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1974 DIGILAW 293 (ALL)

B. P. Srivastava v. Deputy Managing Director

1974-07-24

PREM PRAKASH, S.K.KAUL

body1974
JUDGMENT Prem Prakash, J. - By this petition under Art. 226 of the Constitution, which has been referred to a larger Bench by a learned Single Judge of this Court, the petitioner challenges an order of termination of his services (Annexure 5-A) by the Deputy Managing Director of the U. P. State Ware-Housing Corporation. 2. Shortly stated, the material facts underlying the controversy are these. The petitioner was a routine clerk employed in the State Ware-Housing Corporation, a statutory corporate body created under Section 18(1) of the Ware-Housing Corporation Act (to be hereinafter referred as the Act), established for the purpose of ware-housing of agricultural produce and certain other commodities and for matters connected therewith. The general superintendence and management of the affairs of the State Ware-housing Corporation vests in a Board of Directors which, amongst other Directors, consists of a Managing Director appointed by the Government in consultation with the Directors and with the previous approval of the Central Warehousing Corporation may entrust or delegate to him the Board of Directors is required to act on business principles having regard to public interest and is guided by such instructions on questions of policy as may be given to them by the State Government or the Central Warehousing Corporation. The functions of the State Warehousing Corporation extend to matters, namely, to acquire and build godowns and warehouses, run warehouses for the storage of agricultural produce, seeds, manures, fertlizers, agricultural implements and notified commodities, arrange facilities for the transport of agricultural produce, seeds, manures, fertilizers, agricultural implements etc. A State Warehousing Corporation is to have an executive committee consisting of the Chairman of the Board of Directors, the Managing Director and three other Directors chosen in the prescribed manner subject to the direction of the board of Directors the executive committee is competent to deal with any matter within the competence of the Corporation. A Warehousing Corporation is empowered, with the previous approval of the Government, to make regulations not inconsistent with the Act and in particular such regulations may provide (a) the conditions of service of and the remuneration payable to the officers and other employees of the Warehousing Corporation and (b) the manner in which and the conditions subject to which the shares of the Central Warehousing Corporation may be transferred. A State Ware housing Corporation is constituted with perpetual succession and a seal and is an autonomous body for the purpose of business, which it has to carry on according to the rules and subject to the directions on questions of policy by the State Government or the Central Warehousing Corporation. On a perusal of the provisions of the Act it is demonstrably clear that the activity of a State Warehousing Corporation is only a business activity and it possesses no power which in any manner can be exercised to affect the activities of other citizens. It is not a body charged with the statutory duty of implementing any law which effects in any manner any member of the public. Neither can it be construed as a body constituted by the Legislature in implementation of the Directive principles of the State policy as laid down in Part 4 of the Constitution. 3. On behalf of the petitioner it has been contended that he was appointed by the Managing Director (Annexure 3) in pursuance of the Staff Regulations V (Annexure 4), that after completing the period of probation, which was not extended, he should be deemed to have been confirmed by the operation of Para 8(l) of the Staff Regulations and that the Deputy Managing Director by terminating his employment treating him as a temporary servant of the Corporation committed the breach of the Staff Regulations in as much as no opportunity to show cause against the proposed termination, as required by Para 11(2) was afforded and further the appointing authority being the Managing Director, the Deputy Managing Director could not in law dispense with the petitioner's services. 4. Counsel for the Corporation relying upon the authority of the decision of the Supreme Court in U. P. State Warehousing Corporation, Lucknow v. C.K. Tyagi, A.I.R. 1970 S.C. 1244 has contended that the petitioner had no statutory status and that his remedy for the alleged wrongful termination lies in a suit for damages to be brought in a competent court of law. In particular he has invited our attention to the observations made therein at page 1254 . In particular he has invited our attention to the observations made therein at page 1254 . "Having due regard to the principles discussed above, we are of opinion that the High Court was not justified in granting the declaration that the order dated March 10, 1964 dismissing the respondent from service is null and void and that he is entitled to be reinstated in service with full pay and other emoluments. As pointed out by us, the regulations are made under the power reserved to the Corporation under Section 54 of the Act. No doubt they lay down the terms and conditions of relationship between the Corporation and its employees. An order made in breach of the regulations would be contrary to such terms and conditions, but would not be in breach of any statutory obligation as was the position which this Court had to deal with in the Life insurance Corporation of India v. Sunil Kumar Mukherjee, A.I.R. 1964 S.C. 847. In the instant case a breach has been committed by the appellant of regulation 16(3) when passing the said order of dismissal, in as much as the procedure indicated therein has not been followed. The Act does not guarantee any statutory status to the respondent, nor does it impose any obligation on the appellant in such matters. As to whether the rules framed under Section 52 deal with any such matters, does not arise for consideration in this case as the respondent has not placed any reliance on the rules and he has rested his case only on regulation 16(3). It is not in dispute that, in this case, the authority who can pass an order of dismissal has passed the same. Under those circumstances, a violation of regulation 16(3), as alleged and established in this case, can only result in the order of dismissal being held to be wrongful and, inconsequence, making the appellant liable for damages." 