Page No.# 1/14 GAHC010213822025 undefined THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/5531/2025 SANTANU SARMA S/O- LATE NARAYAN SARMA, R/O- BHABANIPUR, NOONMATI, GHY- 781020, ACCOUNTANT, ASSAM LIVESTOCK AND POULTRY CORPORATION LTD. (ALPCO), UNDER SUSPENSION. VERSUS THE STATE OF ASSAM AND 3 ORS REPRESENTED BY THE COMMISSIONER AND SECRETARY, ANIMAL HUSBANDRY AND VETERINARY DEPARTMENT, DISPUR, GUWAHATI- 781006. 2:ASSAM LIVESTOCK AND POULTRY CORPORATION LTD. (ALPCO) REPRESENTED BY ITS CHAIRMAN KHANAPARA GUWAHATI-781022. 3:THE MANAGING DIRECTOR ASSAM LIVESTOCK AND POULTRY CORPORATION LTD. (ALPCO) KHANAPARA ASSAM GUWAHATI-781022. 4:FINANCE AND ACCOUNTS OFFICER ASSAM LIVESTOCK AND POULTRY CORPORATION LTD. (ALPCO) KHANAPARA ASSAM GUWAHATI-781022 Advocate for the Petitioner : MR. P MAHANTA, M DAS,MR P P MEDHI,MS. M BORGOHAIN Advocate for the Respondent : SC, A.H and V. DEPT., MR A BHATRA (R-2 TO 4),MR A DEKA(R- 2 TO 4),N CHAUDHURY(R-2 TO 4),MR. M DAS(R-2 TO 4),MR. B D DEKA(R-2 TO 4) Page No.# 2/14 Linked Case : WP(C)/5555/2025 DR PURNANANDA KONWAR S/O- LATE MOHIRAM KONWAR R/O- BLOCK NO-2 103 OFFICERS QTR FARM GATE KHANAPARA GUWAHATI-22 (GENERAL MANAGER ASSAM LIVESTOCK AND POULTRY CORPORATION LIMITED ) ASSAM VERSUS THE STATE OF ASSAM AND OTHRS REP. BY THE COMMISSIONER AND SECRETARY GOVERNMENT OF ASSAM ANIMAL HUSBANDRY AND VETERINARY DEPARTMENT ASSAM SACHIVALAYA DISPUR P.S.-DISPUR GUWAHATI-781006 DIST- KAMRUP (M) ASSAM 2:ASSAM LIVESTOCK AND POULTRY CORPORATION LTD. (ALPCO) REPRESENTED BY ITS CHAIRMAN KHANAPARA GUWAHATI-781022. 3:THE MANAGING DIRECTOR ASSAM LIVESTOCK AND POULTRY CORPORATION LTD. (ALPCO) KHANAPARA ASSAM GUWAHATI-781022. 4:FINANCE AND ACCOUNTS OFFICER ASSAM LIVESTOCK AND POULTRY CORPORATION LTD. (ALPCO) KHANAPARA ASSAM GUWAHATI-781022. Page No.# 3/14 ------------ Advocate for : M DAS Advocate for : SC A.H and V. DEPT. appearing for THE STATE OF ASSAM AND OTHRS BEFORE HON’BLE MR. JUSTICE SOUMITRA SAIKIA Advocates for the petitioner : Mr. PP Medhi, Advocate Advocate for the respondents : Mr. N Chaudhury, SC, Livestock and Poultry Corporation, Ms. R Kataki, SC, AH&V Dept. · Date on which Judgment was reserved : Open Court Dictation · Date of Pronouncement of Judgment : 11.05.2026 · Whether the pronouncement is of the Operative Part of the Judgment : No · Whether the full Judgment has been Pronounced : Yes JUDGMENT AND ORDER Heard Mr. PP Medhi, learned counsel for the petitioner. Also heard Ms. R Kataki, learned Standing Counsel, Animal Husbandry & Veterinary Department for the respondent no.1 and Mr. N. Chaudhury, learned Standing Counsel, Livestock and Poultry Corporation for the respondents no. 2, 3 & 4. 2. Since both the writ petitions have arisen out of the same cause of action, Page No.# 4/14 both the writ petitions are taken up together for hearing and disposal. 3. The petitioner in WP(C) No. 5531/2025, namely, Santanu Sarma was serving as an Accountant under the Assam Livestock and Poultry Corporation Limited and the petitioner in WP(C) No.5555/2025, namely, Dr. Purnananda Konwar, was serving as a General Manager under the Assam Livestock and Poultry Corporation Limited. In connection with some transactions which were undertaken during the course of their services, relating to the Corporation, a detailed discussion was held before the Board of Directors. In connection with the bank transaction matters, the Board Of Directors in their 84th Board of Directors Meeting of the Assam Livestock and Poultry Corporation Limited, inter alia, took a decision that there were some unauthorised bank transactions which had been brought to the notice of the Board and accordingly, the Board of Directors took a view that the matter is very serious and a thorough enquiry is to be carried out and a show-cause notice is also required to be issued to the concerned officer. The learned counsel for the petitioner submits that thereafter the Managing Director of the Corporation, namely, the respondent number 3, upon causing an enquiry, issued the impugned show-cause notice dated 22-08- 2025 to both the petitioners and upon causing an enquiry, passed an order suspending the petitioners with immediate effect under Rule 6 (1) of the Assam Page No.