{"id":122115,"date":"1980-01-16T00:00:00","date_gmt":"1980-01-15T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/managing-director-uttar-pradesh-vs-vinay-narayan-vajpayee-on-16-january-1980"},"modified":"2018-01-25T00:42:47","modified_gmt":"2018-01-24T19:12:47","slug":"managing-director-uttar-pradesh-vs-vinay-narayan-vajpayee-on-16-january-1980","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/managing-director-uttar-pradesh-vs-vinay-narayan-vajpayee-on-16-january-1980","title":{"rendered":"Managing Director, Uttar Pradesh … vs Vinay Narayan Vajpayee on 16 January, 1980"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Managing Director, Uttar Pradesh … vs Vinay Narayan Vajpayee on 16 January, 1980<\/div>\n
Equivalent citations: 1980 AIR 840, \t\t 1980 SCR (2) 773<\/div>\n
Author: R S Sarkaria<\/div>\n
Bench: Sarkaria, Ranjit Singh<\/div>\n
           PETITIONER:\nMANAGING DIRECTOR, UTTAR PRADESH WAREHOUSING CORPORATION &AN\n\n\tVs.\n\nRESPONDENT:\nVINAY NARAYAN VAJPAYEE\n\nDATE OF JUDGMENT16\/01\/1980\n\nBENCH:\nSARKARIA, RANJIT SINGH\nBENCH:\nSARKARIA, RANJIT SINGH\nREDDY, O. CHINNAPPA (J)\n\nCITATION:\n 1980 AIR  840\t\t  1980 SCR  (2) 773\n 1980 SCC  (3) 459\n CITATOR INFO :\n RF\t    1981 SC 212\t (31,32)\n R\t    1981 SC 487\t (10)\n F\t    1984 SC 541\t (13)\n RF\t    1984 SC1361\t (20,27)\n R\t    1986 SC1571\t (53,69)\n RF\t    1988 SC 469\t (9)\n RF\t    1990 SC 415\t (21)\n F\t    1991 SC 101\t (223,236)\n\n\nACT:\n     Labour   dispute-Employer-A    Statutory\tCorporation-\nDismissed an employee without giving an opportunity of being\nheard-Validity of.\n     Statutory bodies-Rights of employees under.\n     Constitution of  India-Article 226-Scope  of-High Court\nissued Writ  of Certiorari  quashing order  of dismissal and\nordered reinstatement  of employee  with full  back wages-If\ncompetent to order reinstatement.\n\n\n\nHEADNOTE:\n     The respondent  was an employee of a statutory body. On\nallegations of theft, misappropriation of stocks and certain\nother irregularities  a preliminary enquiry was conducted by\nthe Managing  Director\t(the  appellant)  and  charges\twere\nframed against the employee. In the explanation submitted by\nhim he\texpressly demanded  that he  wished to cross-examine\ncertain witnesses  whose names were given by him, and wanted\nto examine  certain other persons as witnesses. A few months\nthereafter, the\t appellant  passed  the\t impugned  order  of\ndismissal and  required him  to pay  Rs. 549\/- on account of\ncertain commodities allegedly misappropriated by him.\n     The employee's petition under Article 226 for the issue\nof a  writ of certiorari was rejected by a single Judge. The\nDivision Bench\tallowed the  writ on  the  ground  that\t the\nCorporation which  was required\t to act\t in a quasi-judicial\nmanner failed  to give\tan opportunity of being heard to the\ndismissed employee and that therefore the order of dismissal\nwas bad.\n     On appeal,\t the appellant\tcontended that Regulation 16\nproviding for  an enquiry  and giving  an opportunity  to an\nemployee  against  whom\t an  enquiry  was  to  be  held\t for\nmisconduct had\tnot come  into force when the respondent was\ndismissed and,\ttherefore, he had no statutory status and no\nlocus-standi to maintain the writ which in substance was for\nspecific performance of a contract of service.\n     Dismissing the appeal\n^\n     HELD: (Per Sarkaria, J.)\n     1. The  impugned order  of dismissal was bad in law and\nhad been rightly set aside by the High Court [781 F]\n     (a) Regulations defining duties, conduct and conditions\nof its\temployees framed  by statutory bodies have the force\nof law.\t The form  and content of contract with a particular\nemployee being\tprescriptive and  statutory,  the  statutory\nbodies have no free hand in framing the terms and conditions\nof service  to their  employees, but are bound to apply them\nas laid down in the\n774\nregulations. The  regulations give the employees a statutory\nstatus and  impose obligations on the statutory authorities,\nand that  they cannot deviate from the conditions of service\nlaid down  therein. There  is no  personal element in public\nemployment  and\t  service.  Whenever  employees\t rights\t are\naffected by  a decision\t taken under  statutory\t powers\t the\ncourt would  presume the  existence of a duty to observe the\nrules of  natural justice  and compliance  by the  statutory\nbody with rules and regulations imposed by the statute. [779\nE-G]\n     Sukhdev Singh  v. Bhagat  Ram [1975] 3 SCR 619 referred\nto\n     In the  instant case the appellant was a statutory body\nand, therefore,\t even  if  at  the  time  of  dismissal\t the\nstatutory regulations  had not\tbeen framed  or had not come\ninto force, employment being public employment, the employer\ncould not  terminate the  employee's  services\twithout\t due\nenquiry in  accordance with  the regulations  in force or in\nthe absence of any regulations, in accordance with the rules\nof natural  justice. Such  an enquiry  into the conduct of a\npublic\temployee  is  of  a  quasi-judicial  character.