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As is evincible from the factual exposition, a writ of quo warranto has been issued by the High Court of Allahabad, Bench at Lucknow declaring that the appellant is not entitled to continue as the Chairperson of U.P. State Electricity Regulatory Commission (for short ‘the State Commission’) on the foundation that there had been total non-compliance of the statutory provision enshrined under sub-section (5) of Section 85 of the Electricity Act, 2003 (for brevity ‘the Act’). – there has been total non-compliance of the statutory provision by the Selection Committee which makes the decision making process vulnerable warranting interference by the constitutional courts and, therefore, the High Court is justified in holding that the appointment is non est in law. 28. Consequently, the appeal, being sans substratum, stands dismissed without any order as to costs.

REPORTABLE

English: The supreme court of india. Taken abo...

English: The supreme court of india. Taken about 170 m from the main building outside the perimeter wall (Photo credit: Wikipedia)

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7600 OF 2012
@ Special Leave Petition (C) No.1673/2012

 
Rajesh Awasthi .. Appellant
Versus
Nand Lal Jaiswal & Ors. .. Respondents
J U D G M E N T

 

K. S. RADHAKRISHNAN, J.

1. Leave granted.
2. We are, in this case, concerned with the question whether the High
Court was justified in issuing a writ of quo warranto holding that the
appellant has no authority in continuing as Chairperson of U.P. State
Electricity Regulatory Commission (for short ‘the Commission’) on the
ground that the Selection Committee had not complied with sub-section (5)
of Section 85 of the Electricity Act, 2003 (for short ‘the Act’).

3. The post of the Chairperson of the Commission fell vacant on
21.10.2008. The government of Uttar Pradesh, in exercise of its powers
conferred under Section 85(1) of the Act, constituted a Selection Committee
vide notification dated 22.12.2008 consisting 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 for
finalizing the selection of the Chairperson. Applications were invited
intimating various authorities including Ministry of GOI, CAG, CEA, all the
Secretaries of Power working in different States in the country, CBDT, PSUs
power sectors etc. Thirty persons applied for the post including the
appellant. The meeting of the Selection Committee was held on 26.12.2008
and Selection Committee selected two persons on merit, namely, the
appellant and one Mr. Amit Kumar Asthana. Panel of two names was forwarded
by the Selection Committee to the government of U.P. with an asterisk
against the name of the appellant stating that if he was appointed, the
government would ensure first that the provisions of sub-section (5) of
Section 85 of the Act would be complied with. The government appointed the
appellant as the Chairman of the Commission on 29.12.2008. The appellant
on that date sent a letter to the State Government stating that he had
resigned from his previous assignments on 27.12.2008 and severed all his
links with the private sector as required under Section 85 of the Act.

4. The first respondent herein who was the General Secretary, Jal Vidyut
Unit, filed a writ petition before the High Court of Allahabad, Lucknow
Bench seeking a writ of quo warranto, challenging the appointment of the
appellant on various grounds. Apart from the contention that the Selection
Committee had not followed the provisions contained in sub-section (5) of
Section 85 of the Act, it was also alleged that the appellant could not
have been selected since he was working as the Joint President of the J.P.
Power Ventures Ltd at the time of selection, hence he had financial and
other interests in that company which would prejudicially affect his
functions as the Chairperson of the Commission. Further, it was also
pointed out that the procedure laid down in U.P. Electricity Regulatory
Commission (Appointment and Conditions of Service of the Chairperson and
Members) Rules, 1999 (for short ‘the 1999 Rules’) were also not complied
with before initiating the selection process. The appellant questioned the
locus standi of the first respondent and contended that he was not an
aspirant for the post and that the writ petition was filed after a period
of more than two years after his assumption of charge as Chairperson of the
Commission. Referring to the minutes of the Selection Committee dated
26.12.2008, it was pointed out that the selection was validly made and the
appellant was ranked first in panel on merit and sub-section (5) of Section
85 was also complied with. Further, it was stated that the appellant had
no financial or other interests in J.P. Power Venture Ltd. so as to
prejudicially affect his functions as Chairperson. In any view, it was
pointed out that he had resigned from that post on 27.12.2008.

5. The High Court after considering the rival contentions came to the
conclusion that the Selection Committee had failed to follow the provisions
of sub-section (5) of Section 85 of the Act, hence the appointment was
vitiated and the appellant had no authority to hold the post of
Chairperson. Further, it was also found that the Selection Committee had
no power to delegate the powers conferred on it under Section 85(5) of the
Act to the State Government. The court also held that the first respondent
had sufficient locus standi to move the writ petition and the delay in
approaching the court was not a ground, since a person who had been
appointed contrary to a statutory provisions had no legal right to hold on
to that post. The High Court, therefore, allowed the writ petition, issued
a writ of quo warranto and quashed the appointment of the appellant
declaring the same as illegal and void.

