Supreme Court of India
CENTRAL ELECTRICITY SUPPLY UTILITY OF ODISHAversusDHOBEI SAHOO & ORS.
- Citation
- 2013 INSC 741
- Decided
- 1 November 2013
- Disposal
- Appeal(s) allowed
- Bench
- ANIL R DAVE
Holding
A writ of quo warranto may be issued only when the appointment contravenes statutory eligibility or rules, and no direction for recovery of salary or honorarium can be made in such a proceeding.
Summary
The Central Electricity Supply Utility of Odisha (CESU) appointed its Chairman, a retired officer, to also discharge the functions of Chief Executive Officer (CEO) and paid him a consolidated honorarium. A public‑interest litigation sought a writ of quo warranto to quash this arrangement and directed recovery of the honorarium. The High Court quashed the appointment and ordered recovery, but the Supreme Court held that a writ of quo warranto can be issued only when the appointment violates statutory eligibility or rules, and that the Court cannot order recovery of salary or honorarium in such proceedings. The Court found that the Commission had authority under the Electricity Act and the Scheme to make a temporary arrangement, that the appointment was a contract appointment, and that the respondent was entitled to the remuneration for services rendered. Consequently, the High Court’s judgment was set aside and the appeals were allowed.
Issues considered
- The limited jurisdiction of a writ of quo warranto – when it may be issued
- Whether the appointment of the Chairman as CEO violated statutory eligibility or service rules
- Whether the High Court could direct recovery of the honorarium/pay under a quo warranto decree
- The applicability of the doctrine of delay and laches in a quo warranto petition
- The power of the Electricity Regulatory Commission under the Electricity Act, 2003 to make interim arrangements
Legislation cited
- Constitution of Indias. Art.226
- Electricity Act, 2003s. 19, s. 20, s. 22
Subjects
quo warrantopublic interest litigationappointment eligibilitysalary recoveryElectricity Act 2003service lawforced labourdoctrine of delayage limitcontract appointmentpublic office
Judgment
[2013) 14 S.C.R. 621
CENTRAL ELECTRICITY SUPPLY UTILITY OF ODISHA A
v.
DHOBEI SAHOO & ORS.
(Civil Appeal No. 9872 of 2013)
NOVEMBER 01, 2013
B
[ANIL R. DAVE AND DIPAK MISRA, JJ.]
Writs - Writ of quo waffanto - Scope and ambit of - Duty
of the Court while dealing with a writ of quo waffanto - Held:
Jurisdiction of the High Court while issuing a writ of quo C
warranto is limited and can only be issued when the person
holding the public office lacks the eligibility criteria or when
the appointment is contrary to the statutory rules - While
dealing with the writ of quo warranto another aspect has to be
kept in view - In filing a writ of quo waffanto, the principle of D
doctrine of delay and /aches should not be allowed any play
because the person holds the public office as a usurper and
such continuance is to be prevented by the Court - The Court
is required to see that the larger public interest and the basic
concept pertaining to good governance are not thrown to the E
winds - Constitution of India, 1950 - Art.226.
Service Law - Appointment - Quashing of - Appel/ant-
CE SU, a deemed licensee under the Electricity Act for
distribution of electricity in the Central Zone of Odisha - 5th F
respondent, a retired officer, and Chairman of CESU, further
asked to function as CEO of CESU and accordingly given a
consolidated honorarium - Public interest litigation praying for
issue of writ of "quo warranto" for quashing the order of the
Orissa Electricity Regulatory Commission entrusting the
functions of CEO of the CESU to 5th respondent - High Court G
quashed appointment of respondent No. 5 and further directed
the appellant to recover the amount paid to 5th respondent
towards honorarium - Justification - Held: Not justified - High
621 H
622 SUPREME COURT REPORTS [2013] 14 S.C.R.
A Court erroneously opined that it was an appointment - It was
only a contract appointment to choose a highly qualified and
skilled person - High Court, instead of appreciating the
eligibility of the 5th respondent, adverted to the concept of
internal administration of CESU - Reasons ascribed by the
B High Court to quash the arrangement unacceptable - Once
the decision of the High Court, that Respondent no. 5 could
not have been allowed to remain in-charge of CEO, was
dislodged, as a logical corollary the direction for recovery gets
annulled - Electricity Act, 2003 - s.22 - Central Electricity
c Supply Utility of Orissa (Operation and Management)
Scheme, 2006.
Service Law - Appointment - Nullification of, by issue of
a writ of quo warranto - Recovery of salary or honorarium -
Permissibility- Held: Even while issuing a writ of quo warranto,
D there cannot be any direction for recovery of sum - While
exercising power for issue of writ of quo warranto, the Court
only makes a public declaration that the person holding the
public office is a usurper and not eligible to hold the post and
after the declaration is made he ceases to hold the office -
E Till declaration is made, the incumbent renders service and
when he has rendered service he cannot be deprived of his
salary - Denial of pay for the service rendered tantamounts
to forced labour which is impermissible - Asking someone
to work and when his appointment is nullified by issue of a
F writ of quo warranto by the Court, neither the employer can
recover the amount nor the Court can direct for recovery of
the same.
Appellant-CESU (Central Electricity Supply Utility of
G Odisha) is a deemed licensee under the Electricity Act,
2003 for distribution of electricity in the Central Zone of
Odisha. It was created under Section 22 of the Electricity
Act, 2003 passed by the Orissa Electricity Regulatory
Commission. The Commission formulated Central
Electricity Supply Utility of Orissa (Operation and
H Management) Scheme, 2006 for O~eration and
CENTRAL ELECTRICITY SUPPLY UTILITY OF 623
ODISHA v. DHOBEI SAHOO
Management of CESU. 5th respondent, a retired officer, A
and Chairman of CESU, further asked to function as CEO
of CESU and accordingly given a consolidated
honorarium.
Respondent No. 1 and another filed a public interest 8
litigation praying for issue of writ of "quo warranto" for
quashing of the order of the Commission entrusting the
functions of CEO of the CESU to the 5th respondent. The
High Court quashed the appointment of respondent No. ·
5 and further directed the appellant to recover the amount C
paid to the 5th respondent towards honorarium. Hence
the present appeals wherein the scope and ambit of writ
of quo warranto arose for consideration.
Allowing the appeal, the Court
D
HELD:1. The jurisdiction of the High Court while
issuing a writ of quo warranto is a limited one and can
only be issued when the person holding the public office
lacks the eligibility criteria or when the appointment is
contrary to the statutory rules. That apart, the concept of E
locus standi which is strictly applicable to service
jurisprudence for the purpose of canvassing the legality
or correctness of the action should not be allowed to
have any entry, for such allowance is likely to exceed the
limits of quo warranto which is impermissible. The basic
purpose of a writ of quo warranto is to confer jurisdiction F
on the constitutional courts to see that a public office is
not held by usurper without any legal authority. While
dealing with the writ of quo warranto another aspect has
to be kept in view. Sometimes a contention is raised
pertaining to doctrine of delay and laches in filing a writ G
of quo warranto. There is a difference pertaining to
personal interest or individual interest on one hand and
an interest by a citizen as a relator to the court on the
other. The principle of doctrine of delay and laches
should not be allowed any play because the person holds H
624 SUPREME COURT REPORTS [2013] 14 S.C.R.
A the public office as a usurper and such continuance is
to be prevented by the court. The Court is required to see
that the larger public interest and the basic concept
pertaining to good governance are not thrown to the
winds. [Para 18] [641-D-H; 642-A]
B
The University of Mysore v. C. D. Govinda Rao and
another AIR 1965 SC 491: 1964 SCR 575; High Courl of
Gujarat and another v. .Gujarat Kishan Mazdoor Panchayat
and others (2003) 4 SCC 712: 2003 (2) SCR 799; R.K. Jain
v. Union of India (1993) 4 SCC 119: 1993 (3) SCR 802; Mor
C Modern Coop. Transporl Society Ltd. v. Financial Commr. &
Secy. To Govt. of Haryana (2002) 6 SCC 269: 2002 (1)
Suppl. SCR 87 and Centre for PIL and Another v. Union of
India and Another (2011) 4 SCC 1: 2011 (4) SCR 445 -
referred to.
D
2. Public interest litigation is an ingenious and adroit
innovation of the judge-made law within the constitutional
parameters and serves as a weapon for certain purposes.