\t The\nrespondent was\temployed by  the Corporation  in exercise of\nthe powers  conferred on  it by\t the statute and, therefore,\nthe Corporation's  power  to  dismiss  the  respondent\tfrom\nservice was  derived from  this\t statute.  The\tcourt  would\npresume\t the  existence\t of  a\tduty  on  the  part  of\t the\ndismissing authority to observe rules of natural justice and\nto act in accordance with the spirit of the regulation which\nwas then  on the anvil and came into force shortly after the\ndismissal.  Secondly,\tin  the\t  instant  case\t no  regular\ndepartmental enquiry  was held.\t The order  of dismissal was\npassed summarily  after perusing the employee's explanation.\nThe rules  of natural  justice require\tthat  the  dismissed\nemployee should\t be given  a reasonable\t opportunity to deny\nhis guilt,  to defend himself and to establish his innocence\nwhich means  an opportunity  to cross-examine  the witnesses\nrelied upon  by the  Corporation and  an opportunity to lead\nevidence in  defence of\t the charge  as also  the show-cause\nnotice for  the proposed punishment. Such an opportunity was\ndenied to the respondent. [780 G-H; 781 A-D]\n     Executive\t Committee   of\t  U.P.\t State\t Warehousing\nCorporation Ltd. v. chandra Kiran Tyagi [1970] 2 S.C.R. 250;\nRamana Dayaram Shetty v. The International Airport Authority\nof India & Ors. A.I.R.<\/a> 1979 S.C. 1628 referred to.\n     2. The  High Court was in error in directing payment of\nfull back wages to the dismissed employee. [783 E]\n     3(a) In  exercise of  its certiorari jurisdiction under\nArticle 226 of the Constitution, the High Court acts only in\na supervisory  capacity and not as an appellate tribunal. It\ndoes  not  review  the\tevidence  upon\twhich  the  inferior\nTribunal  proposed   to\t base\tits  conclusion;  it  simply\ndemolishes the\torder  which  it  considers  to\t be  without\njurisdiction or manifestly erroneous but does not substitute\nits own\t view for  the view  of the  inferior  tribunal.  In\nmatters\t of  employment\t while\texercising  its\t supervisory\njurisdiction under  Article 226 of the Constitution over the\norders and  quasi-judicial proceedings\tof an administrative\nauthority culminating  in dismissal of an employee, the High\nCourt should ordinarily, in the event of the dismissal being\nfound illegal,\tsimply quash the same and should not further\ngive a\tpositive direction for payment to the employees full\nback wages  (although as  a consequence\t of the annulment of\nthe dismissal the position as it obtained immediately before\nthe dismissal is restored. [782 F-H]\n775\n     (b) Whether an employee of a statutory authority should\nbe reinstated in public employment with or without full back\nwages, is  a question  of fact\tdepending on  evidence to be\nproduced before\t the tribunal.\tOne of the important factors\nto be considered in determining whether reinstatement should\nbe with full back wages and with continuity of employment is\nto see\tif after  the  termination  of\this  employment\t the\nemployee was gainfully employed elsewhere. [783 D-E]\n     In the  instant case  the employee\t did  not  raise  an\nindustrial dispute nor did he invoke the jurisdiction of the\nLabour Court or Industrial Tribunal but moved the High Court\nunder Article  226 primarily  on the  ground of violation of\nthe principles of natural justice. [783B-C]\n     Chinnappa Reddy, J. (concurring).\n     There is  hardly any distinction, on principle, between\na person directly under the employment of the Government and\na  person   under   the\t  employment   of   an\t agency\t  or\ninstrumentality of  the Government  or a  corporation set up\nunder a\t statute or  incorporated but  wholly owned  by\t the\nGovernment. The\t desire to achieve the objectives enumerated\nin the\tpreamble to the Constitution has resulted in intense\ngovernmental  activity\t in  manifold\tways.\tToday,\t the\nGovernment either directly or through corporations set up by\nit or  owned by\t it, owns  or  manages\ta  large  number  of\nindustries   and    institutions.   These    agencies\t and\ninstrumentalities, corporations or companies have become the\nbiggest employers  in the  country. There  is no good reason\nwhy if\tthe Government\tis bound  to  observe  the  equality\nclauses of  the Constitution in the matter of employment and\nin its\tdealing with  its employees, the Corporations set up\nor owned  by the  Government should not be equally bound and\nwhy instead,  such Corporations\t should become\tcitadels  of\npatronage and arbitrary action. To confine the applicability\nof  the\t  equality  clauses,   in  relation  to\t matters  of\nemployment,  strictly\tto  direct   employment\t under\t the\nGovernments, in\t a country  like ours  is perhaps to mock at\nthe Constitution  and the  people. Some\t element  of  public\nemployment is  all that\t is necessary  to take\tthe employee\nbeyond the  reach of  the rule\twhich denies him access to a\ncourt so  as to\t enforce a contract of employment and denies\nhim the\t protection of\tArticles 14  and  16.  