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PETITIONER: NAGPUR IMPROVEMENT TRUST

       Vs.

RESPONDENT: YADAORAO JAGANNATH KUMBHARE & 10 ORS.

DATE OF JUDGMENT:       13/08/1999

BENCH: S.Saghir Ahmad, G.B.Pattanaik

JUDGMENT:

PATTANAIK, J.

     These  appeals  by  the Nagpur Improvement  Trust  are directed  against the judgment of the Division Bench, Bombay High  Court  in  Writ  Petition No.  781 of  1988  and  Writ Petition  No.   1945  of 1989.  By the said  judgment  under challenge,  the High Court has quashed the promotion of  the private    respondents   to    the    post   of    Assistant Engineer(Civil),  inter-alia,  on the ground that there  has been  no  rules  framed by the State Government  to  promote people  in  the  technical line and in the absence  of  such rule,  it  is  not possible for the Trust/Board  to  appoint people  either on the basis of any decision of the Board  or under any executive instructions evolved by the Board.

     The  private  respondents moved the High  Court  under Article  226N of the Constitution alleging that the posts of Engineering  Supervisor  and  Assistant Engineer  under  the Board  are required to be filled up by promotion from  among the  Junior  Engineers.  It was also alleged that the  Trust had  issued  an  advertisement  in the  year  1981  inviting applications  for the post of Assistant Engineer laying down Degree  in Civil Engineering with three years’ experience as the eligibility criteria.  This eligibility clause was later on  dispensed with by subsequent advertisement dated 1st  of August  1982  and people could be appointed with  sufficient experience.   It  was alleged that there being no  statutory rules providing the criteria for promotion, appointments are being  made on the whims of the Trust and such appointments, therefore,  need not be sustained.  A further grievance  had been  made that the draughtsmen who were not eligible to  be promoted to the post of Assistant Engineer, the Trust by its resolution  dated 30th of December 1986 equated the post  of Draughtsman  with  the Engineering Supervisor and made  them eligible  for  promotion and such resolution  was  motivated one,  designed to confer benefit to some particular  persons and  as  such  should  be quashed by the  High  Court.   The Trust/Board  entered  appearance in the High Court and  took the  stand that when the State Government has not framed any rules in exercise of power under Section 21 of the Act, then the  Trust/Board on whom the control and management entirely vests  can  certainly  make appointments and  promotions  to different  posts  and as such appointments  bonafidely  made cannot  be  interfered  with by the High  Court.   The  High Court,  however, on consideration of the submissions made by

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the  rival parties came to the conclusion that under Section 21  of  the  Act,  it is the mandatory  duty  of  the  State Government to frame rules prescribing conditions under which appointments  can  be  made  to the  post  under  the  Trust requiring  professional  skill  and in the absence  of  such rules, the Trust is not empowered to make any appointment to such  posts.   Since admittedly, no rules have been  framed, the  appointments to the post of Assistant Engineer made  by the Trust are invalid and accordingly such appointments were quashed.

     Learned   counsel  appearing  for   the  appellant   - Trust/Board  contends that the view taken by the High  Court in  interpreting  the provisions of the Trust Act is  wholly unsustainable  and  such  interpretation   will  create   an administrative  chaos in managing the affairs of the  Trust. He, however, contended that in the service jurisprudence, it is  an  accepted rule that in the absence of  any  statutory rules,  the administrative instructions operate in the field and,  therefore, so long as there has been no rule framed by the  State Government in exercise of power under Section  21 of the Act, the Trust/Board would be fully empowered to make appointments to different posts by the decision of the Board and  such decisions cannot be found fault with.  The learned counsel  further contended that there has been no finding by the  High  Court that the resolution of the Board  providing criteria  for appointment to the post of Assistant  Engineer and  the ultimate decision of the Board appointing Assistant Engineer  are either for an extraneous consideration or have been  malafidely taken and in that view of the matter,  such decision  should operate and the appointments made  pursuant to such decision should not have been interfered with by the High  Court  in exercise of its  discretionary  jurisdiction under Article 226 of the Constitution of India.

     Learned  counsel for the respondents on the other hand argued  with  vehemence that so long as no rules  have  been framed  by the State Government under Section 21 of the Act, it  was  not  possible  for  the  Trust/Board  to  make  any appointment  to  different  posts and, therefore,  the  High Court was fully justified in quashing such appointments.

