Hindustan Steel Ltd. v. Jai Pal Anand — 1986 DIGILAW 483 (CAL)

JUDGMENT This appeal directed against the judgment and decree dated 22nd March, 1975 passed in Title Appeal No. 70 of 1974 by the 2nd Court of the learned Additional District Judge, Burdwan affirming the judgment and decree passed by the learned Munsif, 1st Court, Durgapur in Title Suit No. 14 of 1973, is at the instance of the defendant appellant, M/s. Hindustan Steel Ltd. 2. Before I advert to the plaint case it is necessary and appropriate for me to write a few lines about the unfortunate manner by which the case of the appellant is presented before the courts below. It appears that the appellant did not produce the personal file of the plaintiff and thereby, the learned courts below were debarred to some extent from considering the nature of the order passed on the application for leave made by the plaintiff, respondent herein. The appellant being a Government undertaking company is required to act cautiously and carefully, particularly while dealing with the case of his employees. Employment of an employee in the Government undertaking company now coming within reach, sweep and amplitude of State within the meaning of Article 12 of the Constitution which is a sensitive issue. After all this affects the livelihood of an employee. It is also surprising that no effective steps were taken before final decision as regards the striking off the name of the plaintiff is arrived at. This is surely a very unfortunate chapter. It is desirable that the concerned appellant ought to have considered all the materials so far as the service record of the plaintiff vis-a-vis the connected applications for leave filed by him, but that was not done in objective manner. The consequence has and had adverse tale on the plaintiff. That gave rise to the filing of the suit in question. 3. The suit is for declaration and permanent as well as mandatory injunction. The prayer as made in the plaint reads thus : a) For a declaration that the order dated 10.5.72 and refusal to let the plaintiff resume his duty are illegal, void, inoperative bad in law, contrary to the provisions laid down in the Standing Orders and not binding on the plaintiff. b) That the plaintiff should be allowed to resume his duty. c) That the cost of the suit be allowed. b) That the plaintiff should be allowed to resume his duty. c) That the cost of the suit be allowed. d) Any other relief or reliefs which the court deems fit and proper be allowed. 4. The plaintiff is a permanent employee of the defendant, Hindustan Steel Ltd. ('appellant' for short) since 1966. On December 20, 1971 the plaintiff fell ill and he went to Health Centre. The doctor declared him unfit to join duty for two days namely, 21st and 22nd December, 1971. On December 21, 1971 the plaintiff on receiving a message about his father's serious illness left for Delhi. On or about December 30, 1971 a telegram was transmitted to the plaintiff at his residential address at Durgapur informing about the illness of his father. One Pradip Sen Gupta received the said telegram and applied for fifteen days' leave on behalf of the plaintiff. Plaintiff's father died on January 14, 1972 and he informed the appellant to extend his leave by twenty days. Thereafter the plaintiff himself fell ill, and he was treated by Dr. Shambhu Nath Mohla of New Delhi. He sent an application for leave under certificate of posting. Latter, he received a letter dated May 10, 1972 discharging him from service by the appellant. It is alleged that the letter of discharge is illegal being contrary to principles of natural justice and the certified Standing Orders of the defendant company. It is also contended that the certified Standing Orders were also not valid inasmuch as these have not been certified by an officer of the State Government but by an officer appointed by the Central Government. The appellant contested the suit by filing a written statement. It is claimed and contended that the plaintiff who was continuously absent from his duty from December 20, 1971, was allowed the maximum leave admissible to him from December 20, 1971 to April 17, 1972. The plaintiff did not apply for leave beyond 17.4.72. He did not resume his duty within fifteen days and as such, his services automatically came to an end. By an order dated May 10, 1972 the name of the plaintiff was struck off from the rolls. This order of May 10, 1972 is valid and legal. The plaintiff did not apply for leave beyond 17.4.72. He did not resume his duty within fifteen days and as such, his services automatically came to an end. By an order dated May 10, 1972 the name of the plaintiff was struck off from the rolls. This order of May 10, 1972 is valid and legal. It is pleaded that the Standing Orders were rightly certified by the Central Government which is the appropriate authority for the defendant company under Industrial Employment and Standing Orders Act, 1946. It was pleaded before the trial court that the plaintiff had no cause of action and his suit was liable to be dismissed. The following issues were framed by the trial court in the suit :– 1. Is the suit maintainable as framed ? 2. Is the order dated 10.5.72 terminating plaintiff's services legal and valid ? 3. Is the plaintiff entitled to get the reliefs prayed for ? 