{"id":173898,"date":"1971-04-27T00:00:00","date_gmt":"1971-04-26T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/indian-airlines-corporation-vs-sukhdeo-rai-on-27-april-1971"},"modified":"2018-10-23T10:06:53","modified_gmt":"2018-10-23T04:36:53","slug":"indian-airlines-corporation-vs-sukhdeo-rai-on-27-april-1971","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/indian-airlines-corporation-vs-sukhdeo-rai-on-27-april-1971","title":{"rendered":"Indian Airlines Corporation vs Sukhdeo Rai on 27 April, 1971"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Indian Airlines Corporation vs Sukhdeo Rai on 27 April, 1971<\/div>\n
Equivalent citations: 1971 AIR 1828, \t\t 1971 SCR 510<\/div>\n
Author: Shelat<\/div>\n
Bench: Shelat, J.M.<\/div>\n
           PETITIONER:\nINDIAN AIRLINES CORPORATION\n\n\tVs.\n\nRESPONDENT:\nSUKHDEO RAI\n\nDATE OF JUDGMENT27\/04\/1971\n\nBENCH:\nSHELAT, J.M.\nBENCH:\nSHELAT, J.M.\nDUA, I.D.\nBHARGAVA, VISHISHTHA\n\nCITATION:\n 1971 AIR 1828\t\t  1971 SCR  510\n 1971 SCC  (2) 192\n\n\nACT:\nAir Corporation Act, 1953-Sections 44, 45-Regulation  framed\nunder  the Act providing terms and conditions of service  of\nemployees--Termination of service in breach of\tregulations-\nRelationship  between Corporation and its employees that  of\nmaster and servant--Therefore, only entitled to damages.\nRegulations-Framed  under Air Corporation  Act,\t 1953-Status\nof.\nMaster\tand  Servant-Employees\tof  statutory\tcorporation-\nRegulations  framed  under  statute only  embody  terms\t and\nconditions of service.\n\n\n\nHEADNOTE:\nThe  appellant\tis  a  Corporation  set\t up  under  the\t Air\nCorporation  Act, 1953.\t The Act authorises the\t corporation\nto   appoint   officers\t and,  other  employees\t  and\tmake\nregulations providing the terms and conditions of service of\nsuch officers and employees.\nThe respondent employed as a motor driver was dismissed from\nthe  service of the Corporation in breach of the  procedural\nsafeguards provided under the regulations.  He filed a\tsuit\nfor  a declaration that the dismissal was illegal and  void.\nThe trial court granted the declaration.  On appeal the High\nCourt  affirmed the decree holding that the Corporation\t was\nunder  a statutory obligation to observe the procedure\tlaid\ndown  in the regulations and that not having been  done\t the\norder  of dismissal was illegal and void and the  respondent\ncontinued  to be in the employment of the Corporation as  if\nthere  was  no\ttermination of\tservice.   On  the  question\nwhether the declaration given by the trial court and  upheld\nby the High Court could be granted,\nHELD:\t  (1)  When  there is a purported termination  of  a\ncontract  of  service, a declaration that  the\tcontract  of\nservice still subsisted would not be made in the absence  of\nspecial circumstances, because of the principle that  courts\ndo  not\t ordinarily grant specific performance\tof  service.\nThis is so, even in cases where the authority appointing  an\nemployee was acting in exercise of statutory authority.\t The\nrelationship  between the person appointed and the  employer\nwould,\tin  such cases, be contractual i.e.,  as  between  a\nmaster and servant, and the termination of that relationship\nwould  not  entitle the servant to a  declaration  that\t his\nemployment had not been validly determined. [512H]\nFrancis\t v. Municipal Councillors of Kuala Lumpur, [1962]  3\nAll E.R. 633, Barber v. Manchester Regional Hospital  Board,\n[1958] 1 All E.R. 322 and Ridge v. Baldwin, [1964] A.C.\t 40,\nreferred to.\nBut the court would grant a declaration of nullity where the\naction complained of is ultra vires or where the appointment\nis to an office or status. [513E-F]\nVine  v. National Dock Labour Board, [1957] A.C.  488,\tBool\nChand  v. The Chancellor,<\/a> [1968] 1 S.C.R. 434 and  Vidyodaya\nUniversity v. Silva, [1964] 3 All E.R. 865, referred to.