Hon'ble S.C. Chaurasia,J.
(Delivered by Hon. Devi Prasad Singh, J.) 1- Instant writ petition under Article 226 of the Constitution of India has been preferred in the nature of quo-warranto against opposite party no. 3, who happens to be the Chairman, U.P. State Electricity Regulatory Commission. It is pleaded that under the statutory provision, he was not eligible for selection and appointment because of interest involved in the State of U.P. of M/s J.P. Power Ventures Ltd. of which he was Vice President.
2- The petitioner is General Secretary (Jal Vidyut Ikai) (Uttar Pradesh Vidyut Mazdoor Sangh) of an employees' association of the same establishment. The petitioner states that he has concern for the purity of system. It is stated that on his request the scam involving Rs. 5000/- crores was referred for C.B.I. inquiry by the Chief Minister of the State on 2.3.2008. According to learned counsel for the petitioner, the post of Chairman, State Electricity Regulatory Commission (in short Commission) fell vacant on 21.10.2008. The selection committee was constituted by the Government of Uttar Pradesh on 22.12.2008 comprising of three members headed by a retired judge of the High Court and two other members, i.e., Chief Secretary of the State of U.P. and Chairman of the Central Electricity Commission. Thirty persons had applied for the post including respondent no. 3-Rajesh Awasthi and the meeting of the selection committee was convened on 26.12.2008. The selection committee selected two persons, out of thirty, namely, Rajesh Awasthi and one Anil Kumar Asthana and sent the name to the Government. However, while sending the name, the selection committee put a rider that in case the State took a decision to appoint respondent no. 3, then the compliance of the provision contained in sub-section (5) of Section 85 of the Electricity Act, 2003 ( in short the Act) be ensured. In pursuance to the request made under the RTI Act, the information with regard to selection was given to one Shri Suresh Chandra Sharma.
3- The qualification with regard to post of Chairman State Regulatory Commission as provided under sub-section (3) of Section 3 of U.P. Electricity Reforms Act, 1999 is as under:-
"The Commission shall consist of a Chairperson and two Members to be appointed by the State Government from amongst the persons possessing the following qualifications:-
(a) one person having Bachelor's Degree in Engineering with experience of not less than twenty-five years in the field of generation, transmission, or supply of electricity and having worked for at least two years on the post of a Chief Engineer or on any other post equivalent thereto in a State Electricity Board or any other utility;
(b) one person having Bachelor's Degree with experience of not less than twenty-five years in the field of administration and having held a post of Additional Secretary to the Government of India or a post equivalent thereto under the Central or the State Government having at least five years experience in one or more departments of finance, power, industry and commerce of Government;
(c)one person having Bachelor's Degree in any discipline of Economics, Commerce, Accountancy, Law or Management with experience of not less than twenty-five years and having worked as a Professor in an Indian Institute of Management or as a whole time Director in a Public Financial Institution specified under Section 4-A of the Companies Act, 1956 or as whole time Director in a Scheduled Bank within the meaning of the Reserve Bank of India Act, 1934 or as a Joint Secretary to the Government or India or a District Judge or has held any other post equivalent thereto."
4- According to the information given under the RTI Act, it appears that the procedure with regard to selection and the qualification has been assessed and procedure for selection process as well as qualification criteria has been applied keeping in view the provision contained in U.P. State Electricity Reforms Act, 1999. It further provides that the procedure with regard to selection shall be applied as given in U.P. Electricity Regulatory Commission (appointment and service conditions of the president and members) Rules, 1999.
5- While pressing for relief in the nature of quo warranto, learned counsel for the petitioner submits that the selection committee had not discharged its obligation in accordance with the procedure prescribed under the Rule and statutory provision as contained in the Act. It is further stated that in view of provision contained in sub-section (5) of Section 85 of the Act, respondent no. 3 could not be selected being an employee of M/s J.P. Power Ventures Ltd. Learned counsel for the petitioner submits that M/s J.P. Power Ventures Ltd. has established two power houses in the State of U.P. situated at Bara and Karchana, District-Allahabad. He has submitted that undue favour was extended to Bara and Karchhana power project by approving higher rate of Rs. 3.02 and Rs. 2.92 per unit, whereas, earlier it was Rs. 2.60 and Rs. 2.59 respectively. Further submission is that the respondent no. 3 was not competent to hold the office and selection was not done in accordance with the procedure prescribed by the Act. Learned counsel for the petitioner submits that even after assumption of duty, respondent no. 3 extended undue favour to Bara and Karchhana power project. He submits that it was the duty of selection committee to comply with the provision contained in sub-section (5) of Section 85 of the Act but that was delegated to the State Government. He further submits that the recommendation of selection committee was conditional one and the State Government could not take care to take the decision in terms of sub-section (5) of Section 85 of the Act. The recommendation of selection committee containing condition envisaged of sub-section (5) of Section 85 is reproduced as under:-
^^mRrj izns'k jkT; fo|qr fu;ked vk;ksx ds v/;{k ds p;u gsrq xfBr p;u lfefr dh cSBd fnukad 26-12-2008 dk dk;Zo`Rr mRrj izns'k fo|qr fu;ked vk;ksx ds v/;{k] Jh fot; dqekj fnukad 21-10-2008 dks viuk dk;Zdky iwjk djus ds mijkUr lsokfuo`Rr gks pqds gSA 2- fo|qr vf/kfu;e] 2003 dh /kkjk&84 vkSj 85 ds vUrxZr mRrj izns'k fo|qr fu;ked vk;ksx ds v/;{k ds p;u ds laca/k esa dk;Zokgh dh tk jgh gSA iz'uxr fjfDr ds laca/k esa p;u lfefr dk xBu ÅtkZ foHkkx dh vf/klwpuk fnukad 22-12-2008 }kjk fd;k x;k gSA fofHkUu [email protected]@laoxksZa ls bPNqd 30 vH;fFkZ;ksa ds ck;[email protected] izkIr gq;sA 3- iz'uxr fjfDr ds p;u gsrq lfefr dh cSBd fnukad 26-12-2008 dks vk;ksftr dh x;hA p;u lfefr }kjk v/;{k] mRrj izns'k fo|qr fu;ked vk;ksx ds in gsrq 30 vkosndksa ds ck;ksMkVk ij fopkj djrs gq, fuEufyf[kr dks Js"Brk dze esa p;fur fd;k x;k%& 1- Jh jkts'k voLFkh* 2- Jh vfuy dqekj vLFkkuk *;fn Jh voLFkh dks 'kklu }kjk fu;qfDr fd;k tkrk gS rks izFker% fo|qr vf/kfu;e] 2003 dh /kkjk 85¼5½ ds izkfo/kkuksa dks lqfuf'pr dj fy;k tk,A g0v0 g0v0 ¼jkds'k ukFk½ ¼vrqy dqekj xqIrk½ v/;{k eq[; lfpo dsUnzh; fo}qr izkf/kdj.k] mRrj izns'k 'kklu g0v0 fnukad 26-12-2008 ¼U;k;ewfrZ Jh ,l0,l0 dqyJs"B½ ¼lsokfuo`Rr½** 6- It has been stated that because of higher rate given to J.P. Power Ventures Ltd., the State of U.P. shall suffer loss of Rs. 30,000/- crores during the span of twenty-five years It is further stated that as Chairman, State Regulatory Commission, the opposite party no. 3 shall take decision with regard to power houses of M/s. J.P. Power Ventures Ltd. and shall extend undue favour.
