K.A. Santosh Kumar v State of Kerala and others (WA 684 of 2020; WP(C) 6505 of 2017)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR.JUSTICE T.R.RAVI** **MONDAY, THE 28TH DAY OF SEPTEMBER 2020 / 6TH ASWINA, 1942** **W.A.No.684 OF 2020** **AGAINST THE JUDGMENT IN WP(C).NO.23372/2019(V) DATED 07.01.2020 OF HIGH COURT OF KERALA** ## **APPELLANT/ PETITIONER IN WP(C):-** **K.A.SANTHOSH KUMAR, AGED 53 YEARS S/O. SHRI K. AMBUJAKSHAN, MYNAKAM, 36B, VAIDYASALA NAGAR, ASHRAMAM, KOLLAM DISTRICT.** **BY ADVS. SRI.M.V.BOSE SRI.VINOD MADHAVAN SMT.P.M.MAZNA MANSOOR** ## **RESPONDENTS/ RESPONDENTS 1 & 2 & ADDL.RESPONDENTS 3 & 4 IN WP(C):-** **1 THE STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.** **2 THE STATE OF KERALA, REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY, INDUSTRIES AND COMMERCE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695 001.** **3 THE KERALA INDUSTRIAL INFRASTRUCTURE DEVELOPMENT CORPORATION (KINFRA), SASTHAMANGALAM, THIRUVANANTHAPURAM - 695 010, REPRESENTED BY ITS MANAGING DIRECTOR.** **WA.684/2020 & - 2 - WP(C).6505/2017** **4 SANTHOSH KOSHY THOMAS, S/O. T.P THOMAS, MANAGING DIRECTOR, KERALA INDUSTRIAL INFRASTURCTURE DEVELOPMENT CORPORATION (KINFRA) SASTHAMANGALAM, THIRUVANANTHAPURAM, RESIDING AT 'VNRA 11', TC 3/458(1), OPP. KAIRALI NAGAR, T.K DIVAKARAN ROAD, MUTTADA P.O, KOWDIAR VILLAGE, THIRUVANANTHAPURAM TALUK, THIRUVANANTHAPURAM 695 025** **R1 & R2 BY SMT.M.R.SREELATHA, SPECIAL GP TO A.G. R3 & R4 BY ADV. SHRI.P.U.SHAILAJAN, SC, KINFRA** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 28.09.2020, ALONG WITH WP(C).6505/2017(K), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WA.684/2020 & - 3 - WP(C).6505/2017** # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **MONDAY, THE 28TH DAY OF SEPTEMBER 2020 / 6TH ASWINA, 1942** ## **WP(C).No.6505 OF 2017** ## **PETITIONER/S:** **K.A SANTHOSH KUMAR, AGED 50 YRS, S/O.SHRI K.AMBUJAKSHAN, MYNAKAM, 36B, VAIDYASALA NAGR, ASHRAMAM, KOLLAM DISTRICT.** **BY ADVS. SRI.M.V.BOSE SRI.JOBY JACOB PULICKEKUDY SRI.JOBY JACOB SRI.VINOD MADHAVAN** ## **RESPONDENT/S:** **1 THE STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM -695001. 2 THE STATE OF KERALA, REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY, INDUSTRIES AND COMMERCE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM -695 001.** **R1 & R2 BY SMT.M.R.SREELATHA, SPECIAL G.P TO A.G.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28.09.2020, ALONG WITH WA.684/2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WA.684/2020 & WP(C).6505/2017** **- 4 -** **K.Vinod Chandran & T.R.Ravi, JJ. --------------------------------------------W.A.No.684 of 2020 & W.P(C)No.6505 of 2017-K --------------------------------------------Dated this the 28[th] day of September, 2020** ## **JUDGMENT** **Vinod Chandran,J.** **The appellant impugns the judgment of the learned Single Judge which refused the relief prayed for to set aside the termination order and continue the appellant for a minimum period of three years as the Managing Director of the 3[rd] respondent Corporation. Though the additional 4[th] respondent who has been appointed to the post after the termination of the appellant has been impleaded, there is no relief sought against him.** **2. Sri.Vinod Madhavan, learned Counsel for the appellant would contend that right from the date of his appointment, he had been seeking specification of the terms and conditions on which such appointment has been made. In fact, though he was selected there was undue delay in carrying out the appointment which led to the filing of WP(C) No.6505 of 2017. While the matter was pending, he was appointed and he joined on 4.2.2017 as Managing Director of the 3[rd] respondent Corporation. When he was continuing so his remuneration was fixed but the tenure of his** **WA.684/2020 & - 5 - WP(C).6505/2017** **appointment was never specified. When the appellant detected some misdemeanors and initiated proceedings against certain employees, who had powerful political support, he fell into the bad books of the Government. Before even completing two years in the post, he was unceremoniously terminated on 25.7.2019, allegedly by fixing his tenure to be till that date.