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1984 DIGILAW 304 (KER)

Rajan Nair v. General Manager Indian Naval Canteen Service Bombay

1984-10-30

K.P.RADHAKRISHNA MENON

body1984
JUDGMENT K.P. Radhakrishna Menon, J. 1. By Ext. P1 order dated 18-7-1981, the petitioner was appointed as Salesman cum Assistant Accountant in the Cochin unit of the Indian Naval Canteen Service, for short 'I.N.C.S.', on a temporary basis with effect from 28-7-1981. The petitioner joined the service, the same day. 2. While in service, on 29-10-1981, the 1st respondent issued Ext. P2 order terminating the service of the petitioner with effect from 1-11-1981. However, even before the order came into force, the 1st respondent issued another order Ext. P3 dated 30-10-1981, appointing the petitioner again on a temporary basis with effect from 3-11-1981. Before the expiry of the said period of appointment, the 1st respondent passed yet another order, Ext. P4, dated 30-1-1982 terminating the service of the petitioner with effect from 31-1-1982. On 30-1-1982 itself the 1st respondent issued Ext. P5 order re-appointing the petitioner with effect from 2-2-1982. By Ext. P6, the 1st respondent again terminated his service with effect from 8-4-1982. 3. The challenge in this Original Petition is against Ext. P6. 4. The learned counsel for the petitioner contended that in as much as I.N.C.S. in fact is carrying on commercial activities it is an industry within the meaning of S.2(j) of the Industrial Disputes Act, for short the Act, and the petitioner, therefore, is a workman within the meaning of S.2(s) of the Act. The termination of service by Ext. P6 is retrenchment as defined in S.2(oo) of the Act and since the retrenchment is effected without complying with the provisions of S.25F, the petitioner is entitled to a declaration that he continued to be in the service of the Ist respondent and consequently to reliefs like reinstatement to the service with arrears of salary, the counsel further submits. In expansion of this argument, the learned counsel contended that though the service of the petitioner under the 1st respondent was apparently not continuous, the same must, for the purpose of the Act, be treated as continuous because there was no dispute that he had worked for more than 240 days during the. period of 12 calendar months, under the 1st respondent by virtue of orders Exts. P1, P3 and P4. The petitioner therefore is entitled to the issue of a writ of certiorari quashing Ext. period of 12 calendar months, under the 1st respondent by virtue of orders Exts. P1, P3 and P4. The petitioner therefore is entitled to the issue of a writ of certiorari quashing Ext. P6 followed by a direction to the respondents to treat him as continuing in service and also to give him all benefits including pay and allowances. 5. The Central Government, Pleader appearing on behalf of the respondents, raised various contentions. He submitted that the writ petition is not maintainable for the sole reason that I.N.C.S. is not a 'State' within the meaning of Art.12 of the Constitution of India. According to him, it is not a department of the Central Government. He submits that it is neither a Governmental agency nor an instrumentality of the Government so as to say that it comes within the meaning of Art.12 of the Constitution of India. The learned counsel further submitted that whatever the position be in regard to the contentions raised by the petitioner that I.N.C.S. is a State, the same cannot be said to be an establishment which satisfies the requirements of an industry within the meaning of S.2(j) of the Act. In this connection, he brought to my notice a Division Bench ruling of this Court in WA No. 289 of 1971 where I.N.C.S. has been held to be not an industry. In view of this pronouncement, the counsel submits, the point in issue is no more res integra and therefore the question does not require to be considered. Yet another argument of the Central Govt. Pleader is that assuming I.N.C.S. is an industry, the petitioner is not entitled to any of the reliefs claimed because the impugned order cannot be said to be one issued in violation of S.25F of the Act. In this connection, he referred to the orders, Exts. P3, and P5, and submitted that a perusal of these orders would establish that the petitioner had not completed 240 days of continuous service under the establishment because these documents positively showed the issue of separate and fresh orders of appointment on each occasion when the service of the petitioner was terminated by Exts. P2 and P4. P3, and P5, and submitted that a perusal of these orders would establish that the petitioner had not completed 240 days of continuous service under the establishment because these documents positively showed the issue of separate and fresh orders of appointment on each occasion when the service of the petitioner was terminated by Exts. P2 and P4. The further contention raised by the learned Central Government Pleader is that the Original Petition is liable to be dismissed on the short ground that the petitioner has approached this Court without exhausting the efficacious alternative remedies that are available for him under the Industrial laws of the country. 6. I shall deal with these various contentions separately. 