of U.P. & ANR. Vs. U.P. Rajya Khanij Vikas Nigam S.S. & Ors  INSC 788 (2
C.K. THAKKER & D.K. JAIN
REPORTABLE CIVIL APPEAL NO. 3202 OF 2008 ARISING OUT OF SPECIAL LEAVE
PETITION (CIVIL) NO. 20071 OF 2006 C.K. THAKKER, J.
1. Leave granted.
2. The present appeal is directed against the judgment and final order dated
July 14, 2006 passed by the High Court of judicature at Allahabad, (Lucknow
Bench) in Writ Petition No.
338 (S/B) of 1997. By the said order, the writ petition filed by Uttar
Pradesh Rajya Khanij Vikas Nigam Sangharsh Samiti ('Samiti' for short) and
Others against the U.P. State Mineral Development Corporation Ltd. and the
State of U.P. was allowed and a writ of mandamus was issued to the respondents
to absorb the employees of the Corporation in various organizations of State
Government/ Public Sector Undertakings and to pay compensation in accordance
3. The case has a chequered history and it is necessary to highlight it to
understand the controversy raised in the present proceedings.
4. On March 23, 1974, U.P. State Mineral Development Corporation Ltd.
('Corporation' for short) was incorporated as a Government Company under
Section 617 of the Companies Act, 1956.
The Corporation was established with a view to provide acceleration in the
field of mining and other incidental activities. Initially, the Corporation was
floated with authorized share capital of Rs.20 crores which was subsequently
increased to Rs.60 crores. It was a Government Company wherein 100% paid up
share capital was by the State. It was thus completely owned by the Government.
It was under the direct control and supervision of the State Government. The
Corporation was thus an 'instrumentality' of the State. In the beginning, the
Corporation showed profits. Subsequently, however, the financial status was
deteriorated and it started incurring losses. The Board of Directors,
therefore, on December 19, 1996 decided to retrench 460 employees. The Board
was required to pay retrenchment compensation to those employees. Accordingly,
a request was made to the State Government to advance loan of Rs.5 crores to
enable the Corporation to pay retrenchment compensation to the employees. A resolution
to that effect was also passed by the Board of Directors. In the resolution,
reasons were indicated which impelled the Corporation to take a decision to
retrench more than 50% of its staff. There were 838 employees out of which 744
were regular employees and 94 were on consolidated salary.
5. Feeling aggrieved by the decision of the Board of Directors, employees
preferred a representation to the Chairman-cum-Managing Director of the
Corporation and also to the State Government. In the representation, grievance
was made by them that the proposed action was illegal and they should not be
retrenched. It was indicated that financial position of the Corporation could
A prayer was also made to absorb employees of the Corporation in other Departments
of the State or other Public Sector Undertakings if they were to be relieved.
No final order of retrenchment was, however, passed. Since neither the
Corporation nor the Government gave assurance with regard to continuation or
otherwise of the Corporation, nor as to absorption of employees working in the
Corporation in the State Government or any other Corporation, the Samiti was
constrained to file a writ petition in the High Court of Judicature at
Allahabad, (Lucknow Bench) in 1997 for the following reliefs;
Whereas, it is most respectfully prayed that this Hon'ble Court may kindly
be pleased to- (i) To issue a writ, order or direction in the nature of
mandamus directing the respondent to absorb the services of the employees of
the Corporation on suitable posts in any of the Corporation under its control
in any of its department;
(ii) To issue a writ, order or direction in the nature of mandamus
commanding the State of U.P. to prepare a list of retrenched employees of the
various Corporations and absorb them in accordance with length of their
In the alternative, issue a writ, order or direction in the nature of
mandamus commanding the State of U.P. and the Corporation to pay compensation
at the rate admissible under the provision of the Industrial Disputes Act, 1947
and additional wages at the rate of six years salary to the member of the
petitioner-Association who are sought to be retrenched;
(iii) To issue a writ, order or any direction which the Hon'ble Court may
deem just and proper in the circumstances of the case; and (iv) To allow the
writ petition with all costs in favour of the petitioner.