5. It is admitted fact that the appellant received a number of applications dated 30.12.71, 5.3.72, 7.4.72, and 5.5.72. Considering the relevant service rule namely, clauses 16(i), (ii), (iii), (iv) of the Standing Orders of Hindustan Steel Limited, Durgapur Steel Plant, West Bengal and also the applications as mentioned above, the learned trial court reached its finding that the extension of leave was dealt with and disposed of according to clauses (iv) and (v) of Rule 16 of the Standing Orders. It is also recorded by the trial court that D.W. 1 was not able to say what orders were passed on the two applications received from the plaintiff. While reaching his conclusion the learned Munsif held that besides clause (x) of Rule 16, in his opinion, envisages cases where the worker remains absent for more than fifteen days after the leave originally sanctioned to him or subsequently extended. In the instant case the defendant did not take any action on the several leave applications received from the plaintiff. The defendant waited until the 10th May, 1972, that is the date more than fifteen days after the leave admissible to the plaintiff had expired. The trial court held that the plaintiff was not intimated that he was not entitled to any leave after April 17, 1978. The defendant waited until the 10th May, 1972, that is the date more than fifteen days after the leave admissible to the plaintiff had expired. The trial court held that the plaintiff was not intimated that he was not entitled to any leave after April 17, 1978. The learned trial Court agreed with the view of the learned lawyer for the plaintiff that the order dated May 10, 1972 sanctioning the leave was a more device to bring the case within the mischief of clause (x) of Rule 16. On a careful consideration of all the facts and materials on record, the learned Munsif held that Clause (x) of Rule 16 of the certified Standing Orders is inapplicable in the facts and circumstances of the case and the impugned order dated May 10, 1972 striking off the name of the plaintiff from the rolls of the appellant company is illegal and invalid. The learned Munsif also considered that the termination of plaintiff's service without giving him an opportunity to show cause was illegal and against principles of natural justice and he also considered the principles as laid down in the case of (1) Jai Shankar Prosad v. State of Rajasthan, AIR 1966 SC 492 and other cases reported in (2) AIR 1966 Patna 229, (3) AIR 1967 Orissa 171 and (4) AIR 1970 Tripura 20 and held that those principles are applicable to the present case and the order dated May 10, 1972 cannot but be termed as bad in law and against the principle of natural justice particularly when absence from duty is of the misconduct according to Rule 29 of the Standing Orders. Accordingly, Issue Nos. 2 and 3 were decided in favour of the plaintiff. However, the learned Munsi decreed the suit by declaring that Office Order Pt.-IV No. BF/103 dated 10/12th May, 1972 issued by the Superintendent, Blast Furnace of the defendant company is illegal and not binding upon the plaintiff. 6. Against the judgment and decree of the trial Court, the appellant preferred an appeal. The learned lower appellate Court concurred with the finding of the learned trial Court. 6. Against the judgment and decree of the trial Court, the appellant preferred an appeal. The learned lower appellate Court concurred with the finding of the learned trial Court. Apart from holding that the impugned order dated May 10, 1972 is illegal and inoperative, the learned lower appellate court held that in the present case, in the matters of such classification, leave and termination of employment, a statutory status, was given to the plaintiff who was, without doubt, a workman of an industrial establishment. The learned lower appellate Court further held that D.W. 1 S. R. Sengupta was not informed at all with regard to his two successive applications for further leave that further leave beyond 17th April, 1972 was not permission and was consequently not granted. It further appears that there is no evidence, upon which the appellant can lay its hands, to indicate that the applications for leave or extension of leave which were admittedly received from the plaintiff were dealt with or disposed on in accordance with the requirements of Clauses (iv) and (v) of Rule 16 of the Standing Orders of Hindustan Steel Ltd. It would be necessary to keep in mind that no invocation of clause (x) of the aforesaid Rule 16 was permissible without prior compliance with all the requirements of clauses (iv) and (v) of the said Rule, and accordingly the lower appellate court concluded that in the facts and circumstances of the present case, the learned Munsif was not wrong in granting a declaration as prayed for and that in any event, the learned Munsif was not wrong in holding that the provisions of clause (x) of Rule 16 of the Certificate Standing Orders were not applicable to the facts of the present case. Accordingly the appeal was dismissed as there was no ground for interference with the same. 7. The question of law sought to be raised by the appellant is that the learned Judge erred in law that the respondent was conferred with any statutory status became of certification of Standing Orders of the appellant. This issue as raised in the grounds of appeal and the contention of the appellant is warranted to be rejected by reason of the Supreme Court decision in the case of (5) Central Inland Water Transport Corporation Ltd. & Anr. This issue as raised in the grounds of appeal and the contention of the appellant is warranted to be rejected by reason of the Supreme Court decision in the case of (5) Central Inland Water Transport Corporation Ltd. & Anr. v. Braja Nath Ganguly & Anr., reported in AIR 1986 SC 1571 , as it has no merit at all. It is held in the aforesaid judgment