Employees  in\npublic sector  often discharge\tthe onerous  duties as civil\nservants  and\tparticipate  in\t  activities  vital  to\t the\ncountry's economy.  Many enactments have declared persons in\nthe service  of local  authorities, government companies and\nstatutory corporations,\t as public  servants and extended to\nthem the protection which is extended to civil servants from\nsuits and prosecutions. It is, therefore, but right that the\nindependence and  integrity of\tthose employed in the public\nsector should  be secured  as much  as the  independence and\nintegrity of civil servants. [784 D-785 A-F]\n     Sukhdev  Singh   &\t Ors.\tv.  Bhagatram  Sardar  Singh\nRaghuvanshi &  Anr.<\/a> [1975]  3  S.C.R.  619;  Ramana  Dayaram\nShetty v.  The International  Airport Authority\t of India  &\nOrs. AIR<\/a> 1979 S.C. 1628 referred to.\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE  JURISDICTION : Civil Appeal No. 274 of
\n1970.\n<\/p>\n
     Appeal by\tSpecial Leave  from the\t Judgment and  Order
\ndated 6-8-1969 of the Allahabad High Court in Special Appeal
\nNo. 4\/67.\n<\/p>\n
     M. N. Phadke and Naunit Lal for the appellants.\n<\/p>\n
776<\/span><\/p>\n
     A. K. Sen, E. C. Agarwala, R. Sathish and V. K. Pandita
\nfor the Respondent.\n<\/p>\n
     The following Judgments were delivered by
\n     SARKARIA,\t J.-Uttar    Pradesh\tState\t Warehousing
\nCorporation (for short, the Corporation), has preferred this
\nappeal by special leave against an appellate judgment, dated
\nAugust 6,  1969, of  a Division\t Bench of  the High Court of
\nAllahabad. It arises out of these facts :\n<\/p>\n
     V. N.  Vajpayee, respondent  herein, was  employed as a
\nWarehouseman with  the Corporation  and at the relevant time
\nwas posted at the Kanpur Warehouse. There was a complaint of
\ntheft,\tmisappropriation   of  stocks\tand  various   other
\nirregularities against the respondent. A preliminary inquiry
\nwas held  by the  Managing Director  of the  Corporation and
\ncharges were  framed against  him and  served  upon  him  on
\nNovember 28,  1960, requiring  him to submit his explanation
\nand to\tindicate the  evidence, if  any.  On  receiving\t the
\ncharge-sheet,  the  respondent\taddressed  a  communication,
\nrequesting the Managing Director to furnish him with certain
\npapers, which  were accordingly\t furnished. Thereafter,\t the
\nrespondent submitted his explanation on January 19, 1961. In
\nthis explanation, he specifically demanded that he wanted to
\ncross-examine certain  witnesses, the  particulars of  which
\nwere mentioned\tby  him.  He  further  gave  the  names\t and
\nparticulars of\tcertain other  witnesses,  stating  that  he
\nwanted\tto   examine  them,  in\t defence.  Nothing  happened
\nthereafter till\t April 18,  1961, on which date the Managing
\nDirector passed\t an order  dismissing  the  respondent\tfrom
\nservice with  effect from  the date of his suspension. Later
\non, a  demand was made from the respondent, requiring him to
\nremit a\t sum of Rs. 549.61 due to the Corporation on account
\nof certain  commodities said to have been misappropriated by
\nthe respondent\ton account  of short  realisation of storage
\ncharges by him.\n<\/p>\n
     The respondent  then filed\t a Writ\t Petition (No. 87 of
\n1962) under  Article 226  of the  Constitution, in  the High
\nCourt praying for a writ of certiorari to quash the order of
\nhis dismissal  on the  ground that  it was  violative of the
\nprinciples of  natural justice,\t inasmuch as he had not been
\ngiven an  opportunity to  cross-examine the witnesses and to
\nestablish his  innocence. He  further prayed for a direction
\nthat the  Corporation be  restrained from recovering the sum
\nof Rs. 549.61 from him.\n<\/p>\n
     In the  counter-affidavit, the  appellants stated\tthat
\nthe respondent had also cross-examined the witnesses. It was
\nfurther\t urged\t that  there  had  also\t cross-examined\t the
\nwitnesses. It was further urged that there was no regulation
\nprovided for conducting an inquiry in a particular
\n777<\/span>
\nmanner, and,  therefor, the  remedy of the respondent was by
\nway of\ta suit\tand he\thad no\tlocus standi  to invoke\t the
\nextra-ordinary jurisdiction  of the  Court under Article 226
\nof the\tConstitution. It  was further  pleaded that the writ
\npetition was delayed and should have been thrown out on that
\nscore, also.\n<\/p>\n
     The writ  petition was  heard by a learned Single Judge
\nof the\tHigh Court,  who  dismissed  it,  holding  that\t the
\nCorporation was\t not required  to act  in  a  quasi-judicial
\nmanner and  that  the  provisions  of  Article\t311  of\t the
\nConstitution were not applicable to the facts of the case.\n<\/p>\n
     Aggrieved, the respondent carried a special appeal to a
\nDivision Bench\tof the\tHigh Court,  which has\treversed the
\njudgment of  the learned Single Judge, and has held that the
\nCorporation was\t required to  act in a quasi-judicial manner
\nand, therefore,\t the writ  petition  was  maintainable.\t The
\nDivision Bench\tremanded the  case for a decision on merits.