6. It was the allegation of the Samiti in the writ petition that loss has
been sustained by the Corporation because of various wrong policy decisions
taken by the U.P. Government and the Corporation. Several employees of the
Corporation were not paid their salary and they were facing great hardship.
Their family members had also suffered a lot and they were on the verge of
7. A counter-affidavit was filed on behalf of the Corporation through its
Managing Director. By way of preliminary objections, it was contended that the
petition was premature inasmuch as no action of retrenchment was taken by the
Corporation. Moreover, alternative and efficacious remedy under the U.P. Industrial Disputes Act
was available to the petitioners.
On merits, it was contended that in view of shrinkage in the activities of
the Corporation and also increase of wage bill because of huge surplus
manpower, the Board of Directors of the Corporation took a decision on December
19, 1996 to retrench excess employees in accordance with law. According to the
deponent, the Corporation was in acute financial crisis and totally dependant
on grant-in-aid from the U.P.
Government. The Corporation had closed down its mining activities in
Lambidhar Mines at Mussorie as per the direction issued by the Supreme Court
(this Court). Even at other places, it had to face competition from private
sector. Because of drastic change in global industrialization and liberalized
economic policy introduced by the Government, non- resident Indians (NRIs) were
attracted and several industrial entrepreneurs in the State entered into the
business of mining. Various projects had been developed in joint sector as well
as in private sector which had also adversely affected the Corporation. The
Corporation was not able to pay salary to its employees in its various Units at
Dehradun, Chopan, Allahabad, Lalitpur etc. It was stated that an Undertaking
cannot be forced to run its business on continuous loss and be directed to
carry on huge surplus manpower and work force without work. It was, therefore,
submitted that the writ petition filed by the Samiti was liable to be dismissed.
8. It is clear from the record that several interim orders were passed by
the High Court from time to time and the Corporation was directed to pay salary
to the employees. The matter was then placed for hearing which came up before a
Division Bench of the High Court.
The Bench consisted of two Hon'ble Judges, viz.
Hon'ble Mr. Justice M. Katju (as His Lordship then was) and Hon'ble Mr.
Justice U.K. Dhaon.
Hon'ble Mr. Justice Katju, vide an order dated December 17, 1999 held that
the petitioners should have availed of alternative remedy available under the
Industrial Law and should not have straightaway filed a writ petition in the
High Court under Article 226 of the Constitution. According to His Lordship, if
an industry was closed down, a remedy available to the workers was to apply for
closure compensation under Section 25 FFF of the Industrial Disputes Act, 1947
(hereinafter referred to as 'the Act') before the Labour Court/Tribunal. If it
was not closed down, their remedy was to apply to the prescribed authority
under the Payment of Wages Act or to a Labour Court/Tribunal under Section
33C(2) of the Act or under Section 6H(2) of the U.P.
Disputes Act. But, it was not proper for the High Court to entertain such
prayer in a writ jurisdiction under Article 226 of the Constitution. It was
also observed that in spite of the fact that virtually the Corporation had
stopped its activities and the business had come to an end, by several interim
orders passed from time to time, the High Court directed the Corporation and
the State to pay salary to the workmen though they had not worked. By such
interim orders, crores of rupees had been paid to the workmen.
Highlighting the difficulties of the Government and Public Sector
Undertakings in commercial establishments, His Lordship made larger and wider
observations as to the policy of the Government in commercial matters. His
Lordship recommended the Central and State Governments to rapidly privatize
most of the public sectors and services like banks, telephone, electricity,
water works, municipal services, etc. We, however, express no opinion on that
9. As regards, the appellant-Corporation, His Lordship said that it was a
'totally sick' unit. On the prayers of the Samiti, it was observed that the
workers had been treated over-indulgently. Most of them had been without work
and were surplus and crores of rupees had been paid to them for doing nothing.
The money had come from public purse and it was unfair to grant relief in such
a petition. Accordingly, the petition was ordered to be dismissed.
10. The other Judge (Hon'ble Mr. Justice U.K. Dhaon), however, did not
concur with the view expressed by Hon'ble Mr. Justice Katju.
