CASE NO.: Appeal (civil) 1257 of 2004 PETITIONER: PRAHALAD SHARMA RESPONDENT: STATE OF U.P. AND ORS. DATE OF JUDGMENT: 24/02/2004 BENCH: BRIJESH KUMAR & ARUN KUMAR JUDGMENT:
JUDGMENT
2004(2) SCR 594
The Judgment of the Court was delivered by BRIJESH KUMAR, J. Leave granted.
This appeal is directed against the judgment and order passed by a Division
Bench of the Allahabad High Court dismissing the writ petition preferred by
the appellant challenging the order passed by the State of Uttar Pradesh
purportedly in exercise of its revisional power under Rule 13 of U.P.
Government Servants (Discipline & Appeal) Rules, 1999 (hereinafter referred
to as ‘the U.P. Rules of 1999’) setting aside the order passed by the
Chairman of the U.P. State Agro Industrial Corporation (for short ‘the
Corporation’) and restoring the order passed by the Managing Director
imposing penalty of dismissal against the appellant.
The Corporation is a Company incorporated under the Companies Act. It is a
Government company. The appellant has been working as a Service Engineer in
the said Corporation at Hapur. It is the case of the Corporation that the
appellant had committed serious financial irregularities which came to the
light of the Corporation and in respect thereof the Managing Director of
the Corporation instituted a departmental enquiry some time in October,
1997. The charges were found proved and ultimately the Managing Director
passed the order dated 29.7.2000 dismissing the services of the appellant
with immediate effect. An appeal was preferred to the Chairman of the
Corporation against the order of punishment. The appellate authority by
order dated 14.9.2000 partly allowed the appeal and ordered for
reinstatement of the appellant with an observation that if the Managing
Director desires he may inflict minor punishment of censure against the
appellant. It was also found by the appellate authority that no charges
were proved against the appellant nor the Corporation has suffered any
financial loss. The conduct of the appellant, it has been observed, was
“infirm” in following the departmental rules and procedure and he has been
careless in his dealings.
It appears that against the order passed by the Chairman reinstating the
appellant, revisional power of the State Government as provided under Rule
13 of the U.P. Rules of 1999, was invoked by the Corporation. The State
Government allowed the revision and found that charges of serious financial
irregularities were proved against the appellant. The punishment of
dismissal as inflicted by the Managing Director was justified. The order
passed by the Chairman allowing the appeal was set aside and the order of
punishment was restored.
It appears that before the State Government a plea was raised about the
jurisdiction of the State Government to entertain the revision under Rule
13 of the U.P. Rules, 1999. In the revisional order, however, it is
mentioned that the above said U.P. Rules of 1999 were adopted by the Board
of Directors of the Corporation, in that view of the matter the State
Government was empowered to hear the revision. This point relating to the
jurisdiction of the State Government, to exercise the power under Rule 13
was raised before the High Court also. The High Court observed that by
means of a resolution dated 10.7.2001 the Corporation had mutatis-mutandis
adopted the U.P. Rules of 1999. Hence the provisions of the aforesaid rules
are applicable to the employees of the Corporation. After quoting the
provisions for revision namely, rule 13, the High Court opined that since
the aforesaid rules are adopted by the Corporation, the State Government
has power to entertain the revision.
We may straightaway address to the question about the exercise of
revisional power by the State Government as provided under the U.P. Rules
of 1999. The Resolution dated 10.7.2001 passed by the corporation reads as
under:
“Additional Agenda No. 1
In respect of incorporating the U.P. Government Servant (Discipline and
Appeal) Rules, 1999 in the Corporation Service Rules, 1984
“Proposal is passed taking a decision that the U.P. Government Servant
(Discipline and Appeal) Rules, 1999 notified by the Special Secretary,
Labour Department – I vide notification no.!3/9/98-Ka-l-99 dated 9th June,
1999 along with necessary amendments will be made applicable to the
officers/employees of the Corporation and it is permitted to incorporate
the same in the Service Rules, 1984 of the Corporation.”
in view of the above resolution, the U.P. Rules of 1999 have been made
applicable to the officers/employees of the Corporation and they were
permitted to be incorporated in the Corporation’s service rules of 1984.
Rule 13 of the U.P. Rules of 1999 provides as under :
“Revision – Notwithstanding anything contained in these rules, the
Government may of its own motion or on the representation of concerned
Government servant call for the record of any case decided by an authority
subordinate to it in the exercise of any power conferred on such authority
by these rules; and
(a) confirm, modify or reverse the order passed by such authority; or
(b) direct that further inquiry he held in the case, or
(c) reduce or enhance the penalty imposed by the order; or
(d) make such other order in the case as it may deem fit.”
