S MOHAN SINGH Vs. PATIALA AND EAST PUNJAB STATES UNION
LAWS(P&H)-1954-2-3
HIGH COURT OF PUNJAB AND HARYANA
Decided on February 22,1954

S MOHAN SINGH Appellant
VERSUS
Patiala And East Punjab States Union Respondents

JUDGEMENT

- (1.) This is a petition under Article 226 of the Constitution.
(2.) The Petitioner, S. Mohan Singh, was appointed on 14-12-1944, Economic Adviser in the former Patiala State under the orders of the Ruler with a starting pay of Rs. 1,000/- P.M. in the grade of Rs. 1,000-100-1,500, and the order stated that he shall also act as Managing Director of the Patiala State Bank for which he shall be paid a salary of Rs. 500/- P.M. by the Bank. One of the terms, of his appointment was that the appointment was , to be for five years in the first instance and after the expiration of that period he was to be treated as continuing in the service of the State on the salary he would be getting at the time and on the same terms and conditions except the period of service, but subject to his employment being terminable by three months' notice on either side-Although the Petitioner has omitted to state this, fact in the petition, the post and office of the Economic Adviser in the former Patiala State was; abolished on 26-4-1948, and the Petitioner continued in the post of the Managing Director of Patiala. State Bank on the pay, grade, and privileges he was then enjoying in the combined work as Economic Adviser and Managing Director of the Patiala State Bank. This was the position on 15-8-1948 on which date the Patiala and East Punjab States Union was formed. On 21-9-1949, the term of office of the' Petitioner as Managing Director of the Bank of Patiala was extended for a further period of five years with effect from 15-11-1949, and one of the conditions of his employment was that the same would be terminable by three months' notice on either side. The Petitioner avers that in September,. 1951, the then Finance Minister initiated a proposal for dispensing with his services by giving him a notice of three months, and that the proposal was circulated by the Finance Minister among, his colleagues, but since there was no basis for the action proposed, the proposal was eventually dropped. On 15-12-1953, the Finance Secretary wrote to him that the Government had decided to terminate his services immediately and to give him three months' pay in lieu of notice in the terms of his contract. The letter says: Government have given full consideration to the explanation which you submitted at the meeting held on the 12th December, 1953, with the Board of Directors regarding the purchase of Punjab Bonds. They are in agreement with the Board of Directors that your explanations are very-unsatisfactory and that your retention in service-is contrary to the public interest. They have, accordingly, decided to terminate your services immediately and to give you three months' pay in lieu of notice to which you are entitled under your contract. I am authorized to, and do hereby, give you notice of termination of your contract accordingly. Should you, however, prefer to give notice to Government of your desire to terminate your contract, Government will accept that and withdraw the notice now given to you. Government will still be willing to give you three months pay as in the case of notice given by Government to you under the contract. You are directed to hand over charge immediately on receipt of this letter, to S. Santokh Singh, who has been instructed to receive charge from you. A formal report of your handing over charge may kindly, be made to me. The Petitioner says that the order terminating his services was not, in fact, made by the Govern ment, that such an order could only be made either by the President or by the Rajpramukh and if it has been made by the Adviser to the Rajpramukh, it is unauthorized and ultra vires, and that in spite of the fact that shelter is taken toy the Finance Secretary in his letter of a term in the contract, the order terminating his services is virtually an order removing him from service ,and since no opportunity to show cause against his proposed removal from service was given to .him, as contemplated by Article 311 of the Constitution, so his removal from service is illegal and without jurisdiction, and further that that order ,is mala fide, oppressive, and has been made for ulterior motive to punish him for his reluctance to oblige certain officials and influential persons by refraining to take suitable action against his subordinates and in the discharge of his official duties. He, therefore, prays: That writs of certiorari, or prohibition and mandamus or any other appropriate writ or order or direction be issued against the Respondent Government quashing their order mentioned in the Finance Secretary's first letter of 15-12-1953 restraining them from giving effect to that order, directing them to allow the Petitioner to continue to work as Managing Director of the Bank and declaring that he still holds that position. Before the reply on behalf of the State was put in the Petitioner made an application on 18-12-1953, in which he has urged two additional grounds in support of his petition and they are (i) that if he is not a government servant, the order of the Government terminating his services is liable to toe quashed for this reason alone and no other question in the case need be gone into. Because "if the Petitioner is not a Government servant, the 'Government have no jurisdiction to order the termination of his services and the order they have made is ultra vires, and (ii) that the order terminating his services violates the provisions of Article 310 of the Constitution.