6. Shri L. Nageswara Rao, learned senior counsel appearing for the
appellant submitted that the High Court has committed an error in holding
that the appointment of the appellant was in violation of sub-section (5)
of Section 85 of the Act. Learned senior counsel took us through the
minutes of the Committee meeting held on 26.12.2008 and pointed out that
the Selection Committee, after examination of the bio-data of 30
candidates, prepared a panel in which the appellant’s name was shown as
first in the order of merit. The Selection Committee, according to learned
counsel, was very much aware of the fact that the appellant was the joint
Vice President of J.P. Power Venture Ltd. and hence had put an asterisk
against his name and reminded the State Government that if he was to be
appointed, the provisions of sub-section (5) of Section 85 of the Act be
first ensured. Learned senior counsel, therefore, submitted that there was
substantial compliance of that provision and in any view it is only a
curable defect, procedural in nature and a writ of quo warranto be not
issued, being a discretionary remedy. Referring to the judgment of this
Court in University of Mysore & Anr. v. C.D. Govinda Rao & Anr. (1964) 4
SCR 575, learned senior counsel submitted that the suitability arrived at
by the Committee is not a matter amenable to proceedings under quo
warranto. Learned senior counsel also referred to the judgments of this
Court in Mahesh Chandra Gupta vs. Union of India (2009) 8 SCC 273 , Hari
Bansh Lal v. Sahodar Prasad Maht and others (2010) 9 SCC 655.

7. Learned senior counsel submitted that, in any view of the matter,
writ of quo warranto will not lie where the breach in question is curable,
hence procedural in nature. Assuming there is non-compliance of sub-
section (5) of Section 85 of the Act, the matter can be relegated back to
Selection Committee for due compliance of that provision. Learned senior
counsel also submitted that the writ of quo warranto is a discretionary
remedy and hence such a course can be adopted by this Court. Reference was
also made to the judgment of this Court in B. Srinivasa Reddy v. Karnataka
Urban Water Supply & Drainage Board Employees Associaition (2006) 11 SCC
731.

8. Mr. Prashant Bhushan, learned counsel appearing for the first
respondent submitted that the High Court has rightly issued the writ of quo
warranto after having found that the appointment was made in gross
violation of sub-section (5) of Section 85 of the Act. Learned counsel
submitted that even the procedure laid down in 1999 Rules was also not
complied with. Learned counsel referring to the bio-data of the applicants
for the post of Chairperson tried to make a comparison of the merit of
other candidates and submitted that many of the candidates who had applied
were far superior to the appellant. Learned counsel also submitted that
the appellant was appointed due to extraneous reasons and the merit was not
properly assessed, leave aside, the non-compliance of sub-section (5) of
Section 85 of the Act and 1999 Rules. Learned counsel also pointed out
that since the appellant was Joint President of the J.P. Power Venture Ltd.
– a private company at the time of selection, he was disqualified in
occupying the post of Chairperson since he had financial and other interest
which would prejudicially affect his functions as Chairperson. Mr.
Ravindra Shrivastava, learned senior counsel appearing for the state of
U.P. submitted that the appointment of the appellant was in violation of
sub-section(5) of Section 85 of the Act and the 1999 Rules and the State is
taking steps to conduct fresh selection after complying with the provisions
of the Act and 2008 Rules, which is in force.

9. We heard learned counsel appearing on either side. The locus standi
of the first respondent or the delay in approaching the writ court seeking
a writ of quo warranto was not seriously questioned or urged before us.
The entire argument centered around the question whether there was due
compliance of the provisions of sub-section (5) of Section 85 of the Act.
Section 85 is given for ready reference:

“SECTION 85: Constitution of Selection Committee to select
Member of the State Commission :
(1) The State Government 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;
(c) the Chairperson of the Authority or the Chairperson of the
Central Commission … … … … .. Member:
Provided that nothing contained in this section shall apply to
the appointment of a person as the Chairperson who is or has been a
Judge of the High Court.
(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 months 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 month 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 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.”
10. The Electricity Act, 2003 is an Act enacted to consolidate the laws
relating to generation, transmission, distribution, trading and use of
electricity and generally for taking measures conducive to development of
electricity industry, promoting competition therein, protecting interest of
consumers and supply of electricity to all areas, rationalization of
electricity tariff etc. The Act also envisages the constitution of
Central Electricity Authority, Regulatory Commission and establishment of
Appellate Tribunal etc. The State Electricity Regulatory Commission (for
short ‘the State Commission’) is constituted under sub-section (1) of
Section 82 of the Act. Sub-section (5) of Section 85 of the Act states
that the Chairperson and Members of the State Commission shall be appointed
by the State Government on the recommendation of a Selection Committee as
per Section 85 of the Act. Section 84 of the Act deals with the
qualifications for appointment of Chairperson and Members of the State
Commission which reads as follows:
“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.”