5. In the above case, the petitioner, who was a Technical Assistant in the State Warehousing Corporation, challenging the order of dismissal in a suit instituted in the civil court, had prayed for a declaration that the order dismissing him from service was null and void and that he was entitled to be reinstated with full pay and other emoluments. In the above case, the petitioner, who was a Technical Assistant in the State Warehousing Corporation, challenging the order of dismissal in a suit instituted in the civil court, had prayed for a declaration that the order dismissing him from service was null and void and that he was entitled to be reinstated with full pay and other emoluments. The contention that the order of dismissal has been passed in violation of a statutory provision (the Regulations) was found untenable by the Supreme Court. This being so, when a point of law has been settled by a majority decision of the Supreme Court, it is not open to us to avoid that decision "by discovering supposed conflicts and illogicality's". In deed Art. 141 of the Constitution declares that the law as enunciated by the Supreme Court shall be binding on all courts within the territory of India. 6. Counsel for the petitioner in his endeavour to take out the case from the ambit of the above rule referred us to Sirsi Municipality v. Cecelia Kom Francis Tellis, A.I.R. 1973 S.C. 855. Upon the basis of certain observations made by Hon'ble Beg, J., he ventured to argue that the law laid down by the Supreme Court in Chandra Kiran Tyagi's A.I.R. 1970 S.C. 1244 case does no longer carry a binding force. To sustain the plea, he also sought support from the observations in the majority opinion of the Court. 7. Turning to the facts of Sirsi Municipality A.I.R. 1973 S.C. 885 case, the petitioner was an employee of the Municipality; she was dismissed from service; she filed a suit for a declaration that the resolution of the Municipality dismissing her from service was void and that she continued to be in service of the Municipality and was entitled to emoluments from the date of the resolution upto the date of the suit. The Municipality was governed by the Bombay District Municipal Act, 1901, Section 46 whereof provided that the Municipality shall make rules in respect of matters enumerated in that section, the conditions of service etc. Rule 143 provided the procedure to dismiss an officer or servant of the Municipality which in the finding of the High Court had not been complied with. Hon'ble Ray, J. (as he then was) delivering the majority opinion of the Court, observed at page 859. Rule 143 provided the procedure to dismiss an officer or servant of the Municipality which in the finding of the High Court had not been complied with. Hon'ble Ray, J. (as he then was) delivering the majority opinion of the Court, observed at page 859. "In this respect employment under statutory bodies differs from ordinary private employment. Where a public body is empowered to terminate employment on specified grounds or where a public body does not observe the procedure laid down by legislature improperly delegates power of dismissal to another body the courts have declared such dismissal from public employment to be invalid." Further it was said: "Rule 143 imposes a mandatory obligation. The rules were made exercise of power conferred on the municipality by statute.....The dismissal of the respondent was rightly found by the High Court to be in violation of Rule 143 which imposed a mandatory obligation...... The dismissal by the municipality was without written order. The dismissal was ultra wires." Hon'ble Beg, J., in a separate opinion, expressed doubts upon the correctness of the decision in Chandra Kiran Tyagi's A.I.R. 1970 S.C. 1244 case, said lie (page 861): "Although Indian Airlines Corporation v. Sukhdeo Rai, A.I.R. 1971 S.C. 1828, which was cited on behalf of the appellant, could perhaps be distinguished on facts, I am unable to reconcile the decision of this Court in the case of U. P. State Warehousing Corporation v. Chandra Kiran Tyagi, A.I.R. 1970S.C. 1244 with our view in the case before us. In Tyagi's' case as in the case before us, no express statutory provision was contravened by the impugned dismissal, but a rule, made under power conferred by statute, which protects the servant concerned from punishment by way of dismissal contrary to rule of natural justice, was violated. If a guaranteed "statutory status" means only an express statutory protection, such as the one found in Art. 311 of the Constitution, and a rule made under a statutory power is not enough to confer it, there was none either in Tyagi's' case or in the case before us." 8. These observations are the sheet-anchor of the petitioner's contention that the principle laid down in Chandra Kiran. Tyagi's' case should not govern the question before us. We are unable to agree with the submission. 9. These observations are the sheet-anchor of the petitioner's contention that the principle laid down in Chandra Kiran. Tyagi's' case should not govern the question before us. We are unable to agree with the submission. 9. Neither the Act nor the Rules made thereunder by the State Government give protection to employee of the State Warehousing Corporation constituted under the Act. The Corporation is an autonomous body carrying on business as any other private body except that in matters of policy it acts under the control of the State Government. As already observed in the foregoing, it is not a Corporation concerned with implementing any law which affects in any manner any member of the public. Nor does the Act contain provision which empowers the Corporation to issue directions, the disobedience of which is punishable as an offence a test applied by the Supreme Court in holding the State Electricity Board a "state" for the purpose of Art. 12 of the Constitution See Rajasthan State Electricity Board v. Mohan Lal, A.I.R. 1967 S.C. 1857. The municipal corporations stand, however, on a different footling. The municipal corporation is endowed with legislative sovereignity the exercise of which has no limits so long as it is within the objects and trust for which the power is conferred. The municipal corporations are political sub-divisions of the State' and