Case Note & Summary
The petitioners were Directors of the Maharashtra State Road Transport Corporation (MSRTC), a corporation established under the Road Transport Corporation Act, 1950. The State Government, by an order dated 30th December 2014, removed all Directors of MSRTC, including the petitioners, under Section 8 of the Act. The petitioners challenged the removal on the grounds that it violated principles of natural justice as no prior hearing was given, and that the order was arbitrary and without reasons. The court examined the provisions of the Act, particularly Section 8 which empowers the State Government to remove the Chairman or any Director from office. The court noted that Section 8 does not expressly provide for a hearing before removal. The court held that the power under Section 8 is a statutory power to be exercised in public interest, and the requirement of a prior hearing would defeat the purpose of the provision. The court also observed that the Board was not functioning properly and the State Government's decision to remove the Directors was in public interest. The court further held that Section 8 does not require the State Government to record reasons in the order of removal. The court dismissed the writ petitions and upheld the removal of the petitioners as Directors. The court also disposed of the civil application filed by the State seeking modification of an interim order.
Headnote
A) Road Transport Corporation Act, 1950 - Removal of Directors - Section 8 - Natural Justice - The court considered whether the removal of directors under Section 8 of the Road Transport Corporation Act, 1950 requires a prior hearing. Held that Section 8 does not expressly provide for a hearing and the power is exercised in public interest; therefore, no prior hearing is required. The removal was upheld as valid. (Paras 1-26) B) Road Transport Corporation Act, 1950 - Removal of Directors - Section 8 - Public Interest - The court examined whether the removal of directors must be in public interest. Held that the power under Section 8 is to be exercised in public interest, and the State Government's decision to remove the petitioners was in public interest as the Board was not functioning properly. (Paras 1-26) C) Road Transport Corporation Act, 1950 - Removal of Directors - Section 8 - Reasons - The court considered whether reasons must be recorded in the order of removal. Held that Section 8 does not require recording of reasons, and the absence of reasons does not invalidate the removal. (Paras 1-26)
Issue of Consideration
Whether the removal of the petitioners as Directors of the Maharashtra State Road Transport Corporation under Section 8 of the Road Transport Corporation Act, 1950 was valid and whether principles of natural justice require a prior hearing before such removal
Final Decision
The court dismissed all writ petitions and upheld the removal of the petitioners as Directors of the Maharashtra State Road Transport Corporation. The civil application filed by the State was disposed of.
Law Points
- Removal of directors under Section 8 of Road Transport Corporation Act
- 1950 does not require prior hearing
- removal must be in public interest
- writ petition maintainable against State action under Section 8
- no requirement to record reasons in order of removal