\nAfter the  remand, the learned Single Judge by his judgment,
\ndated December\t7, 1966,  allowed the writ petition, holding
\nthat the  principles of\t natural justice  had been violated.
\nHe,  therefore,\t  quashed  the\torder  of  the\trespondent’s
\ndismissal, but\trefused to  grant an  injunction restraining
\nthe appellant  for realizing Rs. 549.61 from the respondent.
\nThe Corporation\t again preferred  a Special  Appeal No. 4 of
\n1967 to\t a Division Bench of the High Court, which dismissed
\nthat appeal  by a judgment, dated August 6, 1969. Hence this
\nappeal by the Corporation.\n<\/p>\n
     The main  contention of  the learned  counsel  for\t the
\nappellants is  that at\tthe  relevant  time,  Regulation  16
\nproviding for  an enquiry  and giving  an opportunity to the
\nemployee  had\tnot  come   into  force;  consequently,\t the
\nrespondent had\tno statutory  status and  had  therefore  no
\nlocus standi  to maintain the writ petition. It is submitted
\nthat the  only remedy  of the  respondent was to file a suit
\nfor damages  on account\t of his\t alleged wrongful dismissal.
\nSupport for  this contention has been sought from a decision
\nof  this   Court  in   Executive  Committee  of\t U.P.  State
\nWarehousing Corporation\t Ltd.  v.  Chandra  Kiran  Tyagi<\/a>(1).
\nReference has  also  been  made\t to  Sirsi  Municipality  v.
\nCecelia Kom Francis Tellis.<\/a>(2)
\n     On the  other hand,  Shri A.  K. Sen, appearing for the
\nrespondent, submits that since the decision of this Court in
\nU.P. State  Warehousing\t Corporation  (ibid),  the  law\t has
\nundergone a  change. It is pointed out that the appellant is
\na Corporation  constituted under  a statue  and is owned and
\ncontrolled by the State Government and its employees.\n<\/p>\n
778<\/span><\/p>\n
therefore, have\t a statutory  status. It is argued that even
\nin the absence of Regulation 16 providing for a departmental
\nenquiry, the  appellant was  bound to hold an enquiry and to
\ngive, in  compliance with the rules of natural justice, full
\nand fair opportunity to the respondent to defend himself and
\nrepel the  charges levelled  against him.  It is  maintained
\nthat such  an opportunity  was denied  to him because he was
\nnot allowed  to examine\t witnesses cited  by him in defence.
\nReference in  connection with the proposition propounded has
\nbeen made  to Sukhdev  Sing & Ors. v. Bhagatram Sardar Singh
\nRaghuvanshi & Anr.<\/a>(1)
\n     We will  first notice Chandra Kiran Tyagi’s case, which
\nis the\tsheet-anchor of the appellants’ arguments. The facts
\nof that case were somewhat similar. Tyagi was a Warehouseman
\nin the\temployment of the U.P. State Warehousing Corporation
\nLimited. After\treceiving Tyagi’s  explanation, the  Enquiry
\nOfficer did  not take any evidence in respect of any charge.
\nInstead, he  met various  persons and collected information,
\nand gave his findings on the various charges on the basis of
\nthe  enquiries\tmade  by  him  and  the\t records.  Even\t the
\ninformation so\tcollected was not put to Tyagi. On the basis
\nof  those   findings  of  the  Enquiry\tOfficer,  Tyagi\t was
\ndismissed from\tservice. Tyagi\tfiled a suit challenging his
\ndismissal. He  prayed for a declaration for reinstatement on
\nthe  ground  that  the\trelationship  was  one\tof  personal
\nservice. Speaking  through Vaidialingam,  J. this Court held
\nthat a declaration to enforce a contract of personal service
\nwill not  normally be  granted. It  was noted that there are
\nthree exceptions  to this  rule :  (i) appropriate  cases of
\npublic servants\t who have  been dismissed  from\t service  in
\ncontravention of  Article 311,\t(ii) dismissed workers under
\nindustrial and\tlabour law;  and (iii) when a statutory body
\nhas acted  in breach  of a mandatory obligation imposed by a
\nstatute. It  was further held that though the impugned order
\nwas made  in breach  of the regulation contrary to the terms
\nand conditions\tof the\trelationship between  the  appellant
\n(employer) and\tthe respondent (employee), but, it would not
\nbe in  breach of  any statutory obligation, because, the Act
\ndoes not  guarantee any\t statutory status to the respondent;
\nnor does  it impose  any obligation on the appellant in such
\nmatters. Therefore,  the violation  of regulation  16(3)  as
\nalleged and  established in  that case, could only result in
\nthe order  of dismissal\t being held  to be  wrongful, and in
\nconsequence, making  the appellant  liable for\tdamages, but
\ncould not  have the  effect of\ttreating the  respondent  as
\nstill in service or entitling him to reinstatement.\n<\/p>\n
     The authority  of the  rule in  Tyagi’s  case,  to\t the