as follows :– "Where an interpretation clause defines a word to mean a particular thing, the definition is explanatory and prima facie restrictive ; and whenever an interpretation clause defines a form to include something, the definition is extensive. While an explanatory and restrictive definition confines the meaning of the word defined to what is stated in the interpretation clause, so that wherever the word defined is used in the particular statute in which that interpretation clause occurs, it will bear only that meaning unless where, as is usually provided, the subject or context otherwise requires, an extensive definition expands or extends the meaning of the word defined to include within it what would otherwise not have been comprehended in it when the word defined is used in its ordinary sense. Art. 12 uses the word "includes". It thus extends the meaning of the expression "the State." So as to include within it also what otherwise may not have been comprehended by that expression when used in its ordinary legal sense. Art. 12 defines the expression "the State" while the other Articles of the Constitution such as Article 152 and Article 308, and clause (58) of Section 3 of the General Clauses Act defined the term "State". The deliberate use of the expression "the State" in Article 12 as also in Art. 36 would have normally shown that this expression was used to denote the State in its ordinary and Constitutional sense of an independent or sovereign State and the inclusive clause in Art. 12 would have extended this meaning to include within its scope whatever has been expressly set out in Art. 12. The definition of the expression "the State" in Art. 12 is, however, for the purposes of Parts III and IV of the Constitution. The definition of the expression "the State" in Art. 12 is, however, for the purposes of Parts III and IV of the Constitution. The contents of these two parts clearly show that the expression "the State" in Art. 12 as also in Art. 36 is not confined to its ordinary and Constitutional sense as extended by the inclusive portion of Art. 12 but is used in the concept of the State in relation to the Fundamental Rights guaranteed by Part III of the Constitution and the directive principles of State Policy contained in Part IV of the Constitution which principles are declared by Art. 37 to be fundamental to the governance of the country and enjoins upon the State to apply in making laws." 8. If there is an instrumentality or agency of the State which has assumed the grab of a Government Company as defined in Section 617 of the Companies Act, it does not follow that it thereby ceases to be an instrumentality or agency of the State. For the purpose of Art.12 one must necessarily see through the corporate veil to ascertain whether behind that veil is the face of an instrumentality or agency of the State. Hindustan Steel Ltd. squarely fails within these observations and it also satisfies the various tests which have been laid down. Merely because it has so far not the monopoly of Hindustan Steel Ltd. is not sufficient to divest it of its character of an instrumentality or agency of the State. Hindustan Steel Ltd. is nothing but the Government operating behind a corporate veil carrying out a governmental activity and governmental functions of vital public importance. There can thus be no doubt that the Hindustan Steel Ltd. is "the State" within the meaning of Art.12 of the Constitution. The activities of the appellant are of great importance to public interest, concern and welfare and are activities of the nature carried on by a modern State and particularly a modern Welfare State. The rules of public undertakings covered by Art.12 of the Constitution have further been elucidated and illuminated in the judgment of the Supreme Court in the case of (6) O. P. Bhandari v. Indian Tourism Development Corporation & Ors., AIR 1986 Supreme Court 769. Indian Tourism Development Corporation is covered by definition of State within the ambit of Art. 12 of the Constitution of India. Indian Tourism Development Corporation is covered by definition of State within the ambit of Art. 12 of the Constitution of India. Applying the principles as laid down by the Supreme Court which are squarely and fairly applicable to the case of employee respondent, I hold that the plaintiff by reason of employment in the public sector acquires a statutory status. The finding of the lower appellate court, although made on a reading of different context of the Standing Orders ; cannot be disturbed on this ground as the appellant is a State as aforesaid and the employees are also entitled to claim protection of Articles 12, 14 and 16 of the Constitution of India. Though the law has been settled long after the judgment of the lower courts, even then change in law is to be taken into account and the decision must be reached in the light of the law as laid down by the Supreme Court in the aforesaid two decisions. I, therefore, find no substance in the ground as to non-conferms of statutory status upon the plaintiff as raised by the appellant. The finding of both the learned Courts below that the decision as contained in the order dated 10th May, 1972 is wholly illegal and in operative inasmuch as the decision to strike off the name of the plaintiff without giving an opportunity to show cause, is also illegal and without jurisdiction. Now, import of the expressed striking out is to be considered and examined. Striking off the name of a permanent employee in the facts and circumstances of the case ought to have been made after giving the