According to His Lordship, the petitioners approached the Court by invoking
Article 226 of the Constitution on April 10, 1997. Notice was issued by the
Court on the petition on the next day i.e. on April 11, 1997 and several
interim orders were passed thereafter from time to time. It would not be proper
to dismiss the petition on the ground of availability of alternative remedy
after the writ-petition was entertained, observed Hon'ble Mr. Justice Dhaon.
His Lordship stated that the Corporation had considered the problem and in the
counter-affidavit, it was said that attempts had been made to absorb employees
of the Corporation either in the Government or in other Public Sector
Undertakings. It was further observed that several interim orders which were
passed by the Court came to be challenged by the Corporation in this Court and
this Court also did not interfere with those orders. It was, therefore, not a
fit case to dismiss the petition.
11. Moreover, as held by the High Court of Allahabad in Suresh Chandra Tewari
v. District Supply Officer, AIR 1992 All 331, a petition cannot be dismissed on
the ground of alternative remedy if the same had been entertained and interim
order had been passed.
Relying on another decision of the same Court in Methodist Church in India
v. Bareilly Development Authority, AIR 1988 All 151, it was indicated that
alternative remedy does not oust the jurisdiction of the High Court to grant
relief under Article 226 of the Constitution and in spite of availability of
such remedy, it is open to a High Court to grant relief if it is found
necessary for promotion of justice or prevention of injustice which is the
object of constitutional provision. Reliance was also placed on a decision of
this Court in Whirlpool Corporation v. Registrar of Trademarks, AIR 1999 SC 22
that alternative remedy is no bar in case of infringement of fundamental rights
enshrined in Part III of the Constitution.
12. Hon'ble Mr. Justice Dhaon then considered the merits of the case and
possible absorption of employees of the Corporation in Government Departments
or Public Sector Undertakings. Various meetings were held for the said purpose
and assurance was given to the Court by the Corporation as also on behalf of
the Government. His Lordship, in the circumstances was of the view that the
writ petition was required to be allowed. The petition was accordingly allowed
and a writ in the nature of mandamus was issued directing the respondents to
pay salary to the employees within four months from the date of the order and also
to take necessary steps for their absorption in various organizations of the
State Government/Public Sector Undertakings expeditiously. Liberty, however,
was granted to the respondents to take appropriate steps for the retrenchment
of the employees keeping in view the resolution passed by the Corporation.
13. In view of difference of opinion between two Hon'ble Judges of the
Division Bench, an order was passed on the same day, signed by both the Hon'ble
Judges to place the papers before the Hon'ble Chief Justice for constituting an
14. It appears that in view of cleavage of opinion, the matter was placed
before a third Judge (Hon'ble Mr. Justice S.H.A. Raza), who after hearing the
parties and considering opinions of two judges, held that he was in agreement
with the view expressed by Hon'ble Mr. Justice Dhaon. His Lordship, however,
observed that the State Government had stated that the employees of the
Corporation would be absorbed and as such nothing remained to be decided except
that the State Government should expedite their absorption in the State service
or Public Sector Undertakings on suitable post within a period of three months
from the date of receipt of a certified copy of the order.
15. His Lordship then stated;
"List the petition before the Division Bench for appropriate
16. The above order was passed on January 5, 2001.
17. In view of the above direction, it was incumbent on the Registry to
place the matter before a Division Bench. It was, however, not done.
18. Meanwhile, a Review Petition No. 70 s/s of 2001 was filed by the State
Government highlighting difficulties in the process of absorption. It was,
therefore, prayed to review the order, dated January 5, 2001.
19. When the review was placed before Hon'ble Mr. Justice Raza, it was
dismissed by the Court observing that the learned Additional Chief Standing
Counsel pressed only one point in the review petition that the direction of the
Court to absorb employees of the Corporation be extended so that the majority
judgment of the Court could be implemented by the State Government. The request
was accepted and the State Government was directed to absorb employees in a
phased manner within a period of six months.
20. The Court then stated;
"As the State Government itself has derived a policy of absorption, the
matter need not put up before the Division Bench".