\n511\n(ii) The fact that the appellant Corporation was one set  up\nunder  and was regulated by a statute would not\t take  away,\nwithout\t  anything  more,  the\trelationship   between\t the\nCorporation  and its employees from the category  of  purely\nmaster and servant relationship. [514E]\nVidyodaya  University v. Silva, [1964] All E.R. 865 and\t Dr.\nS. B. Dutt v.  University  of  Delhi,<\/a>  [1959]  S.C.R.  1236,\nreferred to.\n(iii)The  employment  of  the respondent is not\t one  to  an\noffice\tor  status and neither the Act nor  the\t rules\tmade\nunder s. 44 by the Central Government\tlay\tdown\t any\nobligation or restriction as to the power of the Corporation\nto  terminate the employment of its employees or any  proce-\ndural  safeguards subject to which only such power could  be\nexercised. [516E]\n(iv) This  Court  has held that there are only\tthree  well-\nrecognised  exceptions to the general rule under the law  of\nmaster\tand  servant where a declaration  would\t be  issued,\nviz.,  (i)  cases of public servants falling  under  article\n311(2)\tof  the Constitution; (ii) cases falling  under\t the\nindustrial  law\t and  (iii) cases where\t acts  of  statutory\nbodies are in breach of a mandatory obligation imposed by  a\nstatute. [517B]\nS.   R. Tewari v. District Board, Agra,<\/a> [1964] 3 S.C.R.\t 55,\nBank  of  Baroda v. Mehrotra,<\/a> [1970] 2 L.L.J. 54,  Ram\tBabu\nRathaur v. Life insurance Corporation, A.I.R. 1961 All. 502,\nLife  Insurance Corporation v. N. Banerjee, (1971] 1  L.L.J.\n1,  Dr.\t Gupta\tv.  Nathu, [1963] 1  S.C.R.  721,  Kruse  v.\nJohnson, [1898] 2 Q.B.D. 91 and Rajasthan State\t Electricity\nBoard v.  Mohan Lal,<\/a> [1967] 3 S.C.R. 377, referred to.\nLife  Insurance Corporation of India v. Mukherjee,<\/a> [1964]  5\nS.C.R. 528, distinguished.\nBarot v. S. T. Corporation, [1966] 3 S.C.R. 40, explained.\n(V)  Though  made under the power conferred by statute,\t the\nregulations  merely  embody  the  terms\t and  conditions  of\nservice in the Corporation but do not constitute a statutory\nrestriction   as  to  the  kind\t of  contracts\t which\t the\nCorporation  can  make with its servants or the\t grounds  on\nwhich  it  can\tterminate  them.  That\tbeing  so,  and\t the\nCorporation   having  undoubtedly  power  to   dismiss\t its\nemployees,   the  dismissal  of\t the  respondent  was\twith\njurisdiction  and although it was wrongful in the  sense  of\nits  being  in\tbreach of the  terms  and  conditions  which\ngoverned  the relationship between the Corporation  and\t the\nrespondent, it did subsist. [520D]\n(vi) The present case, therefore, did not fall under any  of\nthe  three  well-recognised  exceptions laid  down  by\tthis\nCourt; hence the respondent was only entitled to damages and\nnot to the declaration that his dismissal was null and void.\n[520E]\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1171 of 1967.
\nAppeal from the judgment and decree dated September 27, 1966
\nof  the Calcutta High Court in Appeal from Appellate  Decree
\nNo. 195 of 1964.\n<\/p>\n
G.   B.\t Pai,  O.  C.  Mathur,\tJ.  B.\tDadachanji,  C.\t  S.
\nSreenivasa Rao and Bhajan Ram Rakhini, for the appellant.
\nUrmila\tKapoor,\t Janardan  Sharma  and\tR.  K.\tKhanna,\t for
\nrespondent.\n<\/p>\n
512<\/span><\/p>\n
The Judgment of the Court was delivered by
\nshelat J.-Prior to August 1953, the respondent was  employed
\nas a motor driver in Airways (India) Ltd.  On the passing of
\nthe  Air  Corporation  Act, XXVII of  1953,  and  consequent
\nthereupon of the taking over of the existing air  companies,
\nincluding  the\tAirways\t (India)  Ltd.,\t by  the  appellant-
\nCorporation,  he  became  the  employee\t of  the  appellant-
\nCorporation.   On  January  13, 1956, he  was  suspended  on
\ncertain\t charges.   On being found guilty of  those  charges
\nafter an enquiry had been held, he was dismissed by an order
\ndated February 6, 1956.\n<\/p>\n
The  respondent filed a suit alleging that the\tenquiry\t had
\nbeen  conducted in breach of the procedure laid down by\t the
\nRegulations  made  by the Corporation under sec. 45  of\t the
\nAct, and that therefore, the dismissal was illegal and void.