It is regarded as a weapon to mitigate grievances of the
E poor and the marginalized sections of the society and to
check the abuse of power at the hands of the Executive
and further to see that the necessitous law and order
situation, which is the duty of the State, ts pt'operly
sustained, the people in impecuniosity do not die of
F hunger, national economy is not jeopardized; rule of law
is not imperiled; human rights are not endangered, and
probity, transparency and integrity in the governance
remain in a constant state of stability. The use of the said
weapon has to be done with care, caution and
G circumspection. In the case at hand, there has been a
fallacious perception not only as regards the merits of the
case but also there is an erroneous approach in issuance
of direction pertaining to recovery of the sum from the
holder of the post. [Para 20] [642-E-G; 643-A-B]
H Duryodhan Sahu (Dr.) v. Jitendra Kumar Mishra (1998)
CENTRAL ELECTRICITY SUPPLY UTILITY OF 625
ODISHA v. Dl-IOBEI SAHOO
7 SCC 273: 1998 (1) Suppl. SCR 77; Ashok Kumar Pandey A
v. State of W.B. (2004) 3 SCC 349: 2003 (5) Suppl. SCR
716; 8. Singh (Dr.) v. Union of India (2004) 3 SCC 363: 2004
(2) SCR 1061; Dattaraj Nathuji Thaware v. State of
Maharashtra (2005) 1 SCC 590: 2004 (6) Suppl. SCR 900;
Gurpa/ Singh v. State of Punjab (2005) 5 SCC 136: 2005 (1) S
Suppl. SCR 215; Bandhua Mukti Morcha v. Union of India
and others AIR 1984 SC 802: 1984 (2) SCR 67; Dr. D.C.
Wadhwa and others v. State of Bihar and others AIR 1987 SC
579: 1987 (1) SCR 798; Neetu v. State of Punjab and others
AIR 2007 SC 758: 2007 (1) SCR 223; Bholanath Mukherjee c
and others v. Ramakrishna Mission Vivekananda Centenary
College and others (2011) 5 SCC 464 2011 (5) SCR 416 and
and State of Uttaranchal v. Ba/want Singh Chaufa/ and others
(2010) 3 sec 402 - referred to.
3. When a writ of quo warranto is filed, it is the D
obligation of the relator to satisfy the court that the office
in question is a public office and is held by the usurper
without the legal authority. It is the duty of the court to
see whether the appointment has been made contrary to
the statutory rules. Issue of institutional integrity has also E
to be taken into consideration when a post is filled up
and that is where the manner in which the appointment
came to be made or whether the procedure adopted was
fair, just and reasonable are required to be seen. In the
instant case, on a perusal of the reasons adopted by the F
High Court, it is perceptible that it has paved a different
path. It has given emphasis on the role of the
Commission, the functionism of CESU, the control of the
Chairman on the CEO, the violation of the principles of
natural justice, the nature of appointment, the abuse of G
power by the Commission and the violation of the
regulations in such appointment. Most of the reasons
given by the High Court are totally unrelatable to the
sphere of issue of writ of quo warranto. [Para 35) (651-F-
H; 652-A-B] H
626 SUPREME COURT REPORTS [2013] 14 S.C.R.
A 4. In the instant case, the High Court, instead of
appreciating the eligibility of the 5th respondent, has
adverted to the concept of internal administration of
CESU, that is, CEO is required to report to the Chairman
and if the Chairman remains in charge, his actions may
B go without scrutiny. The assumption in this regard is not
correct. The Board has the overall power of supervision
and management. That apart, the power is vested with
the Commission to do so under the Scheme. The High
Court has also referred to certain provisions about the
c regulations which operate in a different field altogether
and have nothing to do with any appointments under the
Scheme. The only thing which has been highlighted by
the 1st respondent is that it was accepted by the High
Court that he was a retired officer and was appointed as
Chairman and further was asked to remain in charge of
0
CEO and was given some honorarium, which is
impermissible. In fact, what is submitted is that he
becomes an appointee in respect of two posts which the
law does not countenance. The said submission suffers
from a fundamental fallacy. The Chairman of CESU is a
E honorary post. He was getting sitting fees for attending
the meetings. He was not even given a fixed honorarium.
Therefore, to conclude that he was holding two posts
and drawing salary for both the posts is factually
incorrect. [Para 39] [657-B-G]
F
5. The whole thing has to be scrutinized from the
point of view of power. Suitability or eligibility of a
candidate for appointment to a post is within the domain
of the appointing authority. The only thing that can be
G scrutinized by the Court is whether the appointment is
contrary to the statutory provisions/rules. [Para 40] [657-
G-H; 658-A]
6. In the case at hand, from the factual depiction it is
seen that though the policy and the Scheme provide that
H
CENTRAL ELECTRICITY SUPPLY UTILITY OF 627
ODISHA v. DHOBEI SAHOO
the age of the candidate shall not exceed 55 years as on A
1.9.2007, yet the tenure is extendable thereafter
depending upon the performance. Thus, though there is
a maximum age limit at the time of submission of an
application, yet the term can be extended. Even if the
maximum age limit is provided for submission of B
application and the period of appointment is three years,
it is extendable depending upon the performance. Having
regard to the nature of language used, it is to be
construed that it is a contract appointment to choose a
highly qualified and skilled person. The extension is also c
dependent upon performance. No limit is provided for
number of extensions. It would depend upon the
capability, efficiency and suitability as adjudged by the
employer. For grant of extension the person would not
have a right. Similarly his continuance for the term of
0
three years will depend upon the nature of appointment
letter issued to him. That apart, there is no maximum age
limit for Chairman. He holds a higher post and his
experience and capability have been appreciated by the
Commission. It is a well known principle that the
employer can ask an officer to remain in charge of E
another office till the said post is filled up. It is within the
permissible authority of the employer. Under the Scheme,
the Chairman was not getting any remuneration. He was
only getting sitting fees. Looking at his ability and
efficiency, the Commission thought it appropriate that he F
should be given the charge of CEO and accordingly an
honorarium was fixed. Honorarium was not equivalent to
the salary. The High Court has erroneously opined that
it was an appointment. The 5th respondent was not
getting two sets of salary. Thus analysed, the reasons G
ascribed by the High Court to quash the arrangement are
unacceptable and, accordingly, the decision on that
score deserves to be lancinated. [Para 41) [658-G-H; 659-
A-G}
H
628 SUPREME COURT REPORTS [2013] 14 S.C.R.
A Hari Bansh Lal v. Sahodar Prasad Mahto and others
· (2010) 9 SCC 655: 2010 (10) SCR 561 - relied on.
7. Once the decision of the High Court, that the
Chairman could not have been allowed to remain in-
B charge of CEO, was dislodged, as a logical corollary the
direction for recovery gets annulled. But, even in a writ
of quo warranto while declaring that a person is not
eligible to hold the post had rendered service, there
cannot be recovery of amount. While exercising the
power for issue of writ of quo warranto, the Court only
C makes a public declaration that the person holding the
public office is a usurper and not eligible to hold the post
and after the declaration is made he ceases to hold the
office. Till the declaration is made, the incumbent renders
service and when he has rendered service he cannot be
D deprived of his salary. Denial of pay for the service
rendered tantamounts to forced labour which is
impermissible. When an appointment is admitted and the
incumbent functions in the post and neither suspended
nor removed from service, he is entitled to get salary, for
E it is his legal right and it is the duty of the employer to
pay it as per the terms and conditions of the appointment.
The matter may be different when someone continues
after retir~ment by a false declaration or
misrepresentation. Recovery of salary would amount to
F deprivation of payment while the incumbent was holding
the post and had worked. Asking someone to work and
wh«!n his appointment is nullified by issue of a writ of quo
warranto by the Court, neither the employer can recover
the amount nor the Court can direct for recovery of the
G same. There has to be some other reason for denial of
payment, recovery of salary or honorarium. (Para 42]
(659-G-H; 660-A-F]
People's Union for Democratic Rights and others v.
Union of India and others (1982) 3 sec 235: 1983 (1) SCR
H 456 - relied on.
CENTRAL ELECTRICITY SUPPLY UTILITY OF 629
ODISHA v. DHOBEI SAH06
Pollock v. Williams, 322 US 4: 88 L Ed 1095 - referred A
to.
8. Even while issuing a writ of quo warranto there
cannot be any direction for recovery of the sum. While
entertaining a PIL pertaining to a writ of quo warranto, it 8
is the obligation of the court to pave. the path which are
governed by constitutional parameters and the
precedential set-up. It is to be borne in mind that laws are
commended to establish a society as required by the
paradigms laid down by law. The courts while
implementing law may not always be guided by total C
legalistic approach but that does not necessarily mean
to move on totally moralistic principle which has no
sanction of law. There is a temptation to say something
in a public interest litigation which can be construed as
the overreach. Formulations of guidelines or directions D
issued are bound to be within the constitutional
parameters. The matter may be viewed from the point of
view of the 5th respondent. True it is, his remaining in-
charge of the.post of the CEO was called in question
before the High Court in a public interest litigation E
wherein a writ of quo warranto was issued. A judgment
can be erroneous but when there is a direction for
recovery of the honorarium, it indubitably creates a dent
in the honour of a person. Honour once lost may be
irredeemable or irresuscitable. [Paras 43, 44] [661-C-H) F
Case Law Reference:
1964 SCR 575 referred to Para 15
2003 (2) SCR 799 referred to Para 16
G
1993 (3) SCR 802 referred to Para 17
2002 (1) Suppl. SCR 87 referred to Para 19
2011 (4) SCR 445 referred to Para 19
2010 (10) SCR 561 relied on Para 19 ·
H
630 SUPREME COURT REPORTS [2013] 14 S.C:R.
A 1998 (1) Suppl. SCR 77 referred to Para 19
2003 (5) Suppl. SCR 716 referred to Para 19
2004 (2) SCR 1061 referred to Para 19
2004 (6) Suppl. SCR 900 referred to Para'19
B 2005 (1) Suppl. SCR 215 referred to Para 19
1984 (2) SCR 67 referred to Para 21
1987 (1) SCR 798 referred to Para 22
2007 (1) SCR 223 referred to Para 23
c (201 O) 3 sec 402 referred to Para 24
2011 (5) SCR 416 referred to Para 25
1983 (1) SCR 456 relied on Para 42
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
D 9872 of 2013
From the Judgment & Order dated 28.03.2012 of the High
Court of Orissa at Cuttack in Writ Petition No. 23268 of 2011.