7- With regard to qualification of respondent no. 3, it is pleaded by the learned counsel for the petitioner that the respondent no. 3 has got no experience in generation, distribution and transmission of power. He was Civil Engineer in NTPC and left it while holding the post of DGM (Civil) which has no relation with generation, distribution or transmission of power. Being Civil Engineer, respondent no. 3 has got experience in construction and maintenance of building, road etc. 8- Learned counsel for the petitioner submits that the post of DGM in NTPC is lower rank to the post of Chief Engineer in M/s. J.P. Power Ventures Ltd. Respondent no. 3 had worked upto 44 days as Vice President (in counter affidavit admits the working period of 41 days). According to the petitioner's counsel, respondent no. 3 does not possess qualification prescribed under the Rules.
9- While defending the selection and appointment of respondent no. 3, Shri J.N. Mathur, learned Additional Advocate General appearing for respondent nos. 1 and 2 and Shri S.K. Kalia appearing for respondent no. 3 have submitted that the petitioner has got no locus to seek direction in the nature of quo warranto. It is stated that action of the petitioner is not bonafide. Writ petition has been preferred after inordinate delay and he (petitioner) himself was reprimanded by this Court and faced departmental proceedings. Mr. J. N. Mathur further submits that the petitioner is a mischief monger and has not approached this Court with clean hands.
It has also been submitted by the learned Senior Counsels appearing on behalf the respondents that the provision contained in Section 85 of the Act has been applied and vacancy was advertised by intimation. However, it is not disputed that no advertisement was made in the newspaper rather, applications were invited intimating different authorities including the Ministry of GOI, CAG, CEA, all Secretary of Power to different states of the country, CBDT, PSUs power sectors and others. In reply to para 5 of the writ petition, in para 11 the State has not disputed that the vacancy was not advertised in newspaper. With regard to compliance of sub-section (5) of Section 85, the State has also not disputed the averments contained in para 8 of the writ petition. Reply given in para 13 and 14 filed on behalf of the State is re-produced as under:-
"para -13. That the contents of paragraphs 7 of the writ petition relates to the provisions of Section 84 of 2003 Act hence need no reply.
para- 14. That the contents of paragraph 8 of the writ petition as stated are denied being wholly incorrect. The submission of the petitioner that name of respondent no. 3 is at serial no. 20 amongst 30 candidates who applied is highly misconceived for the reason that the said list is not a merit list based on selection, rather, it is only a list of candidates who had applied for the post. The said list is not in the order of merit."
10- With regard to applicability of rule relied upon by the learned counsel for the petitioner, it is stated that the rule has been repealed in pursuance to the provision contained in Section 185 of the Act, hence shall not be applicable.
11- It is not disputed that the respondent no. 3 had worked in M/s. J.P. Power Ventures Ltd. on the post of Vice President. It is also not disputed that while sanctioning the higher per unit tariff rate for Bara and Karchhana power houses, there has been deviation with statutory guideline, but it is stated that it was approved on 28.8.2008 and 13.10.2008 respectively and financial bid was also opened on 6.11.2008, i.e. much before the respondent no. 3 joined M/s. J.P. Power Ventures Ltd. on 17.11.2008, to quote relevant portion of the counter affidavit of the State Government.
"Para 19. That the contents of paragraph 16 of the writ petition as stated are misconceived and the same are denied. In reply thereof it is submitted that the respondent no. 3 had earlier worked as Vice President J.P. Power Ventures Private Ltd. Design and Engineering for a very brief period of 41 days i.e. from 17.11.2008 to 27.12.2008. As already submitted above the respondent no. 3 fulfils the qualification as prescribed for the post in question.
Para 20. That the contents of paragraphs 17 of the writ petition as stated are denied and in reply thereto it is submitted that the respondent no. 3 had nothing to do with the processing of tender for installation of Bara and Karchhna Power Projects in district Allahabad. The Central Government has framed two guidelines for processing of tariff through bidding process.
The Central Government has framed guidelines for processing of tariff through competitive bidding process.
As per the provisions of the aforesaid guidelines the approval of the appropriate Commission (in the instant case, the State Electricity Regulatory Commission) is to be sought in the event of there being any deviation from bidding conditions as given in the guidelines.
So far as the processing of Bara and Karchana Power Projects are concerned, the bidding process as prescribed in the guidelines were followed which prescribed for listing of prospective, qualified eligible bidders through tendering known as 'Request For Qualification' (RFQ) and after identification of qualified bidders, anotehr bid is invited quoting price and other details which is called 'Request For Proposal' (RFP). In the case of aforesaid two Power Projects, U.P. Power Corporation Ltd. was assigned the job of initiating bidding process for selection of developers as per the Competition Bidding Guidelines by the procurers of the Electricity i.e. five DISCOMS (Distribution Companies) owned by the U.P. Power Corporation.
It is also noteworthy that in case of Karchana Project RFQ and RFP involving the deviations from statutory guidelines, if any, was approved on 28.8.2008 and 13.10.2008 respectively and the financial bids were also opened on 6.11.2008 i.e. much before the respondent no. 3 joined M/s. J.P. Power Ventures Ltd. on 17.11.2008.
In the aforesaid circumstances, it cannot be said that respondent no. 3 was in any manner associated or involved in the bidding process of Karchana Project."
12- From the pleading on record, there appears to be no dispute that the respondent no. 3 was working as a Vice President in M/s. J.P. Power Ventures Ltd. at the time when he was selected by the selection committee. It is also not borne out from the record that any decision was taken in pursuance to recommendation of selection committee and finding was recorded with regard to entitlement of respondent no. 3 keeping in view the provision contained in sub-section (5) of Section 85 of the Act.
Under these backdrops, the controversy in question requires adjudication.
13- Learned counsel for the petitioner has relied upon the cases reported in (2009) 7 SCC 1 N.Kannadasan Vs. Ajoy Khose and others, (2003) 4 SCC 712 High Court of Gujrat and another vs. Gujarat Kishan Mazdoor Panchayat and others, (2002) 1 SCC 33 Ghulam Qadir vs. Special Tribunal and others, (2005) 8 SCC 202 Centre for Public Interest Litigation and another vs. Union of India and another, 15 FLR 122 Shree Hanuman Foundries Ltd. vs. Hem Ranjan Deb and others, 1965 AIR (SC) 491 University of Mysore vs. C.D.Govinda Rao and (2009) 8 SCC 273 Mahesh Chandra Gupta vs. Union of India.
14- On the other hand, learned counsel for the State has referred a case reported in (2006) 11 SCC 731 Retired Armed Forces Medical Association & others vs. Union of India and others and on behalf of the opposite party no. 3, Shri S.K.Kalia, learned Senior Counsel has relied upon the cases reported in 1988(Supp) SCC 127 A.N.Shastry vs. State of Punjab and others, AIR 1975 Dehli 66 P.L.Lakhanpal vs. Ajit Nath Ray and AIR 1987 Kerala 140 K.J.Joseph vs. Hon'ble Justice Sukumaran and others.