\nThe  Trial  Court  accepted the\t contention  and  granted  a
\ndeclaration   that  his\t service  continued  as\t the   order
\ndismissing him was null and void.  That decree was upheld by
\nthe  first appellate court.  In a second appeal in the\tHigh
\nCourt,\tit was conceded that the Regulations applied to\t the
\nrespondent’s case, and that the procedure therein laid\tdown
\nfor  terminating  his service was not  complied\t with.\t The
\nCorporation’s contention, however, was that the only  relief
\nto which the respondent was entitled to was damages and that
\na  declaration, such as the one granted by the Trial  Court,
\ncould not be given.  The High Court rejected that contention
\nholding,   that\t the  Corporation  was\tunder  a   statutory
\nobligation  to\tobserve\t the  procedure\t laid  down  in\t the
\nRegulations,  and  that not having been done, the  order  of
\ndismissal was illegal and void and the respondent  continued
\nto  be in the employment of the Corporation as if there\t was
\nno  termination\t of  service.  This  appeal,  founded  on  a
\ncertificate  granted by the High Court, is directed  against
\nits aforesaid judgement and decree.\n<\/p>\n
It being an admitted fact that the respondent’s service\t was
\nterminated  in breach of the procedural safeguards  provided
\nin  the\t Regulations,  the  question  for  determination  is
\nwhether\t in cases, such as the one before us, a\t declaration
\ngiven by the Trial Court and upheld by the High Court  could
\nbe granted.\n<\/p>\n
It  is\ta  well\t settled principle  that  when\tthere  is  a
\npurported   termination\t  of  a\t contract  of\tservice,   a
\ndeclaration,  that the contract of service still  subsisted,
\nwould  not be made in the absence of  special  circumstances
\nbecause of the principle that courts do not ordinarily grant
\nspecific performance of service.  This is so, even in  cases
\nwhere  the  authority appointing an employee was  acting  in
\nexercise of statutory authority The relationship between the
\nperson appointed and the employer would in such cases
\n513<\/span>
\nbe  contractual, i.e., as between a master and servant,\t and
\nthe  termination of that relationship would not entitle\t the
\nservant\t to a declaration that his employment had  not\tbeen
\nvalidly determined. (see A. Francis v. Municipal Councillors
\nof  Kuala Lumpur and Barber v. Manchester Regional  Hospital
\nBoard (2).\n<\/p>\n
“Cases of dismissal fall into three classes”, said Lord Roid
\nin Ridge v. Baldwin. (3) firstly, dismissal of a servant  by
\nhis  master,  secondly, dismissal from\toffice\theld  during
\npleasure,  and\tthirdly, dismissal from office\twhere  there
\nmust  be something against a man to warrant  his  dismissal.
\nIt is in the third category of cases that an employee cannot
\nbe dismissed without first letting him know what is  alleged
\nagainst\t him  and hearing his defence  or  explanation.\t  He
\nadded\tthat  in  a  case  of  purely  master  and   servant
\nrelationship, the servant is not entitled to say that he was
\nnot heard by his master before his dismissal.  Such a  ques-
\ntion  of  being\t heard\tor not\tcan  only  arise  where\t the
\nauthority  employing the servant is under some statutory  or
\nother  restriction as to the kind of contract which  it\t can
\nmake  with  its\t servants or the grounds  on  which  it\t can
\ndismiss them.  Ile question, therefore, would be whether the
\nrelationship between the Corporation and the respondent\t was
\nany  thing else than that of master and servant, or  whether
\nthe  Corporation  was  under some  statutory  limitation  or
\nobligation  by\treason of which it could not  terminate\t his
\nservice\t except by complying with such an  obligation.\t The
\ndecision   in  Vine  v.\t National  Dock\t Labour\t Board\t (4)
\nillustrates a case where the court would grant a declaration
\nof  nullity.  That was a case of lack of power in the  Board
\nto  delegate its disciplinary function to a committee  which
\ndismissed the employee-an action which was held ultra vires,
\nand  therefore,\t a  nullity.   A  similar  consequence\talso
\nfollows\t where\tthe appointment is to an office\t or  status,
\nsuch as the vice-chancellorship of a university, as was\t the
\ncase  in Bool Chand v. The Chancellor<\/a> (5), where this  Court
\nheld  that the tenure of office held by the appellant  could
\nnot  be terminated without informing him of the\t allegations
\nmade  against him and without hearing him or giving  him  an
\nopportunity to give an explanation.\n<\/p>\n
There  is, on the other hand, the case of Vidyodava  Univer-
\nsity  v.  Silva\t (6)  where  a\tteacher\t appointed  by\t the
\nUniversity  was\t found not to be holding such an  office  or
\nstatus\tand  where it was held that the\t University,  though
\nestablished   under  a\tstatute,  was  under  no   statutory
\nobligation  or restriction, subject to which only  it  could
\nterminate the service of the teacher.  The service
\n(1)  [196213 All E.R. 633.\n<\/p>\n
(3)  [1964] A.C. 40 at 65.\n<\/p>\n
(5)  [1968]1 S.C.R. 434.\n<\/p>\n
33-1S.C.India 71
\n(2)  [1958] 1 All E.R. 322.\n<\/p>\n
(4)  [1957] A.C. 488.\n<\/p>\n
(6)  [1964] 3 All E.R. 865.\n<\/p>\n
514<\/span><\/p>\n
of  the respondent was brought to an end by a resolution  of
\nthe University Council set up under the statute establishing
\nthe  University.   The\tresolution  was\t admittedly   passed
\nwithout hearing the teacher.  Under the statute, the Council
\nwas   empowered\t to  institute\tprofessorships\t and   every
\nappointment was to be by an agreement in writing between the
\nUniversity  and the professor and was to be for such  period
\nand on such terms as the Council might resolve.\t Under\tsec.
