Writ Petition No. 5780 of 1999,Civil Application No. 2189 of 2006

10th January, 2011

Petitioner Counsel: Mr. ARSHAD SHAIKH, Mr. MAHESH LONDHE, Ms. PALLAVI DEDHIA, M/s. SANJAY UDESHI
Respondent Counsel: Mr. M.S. KARNIK, Mr. SHASHIPAL SHANKAR

Cases Cited:
National Agricultural Co-operative Marketing Federation of India Limited Vs. Nafed Processed Food Co-op. Marketing Federation of India Employees Union, 2001(1) ILR (DLH) 18 : 2001 (90) DLT 754 [Para 8,14]
Ajay Hasia, etc. Vs. Khalid Mujib Sehravardi and others, 2007 ALL SCR (O.C.C.) 214 =AIR 1981 SC 487 [Para 10]
Dr. S.M. Ilyas and others Vs. Indian Council of Agricultural Research and others, (1993) 1 SCC 182 [Para 10]
U.P. State Co-operative Land Development Bank Ltd. Vs. Chandra Bhan Dubey and others, (1999) 1 SCC 741 [Para 10]
The Mysore Paper Mills Ltd. Vs. The Mysore Paper Mills Officers Association and another, AIR 2002 SC 609 [Para 10]
M.P. State Co-op. Dairy Federation Ltd. Vs. Rajnesh Kumar Jamindar and others, JT 2009 (6) SC 263 [Para 10]
A.M. Ahamed and Co., Madras and others Vs. Union of India and others, AIR 1982 Madras 247 [Para 10,14]
Subhayu Das Gupta Vs. The Institute of Chartered Accountants of India, 1986 LAB. I.C. 771 [Para 10]
Pradeep Kumar Biswas Vs. Indian Institute of Chemical Biology and others, (2002) 5 SCC 111 [Para 11]
Tekraj Vasandi alias K.L. Basandhi Vs. Union of India and others, (1988) 1 SCC 236 [Para 15]
Sakal Deep Sahai Srivastava Vs. Union of India and another, (1974) 1 SCC 338 [Para 16]
N. Ramanatha Pillai Vs. State of Kerala, AIR 1973 SC 2641 [Para 17]
State of Haryana and others Vs. Navneet Verma, 2008(2) ALL MR 308 (S.C.) =(2008) 2 SCC 65 [Para 18]
Dr. N.C. Singhal Vs. Union of India and others, (1980) 3 SCC 29 [Para 19]

JUDGMENT

P.B. MAJMUDAR, J. :- The petitioner has invoked the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India by way of this petition and has prayed for setting aside the order dated 14th May, 1999 by which the post which the petitioner was holding was ordered to be abolished. The petitioner has prayed for reinstatement in service on his original post with full back wages and consequential benefits. The petitioner has also challenged an order of punishment dated 10th June, 1998 passed against him by the management by which three increments of the petitioner are withheld by way of punishment which was confirmed in appeal by the Appellate Authority. He has also challenged the order dated 5th December, 1998 by which the basic pay of the petitioner was reduced for a period of two years which was confirmed in departmental appeal.

2. The petitioner was initially appointed as a Joint Director (Administration) by the second respondent to look after personnel, administration, finance and accounts of the first respondent Foundation. The petitioner was subjected to two departmental inquiries on the basis of which two separate punishment orders were passed, one regarding withholding of three increments and the other regarding reducing his basic pay scale for two years. The post which the petitioner was holding was abolished by the first respondent by way of resolution passed by it in its Managing Committee meeting and by an office order dated 14th May, 1999, the said post was ordered to be abolished which action has also been challenged by the petitioner along with two punishment orders.

3. During the course of hearing, Mr. Karnik, learned counsel appearing for respondent No.2, after taking instructions from the concerned officer of the first respondent, fairly states that without prejudice to the rights and contentions of first respondent to the effect that it is not a "State" within the meaning of Article 12 of the Constitution of India and while maintaining the point that the writ petition under Article 226 of the Constitution is not maintainable against the first respondent, the first respondent is willing to withdraw both the aforesaid punishment orders dated 10th June, 1998 and 5th December, 1998. In view of the said concession, the aforesaid two orders of punishment are treated to have been withdrawn and the learned counsel for respondent No.2 states that whatever benefits the petitioner will be entitled to on account of the withdrawal of these two punishment orders will be paid to the petitioner within a period of two months from today. The said statement of the learned counsel is accordingly recorded. Respondent no.1 to act accordingly.