# 5/14 Services (Discipline and Appeal) Rules, 1964. It is these orders which are being assailed in these writ petitions. 4. Mr. PP Medhi, learned counsel for the petitioner, submits that the Board of Directors is the supreme authority to take all policy decisions in respect of any or all activities concerning the Assam Livestock Poultry Corporation. It is submitted that in respect of any decision concerning the service of the employees in terms of the articles of association of it is the Managing Director who has the discretion to remove or suspend any manager, secretary, officer, clerk, servant, as they think fit. It is therefore submitted that the impugned orders dated 22.08.2025 passed by the Managing Director, Assam Livestock & Poultry Corp. Ltd is contrary to the Articles of Association and therefore, the Managing Director was not vested with any powers to issue orders suspending the petitioners. It is therefore submitted that the impugned suspension orders be interfered with, set aside and quashed. 5. The corporation has filed their counter affidavit. Mr. N. Choudhury, learned Standing Counsel representing the Corporation, fairly submits that the position as it appears from the Articles of Association reflects that the power to appoint or suspend any officer of the Corporation is vested solely on the Board of Directors. In terms of the minutes of the 84th Board Meeting, insofar as the Page No.# 6/14 bank transactions are concerned, the Board of Directors had only taken a decision to impose a detailed enquiry. No such decision was taken to put the petitioners under suspension. He submits that this is the position as is reflected in the records of the Corporation and as has been instructed to him by the Corporation. 6. Learned counsel for the parties have been heard. Pleadings on record have been carefully perused. 7. The Livestock Corporation is the company registered under the Companies Act, 1986. It is a company limited by shares. They have their separate Memorandum of Association as well as the Articles of Association. In so far as the Memorandum of Association of the Companies are concerned it is provided that Clause-64 with regard to the General powers to be exercised by the Board of Directors. From a perusal of the Articles of Association, it is clear that the Board of Directors is entitled to exercise all such powers and to do all such acts and things as the Company is authorised to exercise. In addition, thereto, they have the powers to appoint or remove or suspend any officers at their discretion. The Clause-64 of is extracted below: ”64. General Power: Powers of board of Directors. The Board shall be entitled to exercise all such powers and to do all such acts and things as the Company is authorized to exercise. Page No.# 7/14 Specific Power: To purchase, take on lease or otherwise acquire for the Company, property right or privileges which the Company is authorized to acquire at such price and general are such terms and conditions as they think fit. To appoint officers etc: To appoint at the discretion, remove or suspend such Managers, Secretaries, Officers, Clerk and Servants for permanent, temporary or special services as they may from time to tile think fit.” 8. The said Board, in its meeting as reflected in the minutes, took a decision to cause an enquiry into the bank transactions which were purportedly unauthorised and had been brought to the notice of the Board of Directors. In the minutes of the 84th Board of Directors meeting held on 09-05-2025 at G- 12, the Board had taken the following decision: “(xii) Bank Transaction Matter: The Managing Director informed the Board that some unauthorized Bank transactions have come to the notice and After being apprised about the unauthorized Bank Transaction matter, the BOD opined that the matter is very serious and a thorough enquiry should be carried out. It also directed that a show cause notice should be issued to the concerned officer immediately.” 9. A careful perusal of the minutes reflects that no decision has been taken by the Board at this meeting with regard to placing the petitioners under suspension in connection with the unauthorised bank transactions. The Board had taken a decision to issue show cause to the concerned officers and to cause Page No.