WITH
E
C.A. No. 9871 of 2013
Raj Kumar Mehta for the Appellant.
Rutwik Panda, Priyabrat Sahu, Pramod Dayal, Radha
F Shyam Jena for the Respondents.
The Judgment of the Court was delivered by
DIPAK MISRA, J. 1. Leave granted in both the special
leave petitions.
G 2. Assailing the judgment and order dated 28.3.2012
passed by the High Court of Orissa, Cuttack in WP(C) No.
23268 of 2011 whereby the Division Bench has quashed the
appointment of the respondent No. 5 herein and further directed
the pFesent appellant to recover the amount paid to the 5th
H respondent towards honorarium, in a public interest litigation
CENTRAL ELECTRICITY SUPPLY UTILITY OF 631
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
preferred by the 1st respondent, the present appeals, one by A
the Central Electricity Supply Utility of Odisha (CESU) and the
other by the affected person have been preferred, by special
leave. The factual matrix and the bedrock of challenge being
similar we shall state the facts which are requisite to
understand the controversy. However, the description of the B
parties shall be in accordance with their rank ascribed to them
in the appeal preferred by CESU.
3. The appellant-CESU has been created under Section
22 of the Electricity Act, 2003 (for brevity, "the Act") passed
by the Orissa Electricity Regulatory Commission (for short "the C
Commission"). CESU is a deemed licensee under the Act for
the distribution of electricity in the Central Zone of Odisha. It is
necessary to state here tllat on 1.4.1996 Orissa Electricity
Reforms Act, 1995 came into force providing for restructuring
of the Electricity Sector in the State of Odisha. Thereafter, D
Orissa Electricity Reform (Transfer of Undertakings, Assets,
Liabilities, Proceedings and Personnel) Scheme Rules, 1996
came into existence and on that base a newly constituted, wholly
owned Company of the Government of Orissa, namely, Grid
Corporation of Orissa Limited (GRIDCO) was vested with the E
Transmission, Distribution and Retail Supply functions of the
erstwhile Orissa State Electricity Board. On 1.4.1999 by virtue
of Orissa Electricity Reform (Transfer of Assets, Liabilities,
Proceedings and Personnel of Grid Corporation of Orissa
(GRIDCO) to Distributions Companies) Rules, 1998, the F
distributions and retail Supply functions of GRIDCO were
vested with in four newly constituted Distribution Companies out
of which one was Central Electricity Supply Company of Orissa
Limited (CESCO) which was given the responsibility of
Distributions Undertakings of the Central Zone and to carry out G
them, granted a license for distribution of electricity by the
Commission. Be it noted, 51% Shareholding and Management
of CESCO vested in a private Company, namely, AES Orissa
Distribution Pvt. Ltd. (AESODPL) and the balance 49% was
held by GRIDCO. After coming into force of the Act on H
632 SUPREME COURT REPORTS [2013] 14 S.C.R.
A 10.06.2003 the said arrangement continued as there was
nothing inconsistent with the new legislation. On 26.2.2005 as
management of AESODPL abandoned the management of
CESCO, the license granted in favour of CESCO was revoked
by the Commission under Section 19 of the Act w.e.f.
B 1.04.2005. On 2.04.2005 an Administrator was appointed by
the Commission for management and control of CESCO.
4. As the factual matrix would further unfurl on 8.9.2006 the
Commission initiated the process for sale of utility of CESCO
under Section 20 of the Act. However, as the Utility could not
C be sold, by order dated 8.9.2006 the Commission created a
new Utility, namely, CESU and formulated Central Electricity
Supply Utility of Orissa (Operation and Management) Scheme,
2006 (hereinafter referred to as "the Scheme") for Operation
and Management of CESU. On 5.5.2007, the Scheme was
D amended by the Commission. Clause 5 of the Scheme defined
the powers and functions of the Chairman, CEO (CEO), Chief
Finance Officer (CFO) and Chief Operating Officer (COO). On
31.10 2007, one S.K. Dasgupta was appointed as CEO of
CESU with a financial package of Rs. 22 lakhs per annum. On
E 31.3.2010, respondent No. 5, who had earlier served as
Chairman and Managing Director of GRIDCO as well as
Member of the Commission from 2001 to 2006 and had forty-
five years of experience in the electricity sector was nominated
as member as well as Chairman of the Management Board
F and of CESU without any remuneration. The Chairman was only
entitled to sitting fee of Rs. 2000/- per meeting.
5. As the chronology of events would depict, Mr. S. K.
Dasgupta resigned from the post of CEO on 8.8.2010 and on
10.8.2010 he was relieved. Keeping in view the smooth
G functioning of CESU, the Commission decided to entrust the
function, duties and responsibilities of CEO to the 5th
respondent with immediate effect until further orders or until
alternative arrangements were made by the Commission. It was
mentioned in the order dated 10.8.2010 that the 5th respondent
H would enjoy all the perquisites/facilities as was being given to
CENTRAL ELECTRICITY SUPPLY UTILITY OF 633
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
the CEO except the monthly emoluments. It was also observed A
that the Commission would take a view later on regarding the
desirability of giving an honorarium to the Chairman. On
12.11.2010, the Scheme was again amended and a new
Clause was inserted as Clause 4 (ix) and it was 6th
Amendment to the Scheme. On that day itself the Commission B
fixed consolidated honorarium of Rs. 70,000/- per month for the
5th respondent.
6. After these developments, the respondent No. 1 and
another filed a public interest litigation, WP (C) No. 23268 of C
2011, on 26.8.2011 praying for issue of writ of "quo warranto"
for quashing of the order of the Commission entrusting the
functions of CEO of the CESU to the 5th respondent. It was
contended before the High Court that CESU was a Government
owned company and it had become a rehabilitation centre for
retired persons and deadwoods at the cost of public money; D
that the Orissa State Electricity Board vide Office Order dated
30.8.1961 had adopted the service conditions of Government
servants and GRI DCO vide its Office Order dated 25.4.1996
had adopted the regulations relating to service and allied
matters for the employees of the Board transferred to GRIDCO; E
that asking the Chairman of the Board of Management of
CESU to remain in-charge as CEO was contrary to the
Scheme as amended upto 2010 vide notification dated
12.11.201 O; that the appointment of the 5th respondent was
contrary to Regulation 13(1 )(2)(3) of GRIDCO Officers' Service F
Regulations which provide for appointment to grades above E-
9 shall be on a contract basis initially for a period of three years
and renewable thereafter for such period(s) as the Board for
the Committee of the Board may prescribe until the Officer
attains the age of superannuation as provided in these G
Regulations; and that the third respondent was appointed
contrary to law and, theref.ore, his appointment should be
quashed and the salary drawn by him should be recovered.
7. The aforesaid contentions were resisted by the
H
634 SUPREME COURT REPORTS [2013) 14 S.C.R.
A Commission contending, inter alia, that the Commission had
not appointed the 5th respondent as CEO of CESU but had
assigned the functions, duties and responsibilities till an
alternative arrangement was made by the Commission and the
said arrangement was purely ad hoc in nature; that CESCO
B Officers' Service Regulations had been adopted by CESU but
not that of GRIDCO Officers' Service Regulations; that the 5th
respondent was the Chairman of CESU in view of his bright
engineering career and vast experience in the distribution
sector and there has been no violation of any of the provisions
c of Orissa Service Code and Pension Rules; that the said
temporary arrangement had been made by the Commission
only for the interest of utility and larger interest of the public and
consumers and CESU; that the Commission had given the 5th
respondent a consolidated honorarium of Rs. 70,000/- per
month whereas his predecessor CEO was getting a total salary
0
of Rs.1,67,284/-; and that the Commission asking the 5th
respondent to remain in-charge as CEO was not violative of
any rules or regulations.
8. A counter affidavit was filed by the CESU and the 5th
E respondent contending that a Public Interest Litigation of the
present nature was not maintainable and in any case the
Commission's handing over the charge of as CEO to the 5th
respondent would not be found fault with.