\n18(e)  of the Act, the Council had the power to\t dismiss  an
\nofficer\t or  a teacher on grounds of incapacity\t or  conduct
\nwhich  in  the opinion of not less Than\t two-thirds  of\t the
\nmembers\t of the Council rendered him unfit to be an  officer
\nor a teacher of the University.\t Such a resolution with\t the
\nrequisite majority was passed.\tThe Act gave no right to the
\nteacher\t of being heard by the Council.\t The  Privy  Council
\nheld  that  the mere circumstance that\tthe  University\t was
\nestablished  by the statute and was regulated  by  statutory
\nenactments  contained  in  the Act did\tnot  mean  that\t the
\ncontracts  of employment made with teachers, though  subject
\nto sec. 18(e), were other than ordinary contracts of  master
\nand  servant,  and therefore, the procedure of\tbeing  heard
\ninvoked\t by the respondent was not available to him  and  no
\nwrit  could be issued against the University. (see also\t Dr.
\nS. B. Dutta. v. University of Delhi<\/a> (1) The fact, therefore,
\nthat the appellant-Corporation was one set up under and\t was
\nregulated by Act XXVII of 1953 would not take away,  without
\nanything more, the relationship between it and its employees
\nfrom the category of purely master and servant relationship.
\nAre  there then in the Act any provisions which impose\tupon
\nthe  Corporation  any statutory\t restriction  or  obligation
\nwhich limits its power of terminating that relationship ?
\nThe Act was passed to facilitate acquisition by the Air Cor-
\nporations of undertakings belonging to certain existing\t air
\ncompanies and to make further and better provisions for\t the
\noperation  of  air  transport  services.   By  sec.  3,\t two
\ncorporations,\tthe   Indian   Airlines\t  and\tAir    India
\nInternational,\twere  set  up as  bodies  corporate,  having
\nperpetual succession.  Sec. 8(1) provides that for  purposes
\nof  discharging\t its  functions under the Act  each  of\t the
\ncorporations shall appoint a general manager and subject  to
\nsuch  rules  as may be prescribed in this  behalf  may\talso
\nappoint\t such  number of officers and employees\t as  it\t may
\nthink necessary.  Its second sub-section provides that:\n<\/p>\n
\t      “Subject\tto  the provisions  of\tsection\t 20,
\n\t      every   person   employed\t by  each   of\t the
\n\t      Corporations   shall   be\t subject   to\tsuch
\n\t      conditions of service and shall be entitled to
\n\t      such  remuneration  and privileges as  may  be
\n\t      determined
\n\t      (1)   [1959] S.C.R. 1236, at 1244.\n<\/p><\/blockquote>\n
\t      515<\/span><\/p>\n
\t      by  regulations  made by\tthe  Corporation  by
\n\t      which he is employed.”\n<\/p><\/blockquote>\n
\t      Sec. 20 provides that:\n<\/p><\/blockquote>\n
\t      “Every   officer\tor  other  employee  of\t  an
\n\t      existing air company-employed by that  company
\n\t      prior  to\t the first day of  July,  1952,\t and
\n\t      still in its employment immediately before the
\n\t      appointed\t  date\tshall-become  as  from\t the
\n\t      appointed\t date an officer or other  employee,
\n\t      as  the  case may be, of\tthe  Corporation  in
\n\t      which  the  undertaking has vested  and  shall
\n\t      hold his office or service therein by the same
\n\t      tenure, at the same remuneration and upon\t the
\n\t      same  terms and conditions and with  the\tsame
\n\t      rights  and  privileges  as  to  pensions\t and
\n\t      gratuity\tand other matters as he\t would\thave
\n\t      held  the same under the existing air  company
\n\t      if its undertaking had not vested in the\tCor-
\n\t      poration\tand shall continue to do  so  unless
\n\t      and until his employment in the Corporation is
\n\t      terminated or until his remuneration, terms or
\n\t      conditions    are\t  duly\t altered   by\t the
\n\t      Corporation.”\n<\/p><\/blockquote>\n
Sec. 44(1) empowers the Central Government to make rules  to
\ngive  effect  to the provisions of the Act  and\t sub-s.\t (2)
\nthereof empowers it, in particular and without prejudice  to