# 8/14 a thorough enquiry. There is no decision taken by the Board delegating any powers for suspension of the officer's concern on the Managing Director of the Corporation. A conjoined reading of the Memorandum of Association and the Articles of Association read with the minutes of the meeting clearly reveal that it is the Board of Directors who is reposed with the power to appoint or suspend any officer of the Corporation at their discretion. No such power has been reserved for the Managing Director or any other officer. From the minutes of the 84th Board meeting, it is also not discernible that any powers have been delegated to the Managing Director to suspend the officer's concern. The only decision taken by the Board is to cause a thorough enquiry by issuing a show cause. 10. The impugned orders dated 22-08-2025 reflects that the Managing Director of the Corporation has returned the finding that there was no authorization or communication issued by the Managing Director and the Finance and Accounts Officer for effecting the transaction amounting to Rs.1,00,56,000/-. This amount was effected by way of 15 transactions debited from the account maintained by the Corporation at the Punjab National Bank, Khanapara branch and the amount was released to various payees. The Managing Director, therefore, concluded that pending departmental Page No.# 9/14 proceedings, the writ petitioners have been placed under suspension with immediate effect under Rule 6.1 of the Assam Services (Discipline and Appeal) Rules. Rule 6 of the Assam Services (Discipline and Appeal) Rules provides for placing a government servant under suspension. These set of rules are applicable to government servants. However, it is not in dispute before this Court that these Rules are otherwise not applicable to the employees of the Corporation if they are not being adopted by the Corporation. While under Rule 6 of the Assam Services (Discipline and Appeal) Rules, an employee may be suspended not only by the appointing authority but also by any authority to which the appointing authority is subordinate, the fact remains that the suspension by the subordinate authority must be authorised by the appointing authority by way of proper delegation unless there are rules which provide to the contrary. In so far as the Corporation is concerned, this being a company limited by shares and registered under the Companies Act 1956, it is the Memorandum of Association and the Articles of Association which will govern the powers of the officers as per the specifications therein. The respondents have not been able to show that the Managing Director has otherwise been delegated with the powers to place employees under suspension in the face of a categorical provision under the Articles of Association, which provides that it is only the Board of Directors who are empowered to appoint, remove or suspend Page No.# 10/14 any officers, including managers. It has also not been brought to the notice of the Court that pursuant to the 84th Board of Directors meeting held on 09-05- 2025, there was a separate meeting held whereby the Board had delegated its powers to place any officer under suspension to the Managing Director. In so far as the Corporation is concerned, which is a company limited by shares and registered under the Companies Act, the roles and responsibilities of the employees and the duties are clearly laid down by the Memorandum of Association and the Articles of Association. Where these documents or any subsequent decision taken by the Board of Directors do not authorise any officer subordinate to the Board of Directors to take a decision which otherwise is reserved only for the Board of Directors, then such an Act cannot be taken in recourse to by such subordinate officers without the sanction of the Board of Directors or that such an action was subsequently ratified by the board of directors in this particular case. 11. Within the contours of the law applicable to corporations under the Companies Act, the powers to be exercised by officers of a corporation are required to be clearly specified, particularly with regard to the extent and scope of such powers. Since, as discussed above, the power for appointment, removal or suspension is reserved only for the Board of Directors and no such power was Page No.