  executive authority must be rigorously held to      the standards  by which  it professes its actions to be      judged  a   and  it  must  scrupulously  observe  those      standards  on   pain  of  invalidation  of  an  act  in      violation of  them. This  rule was  enunciated  by  Mr.      Justice Frankfurter  in Viteralli  v. Seton  where  the      learned Judge said:           "An executive  agency must  be rigorously  held to      the standards  by which  it professes  its action to be      judged. Accordingly,  if dismissal  from employment  is      based on  a defined  procedure,  even  though  generous      beyond the  requirements that  bind such  agency,  that      procedure   must   be   scrupulously   observed.   This      judicially evolved  rule of  administrative law  is now      firmly established  and, if  I may  add, rightly so. He      that takes  the procedural  sword shall perish with the      sword.". The aforesaid principle laid down by Mr. Justice Frankfurter in Viteralli  v. Seton  has been  accepted as  applicable in India by  this Court  in A.  S. Ahluwalia  v. Punjab  and in subsequent decision given in Sukhdev v. Bhagatram. Mathew J. quoted  the   above  referred  observation  of  Mr.  Justice Frankfurther with approval.      In view of the pronouncement of this Court on the point it must  be held  to be obligatory on the part of respondent No. 1  to follow  the bye-laws,  if the  bye-laws have  been framed  for   the  conduct   of   its   affairs   to   avoid arbitrariness. Respondent No. 1 cannot, 411 therefore,  escape  the  liability  for  not  following  the procedure prescribed by bye-law 2.      Compliance with this bye-law also seems to be necessary in the  name of  fair-play. If  the vacancy  in the  post of Director had  been publicised  as contemplated by bye-law 2, all the  persons eligible  for the post may have applied and in that  case, the  field of  consideration would  have been enlarged and  the selection  committee or  the Council would have had  a much larger field  from which to choose the best available person  and that  would have removed all doubt, of arbitrariness from  the mind of those eligible for the post. Of course,  we do  not wish  to suggest  for a  moment  that appointment  to   every  post   must  be   made  only  after advertising or  publicising the  vacancy. That  would not be right, for  there are  quite a  few posts  at the  top level which cannot  be and should not be advertised or publicised, because they are posts for which there should be no lobbying nor should  any applications  be allowed  to be entertained. Examples of such posts may be found in the post of Commander of Armed  Forces or  the Chief  Justice or the Judges of the Supreme Court or the High Court. But here bye-law 2 requires that vacancy  in the  post of  Director should be publicised and hence  we are  making they  above  observation  in  this paragraph.      The grievance of the petitioner is that he has not been considered for  appointment to the post of Director although he is  far superior  to respondent  No. 4. If there had been due publicity  as required  by bye-law 2, he and many others like him  would  have  applied  for  the  post.  Shri  Garg, however, contends  for respondent  No. 1 that the petitioner can have  no grievance  as his  case was  duly considered as stated clearly  in the  affidavit of  respondent No. 3, Shri P.N.  Haksar,   Chairman  of  the  Council.  We  accept  the statement  of   respondent  No.  3  that  the  case  of  the

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petitioner was  considered by the selection committee but it is a  little unfortunate  that there is no written report by the selection committee for consideration by the Council. No minutes of  the proceedings  before the  selection committee have been  maintained and  none were  circulated amongst the members of  the Council along with the agenda of the meeting nor were  any such minutes placed before the Council meeting when the  name of  respondent No.  4  was  approved  by  the Council. There  is also  nothing on  record to show that the Council was  at any  time informed as to what names had been considered by  the selection  committee or  that the name of the petitioner  had been considered but respondent No. 4 was found superior. It is always desirable that in 412 public bodies  the  minutes  of  the  proceedings  regarding selection A  should  be  properly  maintained  in  order  to obviate any  suspicion or  doubt and such minutes along with the relevant  documents should  be placed  before the  final authority  entrusted   with  the   task  of   selection  for appointment.      A lot  of argument  has been-advanced  by Shri Tarkunde that the  achievements and accomplishments of the petitioner were much  higher  than  those  of  respondent  No.  4.  His contribution in  the matter  of research  had won  him  high praise. He  ha written articles and books of great merit. On the  other  hand  the  achievements  or  accomplishments  of respondent No.  4 were much lower when com pared to those of the petitioner.  Be that  as it may, it is not for the Court to determine  who is  the superior of the two candidates and who should  be selected. It is for the authorities concerned to select from amongst the available candidates. The members of the  selection committee  as  also  the  members  of  the Council were  eminent persons  and they  may be  presumed to have taken into account all t relevant considerations before coming to  a conclusion.  But the real difficulty is that in the absence  of publicity  as contemplated  by bye law 2, it cannot be  said that  all other  qualified persons  like the petitioner were  also considered  by the selection committee for appointment,  in the  absence of any application by them for the  post   or any  recommendation of  them by any other authority or individual.      Shri Garg,  however, contends  that the  office of  the Director is  a very high office and this honour is conferred and not demanded and an application for this office from the candidates was not at all necessary as in the case of Judges of the  Supreme Court,  High Court  and other constitutional posts of  Comptroller and  Auditor General of India etc. The selection committee  composed of  eminent scientists of high reputation must  be knowing  about the  reputed men  in  the field of  statistics and  it is expected that they must have considered the; case of those persons also.      For reasons we have already indicated, we find no force in this  contention. There is no provision  for publicity in case of  the constitutional  posts  of  the  Judges  of  the Supreme Court  and High  Courts and  Comptroller and Auditor General of  India. Rather in the very nature of things, they cannot be  and are  not  publicised.  But  in  the  case  of appointment of  a Director,  bye-law 2  clearly provides for publicity and  it can  only be  with  the  object  that  all concerned may 413 know  about   the  vacancy   and  either   applications   or recommendations may  be made  for the  post and the names of the eligible  candidates my  be brought before the selection committee for  its consideration. In the state of the record

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before us  it is not possible to say that the members of the Council considered  the case  of the  petitioner  and  other candidates like  him before  approving  the  appointment  of respondent No.  4. It  is  true  that  the  members  of  the selection committee and those of the Council were experts in their respective subjects and were eminent scientists and we must proceed  on the  basis that  they acted in all fairness and no oblique motive can be attributed to them. Indeed Shri Tarkunde did  not allege  any mala fides against the members of the selection committee or the members of the Council.      On the admitted position, no publicity in regard to the vacancy was  done  at  all.  No  information  about  it  was published even  on the  notice board  kept  in  the  various branches of  respondent No.  1 at Calcutta and other places. Nor  was   the  information  published  in  the  journal  of respondent No. 1. There was clearly a breach of bye-law 2 in making appointment  of respondent  No. 4  and there  was  no adequate material  before the  Council on the basis of which the members  could apply  their mind  for determining  as to whether  they  should  approve  the  recommendation  of  the selection committee  in regard  to appointment of respondent No. 4.      For  the  foregoing  reasons  the  writ  petition  must succeed. It is accordingly allowed. The order of appointment dated 3rd  August, 1979  of respondent No. 4 as the Director of respondent  No. 1  is quashed  and set  aside. This  will however not  in any  way affect  the validity  of any action already taken  by respondent  No. 4  as Director nor will it involve  him   in  any   liability  to   refund  any  excess remuneration received  by him  in his  capacity af Director. Before respondent  No. 1  proceeds to select a new Director, it will  comply with  the requirement of bye-law 2 by giving suitable publicity to the vacancy in the office of Director. In the circumstances of the case the parties will bear their own costs. N.V.K.                                    Petition allowed. 414