they are subject to be changed, modified or destroyed as the exigencies of the public interest may demand. The State can overrule their action whether it is deemed unwise or unjust or even abolish them altogether in the legislative discretion. As observed in Kurse v. Johnson, (1908) 2 Q.B. 91. "a bye-law (in the case of a county council) is an ordinance affecting the public or some portion of the public imposed by some authority clothed with the statutory powers or something to be done or not to be done and accompanied by some sanction or penalty for its non-observance. It necessarily involves restriction of liberty of action by persons who come under its operation as to acts which, but for the bye-law. they would be free to do or not to do as they pleased. It necessarily involves restriction of liberty of action by persons who come under its operation as to acts which, but for the bye-law. they would be free to do or not to do as they pleased. Further, it involves this consequence that if validly made-, it has the force of law within the sphere of its legitimate operation." In making regulations a State Warehousing Corporation does neither act as a delegate of the Legislature nor do the regulations effect or abridge the rights of others not concerned with the affairs of the Corporation. In that respect they have not the force of law. In such cases, as laid down in the majority opinion, the principle of pure master and servant contractual relationship has full application. Viewed in these aspects, the majority opinion does not militate against the ratio underlying Chandra Kiran Tyagi's case. Consequently overruling the contention advanced by counsel for the petitioner and acting upon the authority in U. P. State Warehousing Corporation v. Chandra Kiran Tyagi, A.I.R. 1970 S.C. 1244 we hold that a writ cannot issue against the Corporation, the petitioner's remedy being in a suit for damages. 10. Counsel far, the petitioner has next urged that the observations made by the Supreme Court in Chendra Kiran Tyagi's case should he confined in their application to a suit brought in a civil court for the purpose and that they should not be extended to the exercise of jurisdiction under Art. 226 of the Constitution. We are unable to agree. It is well established that you cannot do that indirectly which you are prohibited from doing directly (see Madden v. Nelson and Fort Cheppard Ry. Co., 1899 A. C. 626 and the Attorney General of Sakkat chewan v. Attorney General of Canada, A.I.R. 1949 P.C. 190 at p. 193. If because of the provisions of Section 21(b) of the Specific Relief Act it is not possible to order the re-instatement of the employee or to enforce the contract of employment, it is not possible to achieve the same result by the quashing of the order of dismissal and thus force the employer to reinstate the petitioner. Mandamus does not supersede legal remedies but rather supplies the want of such remedies. Mandamus does not supersede legal remedies but rather supplies the want of such remedies. It is a supplementary remedy to be used only where the party has a clear legal right and no other appropriate redress to prevent a failure of justice is available. Unless there is violation of a public or a statutory duty in the performance of which the petitioner has sufficient legal interest, no mandamus can issue. It cannot be substituted for a decree of specific performance of equity. We, therefore, see no force in this contention. 11. Counsel for the petitioner has next canvassed upon the basis of the observation in Chandra Kiran Tyagis case it is not in dispute that in this case the authority who can pass an order of dismissal has passed the same that the impugned of order having been passed by the Deputy Managing Director, who was not the appointing authority, the rule laid down by the Supreme Court is inapplicable. We find considerable difficulty in accepting the contention which in the main is founded upon the alleged breach of Regulations 11(1) and (2) of the Staff Regulations. When the terms and conditions of service mentioned in the Regulations have proprio vigors no force of law and when the employees of the Corporation have not been given statutory protection of status, on the mere fact that the impugned termination was made by a person other than the appointing authority it cannot he said that it has acted in breach of any mandatory provision of the Act resulting in the order being declared as void or ultra vires. 12. Coming to the merits of the case, the petitioner is unable to show that he was at any stage appointed in a substantive vacancy; he was appointed as a Clerk in a stop-gap arrangement on 25th June, 1966 which was continued by Annexure 2 (dated 5th September, 1966). Annexure 2 states that the petitioner was to continue in the same capacity in which he was appointed on 25th June, 1960. That being so, Clause (2) of Regulation 11 is not applicable. Annexure 2 states that the petitioner was to continue in the same capacity in which he was appointed on 25th June, 1960. That being so, Clause (2) of Regulation 11 is not applicable. Under the Regulations the appointing authority of the post of the category, to which the petitioner belonged, was the Managing Director, but on the date the impugned order was made, the Deputy Managing Director had been authorised by the Executive Committee (Annexure A-2) to appoint staff of various categories including the category to which the petitioner belonged. The petitioner contended that under the Regulations the ap- Board of Revenue by way of pointing authority alone could terminate his Services and the pointing authority under the Regulations continued to be the Managing Director and, therefore, there was, a breach of Regulation 11(1). The Corporation has not produced, documents to show that on the date of the order in question Sri Khazan Singh was officiating as Managing Director. But since the Corporation had undoubtedly the power to appoint and by implication the power to remove its employees (vide Section 23(1) of the Act), the termination of the services of the petitioner was with jurisdiction and if it was wrongful in the sense of its being in breach of the terms and conditions which governed his relationship with the Corporation, he was only entitled to damages and not to the declaration that his removal was null and void. 13. In the result, the petition fails with costs and the Rule is dismissed.