# 11/14 delegated by the Board at any point in time to the Managing Director, it is the unequivocal view of this Court that the impugned order dated 22.08.2025, to the extent it places the petitioners under suspension, cannot be sustained in law. Where an Act is required to be done in a manner which is specified, the same has to be done in the manner so prescribed. It is also necessary to refer to the affidavit filed on behalf of the Corporation where there is a clear averment that no resolution was taken with regard to the suspension of the writ petitioner by the Board of Directors. The relevant paragraph being Paragraph-4 is extracted below: “(4) That, it is pertinent to state herein that the Board of Directors as per Clause-64 of the Memorandum and Articles empowered to appoint, remove or suspend Managers, Secretaries, Officers, Clerk and servants for permanent, temporary or special services as they may from time to time think fit. The Board of Directors in exercise of such capacity and powers considered the agenda raised by the then Managing Director (Dr. Sadnek Singh) regarding the unauthorized bank transaction and after giving due consideration to the issue had resolved vide the Minutes of the Meeting dated 09.05.2025 at Clause No.G(xii) that a thorough enquiry be carried out and also directed that a show cause notice should be issued to the concerned officer immediately. However, no resolution was taken with regard to the suspension of the present writ petitioner.” 12. The decision of the Administrative authority must be related to the purpose of the provisions which conferred such powers on such authority. If they are found to be beyond the powers which are relegated they are manifestly Page No.# 12/14 unjust and/or directed to an unauthorized end. Such decisions will have to be turned to be arbitrary and unreasonable. In the context of the present proceedings, the memorandum and article of association clearly delineate the powers of the authorities who are empowered to appoint or remove or suspend an employee. Such powers are manifestly not conferred on the Managing Director. Therefore, for the purposes of suspension of the petitioners these parameters framed or specified are mandatorily required to be followed including the procedure prescribed, if any while exercising those powers. The authority must act within the powers specified. Any action by such authority undertaken contrary to the powers which are specified or conferred will have to be considered to be unauthorized and ultra vires the memorandum and the articles and therefore, the action of the Managing Director must yield to the powers conferred on it by the memorandum and article of association. The Apex Court in Vinod Kumar Vs. State of Haryana and Ors. reported in (2013) 16 SCC 293 held that: “25. The decision of the administrative authority must be related to the purpose of the enabling provisions of the rules or statutes, as the case may be. If they are manifestly unjust or outrageous or directed to an unauthorised end, such decisions can be set aside as arbitrary and unreasonable. Likewise, when action taken is ultra vires, such action/decision has no legal basis and can be set aside on that ground. When there are rules framed delineating the powers of the authority as well as the procedure to be followed while exercising those powers, the authority has to act within the limits defined by those rules. A repository of power acts ultra vires either when he acts in excess of his power in the narrow sense or when he abuses his power by acting in bad faith or for an inadmissible purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness. This was so explained in Shri Sitaram Sugar Co. Ltd. v. Union of India [(1990) 3 SCC 223] in the following manner: (SCC p. 253, paras 51-52) Page No.