4. In view of the withdrawal of the aforesaid two punishment orders, the question which the Court is now required to be examined in the light of the decision taken by respondent No.1 is regarding abolition of post which the petitioner was holding.

5. The petitioner was employed by the first respondent, a Society registered under the Societies Registration Act. A decision was was taken by the Managing Committee of first respondent at its meeting held on 14th April, 1999 to abolish the post of Joint Director (Personnel and Administration) in view of the financial constraints as well as on the ground that no purpose would be served in continuing the said post. Pursuant thereto, the services of the petitioner were terminated after the office hours on 14th May, 1999. The petitioner was also given three months' notice pay in lieu of the notice. The aforesaid order is impugned at the instance of the petitioner in this petition.

6. Mr. Arshad Shaikh, learned counsel appearing for the petitioner, vehemently argued that the order abolishing the said post is not passed in a bona fide manner but the same is mala fide and is passed only in order to victimise the petitioner. In this connection, reliance is placed to certain orders passed by Mr. U.B. Pandey, Director of first respondent, who is alleged to have enmity with the petitioner and ultimately with a view to remove the petitioner from the services that the ultimate order of abolishing the said post has been passed.

7. This petition is opposed by Mr. Karnik, learned counsel appearing for respondent No.2, on the ground that respondent No.1 is a Society incorporated under the Societies Registration Act and, therefore, is not a State within the meaning of Article 12 of the Constitution of India. He further points that respondent No.3 - National Agricultural Co-operative Marketing Federation of India Ltd. (NAFED), also cannot be said to be a State within the meaning of Article 12 of the Constitution of India. Even otherwise, NAFED has no control over the day to day management of the first respondent in any manner nor it is financing in any manner so far as the working of the first respondent Society is concerned. It is, therefore, submitted that this writ petition is not maintainable. It is further submitted that the policy decision for abolition of post was taken by the Managing Committee consisting of 14 members and that it is not correct to say that the decision was taken at the instance of the second respondent.

8. Mr. Shashipal Shankar, learned counsel for respondent No. 3NAFED states that NAFED cannot be said to be a State within the meaning of Article 12 of the Constitution of India for which he has relied upon the decision of the Delhi High Court in the case of National Agricultural Co-operative Marketing Federation of India Limited vs. Nafed Processed Food Co-operative Marketing Federation of India Employees Union, 2001 (1) ILR (DLH) 18 : 2001 (90) DLT 754 He further states that NAFED has absolutely no control in any manner regarding the affairs of the first respondent, which is purely an independent institution functioning under the State Co-operative Societies Act.

9. As stated earlier, since the two punishment orders have been withdrawn by the first respondent, the only question which requires consideration in this petition is as to whether the order of abolition of the post which the petitioner was holding can be said to be a bona fide order or it is passed with oblique motive to do away with the services of the petitioner and whether the respondent No.1 can be said to be a State within the meaning of Article 12 of the Constitution of India and amenable to the writ jurisdiction of this Court under Article 226 of the Constitution of India.

10. In order to ascertain as to whether the first respondent can be said to be a State within the meaning of Article 12 of the Constitution, it would be necessary to have a look at the bye-laws, a copy of which has been placed on record. So far as President and Vice-President of respondent No. 1 is concerned, they are nominated by NAFED. Over and above President and Vice President, initially there were other additional 8 members. The Court is informed that the strength of the Managing Committee has been now increased to 18 i.e. 4 representatives from NAFED of which one shall be Managing Director, 9 representatives would be elected from amongst the Associate Members, 4 members from eminent scientists/experts in the related field and the Director of first respondent acts as a Member Secretary. As per the bye-laws of the society, the President shall be the Chairman at every meeting of the Committee and in his absence, Vice-President may act as Chairman. The President has power to monitor the aspect about appointment or removal of an employee in the services. The learned counsel for the petitioner submitted that the first respondent, therefore, should be treated as a State within the meaning of Article 12 of the Constitution of India in view of the fact that it discharges an important public function. It is further submitted that respondent No.1 should be treated as a State on its own or in any case in view of the fact that the third respondent is having an effective control over respondent No.1 and third respondent being a State within the meaning of Article 12, respondent No.1 should also be treated as an instrumentality of the State. In order to substantiate his say that the first respondent be considered as a State, the learned counsel for the petitioner has relied upon various judgments of the Supreme Court and other High Courts viz. (i) Ajay Hasia, etc. vs. Khalid Mujib Sehravardi and others, AIR 1981 SC 487 : [2007 ALL SCR (O.C.C.) 214] (ii) Dr. S.M. Ilyas and others vs. Indian Council of Agricultural Research and others, (1993) 1 SCC 182 (iii) U.P. State Co-operative Land Development Bank Ltd. vs. Chandra Bhan Dubey and others, (1999) 1 SCC 741 (iv) The Mysore Paper Mills Ltd. vs. The Mysore Paper Mills Officers Association and another, AIR 2002 SC 609 (v) M.P. State Co-op. Dairy Federation Ltd. vs. Rajnesh Kumar Jamindar and others, JT 2009 (6) SC 263 (vi) A.M. Ahamed and Co., Madras and others vs. Union of India and others, AIR 1982 Madras 247 (vii) Subhayu Das Gupta vs. The Institute of Chartered Accountants of India, 1986 LAB. I.C. 771