** **3. It is submitted that Ext.P7 prescribes appointment of Chief Executive Officers (CEO) in Public Sector Undertakings (PSU) to be for a period of three years from the date of appointment. The documents produced as Exts.P12 to P16 indicates that in the very same Corporation, earlier appointments were made for a period of three years and extensions were also granted for three years. The appellant's terms of service were not fixed despite repeated reminders and he was terminated from service as per Ext.P10. The document produced as Ext.P20, the response to a query made under Right to Information Act specifically indicates that there was no reason why the Government declined its pleasure for continuance of the appellant in the post. The learned Counsel would rely on the decisions in** _**Union of India and others v. Major S.P.Sharma and others**_ **[** _**(2014) 6 SCC 351**_ **] and** _**B.P.Singhal v.**_ **WA.684/2020 & WP(C).6505/2017** **- 6 -** _**Union of India and another**_ **[** _**(2010 6 SCC 331**_ **] to contend that the doctrine of pleasure does not confer a license to act arbitrarily, capriciously or whimsically. Reliance is also placed on** _**S.G.Jaisinghani v. Union of India**_ **[** _**(1967) 2 SCR 703**_ **] to assail the action of the Government in not having specified a tenure for his appointment, which inaction alone has led to the capricious and whimsical act of termination. It is argued that Ext.R1(b) Rules, produced by the respondent, though does not specify notice period in the event of termination or removal; an incumbent Officer on resignation has to give 3 months notice in writing to the Government. Thus a provision has to be read into the Rules, that even termination simpliciter effected by the Government has to be with notice, unless it is on expiry of the tenure itself. The learned Counsel asserted that going by the documents available in the records, the appellant had a reasonable legitimate expectation that his appointment would be for a period of three years. His termination is punitive and not a fair exercise of the doctrine of pleasure. The appellant, according to his Counsel, is liable to reinstated to be continued for the balance period of three years from the** **date of his appointment.** **WA.684/2020 & WP(C).6505/2017** ## **- 7 -** **4. The learned Special Government Pleader, Smt.M.R.Sreelatha asserts that the appellant was removed from his post on a termination simpliciter without any stigma attached to the same. The allegation of** _**malafides**_ **in so far as the proceedings initiated by the appellant against an officer, who was dealing with land acquisition matters; has been explained in the counter affidavit. It is also submitted that there was pending a Vigilance Enquiry against the appellant, which again was not referred to in the order of termination. Nor was it a reason to remove the appellant.** **5. Ext.P7 is said to be superseded by Ext.R1(c). The absolute authority to fix the term of office is on the Government and the Chief Executive Officer's post in a State PSU is to be continued on the pleasure of the Governor. The rules though providing for three months notice period on resignation by an incumbent, does not make liable the Government to such notice perfectly understating the principles behind the doctrine of pleasure. The Government has merely fixed the term by Ext.P10 order and issued a termination simpliciter on expiry of the term fixed by the Government. The Special Government Pleader seeks dismissal of the appeal.** **WA.684/2020 & - 8 - WP(C).6505/2017** **6. The learned Counsel for the appellant has strenuously argued for the position that he was entitled to be appointed for a period of three years and that the Government for ulterior motives refused to fix the terms and conditions in the order of appointment. It is the failure of the Government to fix such term that led to the arbitrary termination. We are unable to accept the said argument of the appellant, especially since he had once before approached this Court. We have called for W.P(C).No.6505 of 2017, which is still pending, to be heard along with this appeal. Ext.P4 appointment order was dated** **4.10.2016. On 7.10.2016 by Ext.P6 the appellant had