(3.) The learned Advocate-General, Dewan Chetan Dass, has put in reply to the petition on be-half of the Respondent, the PEPSU State, in which it is admitted (hat the Petitioner was appointed Economic Adviser to the Government of former Patiala State on 14-12-1944, but it is stated that the order appointing him virtually provided that as Managing Director he shall be paid a salary of Rs. 500/- P.M. by the Bank and in other mat-ters also his position as Managing Director of the Bank was kept separate from his position as Economic Adviser to the former Patiala State. The terms and conditions of service of the Petitioner under the order of 14-12-1948, as referred to by the Petitioner in his petition are admitted, but it is pointed out that the post of the Economic Adviser was abolished on 2G-4-1948, and for about three and a half years' service as Economic Adviser the Petitioner was paid a gratuity of Rs. 3,900/- according to the Service Regulations applicable to him. Thus, it is said, the Petitioner ceased to be in the service of the Slate and became exclusively an employee of the Bank as Managing Director. The extension of the term of office of the Petitioner by the PEPSU Government as Managing Director of the Bank of Patiala for a period of five years with effect from 15-11-1949, is also admitted, but it is stated that one of the terms of . the contract was that the Petitioner's service was terminable by three months' notice and that that term remained operative till the day his service was terminated. It is not denied that in September, 1851, the then Finance Minister of Pepsu did propose termination of Petitioner's service by giving turn three months' salary in lieu of notice and the 'proposal was circulated among his colleagues and ultimately the papers were merely ordered to be recorded on 28-1-1952. It is then stated in reply that on 15-12-1953, the Finance Secretary, on behalf of the Government, issued a letter intimating to the Petitioner that his services were terminated on payment of three months' salary in lieu of notice in the terms of his contract of service and the events which led to that are: At the request of the Government of Pepsu an inspection of books and Accounts of the Bank of Patiala was carried- out by officers of Reserve Bank of India between 11th and 28th September, 1951. Their report was received on 8-11-1951. The report was then sent to the Adviser to His Highness the Rajpramukh on 22-4-1952 and was not received back from his successor, the Counselor, until 2-1-1953. The report was sent to the Petitioner on 24-1-1953 for his comments thereon. After a pressing reminder from the Government the Petitioner submitted his comments on 23-5-1953. An important issue raised in the inspection report was the purchase of Punjab Bonds of the value of over Rs. 30,00,000/- by the Petitioner in September-October, 1947, i.e., soon after partition of the country and their subsequent sale in June-July, 1948, resulting in a loss of about Rs. 70,000/-. The inspection report pointed out in a note to the Board that the Petitioner had stated in June, 1948, that the Punjab Bonds had been purchased long before partition and were considered excellent scraps. The report further pointed out that these scrips had become the liability of the West Punjab (Pakistan Government) under the Indian Independence (Rights, Property and Liability) Order, 1947, as notified on 14-8-1947, in the Government of India Gazette. In his comments the Petitioner admitted that the Punjab Bonds had been purchased after partition and not long before it as stated by him in his note to the Board dated 29-6-1948. He regretted this and attributed the misstatement to the inadvertence on the part of the office. In his note dated 22-10-51 submitted by him to the Board of Directors the Petitioner submitted inter alia that he had purchased the bonds after due consultation with the Chief Accountant of the Reserve Bank of India and Superintendent of Securities, Imperial Bank of India, Bombay. This was in justification of the transaction pertaining to the purchase of the Punjab Bonds which was otherwise highly indiscreet and reckless. Inquiries were made from the said authorities and it transpired that no such consultation had taken place. The information from the Reserve Bank of India was received on 7-1-52 and from the Imperial Bank of India, Bombay, on 5-2-1952. The inspection report of the Reserve Bank of India and the comments of the Petitioner thereon, as also the letters received from the Reserve Bank of India and Imperial Bank of India referred to above were all placed before the Board of Directors at their Meeting held on 6-9-1953, (this date is not correct and in a later affidavit of the Finance Secretary it