STATUTORY PROVISION 15- The Electricity Act, 2003 (in short the Act) contains the provision with regard to tariff and appointment of Chairman of the Commission. The State Commission is constituted under Section 82 of the Act. According to Section 82 of the Act, the State Commission shall be a body corporate having perpetual succession and a common seal, with power to acquire, hold and dispose of the property, both movable and immovable, and to contract and shall, by the said name, sue or be sued. Under sub-section (5) of Section 82, the Chairperson and Members of the State Commission shall be appointed by the State Government on the recommendation of the selection committee referred to in section 85. For convenience, Section 82 of the Act is reproduced as under:-
"Section 82. Constitution of State Commission-(1) Every State Government shall within six months from the appointed date, by notification, constitute for the purposes of this Act, a Commission for the State to be known as the (name of the State) Electricity Regulatory Commission:
Provided that the State Electricity Regulatory Commission, established by a State Government under section 17 of the Electricity Regulatory Commissions Act, 1998 (14 of 1998) and the enactments specified in the Schedule, and functioning as such immediately before the appointed dates shall be the State Commission for the purposes of this Act and the Chairperson, Members, Secretary, and officers and other employees thereof shall continue to hold office, on the same terms and conditions on which they were appointed under those Acts:
Provided further that the Chairperson and other Members of the State Commission, appointed, before the commencement of this Act, under the Electricity Regulatory Commissions Act, 1998 (14 of 1998) or under the enactments specified in the Schedule, may, on the recommendations of the Selection Committee constituted under sub-section (1) of section 85, be allowed to opt for the terms and conditions under this Act by the concerned State Government.
(2) The State Commission shall be a body corporate by the name aforesaid, having perpetual succession and a common seal, with power to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by the said name, sue or be sued.
(3) The head office of the State Commission shall be at such place as the State Government may, by notification, specify.
(4) The State Commission shall consist of not more than three Members including the Chairperson.
(5) The Chairperson and Members of the State Commission shall be appointed by the State Government on the recommendation of a Selection Committee referred to in section 85.
16- The qualification for appointment of Chairperson has been given in Section 84 of the Act. According to Section 84, the Chairperson and the Members of the State Commission shall be persons of ability, integrity and standing who have adequate knowledge of, and have shown capacity in, dealing with problems relating to engineering, finance, commerce, economics, law or management. Apart from the knowledge of the subject, importance has been given to ability, integrity and experience of the person concern. For convenience, Section 84 of the Act is reproduced as under:-
"Section 84. Qualifications for appointment of Chairperson and Members of State Commission.-(1) The Chairperson and the Members of the State Commission shall be persons of ability, integrity and standing who have adequate knowledge of, and have shown capacity in, dealing with problems relating to engineering, finance, commerce, economics, law or management.
(2) Notwithstanding anything contained in sub-section (1), the State Government may appoint any person as the Chairperson from amongst persons who is, or has been, a Judge of a High Court:
Provided that no appointment under this sub-section shall be made except after consultation with the Chief Justice of that High Court.
(3) The Chairperson or any other Member of the State Commission shall not hold any other office.
(4) The Chairperson shall be the Chief Executive of the State Commission."
17- Section 85 deals with the Constitution of Selection Committee to select members of State Commission, which includes a person, who has been a judge of the High Court as Chairperson of the Selection Committee, the Chief Secretary of the State and the Chairperson of the Authority or the Chairperson of the Central Commission. For convenience, Section 85 of the Act is reproduced as under:-
"Section 85-Constitution of Selection Committee to select Members of State Commission- (1) The State Commission shall, for the purposes of selecting the Members of the State Commission, constitute a Selection Committee consisting of-
(a) A person who has been a Judge of the High Court ..Chairperson;
(b) the Chief Secretary of the concerned State ...Member;
(2) The State Government shall, within one month from the date of occurrence of any vacancy by reason of death, resignation or removal of the Chairperson or a Member and six month before the superannuation or end of tenure of the Chairperson or Member, make a reference to the Selection Committee for filling up of the vacancy.
(3) The Selection Committee shall finalise the selection of the Chairperson and Members within three months from the date on which the reference is made to it.
(4) The Selection Committee shall recommend a panel of two names for every vacancy referred to it.
(5) Before recommending any person for appointment as the Chairperson or other Member of the State Commission, the Selection Committee shall satisfy itself that such person does not have any financial or other interest which is likely to affect prejudicially his functions as Such Chairperson or Member, as the case may be.
(6) No appointment of Chairperson or other Member shall be invalid merely by reason of any vacancy in the Selection Committee."
So far as the constitution of committee is concerned, there appears to be no defect. The question cropped up whether the committee has discharged its function in accordance with the provision contained in Section 85 of the Act?
18- The argument advanced by the learned counsel for the petitioner is two fold. Firstly that sub-section (5) of Section 85 of the Act casts duty upon the selection committee to satisfy itself that such persons so selected have no financial or other interest which is likely to affect prejudicially his function as such Chairperson or Member, but it has not been done. Secondly; while sending recommendation, the selection committee had delegated its power to the State Government to ensure the compliance under sub-section (5) of Section 85 of the Act. Whether such delegation could have been done?
The post of Chairperson of the Commission is an important post. Section 62 of the Act deals with the determination of tariff in which it has been provided that Appropriate Commission shall determine the tariff in accordance with the provisions of the Act subject to fulfilment of necessary condition provided therein. Section 63 further provides that appropriate commission shall adopt the tariff and such tariff shall be determined through transparent process of bidding in accordance with the guidelines issued by the Central Government. Under Section 65 of the Act, the State Government has been empowered to extend subsidy to the consumer or class of consumer in the tariff determined by the Commission under Section 62 of the Act. Very important role has been assigned to the Commission under the Act. It shall be appropriate to reproduce sections 62 and 63 of the Act.
"Section 62. Determination of tariff- (1) The Appropriate Commission shall determine the tariff in accordance with the provisions of this Act for--
(a) supply of electricity by a generating company to a distribution licensee:
Provided that the Appropriate Commission may, in case of shortage of supply of electricity, fix the minimum and maximum ceiling of tariff for sale or purchase of electricity in pursuance of an agreement, entered into between the generating company and a licensee or between licensees, for a period not exceeding one year to ensure reasonable prices of electricity;
(b) transmission of electricity;
(c) wheeling of electricity;
(d) retail sale of electricity;
Provided that in case of distribution of electricity in the same area by two or more distribution licensees, the Appropriate Commission may, for promoting competition among distribution licensees, fix only maximum ceiling of tariff for retail sale of electricity.
(2) The Appropriate Commission may require a licensee or a generating company to furnish separate details, as my be specified in respect of generation, transmission and distribution for determination of tariff.
(3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required.
(4) No tariff or part of any tariff may ordinarily be amended, more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified.
(5) The Commission may require a licensee or a generating company to comply with such procedure as may be specified for calculating the expected revenues from the tariff and charges which he or it is permitted to recover.
(6) If any licensee or a generating company recovers a price or charge exceeding the tariff determined under this section, the excess amount shall be recoverable by the person who has paid such price or charge alongwith interest equivalent to the bank rate without prejudice to any other liability incurred by the licensee.
Section 63- Determination of tariff by bidding process-Notwithstanding anything contained in section 62, the Appropriate Commission shall adopt the tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government."
19- Though, it has been argued that the Commission consists of other members, but, ordinarily it may not be doubted that as a Chairperson of the Commission, a person selected in pursuance to Section 85 of the Act plays important role and may shift the balance while fixing tariff in case other members are more or less of weak stature or belong to one group or have political affiliation.
Sub-section (5) of section 85 seems to be mandatory that is why the legislature used the word "before recommending any person for appointment as Chairperson, selection committee shall satisfy itself", means duty has been assigned to the Selection Committee and not the State Government. Hence, at the face of statutory provision as contained in sub-section (5) of Section 85 it seems to be mandatory. The selection committee could not have delegated the power to the State Government and the satisfaction with regard to finance and other interest of the selectee should have been considered and recorded by the committee itself.