11. Learned counsel appearing for the petitioner and the second respondent have relied upon the decision of the Supreme Court in the case of Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology and others (2002) 5 SCC 111 wherein the 7-Judge Bench of the Supreme Court has considered the question about the terms instrumentality or agency of the State, whether the Council of Scientific and Industrial Research (CSIR) is a State within the meaning of Article 12 of the Constitution of India and after applying the tests, the Supreme Court has observed as under:

"Ramana Dayaram Shetty vs. International Airport Authority of India, (1979) 3 SCC 489: AIR 1979 SC 1628 was noted and quoted with approval in extenso and the tests propounded for determining as to when a Corporation can be said to be an instrumentality or agency of the Government therein were culled out and summarized as follows:

(i) One thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the Corporation is an instrumentality or agency of the Government (SCC p. 507, para 14)

(2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the Corporation, it would afford some indication of the corporation being impregnated with governmental character. (SCC p. 508 para 15).

(3) It may also be a relevant factor... whether the corporation enjoys monopoly status which is State conferred or State protected (SCC p. 508, para 15).

(4) Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality (SCC p. 508 para 15).

(5) If the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the Corporation as an instrumentality or agency of Government (SCC p. 509, para 16).

(6) specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government (SCC p. 510 para 18)."

12. The law on this aspect is well settled and the Court is required to consider as to whether the State has a pervasive and deep control over the functioning of a particular institution. The real question which the Court is required to consider is as to whether the first respondent can be said to be a State within the meaning of Article 12 of the Constitution of India. It is no doubt true that the President and Vice-President are appointed through NAFED. There is nothing on record that NAFED is having any control over the functioning of first respondent in any manner. An affidavit in reply has been filed by first respondent taking the stand that NAFED is not controlling the day to day affairs of the first respondent. Apart from that, NAFED is not contributing any financial aid in connection with the regular working of first respondent in any manner. The first respondent is managing its affairs on its own. In this connection it is required to be noted that except giving the grant, the Government of India also does not have any control regarding the functioning of the first respondent in any manner. There are documents on record and considering the bye-laws it can never be said that either the Union of India or NAFED has got any deep or pervasive control over the functioning of first respondent in any manner. After considering the case law regarding Article 12 of the Constitution of India and after considering the bye-laws and the constitution, it is clear that respondent No. 1 is a Co-operative Society registered under the Societies Registration Act and, therefore, the first respondent cannot be said to be a State within the meaning of Article 12 of the Constitution of India. Since first respondent cannot be said to be a State, in our view, the same is not amenable to writ jurisdiction under Article 226 of the Constitution. In view of the same, it is not necessary to examine as to whether respondent No.3 NAFED is a State or not. Even assuming that respondent No.3 is a State, since it has no pervasive or deep control over the functioning of the first respondent and examining the bye-laws and functioning of first respondent on its own independently, in our view, it cannot be said that the first respondent is a State simply because it is engaged itself in education and research work relating to agriculture.

13. The learned counsel for the petitioner has relied upon the booklet produced by Mr. Karnik regarding the working of the first respondent. As per the same, the first respondent is conducting research and development activities on all aspects of crop production, protection, seed technology, post harvest technology and also transfer of technology of onion and garlic crops. Since its inception it is also engaged in quality seed production and distribution of important vegetable crops. We are not in a position to agree with the submission of the learned counsel for the petitioner that simply because the first respondent is engaged in research work in the matter of agriculture and that it is a research and development foundation established for a particular purpose, it can therefore be said that it exercises a public function and can be said to be an instrumentality of the State. First respondent is an independent society working in the matter of horticulture research and development foundation. It also cannot be said that it enjoys all the monopolistic status in any manner. It is pointed out by Mr. Karnik that there are so many other such private institutions engaged itself in such type of research work in the field of agriculture. By discharging such function, the Court cannot come to the conclusion that the first respondent is discharging such a public function and it should be treated as an instrumentality of the State. It can never be said that either the Government or NAFED has any pervasive or deep control over the functioning of first respondent. It is required to be noted that the first respondent is functioning under its own bye-laws. The majority decision has been taken by the Managing Committee of the first respondent. Simply because some financial aid or grant has been given by the Government to the first respondent is no ground for coming to the conclusion that the first respondent is a State within the meaning of Article 12 of the Constitution of India.