11. The Chairperson, therefore, shall be a person of ability, integrity
and standing and has adequate knowledge of, and has shown capacity in,
dealing with problems relating to engineering, finance, commerce,
economics, law or management. The Selection Committee, as per Section 85,
has to recommend a panel of two names for filling up the post of the
Chairperson, but before recommending any person for appointment as the
Chairperson, the Selection Committee has to satisfy itself that such person
does have any financial or other interest which is likely to affect
prejudicially his functions as Chairperson. The State Government under
Section 82(5) of the Act has to appoint the Chairperson on the
recommendation of the Selection Committee.
12. We have gone through the minutes of the Selection Committee meeting
dated 26.12.2008 and also the bio-data of the applicants for the post of
Chairperson of the State Commission. Reference to the bio data of some of
the candidates is useful, hence given below:

Bio-data of applicants for the post of Chairperson U.P.E.R.C.
|S.No. |Date of|Educational Qualification |Retd.|Post Holding |Experience |
|and name|Birth | |From | | |
| | |Academic |Profession|specializati| | | |
| | | |al |on | | | |
|1. S.K. |01-01-1| |BE (Mech. |ME (Prod. | |Director |33 years in |
|Shukla |950 | |Engg. |Engg.) | |(Technical) |T.H.D.C. |
| | | | | | |Tehri Hydro | |
| | | | | | |Devpt. | |
| | | | | | |Corporation | |
|3. Anil |29-07-1| |B. Tech. |M.Tech | |Chief Engr. |33 Years in CEA|
|Kumar |952 | |(Electrica|(Power App. | |System |Transmission |
|Asthana | | |l) |& Systems) | |planning & |and grid |
| | | | | | |Project |opration |
| | | | | | |appraisal CEA | |
|18. U.C.|31-07-1|B.E. | | | |Chairman |4.5 Years |
|Misra |949 |(Electri-c| | | |Bhakra Beas |UPSEB, 15 Years|
| | |al Engg.) | | | |Management |NHPC, 16 Years |
| | | | | | |Board |PGCIL, 2 Years |
| | | | | | | |Chairman BBMB |
|20. |19-01-1|Civil & | | | |Joint |3 Years Central|
|Rajesh |950 |Municipal | | | |President J.P.|Designs |
|Awasthi | |Engg. | | | |Power Ventures|Organization |
| | |Graduate | | | | |Government of |
| | | | | | | |Maharashtra, |
| | | | | | | |7.5 Years |
| | | | | | | |Mining & Allied|
| | | | | | | |Machinery Co. |
| | | | | | | |Ltd., W.B., |
| | | | | | | |24.5 Years |
| | | | | | | |NTPC, Joint |
| | | | | | | |President J.P. |
| | | | | | | |Power Ventures |
| | | | | | | |Ltd. from |
| | | | | | | |17.11.08 |
|21. S.M.|15-06-1|B.Sc. |M.Sc. | | |D.G. |36 Years UPSEB |
|Agarwal |949 |(Elec. |(Elec | | |(Trg.&HRD) |/ UPPCL |
| | |Engg.) |Engg.) | | |UPPCL | |
|24. Dr. |01-08-1|B.E. |M.E. |Ph.D. | |Member |29.5 Years in |
|Man |946 |(Elect.) |(Power |(Commercial | |(Technical) |CEA, 3 Years |
|Mohan | | |System) |Availability| |Gujarat ERC |NTPC, 2 Years |
| | | | |Index of | | |as Engr, |
| | | | |Power Plant)| | |Grade-I, Govt. |
| | | | | | | |of Libya, 4 |
| | | | | | | |Years in Gujrat|
| | | | | | | |ERC. |

13. Illustrative bio-data of some of the candidates would indicate their
academic qualifications, professional experience including the area of
specialization. Appellant’s qualification, experience and the fact that he
was the Joint President of J.P. Power Ventures Ltd., was also indicated.
The Selection Committee has put an asterisk against his name and then left
it to the government to ensure the compliance of sub-section (5) of Section
85 of the Act.

14. We will examine the meaning and content of Section 85(5) and whether
it calls for any interpretation. Lord Brougham in Crowford v. Spooner
(1846) 6 Moore PC 1 has stated that “one has to take the words as the
Legislature has given them, and to take the meaning which the words given
naturally imply, unless where the construction of those words is, either by
the preamble or by the context of the words in question controlled or
altered”. Viscount Haldane in Attorney General v. Milne (1914-15) All
England Report 1061 has held that the language used “has a natural meaning,
we cannot depart from that meaning unless, reading the statute as a whole,
the context directs us to do so”. Viscount Simon, L.C. in Nokes v.
Dancaster Amalgamated Collieries Ltd. (1940) 3 All England Report 549 has
held “the golden rule is that the words of a statute must prima facie be
given their ordinary meaning”. Above principles have been repeated umpteen
times by the House of Lords and this Court and hence, calls for no further
elucidation.

