PETITIONER:
MANAGING DIRECTOR, UTTAR PRADESH WAREHOUSING CORPORATION &AN
Vs.
RESPONDENT:
VINAY NARAYAN VAJPAYEE
DATE OF JUDGMENT16/01/1980
BENCH:
SARKARIA, RANJIT SINGH
BENCH:
SARKARIA, RANJIT SINGH
REDDY, O. CHINNAPPA (J)
CITATION:
1980 AIR 840 1980 SCR (2) 773
1980 SCC (3) 459
CITATOR INFO :
RF 1981 SC 212 (31,32)
R 1981 SC 487 (10)
F 1984 SC 541 (13)
RF 1984 SC1361 (20,27)
R 1986 SC1571 (53,69)
RF 1988 SC 469 (9)
RF 1990 SC 415 (21)
F 1991 SC 101 (223,236)
ACT:
Labour dispute-Employer-A Statutory Corporation-
Dismissed an employee without giving an opportunity of being
heard-Validity of.
Statutory bodies-Rights of employees under.
Constitution of India-Article 226-Scope of-High Court
issued Writ of Certiorari quashing order of dismissal and
ordered reinstatement of employee with full back wages-If
competent to order reinstatement.
HEADNOTE:
The respondent was an employee of a statutory body. On
allegations of theft, misappropriation of stocks and certain
other irregularities a preliminary enquiry was conducted by
the Managing Director (the appellant) and charges were
framed against the employee. In the explanation submitted by
him he expressly demanded that he wished to cross-examine
certain witnesses whose names were given by him, and wanted
to examine certain other persons as witnesses. A few months
thereafter, the appellant passed the impugned order of
dismissal and required him to pay Rs. 549/- on account of
certain commodities allegedly misappropriated by him.
The employee's petition under Article 226 for the issue
of a writ of certiorari was rejected by a single Judge. The
Division Bench allowed the writ on the ground that the
Corporation which was required to act in a quasi-judicial
manner failed to give an opportunity of being heard to the
dismissed employee and that therefore the order of dismissal
was bad.
On appeal, the appellant contended that Regulation 16
providing for an enquiry and giving an opportunity to an
employee against whom an enquiry was to be held for
misconduct had not come into force when the respondent was
dismissed and, therefore, he had no statutory status and no
locus-standi to maintain the writ which in substance was for
specific performance of a contract of service.
Dismissing the appeal
^
HELD: (Per Sarkaria, J.)
1. The impugned order of dismissal was bad in law and
had been rightly set aside by the High Court [781 F]
(a) Regulations defining duties, conduct and conditions
of its employees framed by statutory bodies have the force
of law. The form and content of contract with a particular
employee being prescriptive and statutory, the statutory
bodies have no free hand in framing the terms and conditions
of service to their employees, but are bound to apply them
as laid down in the
774
regulations. The regulations give the employees a statutory
status and impose obligations on the statutory authorities,
and that they cannot deviate from the conditions of service
laid down therein. There is no personal element in public
employment and service. Whenever employees rights are
affected by a decision taken under statutory powers the
court would presume the existence of a duty to observe the
rules of natural justice and compliance by the statutory
body with rules and regulations imposed by the statute. [779
E-G]
Sukhdev Singh v. Bhagat Ram [1975] 3 SCR 619 referred
to
In the instant case the appellant was a statutory body
and, therefore, even if at the time of dismissal the
statutory regulations had not been framed or had not come
into force, employment being public employment, the employer
could not terminate the employee's services without due
enquiry in accordance with the regulations in force or in
the absence of any regulations, in accordance with the rules
of natural justice. Such an enquiry into the conduct of a
public employee is of a quasi-judicial character. The
respondent was employed by the Corporation in exercise of
the powers conferred on it by the statute and, therefore,
the Corporation's power to dismiss the respondent from
service was derived from this statute. The court would
presume the existence of a duty on the part of the
dismissing authority to observe rules of natural justice and
to act in accordance with the spirit of the regulation which
was then on the anvil and came into force shortly after the
dismissal. Secondly, in the instant case no regular
departmental enquiry was held. The order of dismissal was
passed summarily after perusing the employee's explanation.