Sub-section (5) of section 85 should be read with sub-section (1) of Section 84 of the Act, which provides that a person so selected must be a person of ability, integrity and standing. Virtually, the selection committee had been bestowed with power to record its satisfaction with regard to ability, integrity, standing and involvement of financial and other interest in the State of U.P. which may prejudicially affect his or her function as Chairman of the Commission. It requires thorough investigation by the Selection Committee itself and not by the State Government.
20- It is settled law that every word of statute should be given a meaning, by considering the statute as a whole. While interpreting a statutory provision the entire section or whole of the statute should be considered, as the case may be. According to Maxwell on the Interpretation of Statutes (12th edition page 36) any construction which may leave without affecting any part of the language of a statute should ordinarily be rejected.
Relevant portion from to Maxwell on the Interpretation of Statutes (12th edition page 36) is reproduced as under:-
"A construction which would leave without effect any part of the language of a statute will normally be rejected. Thus, where an Act plainly gave an appeal from one quarter sessions to another, it was observed that such a provision, though extraordinary and perhaps an oversight, could not be eliminated."
21- In view of above the court should always avoid interpretation, which would leave any part of the provision to be interpreted without effect. While doing so every clause of a statute is to be construed with reference to the context and other clauses of the Act to make a consistent enactment of the whole statute. According to Maxwell (supra) statutory language should not be read in isolation but in its context.
While referring a decision of House of Lord reported in AG v. HRH Prince Ernest Augustus, 1957 (1) All ER 49 (HL) in a famous treatise Principles of Statutory Interpretation by Justice G.P.Singh the views of Lord Tucker has been discussed with approval as under (9th Edition page 34):-
"In an appeal before the House of Lords, where the question was of the true import of a statute, the Attorney-General wanted to call in aid the preamble in support of the meaning which he contended should be given to the enacting part, but in doing so was met by the argument on behalf of the respondent that where the enacting part of a statute is clear and unambiguous, it cannot be controlled by the preamble which cannot be read. The House of Lords rejected the objection to the reading of the preamble,. Although, ultimately it came to the conclusion that the enacting part was clear and unambiguous. VISCOUNT SIMONDS (LORD TUCKER agreeing) in that connection said: " " I conceive it to be my right and duty to examine every word of a statute in its context, and I use context in its widest sense as including not only other enacting provisions of the same statute, but its preamble, the existing state of the law, other statutes in pari materia, and the mischief which I can, by those and other legitimate means, discern that the statute was intended to remedy."
22- Thus the exposition ex visceribus actus is a long recognised rule of construction. Words in a statute often taken their meaning from the context of the statute as a whole. They are therefore not to be considered in isolation. Hon'ble Supreme Court in a case reported in AIR 1992 SC 1, Mohan Kumar Singhania Vs. Union of India has proceeded to held as under:-
"However, it is suffice to say that while interpreting a statute the consideration of inconvenience and hardships should be avoided and that when the language is clear and explicit and the words used are plain and unambiguous, were are bound to construe them in their ordinary sense with reference to other clauses of the Act or Rules as the case may be, so far as possible, to make a consistent enactment of the whole statute or series of statute/Rules/regulations relating to the subject matter. Added to this, in construing statute, the court has to ascertain the intention of the law making authority in the backdrop of the dominant purpose and underlying intendment of the said statute and that every statute is to be interpreted about any violence to its language and applied as far as its explicit language admits consistent with the established rules of interpretation.
23- The aforesaid settled rule of interpretation has been affirmed by the Apex Court from time to time in various cases including 1974 (1) SCC 596, M/s Gammon India Ltd and others Vs. Union of India and others (para 19), AIR 1978 SSC 995, M/s Punjab Beverages Ltd, Chandigarh Vs. Suresh Chand and another( para 5), AIR 2002 SC 829, Kailash Chandra and antoher Vs. Mukundi Lal and others (para 10) and AIR 2000 SC 66, Grasim Industries Ltd and another Vs. State of M.P.
DELAY 24- It has been argued by the learned counsel for the opposite parties that there is delay of almost two years Hence, the writ petition should not be entertained.
25- We have already held that the provision contained in sub-section (5) of Section 85 is mandatory. The post of Chairperson of the State Regulatory Commission is very high post dealing with the matter of high stake on financial side, which includes fixation of tariff and other important matters provided under Section 62 read with Section 82 of the Act. In case any appointment is made to such a high post ignoring the statutory provision and the Court declines to interfere with such dispute because of some delay caused in preferring the writ petition, it shall amount to perpetuate the illegality.
26- A person appointed in contravention of the statutory provision in case permitted to continue upto the end of term, it shall be successful event for the persons to involve themselves in unlawful activities while seeking assignment of high office in utter disregard to statutory provision. Appointment done in contravention of the statutory provision should not continue even for a day and whenever attention of the Court is invited to such matter, the Court should not shirk from its responsibility to uphold the rule of law and constitutional mandate.
27- Moreover, it is settled proposition of law that the power conferred under Article 226 of the Constitution of India is discretionary remedy and the Court has got ample power to interfere even if a writ petition is filed at highly belated stage to secure the public interest. Only because the petitioner has been an employee of the department or he was charged for certain misconduct, shall not be a ground to throw the writ petition. Attention of the court has not been invited towards any material on record, which may establish that there has been some dispute or personal animosity between the petitioner and opposite party no. 3. In the absence of any personal animosity, the writ petition cannot be treated as a tool to revenge from the opposite party no. 3.
28- In view of above, the preliminary objection raised by the learned counsel for the respondents that the writ petition has been filed at belated stage does not seem to be sustainable and the writ petition requires adjudication on merit.
Quo-warranto and Locus Standi 29- The prerogative writ under the common law in the nature of quo-warranto has been used against the authorities of the 'State', who usurps the offices without any authority or their appointment is void- ab-inito.
30- The Privy Council in a case reported in AIR (34) 1947 Privy Council 90 Hamid Hasan Nomani vs. Banwarilal Roy and others, while considering the nature of quo warranto observed that an information in the nature of quo warranto is the modern procedure replacing the obsolete High Prerogative Writ of quo warranto. It is used to try the civil right to a public office.
31- The Hon'ble Supreme Court in a case reported in AIR 1965 SC 491, The University of Mysore vs. C.D.Govinda Rao and another had relied upon the definition given in Halsbury's Law of England, to quote relevant portion:-
"An information in the nature of quo warranto took the place of the obsolete writ of quo warranto which lay against a person who claimed or usurped an office, franchise, or liberty, to enquire by what authority he supported his claim, in order that the right to the office or franchise might be determined." Broadly stated, the quo warranto proceeding affords a 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 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 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 recognised in that behalf, they tend to protect the public from usurpers of public office; in some cases, persons not entitled to public office 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 held, and in such cases, if the jurisdiction of the Courts to issue writ of quo warrnto is properly invoked, the usurper can be ousted and the person entitled 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 public office and is held by usurper without legal authority, and that necessarily leads to the enquiry as to whether the appointment of the said alleged usurper has been made in accordance with law or not."
32- In Words and Phrases, Second Edition of John B. Saunders, the word 'quo warranto' has been defined as under:-
"An information in the nature of a quo warranto took the place of the obsolete writ of quo warranto which lay against a person who claimed or usurped an office, franchise, or liberty, to inquire by what authority he supported his claim, in order that the right to the office or franchise might be determined. It also lay in cases of non-user, abuse, or long neglect of a franchise."
33- In Corpus Juris Secundum, Vol. 74, while dealing with the writ in the nature of quo warranto, the word quo warranto has been dealt with as under:-
"Quo warranto in its broadest sense is a proceeding to determine the right to the use or exercise of a franchise or office and to oust the holder from its enjoyment, if the holder's claim is not well founded, or it he or she has forfeited his or her right to enjoy the privilege.