21. Review petition was thus disposed of on July 13, 2001. In view of the
above observations, the matter was not placed before a Division Bench and no
order was passed by the Bench. Contempt proceedings were also initiated by the
employees that the orders passed by the Court were not obeyed and not
22. On March 19, 2005, the appellants moved an application before the Senior
Judge of the High Court (Lucknow Bench) for listing the writ petition before an
appropriate Bench for final disposal; since there was no final decision on the
writ petition except opinions of three Hon'ble Judges. The application moved by
the Corporation was registered as Civil Miscellaneous Application No. 12153 of
The Senior Judge of the Lucknow Bench passed the following order on March
"List before a Division Bench in which Hon'ble U.K. Dhaon is a member
in next week."
23. The matter was then placed before a Division Bench (Coram : U.K. Dhaon
Paliwal, JJ.) The Corporation on May 9, 2005, filed supplementary
counter-affidavit placing on record inter alia the following facts and
Absorption Rules, 1991;
Policy of the State Government
regarding absorption of employees, dated July 10, 2000;
Application for modification of undertaking of Harminder Raj Singh
recorded in the order dated August 4, 1999;
Absorption Rules, 2003.
24. On July 19, 2005, the Division Bench of the High Court, instead of
deciding the writ petition decided the application, dated March 10, 2005 (which
was for listing of the matter before a Division Bench). It was observed that
the matter was heard and finally decided by the Hon'ble Third Judge in
accordance with Rule 3 of Chapter VIII of the Allahabad High Court Rules, 1952
and, hence, no further order was required to be passed. The application was,
25. The High Court was obviously in error in passing the above order. The State
and the Corporation, therefore, filed Special Leave Petition in this Court
which was registered as Civil Appeal No. 5473 of 2005. It was contended before
this Court that after difference of opinion between two Hon'ble Judges, the
matter was placed before a third Judge who decided it and directed to place it
before a Division Bench which ought to have been done and the case ought to
have been placed before a Division Bench. Even if Review was rejected against
the order passed by the third Judge, proper procedure was required to be
followed which was not done. The Senior Judge (Lucknow Bench) also ordered to
place the matter before a Division Bench. The order passed by the Single Judge,
therefore, could not be said to be legal and lawful.
26. This Court referred to the relevant rules and upheld the contention of
the State and observed that the matter ought to have been placed before a
Division Bench. On September 2, 2005, a two Judge Bench of this Court to which
one of us (C.K. Thakker, J.) was a party, inter alia, passed the following
"In the aforesaid circumstances, we set aside the impugned judgment and
direct that Writ Petition No. 338 (S/B) of 1997 shall be listed before
appropriate Bench for orders in accordance with law, considering the orders
passed by two learned Single Judges on 17th December, 1999 disagreeing with
each other and also the opinion of the learned third Judge in the matter, dated
5th January, 2001.
The Division Bench will decide the matter expeditiously, without being
influenced by any observations made by this Court and in accordance with law,
preferably within a period of three months."
27. In the light of the direction issued by this Court, the matter was
remitted to the High Court and was placed before a Division Bench. The Division
Bench of the High Court allowed the writ petition filed by the petitioners and
issued the following direction;
"On a thoughtful consideration of the matter, we are also of the view
that when the matter was referred to Hon'ble Third Judge and he recorded his
opinion and issued a specific direction to the office that the matter be placed
before the Division Bench of appropriate orders, it was duty of the office to
have placed the matter before the Division Bench for suitable orders. The
application dated 09/13.05.2005 moved by the State of U.P. for taking on record
the supplementary counter-affidavit pointing out difficulties in absorption of
the employees of the corporation, is not maintainable. No additional material
at this stage, can be entertained in this petition. The application is,
The writ petition is finally disposed of in the following terms;
The writ petition is allowed and a writ of mandamus is issued directing the
opposite parties to absorb the employees of the petitioners- association within
four months from today in various organizations of the State Government/Public
Sectors and to pay compensation, in accordance with law. However, it will be
open for the opposite parties to take necessary steps for the retrenchment of
the employees of the petitioners- association keeping in view the resolution
dated 19.12.1996 of the Board of Directors of the Corporation.
Parties shall bear their own costs."