7. I shall first deal with the question whether I.N.C.S. is a State within the meaning of Art.12 of the Constitution of India. I.N.C.S. is established under the orders of the Government of India and the administration of the establishment is vested in a Board constituted under Clause.7 of 'the Indian Naval Service Constitution', for short the 'Service Constitution' (This contains clauses relating to the constitution of I.N.C.S. and its working), a part of the Indian Naval Canteen Regulations, for short the Regulations. Clause.7 reads: "7. All property and rights of the Organisation shall be vested in the Indian Naval Canteen Control Board constituted as follows and held by it on trust for the objects of the Organisation: Chief of Logistics - chairman Director of Supply Branch - Member Director of Personnel Service " Director of Clothing & Victualling " Dy. Director of Clothing & Victualling " A Representative of Ministry of Finance (Defence/Navy) " A Representative of Ministry of Defence (Navy) " An officer to be appointed by Naval Headquarters Member/Secre." This clause indicates that the Government through its officers is virtually administering the I.N.C.S. Clause.3 of the Service Constitution provides that the net profit earned by the I.N.C.S. shall be held by it in trust for and to be paid to the I.N. amenities fund to be used for such benevolent or amenity purposes as the Chief of Naval Staff may deem fit. Clause.6 prescribes that the objects for which I.N.C.S. has been established, "may be extended and the constitution of the organisation altered under the orders of the Chief of the Naval Staff." It is seen from Clause.11 that the Board constituted under Clause.7 shall submit an annual report to the chief of the Naval Staff, containing a full statement on the state of the organisation together with the balance sheet and the profit and loss account for the year. Clause.0212 of the 'regulations of the business contained in Chap.2 of the 'regulations', provides that the member secretary of the Board will be an officer appointed by the Naval Head Quarters. Clause.0411 of Chapter IV of the regulations contains provisions to the effect that credit can be allowed to serving officers subject to monetary limits laid down by Naval Head Quarters. Regarding the entitlement of the employees for holidays this is what the regulations have provided: "The employees will be entitled to such number of holidays not exceeding 16 days and 2 days restricted holidays as decided by the local Naval authorities." A reference in this context to the pages of The Non-statutory Regulations, Part I, compiled by the Government of India, Ministry of Defence, for the Navy, is relevant. Chap.28 thereof relates to "Canteens and non public funds". Sub clause (2) of Clause.2802 of Chap.28 provides that "The canteen shall operate as a business concern only, subject to such instructions as may be issued by the Chief of the Naval Staff from time to time". Clause.0103 of Chap.1, containing General Regulations of the above Non-statutory Regulations for the Navy reads: "Although for convenience of reference these Regulations are divided into chapters, it shall be distinctly understood that every direction contained therein shall be considered as applicable to all whom it may concern, notwithstanding that it may appear in a chapter addressed to a particular class of officers." 8. The facts mentioned above would clearly show that I.N.C.S. is an establishment belonging to or in any event administered and controlled by the Indian Navy, one of the three wings of the Defence Department, and thus a 'naval establishment' as defined in sub-section (12A) of S.3 of the Navy Act, 1957. The facts mentioned above would clearly show that I.N.C.S. is an establishment belonging to or in any event administered and controlled by the Indian Navy, one of the three wings of the Defence Department, and thus a 'naval establishment' as defined in sub-section (12A) of S.3 of the Navy Act, 1957. The said definition reads: " 'Naval establishment' means an establishment belonging to or under the control of the Indian Navy whether within or without India." Being a naval establishment it is part of the Government itself. 9. The above mentioned provisions in the Regulations read along with S.3(12A) of the Navy Act clearly show that in any event the control of the Central Government permeates to every region of administration of the establishment (I.N.C.S.) making it an instrumentality or agency of the Central Government (if not a wing of Navy itself) and as such 'State' within the meaning of Art.12 of the Constitution. I am fortified in this view by the decision of the Supreme Court in Som Prakash Rekhi v. Union of India, 1981 (1) SCC 449 . The Supreme Court has stated thus: "Art.12 is a special definition with a broader goal. Far from restricting the concept of State it enlarged the scope to embrace all authorities under the control of government. Any authority under the control of the Government of India comes within the definition of the State under Art.12." (head-note emphasis supplied) It can thus be seen that if an establishment is under the control of the Government, it will bean instrumentality or agency of the said Government and hence a State within the meaning of Art.12 of the Constitution. In B. S. Minhas v. Indian Statistical Institute and others, 1983 (4) SCC 582 , the Supreme Court while reiterating the principle enunciated in its earlier pronouncements has held that if "the control of the Central Government is deep and pervasive