The U.P. Rules of 1999 relate to the employees of the State Government. The
revisional power has thus been vested in the State Government to exercise
the same on its own motion or on the representation of concerned government
servant. In exercise of this power the State Government could call for the
record of any case decided by an authority subordinate to it and pass
appropriate order confirming or modifying or reversing the order under
revisional scrutiny besides other powers as provided for under the Rule.
The question for consideration is as to whether or not this revisional
power is available to the State Government in relation to the employees of
the Corporation. In this connection it may be observed that a Corporation
or any other organization may adopt the rules on any subject, as may be
applicable in the State Government or any other organization. But by doing
so only the rules are adopted not the authorities unless specifically
provided for. Otherwise it would result in a queer situation where the
authorities of the organization whose rules on a particular subject have
been adopted by another organization would start exercising those powers in
relation to the matters of the organization adopting the rules, which would
obviously not be permissible. If the organisation adopts the rules
pertaining to disciplinary matters as prevalent in the government or other
organization, it would only mean that same procedure would be applicable in
respect of the employees of the organization adopting the rules namely, the
manner of holding an enquiry into the charges, opportunity of hearing,
provision for appeal or revision would be applicable in respect of the
employees of the organization adopting the rules but such powers would be
exercisable by the corresponding authorities in the organization adopting
the rules. If some power is vested in a particular authority, for example,
in this case in the state government or for that matter it could be with
any other officer or functionary of the state government, would not subject
the employees of a corporation or organization to the control of those
authorities of the organization whose rules have been adopted. If an appeal
is provided to be preferred against an order of punishment, to an authority
who is higher than the punishing authority, that remedy may be available to
the employees of the organization adopting the rules for preferring the
appeal to the higher authority of his own organization but not that the
appellate authority would also be the same belonging to the organization
whose rules are adopted. Similarly, if any authority corresponding or
parallel to the state government is available in the corporation such
authority mayexercise revisional powers as conferred upon the state
government in the U.P. Rules of 1999. The authorities of a foreign
organization cannot be vested with such powers merely because of adoption
of the rules on a particular subject as applicable to other organizations.
The same procedure or protection will be applicable and available to the
employees of the corporation as may be provided under the U.P. Rules of
1999 but the corresponding authorities would obviously be different.
Otherwise authorities of the other department whose Rules are adopted may
get wide powers like looking into any records of the organization adopting
the rules and exercising powers like in this case vested under rule 13,
upsetting, modifying, reversing orders passed by the authorities of the
adopting organization.
The learned counsel for the appellant also draws our attention to rule 13
to indicate that if the rule is to be applicable, as it is, then the
government will have power to revise the order only in case it has been
passed by an authority subordinate to it. The Managing Director or the
Chairman are the authorities and functionaries of the corporation.
Incumbent of such offices may even though some times be Govt. servants on
deputation but while working as Chairman or the Managing Director or any
authority in the organization or the corporation, they would not be
subordinate to the government. It is again to be noticed that then perhaps
the right to invoke” the revisional powers may be available only to the
“concerned government servant” as provided under rule 13 and may not be
available to the employee of the corporation. Therefore, it is submitted
and in our view, rightly, that adoption of rules are implemented in a
manner as they fit in the structure of the adopting organization and not as
a straight jacket application to the adopting organization. It has also
been pointed out that according to the provisions of the rule 13, as it is,
an order can be subjected to the revisional power of the State only if the
order has been passed in exercise of any power conferred under rules of
1999. It is submitted that the orders passed by the Managing Director or
the Chairman cannot be said to be orders passed under the U.P. Rules of
1999 and not under the rules as adopted by the Corporation.
The appellant has placed reliance upon a decision reported in 1970 (1) SCC
177, Dr. S.L. Aggarwal v. The General Manager, Hindustan Steel Ltd., In
this case services of an officer of Hindustan Steel Ltd. were terminated.
He sought protection of Article 311 of the Constitution of India. This
Court held that the appellant was an employee of the Hindustan Steel Ltd.
which has its independent existence. Thus rules and provisions relating to
the government employees could not be applicable to those employees. In
paragraph 10 of the judgment it is held as follows :
“……We must, therefore, hold that the corporation which is Hindustan
Steel Limited in this case is not a department of the Government nor are
the servants of it holding posts under the State. It has its independent
existence and by km relating to Corporations it is distinct even from its
members.”
It was also observed that even though a corporation may be completely owned
by the government or the directors may be appointed by the President of
India, nevertheless in the eye of the law the company was a separate entity
and had a separate legal existence.