The rules of natural justice require that the dismissed
employee should be given a reasonable opportunity to deny
his guilt, to defend himself and to establish his innocence
which means an opportunity to cross-examine the witnesses
relied upon by the Corporation and an opportunity to lead
evidence in defence of the charge as also the show-cause
notice for the proposed punishment. Such an opportunity was
denied to the respondent. [780 G-H; 781 A-D]
Executive Committee of U.P. State Warehousing
Corporation Ltd. v. chandra Kiran Tyagi [1970] 2 S.C.R. 250;
Ramana Dayaram Shetty v. The International Airport Authority
of India & Ors. A.I.R. 1979 S.C. 1628 referred to.
2. The High Court was in error in directing payment of
full back wages to the dismissed employee. [783 E]
3(a) In exercise of its certiorari jurisdiction under
Article 226 of the Constitution, the High Court acts only in
a supervisory capacity and not as an appellate tribunal. It
does not review the evidence upon which the inferior
Tribunal proposed to base its conclusion; it simply
demolishes the order which it considers to be without
jurisdiction or manifestly erroneous but does not substitute
its own view for the view of the inferior tribunal. In
matters of employment while exercising its supervisory
jurisdiction under Article 226 of the Constitution over the
orders and quasi-judicial proceedings of an administrative
authority culminating in dismissal of an employee, the High
Court should ordinarily, in the event of the dismissal being
found illegal, simply quash the same and should not further
give a positive direction for payment to the employees full
back wages (although as a consequence of the annulment of
the dismissal the position as it obtained immediately before
the dismissal is restored. [782 F-H]
775
(b) Whether an employee of a statutory authority should
be reinstated in public employment with or without full back
wages, is a question of fact depending on evidence to be
produced before the tribunal. One of the important factors
to be considered in determining whether reinstatement should
be with full back wages and with continuity of employment is
to see if after the termination of his employment the
employee was gainfully employed elsewhere. [783 D-E]
In the instant case the employee did not raise an
industrial dispute nor did he invoke the jurisdiction of the
Labour Court or Industrial Tribunal but moved the High Court
under Article 226 primarily on the ground of violation of
the principles of natural justice. [783B-C]
Chinnappa Reddy, J. (concurring).
There is hardly any distinction, on principle, between
a person directly under the employment of the Government and
a person under the employment of an agency or
instrumentality of the Government or a corporation set up
under a statute or incorporated but wholly owned by the
Government. The desire to achieve the objectives enumerated
in the preamble to the Constitution has resulted in intense
governmental activity in manifold ways. Today, the
Government either directly or through corporations set up by
it or owned by it, owns or manages a large number of
industries and institutions. These agencies and
instrumentalities, corporations or companies have become the
biggest employers in the country. There is no good reason
why if the Government is bound to observe the equality
clauses of the Constitution in the matter of employment and
in its dealing with its employees, the Corporations set up
or owned by the Government should not be equally bound and
why instead, such Corporations should become citadels of
patronage and arbitrary action. To confine the applicability
of the equality clauses, in relation to matters of
employment, strictly to direct employment under the
Governments, in a country like ours is perhaps to mock at
the Constitution and the people. Some element of public
employment is all that is necessary to take the employee
beyond the reach of the rule which denies him access to a
court so as to enforce a contract of employment and denies
him the protection of Articles 14 and 16. Employees in
public sector often discharge the onerous duties as civil
servants and participate in activities vital to the
country's economy. Many enactments have declared persons in
the service of local authorities, government companies and
statutory corporations, as public servants and extended to
them the protection which is extended to civil servants from
suits and prosecutions. It is, therefore, but right that the
independence and integrity of those employed in the public
sector should be secured as much as the independence and
integrity of civil servants. [784 D-785 A-F]
Sukhdev Singh & Ors. v. Bhagatram Sardar Singh
Raghuvanshi & Anr. [1975] 3 S.C.R. 619; Ramana Dayaram
Shetty v. The International Airport Authority of India &
Ors. AIR 1979 S.C. 1628 referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 274 of
1970.
Appeal by Special Leave from the Judgment and Order
dated 6-8-1969 of the Allahabad High Court in Special Appeal
No. 4/67.
M. N. Phadke and Naunit Lal for the appellants.
776
A. K. Sen, E. C. Agarwala, R. Sathish and V. K. Pandita
for the Respondent.