28. It is this order which is challenged by the appellants in the present
29. Notice was issued on December 11, 2006. The respondents appeared,
accepted the notice and prayed time to file counter affidavit. Meanwhile,
operation of the judgment was stayed. The Registry was thereafter asked to place
the matter for final hearing on a non- miscellaneous day and that is how the
matter has come up before us.
30. We have heard learned counsel for the parties.
31. The learned counsel for the appellants contended that the High Court was
wholly wrong in entertaining a petition under Article 226 of the Constitution
and in not relegating the writ petitioners to avail of alternative remedy
available under the Industrial Law. It was also submitted that disputed
questions of fact were involved in the petition which could not be
appropriately dealt with and decided in exercise of extraordinary jurisdiction
by a writ court and on that ground also the Court ought to have directed the
writ petitioners to approach an appropriate forum. Moreover, no action of retrenchment
of employees had been taken and, as such, the writ petition was premature and
32. On merits, it was submitted that it is settled law that creation,
continuation and abolition of post is a 'sovereign function' and such a
decision cannot be interfered with by a court of law in exercise of power of
judicial review on limited parameters unless it is contrary to law,
inconsistent with the provisions of the Constitution or mala fide. It has been
clearly stated in the affidavit in reply by the Corporation that the activities
of the Corporation were virtually stopped and 'no- work' resulted in taking a
decision to close down the Corporation. It was urged that apart from earning
profits, the Corporation had incurred huge losses. There were financial
problems and economic difficulties. There was excess of manpower and hence a
policy decision was taken to retrench surplus employees. Such a decision cannot
be made subject matter of 'judicial review' when no provision of law had been
violated. The counsel contended that even if there was violation of some
provision of law and legitimate dues of employees were not paid or they were
deprived of other benefits, such questions could have been agitated before an
appropriate forum under appropriate law and not by a writ Court. So far as
absorption of employees of the Corporation is concerned, an action can be taken
by a Corporation which is an instrumentality of State within the meaning of
Article 12 of the Constitution as also by the State of U.P. only in accordance
with statutory rules framed by the State in exercise of power under proviso to
Article 309 of the Constitution, viz. Uttar Pradesh Absorption of Retrenched
Employees of Government or Public Corporations in Government Service Rules,
1991, as amended from time to time. A public authority cannot act inconsistent
with or contrary to statutory rules. It was stated that no statement was made
by any officer on behalf of the Corporation that the employees of the
Corporation would be absorbed by the Government either in Government service or
in any Public Sector Undertaking. But, even if some statement was made, it had
no legal force and binding effect and cannot be enforced inasmuch as no
statement could have been made which is not in consonance with law or against
In the instant case, an application was also made by the Secretary of the
Corporation stating therein that no assurance was given by him to the Court
that the retrenched employees would be absorbed nor such assurance could be
given by any one else. But the High Court, unfortunately, rejected the said
application and proceeded to decide the matter on so-called assurance.
According to the learned counsel, there can be no estoppel against a statute.
If the relevant provisions of law do not entitle an employee after retrenchment
to be absorbed in any other Department or Undertaking, no such right can flow
from a statement, assurance or even undertaking if it is not in consonance with
law. It was submitted that the Court ought to have appreciated the fact that no
employer can be compelled by a Court of Law to continue its business in losses
and if the employer decides to close down its Undertaking, it has right to do
so subject of course to law in force. If there is violation of any provision of
law, appropriate authority can always pass an appropriate order but a writ
Court cannot direct the employer to continue the employees in service, to pay
salary to them nor it can order the State Government to absorb excess employees
of such Corporation either in Government or any other Public Sector
Undertaking. The counsel also made grievance against the direction to the
Corporation to pay 'compensation'. On all these grounds, it was submitted that
the appeal deserves to be allowed by setting aside the order passed by the High
33. The learned counsel for the Samiti and the employees, on the other hand,
supported the final order passed by the High Court. It was submitted that one
of the Judges of the Division Bench was clearly in error in dismissing the
petition on the ground of availability of alternative remedy. The other Judge
was right in observing that an alternative remedy is not an 'absolute' bar to a
writ remedy under Article 226 of the Constitution particularly when it relates
to enforcement of fundamental rights guaranteed by Part III of the
Constitution. Moreover, the writ petition had already been entertained, several
orders were passed from time to time and as held in several decisions, once a
petition is entertained, it cannot be dismissed on the ground of availability
of alternative remedy and must be decided on merits. That was done by the other
Judge and that part of the decision could not be said to be contrary to law.