\neffect, that an employee of such a statutory body even if it
\nbe owned and managed by
\n779<\/span>
\nthe Government does not enjoy a statutory status, appears to
\nhave been  eroded by  the later\t decisions  of\tthis  Court,
\nparticularly  the  pronouncement  in  Sukhdev  Singh’s\tcase
\n(ibid). The  statutory bodies  in that\tcase were  : Oil and
\nNatural Gas  Commission, Industrial  Finance Corporation and
\nLife  Insurance\t Corporation.  All  the\t three\tbodies\twere
\ncreated under  separate\t stututes  enacted  by\tthe  Central
\nLegislature. It\t was clear  from the  Oil  and\tNatural\t Gas
\nCommission Act,\t 1954, that  the Commission  created by\t it,
\nacts as\t an agency  of the Central Government. Similarly, by
\nvirtue of  the Industrial Finance Corporation Act, 1948, the
\nFinance Corporation  is under  the control and management of
\nthe Central  Government. The  Life Insurance  Corporation is
\nsimilarly owned\t and managed  by the  Government and  can be
\ndissolved only\tby the\tGovernment in view of the provisions
\nof the\tLife Insurance\tAct, 1956.  All the  three  statutes
\nconstituting the  three statutory  corporations enabled them
\nto make regulations which provide, inter alia, for the terms
\nand  conditions\t  of  employment   and\tservices   of  their
\nemployees. Questions  arose :  (i) whether  the\t regulations
\nhave the  force of  law,  and  (ii)  whether  the  statutory
\ncorporations are `State’ within the meaning of Article 12 of
\nthe  Constitution.  Ray,  C.J.,\t speaking  for\thimself\t and
\nChandrachud and\t Gupta JJ., held that the regulations framed
\nby these  statutory bodies  for the  purpose of defining the
\nduties, conduct\t and conditions\t of its\t employees have\t the
\nforce of  law. The  form and  content of the contract with a
\nparticular  employee  is  prescriptive\tand  statutory.\t The
\nnotable feature\t is that these statutory bodies have no free
\nhand in framing the conditions and terms of service of their
\nemployees. They\t are bound to apply the terms and conditions
\nas laid\t down in  the regulations. These regulations are not
\nonly binding  on the  authority but also on the public. They
\ngive the employees a statutory status and impose obligations
\non the\tstatutory authorities,\twho cannot  deviate from the
\nconditions of service.\n<\/p>\n
     It was  further made clear that an ordinary individual,
\nin the\tcase of master and servant contractual relationship,
\nenforces  breach  of  contract,\t the  remedy  being  damages
\nbecause personal  service is  not capable of enforcement. In
\nthe case  of statutory bodies, however, there is no personal
\nelement whatsoever  because of\tthe impersonal\tcharacter of
\nthe bodies.  In their case, the element of public employment
\nand service and the support of statute require observance of
\nrules and  regulations. At  page  634  of  the\tReport,\t the
\nlearned\t Chief\t Justice   significantly   reiterated\tthat
\n“whenever a  man’s rights  are affected\t by  decision  taken
\nunder  statutory   powers,  the\t  Court\t would\tpresume\t the
\nexistence of  a duty to observe the rules of natural justice
\nand com-\n<\/p>\n
780<\/span><\/p>\n
pliance with  rules and regulations imposed by statute”. The
\nCourt then  referred to\t U.P.  Warehousing  Corporation\t and
\nIndian\tAirlines  Corporation  cases  and  held\t that  these
\ndecisions were\tin direct  conflict with an earlier decision
\nof this\t Court in  Narainda Barot  v. Divisional Controller,
\nS.T.C.,(1) and\twere wrongly decided. The Court followed the
\ndecision in Sirsi Municipality (ibid).\n<\/p>\n
     Mathew J.\tin his\tseparate  but  concurring  judgment,
\npointed out  how the  concept of  the  State  has  undergone
\ndrastic changes\t in recent  years. A  State is\tan  abstract
\nentity and  can act  only  through  the\t instrumentality  or
\nagency of  natural or juridicial persons. With the advent of
\na   welfare   State   the   framework\tof   civil   service
\nadministration became increasingly insufficient for handling
\nthe new\t tasks which  were often of a specialised and highly
\ntechnical character  For this  reason, a  policy  of  public
\nadministration through\tseparate  Corporations\twhich  would
\noperate largely\t according to  business\t principles  and  be
\nseparately   accountable,    was   evolved.    Such   public
\ncorporations constituted  under enactments,  became a  third
\narm of\tthe Government.\t The employees of public corporation
\nare not\t civil servants.  In so\t far as\t public corporations
\nfulfil public  tasks on\t behalf of  the Government, they are
\npublic authorities  and, as  such,  subject  to\t control  by