The following Judgments were delivered by
SARKARIA, J.-Uttar Pradesh State Warehousing
Corporation (for short, the Corporation), has preferred this
appeal by special leave against an appellate judgment, dated
August 6, 1969, of a Division Bench of the High Court of
Allahabad. It arises out of these facts :
V. N. Vajpayee, respondent herein, was employed as a
Warehouseman with the Corporation and at the relevant time
was posted at the Kanpur Warehouse. There was a complaint of
theft, misappropriation of stocks and various other
irregularities against the respondent. A preliminary inquiry
was held by the Managing Director of the Corporation and
charges were framed against him and served upon him on
November 28, 1960, requiring him to submit his explanation
and to indicate the evidence, if any. On receiving the
charge-sheet, the respondent addressed a communication,
requesting the Managing Director to furnish him with certain
papers, which were accordingly furnished. Thereafter, the
respondent submitted his explanation on January 19, 1961. In
this explanation, he specifically demanded that he wanted to
cross-examine certain witnesses, the particulars of which
were mentioned by him. He further gave the names and
particulars of certain other witnesses, stating that he
wanted to examine them, in defence. Nothing happened
thereafter till April 18, 1961, on which date the Managing
Director passed an order dismissing the respondent from
service with effect from the date of his suspension. Later
on, a demand was made from the respondent, requiring him to
remit a sum of Rs. 549.61 due to the Corporation on account
of certain commodities said to have been misappropriated by
the respondent on account of short realisation of storage
charges by him.
The respondent then filed a Writ Petition (No. 87 of
1962) under Article 226 of the Constitution, in the High
Court praying for a writ of certiorari to quash the order of
his dismissal on the ground that it was violative of the
principles of natural justice, inasmuch as he had not been
given an opportunity to cross-examine the witnesses and to
establish his innocence. He further prayed for a direction
that the Corporation be restrained from recovering the sum
of Rs. 549.61 from him.
In the counter-affidavit, the appellants stated that
the respondent had also cross-examined the witnesses. It was
further urged that there had also cross-examined the
witnesses. It was further urged that there was no regulation
provided for conducting an inquiry in a particular
777
manner, and, therefor, the remedy of the respondent was by
way of a suit and he had no locus standi to invoke the
extra-ordinary jurisdiction of the Court under Article 226
of the Constitution. It was further pleaded that the writ
petition was delayed and should have been thrown out on that
score, also.
The writ petition was heard by a learned Single Judge
of the High Court, who dismissed it, holding that the
Corporation was not required to act in a quasi-judicial
manner and that the provisions of Article 311 of the
Constitution were not applicable to the facts of the case.
Aggrieved, the respondent carried a special appeal to a
Division Bench of the High Court, which has reversed the
judgment of the learned Single Judge, and has held that the
Corporation was required to act in a quasi-judicial manner
and, therefore, the writ petition was maintainable. The
Division Bench remanded the case for a decision on merits.
After the remand, the learned Single Judge by his judgment,
dated December 7, 1966, allowed the writ petition, holding
that the principles of natural justice had been violated.
He, therefore, quashed the order of the respondent’s
dismissal, but refused to grant an injunction restraining
the appellant for realizing Rs. 549.61 from the respondent.
The Corporation again preferred a Special Appeal No. 4 of
1967 to a Division Bench of the High Court, which dismissed
that appeal by a judgment, dated August 6, 1969. Hence this
appeal by the Corporation.
The main contention of the learned counsel for the
appellants is that at the relevant time, Regulation 16
providing for an enquiry and giving an opportunity to the
employee had not come into force; consequently, the
respondent had no statutory status and had therefore no
locus standi to maintain the writ petition. It is submitted
that the only remedy of the respondent was to file a suit
for damages on account of his alleged wrongful dismissal.
Support for this contention has been sought from a decision
of this Court in Executive Committee of U.P. State
Warehousing Corporation Ltd. v. Chandra Kiran Tyagi(1).
Reference has also been made to Sirsi Municipality v.
Cecelia Kom Francis Tellis.(2)
On the other hand, Shri A. K. Sen, appearing for the
respondent, submits that since the decision of this Court in
U.P. State Warehousing Corporation (ibid), the law has
undergone a change. It is pointed out that the appellant is
a Corporation constituted under a statue and is owned and
controlled by the State Government and its employees.