     To   appreciate   the  correctness    of   the   rival submissions,  it would be necessary to examine the  relevant provisions  of  the  Trust Act and to find out  whether  the conclusion  arrived  at by the High Court is  in  accordance with  law.   The  Nagpur Improvement Trust Act, 1936  is  in operation ever since its promulgation and has been operative in  the field for more than 60 years.  Section 21 of the Act conferring the power on the State Government to frame rules, reads thus:

     "1(1)  Subject to rules as the [State] Government may make  prescribing the conditions under which members of  the staff   appointed   by  the   Trust  to  offices   requiring professional skill may be appointed, suspended or dismissed, the  Trust may from time to time fix the number and salaries of  such  permanent servants as it may think  necessary  and proper to assist in carrying out the purposes of this Act:

     Provided  that  the  Trust   may,  with  the  previous sanction   of  the  [State]   Government  appoint  a  person possessing professional skill on a short term contract for a period not exceeding five years.

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     (2)  The  Chairman may in cases of  emergency  appoint such  temporary  servants as may in his opinion be  required for  the  purposes  of  this Act, and may  direct  that  the salaries  of such temporary servants fixed as the  emergency may require shall be paid from the Trust fund:

     Provided that

     (i)  He  shall  not  act under this  sub-  section  in contravention  of  any  order of the Trust  prohibiting  the employment  of  temporary servants for any particular  work, and

     (ii)  every  appointment made under  this  sub-section shall  be  reported  at the next following  meeting  of  the Trust."

     Section 22 conferring the power on the Chairman of the Board in certain cases and in the Trust/Board itself in some other  cases  is  quoted  herein  below  in  extenso:   "2. Subject to the provisions of Section 21 and to any rules for the  time being in force, the power of appointing, promoting and  granting  leave to officers and servants of the  Trust, and  reducing, suspending or dismissing them for misconduct, and dispensing with their services for any reason other than misconduct, shall be vested "

     (a) in the case of officers and servants whose monthly salary  does not exceed one hundred and fifty rupees, in the Chairman, and

     (B) in other cases, in the Trust:

     Provided  that any officer or servant in receipt of  a monthly  salary  exceeding  fifty  rupees  who  is  reduced, suspended,  or  dismissed by the Chairman may appeal to  the Trust, whose decision shall be final."

     The  management  of  the  Trust itself  vests  on  the Trust/Board.   Various provisions in the Act, however,  make it  clear  that  the State  Government  exercises  effective control  over  the affairs of the Trust/Board.  The  control which the State Government exercises over the affairs of the Trust/Board  is  apparent from the provisions of Section  25 itself,  which reads as under:  "25.  (1) The Chairman shall forward  to  the [State]Government a copy of the minutes  of the proceedings of each meeting of the Trust within ten days from  the  date on which the minutes of the  proceedings  of such  meeting  were signed, as prescribed in clause  (g)  of sub-section (1) of Section 16.

     (2)  If the [State] Government so directs in any case, the  Chairman shall forward to it a copy of all papers which were laid before the Trust for consideration at any meeting.

     (3) The [State] Government may require the Chairman to furnish with

     (a)  any  return, statement, estimate,  statistics  or other  information regarding any matter under the control of the Trust, or

     (b) a report on any such matter, or

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     (c)  a  copy  of  any document in the  charge  of  the Chairman.

     The  Chairman shall comply with every such requisition without unreasonable delay."