requested that the terms and conditions of appointment be issued to him; which was not responded to by the Government. The Government also did not appoint him, in which circumstance, WP(C)No. 6505 of 2017 was filed on 27.2.2017. It only sought for appointment and did not raise a plea with respect to fixing the terms and conditions of appointment. The appellant joined while the Writ Petition was pending on 4.2.2017 and was continuing in the post. The appellant having approached this Court with a Writ Petition which was pending while he was continuing, never raised a contention before Court that he is also entitled to be** **WA.684/2020 & - 9 - WP(C).6505/2017** **fixed with the terms and conditions. In fact, while he was continuing in the post, he was fixed with a remuneration which was paid during the service period. Even then he did not seek to amend the writ petition seeking a relief for fixation of tenure. It is trite that when an aggrieved person approaches a Court of law, he should, at the first instance plead and seek the entire gamut of reliefs he is entitled to on the aspect against which he has sought redress. If he does not agitate any such cause at the first instance then he is deemed to have waived his right to seek that particular entitlement. It is too late in the day to seek for fixation of a specific tenure for continuance in a post, when the incumbent has already been removed. As far as the other service conditions, Ext.R1(b) provides by Clause 9(b) that a person who is not deputed from Government service would be governed, in so far as the conditions of service are concerned, by the rules as applicable to an Officer in Scale A of the PSUs of the State. The appellant does not have a contention based on any such Rule that there is a fixed tenure prescribed for a CEO's post in a PSU.** **7. The fact remains that the tenure of appointment was never specified by the Government. Ext.P7, though** **WA.684/2020 & - 10 - WP(C).6505/2017** **speaks of a tenure of three years, is not applicable since it was issued as early as on 7.10.2006. Ext.R1(a) is the enactment by which the Corporation was constituted. Under Section 6(2) the Managing Director of the Corporation holds office for such term as the Government specifies. Ext.R1(b) is the Kerala Industrial Infrastructure Development Rules, 2008 brought in after Ext.P7 which also by Rule 3 reaffirms the power on the Government to fix the tenure of appointment of a Managing Director. The said Rule further enables the Government to terminate the service of a Managing Director without any reason therefor. Ext.R1(c) a subsequent Government Order also is in consonance with the Rules and by Clause 3 reiterates the rule position. This Court does not find any reason to rely on Exts.P12 to P16 documents since those were cases in which the tenure was specifically provided as three years. Merely for reason of earlier appointments having specified a tenure of three years, that would not enable the appellant also to be fixed with the very same tenure. Even if the tenure is fixed, the Government has the power to remove the Managing Director without assigning any reasons, which is a reflection of the pleasure doctrine as declared in Article 310 of the Constitution of India. In the above view of the matter, we** **- 11 -** **WA.684/2020 & WP(C).6505/2017** **are of the definite opinion that there is no question of any direction being issued to the Government to fix the tenure of appointment of the appellant nor is there any ground to reinstate the appellant and continue him in employment.** **8. Now we come to the justifiability of Ext.P10. Before we go to it, we notice the specific contention of the learned Counsel for the appellant that the learned Single Judge was led by the fact that there was a Vigilance Enquiry pending against him. The learned Counsel also invited us to look into the allegations raised in such enquiry which we declined. We are not so much on the sufficiency of reasons in a judicial review, as we are on the existence of reasons, especially of an exercise in declining continuance in a post, which is at the pleasure of the Governor. We are, however, of the opinion that the finding of the learned Single Judge that the factum of pending Vigilance Enquiry would restrain the Court from interfering with the removal cannot be sustained. Even the Government does not have a contention that the removal was on account of such an enquiry initiated. The counter affidavit specifically terms Ext.P10 to be a termination simpliciter; not in any manner casting a stigma on the** **WA.684/2020 & WP(C).6505/2017** ## **- 12 -** **appellant (para 21 and 22 of counter affidavit dated 27.9.2019).