F 9. The High Court referred to the maintainability of the writ
petition and came to hold that as the post of the CEO, CESU,
had not been filled in accordance with the Service Regulations
of GRIDCO, the challenge to the effect that the Chairman being
higher in rank than the CEO could not have been asked to
G discharge the function of CEO and granting honorarium of
Rs. 70,000/- in addition to his usual perquisites, a writ of quo
warranto would lie. Thereafter, the High Court proceeded to
scrutinize the order passed by the Commission asking the 5th
respondent to discharge the functions of CEO as a temporary
measure and opined that it has to be construed as an
H
CENTRAL ELECTRICITY SUPPLY UTILITY OF 635
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
appointment and the person concerned was not suitable to hold A
the post as the service regulations do not provide for the same.
The High Court referred to clause 4(iv) and clause 5 of the
Scheme and the impugned order dated 12.11.2010 whereby
the 5th respondent, Mr. Jena, was given Rs. 70,000/- per month
as a consolidated honorarium in addition to the usual B
perquisites being enjoyed by the CEO like telephone, vehicle,
travelling allowances excluding the house rent and opined
ascribing certain reasons that the said appointment was illegal
and, accordingly, quashed the same. The High Court further
directed for recovery of the amount from the 5th respondent. It c
is also apt to note here that the High Court directed that the
Commission shall immediately take steps to fill up the post of
CEO within a period of two months from the date of receipt of
the copy of the judgment and the Chairman shall not be allowed
to function till filling up of the post of CEO and some other
0
responsible officer of CESU shall act as in-charge CEO.
10. At this stage, we think it apposite to summarise the
principal reasons which have been ascribed by the High Court
while setting aside the order whereby the 5th respondent was
asked to function as CEO and given the consolidated E
honorarium:
(i) The Commission has acted illegally and arbitrarily
in appointing the Chairman as the CEO, who is also
one of the Members of the Board Management of F
CESU.
(ii) On reading of all the relevant clauses it is very clear
that the Chairman of the CESU is required to
supervise the smooth functioning of the CESU and
CEO is to act under the control of the Chairman. That G
being the position and the opp. party no. 3, who is
a retired officer and the Chairman of CESU could
not have been appointed as CEO.
(iii) If the post of CEO in the organization falls vacant H
636 SUPREME COURT REPORTS (2013] 14 S.C.R.
A in view of the urgency of either temporary
appointment can be made or in charge
arrangement can be made for temporary period,
but the same power could not have been conferred
upon the Chairman as the Chairman is required to
B supervise and control the function of officers of the
Board as well as in the Organization and, therefore,
his appointment as CEO by way of an alternative
arrangement is contrary to Clause 5 of the Scheme.
(iv) It is not legally correct on the part of the
c Commission to appoint the Chairman as the CEO,
which is contrary to the service regulations and the
5th respondent should not have been allowed to
function as the CEO having regard to the nature of
powers and functions required to be discharged by
D the Chairman, for CEO is under the control and
supervision of the Chairman. As the 5th respondent
cannot supervise his own work there is violation of
principles of natural justice as he cannot find out his
own defects and discharge his responsibilities.
E
(v) The Commission has acted in violation of service
regulations and hence, it is case of abuse of power.
That apart, propriety demanded that the 5th
respondent should not have entrusted with the
F additional charge of CEO.
(vi) The appointment being contrary to the guidelines
framed by CESU, the 5th respondent becomes an
usurper to the public office and hence, his
appointment deserved to be quashed.
G
11. We have heard Mr. P.P. Rao, learned senior counsel
for Central Electricity Supply Utility of Odisha, Mr. M.G.
Ramachandran, learned counsel for Bijay Chandra Jena,
Respondent No. 1 in person assisted by Mr. Aparajit Ninawe,
H learned counsel, and Mr. Rutwik Panda, learned counsel for
CENTRAL ELECTRICITY SUPPLY UTILITY OF 637
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.)
respondent No. 4 in both the appeals. A
12. Calling in question the def~sibility of the judgment Mr.
Rao, learned senior counsel, has advanced the following
contentions: -
(a) In relation to a service matter a public interest B
litigation is not maintainable except as far as it
relates to a writ of quo warranto and in the case at
hand, the High Court has failed to understand the
implications of the writ of quo warranto and has not
only entertained the PIL in the garb of a writ of quo c
warranto but further proceeded to direct recovery
of the amount paid to the Chairman of the
Commission while functioning as a CEO which is
beyond the scope of a PIL.
D
(b) A writ of quo warranto cannot be issued unless
there is violation of statutory provisions and in the
case at hand, in the absence of any statutory
provis.ion, and regard being had to the amendment
of the Scheme made on 12.11.2010 wherein sub- E
clause (ix) has been incorporated in clause 4
enabling the Commission to allow the Chairman to
discharge the functions and responsibilities of both
the posts, the arrangement could not have been
unsettled by the High Court.
F
(c) The High Court has failed to appreciate that the
appointing authority has the inherent power to make
an interim arrangement when the post falls vacant
pending selection and appointment of another
eligible and suitable candidate to the post and in G
similar analogy giving additional charge of the post
to a superior officer is not contrary to the public
policy or against the interest of the institution.
(d) The High Court has fundamentally misconstrued the
H
638 SUPREME COURT REPORTS [2013] 14 S.C.R.
A provisions under the Act, Regulations and the
Scheme and has erroneously opined that the
Chairman, who was holding the additional charge,
had usurped the position despite being eligible,
qualified and experienced.
B
(e) The conclusion that the Chairman, who was age
barred for holding the post of CEO, should have
been treated to be disqualified to hold the post, is
both fallacious on facts and erroneous in law. There
is no statutory provision prescribing the age. That
c apart, the policy decision and the advertisement do
not curtail the power/authority of the Commission to
make any appropriate temporary arrangement,
more so, when it is so permissible under the
Scheme.
D
13. Mr. Ramachandran, learned counsel, while reiterating
the submissions made by Mr. P.P. Rao, further submitted that
when the Chairman had performed the duties of the CEO, there .
was no justification to direct for recovery of the sum, for it is
E unknown to service jurisprudence and in certain circumstances
amounts to beggary which is enshrined under Article 23 of the
Constitution of India. The learned counsel would contend that
Mr. Jena who has earned his reputation in his own field, despite
the said order, had intimated CESU that he would not function
F and he is not functioning in praesenti.
14. Mr. Sahoo, appering in person and Mr. Aparajit
Ninawe, learned counsel, who assisted him, submitted that the
verdict of the High Court is absolutely flawless and relying on
G the additional affidavit it has been put forth that the post of CEO
in CESU is a selection post which should have been filled up
through a public advertisement as per the procedure of
selection and, therefore, Mr. Jena could not have been allowed
to hold two posts, namely, the Chairman of CESU as well as
the CEO. It is further contended that there is a policy decision
H for filling up of posts for senior positions in CESU and that
CENTRAL ELECTRICITY SUPPLY UTILITY OF 639
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
being the position, appointment of Mr. Jena is vitiated. The said A
policy decision has been emphatically placed reliance upon to
highlight the factum of age which was 55 years in 2007. It is
also asserted in the affidavit that the age limit has been
enhanced to 60 years in the year 2012 but by the time Mr. Jena
was asked to take over the charge he was more than 69 years B
and, hence, he was ineligible to hold the post.
15. Before we advert to the aforesaid submissions and the
legal substantiality of the order passed by the High Court, we
may refer to certain authorities that throw light on the duty of C
the Court while dealing with a writ of quo warranto. In The
University of Mysore v. G.D. Govinda Rao and another1,
Gajendrakadkar, J. (as his Lordship then was) speaking for the
Constitution Bench, has stated thus: -
"Broadly stated, the quo warranto proceeding affords a D
judicial enquiry in which any person holding an independent
substantive public office, or franchise, or liberty, is called
upon to show by what right he holds the said office,
franchise or liberty; if the inquiry leads to the finding that
the holder of the office has no valid title to it, the issue of E
the writ of quo warranto ousts him from that office. In other
words, the procedure of quo warranto confers jurisdiction
and authority on the judiciary to control executive action in
the matter of making appointments to public offices against
the relevant statutory provisions; it also protects a citizen F
from being deprived of public office to which he may have
a right. It would thus be seen that if these proceedings are
adopted subject to the conditions recognized in that behalf,
they tend to protect the public from usurpers of public
office; in some cases, persons not entitled to public office G
may be allowed to occupy them and to continue to hold
them as a result of the connivance of the executive or with
its active help, and in such cases, if the jurisdiction of the
courts to issue writ of quo warranto is properly invoked, the
1. AIR 1965 SC 491. H
640 SUPREME COURT REPORTS [2013) 14 S.C.R.
A usurper can be ousted and the person entitle to the post
allowed to occupy it. It is thus clear that before a citizen
can claim a writ of quo warranto. he must satisfy the court.
inter alia. that the office in question is a public office and
is held by usurper'without legal authority. and that
B necessarily leads to the enquiry· as to whether the
appointment of the said alleged usurper has been made
in accordance with law or not."