plaintiff, respondent herein a reasonable opportunity of being heard. The appellant being State within the meaning of Art. 12 of the Constitution is required to adhere to the basic concept of fairness. Duty to act fairly is implicit in a case where the plaintiff is fastened with civil consequences. It is well settled that any order involving civil consequences must be made after following the rules of natural justice or, in other words, adherence to basic concept of fairness. The doctrine of fairness is a challenging advance in the field of judicial review. It is well settled that any order involving civil consequences must be made after following the rules of natural justice or, in other words, adherence to basic concept of fairness. The doctrine of fairness is a challenging advance in the field of judicial review. It is some what unfortunate that the appellant did not at all act objectively without considering the pros and cons of the entire matter how and in what circumstances the order dated May 10, 1972 could have been passed at the time when the appellant was not informed that his leave had been granted till 17th April, 1972. The appellant was not informed of the decision of the authority concerned on the leave applications made by him on 5th March, 1972, 7th April and 5th May, 1972. In the absence of any communication to the plaintiff in this regard it demonstrates that the appellant initially decided to take steps under clause (iv) and (v) of Rule 16 of the Standing Orders. It is also very strange and startling feature of the case. Personal service file and leave application filed by the plaintiff were not placed before the courts below. The contention of Mr. Dutt, learned Advocate appearing for the appellant, is that the Courts below omitted to note the express pleading of the appellant in paragraph 8 of its written statement that by a letter dated 6th/7th February, 1972 the plaintiff was directed by the Superintendent, Blast Furnace, Durgapur Steel Plant to join his duties within three days from the date of receipt of the said letter. Such ground or plea as raised before this Court, is not available to the appellant inasmuch as the letter dated 6th/7th February, 1972 was not made one of the exhibits in the case. How the court is expected to deal with the said letter when the same was not made one of the exhibits. Assuming but not admitting that the said letter was one of parts of the exhibits, no explanation could be found, as held by the lower courts as to the decision taken on the leave application made to the authority between the period 21st December, 1971 and 17th April, 1972. Assuming but not admitting that the said letter was one of parts of the exhibits, no explanation could be found, as held by the lower courts as to the decision taken on the leave application made to the authority between the period 21st December, 1971 and 17th April, 1972. If the leave is allowed till 17th April, 1972, the authority concerned could not straightway resort to clause (x) of Rule 16 without informing the plaintiff that he would not be granted any leave after 17th April, 1972 and action would be taken against him in the event the plaintiff failed to report for duty upon expiration of 17th April, 1972. Neither any communication was made, nor any letter was sent to the plaintiff as regards the grant of leave upto 17th April, 1972. In the absence of any communication to the plaintiff, the lower courts rightly held that clause (x) of Rule 16 in no manner has any application. The action of the appellant in striking off the name of the plaintiff from the rolls issues penal consequences. In this connection reference may be made to the judgment reported in the case of (7) State of Punjab v. K. R. Erry & Others, AIR 1973 SC 834 . The striking off the name of the plaintiff is not only involve civil consequence but also it amounts to loss of livelihood of the plaintiff and in that view of the matter, it is incumbent upon the appellant to rigidly adhere to the principles of natural justice by affording reasonable opportunity to the plaintiff why his name should not be struck off from the master rolls. But admittedly, that is not done. Without following the procedures as indicated above, the appellant struck off the name of the plaintiff from the master rolls and the authority concerned reached its decision without consideration of the relevant facts that the appellant was not informed of the grant of leave till 17th April, 1972 nor was he informed of the decision of the authority on the leave applications made by him from time to time. Failure to observe the rules of natural justice vis-a-vis to act fairly goes to the root of the matter and thereby the decision of the concerned authority as contained in the order dated May 10, 1972 cannot but be considered as null and void. Failure to observe the rules of natural justice vis-a-vis to act fairly goes to the root of the matter and thereby the decision of the concerned authority as contained in the order dated May 10, 1972 cannot but be considered as null and void. I feel intened to refer to the judgment of the Supreme Court in the case of (8) S. D. Singh v. Reserve Bank of India, 1985 Supreme Court Cases (Labour & Service) 975. Although the said judgment deals with striking of the name from the rolls of Tikka Mazdoor helping the examiners of coin and notes appointed by Reserve Bank of India under sections 2(oo), 2A, 25B(2)(a)(ii), 25F, 25N and 25Q of the Industrial Disputes Act, but the principles decided there are illuminative and the same is helpfull and is materially culled for the purpose