and, therefore, to all intents and purposes, it is an instrumentality of the Central Government and as such is am 'authority' within the meaning of Art.12 of the Constitution. It is, therefore, subject to the constitutional obligations under Art.14 and 16 of the Constitution." Yet another decision of the Supreme Court which lends support to the above view is, Sukhdev Singh v. Bhagatram, 1975 (1) SCC 421 : AIR 1975 SC 1331 . It is, therefore, subject to the constitutional obligations under Art.14 and 16 of the Constitution." Yet another decision of the Supreme Court which lends support to the above view is, Sukhdev Singh v. Bhagatram, 1975 (1) SCC 421 : AIR 1975 SC 1331 . Interpreting the relevant provisions of the Life Insurance Corporation Act and the Industrial Finance Corporation Act, Ray C.J. has held thus: "The structure of the Life Insurance Corporation indicates that the Corporation is an agency of the Government carrying on the exclusive business of life insurance. Each and every provision shows in no uncertain terms that the voice is that of the Central Government and the hands are also that of the Central Government ............ These provisions of the Industrial Finance Corporation Act show that the Corporation is in effect managed and controlled by the Central Government." 10. The learned counsel appearing on both sides have drawn my attention to a number of decisions both of the Supreme Court and of this Court in addition to those, I have discussed in support of their respective arguments relating to the question whether I.N.C.S. is a State. The decisions of the Supreme Court already discussed, cover the point in issue and therefore it is unnecessary to burden this judgment with citations from those decisions. 11. The factors mentioned above show that I.N.C.S. is an establishment directly under the control of the Indian Navy and hence is a part of the Defence Department of the Central Government. In other words, it is a representative or proxy of the Government and thus a Governmental agency or instrumentality, as understood in law. I.N.C.S. accordingly is a State within the meaning of Art.12 of the Constitution of India. 12. Before I deal with another preliminary objection raised by the Central Government Pleader that the Original Petition is not maintainable for the reason that the petitioner has approached this Court without exhausting the efficacious alternative remedy, I shall deal with the question whether I.N.C.S. is an 'industry'. 12. Before I deal with another preliminary objection raised by the Central Government Pleader that the Original Petition is not maintainable for the reason that the petitioner has approached this Court without exhausting the efficacious alternative remedy, I shall deal with the question whether I.N.C.S. is an 'industry'. The learned Central Government Pleader in this connection called my attention to a judgment of this Court in State of Kerala v. Secretary, Indian Naval Canteen Control Board and others, W.A. No. 298 of 1971, where this Court has held that "it is not possible to say that the occupation of the Naval Canteen Service is an enterprise or a trade or business in a commercial sense." In short this Court has held that it is not an industry. To arrive at the (said decision, this Court has relied on the decisions of the Supreme Court reported in Madras Gymkhana Club Employees' Union v. Management, AIR 1968 S.C. 554 , and S.J. Hospital, New Delhi v. K. S. Sethi, AIR 1970 SC 1407 . The aforesaid decisions however, have been overruled by a later decision of the Supreme Court reported in Bangalore Water Supply v. A. Rajappa, AIR 1978 SC 548 . Here it is enough if I refer to the following passage from the said decision: "We overrule Safdarjung ( AIR 1970 SC 1407 ), Solicitors' case ( AIR 1962 SC 1080 ). Gymkhana ( AIR 1968 SC 554 ), Delhi University ( AIR 1963 SC 1873 ), Dhanrajagiri Hospital ( AIR 1975 SC 2032 ) and other rulings whose ratio runs counter to the principles enunciated above, and Hospital Mazdoor Sabha ( AIR 1960 SC 610 ) is hereby rehabilitated." The Supreme Court in the said decision has also held that "even in departments discharging sovereign functions, if there are units which arc industries and they are substantially severable, then, they can be considered to come within S.2(j)." 13. Considered in the light of the above principle of law, I.N.C.S. must be held to be an industry. Sub clause (2) of Clause.2802 of Chap.28 of the Non-statutory Regulations declares that "The canteen shall operate as a business concern only ....". In the light of the above, I hold, I.N.C.S. is an industry within the meaning of S.2(j) of the Act. 14. Sub clause (2) of Clause.2802 of Chap.28 of the Non-statutory Regulations declares that "The canteen shall operate as a business concern only ....". In the light of the above, I hold, I.N.C.S. is an industry within the meaning of S.2(j) of the Act. 14. Confronted with this situation, the learned Central Government Pleader argued that assuming I.N.C.S. is an industry, the petitioner is not entitled to any reliefs for the reason that the order impugned cannot be said to be an order passed in violation of S.25F of the Act. In expansion of this argument, he submitted that though the petitioner worked for more than 240 days in the service of I.N.C.S., the said service cannot be said to be 'continuous service' and will not qualify for any relief under S.25F. He referred