15. We are clear in our mind about the language used in sub-section (5)
of Section 85 of the Act, which calls for no interpretation. Words are
crystal clear, unambiguous and when read literally, we have no doubt that
the powers conferred under sub-section (5) of Section 85 of the Act has to
be exercised by the Selection Committee and the Committee alone and not by
the Government. Some of the words used in sub-section (5) of Section 85
are of considerable importance, hence, we give some emphasis to those words
such as “before recommending”, “the Selection Committee shall satisfy” and
“itself”. The Legislature has emphasized the fact that ‘the Selection
Committee itself has to satisfy’, meaning thereby, it is not the
satisfaction of the government what is envisaged in sub-section (5) of
Section 85 of the Act, but the satisfaction of the Selection Committee.
The question as to whether the persons who have been named in the panel
have got any financial or other interest which is likely to affect
prejudicially his functions as Chairperson, is a matter which depends upon
the satisfaction of the Selection Committee and that satisfaction has to be
arrived at before recommending any person for appointment as Chairperson to
the State Government. The government could exercise its powers only after
getting the recommendations of the Selection Committee after due compliance
of sub-section (5) of Section 85 of the Act. The Selection Committee has
given a complete go-by to that provision and entrusted that function to the
State Government which is legally impermissible. The State Government
also, without application of mind and overlooking that statutory provision,
appointed the appellant.

16. A writ of quo warranto will lie when the appointment is made contrary
to the statutory provisions. This Court in Mor Modern Coop. Transport
Coop. Transport Society Ltd. v. Govt. of Haryana (2002) 6 SCC 269 held that
a writ of quo warranto can be issued when appointment is contrary to the
statutory provisions. In B. Srinivasa Reddy (supra), this Court has
reiterated the legal position that the jurisdiction of the High Court to
issue a writ of quo warranto is limited to one which can only be issued if
the appointment is contrary to the statutory rules. The said position has
been reiterated by this Court in Hari Bans Lal (supra) wherein this Court
has held that for the issuance of writ of quo warranto, the High Court has
to satisfy that the appointment is contrary to the statutory rules.

17. We are of the view that the principle laid down by this Court in the
above-mentioned judgment squarely applies to the facts of this case. The
appointment of the first respondent, in our considered view, is in clear
violation of sub-section (5) of Section 85 of the Act. Consequently, he
has no authority to hold the post of Chairperson of the U.P. State
Electricity Regulatory Commission.

18. We express no opinion with regard to the contentions raised by the
first respondent that the appellant had links with J.P. Power Ventures Ltd.
According to the first respondent, the appellant had approved the higher
tariff right to favour M/s J.P. Power Ventures Ltd., vide his order dated
27.8.2010. We have already found that the question as to whether, being
Vice President of the J.P. Power, the appellant had any financial or other
interest which would prejudicially affect his function as chairperson was
an issue which the Selection Committee ought to have considered. We may
point out that when the Selection Committee was constituted, 1999 Rules
were in force and the present 2008 Rules came into force only on 1.1.2009.
By virtue of Section 85 of the Act, the then existing Rules 1999 were also
safeguarded. Section 3 of the 1999 Rules deals with the selection process
for the post of Chairperson, which is almost pari-materia to the 2008
Rules. Sub-section (3) of Rule 3 is of some relevance, hence we extract
the same:

“3 (3) The convener shall sand requisition for the selection of
any member for the aforesaid posts to different departments of State
Governments and Central Govt., Public and Private Undertakings,
Industrial Enterprises and to Organisation engaged in generation,
distribution and supply of electricity, financial institutions,
educational institutions and to the High Court and shall also invite
applications directly from eligible persons by notifying the vacancy
in the Government Gazette. The eligible persons may send their
applications directly or through an officer or authority under whom he
is for the time being working.”

19. The above-mentioned statutory requirements were also not followed in
the instant case, over and above, the non-compliance of sub-section (5) of
Section 85 of the Act.

20. We fully agree with the learned senior counsel for the appellant that
suitability of a candidate for appointment does not fall within the realm
of writ of quo warranto and there cannot be any quarrel with that legal
proposition. Learned senior counsel also submitted that, assuming that
the Selection Committee had not discharged its functions under sub-section
(5) of Section 85 of the Act, it was only an omission which could be cured
by giving a direction to the Selection Committee to comply with the
requirement of sub-section (5) of Section 85 of the Act. Learned senior
counsel submitted that since it is a curable irregularity, a writ of quo
warranto be not issued since issuing of writ of quo warranto is within the
discretion of the Court. Learned senior counsel made reference to the
judgment of Court in R. v. Speyer (1916) 1 K.B. 595.