Sometimes, the terms "quo warranto" is used to describe, not only proceedings under the common-law writ of quo warranto, but also proceedings under an information in the nature of a writ of quo warranto or similar statutory remedies. The distinctions between a writ of quo warranto and an information in the nature of quo warranto are frequently disregarded and the terms used as synonymous and convertible.
'Quo warranto is an ancient common law, prerogative writ and remedy. It is one of the most ancient and important writs known to the common law.
The ancient writ of quo warranto was in the nature of a writ of right for the king, against a person who claimed or usurped any office, franchise, or liberty, to inquire by what authority, the person supported the claim, in order to determine the right, or abuse of a franchise, a writ commanding the defendant to show by what warrant he or she exercised the franchise, never having had any grant of it, or having forfeited it by neglect or abuse."
34- With regard to 'Form and Nature' of quo warranto, Corpus Juris Secundum deals with the subject, as under:-
"Quo warranto is an extraordinary remedy. Through a quo warranto proceeding, the state acts to protect itself and the good of the public generally, through duly chosen agents of the state, who have full control of the proceeding.
At least where an information is filed by a prosecuting attorney ex officio, a quo warranto proceeding is of a public nature and is not a personal action, it being rather an inquisition which the sovereignty, by its courts, institutes to ascertain whether its prerogative rights have been invaded. However, a proceeding by information to try title to an office is personal as to the persons claiming the office, and in the sense that it is against an individual, rather than against an officer as such.
Some matters may be assailed by quo warranto in a direct, rather than a collateral, attack. Other matters are properly assailed by collateral attack, rather than quo warranto proceedings; and, quo warranto itself may employed as a method of collateral attack.
Quo warranto is not a writ of correction or review. It is not an alternative for mandamus or injunction, or for an appeal or writ of error. On an appeal, the appellant may be permitted to introduce extrinsic evidence of the judgment in a quo warranto proceeding. Quo warranto cannot be used to force a rightful possessor of the office to do anything."
35- While considering the locus standi of a person to prefer a writ petition in the nature of quo warranto or habeas corpus, the Hon'ble Supreme Court in a case reported in AIR 1966 SC 828 Gadde Venkateswara Rao vs. Government of Andhra Pradesh held that though ordinarily a writ petition is preferred for enforcement of statutory or fundamental right conferred by Part III of the Constitution of India by the person, who entitled to apply therein and whose rights are affected but when matter comes to habeas corpus or quo warranto, this rule has to be relaxed or modified. In the case of Gadde Vankateswara Rao (supra) the appellant President of Panchayat Samiti had preferred writ petition on the ground that he represents entire village in dealing with Block Development Committee, hence he has right to prefer the writ petition being representative of the committee. Their Lordships held that petition was maintainable, to quote relevant portion:-
The first question is whether the appellant had locus standi to file a petition in the High Court under Art. 226 of the Constitution. This Court in The Calcutta Gas Company (Proprietary) Ltd. v. The State of West Bengal (1962) Supp 3 SCR 1 at p. 6: AIR 1962 SC 1044 at p. 1047), dealing with the question of locus standi of the appellant in that case to file a petition under Art. 226 of the Constitution in the High Court, observed:-
"Article 226 confers a very wide power on the High Court to issue directions and writs of the nature mentioned therein for the enforcement of any of the rights conferred by Part III or for any other purpose. It is, therefore, clear that persons other than those claiming fundamental right can also approach the court seeking a relief thereunder. The Article in terms does not describe the classes of persons entitled to apply thereunder; but it is implicit in the exercise of the extraordinary jurisdiction that the relief asked for must be one to enforce a legal right........................ The right that can be enforced under Art. 226 also shall ordinarily be the personal or individual right of the petitioner himself, though in the case of some of the writs like habeas corpus or quo warranto this rule may have to be relaxed or modified."
Has the appellant a right to file the petition out of which the present appeal has arisen ? The appellant is the resident of the Panchayat Samithi of Dharmajigudem. The villagers of Dharmajigudem formed a committee with the appellant as President for the purpose of collecting contributions from the villagers for setting up the Primary Health Centre. The said committee collected Rs. 10,000/- and deposited the same with the Block Development Officer. The appellant represented the village in all its dealings with the Block Development Committee and the Panchayat Samithi in the matter of the location of the Primary Health Centre at Dharmajigudem. His conduct, the acquiescence on the part of the other members of the committee, and the treatment meted out to him by the authorities concerned support the inference that he was authorized to act on behalf of the committee. The appellant was, therefore, a representative of the committee which was in law the trustees of the amounts collected by it from the villagers for a public purpose. We have, therefore, no hesitation to hold that the appellant had the right to maintain the application under Art. 226 of the Constitution. This Court held in the decision cited supra that "ordinarily" the petitioner who seeks to file an application under Art. 226 of the Constitution should be one who has a personal or individual right in the subject-matter of the petition. A personal right need not be in respect of a proprietary interest : it can also relate to an interest of a trustee. That apart, in exceptional cases, as the expression "ordinarily" indicates, a person who has been prejudicially affected by an act or omission of an authority can file a writ even though he has no proprietary or even fiduciary interest in the subject-matter thereof. The appellant has certainly been prejudiced by the said order. The petition under Art. 226 of the Constitution at his instance is, therefore, maintainable.
36- In the present case, the petitioner being General Secretary of the employees' Union seems to possess locus standi to prefer the writ petition. Otherwise also, a writ in the nature of quo warranto, as held by the Supreme Court, may be filed by any person challenging the right of authority to hold public office.
37- In the case reported in (2006) 11 Supreme Court Cases 731 (1) Retd. Armed Forces Medical Association and others vs. Union of India and others, their Lordships of Supreme Court held that where appointment is contrary to the statutory rule, writ in the nature of quo warranto may be issued, to quote relevant portion:-
"The law is well settled. 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 quo warranto. The jurisdiction of the High Court to issue a writ of quo warranto is a limited one which can only be issued when the appointment is contrary to the statutory rules."
38- With regard to locus in the same judgment (supra), their Lordships has relied upon earlier decision of the Supreme Court and held that where a person who comes to the Court with bona fides and public interest can have locus, to quote relevant portion:-
"This Court in B.Singh (Dr.) vs. Union of India held that only a power who comes to the Court with bona fides and public interest can have locus. Coming down heavily on busybodies, meddlesome interlopers, wayfarers or officious interveners having absolutely no public interest except for personal gain or private profit either of themselves or as a proxy of others or for any other extraneous motivation or for glare of publicity, this Court at paga 14 of the Report held as under: SCC p. 373, para 14) "14. The court has to be satisfied about; (a) the credentials of the applicant; (b) the prima facie correctness or nature of information given by him; and (c) the information being not vague and indefinite. The information should show gravity and seriousness involved. Court has to strike a balance between two conflicting interests: (i) nobody should be allowed to indulge in wild and reckless allegations besmirching the character of others; and (ii) avoidance of public mischief and to avoid mischievous petitions seeking to assail, for oblique motives, justifiable executive actions. In such case, however, the court cannot afford to be liberal. It has to be extremely careful to see that under the guise of redressing a public grievance, it does not encroach upon the sphere reserved by the Constitution to the executive and the legislative. The court has to act ruthlessly while dealing with imposters and busybodies or meddlesome interlopes impersonating as public-spirited holy men. They masquerade as crusaders of justice. They pretend to act in the name of pro bono publico, though they have no interest of the public or even of their own to protect."