of reaching conclusion that striking off the name of the plaintiff, a permanent employee is ex facie arbitrary, illegal and inoperative. In paragraph 14 of the said judgment it is held that the Reserve Bank of India who should set a model for other employers being a prestigious institution, behaved towards its employees. Perhaps the Reserve Bank of India and its officers are not aware of the grave unemployment problem facing the youth of this country and also not aware of the fact that graduates, both boys and girls, sweep our roads and post-graduates in hundreds, if not in thousands, apply for the posts of peons. The Supreme Court held that it has been our sad experience to find employers trying to stifle the efforts of employees in their legitimate claims seeking benefits under the Industrial Law by tiring them out in adjudication proceedings raising technical and hyper-technical pleas. Most respectfully I accept the decision of the Hon'ble Supreme Court while dealing with the present case. In my opinion, non-consideration of the materials on record raises a substantial question of law. Apart from what have been held by me, I am inclined to place on record that the appellant while arriving at its decision dated May 10, 1972, conciously overlooked the relevant materials and passed the said order on irrelevant materials. Consideration of materials and non-consideration of relevant materials render the purported order dated May 10, 1972 as being wholly bad in law arid void ab initio. Consideration of materials and non-consideration of relevant materials render the purported order dated May 10, 1972 as being wholly bad in law arid void ab initio. I am fully conscious of the narrow compass within which exercise of the power under section 100 of the Code of Civil Procedure is to be effected. The effect of sections 100 and 101 read together is that a second appeal is competent only on the ground of a grave error in law or procedure and not merely on the ground of an error on a question of fact. This Court has no jurisdiction to entertain a second appeal on the ground of an erroneous finding of fact, however gross or inexcusable the error may seem to be. In support of the above decision reference may be made to the case of (9) Afsar Shaikh v. Soleman Bibi, AIR 1976 SC 163 . I do not find grave/error of law warranting interference of this Court at the second appeal stage. In this connection I may also refer to the judgment of the Supreme Court in the case of (10) Kishanlal Biharilal Maheswari v. Ramarao Hanuman Rao Patil, AIR 1981 SC 1183 . I further proceed to test the contention of the appellant that the finding of fact cannot otherwise be disturbed at the second appeal stage. The exception as point out earlier not being available, I am to rely on the decision of the Supreme Court reported in the case of (11) Karbalai Begum v. Mohd. Sayeed, AIR 1981 SC 77 . It has been laid down in the said decision that even if a finding of fact is wrong, it is not open to the High Court to interfere with it in second appeal inasmuch as a finding of fact is binding in second appeal. The learned courts below did not arrive at the finding of fact by ignoring important and relevant evidence nor the finding is bad in law that being so, the decision in (12) Damadilal v. Parashram AIR 1976 SC 2229 has no application in any manner whatsoever in the facts and circumstances of the case. 9. In view of the foregoing reasonings, I find no substance in the appeal and the appeal is accordingly dismissed, but without any order as to costs. 10. 9. In view of the foregoing reasonings, I find no substance in the appeal and the appeal is accordingly dismissed, but without any order as to costs. 10. Lastly, I am inclined to place it on record that Miss Chaturvedi, learned Advocate appearing on behalf of the plaintiff respondent produced before me a certified copy of the order passed by this Court on June 29, 1976 in C. R. No. 655(S)/76 which is as follows :– "...... The petitioner (appellant in the connected appeal) will deposit in the trial court the decretal costs, if not deposited, within three months from this day ; if deposited, the opposite party will be entitled to withdraw the same without security and without prejudice. 2. The petitioner will deposit in cash a sum of Rs. 20,000.00 (Rupees twenty thousand) in the trial court within four months from this day. If the said sum is deposited the trial court will take steps to open a Fixed Deposit Account with the local branch of the State Bank of India for a term of one year at present ; 3. The petitioner will go on remitting by Money Order a sum of money equivalent to last pay drawn by the opposite party, month by month, within the 30th day of each month for which the sum is payable. First such remittance shall be sent within the 30th of July, 1976. The opposite party will receive the said remittance subject to the decision in the Rule and he would be bound to refund the said sum in case the connected appeal succeeds and the suit brought by the opposite party fails. The said payment will also be without prejudice to the rights and contention of the parties at the final hearing. In case of non-compliance with any of the above terms of the Rule, the Rule will stand discharged......" In view of my finding dismissing the appeal, the plaintiff respondent will be entitled to withdraw the said amount of Rs. 20,000/- which is now lying deposited in the trial court together with the interest accrued thereon. It is also ordered that the plaintiff will also be entitled to all service benefit in accordance with law.