21. We are of the view that non-compliance of sub-section (5) of Section
85 of the Act is not a procedural violation, as it affects the very
substratum of the appointment, being a mandatory requirement to be complied
with, by the Selection Committee before recommending a person for the post
of Chairperson. We are of the view that non-compliance of sub-section (5)
of Section 85 of the Act will vitiate the entire selection process since it
is intended to be followed before making the recommendation to the State
Government. Non-compliance of mandatory requirements results in
nullification of the process of selection unless it is shown that
performance of that requirement was impossible or it could be statutorily
waived. The expression “before recommending any person” clearly indicates
that it is a mandatory requirement to be followed by the Selection
Committee before recommending the name of any person for the post of
Chairperson. The expression “before” clearly indicates the intention of
the Legislature. The meaning of the expression “before” came for
consideration before this Court in State Bank of Travancore v. Mohammad
(1981) 4 SCC 82 where the words “any debt due at and before the
commencement of this Act to any banking company” as occurring in section
4(1) of the Kerala Agriculturist Debt Relief Act, 1970, were construed by
the Supreme Court to mean “any debt due at and before the commencement of
this Act”. We, therefore, find it difficult to accept the contention of
learned senior counsel that this, being a procedural provision and non-
compliance of sub-section (5) of Section 85 of the Act, is a defect curable
by sending the recommendation back to the Selection Committee for
compliance of sub-section (5) of Section 85 of the Act.

22. We are, therefore, in agreement with the High Court that the
appointment of the appellant was in clear violation of sub-section (5) of
Section 85 of the Act and, consequently, he has no authority to hold the
post of the Chairperson of the Commission and the High Court has rightly
held so. This appeal, therefore, lacks merits and the same is dismissed
with no order as to costs.

…………………………………J.
(K.S. Radhakrishnan)
…………………………………J.
(Dipak Misra)
New Delhi,
October 19, 2012

 

 
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 7600 2012
(Arising out of SLP (C) No. 1673 of 2012)
Rajesh Awasthi ….. Appellant

Versus

Nand Lal Jaiswal and others .…Respondents
J U D G M E N T

Dipak Misra, J

 

I have my respectful concurrence with the conclusion and the views
expressed by my learned Brother Radhakrishnan, J. However, regard being
had to the importance of the matter, I propose to record my views in
addition.

2. As is evincible from the factual exposition, a writ of quo warranto
has been issued by the High Court of Allahabad, Bench at Lucknow declaring
that the appellant is not entitled to continue as the Chairperson of U.P.
State Electricity Regulatory Commission (for short ‘the State Commission’)
on the foundation that there had been total non-compliance of the statutory
provision enshrined under sub-section (5) of Section 85 of the Electricity
Act, 2003 (for brevity ‘the Act’).

3. As the facts have been stated in detail by my learned Brother, it is
not necessary to repeat the same. Suffice it to state that the pleas of
locus standi and delay and laches have not been accepted and a finding has
been returned by the High Court that the selection of the appellant was in
flagrant violation of the provisions of the Act and, therefore, his
continuance in law is impermissible.

4. Before I proceed to deal with the justifiability of the order passed
by the High Court, it is thought apposite to refer to certain authorities
that fundamentally deal with the concept of writ of quo warranto. In B.R.
Kapur v. State of Tamil Nadu and another[1], in the concurring opinion
Brijesh Kumar,J., while dealing with the concept of writ of quo warranto,
has referred to a passage from Words and Phrases Permanent Edition, Volume
35, at page 647, which is reproduced below: –

“The writ of “quo warranto” is not a substitute for mandamus or
injunction nor for an appeal or writ of error, and is not to be
used to prevent an improper exercise of power lawfully
possessed, and its purpose is solely to prevent an officer or
corporation or persons purporting to act as such from usurping a
power which they do not have. State ex inf. Mc. Kittrick v.
Murphy, 148 SW 2d 527, 529, 530, 347 Mo. 484.

(emphasis supplied)

Information in nature of “quo warranto” does not command
performance of official functions by any officer to whom it may
run, since it is not directed to officer as such, but to person
holding office or exercising franchise, and not for purpose of
dictating or prescribing official duties, but only to ascertain
whether he is rightfully entitled to exercise functions claimed.
State Ex. Inf. Walsh v. Thactcher, 102 SW 2d 937, 938, 340 Mo.
865.”

(Emphasis supplied)

5. In The University of Mysore v. C.D. Govinda Rao and another[2], while
dealing with the nature of the writ of quo warranto, Gajendragadkar,J. has
stated thus: –

“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 help, and in such cases, if the jurisdiction of the
courts to issue writ of quo warranto 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 a 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.”

6. From the aforesaid pronouncements it is graphically clear that a
citizen can claim a writ of quo warranto and he stands in the position of a
relater. He need not have any special interest or personal interest. The
real test is to see whether the person holding the office is authorised to
hold the same as per law. Delay and laches do not constitute any
impediment to deal with the lis on merits and it has been so stated in Dr.
Kashinath G. Jalmi and another v. The Speaker and others[3].