14. Considering the said aspect, we are not in a position to accept the say of Mr. Shaikh that the first respondent is a State within the meaning of Article 12 of the Constitution of India. Mr. Shaikh has invited our attention to the decision of the Madras High Court in the case of A.M. Ahamed and Co. (supra) wherein it has been held that NAFED is a State. However, the Delhi High Court in the case of National Agricultural Coop. Marketing Federation of India (supra), after considering the constitution of NAFED has come to the conclusion that NAFED is not a State. The relevant observations of the Delhi High Court are as under.

"6. It is essential to know the constitution of the society for finding an answer to this question . NAFED is a co-operative society registered under the Bombay Co-operative Societies Act as extended to Delhi. Later is was deemed to be registered as a Co-operative Society under the Delhi Co-operative Societies Act, 1973. It being a Multiunit Co-operative society it is deemed to be registered as a Co-operative Society under the MultiState Co-operative Societies Act, 1984 in view of Section 3 (g) of this Act. The second schedule of this Act contains a list of National Level Co-operative Societies. The name of petitioner figures at item No. 4 in this list. It has its own bye-laws as per which it manages its affairs. It is created for the benefit and welfare of its members. The entire share capital of the society is held by members, co-operative societies, and no share capital is vested with the Government of India. In the counter affidavit filed by the appellant in the appeal, it has been asserted that the society does not receive any financial assistance or subsidy from the Government and it runs its own business on commercial principles, raising its own funds/resources and obtaining loans from financial institutions/commercial banks on commercial terms. NAFED does not enjoy any monopoly status in its business. Some times export of certain commodities like nigerseed, onions, etc. are canalised through NAFED. According to the bye-laws the Board of Directors is the authority responsible for the management, administration, business and functioning of NAFED. The Board of Directors is elected in accordance with the bye-laws and out of 42 Directors, only three are government nominees who do not have special or veto powers in the management of the society i.e. NAFED.

7. On the basis of aforesaid structure in constitution of NAFED it cannot be treated as "state" or other authority or instrumentality or agency of the State within the meaning of Article 12 of the Constitution of India.

9. There are number of judgments of various High Courts whereby such co-operative societies are held not to be "State" or other authority within the meaning of Article 12 of the Constitution..

10. Courts have been unanimous on this legal aspect. Co-operative Societies, normally, cannot be termed as a 'state' or other authority within the meaning of Article 12 of the Constitution. The learned counsel for the respondent strongly relied on Ahmad and Company (supra). In our view, this judgment does not advance the case of the respondents. This judgment only reiterates the contention of the appellant as elaborated in the case of Sri Kona Seema (supra) that any organisation can be an instrumentality of a State for limited purposes, viz. Canalization of export of onions as was the case in Ahmad and Company. ..."

Since we have come to the conclusion that NAFED has no deep or pervasive control over the affairs of the first respondent, it is not necessary for us to go into the question as to whether NAFED can be said to be a State or not. Simply because few members of the NAFED has been sent to the Managing Committee of the first respondent and majority of the members are independent, it can be said that the first respondent is an independent Co-operative Society functioning on its own and it cannot be said to be a State within the meaning of Article 12 of the Constitution of India. In view of the above, this petition against respondent No.1 challenging the action of abolition of post is not maintainable before this Court.

15. It may be useful to refer the observations of the Supreme Court regarding societies registered under the Societies Registration Act, in the case of Tekraj Vasandi alias K.L. Basandhi vs. Union of India and others (1988) 1 SCC 236 which read as under:

" We have several cases of societies registered under Societies Registration Act which have been treated as 'State' but in each of those cases it would appear on analysis that either governmental business had been undertaken by the society or what was expected to be the public obligation of the 'State' had been undertaken to be performed as a part of the Society's function. In a Welfare State, as has been pointed out on more than one occasion by this Court, governmental control is very pervasive and in fact touches all aspects of social existence. In the absence of a fair application of the tests to be made, there is possibility of turning every nongovernmental society into an agency or instrumentality of the State. That obviously would not serve the purpose and may be far from reality. A broad picture of the matter has to be taken and a discerning mind has to be applied keeping the realities and human experiences in view so as to reach a reasonable conclusion. Having given our anxious consideration to the facts of this case, we are not in a position to hold that ICPS is either an agency or instrumentality of the State so as to come within the purview of 'other authorities' in Article 12 of the Constitution. We must say that ICPS is a case of its type - typical in many ways and the normal tests may perhaps not properly apply to test its character."