778
therefore, have a statutory status. It is argued that even
in the absence of Regulation 16 providing for a departmental
enquiry, the appellant was bound to hold an enquiry and to
give, in compliance with the rules of natural justice, full
and fair opportunity to the respondent to defend himself and
repel the charges levelled against him. It is maintained
that such an opportunity was denied to him because he was
not allowed to examine witnesses cited by him in defence.
Reference in connection with the proposition propounded has
been made to Sukhdev Sing & Ors. v. Bhagatram Sardar Singh
Raghuvanshi & Anr.(1)
We will first notice Chandra Kiran Tyagi’s case, which
is the sheet-anchor of the appellants’ arguments. The facts
of that case were somewhat similar. Tyagi was a Warehouseman
in the employment of the U.P. State Warehousing Corporation
Limited. After receiving Tyagi’s explanation, the Enquiry
Officer did not take any evidence in respect of any charge.
Instead, he met various persons and collected information,
and gave his findings on the various charges on the basis of
the enquiries made by him and the records. Even the
information so collected was not put to Tyagi. On the basis
of those findings of the Enquiry Officer, Tyagi was
dismissed from service. Tyagi filed a suit challenging his
dismissal. He prayed for a declaration for reinstatement on
the ground that the relationship was one of personal
service. Speaking through Vaidialingam, J. this Court held
that a declaration to enforce a contract of personal service
will not normally be granted. It was noted that there are
three exceptions to this rule : (i) appropriate cases of
public servants who have been dismissed from service in
contravention of Article 311, (ii) dismissed workers under
industrial and labour law; and (iii) when a statutory body
has acted in breach of a mandatory obligation imposed by a
statute. It was further held that though the impugned order
was made in breach of the regulation contrary to the terms
and conditions of the relationship between the appellant
(employer) and the respondent (employee), but, it would not
be in breach of any statutory obligation, because, the Act
does not guarantee any statutory status to the respondent;
nor does it impose any obligation on the appellant in such
matters. Therefore, the violation of regulation 16(3) as
alleged and established in that case, could only result in
the order of dismissal being held to be wrongful, and in
consequence, making the appellant liable for damages, but
could not have the effect of treating the respondent as
still in service or entitling him to reinstatement.
The authority of the rule in Tyagi’s case, to the
effect, that an employee of such a statutory body even if it
be owned and managed by
779
the Government does not enjoy a statutory status, appears to
have been eroded by the later decisions of this Court,
particularly the pronouncement in Sukhdev Singh’s case
(ibid). The statutory bodies in that case were : Oil and
Natural Gas Commission, Industrial Finance Corporation and
Life Insurance Corporation. All the three bodies were
created under separate stututes enacted by the Central
Legislature. It was clear from the Oil and Natural Gas
Commission Act, 1954, that the Commission created by it,
acts as an agency of the Central Government. Similarly, by
virtue of the Industrial Finance Corporation Act, 1948, the
Finance Corporation is under the control and management of
the Central Government. The Life Insurance Corporation is
similarly owned and managed by the Government and can be
dissolved only by the Government in view of the provisions
of the Life Insurance Act, 1956. All the three statutes
constituting the three statutory corporations enabled them
to make regulations which provide, inter alia, for the terms
and conditions of employment and services of their
employees. Questions arose : (i) whether the regulations
have the force of law, and (ii) whether the statutory
corporations are `State’ within the meaning of Article 12 of
the Constitution. Ray, C.J., speaking for himself and
Chandrachud and Gupta JJ., held that the regulations framed
by these statutory bodies for the purpose of defining the
duties, conduct and conditions of its employees have the
force of law. The form and content of the contract with a
particular employee is prescriptive and statutory. The
notable feature is that these statutory bodies have no free
hand in framing the conditions and terms of service of their
employees. They are bound to apply the terms and conditions
as laid down in the regulations. These regulations are not
only binding on the authority but also on the public. They
give the employees a statutory status and impose obligations
on the statutory authorities, who cannot deviate from the
conditions of service.