\nthe  generality of that power, to make rules,  inter  alia,
\nproviding the terms and conditions of service of the general
\nmanager\t and  such other categories of officers\t as  may  be
\nspecified  from\t time  to  time\t under\ts.  8(1).   Sec.  45
\nauthorises each of the two Corporations with the approval of
\nthe Central Government and by notification in the Government
\ngazette to make regulations not inconsistent with the Act or
\nthe  rules made under s. 44 “for the administration  of\t the
\naffairs\t of  the  Corporation  and  for\t carrying  out\t its
\nfunctions”  and\t in  particular\t providing  the\t terms\t and
\nconditions of service of officers and other employees of the
\nCorporation  other than the general manager and officers  of
\nany other categories referred to in s. 44.\n<\/p>\n
The  effect of these provisions, briefly, is, (1) that\tsec.
\n8(1)  authorises  the Corporation to  appoint  officers\t and
\nother  employees, (2) that under s. 8(2) the Corporation  is
\nempowered,  subject  to\t s. 20, to lay down  the  terms\t and
\nconditions  of service of such officers and employees as  it
\nmay determine by regulations made under s. 45, and (3)\tthat
\nby  virtue  of\ts.  20 the officers  and  employees  of\t the
\nexisting  air companies, whose undertakings were taken\tover
\nby  the Corporations, became, by whom the operation  of\t the
\nAct,  the  employees of the Corporation in On  a  Particular
\nundertaking  was vested.  The section ensures that on  their
\nso
\n516<\/span>
\nbecoming  the  employees of the Corporation  they  would  be
\ngoverned  by  the same terms and conditions  of\t service  by
\nwhich  they were governed immediately before  the  appointed
\ndate   until  the  Corporation\taltered\t those\t terms\t and
\nconditions   by\t regulations  The  power  to   appoint\t its
\nemployees.  except  to the extent of the  employees  of\t the
\nexisting  air companies becoming by operation of s.  20\t its
\nemployees, is vested in each of the two Corporations Each of
\nthem has also the power to lay down the terms and conditions
\nof service of its employees by regulations and thereby\teven
\nalter  the terms and conditions, which those who  became  by
\noperation  of  law  its employees had  in  their  respective
\nexisting  companies, and which, until such alteration,\twere
\nensured\t to them.  Indeed, the power of the  Corporation  to
\nterminate the employment of its officers and other employees
\nwas no where disputed; the only dispute raised was as to the
\nmanner\tin which it could be exercised.\t It is necessary  to
\nobserve\t in  this connection  that neither the Act  nor\t the
\nrules made under sec. 44 by the Central Government lay\tdown
\nany  obligation\t or  restriction  as to\t the  power  of\t the
\nCorporation to terminate the employment of its employees  or
\nany procedural safeguards, subject to which only, such power
\ncould be exercised.  The reason is that under the scheme  of
\nthe  Act  such\tprocedural safeguards and  other  terms\t and
\nconditions  of\tservice\t were  to be  provided\tfor  in\t the
\nregulations made by the Corporation under sec. 45.
\nThe employment of the respondent not being one to an  office
\nor  status and there being no obligation or  restriction  in
\nthe  Act  or the rules subject to which only  the  power  to
\nterminate  the respondent’s employment could  be  exercised,
\ncould  the  respondent contend that he was  entitled  to  a,
\ndeclaration that the termination of his employment was\tnull
\nand void ?\n<\/p>\n
A  case\t of an analogous nature arose in U. P.\tState  Ware-
\nhousing\t Corporation  Ltd. v. Tyagi.  (1)  The\tAgricultural
\nProduce\t (Development  and  Warehousing)  Corporation\tAct,
\nXXVIII\tof 1956, with which the Court there  was  concerned,
\nprovided   for\t the   incorporation   and   regulation\t  of
\ncorporations   for   development     and   warehousing\t  of
\nagricultural  produce  on cooperative principles.   See.  28
\nempowered  State  Governments to set up\t such  corporations.