[Emphasis supplied]
c 16. In High Court of Gujarat and another v. Gujarat Kishan
Mazdoor Panchayat and others 2 S.B. Sinha, J., in· his
concurring opinion, while adverting to the concept of exercise
of jurisdiction by the High Court in relation to a writ of quo
warranto, has expressed thus: -
D
"22. The High Court in exercise of its writ jurisdiction in a
matter of this nature is required to determine at the outset
as to whether a case has been made out for issuance of
a writ of certiorari or a write of quo warranto. The jurisdiction
of the High Court to issue a writ of quo warranto is a limited
E
one. While issuing such a writ. the Court merely makes a
public declaration but will not consider the respective
impact of the candidates or other factors which may be
relevant for issuance of a writ of certiorari. (See R.K. Jain
v. Union of lndia 3, SCC para 74)
F
23. A writ of quo warranto can only be issued when the
appointment is contrary to the statutory rules. (See Mor
Modern Coop. Transport Society Ltd. v. Financial
Commr. & Secy. To Govt. of Haryana 4 .)
G
[Underlining is ours]
2. (2003) 4 sec 112.
3. (1993) 4 sec 119.
H 4. (2002i 6 sec 269.
CENTRAL ELECTRICITY SUPPLY UTILITY OF 641
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
17. In Centre for P/L and Another v. Union of India and A
Another°, a three-Judge Bench, after referring to the decision
in R.K. Jain (supra), has ruled thus: -
"64. Even in R.K. Jain case, this Court observed vide para
73 that judicial review is concerned with whether the 8
incumbent possessed qualifications for the appointment
and the manner in which the appointment came to be
made or whether the procedure adopted was fair, just and
reasonable. We reiterate that the Government is not
accountable to the courts for the choice made but the
Government is accountable to the courts in respect of the C
lawfulness/legality of its decision when impugned under the
judicial review jurisdiction."
18. From the aforesaid exposition of law it is clear as noon
day that the jurisdiction of the High Court while issuing a writ of 0--
quo warranto is a limited one and can only be issued when the
person holding tt . o public office lacks the eligibility criteria or
when the. appointment is contrary to the statutory rules. That
apart, the concept of locus standi which is strictly applicable to
service jurisprudence for the purpose of canvassing the legality E
or correctness of the action _should not be allowed to have any
entry, for such allowance is likely to exceed the limits of quo
warranto which is impermissible. The basic purpose of a writ
of quo warranto is to confer jurisdiction on the constitutional
courts to see that a public office is not held by usurper without F
any legal authority. While dealing with the writ of quo warranto
another aspect has to be kept in view. Sometimes a contention
is raised pertaining to doctrine of delay and laches in filing a
writ of quo warranto. There is a difference pertaining to
personal interest or individual interest on one hand and an G
interest by a citizen as a relator to the court on the other. The
principle of doctrine of delay and laches should not be allowed
any play because the person holds the public office as a usurper
and such continuance is to be prevented by the court. The Court
5. (2011)4SCC1. H
642 SUPREME COURT REPORTS [2013) 14 S.C.R.
A is required to see that the larger public interest and the basic
concept pertaining to good governance are not thrown to the
winds.
19. Mr. P.P. Rao, learned senior counsel, has
commended us to the decision in Hari Bansh Lal v. Sahodar
8
Prasad Mahto and others6, where the learned Judges referred
to the principles laid down in Duryodhan Sahu (Dr.) v. Jitendra
Kumar Mishra7 Ashok Kumar Pandey v. State of WB. 6, 8.
Singh (Dr.) v. Union of lndia 9, Dattaraj Nathuji Thaware v.
C State of Maharashtra 10 and Gurpal Singh v. State of Punjab 11
and expressed the view thus: -
"The above principles make it clear that except for a writ
of quo warranto, public interest litigation is not
maintainable in service matters."
D
20. Ordinarily, after so stating we would have proceeded
to scan the anatomy of the Act, the Rules, the concept of the
Scheme under the Act and other facets but we have thought it
imperative to revisit certain authorities pertaining to public
E interest litigation, its abuses and the way sometimes the courts
perceive the entire spectrum. It is an ingenious and adroit
innovation of the judge-made law within the constitutional
parameters and serves as a weapon for certain purposes. It is
regarded as a weapon to mitigate grievances of the poor and -
F the marginalized sections of the society and to check the abuse
of power at the hands of the Executive and further to see that
the necessitous law and order situation, which is the duty of the
State, is properly sustained, the people in impecuniosity do not
die of hunger, national economy is not jeopardized; rule of law
G 6. c201 O) 9 sec 655.
7. (1998) 1 sec 273.
8. (2004) 3 sec 349.
9. (2004) 3 sec 363
10. c2005) 1 sec 590.
H 11. c2005) 5 sec 136.
CENTRAL ELECTRICITY SUPPLY UTILITY OF 643
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
is not imperiled; human rights are not endangered, and probity, A
transparency and integrity in the governance remain in a
constant state of stability. The use of the said weapon has to
be done with care, caution and circumspection. We have a .
reason to say so, as in the case at hand there has been a
fallacious perception not only as regards the merits of the case B
but also there is an erroneous approach in issuance of direction
pertaining to recovery of the sum from the holder of the post.
We shall dwell upon the same at a later stage.
21. As advised at present, we may refer to certain
authorities in the field in this regard. In Bandhua Mukti Morcha C
v. Union of India and others12, Bhagwati, J., (as his Lordship
then was) had observed thus: -
"When the Court entertains public interest litigation, it does
not do so in a caviling spirit or in a confrontational mood D
or with a view to tilting at executive authority or seeking to
usurp it, but its attempt is only to ensure observance of
social and economic rescue programme, legislative as
well as executive, framed for the benefit of the have-nots
and the handicapped and to protect them against violation E
of their basic human rights, which is also the constitutional
obligation of the executive. The Court is thus merely
assisting in the realization of the constitutional objectives."
22. In Dr. D.C. Wadhwa and others v. State of Bihar and
others13, the Constitution Bench, while entertaining a petition F
under Article 32 of the Constitution on behalf of the petitioner
therein, observed that it is the right of every citizen to insist that
he should be governed by laws made in accordance with the
Constitution and not laws made by the executive in violation of
the constitutional provisions. It has also been stated therein that G
the rule of law constitutes the core of our Constitution and it is
the essence of rule of law that the exercise of the power by the
12. AIR 1984 SC 802.
13. AIR 1987 SC 579. H
644 SUPREME COURT REPORTS (2013) 14 S.C.R.
A State whether it be the legislature or the executive or any other
authority should be within the constitutional limitation and if any
practice is adopted by the executive which is in flagrant violation
of the constitutional limitations, a member of the public would
have sufficient interest to challenge such practice and it would
B be the constitutional duty of the Court to entertain the writ
petition.
23. in Neetu v. State of Punjab and others14 , the Court has
opined that it is shocking to note that Courts are flooded with
C large number of so called public interest litigations where even
a minuscule percentage can legitimately be called as public
interest litigation. Commenting on entertaining public i11terest
litigations without being careful of the parameters by the High
Courts the learned Judges observed as follows: -
D "Though the parameters of public interest litigation have
been indicated by this Court in large number of cases, yet
unmindful of the real intentions and objectives. High Courts
are entertaining sucll petitions and wasting valuable judicial
time which, as noted above, could be otherwise utilized for
E disposal of genuine cases."
Thereafter, giving a note on caution, the Court stated: -
"Public interest litigation is a weapon which has to be
used with great care and circumspection and the judiciary
F has to be extremely careful to see that behind the beautiful
veil of public interest an ugly private malice, vested interest
and/or publicity seeking is not lurking. It is to be used as
an effective weapon in the armoury of law for delivering
social justice to the citizens."
G
24.ln State of Uttaranchal v. Ba/want Singh Chaufal and
others 15 , this Court adverted to the growth of public interest
14. AIR 2007 SC 758.
H 1s. 2010) 3 sec 402.
CENTRAL ELECTRICITY SUPPLY UTILITY OF 645
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.)
litigations in this country, and the view expressed in various A
Pl Ls and the criticism advanced and eventually conceptualized
the development which is extracted below: -
"We deem it appropriate to broadly divide the public
interest litigation in three phases:
B
Phase I. - It deals with cases of this Court where
directions and orders were passed primarily to
protect fundamental rights under Article 21 of the
marginalized groups and sections of the society.
who because of extreme poverty, illiteracy and C
ignorance cannot approach this Court or the High
Courts.
Phase II. - It deals with the cases relating to
protection, preservation or ecology, environment, 0
forests, marine life, wildlife, mountains, rivers,
historical monuments etc. etc.
Phase 111. - It deals with the directions issued by the
Courts in maintaining the probity, transparency and
integrity in governance." E
25. In Bho/anath Mukherjee and others v. Ramakrishna
Mission Vivekananda Centenary College and others16, it has
been laid down that public interest litigation would not be
maintainable in service law cases. F
26. In Duryodhan Sahu (supra), a three-Judge, Bench
posed a question whether the administrative tribunals
constituted under the Administrative Tribunals Act, 1985 can
entertain a public interest litigation. A post of lecturer was G
created in a Government Medical College recognized by the
Medical Council of India and the State Government requested
the Public Service Commission to recommend a suitable
candidate from the reserved list. At that stage, a third party
1a. (2011) 5 sec 464.