7. In High Court of Gujarat v. Gujarat Kishan Mazdoor Panchayat[4] it
has been laid down by this Court that a writ of quo warranto can be issued
when there is violation of statutory provisions/rules. The said principle
has been reiterated in Retd. Armed Forces Medical Association and others v.
Union of India and others[5].

8. In the case of Centre for PIL and another v. Union of India and
another[6] a three-Judge Bench, after referring to the decision in R.K.
Jain v. Union of India[7], has opined thus: –

“Even in R.K. Jain case, this Court observed vide para 73 that
judicial review is concerned with whether the incumbent
possessed qualifications for the appointment and the manner in
which the appointment came to be made or whether the procedure
adopted was fair, just and reasonable. We reiterate that the
Government is not accountable to the courts for the choice made
but the Government is accountable to the courts in respect of
the lawfulness/legality of its decisions when impugned under the
judicial review jurisdiction.”

 

It is also worth noting that in the said case a view has been expressed
that the judicial determination can be confined to the integrity of the
decision making process in terms of the statutory provisions.

9. Regard being had to the aforesaid conception of quo warranto I may
proceed to scrutinize the statutory provisions. Section 84 of the Act
deals with qualifications for appointment of Chairperson and Members of
State Commission. Section 85 provides for constitution of Selection
Committee to select Members of the State Commission. Sub-sections (4) and
(5) of Section 85 which are relevant for the present purpose read as
follows: –

“(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.”

10. On a perusal of the report of the Selection Committee it is manifest
that the Committee has not recorded its satisfaction with regard to
ingredients contained in Section 85(5) of the Act and left it to the total
discretion of the State Government.

11. On a scanning of the anatomy of Section 85(5) it is limpid that the
Selection Committee before recommending any person for appointment as a
Chairperson or a Member of the State Commission shall satisfy itself that
the 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. As the proceedings of the Selection Committee would reveal,
it had not recorded its satisfaction prior to recommending the names of the
two candidates. It is vivid that the Selection Committee abandoned its
function and simply sent the file to the State Government. It has been
argued with vehemence by Mr. Nageswara Rao, learned senior counsel for the
appellant that when two names were chosen from amongst certain persons it
has to be inferred that there was recommendation after due satisfaction as
per statutory requirement.

12. On a plain reading of the provision it is clear as crystal that the
Selection Committee is obliged in law to satisfy itself with regard to
various aspects as has been stipulated under sub-section (5) of Section 85
of the Act. It is perceptible that the said exercise has not been
undertaken. It is worthy to note that the Act has a purpose. It has been
enacted to consolidate the laws relating to generation, transmission,
distribution, trading and use of electricity and generally for taking
measures conducive to development of electricity industry, promoting
competition therein, protecting interest of consumers and supply of
electricity to all areas, rationalization of electricity tariff, ensuring
transparent policies regarding subsidies, promotion of efficient and
environmentally benign policies, constitution of Central Electricity
Authority, Regulatory Commissions and establishment of Appellate Tribunal
and for matters connected therewith or incidental thereto. Ergo, the
provisions engrafted in the Act have their sacrosanctity.

13. Presently, it is requisite to survey some of the statutory
provisions. Section 82 of the Act provides for constitution of the State
Commission. Section 2(64) defines the State Commission. It is as follows:

“(64) “State Commission” means the State Electricity Regulatory
Commission constituted under sub-section (1) of section 82 and
includes a Joint Commission constituted under sub-section (1) of
section 83;”

Section 86 deals with the functions of the State Commission. Keeping in
view the functions attributed to the State Commission by the legislature I
think it condign to reproduce the said provision in entirety: –

“86. Functions of State Commission. – (1) The State Commission
shall discharge the following functions, namely: –

(a) determine the tariff for generation, supply, transmission
and wheeling of electricity, wholesale, bulk or retail, as
the case may be, within the State:

Provided that where open access has been permitted
to a category of consumers under section 42, the State
Commission shall determine only the wheeling charges and
surcharge thereon, if any, for the said category of
consumers;

(b) regulate electricity purchase and procurement process of
distribution licensees including the price at which
electricity shall be procured from the generating companies
or licensees or from other sources through agreements for
purchase of power for distribution and supply within the
State;

(c) facilitate intra-State transmission and wheeling of
electricity;

(d) issue licences to persons seeking to act as transmission
licensees, distribution licensees and electricity traders
with respect to their operations within the State;

(e) promote cogeneration and generation of electricity from
renewable sources of energy by providing suitable measures
for connectivity with the grid and sale of electricity to
any person, and also specify for purchase of electricity
from such sources, a percentage of the total consumption of
electricity in the area of a distribution licensee;

(f) adjudicate upon the disputes between the licensees and
generating companies and to refer any dispute for
arbitration;

(g) levy fee for the purposes of this Act;

(h) specify State Grid Code consistent with the Grid Code
specified under clause (h) of sub-section (1) of section
79;

(i) specify or enforce standards with respect to quality,
continuity and reliability of service by licensees;

(j) fix the trading margin in the intra-State trading of
electricity, if considered, necessary;

(k) discharge such other functions as may be assigned to it
under this Act.