The other decision which has been referred by the learned counsel for the
appellant is reported in 1994 Supp. (3) SCC 385. Maharashtra State Co-
operative Cotton Growers’ Marketing Federation Ltd. & Anr. v. Employees ‘
Union and Anr. In this case, in the appointment letter which was issued to
the seasonal employees, it was specified therein that their conditions of
service shall be governed by Model Standing Orders. Some of the provisions
of the Model Standing Orders provided for making the services of some
categories of employees permanent. The seasonal employees also claimed the
same benefit. It has been held that it was incorrect to say that all the
Model Standing Orders would be applicable to the seasonal employees. It has
been observed that the Model Standing Orders would be applicable to the
seasonal employees mutatis-mutandis. It is further observed that the Model
Standing Order no.4-B in particular, will be inapplicable to the seasonal
employees because of the very nature of their employment and hence it could
not be read into service conditions of the seasonal employees even though
it was mentioned in their letter of appointments that they shall be
governed by the provisions of the Model Standing Orders. It was further
held that only such conditions of service would be applicable which could
be applied to the seasonal employees and not the other conditions. It has
also been observed that the Model Standing Orders would be applicable to
the seasonal employees mutatis-mutandis.
The expression “mutatis-mutandis”, itself implies applicability of any
provision with necessary changes in points of detail. The rules which are
adopted, as has been done in the present case, make the principles embodied
in the rules applicable and not the details pertaining to particular
authority or the things of that nature. In the present case, we find that
the High Court has found that the U.P. Rules of 1999 have been adopted
mutatis-mutandis. Therefore, in our view, the revisional power which has
been vested in the state government in respect of the employees of the
state may be exercisable by an authority parallel or corresponding thereto
in the Corporation in regard to employees of the Corporation.
Learned counsel appearing for the appellant submits that the revision was
filed before the state government prior to the resolution dated 10.7.2001
by which U.P. Rules of 1999 have been adopted by the corporation. On that
ground also, the state government had no power to interfere in the matter
since the appeal had already been decided in the year 2000 which order had
become final before adoption of U.P. Rules of 1999. It is also submitted
that since it is provided under rule 13 of the U.P. Rules of 1999 that the
revisional powers would be exercisable in respect of the orders passed
under the U.P. Rules of 1999 also leads to the inference that they are
prospective in nature and would not be applicable to the orders which have
not been passed under the U.P. Rules of 1999. We, however, find no
substance in this submission as learned counsel for the respondent has
drawn our attention to the resolution dated February 16, 1991 passed by the
Board of Directors of the Corporation. The office order dated February 16,
1991 in relation to the decision of the Board of Directors of the
Corporation as taken on 21.6.1990 vide resolution no.7 is quoted below:
“24(A) Disciplinary action, suspension and subsistence allowance, payment
related rules and orders of the U.P. Government will be applicable on
officers and employees of the Corporation”.
In pursuance of the above noted resolution rule 24-A was substituted in
Chapter I of General Service Regulations of 1984 of the Corporation. Rule
24-A, as substituted, reads as under :
“24(A) Disciplinary action, suspension and subsistance allowance payment
related rules and orders of the U.P. Government will be applicable on
officers and employees of the Corporation.”
In view of the decision of the Board of Directors and the resolution and
later on as a consequence thereof substitution of Rule 24-A in the General
Service Regulations of 1984 of the Corporation, it is clear that the rules
as applicable to the employees of the U.P. Government, in the matters
relating to disciplinary action, suspension or subsistence allowance etc.
were made applicable to the employees of the Corporation. It appears that
since for the employees of the state government some new rules were
promulgated namely, the U.P. Government Servants (Discipline and Appeal)
Rules, 1999, a second resolution was passed on 10.7.2001 specifically
incorporating those rules for the purposes of disciplinary matters against
the employees of the Corporation. In this light of the matter the question
of giving retrospective effect to the U.P. Rules of 1999 does not arise. We
feel that even if no specific resolution was passed for incorporation of
U.P. Rules of 1999 on 7.10.2001 even then it would not have made any
difference since rule 24-A was substituted in the regulations of 1984 in
the year 1991 itself by virtue of which U.P. Rules 1999 would also be
applicable without any further resolution as whatever rules as may apply to
the employees of the state government in the matters relating to
disciplinary action etc. would be applicable to the employees of the
corporation.
In our view, the judgment of the High Court holding that the revisional
power as vested in the state government under rule 13 of the U.P. Rules of
1999 shall be available in respect of the employees of the Corporation is
erroneous and not sustainable. The High Court abruptly formed the opinion
without examining the question at all.
We, however, need not go into the question, as sought to be raised, as to
who would be an authority parallel or corresponding to the state government
in the Corporation to whom a revision may lie, since it is not involved in
this case.
In the result, we allow the appeal and set aside the order passed by the
High Court as well as the order dated 15.9.2001 passed by the state
government in revision, having been passed without jurisdiction. There
will, however, be no order as to costs.