34. On merits, it was submitted that the High Court was right in granting
relief to the employees. The Corporation was established in 1974, employees
were working since many years and keeping in view the facts and circumstances
in their entirety, the High Court directed the State Government to absorb them
in the Government Departments or other Public Sector Undertakings and such a
decision cannot be said to be contrary to law. On behalf of the Corporation, an
assurance was given that the employees would be absorbed. The Court was
requested to grant time for the said purpose which has been done. No fault can
be found against such an action and the grievance raised by the Corporation is
not well-founded. The Court, considering all the facts and circumstances,
issued certain directions which are in consonance with law. It was also stated
that several interim orders which were passed by the Court from time to time
were confirmed even by this Court. It was only because the matter was not
placed before a Division Bench of the High Court and the earlier order was not
complied with that this Court allowed the appeal filed by the State and
remitted the matter to the High Court to be dealt with and decided by a
Division Bench. But once the Division Bench has decided the matter and passed
an order, no interference is called for.
It was also submitted that the Government has absorbed several employees by
adopting 'pick and choose' method which shows that it wants to oblige
'fortunate few' without any legal basis or principle. It was further stated
that it is not true that the Corporation has closed its activities and mining
work. It is working and several persons are still in service performing their
functions and discharging their duties.
For all these reasons, the appeal deserves to be dismissed.
35. We have given most anxious and thoughtful consideration to the rival
contentions of the parties. So far as preliminary objection raised by the
Corporation before the High Court is concerned, in our considered view, the
same was well-founded and ought to have been upheld. It was urged before the
High Court on behalf of the Corporation and the State Government that the writ
petition was premature inasmuch as no retrenchment had been effected. Several
disputed questions of fact were involved in the petition. If the contention of
the Samiti was that there was illegal closure of Undertaking or there was
non-payment of wages by the employer, appropriate proceedings could have been
initiated under Industrial Law. In fact, one of the Judges of the Division
Bench upheld the contention and observed that the employees could have claimed
closure compensation under Section 25 FFF of the Act or could have approached
prescribed authority under the Payment of wages Act relying upon Section 33C(2)
of the Act or Section 6H(2) of the U.P.
Disputes Act. The other Single Judge of the Division Bench, however, held
that the writ petition had been entertained and interim orders were also
passed. Relying upon Suresh Chandra Tewari, the learned Judge held that
"the petition cannot be dismissed on the ground of alternative remedy if
the same has been entertained and interim order has been passed".
36. With respect to the learned Judge, it is neither the legal position nor
such a proposition has been laid down in Suresh Chandra Tewari that once a
petition is admitted, it cannot be dismissed on the ground of alternative
remedy. It is no doubt correct that in the 'head note' of All India Reporter
(AIR), it is stated that "petition cannot be rejected on the ground of
availability of alternative remedy of filing appeal". But it has not been
so held in the actual decision of the Court.
37. The relevant paragraph 2 of the decision reads thus:
"2. At the time of hearing of this petition a threshold question, as to
its maintainability was raised on the ground that the impugned order was an
appealable one and, therefore, before approaching this Court the petitioner
should have approached the appellate authority. Though there is much substance
in the above contention, we do not feel inclined to reject this petition on the
ground of alternative remedy having regard to the fact that the petition has
been entertained and an interim order passed".
38. Even otherwise, the learned Judge was not right in law. True it is that
issuance of rule nisi or passing of interim orders is a relevant consideration
for not dismissing a petition if it appears to the High Court that the matter
could be decided by a writ-Court. It has been so held even by this Court in
several cases that even if alternative remedy is available, it cannot be held
that a writ- petition is not maintainable. In our judgment, however, it cannot
be laid down as a proposition of law that once a petition is admitted, it could
never be dismissed on the ground of alternative remedy. If such bald contention
is upheld, even this Court cannot order dismissal of a writ petition which
ought not to have been entertained by the High Court under Article 226 of the
Constitution in view of availability of alternative and equally efficacious
remedy to the aggrieved party, once the High Court has entertained a
writ-petition albeit wrongly and granted the relief to the petitioner.
