Decided on April 01,1992

D. Lakshminarayana Rao Appellant
A.P. State Warehousing Corporation And Others Respondents


D.J. Jagannadha Raju, J. - (1.)The language of sub-section (2) of Sec. 42 indicates the matters on which regulations are to be made. Clause (a) deals with the conditions of service of and remuneration payable to the officers and other employees of a Warehousing Corporation. Clause (d) deals with the duties and conduct of officers and employees of a Warehousing Corporation. We are not concerned with the other clauses of sub-section (2). Sub-section (3) provides for the appropriate government, by notification in the Official Gazette rescinding any regulation which it has sanctioned and thereupon the regulation shall cease to have effect. It is significant to remember that in this case, no notification was issued by the appropriate Government rescinding any of the regulations made by the first respondent-Corporation.
(2.)I shall now deal with the scheme of the A.P. State Warehousing Corporation Employees Regulations, 1965, which have been validly made in strict conformity with sub-section (1) of Sec. 42 of the Act. Regulation 4 of the abovesaid regulations deals with classification of employees. The language of this Regulation is very very important. It reads as follows : "CLASSIFICATION OF EMPLOYEES : The employees of the Corporation shall be classified as follows:-
Class-I : Secretary, Inspection and Storage Officer, Construction Engineer, Inspecting Accountant Storage Assistant, Regional Inspection Officer, Warehousing Manager, Gr. I and Warehousing Manager Grade II and such other posts as may be created by the Board from time to time.

Class-II : Warehouse Manager Grade II, Technical Assistant, Superintendent, Accountant, Supervisor, Draughtsman Grade II, Draughtsman Grade III, Overseer, Godown Keeper, Senior Assistant, Junior Assistant, Stenographer, Typist, Record-keeper and such other posts as may be created by the Board from time to time.

Class III : Driver, Attender, Dusting Operator-cum-Peon (at Warehouses) Weighman, Peon, Watchman and such other posts as may be created from time to time."
A reading of this Regulation clearly indicates that the power to create posts is given to the Board and the Board is competent to create such other posts as may be created from time to time. Under Regulation 5, the Board shall determine from time to time the number of posts both permanent and temporary under the various categories for carrying out its functions. Under the Proviso to Regulation 5, the Managing Director is given the power to create any post under Class III for a period not exceeding six months, subject to the approval of the Executive Committee. By virtue of Sec. 20 of the Act, the Board of Directors has full powers of management. By virtue of the Rules made by the State Government, the Executive Committees are created as per clause (d) of Sec. 41(2) of the Act. We have to Judge, the actions of the respondents in this case in the light of the above provisions of the Act, the Rules and the Regulations.
(3.)Ex. P.5 clearly shows that the Board of Directors at its meeting on 31.3.1987 took a decision for upgradation of three posts of Regional Managers and they are to be designated as Senior Regional Managers (S.R.Ms.). This decision was taken in pursuance of the recommendation of the Executive Committee and the Minutes of the Executive Committee; 81st meeting held on 313.1987. In pursuance of Ex P.5, the Managing Director issued Ex. P.1 order dated 12.4.1987. This clearly indicates that the three petitioners have been posted as Senior Regional Managers in the upgraded posts and the scale of pay is also indicated in the order. On the very same day, the Managing Director informed the various authorities about the need for the creation of the new posts of Senior Regional Managers in view of the quantum jump in the capacity of the Warehouses and their occupancy and the Board, considering all these aspects, upgraded the posts of Regional Managers at Karimnagar, Cuddapah and Kakinada to the category of Senior Regional Managers. As can be seen from Ex. P.4 on 16.5.1988, the State Government Secretary wrote a letter to the Managing Director of first respondent-Corporation stating that the sub- committee recommended the revised scales of pay and that the Government gives its concurrence. In paragraph 2 of this letter, the State Government informed the Managing Director that the proposal of the Board for creating two posts of Senior Regional Managers and P.R.O. and sanctioning them special scale of pay be deferred in view of the need for enforcing economy in the organization. The letter nowhere mentions under what statutory power or under what rule or regulation the Government is objecting to the creation of the posts which had already taken place in April, 1987. Immediately after receiving this letter of the State Government, the Managing Director issued the impugned order dated 21.7.1988 whereby he re-designated the Senior Regional Managers as Regional Managers only and posted them to the posts held by them before upgradation. One fails to understand why the Managing Director did not ask the Government as to under what statutory power or under what Rule or Regulation, the State Government was objecting to the creation of the posts. When Regulation 4 gives the right to the Board of Directors to create the posts. It should be remembered that by the time Ex P.3 impugned order was passed, the present petitioners had already functioned as Senior Regional Managers for one year and three months.

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