\nGovernment. The\t public corporation  being a creation of the
\nState is  subject to  the constitutional  limitation as\t the
\nState itself.\n<\/p>\n
     The Court\tthus with  a majority  of 4-1  held that the
\nstatutory bodies then under consideration were `authorities’
\nwithin the  meaning of\tArticle 12  of the  Constitution and
\nthough their  employees were not servants of the Union or of
\na State, yet they had a statutory status.\n<\/p>\n
     The appellant  is a  Corporation constituted  under the
\nUttar Pradesh  State Warehousing  Corporation  (Act  28)  of
\n1956, which  was subsequently replaced by the Central Act 58
\nof 1962.  It is\t a  statutory  body  wholly  controlled\t and
\nmanaged by  the Government.  Its status is analogous to that
\nof  the\t Corporations  which  were  under  consideration  in
\nSukhdev Singh’s\t case (ibid).  The ratio  of Sukhdev Singh’s
\ncase, therefore,  squarely applies to the present case. Even
\nif at  the time\t of the dismissal, the statutory regulations
\nhad not\t been framed  or had  not come into force, then also
\nthe employment\tof the\trespondent was public employment and
\nthe statutory  body, the  employer, could  not terminate the
\nservices of  its employee  without due enquiry in accordance
\nwith the  statutory Regulations,  if any in force, or in the
\nabsence of such Regulations, in accordance with the rules of
\nnatural justice.  Such an  enquiry into\t the  conduct  of  a
\npublic employee is of
\n781<\/span>
\na quasi-judicial  character. The  respondent was employed by
\nthe  appellant-Corporation   in\t exercise   of\tthe   powers
\nconferred on  it  by  the  statute  which  created  it.\t The
\nappellants’ power to dismiss the respondent from service was
\nalso derived  from the\tstatute. The  Court would therefore,
\npresume\t the  existence\t of  a\tduty  on  the  part  of\t the
\ndismissing  authority\tto  observe  the  rules\t of  natural
\njustice, and  to  act  in  accordance  with  the  spirit  of
\nRegulation 16,\twhich was  then on  the anvil  and came into
\nforce shortly  after the  impugned dismissal.  The rules  of
\nnatural justice\t in the\t circumstances of the case, required
\nthat the respondent should be given a reasonable opportunity
\nto deny\t his guilt,  to defend\thimself and to establish his
\ninnocence which\t means and includes an opportunity to cross-
\nexamine\t the   witnesses  relied   upon\t by  the  appellant-
\nCorporation and\t an opportunity\t to lead evidence in defence
\nof the\tcharge as  also a show-cause notice for the proposed
\npunishment. Such an opportunity was denied to the respondent
\nin the\tinstant case.  Admittedly, the\trespondent  was\t not
\nallowed to  lead evidence  in defence.\tFurther, he  was not
\nallowed to  cross-examine certain  persons whose  statements
\nwere not recorded by the Enquiry Officer (Opposite Party No.\n<\/p>\n
1) in  the presence of the respondent. There was controversy
\non this\t point. But  it was clear to the High Court from the
\nreport of enquiry by the Opposite Party No. 1 that he relied
\nupon the  reports of some persons and the statements of some
\nother persons  who were\t not  examined\tby  him.  A  regular
\ndepartmental enquiry takes place only after the charge-sheet
\nis drawn  up and served upon the delinquent and the latter’s
\nexplanation is\tobtained.  In  the  present  case,  no\tsuch
\nenquiry was  held and  the order  of  dismissal\t was  passed
\nsummarily after\t perusing the  respondent’s explanation. The
\nrules of  natural justice  in this  case, were\thonoured  in
\ntotal breach.  The impugned  order of dismissal was thus bad
\nin law and had been rightly set aside by the High Court.\n<\/p>\n
     Before passing  on to  the\t next  question\t we  may  in
\nfairness mention,  that Mr.  Asok Sen  had  cited  two\tmore
\ndecisions, also.  The first  was a  recent judgment  of\t the
\nHouse of  Lords\t in  Melloch.  v.  Aberdeen  Corporation(1),
\nwherein Lord  Wilberforce in  his speech (at pages 1595-1596
\nof the\tReport) observed  that in cases in which there is an
\nelement of  public employment  or  service,  or\t support  by
\nstatute or something in the nature of an office or a status,
\nwhich is  capable of  protection, then\tirrespective of\t the
\nterminology used,  and even  though in\tsome  inter  parties
\naspects the  relationship may  be called  that of master and
\nservant, there may be essential procedural requirement to be
\nobserved on  grounds of natural justice. The second decision
\nis Ramana
\n782<\/span>
\nDayaram Shetty\tv. The\tInternational Airport  Authority  of
\nIndia & Ors.<\/a>(1)
\n     In Ramana\tDayaram Shetty’s  case (ibid)  Bhagwati,  J.
