Order of Karnataka CM was set aside as there was no valid reasons recorded for exercise of doctrine of pleasure

Yugashree | School of Law Sastra University, Thanjavur | 5th April 2020

B K Uday Kumar vs. State Of Karnataka

Facts

The Karnataka Power Transmission Corporation Limited is a company owned by the State Government. Previously it used to supply power to the entire state. In the year 2002 Government of Karnataka formed 4 distribution companies including the respondent number 4 which is Bangalore Electricity Supply Company Limited (BESCOM) and it distributes power to eight districts. The appellant joined KPTC ltd in 1985 and in the year 2008 Chief Engineer but reverted to the post of Superintending Engineer by citing the judgement of  B.K. Pavitra (I) & Others -vs. Union of India and Others. The Appellant in 2017 claimed that his seniority was restored by a deeming provision with reference to Karnataka Act No 21 of 2017.In 2019 he was appointed as Managing Director of the Karnataka Vidyuth Karkhane Limited (KAVIKA) another State Government owned company. 3^rd Respondent of this case was actually deputed to work as Director of BESCOM in 2018.On JULY 2019 the appellant was appointed as technical director of BESCOM and on that day itself he filed a declaration expressing  his interest to become a director with reference to section149 of the companies act and the 2rd respondent was appointed as director to KAVIKA The 3^rd respondent challenged the appointment of appellant by filing Writ Petition and the appellant filed statement of objections that it cannot be challenged without impleading BESCOM as party to the writ petition reason being that it is a company registered under companies act and also contended that 3^rdrespondent doesn’t possess enough qualification. The appellant was promoted as Chief Engineer in 1992 whereas the respondent appointed to the said post at 1999. The provisional list was drawn up and, in that provisional list, the name of the appellant was, in the case of the Chief Engineer, serial number-2. As far as the third respondent is concerned, no eligibility date has been fixed, as it did not set the required five years of service on the date of his appointment as Chief Engineer. It is submitted that all procedural formalities, including the adoption of decisions by the Board, have been complied with before the Government has passed the orders in the exercise of its powers under Article-74(a) and (b) of the Articles of Association and the Memorandum of Association of BESCOM. It was claimed that the appellant had assumed the office of Director BESCOM & 3rd respondent after handing over the charge of that post to the appellant, who had filed the written petition, and that fact had not been incorporated in the written petition. It was argued that, pursuant to Article 74 of the Articles of Association of the Government of Karnataka, it is empowered to appoint and appoint the Director of BESCOM and, at the same time, the Government has its absolute discretion to remove the Director. In the opinion of Judge that no reason has been given for the removal of the third respondent- and for the appointment of the appellant to the post of Director BESCOM and that the order for appointment of the appellant dated 2019 has therefore been set aside by allowing the writ petition filed by the third respondent.

Pleadings and Judgement:

The court stated that the at no point the appellant’s side challenged regarding the violation of procedures of the said act of 2013.The DIN number should precede the passing of resolution appointing the director of BESCOM are erroneous findings and cannot be upheld. There was no foundation in the pleadings as to finding that the appellant cannot have taken over the charge of the post on July, 2019. if the order appointing the appellant is to be set aside, the entire exercise must be ordered to be re-done^[1].It was argued by the respondent pointing out the findings of the judgements regarding the violation of companies act were based on documents and materials produced before the court .

The court 1^st looked up on which ground BESCOM was added as 4^th party and also referred to the Articles of Association of BESCOM. It specifies that Karnataka Government shall have the power to select and nominate, and can, at any time withdraw one or more directors from the Office and appoint other person to the Office of the Chairman or the Managing Director, or a full time manager of the Business. The court has to look upon doctrine of pleasure to decide on this case.Having set aside the order of the Hon’ble Chief Minister on the ground that there are no valid reasons reported for the practice of the doctrine of pleasure.

Order:

1. The court vitiated the Judgement the learned Single Judge on the ground that there was arbitrary and illegal use of Doctrine of Pleasure.
2. The court directed that the proposal of cancellation of respondent’s appointment and the appointment of the appellant must be placed before the CM who is free to pass orders in this regard.
3. The file has to be placed before the CM after the expiry of 6 weeks from the date of the Judgement.
4. The court disposed the case with above mentioned directions.

^[1] In the case of B.P. Singhal (supra)