H
646 SUPREME COURT REPORTS (2013) 14 S.C.R.
A described himself a!> the Secretary of a particular Surakhya
Committee, filed an original application for quashing the
Government order creating the post of the teacher. A grievance
was also put forth that the post was not advertised. The tribunal
restrained the appointment of the beneficiary, the appellant
B before this Court. The learned Judges opined that the
administrative tribunal constituted under the said Act cannot
entertain a public interest litigation at the instance of a total
stranger. While so stating the three-Judge Bench opined that
as the prayer was for quashment of the creation of post itself
c and preventing the authorities and for preventing the
Government from appointing any candidate as Lecturer, the
prayer would not come in the sphere of quo warranto.
27. Thus, from the aforesaid authorities it is quite vivid that
the public interest litigation was initially evolved as a tool to take
D care of the fundamental rights under Article 21 of the
Constitution of the marginalized sections of the society who
because of their poverty and illiteracy could not approach the
court. In quintessence it was initially evolved to benefit the have-
nots and the handicapped for protection of their basic human
E rights and to see that the authorities carry out their constitutional
obligations towards the marginalized sections of people who
cannot stand up on their own and come to court to put forth their
grievances. Thereafter, there has been various phases as has
been stated in Balwant Singh Chaufal (supra). It is also
F perceptible that court has taken note of the fact how the public
interest litigations have been misutilized to vindicate vested
interests for the propagated public interest. In fact, as has been
seen, even the people who are in service for their ~eniority and
promotion have preferred public interest litigations. It has also
G come to the notice of this Court that some persons, who
describe themselves as pro bono publico, have approached
the court challenging grant of promotion, fixation of seniority,
etc. in respect of third parties.
28. Regard being had to the aforesaid enunciation of law
H
CENTRAL ELECTRICITY SUPPLY UTILITY OF 647
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
relating to two spheres, namely, issue of a writ of quo warranto A
and the directions which are justified to be issued in a public
interest litigation in the said context, we shall proceed to
scrutinize the legal substantiality of the judgment of the High
Court.
B
29. At this stage, it is necessary to understand the Scheme
framed by the State Commission as per the provisions of
Section 22 of the Act. As stated earlier, CESU was constituted
by an order dated 8.9.2006 passed by the Commission. The
Scheme was amended from time to time vide notifications C
dated 13.10.2006, 5.5.2007, 31.10.2007, 6.9.2008, 2.8.2010,
12.11.2010, 5.9.2011, 31.3.2012 and 17.9.2012. As per the
Scheme a CEO is to be appointed on the basis of a regular
advertisement published in the newspaper and the
advertisement prescribes the qualification and other criteria to
be satisfied by an applicant aspirant to the post of CEO. The 0
service conditions of the CEO are decided by the State
Commission taking into consideration the situation prevalent as
per the resolution and orders passed by the State Commission
from time to time and the said selection, is to be made in a
transparent manner. It is the stand of the appellant that Mr. Jena E
was not appointed as CEO in accordance with the procedure.
It is to b~ noted that he was functioning as the Chairman of
CESU. Sub-clause (iv) of clause 4 of the amended Scheme
dated 31.10.2007 may be reproduced with profit: -
F
"The CEO, CFO, COO and CCO should not hold any other
posts/office during their tenure in the CESU. The terms of
office, emoluments and conditions of service of CEO,
CFO, COO and CCO shall be such as to be decided by
the Commission by order issued under this Scheme. The G
Commission may extend their tenure for a further period,
as it thinks fit."
29. Clause 5(ii) of 2007 Scheme enumerated the powers
and functions of the CEO. Clause 5 was amended and
H
648 SUPREME COURT REPORTS [2013] 14 S.C:R.
A thereafter on 12.11.2010 further amendment was brought in.
The amendment, inter alia, substituted clause 4(iv). The
following was added to the existing clause 4 as clause 4(ix): -
"Whenever needed, the power, functions and
responsibilities of Chairman and CEO can be disc~arged
B
by one person, designated as Chairman-cum-CEO."
30. At this stage, it may be noted with profit that the
Commission vide letter dated 29.12.2007 had communicated
to the CESU about the terms and conditions for appointment
C of CEO. It reads as follows: -
"1. Chief Executive Officer:
The Scale of Pay of the Chief Executive Officers is
fixed at Rs.18,400-500-22,400/-. The Basic Pay of Shri
D Dasgupta joining in the post of Chief Executive Officer is
fixed at Rs.22,400/- per month. Besides above, he is
entitled to Dearness Pay and DA at the current rate allowed
by the State Government. The cost to the Company per
month includes the House Rent Allowances, Medical
E Allowances, Books, Periodical and Telephone Allowances,
Attendant's Allowances, LTC and personal Pay. Besides
above, as Chief Executive Officer would be entitled to
Leave Salary Contribution, Contributory Provident Fund,
Service Gratuity as applicable to the post, which are
F included in the cost to Company.
The Chief Executive Officer is entitled to
Conveyance Allowance of Rs.20,000/- per month for
vehicle hired/owned by him along with the driver's pay +
G reimbursement of the cost of fuel for official duty beyond
the local duty
Or
He is entitled to a vehicle provided by the CESU
H along with five liters of fuel per day for personal use. The
CENTRAL ELECTRICITY SUPPLY UTILITY OF 649
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
option is to be exercised by the incumbent. A
The personal Pay includes the Management
Allowances aliowed to the post of Chief Executive Officer
which is the monthly pay out of Medi-claim Insurance
Premium and the Life Insurance Premium. As such all
Medical Expenses shall be borne by him. The Personal B
Pay shall be linked to the performance of the Chief
Executive Officer.
As negotiated at the time of interview the
appointment of Shri Swapan Dasgupta as CEO in CESU C
is initially for a period of four years on Contract Basis, .
which can be extended for one year depending on the
necessity of the organization, performance and usefulness
of the officer and the cost to company shall be limited to
10% over and above his present entitled in CESC, D
Koikata.
The Contract can be terminated on either side by
three months notice or by payment/deposit of three
months' emoluments in lieu of notice."
E
31. When Mr. Swapan Dasgupta was appointed as CEO,
the conditions of appointment were - annual package of Rs.22
lakhs with certain perquisites. After Mr. Dasgupta submitted
his letter dated 9.8.2010 requesting the Commission to relieve
· him from the post of CEO, the Commission decided to relieve F
him with effect from that date. Thereafter on 10.8.2010 the
Commission passed the following order: -
"At present, Shri B.C. Jena, Chairman, CESU
Management Board is closely monitoring the overall G
functioning of CESU as per para 5 of the FIFTH
Amendment to the Central Electricity Supply Utility of
Orissa (Operation and Management) Scheme, 2006
notified by the Commission vide Notification No.
CESU(O&M)/4590 dtd. 03.8.2010. It has been stipulated
H
650 SUPREME COURT REPORTS [2013] 14 S.C.R.
A that the Chairman shall guide, advise and have overall
superintendence and control over the CEO, CFO, COO,
CCO, CPIO, Sr. G.M. (HR) and CVO for smooth and
efficient functioning of the CESU. Since it will take quite
some time for the selection of a CEO to make alternative
B arrangement, the Commission shall have now decided that
the function, duties and responsibilities of CEO, CESU
shall be discharged by Shri B.C. Jena, Chairman, CESU
Management Board until further orders or until alternative
arrangement is made by the Commission. This order will
c be effective from 10.8.2010.
Shri Jena will enjoy all the perquisites/ facilities as
was being given to the CEO except the monthly
emoluments. The Commission would take a view later on
regarding the desirability of giving an honorarium to the
D Chairman, CESU Management Board for enabling him to
discharge his duties and responsibilities as a CEO over :;
and above the responsibilities of Chairman and his other ·
current assignments, if any." .. ·
E 32. We may also note with profit that a policy decision had
been taken for preparing an advertisement for appointment of
the CEO at the time of Sengupta's appointment. It provided for
filling up of senior positions for CESU. It stipulated that the
tenure of appointment would be for a period of three years and
F extendable thereafter depending upon the performance and the
maximum age limit of the candidate shall not exceed 55 years
as on 1.9.2007. The qualification that was required was that
the CEO shall be a person with drive and initiative and shall
be in overall charge of engineering, finance, commerce,
G corporate/regulatory affairs and general management. He
should at least possess a degree in electrical engineering. An
added qualification of MBA/CA/FICWA from a reputed
University was desirable. It was also stipulated that service
experience of about 15-20 years of which at least 5 years was
H a must for top managerial position.
CENTRAL ELECTRICITY SUPPLY UTILITY OF 651
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
33. Mr. Sahoo has brought on record an advertisement for A
filling up the post for the period 2007-08. The advertisement
dated 26.5.2012 has also been brought on record. True it is, it
is after the judgment of the High Court and it reads as follows:
B
"The Chief Executive Officer shall be a person with
initiative a drive. He will be in overall charge of
engineering, finance, commerce, corporate/ regulatory
affairs and general management of the utility. This is a
Board level position and he should at least possess a
professional degree in Engineering or Management or C
Accountancy or Law from a reputed University. He should
have at least 10 years experience in senior level
managerial position in a large organization."