39. On the facts and in the circumstances of the case, particularly in view
of assertions by the Corporation that its work had been substantially reduced;
it was running into losses; the question was considered by the Board of
Directors and it was resolved to retrench certain employees, it would have been
appropriate, had the High Court not entertained the writ petition under Article
226 of the Constitution. [See also Scooters India v. Vijai E. V. Eldred, (1998)
6 SCC 549]
40. The matter, however, did not rest on averments and counter-averments.
The record reveals that the Corporation was convinced that retrenchment of
certain employees was absolutely necessary. According to the Corporation,
because of globalization and entry of private sector in the business and also
because of various orders passed by this Court from time to time in Public
Interest Litigation (PIL), the activities of the Corporation had been
considerably curtailed. It was incurring losses and was not able to pay
salaries and wages to its employees. It was, therefore, decided to take
recourse to retrenchment in accordance with law.
41. Now, whether such action could or could not have been taken or whether
the action was or was not in consonance with law could be decided on the basis
of evidence to be adduced by the parties. Normally, when such disputed
questions of fact come up for consideration and are required to be answered,
appropriate forum would not be a writ court but a Labour Court or an Industrial
Tribunal which has jurisdiction to go into the controversy. On the basis of
evidence led by the parties, the Court/Tribunal would record a finding of fact
and reach an appropriate conclusion. Even on that ground, therefore, the High
Court was not justified in allowing the petition and in granting relief.
42. There is yet one more reason. In the High Court, the Corporation filed
an application stating therein that regarding absorption of employees,
statutory rules had been framed by the State Government in exercise of power
under the proviso to Article 309 of the Constitution. A prayer was, therefore,
made to allow the application to bring statutory rules on record and to
consider them. The Court, however, rejected the prayer. In our opinion, the
High Court was not right in rejecting such prayer. If there were statutory
rules and such rules provide for absorption of employees on certain grounds and
on fulfillment of some conditions laid down in those rules, it was the duty of
the High Court to consider those rules and to decide whether under the
statutory rules, such absorption could be ordered.
43. After all, the High Court was considering the prayer of the petitioners
to grant a writ in the nature of mandamus. It was, therefore, expected of the
High Court to keep in view the relevant provisions of law.
The High Court mainly relied upon an assurance said to have been given by
the Secretary on behalf of the Corporation that excess employees would be
absorbed either in the Government Department or in other Public Sector
Undertakings. From the record it appears that it was the case of the Secretary
of the Corporation that no such assurance was given by him to the Hon'ble
Court. But even if he had given such assurance, it was of no consequence since
in the teeth of statutory rules, such assurance had no legal efficacy. Moreover,
an application was made on affidavit by the Secretary of the Corporation
clarifying the position and praying for modification of the earlier order
passed by the High Court in which such statement on behalf of the Corporation
appeared. The High Court, however, rejected even that application. In our
considered opinion, even on that ground, the High Court ought not to have
issued final directions.
44. It is settled law that there can be no estoppel against a statute. If
the field was occupied by statutory rules, the employees could get right only
under those rules. The High Court was equally bound to consider those rules and
to come to the conclusion whether under the statutory rules, the retrenched
employees were entitled to absorption either in Government Department or in any
other Public Sector Undertaking. Statement, assurance or even undertaking of
any officer or a counsel of the respondent-Corporation or of the Government
Pleader of the State is irrelevant. The High Court, in our view, ought to have
considered the prayer of the Corporation and decided the question if it wanted
to dispose of the matter on merits in spite of availability of alternative
remedy to the employees.