** **9. There can be no doubt that exercising the pleasure doctrine, the Government could remove a CEO without any reason assigned. However, as has been held by the Hon'ble Supreme Court in** _**B.P.Singhal**_ **it cannot be an arbitrary, capricious or whimsical exercise of power. Though the removal should be without any stigma attached, there should be some valid cause for withdrawal of the pleasure as held in** _**B.P.Singhal.**_ **It is in this perspective that the impugned order at Ext.P10 has to be looked at.** **10. Ext.P10 has two limbs. In para 2 which comprises the first limb, the term of the appellant as M.D is decided to be fixed upto 27.7.2019. In the second limb, in the same breath, the appellant is terminated. Obviously the fixation of tenure was for the purpose of termination. If the removal is on expiry of tenure, there is no reason why the word termination should be used. If the removal was a termination simpliciter as contended by the Government there was no reason to fix the tenure of appointment, to that very date on which the order was issued.** **11. Ext.P20, the response to the RTI query assumes relevance in finding out the compelling reason behind the** **WA.684/2020 & WP(C).6505/2017** ## **- 13 -** **removal; which even according to** _**B.P.Singhal**_ **should at least be available in the files. The query as to the attendant circumstances or reasons is answered by Ext.P20. The note at Ext.P20 again speaks of fixing of the term up to 27.7.2019 and the removal from the Board of Directors as also from the office of M.D. The files indicate that though the Principal Secretary has opined that the Government is fully empowered to terminate the services of the appellant without citing any reason; it is also cautioned that the Courts may interfere on due process for removal having not been followed. The Hon'ble Minister, however, overruled the objection and directed termination of service relying on Rule 3 of the Rules of 2008. On the totality of the circumstances as revealed form the records, we are of the opinion that the termination was punitive and the files do not disclose any reasons for removing him as has been declared in** _**B.P.Singhal**_ **.** **12. A somewhat similar exercise of the pleasure doctrine in removing the First Vice Chancellor of a University was considered by a Division Bench of this Court in** _**Ashok v. Kerala Veterinary and Animal Sciences University**_ **[** _**2012 (3) KLT 829**_ **]. Though administrative reasons were stated, the Court found from the files no such** **WA.684/2020 & WP(C).6505/2017** ## **- 14 -** **administrative exigency as pleaded by the Government. There was an allegation of the incumbent having published an article against the policies of the Government, for which no disciplinary action was taken. It was found that the removal was not for any** _**bonafide**_ **reason. In the instant case interestingly the Government proclaims that there is absolutely no reason behind the termination. But as we found, to serve the purpose of termination, an order was issued fixing the tenure in such a manner as to terminate the appellant on the date of issue of that order itself. The removal of a person appointed after a due selection process should be on some valid ground even when there is an exercise of the doctrine of pleasure or withdrawal of the pleasure. The termination being found to be not proper, we have to mould the relief since the appointment was not a permanent one, the period of which was never specified till the order of termination. We have already held that there can be no ground for reinstatement or continuance. In the above circumstance considering the peculiar facts arising herein, we are of the opinion that it would be sufficient to set aside the impugned order, deeming the appellant to have been relieved of his duties with three months notice pay.