(2) The State Commission shall advise the State Government on
all or any of the following matters, namely: –

(i) promotion of competition, efficiency and economy in
activities of the electricity industry;

(ii) promotion of investment in electricity industry;

(iii) reorganization and restructuring of electricity industry
in the State;

(iv) matters concerning generation, transmission, distribution
and trading of electricity or any other matter referred to
the State Commission by that Government;

(3) The State Commission shall ensure transparency while
exercising its powers and discharging its functions.

(4) In discharge of its functions, the State Commission shall
be guided by the National Electricity Policy, National
Electricity Plan and Tariff Policy published under section 3.”

14. On an x-ray of the Preamble of the Act and the important functions
ascribed to the State Commission I have no scintilla of doubt that the
selection of Chairperson or a member is extremely important, more so, when
there is a statutory prescription about the manner in which the Selection
Committee is required to act. I may state here that though the language is
plain, unambiguous, clear and leads to a singular construction, yet I think
it apt to reproduce a passage from Utkal Contractors Joinery Pvt. Ltd. and
others etc. v. State of Orissa and others[8] wherein Chinnappa Reddy, J.
has observed thus: –

“A statute is best understood if we know the reason for it. The
reason for a statute is the safest guide to its interpretation.
The words of a statute take their colour from the reason for it.
How do we discover the reason for a statute? There are
external and internal aids. The external aids are Statement of
Objects and Reasons when the Bill is presented to Parliament,
the reports of Committees which preceded the Bill and the
reports of Parliamentary Committees. Occasional excursions into
the debates of Parliament are permitted. Internal aids are the
preamble, the scheme and the provisions of the Act. Having
discovered the reason for the statute and so having set the sail
to the wind, the interpreter may proceed ahead. No provision in
the statute and no word of the statute may be construed in
isolation. Every provision and every word must be looked at
generally before any provision or word is attempted to be
construed. The setting and the pattern are important.”

(emphasis supplied)

15. In Atma Ram Mittal v. Ishwar Singh Punia[9], Sabyasachi Mukherji, J.
(as his Lordship then was) emphasizing on the intention of the legislature,
stated thus: –

“Blackstone tells us that the fairest and most rational method
to interpret the will of the legislator is by exploring his
intentions at the time when the law was made, by signs most
natural and probable. And these signs are either the words, the
context, the subject matter, the effects and consequence, or the
spirit and reason of the law.”

16. In the said case reference was made to the decision in Popatlal Shah
v. State of Madras[10] wherein it has been laid down that each word, phrase
or sentence is to be construed in the light of purpose of the Act itself.
A reference was made to the observations of Lord Reid in Black-Clawson
International Ltd. v. Papierwerke Waldhof-Aschaffenburg A G[11] wherein the
Law Lord has observed as under: –

“We often say that we are looking for the intention of the
Parliament, but this is not quite accurate. We are seeking the
meaning of the words which Parliament used. We are seeking not
what Parliament meant but the true meaning of what they said.”

17. In Sangeeta Singh v. Union of India and others[12] emphasis was laid
on the language employed in the statute and in that context it has been
opined as follows: –

“5. It is well-settled principle in law that the court cannot
read anything into a statutory provision or a stipulated
condition which is plain and unambiguous. A statute is an edict
of the legislature. The language employed in a statute is the
determinative factor of legislative intent. Similar is the
position for conditions stipulated in advertisements.”

18. I have referred to the aforesaid pronouncements only to highlight
that Section 85(5) of the Act has inherent inviolability and every word
used therein has to be understood in the context regard being had to the
legislative intendment. There has to be concentrated focus on the purpose
of legislation and the text of the language, for any deviation is likely to
bring in hazardous results.

19. At this juncture I may profitably refer to Uttar Pradesh Power
Corporation Limited v. National Thermal Power Corporation Limited and
others[13] wherein, after referring to the decision in W.B. Electricity
Regulatory Commission v. CESC Ltd.[14], this Court has stated thus: –

“12. Looking to the observations made by this Court to the
effect that the Central Commission constituted under Section 3
of the Act is an expert body which has been entrusted with the
task of determination of tariff and as determination of tariff
involves highly technical procedure requiring not only working
knowledge of law but also of engineering, finance, commerce,
economics and management, this Court was firmly of the view that
the issues with regard to determination of tariff should be left
to the said expert body and ordinarily the High Court and even
this Court should not interfere with the determination of
tariff.”

20. Be it noted, emphasis has also been laid on functioning of regulatory
bodies in ITC Limited v. State of Uttar Pradesh and others[15].