45. Again, in our considered opinion, it was incumbent on the employees to
show the right of absorption of retrenched employees in Government Department
or other Public Sector Undertakings. The petitioners had prayed for a writ of
mandamus which presupposes a legal right in favour of the applicant. Such right
must be a subsisting right and enforceable in a Court of Law. There must be
corresponding legal duty on the part of the respondent-Corporation or
Government which required the Corporation or Government 'to do that which a
statute required it to do'. No such right of absorption has been shown by the
petitioners. Nor any such corresponding duty of the respondents could be shown
to the High Court by the employees. As noted above, the case of the Corporation
was that the retrenched employees could be absorbed only in accordance with
statutory rules framed under proviso to Article 309 of the Constitution. No
such direction of absorption of all employees, hence, could be issued by the
High Court. The High Court failed to appreciate all these relevant
considerations. Even the application by which the Corporation sought to place
on record statutory rules was rejected by the Court and a writ of mandamus was
46. It is well settled that a Court of Law can direct the Government or an
instrumentality of State by mandamus to act in consonance with law and not in
violation of statutory provisions. Unless a Court records a finding that act of
absorption of all employees of the Corporation either in Government Department
or in any other Public Sector Undertaking is in accordance with law, no writ
can be issued.
Therefore, even on that ground, the directions of the High Court deserve to
be set aside.
47. Regarding payment of compensation to the employees also, the High Court
was not right. We have extracted the operative part of the order of the High
Court in earlier part of the judgment. The High Court has stated that the
appellants herein would absorb the employees of the Corporation and would
"pay compensation in accordance with law". It was contended by the
Corporation that there was no foundation in the entire writ petition as to the
provisions of law under which such compensation could be claimed and violation
of the law by the Corporation or by the State. No finding has been recorded by
the High Court that a specific or particular provision of law had been violated
which entitled the workers to claim compensation. No reasons had been recorded
by the High Court in the impugned judgment for issuing such direction nor any
basis for such direction has been shown. In our opinion, therefore, no such
blanket direction could have been issued by the High Court which was not even
capable of implementation.
48. To us, one of the considerations in such matters is whether an order
passed or direction issued is susceptible of implementation and enforcement,
and if it is not implemented whether appropriate proceedings including
proceedings for willful disobedience of the order of the Court can be initiated
against the opposite party. The direction issued by the High Court falls short
of this test and on that ground also, the order is vulnerable.
49. It is contended on behalf of the employees that the Corporation was not
right when it stated that there was no work and several projects came to be
closed. It was also contended that many employees were absorbed by the
Corporation and there was an element of 'pick and choose'. The said action was
arbitrary, discriminatory, unreasonable and violative of Articles 14, 19 and 21
of the Constitution. Regarding loss caused to the Corporation, according to the
Samiti, it was the result of wrong and improper decisions of the Corporation
and the State Government. Poor employees should not suffer on that count.
50. In our considered view, however, all such actions could be examined by
an appropriate Court/Tribunal under the Industrial Law and not by a writ Court
exercising power of judicial review under Article 226 of the Constitution. If
the impugned action of the Corporation of retrenchment of several employees is
not in consonance with law, the employees are certainly entitled to relief from
an appropriate authority. If any action is taken which is arbitrary,
unreasonable or otherwise not in consonance with the provisions of law, such
authority or Court/Tribunal is bound to consider it and legal and legitimate relief
can always be granted keeping in view the evidence before it and considering
statutory provisions in vogue. Unfortunately, the High Court did not consider
all these aspects and issued a writ of mandamus which should not have been
done. Hence, the order passed and directions issued by the High Court deserve
to be set aside.
51. For the foregoing reasons, the appeal deserves to be allowed and the
order passed by the High Court is liable to be set aside and is accordingly set
52. Since we are of the view that one of the Hon'ble Judges of the Division
Bench of the High Court which decided the matter at the initial stage was right
in relegating the petitioners to avail of alternative remedy under the
Industrial Law and as we hold that the High Court should not have entertained
the petition and decided the matter on merits, we clarify that though the writ
petition filed by the petitioners stands dismissed, it is open to the employees
to approach an appropriate Court/Tribunal in accordance with law and to raise
all contentions available to them. It is equally open to the Corporation and
the State authorities to defend and support the action taken by them. As and
when such a course is adopted by the employees, the Court/Tribunal will decide
it strictly in accordance with law without being influenced by the fact that
the writ petition filed by the writ petitioners is dismissed by this Court.
53. The appeal is allowed accordingly.
Considering the facts and circumstances of the case, however, there shall be
no order as to costs.
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