34. It also stipulates that the tenure of appointment would D
be for a period of two years and extendable thereafter
depending upon the performance of the candidate and the
requirement of the organization and the applicant should not be
more than 60 years of age as on 1.4.2012.
E
35. In this backdrop it is to be seen whether the action of
the authority requiring the Chairman to remain in-charge of the
CEO or to function as CEO comes within the scope and ambit
of writ of quo warranto. We have already stated the principles
relating to exercise of jurisdiction of the court to issue a writ of
quo warranto. When a writ of quo warranto is filed, it is the F
obligation of the relater to satisfy the court that the office in
question is a public office and is held by the usurper without
the legal authority. It is the duty of the court to see whether the
appointment has been made contrary to the statutory rules.
Issue of institutional integrity has also to be taken into G
consideration when a post is filled up and that is where the
manner in which the appointment came to be made or whether
the procedure adopted was fair, just and reasonable are
required to be seen. On a perusal of the reasons adopted by
the High Court it is perceptible that it has paved a different path. H
652 SUPREME COURT REPORTS [2013] 14 S.C.R.
A It has given emphasis on the role of the Commission, the
function ism of CESU, the control of the Chairman on the CEO,
the violation of the principles of natural justice, the nature of
appointment, the abuse of power by the Commission and the
violation of the regulations in such appointment. In our opinion,
B most of the reasons that have been given by the High Court
are totally unrelatable to the sphere of issue of writ of quo
warranto. We are only required to see whether the Commission
had the authority to make any temporary arrangement and
whether the 5th respondent was eligible for the said purpose.
c To understand the said facet, we have to refer to certain
provisions of the Act which encapsulate the basic map of the
functions of the licensees and the utility service. Section 19 of
the Act deals with revocation of licence of a licensee. Section
20 provides for sale of utilities of licensees. It prescribes the
procedure and the arrangements to be made by the
0
Commission. Till the licence is sold, the Commission has been
authorised to make interim arrangements. It has been conferred
the power to appoint Administrator of the utility. Section 22
takes care of the situation where no purchase takes place, that
is to say, when the utility is not sold in the manner provided
E under Section 20 or Section 24. We think it necessary to
reproduce Section 22 of the Act: -
"22. Provisions where no purchase takes place. - (1)
If the utility is not sold in the manner provided under section
F 20 or section 24, the Appropriate Commission may, to
protect the interest of the consumers or in the public
interest, issue such directions or formulate such Scheme
as it may deem necessary for operation of the utility.
(2) Where no directions are issued or Scheme is
G
formulated by the Appropriate Commission under sub-
section (1 ), the licensee referred to in section 20 or section
24 may dispose of the utility in such manner as it may
deem fit.
H Provided that, if the licensee does not dispose of the
CENTRAL ELECTRICITY SUPPLY UTILITY OF 653
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
utility, within a period of six months from the date of A
revocation, under section 20 or section 24, the Appropriate
Commission may cause the works of the licensee in,
under, over, along or across any street or public land to
be removed and every such street or public land to be
reinstated, and recover the cost of such removal and B
reinstatement from the licensee."
From the aforesaid provision, it
is limpid that the Commission has been conferred power to
formulate a Scheme or issue directions in the public interest C
so that operation of the utility service is not put to hazard.
36. In the case at hand, as has been stated earlier, the
utility service came into existence after formulation of a
Scheme. The Scheme has been amended from time to time.
The High Court has referred to clause 4(iv) and clause 5 of the D
Scheme. We think it appropriate to reproduce clause 4(iv) and
clause 5 of the Scheme as reproduced by the High Court: -
"(iv) The CEO, CFO and COO should not hold any other
posts/office during their tenure in the CESU. The terms of E
office, emoluments and conditions of service of CEO,
CFO and COO shall be such as to be decided by the
Commission by order issued under this Scheme. The
Commission may extend their tenure for a further period,
as it thinks fit."
F
xxx xxx xxx
Clause 5:
"(i) Chairman
G
(a) He shall preside over all Board Meetings.
(b) He shall guide, advise and have overall
superintendence and control over the CEO, CFO
H
654 SUPREME COURT REPORTS [2013] 14 S.C.R.
A and COO for smooth and efficient functioning of the
CESU. .
(c) He shall decide all the matters referred to him
by the Board.
B (d) He shall discharge all other duties assigned by
the Commission under the Scheme.
(ii) Chief Executive Officer (CEO)
Subject to overall supervision, control and
c delegation of power by the Management Board and
directions of the Commission -
(a) He shall act as Chief Executive and Chief
Spokesman of the CESU.
D
(b) He shall manage the day-to-day affairs and
management of CESU and shall represent the
CESU before the Commission and other
Authorities.
E (c) He shall carrv out and implement the orders and
directions issued by the Commission to the CESU. ·
(d) He shall carrv out and implement the resolutions/
decisions taken by the Management Board.
F
(e) In consultation with the Management Board, he
shall design and implement the organizational
structure and management of the CESU.
(f) In the name and on behalf of the CESU, he shall
G enter into contract with all external agencies and
take loans from funding/financial institutions.
(g) On behalf of the CESU, he shall discharge all
its statutory/regulatory requirement and obligations.
H
CENTRAL ELECTRICITY SUPPLY UTILITY OF 655
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
(h) Any other function as may be assigned by the A
Commission or the Management Board from time
to time under the Scheme.
(i) The CEO shall report to the Chairman."
37. After reproducing the same the High Court has opined B
thus: -
"On reading of all the aforesaid relevant clauses it is very
clear that the Chairman of the CESU is required to
supervise the smooth functioning of the CESU and Chief c
Executive Officer is to act under the control of the
Chairman. That being the position and the opp. party no.
3, who is a retired officer and the Chairman of CESU
could not have been appointed as Chief Executive Officer.
If the post of Chief Executive Officer in the Organization D
falls vacant in view of the urgency of either temporary
appointment can be made or in charge arrangement can
be made for temporary period, but the same power could
not have been conferred upon the Chairman as the
Chairman is required to supervise and control the function
E
of Officers of the Board as well as in the Organization,
therefore his appointment as Chief Executive Officer as an
alternative arrangement is contrary to Clause 5 of the
Scheme referred to supra. The powers and functions of the
Chief Executive Officer have been extracted above. Further,
as could be seen from the impugned order, the
F
appointment in question is styled as temporary in nature.
If the post falls vacant, it is the duty of the Commission to
see that the post is filled up by following the service
regulations."
G
38. Thereafter, the High Court has referred to the resolution
dated 12.11.2010 by which the Commission had allowed Mr.
Jena to continue as Chairman-cum-CEO to discharge the
duties and responsibilities until further orders and was extended
the benefit of consolidated honorarium of Rs.70,000/- per month H
656 SUPREME COURT REPORTS [2013] 14 S.C.R.
A in addition to the usual perquisites as enjoyed by the CEO.
After so stating, the High Court has proceeded to express thus:
"24. The contention urged on behalf of opp. party no. 2-
Secretary, OERC is that only temporary arrangement has
B
been made fixing a monthly honorarium of Rs.70,000/-
which is payable to the Chief Executive Officer. It is
unknown to the service jurisprudence that an employee/
officer who is put in charge of another office or post in
addition to his own duty is to be granted honorarium. The
c same is totally impermissible in law. On reading
Annexures-3 & 5, we are of the view that it is not legally
correct on the part of the Commission to appoint·the
Chairman as the Chief Executive Officer, which is contrary
to the service regulations. opp. party no. 3 should not have
D been placed on temporary arrangement as the Chief
Executive Officer having regard to the nature of powers and
functions required to be discharged by the Chairman who
has been put in charge of the Chief Executive Officer who
is under the control and supervision of the Chairman. He
E cannot supervise his own work which is the violation of
principle of natural justice. He cannot find out his own
defect and discharge his responsibilities.
25. Therefore, we are of the view that the Commission has
F acted illegally and in violation of service regulations placing
the opp. party no.3 in the post of Chief Executive Officer
and further granting him honorarium w.e.f. 11.08.2010 vide
letter dated 12.11.2010 under Annexure-5, which is a clear
case of abuse of power of the Commission and the said
appointment order is without authority of law and opp. party
G
no.3 should not have been entrusted with the duties,
functions and responsibilities of the CEO while functioning
as Chairman of CESU. Therefore, we are of the view that
both Annexures-3 & 5 are liable to be quashed and the
same are accordingly quashed and a writ of quo warranto
H
CENTRAL ELECTRICITY SUPPLY UTILITY OF 657
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
is issued forthwith as the opp. party no.3 is not competent A
. to hold the post of Chief Exeucitve Officer of CESU."