to the definition of continuous service under S.25B which reads: "25B. Definition of continuous service For the purpose of this chapter, (1) *** *** *** (1) *** *** *** (2) Where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer, (a) for a period of one year, if the workman, during a period of twelve calender months proceeding the date with reference to which calculation is to be made, has actually worked under the employer for not less than (1) *** *** *** (1) *** *** *** (ii) two hundred and forty days, in any other case; (1) *** *** *** (1) *** *** *** He submitted that in the present case Exts. P1, P3 and P5 would show that the petitioner was not employed in the service of the I.N.C.S. continuously during the relevant period, but was working only on the basis of fresh appointments made for fresh period, as evidenced by Exts. P1, P3 and P5. If that be the position, it is further submitted, the period during which he worked in the service of I.N.C.S. can be treated as three different periods, each one independent of the other, as if he is a fresh appointee under each of the orders of appointment. I am afraid, this approach is not justified in the circumstances of the case. The establishment never had in view to treat the appointments under Exts. I am afraid, this approach is not justified in the circumstances of the case. The establishment never had in view to treat the appointments under Exts. P1, P3 and P5 as fresh appointments; on the other hand, Exts. P2 and P4 do establish that I.N.C.S. wanted the petitioner to continue uninterruptedly; or else one fails to see why these orders were issued before the expiry of the period stipulated in the orders of appointment, Exts. P1 and P3. These orders would show that they were issued before the orders of termination came into force. I do not think I need discuss this aspect any more, in view of the decision of the Supreme Court in S. K. Verma v. Industrial Tribunal cum Labour Court, New Delhi, AIR 1981 SC 422 . The relevant passage reads thus: "9. *** *** *** These changes brought about by Act 36 of 1964 appear to be clearly designed to provide that a workman who has actually worked under the employer for not less than 240 days during a period of twelve months shall be deemed to have been in continuous service for a period of one year whether or not he has in fact been in 3 such continuous service for a period of one year. It is enough that he has worked for 240 days in a period of 12 months; it is not necessary that (he should have been in the service of the employer for one whole year. So we hold that Usha Kumari and Madhu Bala are in the same position as the other appellants." The above principle has been reaffirmed by the Supreme Court in a later decision in Mohan Lal v. Management, Bharat Electronics Ltd., AIR 1981 SC 1253 , where it has been held thus: "....... Therefore, both on principle and on precedent it must be held that S.25B(2) comprehends a situation where a workman is not in employment for period of 12 calendar months, but has rendered service for a period of 240 days within the period of 12 calendar months commencing and counting backwards from the relevant date, i.e., the date of retrenchment. If he has, he would be deemed to be in continuous service for a period of one year for the purpose of S.25B and Chapter VA." 15. If he has, he would be deemed to be in continuous service for a period of one year for the purpose of S.25B and Chapter VA." 15. What is insisted upon under law as interpreted by the Supreme Court is rendering of service for a period of 240 days within the period of 12 calendar months commencing and counting backwards from the date of retrenchment. The petitioner satisfies the requirements of S.25F read with S.25B and hence he is entitled to the benefits of S.25F of the Act. 16. Now I shall deal with the preliminary objection which I have already referred to, namely, that the petition is not maintainable for the reason that the petitioner approached this Court without exhausting the efficacious alternative remedies provided for under the various industrial enactments. The learned Central Government Pleader in this connection cited the decision of the Supreme Court in U. P. Warehousing Corporation v. Vijay Narayan, AIR 1980 SC 840 , where the Supreme Court has stated as follows: "18. There appears to be force in this contention. It must be remembered that in the exercise of its certiorari jurisdiction under Art.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 of the way as one which should not be used to the detriment of the writ petitioner. In other words, the offending order or the impugned illegal proceeding is quashed and put 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 Art.226 of the Constitution, over the orders and quasi judicial proceedings of an administrative authority -not being a proceeding under the industrial labour law before an industrial labour tribunal- culminating in dismissal of the 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 employee full back wages (although as a 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. ....... He directly moved the High Court for the exercise of its special jurisdiction under Art.