** **WA.684/2020 & - 15 - WP(C).6505/2017** **13. We are conscious of the fact that if the power to remove was properly exercised, then there would have been no question of notice even going by the Rules. The Government was not able to satisfy us as to the removal being for valid or** _**bonafide**_ **reasons. This is also evident from the endorsement of, none other than the Minister, that Rule 3 be invoked to terminate the incumbent without assigning any reasons. Neither is any reason evident from the files nor is it contended by the State that there was any reason behind the termination other than the term having been fixed; which fixation was made by an order up to a particular day; which is also the date of the order, a clear attempt to terminate the incumbent.** **14. We deem it appropriate to grant the appellant the above relief with three months notice pay, which is the requirement when an incumbent voluntarily resigns before expiry of his or her term. What was found by the Executive Government to be reasonable in the context of a resignation by an incumbent, would be a reasonable requirement as against the Government too, when a termination is made without any valid reason. The judgment of the learned Single Judge would stand set aside to the extent herein above found and the appeal would stand partly** **WA.684/2020 & - 16 - WP(C).6505/2017** **allowed. The Government shall pay the notice pay of three months, in lieu of notice, within a period of one month with interest @6% from the date of Ext.P10 order. If the above payment is not made within a period of three months from today, the interest shall run @9%. The differential amount of interest @3%, the Government will be free to recover from the Officer of the Government, who is responsible for the delay occasioned.** **W.A.No.684/2020 would stand partly allowed and WP(C)No.6505/2017 would stand dismissed as** _**infructuous**_ **. The parties shall suffer their respective costs.** **Sd/K.VINOD CHANDRAN JUDGE** **Sd/T.R.RAVI JUDGE** **Sn.** **WA.684/2020 & - 17 - WP(C).6505/2017** ## **APPENDIX OF WA 684/2020** ## **APPELLANT'S ANNEXURES:** **ANNEXURE A1:** **A true copy of the order, dated 17/06/2019, in I.A.No.255/2019, in Company Petition No.9/2011 the Indore bench of the Hon'ble High Court of Madhya Pradesh.** **ANNEXURE A2:** **A true copy of the order, dated 29/07/2019, passed by the Indore bench of the Hon'ble High Court of Madhya Pradesh in COMA No.04/2019.** **WA.684/2020 & - 18 - WP(C).6505/2017** ## **APPENDIX OF WP(C) 6505/2017** ## **PETITIONER'S/S EXHIBITS:** - **EXT.P1 TRUE COPY OF THE COMMUNICATION DT.30.06.2016 ISSUED BY THE GOVERNMENT TO THE SECRETARY RIAB** - **EXT.P2 TRUE COPY OF THE ADVERTISEMENT INVITING APPLICATIONS** - **EXT.P3 TRUE COPY OF THE COMMUNICATION DT.27.08.2016 ISSUED BY THE ADDITIONAL SECRETARY DEPARTMENT OF INDUSTRIES, DEPARTMENT OF KERALA.** - **EXT.P4 TRUE COPY OF THE G.O(RT)NO.1050/2016/ID DT.04.10.2016 ISSUED BY THE GOVERNMENT APPOINTING THE PETITIONER HEREIN AS MANAGING DIRECTOR OF KINFRA** - **EXT.P5 TRUE COPY OF THE LETTER DT.07.10.2016 ISSUED BY THE PETITIONER TO THE SECRETARY, PUBLIC SECTOR RESTRUCTURING & INTERNAL AUDIT BOARD, ACKNOWLEDGING THE RECEIPT OF EXHIBIT P4.** - **EXT.P5(A) TRUE COPY OF THE LETTER DT.08.10.2016 ISSUED BY THE PETITIONER TO THE ADDL.CHIEF SECRETARY (INDUSTRIES AND COMMERCE) ACKNOWLEDGING THE RECEIPT OF EXHIBIT P4** - **EXT.P6 TRUE COPY OF THE COMMUNICATION DT.01.11.2016 ISSUED BY THE PETITIONER HEREIN TO THE 2ND RESPONDENT** - **EXT.P7 TRUE COPY OF THE LETTER DT.03.12.2016 ISSUED BY THE PETITIONER HEREIN TO THE 1ST RESPONDENT** - **EXT.P8 TRUE COPY OF THE COMMUNICATION DT.01.02.2017 ISSUED BY THE VIGILANCE AND ANTI-CORRUPTION BUREAU** - **EXT.P9 TRUE COPY OF THE REPRESENTATION DT.16.02.2017 PREFERRED BY THE PETITIONER.** - **EXT.P10 TRUE COPY OF THE LIST OF CANDIDATES RECOMMENDED BY THE RIAB FOR VARIOUS PUBLIC SECTOR UNDERTAKINGS UNDER VARIOUS SECTORS.** - **EXT.P11 TRUE COPY OF THE LIST OF CANDIDATES APPOINTED AS MANAGING DIRECTORS OF VARIOUS PUBLIC SECTOR UNDERTAKINGS.** **[TRUE COPY]**