\nSec. 52 authorised the appropriate Government to make  rules
\nand  ss. 53 and 54 gave power to the Board set up under\t the
\nAct  and the corporations respectively to  make\t regulations
\nconsistently  with the provisions of the Act and  the  rules
\nThe  respondent\t there was dismissed  from  service  without
\nfollowing  the\tprocedure  laid down  in  regulation  16(3).
\nThere was no
\n(1)  [1970] 2 S.C.R. 250.\n<\/p>\n
517<\/span><\/p>\n
question  or  doubt about the power of\tthe  Corporation  to
\nterminate   his\t service.   The\t question  was,\t whether   a
\ndeclaration  to the effect that the termination was  invalid
\nand  void  on  the ground of  non-compliance  of  regulation
\n16(3), could be granted in the suit filed by the respondent.
\nThis Court, after examining a number of decisions,  followed
\nthe  decision  in S.  R. Tewari v. District Board  Agra<\/a>\t (1)
\nwhich  laid down that there were only three well  recognized
\nexceptions  to the general rule under the law of master\t and
\nservant\t where such a declaration would be  issued,  namely,
\n(1)  cases of public servants falling under Art.  311(2)  of
\nthe  Constitution,  (2) cases falling under  the  industrial
\nlaw,  and  (3) cases where acts of statutory bodies  are  in
\nbreach\tof a mandatory obligation imposed by a statute,\t and
\nheld  that the case before it did not fall under any one  of
\nthe  said three exceptions, that the dismissal was  wrongful
\ninasmuch as it was in breach of the terms and conditions  of
\nemployment embodied in the regulations and not one of breach
\nof  a statutory restriction or obligation, subject to  which
\nonly the power to terminate the relationship depended.\t(see
\nalso  Bank of Baroda v. Mehrotra<\/a> (2) In S. R. Tewari’s\tcase
\n(1)  this  Court noticed with approval the decision  of\t the
\nHigh  Court  of\t Allahabad  in\tRam  Babu  Rathaur  v.\tLife
\nInsurance Corporation (3) that though the Corporation was  a
\nstatutory  body, the relations between it and its  employees
\nwere governed by contract and were of master and servant and
\nnot  subject  to  any  statutory  obligation  although\t the
\nCorporation  had framed under its power under the Act  regu-
\nlations containing conditions of service in the Corporation.
\nA similar view has recently been taken by the High Court  of
\nCalcutta in Life Insurance Corporation v. N. Banerjee (4).
\nCounsel for the respondent, however, sought assistance\tfrom
\nthe  decision in the Life Insurance Corporation of India  v.
\nMukherjee<\/a> (5).\tThat decision is clearly distinguishable and
\ncan, therefore, give no assistance.  Prior to the passing of
\nthe  Life  Insurance Corporation Act,  1956  the  respondent
\nthere  was  an employee of one of  the\tinsurance  companies
\ntaken over under the Act.  Under his contract of employment,
\nhis service was liable to be terminated without notice if he
\nwas  found  guilty of fraud, misappropriation etc.  but\t was
\nentitled  to  30 days’ notice if it was terminated  for\t any
\nother reason.  His service was terminated admittedly without
\ngiving him an opportunity to be heard.\tWith the transfer of
\nthe controlled business from the insurer to the Corporation,
\nthe  employees\tof the former became the  employees  of\t the
\nlatter and
\n(1) [1964] 3 S.C.R. 55.\t    (2) [1970] II L.L.J. 54.
\n(3) A.I.R. 1961 All. 502.   (4) [1971] 1 L.L.J. 1.
\n(5)  [1964] 5 S.C.R. 528.\n<\/p>\n
518<\/span><\/p>\n
were  governed under S. 11 (1) of the Act by the same  terms
\nand  conditions\t as  before.  But under sec.   11  (2),\t the
\nCentral\t Government had the power to alter those  terms\t and
\nconditions.   Under  this power, the  Government  issued  an
\norder  reducing the remuneration payable to the\t development
\nofficers and revising their other terms and conditions.\t Cl.