# 13/14 “51. A repository of power acts ultra vires either when he acts in excess of his power in the narrow sense or when he abuses his power by acting in bad faith or for an inadmissible purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness. See Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. [(1948) 1 KB 223 : (1947) 2 All ER 680 (CA)] In the words of Lord Macnaghten in Westminster Corpn. v. London and North Western Railway Co. [1905 AC 426 (HL)] : (AC p. 430) ‘… It is well settled that a public body invested with statutory powers such as those conferred upon the corporation must take care not to exceed or abuse its powers. It must keep within the limits of the authority committed to it. It must act in good faith. And it must act reasonably. The last proposition is involved in the second, if not in the first.’ In Barium Chemicals Ltd. v. Company Law Board [AIR 1967 SC 295 : 1966 Supp SCR 311] , this Court states: (AIR p. 323, para 60) ‘60. … Even if [the statutory order] is passed in good faith and with the best of intention to further the purpose of the legislation which confers the powers, since the Authority has to act in accordance with and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extraneous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation. In any one of these situations it can well be said that the authority did not honestly form its opinion or that in forming it, it did not apply its mind to the relevant facts.’ In Renusagar [State of U.P. v. Renusagar Power Co., (1988) 4 SCC 59 : AIR 1988 SC 1737] , Mukharji, J., as he then was, states: (SCC p. 104, para 86) ‘86. … The exercise of power whether legislative or administrative will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary. Similarly, if the power has been exercised on a non-consideration or non-application of mind to relevant factors the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated.’ 52. The true position, therefore, is that any act of the repository of power, whether legislative or administrative or quasi-judicial, is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair-minded authority could ever have made it [See the observations of Lord Russel in Kruse v. Johnson, (1898) 2 QB 91 : (1895-99) All ER Rep 105 (DC) and that of Lord Greene, M.R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1948) 1 KB 223 : (1947) 2 All ER 680 (CA). See also Chertsey UDC v. Mixnam's Properties Ltd., 1965 AC 735 : (1964) 2 WLR 1210 : (1964) 2 All ER 627 (HL); Customs and Excise Commissioners v. Cure and Deeley Ltd., (1962) 1 QB 340 : (1961) 3 WLR 798 : (1961) 3 All ER 641; McEldowney v. Forde, 1971 AC 632 : (1969) 3 WLR 179 : (1969) 2 All ER 1039 (HL); Carltona Ltd. v. Works Commissioners, (1943) 2 All ER 560 (CA); Point of Ayr Collieries Ltd. v. Lloyd George, (1943) 2 All ER 546 (CA); Scott v. Glasgow Corpn., 1899 AC 470 (HL); Baird (Robert) Ltd. v. Glasgow Corpn., 1936 AC 32 (HL); Manhattan General Equipment Co. v. Commr. of Internal Revenue, 80 L Ed 528 : 297 US 129 (1936); Arthur Yates & Co. (Pty) Ltd. v. Vegetable Seeds Committee, (1945) 72 CLR 37 (Aust); Bailey v. Conole, (1931) 34 WALR 18 (Aust); Boyd Builders Ltd. v. City of Ottawa, (1964) 45 DLR (2d) 211 (Can); Burns and Township of Haldimand, In re, (1966) 52 DLR (2d) 1014 (Can) and Lynch v. Tilden Produce Co., 68 L Ed 1034 : 265 US 315 (1924)] .” Page No.# 14/14 13. In view of the discussions above and in view of the position as is reflected in the Memorandum of Articles and the Articles of Association, this Court will have to hold that the order passed by the Managing Director placing the petitioners under suspension was unwarranted as the same is not authorised by the provisions under the Memorandum of Articles and the Articles of Association and/or ratified by any decision of the Board of Directors. 14. Under such circumstances, the impugned orders dated 22.08.2025, to the extent they have placed the petitioners under suspension, are hereby set aside. The writ petitions are allowed to the extent. The respondents will forthwith reinstate the petitioners back into service with all service benefits with effect from the date they were placed under suspension. Needless to say, notwithstanding the orders passed in the writ petitions, it is always open for the Board to take any proper decision in respect of the powers enumerated under the Articles of Association regarding appointment, dismissal or suspension of any employees including the writ petitioners. 15. The writ petitions stand disposed of. 16. Interim orders, if any, stand merged. JUDGE Comparing Assistant