39- In the case of Hanuman Foundries Ltd. (supra) their Lordships of Supreme Court held that the writ of quo warranto is a direct attack which is merely collateral. Their Lordships have relied upon Halsbury's Laws of England (supra) and held that the office must be a public office and the court must be satisfied that the person proceeded against, has been in actual possession of the office. The principle laid down in the case of University of Mysore (supra) and in the case of Ghulam Qadir (supra), the question with regard to locus has been dealt with by Hon'ble Supreme Court and it is held that the right under Article 226 of the Constitution of India may be enforced only by the aggrieved person ordinarily, but even then in appropriate cases, the court may permit by adopting liberal approach.
40- In the case of Centre for Public Interest Litigation and another (supra) Supreme Court held that where the controversy relates to appointment on high post like Chief Secretary, then decision must be taken in transparent manner giving no scope for any grievance. In the case of Gujarat Kishan Mazdoor Panchayat and others (supra), Hon'ble Supreme Court reiterated the settled proposition of law that a writ of quo warranto may be issued in case appointment is contrary to statutory rule, to quote relevant portion:-
"A writ of quo warranto can only be issued when the appointment is contrary to the statutory rules. (See Mor Modern Coop. Transparent Society Ltd. vs. Financial Commr. & Secy. to Government of Haryana."
41- In N. Kannadasan vs. Ajoy Khose (supra) with regard to writ of quo warranto and locus standi, Hon'ble Supreme Court reiterated that integrity of the holder of the office on high post plays important role and this factor was required to be taken into consideration not only by the Chief Justice of the High Court but also by the State Government, to quote relevant portion:-
"We have noticed hereinbefore that the integrity of the holder of a high office plays an important role. It was, thus, a factor which was required to be taken into consideration not only by the Chief Justice of the High Court but also by the State. The consultative process brings within its ambit a heavy duty so as to enable the holder of a high office like Chief Justice to know the same. It must be shown that he had access and in fact was aware of the fact that the appellant had not been made a Permanent Judge. The matter might have been different if such a fact had been taken into consideration. If a decision for the purpose of making a recommendation in terms of proviso appended to Section 16 of the Act necessitates looking into all relevant materials, non-consideration of such a vital fact, in our opinion, cannot be ignored as the opinion is a subjective one and not based on objective criteria. We are more than sure that had the records been brought to his notice, the Chief Justice would not have made the recommendation."
42- In the case reported in Mahesh Chandra Gupta (supra), the Hon'ble Supreme Court held that when the question cropped up with regard to appointment on the high post, then it shall be done strictly in accordance with the statutory provision and not otherwise keeping in view the eligibility criteria.
43- In the case of A.N.Shashtri (supra) relied upon by the learned counsel for the opposite party no. 3, their Lordships of Supreme Court ruled that the High Court should be slow in a petition filed under the quo warranto unless there is a clear infringement of law. In the case of K.J.Joseph (supra) Supreme Court ruled that while exercising discretion, the court should consider all the circumstances of the case including the lapse of time and circumstances which would establish laches, acquiescence or estoppel and whether the public interest would be served.
44- Much reliance has been placed by Shri J.N. Mathur, learned Additional Advocate General on the case reported in AIR 2006 SC 3106, B. Srinivasa Reddy Vs. Karnataka Urban Water Supply & Drainage Board Employees' Association & others. In the case of B. Srinivasa Reddy (supra), there was dispute between the petitioner and the authority concerned, hence it was held that the action of petitioner suffers from malafide.
45- In the present case, there appears to be no material on record, which may indicate that at any stage or any point of time, there has been a litigation between the petitioner and opposite party no. 3 or the petitioner was charged by opposite party no. 3. There is no material which may establish that before filing of writ petition, there has been some contradiction or tussle between the petitioner and opposite party no. 3. Hence, there appears to be no material on record which may establish the existence of any malice on the part of petitioner against opposite party no. 3. Being General Secretary of the employees' Union and having interest with regard to public cause or for welfare of department, the petitioner could have filed the writ petition (supra).
46- It is settled law that the estoppel cannot override the law of land and the statutory provision vide AIR 1986 SC 180 Olga Tellis vs. Bombay Municipal Corporation, AIR 1970 SC 1354 Nookala Setharamaiah vs. Kotaish Naidu, AIR 1985 SC 1003 Banwari Lal vs. P.C. Aggarwal, 1984 (2) SCC 656 A.C. Jose vs. Sivan Pillai and 1996 (5) SCC 634 I.T.C. Ghadrachalam Paperboards vs. Mandal Revenue Officer.
Accordingly, the principle of acquiescence or estoppel because of some delay or otherwise shall not be available to the respondents while defending the impugned appointment.
47- In case an appointment is done in flagrant violation of statutory provision or selection committee had not discharged its statutory obligation, then throwing out the petition on this ground shall amount to perpetuate the illegality and continuance of a person in public office for which he was not duly selected in accordance with the statutory provision.
48- In view of above, the petitioner has got locus to prefer the writ petition and this Court may look into the procedure adopted by the State Government and selection committee in appointing the opposite party no. 3 as Chairperson of the Commission within the ambit and scope of quo warranto.
SELECTION COMMITTEE 49- A plain reading of Section 84 (supra) reveals that the selection committee shall select a person for the post of Chairperson of the Commission, who should be a person of ability, integrity and standing with adequate knowledge of, and have shown capacity in, dealing with problems relating to engineering, finance, commerce, economics, law and management. Sub-section (5) of Section 85 further provides that the selection committee shall satisfy itself that such person does not have any financial or other interest which is likely to affect prejudicially his functions as a Chairperson. Financial or other interest co-relates with the candidate's ability, integrity and standing and it is for the selection committee to look into it.
50- In the case of Modern Cooperative Transport Society Ltd. (supra) the controversy relates to the appointment on the post of transport commissioner. Their Lordships of Supreme Court held that being overall incharge of the State Undertaking, he or she is accountable for his performance and the profit earned and loss suffered by it. Hence appointment of such person cannot be in breach of statutory provision, to quote relevant portion:-
"The counter affidavits filed by the respondents make the factual position clear that the Transport Commissioner is overall incharge of the State undertaking which is departmentally managed. He is also accountable to the government for its performance and the profits earned or losses suffered by it. It logically follows that the Transport Commissioner carries the burden of financial accountability. The undisputed facts also establish that the private operators provide transport service on the routes on which they are permitted to operate, and though their competition with Haryana Roadways may be limited, having regard to the fact that they operate fewer routes, the existence of competition between the two cannot be denied. In these facts and circumstances, the question whether the Transport Commissioner has a financial interest in the Haryana Roadways within the meaning of that term in Section 68(2)of the Act falls for our consideration.
Unfortunately, the High Court did not consider the question which directly arose before it, namely, whether the appointment of the Transport Commissioner/Traffic Manager as Chairman/member of the Regional Transport Authority was not in breach of statutory provisions. The High Court did not exercise its writ jurisdiction in the absence of any averment to the effect that the aforesaid officers had misused their authority and acted in a manner prejudical to the interest of the appellants. In our view the High Court should have considered the challenge to the appointment of the officials concerned as members of the Regional Transport Authority on the ground of breach of statutory provisions. The mere fact that they had not acted in a manner prejudicial to the interest of the appellant could not lend validity to their appointment, if otherwise, the appointment was in breach of statutory provisions of a mandatory nature. It has, therefore, become necessary for us to consider the validity of the impugned Notification said to have been issued in breach of statutory provision."