16. Since the matter is argued on merits, we have to examine the question as to abolition of post. Though it is not necessary to go into that question, still we have examined the said question. The learned counsel for the petitioner has relied upon the judgment of the Supreme Court in the case of Sakal Deep Sahai Srivastava vs. Union of India and another, (1974) 1 SCC 338 The Supreme Court has held that the order abolishing the post of Office Superintendent was passed with oblique motive and was not a bona fide order and could be ignored because even administrative action should be honest and bona fide. It is no doubt true that in a given case if it is found that the post w as abolished only with oblique motive and to do away with the services of an employee serving on the said post, the Court can certainly strike down the order, if it is found that it is passed by way of victimization or with some oblique motive. In this connection it is required to be noted that it is true that the petitioner was subjected to departmental proceedings initiated by second respondent in which punishment orders were passed. When the appeal preferred by the petitioner was pending, the decision to abolish the post was taken. It is however required to be noted that the decision about abolition of post was passed by the Managing Committee consisting of 14 members. The decision was taken unanimously. There is nothing on record to show that such a decision has been taken by the second respondent. Nobody has given any dissent to such unanimous decision. Even otherwise, the agenda of the said meeting was circulated to the members one week in advance and after due deliberation, the decision to abolish the post was taken. Mr. Shaikh vehemently submitted that a proposal was made to abolish various posts but ultimately only one post was abolished. He further submits there is nothing on record by which we can come to the conclusion that there was financial constraints faced by the institution. Simply because the petitioner has been paid three months' salary in advance, this Court cannot presume that the ground regarding financial aspect is a created one and only with a view to do away with the services of the petitioner.

17. Mr. Karnik has submitted that the power to create, continue and abolish any civil post is the exclusive policy decision of the Government. In this connection, the learned counsel has invited our attention to the judgment of the Supreme Court in the case of N. Ramanatha Pillai vs. State of Kerala, AIR 1973 SC 2641 wherein the Supreme Court has held as under:

"14. The first question which falls for determination is whether the Government has a right to abolish a post in the service. The power to create or abolish a post is not related to the doctrine of pleasure. It is a matter of governmental policy. Every sovereign government has this power in the interest and necessity of internal administration. The creation or abolition of post is dictated by policy decision, exigencies of circumstances and administrative necessity. The creation, the continuance and the abolition of post are all decided by the Government in the interest of administration and general public".

23. A post may be abolished in good faith. The order abolishing the post may lose its effective character if it is established to have been made arbitrarily, mala fide or as a mask of some penal action within the meaning of Article 311 (2).

33. ... With regard to abolition of post and consequential termination no charges could normally be framed and no enquiry could be held. Therefore, apart from the consideration that abolition of post is not infliction of a penalty like dismissal or removal or reduction in rank, the framing of charge, the enquiry and opportunity of showing cause against the imposition of penalty cannot normally apply to the case of abolition of post. The discharge of the civil servant on account of abolition of the post held by him is not an action which is proposed to be taken as a personal penalty but it is an action concerning the policy of the State whether a permanent post should continue or not"

36. The abolition of post may have the consequence of termination of service of a government servant. Such termination is not dismissal or removal within the meaning of Article 311 of the Constitution. The opportunity of showing cause against the proposed penalty of dismissal or removal does not therefore arise in the case of abolition of post. The abolition of post is an executive policy decision. Whether after abolition of the post the Government servant who was holding the post would or could be offered any employment under the State would therefore be a matter of policy decision of the Government because the abolition of post does not confer on the person holding the abolished post any right to hold the post."