\n(10)  of this order empowered the Corporation inter alia  to
\nterminate the services of such an officer, (a) after  giving
\nhim  an\t opportunity  of  showing  cause,  or  (b)   without
\nassigning  any\treason but with the prior  approval  of\t the
\nChairman  of the Corporation and after giving three  months’
\nnotice.\t Cl. (11) of the order provided that the actual\t pay
\nadmissible  to an officer would be determined in  accordance
\nwith the regulations which the corporation would make  under
\nthe power reserved to it by the Act.  It is thus clear that,
\nexcept for the pay and allowances admissible to an  officer,
\nthe  Order  was a self-contained code as regards  the  other
\nterms  and  conditions\tof  service  including\tdisciplinary
\naction.\t  In the meantime, two circulars had been issued  by
\nthe  managing  director\t which\tprovided  that\tin   certain
\ncircumstances  the services of an officer could be  termina-
\nted.   As  contemplated by cl. (II) of the said\t Order,\t the
\nCorporation  framed  regulations under sec. 49 of  the\tAct.
\nRegulation  4(3) incorporated the said circulars as part  of
\nthe   regulations  for\tpurposes  of  determining  the\t pay
\nadmissible  to and the fitment of the development  officers.
\nThus,  the circulars became part of the\t regulations  though
\nwhen  they  were issued they were merely  administrative  in
\ncharacter  and\twithout\t any  sanction\tof  the\t Act.\t The
\nCorporation  claimed that under regulation 4(3),  which\t in-
\ncorporated the said circulars, it had the power to terminate
\nthe  service  of  Mukherjee without  assigning\tany  reason.
\nNegativing  that contention, this Court held that  s.  11(2)
\nwas paramount and would override any provision of the  Order
\npassed\tby the Central Government if it was contrary to\t it.
\nNext would come the Order, and lastly the regulations  which
\nwere subject to the Act and the Order, and therefore, if the
\nregulations  were to be inconsistent with the provisions  of
\nS. 11(2) or the said Order, the regulations would be to that
\nextent invalid.\t Therefore, even if the regulations provided
\nfor  termination  of  services they would have\tto  be\tread
\nsubject\t to the Order of the Government,  and  consequently,
\nthe  order terminating the service of an officer would\thave
\nto  be in consonance with the provisions of the said  Order.
\nConsequently, an order terminating the service of an officer
\nwithout\t giving\t him  an  opportunity  of  being  heard,  as
\nprovided  by  cl. (10) of the said Order, would\t be  without
\npower, and therefore, invalid.\tThe Court held the  impugned
\ndismissal  as  invalid also for the reason  that  regulation
\n4(3)  provided for determination of pay and  allowances\t and
\nthe  fitment  of officers in accordance with  the  principle
\nlaid down in the said circulars, and therefore, the  service
\nof an officer could not be determined under the guise of
\n519<\/span>
\nfitment.  That could, therefore, be done only under cl. (10)
\nof the Order and in accordance with the procedure laid\tdown
\nin  that clause.  The order declaring the dismissal  invalid
\nthus  was based on the ground that the regulations  and\t the
\nOrder  of the Central Government must be  read\tharmoniously
\nand when so read, the Central Government’s Order gave  power
\nto  terminate the service of an officer after following\t the
\nprocedure  there laid down, and consequently,  the  impugned
\ndismissal  made\t inconsistently with the provisions  of\t the
\nsaid  Order  was  without  jurisdiction,  and  therefore,  a
\nnullity.   It  is  clear that this  decision  was  based  on
\ndifferent  facts and on different principles and  cannot  be
\nlegitimately invoked by the respondent.\t But the decision in
\nBarrot\tv. S. T. Corporation (1) would seem to\tsupport\t the
\nrespondent.    There,  the  order  of  termination  of\t the
\nappellant’s service by the Corporation, a body set up  under
\nthe  Road Transport Corporations Act, 1950, was held  to  be
\nbad  in law on account of its being in contravention of\t cl.
\n4(b) of the Regulations containing service conditions framed
\nby  the Corporation under the power given to it by the\tAct.
\nBut the question whether the said Regulations constituted  a
\nstatutory  obligation  subject to which only  the  power  to
\nterminate  the employment could be exercised or not, or\t the
\nquestion whether they took the employment out of master\t and
\nservant\t  relationship\twas  not  canvassed.   Neither\t the
\ndecision  in S. R. Tewari’s case (2) nor any  other  similar
\ndecision  was  also it seems, brought to the notice  of\t the
\nCourt.\n<\/p>\n
Nor  can  counsel derive any aid, from the decision  in\t Dr.