51- While considering the nature of 'financial interest', their Lordships held that it implies direct personal benefit of an economic nature and in the wider sense it may include any interest direct or indirect which a person has in relation to the finances of the undertaking, to quote relevant portion:-
"The next question which falls for consideration is what is the nature of the "financial interest" contemplated by the said sub-section. The expression financial interest is capable of a narrower as well as a wider meaning. In the narrower sense it implies direct personal benefit of an economic nature. In the wider sense it may include any interest direct or indirect which a person has in relation to the finances of the undertaking. Such an interest may be the interest of an official who manages the finances of the undertaking or on whom rests the burden of financial accountability. It is trite to say that the intention of the Legislature must be found by reading the statutes as a whole. The Court must ascertain the intention of the Legislature by directing its attention not merely to the Clauses to be construed but to the entire statute; it must compare the Clause with the other parts of the law, and the setting in which the Clause to be interpreted occurs. The rule is of general application as even plainest terms may be controlled by the context. Expression used in a statute should ordinarily be understood in a sense in which they best harmonize with the object of the statute, and which effectuate the object of the Legislature. Therefore, when two interpretations are feasible the Court will prefer that which advances the remedy and suppress the mischief as the Legislature envisioned. Keeping these principles in mind we shall now consider what meaning has to be given to the expression "financial interest" in sub-section (2) of Section 68 of the Act."
52- In view of the aforesaid broader proposition propounded by Hon'ble Supreme Court, the question whether the opposite party no. 3 could have been appointed on the post of Chairperson of the regulatory commission, that too when he was serving in the M/s J.P. Power Ventures Ltd. for short period (41 days) and whether the opposite party no. 3 resigned from NTPC in pre-planned manner and then join in M/s J.P. Power Ventures Ltd. to seek appointment in the Commission that too when the State Government relaxed the Rule/Guidelines fixing higher tariff rate for two units of M/s J.P. Power Ventures Ltd. has not been considered by the selection committee in accordance to sub-section (5) of Section 85 of the Act.
The other question arises whether the delegation of the power by the selection committee vitiates the selection?
DELEGATION OF POWER BY THE SELECTION COMMITTEE 53- Delegatus non potest delegare is a maxim applied in its letter and spirit by the European Court since century and is guiding principle to check the validity of sub-delegation. It means that a delegate, who has received his authority from the principal (statute), is incompetent to sub-delegate his power to some other person or body. From this, it follows that unless sub-delegation is authorised by the statute itself, sub-delegation would be bad and any act done by the sub-delegation would be void:Allingham vs. Minister of Agriculture, (1948) 1 All E.R. 780.
54- In the case reported in AIR 1961 Supreme Court 82 J.Y. Kondala Rao and others vs. Andhra Pradesh State Road Transport Corporation and others, the Hon'ble Supreme Court held that the power conferred on the transport authority could have been exercised only in the manner provided in the Act and not otherwise.
55- In AIR 1967 Supreme Court 295 Barium Chemicals Ltd. and another vs. Company Law Board and others, a most celebrated judgment, Hon'ble Supreme Court held that a delegated authority cannot be re-delegated to other authority, to quote relevant portion:-
"As a general rule, whatever a person has power to do himself, he may do by means of an agent. This broad rule is limited by the operation of the principle that a delegated authority cannot be redelegated, delegates non protest delegate. The naming of I delegate to, do an act involving a discretion indicates that the delegate was selected because of his peculiar skill and the confidence reposed in him, and there is a presumption that he is required to do the act himself and cannot redelegate his authority. As a general rule, "if the, statute directs that certain acts shall be done in a specified manner or by certain persons, their performance in any other manner than that specified or by any other person than one of those name is impliedly prohibited." See Crawford on statutory Construction, 1940 Edn., art. 195, p. 335:- Normally, a discretion entrusted by Parliament to an administrative organ must be exercised by that organ itself. If a statute entrusts an administrative function involving the exercise of a discretion to a Board consisting of two or more persons it is to be presumed that each member of the Board should exercise his individual judgment on the matter and all, the members of the Board should act together and arrive at a joint decision. Prima facie, the Board must act as a whole and cannot delegate its function to one of its members."
56- Keeping in view the broader principle (supra) since power under sub-section (5) of Section 85 was conferred on the selection committee, it was for the selection committee to record a finding with regard to financial interest of opposite party no. 3 instead of referring the matter to the State Government.
57- In a case reported in (1989) 3 Supreme Court 132 Marathwada University vs. Seshrao Balwant Rao Chavan, while considering the sub-delegation, their Lordships held that the executive council was not authorised to delegate its power in the absence of any statutory provision. Power to take disciplinary action was conferred on the Executive Council, which could not have been delegated to the Vice Chancellor that too without approval of the Chancellor. Under the statute, approval of the Chancellor was mandatory and in the absence of any approval, power could not have been delegated to the Vice Chancellor.
58- In (1994) 5 Supreme Court Case 346 Sahni Silk Mills (P) Ltd. and another vs. Employees' State Insurance Corporation, while dealing with the case under the Employees State Insurance Corporation Act, 1948 and interpreting Section 94-A, Hon'ble Supreme Court has observed as under:-
" So far as the present Section 94-A is concerned, it says that the Corporation subject to any regulation made by the Corporation in that behalf, may direct that particular or any of the powers and functions which may be exercised or performed by the Corporation, may in relation to such matters and subject to such conditions, if any, as may be specified "be also exercisable by any officer or authority, subordinate to the Corporation". Section 94-A does not specifically provide that any officer or authority subordinate to the Corporation to whom the power has been delegated by the Corporation, may in his turn authorise any other officer to exercise or perform that power or function. But by the resolution dated 28-2-1976 the Corporation has not only delegated its power under Section 85-B(1) of the Act to the Director General, but has also empowered the Director General to authorise any other officer to exercise the said power. Unless it is held that Section 94-A of the Act, enables the Corporation to delegate any of its powers and functions to any officer or authority subordinate to the Corporation, and he in his turn can sub-delegate the exercise of the said power to any other officer, the last part of the resolution dated 28-2-1976 cannot be held to be within the framework of Section 94-A. According to us, Parliament while introducing Section 94-A in the Act,only conceived direct delegation by the Corporation to different officers or authorities, subordinate to the Corporation, and there is no scope for such delegate to sub-delegate that power, by authorising any other officer to exercise or perform the power so delegated."
59- In (2004) 3 Supreme Court Cases 723 Promod K. Pankaj vs. State of Bihar and others, again the Hon'ble Supreme Court reiterated the aforesaid proposition of law and held that unless the statute provides to delegate power, it could not be delegated.
60- Keeping in view the aforesaid proposition of law and applying the maxim of Delegatus non potest delegare, it is beyond any cavil that the selection committee constituted under Section 85 of the Act, was not competent to delegate its power conferred on it under sub-section (5) of Section 85 of the Act to the State Government. Thus, the selection committee has not discharged its statutory obligation while making selection for the post of Chairperson of the Commission and shirk from its liability. Hence the selection does not seem to be in conformity with the statutory provision.
Apart from above, it may also be noted that no material has been placed by the learned Additional Advocate General that even the State Government has applied its mind keeping in view the resolution of the selection committee and recorded a finding that the opposite party no. 3 has got no financial or other interest in the State of U.P., hence eligible for the said post. In the absence of any finding recorded keeping in view the letter and spirit of sub-section (5) of Section 85 of the Act, the appointment letter issued to the opposite party no. 3 seems to suffer from substantial illegality.