38. Counsel for the appellant Ramanath Pillai repeated in this Court the allegations of mala fide in regard to the abolition of post. Broadly the allegations were two fold. First, that the second respondent made a speech in the Assembly and made references to the appellant which would show that the second respondent was biased and prejudiced against the appellant. Second, after the abolition of the Vigilance Commission a new department was created. The functions of the new department were the same as those of the Vigilance Commission. Therefore, the object was not to abolish the Vigilance Commission and only to terminate the services of the appellant. The High Court held that the State entertained doubts as to the advisability of establishing Vigilance Commission even before it was constituted in 1965. After the retirement of the first Vigilance Commissioner P.D. Nandana Menon the question was again considered. Views were expressed that the Commission had not worked satisfactorily. The State, therefore, decided to abolish the Vigilance Commission. The High Court rightly held that the exigencies of administration required alterations in the establishment and creation of a new department. This is a governmental function and a policy decision. The High Court was correct that there was no reason to hold that there was colourable exercise of power by the State."

18. Mr. Karnik has further invited our attention to the decision of the Supreme Court to bring home the point regarding abolition of post in the case of State of Haryana and others vs. Navneet Verma, (2008) 2 SCC 65 : [2008(2) ALL MR 308 (S.C.)] In the said case the question posed before the Supreme Court was whether the abolition of the post has been done in good faith or whether it is a camouflage to cover up and conceal the real intention of weeding out the respondent from service. After scrutinizing the authorities on the point, the Supreme Court has held as under:

"17. We summarise the power of the Government in abolishing a post and role of the Court for interference.

(a) The power to create or abolish a post rests with the Government;

(b) whether a particular post is necessary is a matter depending upon the exigencies of the situation and administrative necessity.

(c) creation and abolition of posts is a matter of government policy and every sovereign government has this power in the interest and necessity of internal administration.

(d) creation, continuance and abolition of posts are all decided by the Government in the interest of administration and general public.

(e) the Court would be the least competent in the face of scanty material to decide whether the Government acted honestly in creating a post or refusing to create a post or its decision suffers from mala fides, legal or factual.

(f) as long as the decision to abolish the post is taken in good faith in the absence of material, interference by the Court is not warranted"

31. It is clear from the materials placed in the rejoinderaffidavit that the Government of Haryana has been making earnest efforts to control its nonplanned expenditure. The rejoinderaffidavit also shows that due to various efforts including the action taken by HBPE nonplanned expenditure has been substantially reduced.

32. In the light of the particulars furnished, we are of the opinion that the decision to abolish the posts of Accounts Executives was taken on the basis of the overall assessment of the workload and staff requirement of the Bureau and the same was finally approved and sanctioned by the Government and consequent to the said decision, the service of the respondent herein was terminated. We hold that the entire action was taken in good faith and there is no substantial material to arrive at a conclusion that the abolition of the post was due to revenge against the respondent herein.".

19. Our attention is also invited by Mr. Karnik to the observations of the Supreme Court in the case of Dr. N.C. Singhal vs. Union of India and others (1980) 3 SCC 29 which read as under:

"18. .....Creation and abolition of posts is a matter of government policy and every sovereign government has this power in the interest and necessity of internal administration. The creation or abolition of post is dictated by policy decision, exigencies of circumstances and administrative necessity. The creation the continuance and the abolition of post are all decided by the government in the interest of administration and general public (see M. Ramanatha Pillai v. State of Kerala). The Court would be the least competent in the face of scanty material to decide whether the Government acted honestly in creating a post or refusing to create a post or its decision suffers from mala fide, legal or factual. In this background it is difficult to entertain the contention of the appellant that posts were created to accommodate some specific individuals ignoring the requirements of the hospital or the interests of the general public at large."

As pointed out earlier, since the decision of abolition of the post was taken by all the members of the Managing Committee in view of the financial constraints, it is not possible for us to come to the conclusion that the decision has been taken only to do away with the services of the petitioner. In our view, the petitioner has failed to make out any case that the abolition of post was made in a mala fide manner. The decision to abolish the post was taken in the interest of the administration. It is also required to be noted that this is not a case that after abolition of the said post, subsequently any attempt was made to create the said post by this time. Now more than 14 years have elapsed. Simply because the work in question has been done through other incumbent is no ground for coming to the conclusion that the abolition of the post which the petitioner was holding was taken by the Managing Committee in a mala fide or arbitrary manner. Since we have taken the view that the first respondent is not a State and since the matter is argued before us, incidentally we have dealt with the issue regarding abolition of post. As pointed out earlier, the counsel appearing for respondent No.2 has already made a statement that the punishment orders are withdrawn by respondent No.1 on its own. Whatever benefits accruing therefrom would be paid to the petitioner within a period of two months from today.

20. Subject to what is stated above, the writ petition is rejected. Rule is discharged. Civil Application is also disposed of.

Petition dismissed.