39. We have reproduced the order in extenso because we
are of the considered opinion that the reasons are flawed. The
Commission has the power under the Scheme to give B
additional charge of CEO to the Chairman. The Scheme is
framed by the Commission. The whole thing is controlled by the
language used in the Scheme. The High Court, instead of
appreciating the eligibility of the 5th respondent, has adverted
to the concept of internal administration of CESU, that is, CEO C
is required to report to the Chairman and if the Chairman
remains in charge, his actions may go without scrutiny. The
assumption in this regard is not correct. The Board has th·e
overall power of supervision and management. That apart, the
power is vested with the Commission to do so under the
Scheme. The High Court has also referred to certain provisions D
about the regulations. Needless to emphasise, the said
regulations operate in a different field altogether and have
nothing to do with any appointments under the Scheme. The
only thing which has been highlighted by the 1st respondent is
that it was accepted by the High Court that he was a retired E
officer and was appointed as Chairman and further was asked
to remain in charge of CEO and was given some honorarium,
which is impermissible. In fact, what is submitted is that he
becomes an appointee in respect of two posts which the law
does not countenance. The said submission suffers from a F
fundamental fallacy. The Chairman of CESU is a honorary post.
He was getting sitting fees for attending the meetings. He was
not even given a fixed honorarium. Therefore, to conclude that
he was holding two posts and drawing salary for both the posts
is factually incorrect. G
40. The whole thing has to be scrutinized from the point of
view of power. Suitability or eligibility of a candidate for
appointment to a post is within the domain of the appointing
authority. The only thing that can be scrutinized by the Court is
H
658 SUPREME COURT REPORTS [2013] 14 S.C.R.
A whether the appointment is contrary to the statutory provisions/
rules. In Hari Bansh Lal (supra) the Court took note of the stand
of the Law Officer of Jharkhand State Electricity Board and
commented on the somersault in the stand made by the State
and thereafter proceeded to note that the appellant Hari Bansh
B Lal had retired in 1985 and there is no prescription for upper
age limit for appointment as Member or Chairman of the Board.
The Court took note of the encomiums by the Electricity Board
and the State Government before the High Court. Eventually,
the learned Judges opined thus: -
c "43. Though, in the PIL, the writ petitioner has mentioned
the age of Mr. Lal as 90, it is factually incorrect and Mr Lal
himself swore an affidavit and asserted and it is not
disputed by the State that he is 84 as on date and
according to him, he is hale and healthy. We have already
D reproduced the stand of the State Government before the
High Court about his qualification and service rendered as
Member and Chairman in the State Electricity Board."
xxx xxx xxx
E
"45. Taking note of all these relevant factors and of the fact
that admittedly, there is no age-limit prescribed in the rules
for appointment to the post of Chairman and also with
regard to the stand of the State Government about the
qualification as well as good service rendered by the
F appellant, we feel that in the event of quashing the High
Court's order, he should be allowed to continue as
Chairman of the Electricity Board."
41. Keeping the aforesaid opinion in mind, we shall
G address to the controversy in the case at hand. From the factual
depiction it is seen that though the policy and the Scheme
provide that the age of the candidate shall not exceed 55 years
as on 1.9.2007, yet the tenure is extendable thereafter
depending upon the performance. We have referred to the
H same only for the purpose that though there is a maximum age
CENTRAL ELECTRICITY SUPPLY UTILITY OF 659
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.]
limit at the time of submission of an application, yet the term A
can be extended. It may be apposite to note here that even if
the maximum age limit is provided for submission of application
and the period of appointment is three years, it is extendable
depending upon the performance. Having regard to the nature
of language used, it is to be construed that it is a contract B
appointment to choose a highly qualified and skilled person.
The extension is also dependant upon performance. No limit
is provided for number of extensions. It would depend upon the
capability, efficiency and suitability as adjudged by the
employer. Needless to say, for grant of extension the person c
would not have a right. Similarly his continuance for the term of
three years will depend upon the nature of appointment letter
issued to him. Thus viewed, we are inclined to think that the
principle stated in Hari Bansh Lal's case would get attracted.
That apart, there is no maximum age limit for Chairman. He 0
holds a higher post and his experience and capability have
been appreciated by the Commission. It is a well known
principle that the employer can ask an officer to remain in
charge of another office till the said post is filled up. It is within
the permissible authority of the employer. Under the Scheme E
the Chairman was not getting any remuneration. He was only
getting sitting fees. Looking at his ability and efficiency the
Commission thought it appropriate that he should be given the
charge of CEO and accordingly an honorarium was fixed.
Honorarium was not equivalent to the salary. The High Court
has erroneously opined that it was an appointment. The 5th F
respondent was not getting two sets of salary. Thus analysed,
we have no hesitation that the reasons ascribed by the High
Court to quash the arrangement are unacceptable and,
accordingly, the decision on that score deserves to be
lancinated and we so do. G
42. We may proceed to state that once we have dislodged
the the decision of the High Court whereby it has opined that
the Chairman could not have been allowed to remain in-charge
of CEO as a logical coroJlary the direction for recovery gets H
J , •' • I 1
A, annulled,. B.ut we think it appropriate to add something. Even
·~n°'a Y'rit of quo _warranto..while declaring that a person is not
eligible to hold the !lost had rendered service, we are disposed
t~ think 1 th_e~e cannot be r~covery of amount. While exercising
the power for' issue of writ of quo warranto the Court only makes
B a public declaration that the person holding the public office is
a usurper and not eligible to hold the post and after the
declaration is made he ceases to hold the office. Till the
declaration is made, the incumbent' renders service and when
he has rendered service he cannot be deprived of his salary.
·c Denial of pay for the service rendered tantamounts.to forced
labour which is impermissible. ·When an appointment is
admitted and the incumbent functions in the post and neither
suspended nor removed from service,' he is entitled to get
salary, for it is his legal right and it is the duty of the employer
to pay it as per the terms and conditions of the appointment.
D The matter may be different when someone continues after
retirement by a false declaration or misrepresentation: Recovery
of salary would amount to deprivation of payment while the
incumbent was. holding the post and had worked. Asking
someone to 'work and when his appointment is nullified by issue
E of a writ of quo warranto by the Cou.r( we
think that neither the
employer can recover the amount nor the Court can direct for
recovery of the same. There has to tie
some other reason for
denial of payment, .recovery of salary or honorari~m. In. this
context,'we may fruitfully reproduce a passage from People's
F Union for Democratic Rights and others v. Union of India and
others 11 : - ·· · ·
"... if a person has contracted with another to perform
service and there is consideration for such 'service in the
G shape of liquidation of debt or even remuneration he cannot
be forced, by "compulsion of law or otheiwise, to continue
to perform "such service, as that would be forced labour
within the inhibition ofArticle 23. This Article strikes at
everj form of forced labour "even if it has its origin in a
------' ·- t ' -. ,, -
H 11. (1982) 3 sec 235.
'·
CENTRAL ELECTRICITY SUPPLY UTILITY OF 661
ODISHA v. DHOBEI SAHOO [DIPAK MISRA, J.J
contract voluntarily entered into by the person obligated to A
provide labour or service (vide Pollock v. Wi//iams18). The
. reason is that it offends against human dignity to c9mpel
a person to provide ,labour or service to another if he does
not wish to do so, even though it be in breach of the. contract
entered into by him. There should be no serfdom or B
involuntary servitude in a free democratic lr:idia which
respects the dignity of the individual and the worth of the
human person.": ' ·" ·
. j. _,, ·, -~
· 43. In view of the aforesaid analysis we are of the resolute
opinion that even while issuing a writ of quo warranto there C
cannot be any direction for recovery of the sum. While
· entertaining a PIL pertaining to a writ of quo warranto we would
add that it is the obligation of the court to pave the path which
are governed by constitutional parameters and the precedential
set-up. It is to be borne in mind that laws are commended to D
establish a society as required by the paradigms laid down by
law. The courts while implementing law may not always be
guided by total legalistic approach but that does not necessarily
mean to move on totally moralistic principle which has no
sanction of law. We have been constrained to say so as we E
find that there is a temptation to say something in a public
interest litigation which can be construed as the overreach. It
needs no special emphasis to state that formulations of
guidelines or directions issued are bound to be within the
constitutional parameters. F
44. The matter may be viewed from the point of view of
the 5th respondent. True it is, his remaining in-charge of the
post of the CEO was called in question before the High Court
in a public interest litigation wherein a writ of quo warranto was G
issued. A judgment can be erroneous but when there is a
direction for recovery of the honorarium, it indubitably creates
a dent in the honour of a person. Honour once lost may be
irredeemable or irresuscitable. Mr. Ramachandran has number
18. 322 US 4: 88 L Ed 1095. H
662 SUPREME COURT REPORTS (2013] 14 S.C.R.
A of times submitted before us that because of the humiliation
faced, the 5th respondent qecided not to continue in the post
of the Chairman also. We have stated so because we strongly
feel that a cautious approach is requisite while dealing with a
writ of quo warranto.
B
45. Resultantly, the appeals are allowed and the judgment
and order passed by the High Court is set aside. In the facts
and circumstances of the case there shall be no order as to
costs.
C Bibhuti Bhushan Bose Appeals allowed.
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