\nafter making  an exhaustive  survey of the decisions of this
\nCourt and of American Courts, summarised some of the factors
\nwhich are  considered to  determine whether a Corporation is
\nan agency  or instrumentality of Government. We do not think
\nit  necessary\tto  burden   this  judgment  by\t a  detailed
\ndiscussion of  these cases  because in the instant case, all
\nthe material  factors exist which show beyond doubt that the
\nUttar  Pradesh\tState  Warehousing  Corporation\t constituted
\nunder  the   Central  Act  28  of  1956,  is  an  agency  or
\ninstrumentality of  the\t Government,  and  the\trelationship
\nbetween the Corporation and its employees is not purely that
\nof master  and servant, founded only on contract. Indeed, it
\nwas not seriously disputed that the respondent was in public
\nemployment, and\t the Corporation  is an authority within the
\nmeaning of Article 12 of the Constitution.\n<\/p>\n
     Further contention\t of  the  learned  counsel  for\t the
\nappellants is  that even  if the dismissal of the respondent
\nwas wrongful,  the High Court could only quash the same, but
\nit could  not in the exercise of its certiorari jurisdiction
\nunder Article  226 of  the  Constitution  give\tthe  further
\ndirection that\tthe employee should be reinstated in service
\nwith full  back wages.\tIt is maintained that in giving this
\nfurther direction,  the High Court had overleaped the bounds
\nof its jurisdiction.\n<\/p>\n
     There appears  to be  force in this contention. It must
\nbe  remembered\tthat  in  the  exercise\t of  its  certiorari
\njurisdiction under Article 226 of the Constitution, the High
\nCourt acts  only in  a supervisory  capacity and  not as  an
\nappellate tribunal.  It does  not review  the evidence\tupon
\nwhich the inferior tribunal proposed to base its conclusion;
\nit simply  demolishes the  order which\tit considers  to  be
\nwithout jurisdiction  or manifestly erroneous, but does not,
\nas a rule, substitute its own view for those of the inferior
\ntribunal.  In  other  words,  the  offending  order  or\t the
\nimpugned illegal  proceeding is\t quashed and  put out of the
\nway as\tone which should not be used to the detriment of the
\nwrit  petitioner.  Thus\t in  matters  of  employment,  while
\nexercising its supervisory jurisdiction under Article 226 of
\nthe  Constitution,   over  the\t order\tand   quasi-judicial
\nproceeding  of\t an  administrative  authority-not  being  a
\nproceeding under  the industrial  law\/labour law  before  an
\nindustrial\/labour tribunal-culminating\tin dismissal  of the
\nemployee, the High Court should ordinarily. in
\n783<\/span>
\nthe event of the dismissal being found illegal, simply quash
\nthe same  and should  not further  give a positive direction
\nfor payment  to the  employee full  back wages\t(although as
\nconsequence of\tthe annulment of the dismissal, the position
\nas  it\t obtained  immediately\t before\t the   dismissal  is
\nrestored), such peculiar powers can properly be exercised in
\na case\twhere the  impugned adjudication  or award  has been
\ngiven by an Industrial Tribunal or Labour Court. The instant
\ncase is\t not one under Industrial\/Labour Law. The respondent
\nemployee never\traised any  industrial dispute,\t nor invoked
\nthe jurisdiction  of the  Labour  Court\t or  the  Industrial
\nTribunal. He  directly moved the High Court for the exercise
\nof  its\t special  jurisdiction\tunder  Article\t226  of\t the
\nConstitution  for   challenging\t the   order  of   dismissal
\nprimarily on  the  ground  that\t it  was  violative  of\t the
\nprinciples of natural justice which required that his public
\nemployment should not be terminated without giving him a due
\nopportunity to\tdefend himself\tand  to\t rebut\tthe  charges
\nagainst him. Furthermore, whether a workman or employee of a
\nstatutory  authority   should  be   reinstated\t in   public
\nemployment with or without full back wages, is a question of
\nfact  depending\t on  evidence  to  be  produced\t before\t the
\ntribunal. If  after the\t termination of\t his employment\t the
\nworkman\/employee was  gainfully employed  elsewhere, that is
\none of the important factors to be considered in determining
\nwhether or  not the  reinstatement should  be with full back
\nwages and  with continuity of employment. For these two fold
\nreasons, we  are of opinion that the High Court was in error
\nin directing payment to the employee full back wages.\n<\/p>\n
     For the  foregoing reasons while upholding the judgment
\nof the\tHigh Court  with regard to the quashing of the order
\nof dismissal  of the  respondent on  the ground of its being
\ninvalid,  we   delete  the  direction  for  payment  to\t the
\nrespondent full back wages. Excepting this modification, the
\nappeal is  dismissed. However,\tin  the\t circumstances,\t the
\nappellant-Corporation shall  pay the costs of the respondent
\nin this Court.\n<\/p>\n
     CHINNAPPA\t REDDY,\t  J.-The   respondent-employee\t was
\ndismissed from\tservice. The employer dismissed him, without
\nobserving the  principles of  natural justice. This has been
\nfound by  the High  Court who quashed the order of dismissal
\nin a  proceeding under\tArt. 226  of the  Constitution.\t The
\nemployer  has\tappealed.  The\t employer  claims   that   a
\ndeclaration to enforce a contract of personal service cannot
\nbe granted by the Court. The only remedy of the employee, he
\npleads,\t is   to  file\ta  suit\t for  damages  for  wrongful
\ndismissal. The\tanswer of  the employer is that the employer
\nis a statutory Corpora-\n<\/p>\n
784<\/span><\/p>\n
tion whose  employees have  statutory status,  and that\t the
\nemployer is  bound by the regulations made under the statute
\nas also to observe the principles of natural justice. Breach
\nof the\tregulations or\tfailure to observe the principles of
\nnatural\t justice   entitles  the   employee  to\t invoke\t the
\njurisdiction of\t the High  Court under\tArticle 226  of\t the
\nConstitution.\n<\/p>\n
     The question whether breach of statutory regulations or
\nfailures to  observe the  principles of natural justice by a
\nstatutory Corporation  will  entitle  an  employee  of\tsuch
\nCorporation to claim a declaration of continuance in service
\nand the\t question whether  the employee\t is entitled  to the
\nprotection of  Arts. 14\t and 16 against the Corporation were
\nconsidered at  great length  in\t Sukhdev  Singh\t &  Ors.  v.