\nGupta v. Nathu (3) where the Court was dealing with a by-law
\nmade by the Central Government under powers conferred on  it
\nby  the\t Forward  Contracts  (Regulation)  Act,\t 1952  which
\ncompulsorily   amended\tthe  bye-laws  of  the\t association
\nrecognized under the Act and which vested certain powers  on
\nauthorities  external  to the association.  The\t bye-law  in
\nquestion  was not limited in its application to the  members
\nof the association but to all those who entered into forward
\ncontracts  and were governed by its by-laws.  But all  rules
\nand regulations made by authorities ill pursuance of a power
\nunder  a statute do not necessarily have the force  of\tlaw.
\nIn Kruse v. Johnson. (4) while considering the validity of a
\nbye-law made by a country council.  Lord Russell described a
\nbye-law having the force of law as one affecting the  public
\nor  some  section of the public, imposed by  some  authority
\nclothed with statutory powers, ordering something to be done
\nor  not\t to  be done and accompanied by\t some  sanction or
\npenalty for its non-observance.\t It validly made such a bye-
\nlaw has the force of law within the sphere of its
\n(1)  [1966] 3 S.C.R. 40.\n<\/p>\n
(3)  [1963] 1 S.C.R. 721.\n<\/p>\n
(2)  [1964] 3 S. C. R. 55.\n<\/p>\n
(4)  [1898] 2 Q.B. 91, at 96.\n<\/p>\n
520<\/span><\/p>\n
legitimate  operation.\tThe function of such bye-laws is  to
\nsupplement   the  general  law\tby  which  the\t legislature
\ndelegates  its own power to make them.\tIn  Rajasthan  State
\nElectricity Board v. Mohan Lal<\/a> (1) where this Court held the
\nBoard,\tset  up under the Electricity (Supply)\tAct,  54  of
\n1948,  as  a  State within the meaning of  Art.\t 12  of\t the
\nConstitution  against which mandamus could issue under\tArt.
\n226,  emphasised the fact that the Act contained  provisions
\nwhich\tempowered  the\tBoard  to  issue   directions,\t the
\ndisobedience of which was punishable as a penal offence.  As
\nobserved earlier, under sections 8(2) and 20, the appellant-
\nCorporation  has  been\tgiven the power to  employ  its\t own
\nofficers  and  other  employees\t to  the  extent  it  thinks
\nnecessary  on terms and conditions provided by it  in  regu-
\nlations\t made  under sec. 45.  The regulations\tcontain\t the
\nterms  and conditions which govern the relationship  between
\nthe  Corporation and its employees.  Though made  under\t the
\npower conferred by the statute, they merely embody the terms
\nand  conditions\t of service in the Corporation\tbut  do\t not
\nconstitute  a  statutory  restriction  as  to  the  kind  of
\ncontracts  which the Corporation can make with its  servants
\nor  the grounds on which it can terminate them.\t That  being
\nso,  and  the Corporation having undoubtedly  the  power  to
\ndismiss\t its employees, the dismissal of the respondent\t was
\nwith jurisdiction, and although it was wrongful in the sense
\nof  its\t being in breach of the terms and  conditions  which
\ngoverned  the relationship between the Corporation  and\t the
\nrespondent,  it did subsist.  The present  case,  therefore,
\ndid  not fall under an of the three well  recognized  excep-
\ntions,\tand therefore, the respondent was only\tentitled  to
\ndamages\t and not to the declaration that his  dismissal\t was
\nnull and void.\n<\/p>\n
In  our view, the High Court was in error in  upholding\t the
\ndeclaration  granted by the Trial Court.  The appeal by\t the
\nCorporation,  therefore,  succeeds and is allowed  with\t the
\nresult that the judgment and decree passed by the High Court
\nis  set aside.\tIn the circumstances of the  case,  however,
\nthere will be no order as to costs.\n<\/p>\n
K. B. N.\n<\/p>\n
\t\t      Appeal allowed.\n<\/p>\n
(1) [1967] 3 S.C.R. 377.\n<\/p>\n
521<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Indian Airlines Corporation vs Sukhdeo Rai on 27 April, 1971 Equivalent citations: 1971 AIR 1828, 1971 SCR 510 Author: Shelat Bench: Shelat, J.M. PETITIONER: INDIAN AIRLINES CORPORATION Vs. RESPONDENT: SUKHDEO RAI DATE OF JUDGMENT27\/04\/1971 BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. DUA, I.D. BHARGAVA, VISHISHTHA CITATION: 1971 AIR 1828 1971 SCR 510 […]<\/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-173898","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nIndian Airlines Corporation vs Sukhdeo Rai on 27 April, 1971 - 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\/indian-airlines-corporation-vs-sukhdeo-rai-on-27-april-1971\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Indian Airlines Corporation vs Sukhdeo Rai on 27 April, 1971 - 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