has been given as 3-9-1953). The Petitioner was present at this meeting and heard. The Board of Directors found: (i) That the Petitioner should have known that the bonds were the liability of the West Punjab Government (Pakistan) and that in view of the conditions prevailing at that time he should have exercised more prudence and caution in their purchase. (ii) That the purchase was not authorised by the competent authority, i.e., the Board. (iii) That the Petitioner had made misstatements that the securities had been purchased long before the partition and further that before purchasing them he had consulted the Chief Accountant of Reserve Bank of India and the Superintendent of Securities, Imperial Bank of India, Bombay. Before taking any action on the findings of the Board of Directors in the Punjab Bonds matter, the Adviser to His Highness the Rajpramukh called a meeting of the Board of Directors at his residence on 12-12-1953. The notice for the meeting was issued on 2-12-1953 and an intimation was sent to the Petitioner on the same date. On 4-12-1953 a copy of the findings of the Board of Directors of September, 1953, was also sent to the Petitioner on his request. The Chairman, Shri P.K. Wattal, Finance Secretary to the Government and all the four Directors including the Petitioner were present. The Punjab Bonds case was discussed in the presence of the Petitioner who had the opportunity to express himself on the matter. The Board of Directors reiterated their earlier findings of September, 1953. When the matter came to the stage of taking decision, the Petitioner left the meeting of his own. The Adviser to His Highness the Rajpramukh invited the views of the Board of Directors on the action to be taken. They unanimously expressed the view that the explanations furnished by the Petitioner were unsatisfactory and that his retention in the service was contrary to public interest. It was accordingly decided to terminate his services immediately and to give him three months' salary in lieu of notice. It was also decided that if the Petitioner preferred to give a notice to the Government he should be allowed to do so in which case the notice given by the, Government to him would be withdrawn. The proceedings of the meeting were recorded by Shri B.K. Wattal, Finance Secretary to the Government, and confirmed by the Adviser to his Highness the Rajpramukh on 14-12-1953. Notice was accordingly issued to the Petitioner on 15-12-1953 in accordance with the orders of the Adviser to His Highness the Rajpramukh. The proceedings of the meeting were also circulated to the Board of Directors and confirmed by them. The position taken by the Respondent is that the order terminating the Petitioner's services was made by the Government, that the Adviser to His Highness the Rajpramukh was duly competent to order the termination of the Petitioner's services and the order made by him is valid and operative, that Article 311 of the Constitution has no application to the case of the Petitioner because he was neither a member of the Civil Service of the State nor did he hold Civil Post under the State being an employee of the Bank of Patiala, that his services were terminated according to the terms of his service, that the mere fact that it has been stated in the communication made to the Petitioner that his services were being terminated in public interest does not alter the position nor does it attract the operation of Article 311 of the Constitution and so the order being perfectly legal the Petitioner was not entitled to an opportunity under the said Article as his claims, and that the termination of his services in the terms of his contract was not mala fide, oppressive and with ulte-'rior motive. The further objections to the petition are that the Petitioner has suppressed facts material and relevant, to the decision of the issues which arise for determination and therefore is not entitled to the exercise of extraordinary and discretionary powers of the High Court under Article 226 of the Constitution, that there is no infringement of any of the fundamental rights or a legally recognized and well established right in the Petitioner, that the order terminating the Petitioner's services is executive in nature and a writ of certiorari cannot legally issue and there is no occasion for issue of writ of prohibition or mandamus, that the Petitioner's claim for the issue of any other order, writ or direction", without stating what exact order or direction or writ the Petitioner seeks, is not entertain able, and that the Petitioner has the alternative remedy by way of suit. In the end the prayer is that the petition may be dismissed with costs.;


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