It was further made clear that an ordinary individual,
in the case of master and servant contractual relationship,
enforces breach of contract, the remedy being damages
because personal service is not capable of enforcement. In
the case of statutory bodies, however, there is no personal
element whatsoever because of the impersonal character of
the bodies. In their case, the element of public employment
and service and the support of statute require observance of
rules and regulations. At page 634 of the Report, the
learned Chief Justice significantly reiterated that
“whenever a man’s rights are affected by decision taken
under statutory powers, the Court would presume the
existence of a duty to observe the rules of natural justice
and com-
780
pliance with rules and regulations imposed by statute”. The
Court then referred to U.P. Warehousing Corporation and
Indian Airlines Corporation cases and held that these
decisions were in direct conflict with an earlier decision
of this Court in Narainda Barot v. Divisional Controller,
S.T.C.,(1) and were wrongly decided. The Court followed the
decision in Sirsi Municipality (ibid).
Mathew J. in his separate but concurring judgment,
pointed out how the concept of the State has undergone
drastic changes in recent years. A State is an abstract
entity and can act only through the instrumentality or
agency of natural or juridicial persons. With the advent of
a welfare State the framework of civil service
administration became increasingly insufficient for handling
the new tasks which were often of a specialised and highly
technical character For this reason, a policy of public
administration through separate Corporations which would
operate largely according to business principles and be
separately accountable, was evolved. Such public
corporations constituted under enactments, became a third
arm of the Government. The employees of public corporation
are not civil servants. In so far as public corporations
fulfil public tasks on behalf of the Government, they are
public authorities and, as such, subject to control by
Government. The public corporation being a creation of the
State is subject to the constitutional limitation as the
State itself.
The Court thus with a majority of 4-1 held that the
statutory bodies then under consideration were `authorities’
within the meaning of Article 12 of the Constitution and
though their employees were not servants of the Union or of
a State, yet they had a statutory status.
The appellant is a Corporation constituted under the
Uttar Pradesh State Warehousing Corporation (Act 28) of
1956, which was subsequently replaced by the Central Act 58
of 1962. It is a statutory body wholly controlled and
managed by the Government. Its status is analogous to that
of the Corporations which were under consideration in
Sukhdev Singh’s case (ibid). The ratio of Sukhdev Singh’s
case, therefore, squarely applies to the present case. Even
if at the time of the dismissal, the statutory regulations
had not been framed or had not come into force, then also
the employment of the respondent was public employment and
the statutory body, the employer, could not terminate the
services of its employee without due enquiry in accordance
with the statutory Regulations, if any in force, or in the
absence of such Regulations, in accordance with the rules of
natural justice. Such an enquiry into the conduct of a
public employee is of
781
a quasi-judicial character. The respondent was employed by
the appellant-Corporation in exercise of the powers
conferred on it by the statute which created it. The
appellants’ power to dismiss the respondent from service was
also derived from the statute. The Court would therefore,
presume the existence of a duty on the part of the
dismissing authority to observe the rules of natural
justice, and to act in accordance with the spirit of
Regulation 16, which was then on the anvil and came into
force shortly after the impugned dismissal. The rules of
natural justice in the circumstances of the case, required
that the respondent should be given a reasonable opportunity
to deny his guilt, to defend himself and to establish his
innocence which means and includes an opportunity to cross-
examine the witnesses relied upon by the appellant-
Corporation and an opportunity to lead evidence in defence
of the charge as also a show-cause notice for the proposed
punishment. Such an opportunity was denied to the respondent
in the instant case. Admittedly, the respondent was not
allowed to lead evidence in defence. Further, he was not
allowed to cross-examine certain persons whose statements
were not recorded by the Enquiry Officer (Opposite Party No.
1) in the presence of the respondent. There was controversy
on this point. But it was clear to the High Court from the
report of enquiry by the Opposite Party No. 1 that he relied
upon the reports of some persons and the statements of some
other persons who were not examined by him. A regular
departmental enquiry takes place only after the charge-sheet
is drawn up and served upon the delinquent and the latter’s
explanation is obtained. In the present case, no such
enquiry was held and the order of dismissal was passed
summarily after perusing the respondent’s explanation. The
rules of natural justice in this case, were honoured in
total breach. The impugned order of dismissal was thus bad
in law and had been rightly set aside by the High Court.