     Even  under  Section  24(c) of the Act, if  the  State Government  is of the opinion that the duties imposed on the Trust  has  not been performed or has been performed  in  an Mmperfect  manner, then the State Government may direct  the Trust to make arrangements for the proper performance of the duties  or  to take such measure as may be specified by  the State  Government.   In view of the aforesaid provisions  in the  Act,  the  conclusion is irresistible  that  the  State Government  exercises effective control over the affairs  of the  Board  including  in  the  matter  of  appointments  to different  posts, if made by the Board under its resolution. It  is, no doubt, true that under Section 21 of the Act, the State  Government is required to make rules prescribing  the conditions  under  which  members  of  the  staff  requiring professional  skill  could be appointed by the  Trust.   But when  the State Government has not made any such rules  even if  the  rules can be held to be of mandatory nature as  has been  held  by  the  High Court, then  it  is  difficult  to comprehend that the Board is denuded of its general power of appointing  and  promoting  people  to  different  posts  as provided  under  Section 22 of the Act.  If the view of  the High  Court  under  the  impugned judgment is  taken  to  be correct  then all appointments to different posts ever since 1936 have to be held to be invalid inasmuch as no rules have been framed by the State Government in exercise of the power under  Section  21  of  the  Act.   While  interpreting  the provisions of Section 21 of the Act, the High Court has lost sight of the general principle of service jurisprudence that in  the absence of any statutory rules governing the service conditions  of  the  employees, the  executive  instructions and/or decisions taken administratively would operate in the field  and appointments/promotions can be made in accordance with  such executive instructions/administrative directions. In  this view of the matter and concededly, no rules  having been  framed  by the State Government in exercise  of  power under  Section  21  of the Act, the  Trust/Board  was  fully empowered  to take administrative decisions in the matter of appointments and promotions to different posts including the posts  requiring  professional  skill and  consequently  the resolution of the Board taken in accordance with sub-section (2)  of  Section  22  of the Act  deciding  to  promote  the employees  to the post of Assistant Engineer cannot be  said to be invalid or inoperative.  The High Court, therefore, in our view fell in error to hold that the appointments made to the  posts of Assistant Engineer are invalid in law.  It was also  brought  to our notice that by notification dated  3rd August  1937,  a rule had been framed in exercise  of  power under  Section 89(1)(c) of the Nagpur Improvement Trust  Act which  clearly  indicated  that  except   for  the  post  of Executive  Officer,  Trust Engineer, Valuation Officer,  the power  of Trust under Section 22 to appoint persons to posts requiring  professional  skill remain unaffected.  The  said notification is quoted in extenso:- "No.  7600-1302-M-XIII.- In  exercise  of  the  powers conferred  by  clause  (c)  of sub-section  (1)  of  Section 89 of the  Nagpur  Improvement Trust  Act, 1936 (C.P.  Act XXXVI of 1936), the Governor  of

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the  Central  Provinces  and Berar is pleased  to  make  the following  rules as to the conditions on which officers  and servants  of  the  Trust   appointed  to  offices  requiring professional skill may be appointed, suspended or dismissed: - RULES

     1.   In  the case of the officers specified  below  no post shall be created or abolished, and no alteration in the emoluments thereof shall be made without the approval of the Provincial Government, and every appointment to or dismissal from  any  of the undermentioned posts shall be  subject  to confirmation by the Provincial Government:-

     (1)  Executive  Officer.   (2)  Trust  Engineer.   (3) Valuation Officer.

     2.   Subject  to the provisions of section 22  of  the Act,  the  power  of  appointment  to  dismissal  from,  and fixation  of  the  emoluments of all other  posts  requiring professional skill shall be vested in the Trust."

     The  aforesaid notification fully supports our earlier conclusion  that Trust Board would appoint persons to  posts requiring  professional  skill by evolving principle  or  by specific  resolution.  Besides, notwithstanding power having been   conferred   upon  the   State  Government  to   issue appointments  direction on getting the copy of resolution by the  Board, no such direction having been given, it must  be assumed  that  the  State Government also  never  found  the resolution  promoting respondent No.  3 and 5 to the post of Assistant  Engineer  to be invalid in any manner.   In  this view  of the matter, the part of the direction quashing  the appointments  made  in  favour of the respondents  3  and  5 before  the  High  Court is set aside and we hold  that  the appointments  of  those  two  respondents  to  the  post  of Assistant  engineer  made by the Board by its resolution  is valid  in law.  The direction of the High Court to the State Government to frame rules in exercise of power under Section 21  of the Act, however, is not being interfered with and is upheld.  We make it clear that until rules are framed by the State  Government  there would be no fetter on the power  of the  Board  to make appointments in accordance with  law  by taking  appropriate decisions.  But this conclusion of  ours does  not,  in any manner, dilute the direction of the  High Court to State Government to frame rules under Section 21 of the  Act.  The appeals are accordingly allowed to the extent indicated above.  There will be no order as to costs.