FINANCIAL AND OTHER INTEREST 61- With regard to other interest of the opposite party no. 3, it is admitted fact on record that M/s J.P. Power Ventures Ltd. was extended higher per unit rate with regard to electricity produced from Bara and Karchhna Project at Allahabad. Reason with regard to higher tariff rate is that the guidelines were modified by the government before the petitioner joined as Vice President in the M/s J.P. Power Ventures Ltd.
62- Respondent no. 3 while filing counter affidavit, in para 24 stated that he is not concern with the tariff fixed by the Commission with regard to Bara and Karchhana Project of the M/s J.P. Power Ventures Ltd. since he was not in service. To quote relevant portion from para 24 of the counter affidavit.
"It is further submitted here that the 'Commission' under the Chairmanship of the deponent was neither required to conduct rate analysis and approve the project under prescribe guidelines the Deponent/Commission, therefore, has neither conducted rate analysis nor has approved the subject projects. The Power Corporation has acted and issued Letters of Intent for award of these two projects under reference on rates decided by it in accordance with Guidelines without involvement or even its prior intimation to the Commission under the Chairmanship of the deponent. The Commission is not required to sanction or approve the rates prior to or after Letter of Intent or any stage of processing tariff by competitive bidding."
63- On the other hand, the State while filing counter affidavit, admitted that with regard to Karchhana Project of M/s J.P. Power Ventures Ltd. and RFP involving deviation from statutory guidelines was approved on 28.8.2008 and 13.10.2008 respectively and financial bid was opened on 6.11.2008 i.e. much before the respondent no. 3 joined M/s J.P. Power Ventures Ltd. on 17.11.2008.
64- While filing rejoinder affidavit, the petitioner has invited attention to the fact that in initial bidding minimum rate for Karchhana Power House was Rs. 2.60 per unit quoted by M/s. Lanco, which was cancelled after second competitive bidding wherein the minimum rate of Rs. 2.59 per unit was quoted by M/s. Reliance Co. that too was cancelled and for the third time, minimum rate quoted by M/s. J.P. Associates Ltd. of Rs. 2.97 was accepted. It is further stated that lower tariff rate has been ignored for the M/s. J.P. Associates Ltd. and the levelized tariff of Rs. 3.02/KWH for Bara and Rs. 2.97/KWH for Karchhana Project was accepted. It was the respondent no. 3 to approve vide order dated 27.8.2010 with regard to higher tariff rate. It shall be appropriate to reproduce the relevant portion from the rejoinder affidavit contained in Para 15 (viii):-
"Respondent no. 3 has not given any reply regarding initial bidding in which the minimum rate for Karchhana Power House was Rs. 2.60 per unit which was quoted by M/s. Lanco. UPPCL has cancelled this bid with the plea that this rate if higher than market rate. Thereafter, competitive bidding was again done wherein the minimum rate of 2.59 per unit was quoted by M/s. Reliance Co. which too was cancelled with the same plea. In the third bidding the minimum rate of Rs. 2.97 per unit quoted by M/s. J.P. Associates Ltd. was accepted by UPPCL without any analysis of the previous rates quoted which were comparatively much lower. As per Section 63 of the Electricity Act, 2003, the Commission shall adopt the tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by Central Government. The above process of bidding for Bara and Karchhana Project is not transparent as lower rates have been ignored taking false pleas and favour has been done to M/s. J.P. Associates Ltd. By accepting the levelized tariff of Rs. 3.02/KWH for Bara (3 x 660) and Rs. 2.97/KWH for Karchhana (2 x 660) Project. Mr. Rajesh Awasthi vide order dated 27.8.2010 has approved the higher tariff rate of Rs. 2.97/KWH for Karchhana Project only with his signature without making analysis or any consideration or earlier quoted tariff rates quoted by other companies, thus putting heavy burden on State Electricity consumer. The copy of the order dated 27.8.2010 is being annexed herewith as ANNEXURE NO. RA-1 to this rejoinder affidavit."
65- While filing written argument, learned counsel for the petitioner has invited attention to subsequent order passed in favour of J.P. Power Ventures Ltd. but has not filed it with the affidavit. We are not inclined to take into account the facts which are not placed on record. However, on the basis of evidence on record, prima facie, it may not be ruled out that while holding the post of Chairperson, opposite party no. 3 might have some interest in favour of two projects of J.P. Power Ventures Ltd.
66- We are not recording any finding but things are clear that tariff fixed with regard to these two projects was on higher side since averment contained in the rejoinder affidavit has not been disputed. The State also admits that the guidelines/rules were relaxed with regard to project of M/s J.P. Power Ventures Ltd.
67- It has been vehemently emphasized by the petitioner's counsel that higher tariff rate suffers from extraneous reasons and the matter may be referred for investigation to CBI, but we are not inclined to interfere in the present case, being a petition for quo warranto. Issue is left open for adjudication by the appropriate Forum.
68- Learned counsel for the petitioner has vehemently argued that the respondent no. 3 is not qualified for the post in question. On the other hand, Shri S.K.Kalia, learned senior counsel for the respondent no. 3 submits that he is well qualified for the post in question and has rightly been selected.
So far as the qualification of respondent no. 3 for the post in question is concerned, it is not necessary to consider the same since the writ petition deserves to be allowed on account of non compliance of statutory provision and is left open.
69- All the aforesaid facts and circumstances should have been taken into account and the selection committee should have applied its mind in pursuance to the provision contained in sub-section (5) of Section 85 of the Act. It shall be always obligatory on the part of selection committee to record a finding keeping in view the provision contained in sub-section (1) of Section 84 read with sub-section (5) of Section 85 of the Act.
FINDING 70- (i) Sub-section (5) of Section 85 of the U.P. Electricity Act is mandatory. It is for the selection committee to record a finding keeping in view the facts and circumstances of each case in pursuance to the provision contained in sub-section(5) of Section 85 of the Act. (ii) In the absence of any provision contained in the Act, it was not open for the selection committee to delegate its power to the State Government to look into the matter keeping in view the provision contained in sub-section (5) of section 85 of the Act. There could not have been a conditional selection.
(iii) Sub-section (5) of Section 85 and sub-section (1) of Section 84 of the Act are inter-related issues and deal with the honesty, integrity, standing, financial and other interest of the person interviewed for the post of Chairperson or Members of the State Regulatory Commission. Non-application of mind renders the selection void and illegal.
(iv) Since the appointment was done in violation of statutory provision, power was delegated without any authority and appointment being illegal and void, the writ petition could not be thrown out only because of some delay. A person appointed in contravention of the statutory provision ignoring the mandatory duty cannot be permitted to hold an office as it shall amount to perpetuation of illegality.
(v) The defence of estoppel and acquiescence shall not be available against the statutory provision.
71- In view of above, the writ petition deserves to be allowed. The respondent no. 3, for the reasons and finding recorded (supra), is not entitled to continue on the post of Chairman, State Electricity Regulatory Commission, Uttar Pradesh and liable to be removed with immediate effect.
72- Accordingly, the writ petition is allowed. A writ in the nature of quo warranto is issued restraining the respondent no. 3 to continue on the post of Chairman, State Electricity Regulatory Commission, Uttar Pradesh and removed forthwith.
The appointment of respondent no. 3 is also declared illegal, void and quashed, declaring vacancy in the office of Chairperson, State Electricity Regulatory Commission. The State of Uttar Pradesh may hold fresh selection with prior permission of Election Commission in accordance to Rules or on its own motion after declaration of result of general election in accordance with the provision contained in the Act and relevant Rules.
The writ petition is allowed accordingly. No order as to costs.
[Justice S.C.Chaurasia] [Justice Devi Prasad Singh] Order date:-10.01.2012 Rizvi