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 backwages, 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 it 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 twofold reasons, we are of opinion that the High Court was in error in directing payment to the employee full back wages." (emphasis supplied) 17. This decision has no application to the facts of the case. There are indications in the decision that the service of an employee governed by industrial laws, is different from the service of 'public employee' and it was after noticing the difference, the Supreme Court held that the High Court was in error in directing payment of full back wages. This decision has no application to the facts of the case. There are indications in the decision that the service of an employee governed by industrial laws, is different from the service of 'public employee' and it was after noticing the difference, the Supreme Court held that the High Court was in error in directing payment of full back wages. This decision therefore is not an authority supporting the preliminary objection of the learned counsel. On the other hand, a decision of this Court in Asst. Personnel Officer, Southern Railway v. K. T. Antony, 1978 (2) LLJ 254, has held: "4. Counsel for the appellant contended that, even if the termination be illegal, the respondent has an alternative remedy by way of reference of the dispute to the Industrial Tribunal, and, therefore, a petition under Art.226 of the Constitution would not be entertainable. We are unable to accept this argument. Reference of Industrial dispute to the Tribunal can only be at the instance of the Government on certain conditions mentioned in S.10 of the Act. We cannot regard it as an alternative remedy available to the respondent .........." This has been followed in a later decision of this Court in John Fernandez v. Executive Engineer, 1978 KLT 857 . In view of the Division Bench ruling of this Court, I am of the view that the preliminary objection raised by the learned counsel for the 1st respondent is not sustainable. The same is rejected. 18. The learned Government Pleader relying on U.P. Warehousing Corporation's case further submitted that in matters of employment, this Court in exercise of the jurisdiction under Art.226 of the Constitution shall not issue any order, other than an order declaring the validity of the retrenchment order, directing reinstatement with full back wages because those are matters that are directly coming within the jurisdiction of the Industrial Tribunal or Labour Courts. This argument at first blush is attractive; but going deep into the matter and understanding what the Supreme Court has laid down in the said decision, I have no hesitation to reject it. Here it is relevant to note that in the said decision the Supreme Court was considering the question relating to the dismissal of a "public employee" who was not entitled to the benefit of the industrial laws. Here it is relevant to note that in the said decision the Supreme Court was considering the question relating to the dismissal of a "public employee" who was not entitled to the benefit of the industrial laws. On the other hand, in matters coming under the industrial laws, the Supreme Court is of the view that the High Court will be justified if a direction is issued to reinstate the employee with back wages after declaring that the order terminating service is illegal and invalid. A recent ruling of the Supreme Court in L. Robert D'souza v. Executive Engineer, 1982 (1) SCC 645 , is to the point. In the said decision, the Supreme Court held thus: "......Accordingly, the termination of service in this case would constitute retrenchment and for not complying with pre-conditions to valid retrenchment the order of termination would be illegal and invalid. ..........................................Accordingly, we allow this appeal, set aside the order of the High Court and declare that the termination of service of the appellant was illegal and invalid and the appellant continues to be in service and he would be entitled to full back wages. ......" 19. The learned Central Government Pleader thereupon contended that the termination of service evidenced by Ext. P6 cannot be treated as a termination simpliciter, because the real basis of the termination is misconduct as stated by the 1st respondent in the counter affidavit I do not think that I will be justified in allowing the 1st respondent to raise such a contention in this proceedings under Art.226 of the Constitution, especially when such a case is not discernible from Ext. P6 order. Not even a notice had been sent to the petitioner appraising him of the alleged misconduct, so far. Whatever that be, I am of the view, that such order like Ext. P6 affecting the career of an employee cannot be considered in the light of the explanation subsequently given by the maker of the order or on his behalf by some other officer as to what was the reason for the termination of the service. 20. Accordingly, I quash Ext. P6 and declare that the petitioner continues in service. I further direct respondents 1 and 2 to treat the petitioner as if he is continuing in service and consequently to give him all the benefits he is entitled to, including pay and allowances. 20. Accordingly, I quash Ext. P6 and declare that the petitioner continues in service. I further direct respondents 1 and 2 to treat the petitioner as if he is continuing in service and consequently to give him all the benefits he is entitled to, including pay and allowances. In the result, the Original Petition is allowed. No order as to costs.