21. I have referred to the aforesaid authorities singularly for the
purpose that regulatory commission is an expert body and in such a
situation the selection has to be absolutely in accord with the mandatory
procedure as enshrined under Section 85 of the Act.

22. In the present context, it has become necessitous to dwell upon the
role of the Selection Committee. Section 85(1) of the Act provides for
constitution of Selection Committee to select Members of the State
Commission. The said Committee, as the composition would show, is a high
powered committee, which has been authorised to adjudge all aspects. I may
hasten to add that I am not at all delving into the sphere of suitability
of a candidate or the eligibility, for in the case at hand the issue in
singularity pertains to total non-compliance of the statutory command as
envisaged under Section 85(5).

23. It is seemly to state the aforementioned provision employs the term
“recommendation”. While dealing with the concept of recommendation, a three-
Judge Bench of this Court in A. Pandurangam Rao v. State of Andhra Pradesh
and others[16] has stated that the literal meaning of the word “recommend”
is quite simple and it means “suggest as fit for employment”. In the
present case the Selection Committee as per the provision was obliged to
satisfy itself when the legislature has used the word “satisfied”. It has
mandated the Committee to perform an affirmative act. There has to be
recording of reasons indicating satisfaction, may be a reasonable one.
Absence of recording of satisfaction is contrary to the mandate/command of
the law and that makes the decision sensitively susceptible. It has to be
borne in mind that in view of the power conferred on the State Commission,
responsibility of selection has been conferred on a high powered Selection
Committee. The Selection Committee is legally obliged to record that it
has been satisfied that the candidate does not have any financial or other
interest which is likely to affect prejudicially his functions as Chairman
or Member, as the case may be. The said satisfaction has to be reached
before recommending any person for appointment. It would not be an
exaggeration to state that the abdication of said power tantamounts to
breach of Rule of Law because it not only gives a go by to the warrant of
law but also creates a dent in the basic index of law. Therefore, the
selection is vitiated and it can never come within the realm of curability,
for there has been statutory non-compliance from the very inception of
selection.

24. It is necessary to state here that in many an enactment the
legislature has created regulatory bodies. No one can be oblivious of the
fact that in a global economy the trust on the regulators has been
accentuated. Credibility of governance to a great extent depends on the
functioning of such regulatory bodies and, therefore, their selection has
to be in total consonance with the statutory provisions. The same inspires
public confidence and helps in systematic growth of economy. Trust in such
institutions helps in progress and distrust corrodes it like an incurable
malignancy. Progress is achieved when there is good governance and good
governance depends on how law is implemented. Keeping in view the objects
and reasons and preamble of the Act and the functions of the Commission, it
can be stated with certitude that no latitude can be given and laxity can
have no allowance when there is total violation of the statutory provision
pertaining to selection. It has been said long back “a society is well
governed when the people who are in the helm of affairs obey the command of
the law”. But, in the case at hand the Selection Committee has failed to
obey the mandate of the law as a consequence of which the appellant has
been selected and, therefore, in the ultimate eventuate the selection
becomes unsustainable.

25. It is manifest in the selection of the appellant that there is
absence of “intellectual objectivity” in the decision making process. It
is to be kept in mind a constructive intellect brings in good rationale and
reflects conscious exercise of conferred power. A selection process of
this nature has to reflect a combined effect of intellect and industry. It
is because when there is a combination of the two, the recommendations as
used in the provision not only serves the purpose of a “lamp in the study”
but also as a “light house” which is shining, clear and transparent.

26. I emphasize on the decision making process because in such a case
there is exercise of power of judicial review. In Chief Constable of the
North Wales Police v. Evans[17], Lord Brightman observed thus: –

“….Judicial review, as the words imply, is not an appeal from
a decision, but a review of the manner in which the decision was
made….”

27. In view of the aforesaid analysis, I conclude that there has been
total non-compliance of the statutory provision by the Selection Committee
which makes the decision making process vulnerable warranting interference
by the constitutional courts and, therefore, the High Court is justified in
holding that the appointment is non est in law.

28. Consequently, the appeal, being sans substratum, stands dismissed
without any order as to costs.
……………………………….J.
[Dipak Misra]

New Delhi;
October 19, 2012.

———————–
[1] AIR 2001 SC 3435
[2] AIR 1965 SC 491
[3] AIR 1993 SC 1873
[4] (2003) 4 SCC 712
[5] (2006) 11 SCC 731 (I)
[6] (2011) 4 SCC 1
[7] (1993) 4 SCC 119
[8] AIR 1987 SC 1454
[9] (1988) 4 SCC 284
[10] 1953 SCR 677 : AIR 1953 SC 274
[11] 1975 AC 591
[12] (2005) 7 SCC 484
[13] (2011) 12 SCC 400
[14] (2002) 8 SCC 715
[15] (2011) 7 SCC 493
[16] AIR 1975 SC 1922
[17] (1982) 1 W.L.R. 1155

 

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