Before passing on to the next question we may in
fairness mention, that Mr. Asok Sen had cited two more
decisions, also. The first was a recent judgment of the
House of Lords in Melloch. v. Aberdeen Corporation(1),
wherein Lord Wilberforce in his speech (at pages 1595-1596
of the Report) observed that in cases in which there is an
element of public employment or service, or support by
statute or something in the nature of an office or a status,
which is capable of protection, then irrespective of the
terminology used, and even though in some inter parties
aspects the relationship may be called that of master and
servant, there may be essential procedural requirement to be
observed on grounds of natural justice. The second decision
is Ramana
782
Dayaram Shetty v. The International Airport Authority of
India & Ors.(1)
In Ramana Dayaram Shetty’s case (ibid) Bhagwati, J.
after making an exhaustive survey of the decisions of this
Court and of American Courts, summarised some of the factors
which are considered to determine whether a Corporation is
an agency or instrumentality of Government. We do not think
it necessary to burden this judgment by a detailed
discussion of these cases because in the instant case, all
the material factors exist which show beyond doubt that the
Uttar Pradesh State Warehousing Corporation constituted
under the Central Act 28 of 1956, is an agency or
instrumentality of the Government, and the relationship
between the Corporation and its employees is not purely that
of master and servant, founded only on contract. Indeed, it
was not seriously disputed that the respondent was in public
employment, and the Corporation is an authority within the
meaning of Article 12 of the Constitution.
Further contention of the learned counsel for the
appellants is that even if the dismissal of the respondent
was wrongful, the High Court could only quash the same, but
it could not in the exercise of its certiorari jurisdiction
under Article 226 of the Constitution give the further
direction that the employee should be reinstated in service
with full back wages. It is maintained that in giving this
further direction, the High Court had overleaped the bounds
of its jurisdiction.
There appears to be force in this contention. It must
be remembered that in the exercise of its certiorari
jurisdiction under Article 226 of the Constitution, the High
Court acts only in a supervisory capacity and not as an
appellate tribunal. It does not review the evidence upon
which the inferior tribunal proposed to base its conclusion;
it simply demolishes the order which it considers to be
without jurisdiction or manifestly erroneous, but does not,
as a rule, substitute its own view for those of the inferior
tribunal. In other words, the offending order or the
impugned illegal proceeding is quashed and put out of the
way as one which should not be used to the detriment of the
writ petitioner. Thus in matters of employment, while
exercising its supervisory jurisdiction under Article 226 of
the Constitution, over the order and quasi-judicial
proceeding of an administrative authority-not being a
proceeding under the industrial law/labour law before an
industrial/labour tribunal-culminating in dismissal of the
employee, the High Court should ordinarily. in
783
the event of the dismissal being found illegal, simply quash
the same and should not further give a positive direction
for payment to the employee full back wages (although as
consequence of the annulment of the dismissal, the position
as it obtained immediately before the dismissal is
restored), such peculiar powers can properly be exercised in
a case where the impugned adjudication or award has been
given by an Industrial Tribunal or Labour Court. The instant
case is not one under Industrial/Labour Law. The respondent
employee never raised any industrial dispute, nor invoked
the jurisdiction of the Labour Court or the Industrial
Tribunal. He directly moved the High Court for the exercise
of its special jurisdiction under Article 226 of the
Constitution for challenging the order of dismissal
primarily on the ground that it was violative of the
principles of natural justice which required that his public
employment should not be terminated without giving him a due
opportunity to defend himself and to rebut the charges
against him. Furthermore, whether a workman or employee of a
statutory authority should be reinstated in public
employment with or without full back wages, is a question of
fact depending on evidence to be produced before the
tribunal. If after the termination of his employment the
workman/employee was gainfully employed elsewhere, that is
one of the important factors to be considered in determining
whether or not the reinstatement should be with full back
wages and with continuity of employment. For these two fold
reasons, we are of opinion that the High Court was in error
in directing payment to the employee full back wages.
For the foregoing reasons while upholding the judgment
of the High Court with regard to the quashing of the order
of dismissal of the respondent on the ground of its being
invalid, we delete the direction for payment to the
respondent full back wages. Excepting this modification, the
appeal is dismissed. However, in the circumstances, the
appellant-Corporation shall pay the costs of the respondent
in this Court.