\nBhagatram Sardar Singh Raghuvanshi & Anr.<\/a>(1) The question as
\nto who may be considered to be agencies or instrumentalities
\nof the Government was also considered, again at some length,
\nby this\t Court in Ramana Dayaram Shetty v. The International
\nAirport Authority of India & Ors.<\/a>(2)
\n     I find it very hard indeed to discover any distinction,
\non principle, between a person directly under the employment
\nof the\tGovernment and\ta person  under the employment of an
\nagency\tor   instrumentality  of   the\t Government   or   a
\nCorporation, set  up under  a statute  or  incorporated\t but
\nwholly owned by the Government. It is self evident and trite
\nto say\tthat the function of the State has long since ceased
\nto be  confined to the preservation of the public peace, the
\nexaction of  taxes and\tthe defence  of its frontiers. It is
\nnow the\t function of  the State\t to secure `social, economic
\nand political  justice’, to  preserve `liberty\tof  thought,
\nexpression,  belief,  faith  and  worship’,  and  to  ensure
\n`equality  of  status  and  of\topportunity’.  That  is\t the
\nproclamation  of   the\tpeople\t in  the   preamble  to\t the
\nConstitution. The  desire to  attain  these  objectives\t has
\nnecessarily resulted  in intense  Governmental\tactivity  in
\nmanifold  ways.\t Legislative  and  executive  activity\thave
\nreached very  far and  have touched  very many\taspects of a
\ncitizen’s life.\t The Government,  directly  or\tthrough\t the
\nCorporations, set  up by  it or\t owned by  it, now  owns  or
\nmanages, a  large number  of industries and institutions. It
\nis the\tbiggest builder\t in the\t country. Mammoth  and minor
\nirrigation projects,  heavy and\t light engineering projects,
\nprojects of  various kinds are undertaken by the Government.
\nThe Government\tis also\t the biggest  trader in the country.
\nThe State  and the  multitudinous agencies  and Corporations
\nset up by it are the principal purchasers of the produce and
\n785<\/span>
\nthe products  of our  country and  they control\t a vast\t and
\ncomplex\t machinery  of\tdistribution.  The  Government,\t its
\nagencies and  instrumentalities, Corporations  set up by the
\nGovernment  under  statutes  and  Corporations\tincorporated
\nunder the  Companies Act  but owned  by the  Government have
\nthus become  the biggest  employers in the country. There is
\nno good\t reason why,  if Government  is bound to observe the
\nequality clauses  of  the  constitution\t in  the  matter  of
\nemployment and\tin its\tdealings  with\tthe  employees,\t the
\nCorporations set up or owned by the Government should not be
\nequally bound  and why,\t instead,  such\t Corporations  could
\nbecome citadels\t of patronage  and arbitrary  action.  In  a
\ncountry like  ours which  teems with  population, where\t the
\nState,\tits   agencies,\t its   instrumentalities   and\t its
\nCorporations are  the biggest  employers and  where millions
\nseek employment\t and security,\tto confirm the applicability
\nof the\tequality clauses of the constitution, in relation to
\nmatters of  employment, strictly  to direct employment under
\nthe Government\tis perhaps  to mock  at the Constitution and
\nthe people. Some element of public employment is all that is
\nnecessary to  take the employee beyond the reach of the rule
\nwhich denies  him access to a Court so enforce a contract of
\nemployment and\tdenies him the protection of Arts. 14 and 16
\nof the\tConstitution. After  all employment  in\t the  public
\nsector has  grown to  vast dimensions  and employees  in the
\npublic sector  often discharge\tas onerous  duties as  civil
\nservants  and\tparticipate  in\t  activities  vital  to\t our
\ncountry’s economy.  In growing realization of the importance
\nof employment  in the  public  sector,\tParliament  and\t the
\nLegislatures of\t the States  have declared  persons  in\t the
\nservice\t of  local  authorities,  Government  companies\t and
\nstatutory corporations\tas public  servants and, extended to
\nthem by express enactment the protection usually extended to
\ncivil servants from suits and prosecution. It is, therefore,
\nbut right  that the  independence  and\tintegrity  of  those
\nemployed in  the public\t sector should be secured as much as
\nthe independence and integrity of civil servants.\n<\/p>\n
     I agree  with what has been said by my brother Sarkaria
\nJ. I have added a few lines to emphasise some aspects of the
\nproblem.\n<\/p>\n
P.B.R.\t\t\t\t\t   Appeal dismissed.\n\n786<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Managing Director, Uttar Pradesh … vs Vinay Narayan Vajpayee on 16 January, 1980 Equivalent citations: 1980 AIR 840, 1980 SCR (2) 773 Author: R S Sarkaria Bench: Sarkaria, Ranjit Singh PETITIONER: MANAGING DIRECTOR, UTTAR PRADESH WAREHOUSING CORPORATION &AN Vs. RESPONDENT: VINAY NARAYAN VAJPAYEE DATE OF JUDGMENT16\/01\/1980 BENCH: SARKARIA, RANJIT SINGH BENCH: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-122115","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nManaging Director, Uttar Pradesh ... vs Vinay Narayan Vajpayee on 16 January, 1980 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/managing-director-uttar-pradesh-vs-vinay-narayan-vajpayee-on-16-january-1980\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Managing Director, Uttar Pradesh ... vs Vinay Narayan Vajpayee on 16 January, 1980 - 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