Managing Director, Uttar Pradesh
Warehousing Corporation & ANR Vs. Vinay Narayan Vajpayee [1980] INSC 5 (16
January 1980)
SARKARIA, RANJIT SINGH 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:
Labor 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.
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, there for, 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 statutes
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 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 fulfill 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 Corporation 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 has
reached very far and has 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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