The seven lawmakers -- five of the Congress and two of its ally DMK -- were appointed as PSUs' chiefs in July last year for a period of 12 months. Lt Governor Kiran Bedi had stressed that the performance of the statutory body under the leadership of newly-appointed chairpersons would be reviewed before considering their continuance.
However, the proposal by Puducherry Chief Minister V Narayanasamy recommending renewal of their tenure came without mid-term performance appraisal and year-end review reports of the corporations as was required under conditions of their appointment, a release from the Lieutenant Governor office said.
"Hence the Lt Governor returned the proposal sent by the chief minister," it said.
Ms Bedi clarified that she had no choice but to terminate their services and added, "We had asked for appraisal report but the cabinet wants a blanket extension. We've terminated (their services). Where is the accountability?"
Ms Bedi invoked the provisions of the Government of Union Territories Act 1963 and also Rules of Business of Government of Puducherry 1963 and directed that the seven MLAs should cease to function as chairpersons. Now, government secretaries will be in charge of these bodies.
DMK's R Siva, one of the seven lawmakers, who has lost the chairmanship of Pondicherry Industrial Promotion & Investment Corporation, said, "She's trying to run a BJP government in Puducherry. Puducherry has been pushed backwards due to her interference over the last one year."
This is the latest in a series of run-ins the Lt Governor has had with the Congress government. Recently, the Puducherry assembly wanted the Lieutenant Governor's powers be curtailed after she defied the speaker's order reinstating a senior officer he had put on compulsory wait pending inquiry.
Earlier this month, Ms Bedi administered oath of office as nominated MLAs to two BJP office bearers and an RSS member after the home ministry nominated them. The ruling Congress says it's the Speaker's job and conventionally it's the ruling party that forwards proposed names to the centre.
Last month, she ordered a Central Bureau of Investigation probe into alleged corruption in admission of students to postgraduate courses by private medical colleges in the Union Territory.
On Friday, the former French colony woke up to posters showing Ms Bedi as Hitler, which have apparently been taken out by members of the ruling Congress to demand Ms Bedi's exit. The party has described her way of functioning as dictatorial ever since she took office in May last year.
"These are in real poor taste. They are an attempt at lowering the status of the office of the Lieutenant Governor," Ms Bedi had told NDTV.