CHINNAPPA REDDY, J.-The respondent-employee was
dismissed from service. The employer dismissed him, without
observing the principles of natural justice. This has been
found by the High Court who quashed the order of dismissal
in a proceeding under Art. 226 of the Constitution. The
employer has appealed. The employer claims that a
declaration to enforce a contract of personal service cannot
be granted by the Court. The only remedy of the employee, he
pleads, is to file a suit for damages for wrongful
dismissal. The answer of the employer is that the employer
is a statutory Corpora-
784
tion whose employees have statutory status, and that the
employer is bound by the regulations made under the statute
as also to observe the principles of natural justice. Breach
of the regulations or failure to observe the principles of
natural justice entitles the employee to invoke the
jurisdiction of the High Court under Article 226 of the
Constitution.
The question whether breach of statutory regulations or
failures to observe the principles of natural justice by a
statutory Corporation will entitle an employee of such
Corporation to claim a declaration of continuance in service
and the question whether the employee is entitled to the
protection of Arts. 14 and 16 against the Corporation were
considered at great length in Sukhdev Singh & Ors. v.
Bhagatram Sardar Singh Raghuvanshi & Anr.(1) The question as
to who may be considered to be agencies or instrumentalities
of the Government was also considered, again at some length,
by this Court in Ramana Dayaram Shetty v. The International
Airport Authority of India & Ors.(2)
I find it very hard indeed to discover any distinction,
on principle, between a person directly under the employment
of the Government and a person under the employment of an
agency or instrumentality of the Government or a
Corporation, set up under a statute or incorporated but
wholly owned by the Government. It is self evident and trite
to say that the function of the State has long since ceased
to be confined to the preservation of the public peace, the
exaction of taxes and the defence of its frontiers. It is
now the function of the State to secure `social, economic
and political justice’, to preserve `liberty of thought,
expression, belief, faith and worship’, and to ensure
`equality of status and of opportunity’. That is the
proclamation of the people in the preamble to the
Constitution. The desire to attain these objectives has
necessarily resulted in intense Governmental activity in
manifold ways. Legislative and executive activity have
reached very far and have touched very many aspects of a
citizen’s life. The Government, directly or through the
Corporations, set up by it or owned by it, now owns or
manages, a large number of industries and institutions. It
is the biggest builder in the country. Mammoth and minor
irrigation projects, heavy and light engineering projects,
projects of various kinds are undertaken by the Government.
The Government is also the biggest trader in the country.
The State and the multitudinous agencies and Corporations
set up by it are the principal purchasers of the produce and
785
the products of our country and they control a vast and
complex machinery of distribution. The Government, its
agencies and instrumentalities, Corporations set up by the
Government under statutes and Corporations incorporated
under the Companies Act but owned by the Government have
thus become the biggest employers in the country. There is
no good reason why, if Government is bound to observe the
equality clauses of the constitution in the matter of
employment and in its dealings with the employees, the
Corporations set up or owned by the Government should not be
equally bound and why, instead, such Corporations could
become citadels of patronage and arbitrary action. In a
country like ours which teems with population, where the
State, its agencies, its instrumentalities and its
Corporations are the biggest employers and where millions
seek employment and security, to confirm the applicability
of the equality clauses of the constitution, in relation to
matters of employment, strictly to direct employment under
the Government is perhaps to mock at the Constitution and
the people. Some element of public employment is all that is
necessary to take the employee beyond the reach of the rule
which denies him access to a Court so enforce a contract of
employment and denies him the protection of Arts. 14 and 16
of the Constitution. After all employment in the public
sector has grown to vast dimensions and employees in the
public sector often discharge as onerous duties as civil
servants and participate in activities vital to our
country’s economy. In growing realization of the importance
of employment in the public sector, Parliament and the
Legislatures of the States have declared persons in the
service of local authorities, Government companies and
statutory corporations as public servants and, extended to
them by express enactment the protection usually extended to
civil servants from suits and prosecution. It is, therefore,
but right that the independence and integrity of those
employed in the public sector should be secured as much as
the independence and integrity of civil servants.
I agree with what has been said by my brother Sarkaria
J. I have added a few lines to emphasise some aspects of the
problem.
P.B.R. Appeal dismissed.
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