Report No. 145
4.2. Article 311 of the Constitution.-
At the outset, we must mention that employees of public sector undertakings do not enjoy the benefits of Article 311 of the Constitution. Broadly speaking, that Article provides certain safeguards to civil servants against dismissal, removal or reduction in rank without complying with the provisions of that Article. Two major safeguards are: (i) that a person holding a civil post under the Union or a State shall not be dismissed or removed by an authority subordinate to that by which he was appointed; and (ii) that he shall not be dismissed, removed or reduced in rank without an inquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges.
This Article does not apply to a person who does not hold a "civil post under the Union or a State". Since public sector undertakings are, in juristic theory, separate from the Government as such, and since their employees are not paid out of the Consolidated Fund of the Government, they do not hold a civil post. Consequentially, Article 311 does not apply to them.1 The point hardly needs further elaboration. But it may be useful to quote the following passage from a decision of the Supreme Court2:-
"While we were referring to the cases in an earlier part of our judgment, we have noticed the caution indicated by this court that even if some institution becomes 'State' within the meaning of Article 12, its employees do not become holders of civil posts so as to become entitled to the cover of Article 311. They would, however, be entitled to the benefits of Part III of the Constitution."
It has been pointed out that employees of the public sector undertakings do not enjoy the protection of Article 311, for the simple reason that undertakings are legal entities, separate from the Government3. Even a statutory undertaking is not regarded as "State" for the purposes4 of Article 311.
1. (a) Sukhdev Singh v. Bhagat Ram, AIR 1975 SC 1331;
(b) Soon-prakash Rekhi v. Union of India, (1951) 1 SCC 449 (463), para. 29;
(c) Ajay Hasia v. Khalid Mujib, (1981) 1 SCC 722, para. 12;
(d) A.R. Kalra v. P.&E. Corporation of India, AIR 1984 SC 1361, para 20.
2. Tekhraj v. Union of India, AIR 1988 SC 469, para. 21.
3. Guru Gobinda v. Shankari Prasad, AIR 1964 SC 254 (258); Mafatlal v. Divisional Controller, AIR 1966 SC 1364.
4. State of Bihar v. Union of India, (1970) 1 SCC 67 (75).