NIRENDRA KRISHNA MITRA, J. ( 1 ) - None appears for the opposite party inspite of service of notice upon him. The opposite party No. 1 was an Officer Trainee of the petitioner's Company and he was posted at its Siliguri Installation at New Jalpaiguri. The Regional Manager of the petitioner company having his office at Calcutta, terminated his service allegedly without assigning any reason. The opposite party No. 1 filed a suit being O. C. Suit No. 7 of 1980 in the Court of the learned Munsif at Jalpaiguri against the petitioner and the opposite parties Nos. 2 and 3 praying inter alia, for a declaration that the order of termination pa4sed by the Regional Operation Manager of the petitioner-company vide letter No. P R A/1121/135, dated February 15, 1977 was wholly mala fide and without jurisdiction, for a declaration that the opposite party No. 1 was still in service under the petitioner company and also for damages. A preliminary objection was raised by the petitioner company regarding the jurisdiction of the learned Munsif to try the suit which was made the Issue No. 1. The learned Munsif by his order, dated 16th September, 1985 decided the said Issue No. 1 in favour of the opposite party No. 1 holding that the Court had jurisdiction to try the suit and was competent to make declaration in the form as prayed for by the plaintiff/opposite party No. 1 i. e. he could become successful in the suit. Against the said order the petitioner-company has moved this Court in revision along with an application under Section 5 of the Limitation Act and obtained the present Civil Order. ( 2 ) IT was contended by Mr. Chowdhury, the learned Counsel appearing on behalf of the petitioner-company that the learned Munsif was wrong in deciding the said Issue No. 1 in favour of the opposite party No. 1, as the relationship between the opposite party No. 1 and the petitioner Company No. 1 was that of a "master" and "servant" flowing from a personal contract and as such, such contract was unenforceable in a Civil Court in view of Section 14 read with Section 34 of the Specific Relief Act. ( 3 ) MR. Chowdhury based his contention relying mainly on the decision of the Supreme Court in the case of Ajay Hasia, etc. vs. Khalid Mujib Sehravardi and Ors.
( 3 ) MR. Chowdhury based his contention relying mainly on the decision of the Supreme Court in the case of Ajay Hasia, etc. vs. Khalid Mujib Sehravardi and Ors. reported in A. I. R. 1981 S. C. , 487, and submitted that the said case really does not stand in his way but really supports him. ( 4 ) I have heard Mr. Chowdhury at length and perused the plaint and the written statement filed in the suit and also the order under challenge. Undoubtedly, the petitioner-company is a Government Company and therefore, it comes within the meaning of "other authority" as stated in Article 12 of the Constitution of India and therefore, is "state" within the meaning of that expression as used in the said Article 12 and its employees are entitled to the protections under the Constitution of India. The petitioner-company is therefore, subject to the same Constitutional limitation as a State. Reference may be made in the case of Ramana Dayaram Shetty -vs- International Air Port Authority of India and Ors. reported in A. I,r. 1979 S. C. , 1628, where it was observed inter alia by the Supreme Court that obviously, where a Corporation is an instrumentality or agency of Government, it would, in the exercise of its powers or discretion, be subject to the same constitutional or public law limitation as Government. The rule inhibiting arbitrary action by Government must also apply equally where such Corporation is dealing with the public, whether by Way of giving jobs or entering in to contracts or otherwise and it cannot act arbitrarily and enter into relationship with any person it likes at its sweet will, but its action must be in conformity with some principle which meets the test of reason and relevance. The same principle of law was also reiterated by the Supreme Court in the decision of Ajay Hasia, etc. vs. Khalid Mob Sehravardi and Ors.
The same principle of law was also reiterated by the Supreme Court in the decision of Ajay Hasia, etc. vs. Khalid Mob Sehravardi and Ors. (Supra) reported in A. I. R. 1981 S. C. 487, in which the Supreme Court inter alia, observed that where the Corporation is an instrumentality or agency of Government, it must be held as an "authority" within the meaning of Article 12 o the Constitution of India and hence, subject to the same basic obligation to obey the fundamental rights like a Government and it is immaterial for determining whether the Corporation is an authority, or whether the Corps action is created by a statute or not. The test is, whether it is an instrumentality or agency of the Government and not as to bow it is created. The corporation may be a statutory corporation created by the statute or it may be a Government Company or a company registered under the Companies Act or it may be a Society registered under the Society Registration Act, or any other similar statute. Whether may be its genetical origin it would be an "authority" within the meaning the Article 12 of the Constitution of India if it is am instrumentality or agency of the Government and the instrumentality or agency of Government is not limited to a corporation created by the statute but it is clearly applicable to a Company or a Society as well.
The Supreme Court in its judgment in the case of Central Inland Water Transport Corporation Ltd. and Anr.-vs- Brojonath Ganguly, reported in A. I. R. 1986 S. C. , 1571, which is in, my view is a landmark relating to service contracts and on the interpretation of the relevant Service Rules, held that the rule empowering the Government Corporation to terminate services of its permanent employees by giving notice or pay in lieu of notice period is opposed to the public policy and violate of Article 14 and directive principles contained in Article 39 (a) and 41 of the Constitution of India and has also reiterated the principle laid down by the Supreme Court in its other two decisions as referred to above and held further that if there is an instrumentality or agency of the state which has assumed the garb 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 of agency of the State. For the purpose of Article 12 of the Constitution of India 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 and in my view the petitioner-company squarely falls within those observations of the Supreme Court. The petitioner company is not only a Government Company as defined in Section 617 of the Companies Act, but is also owned by the Central Government. It is financed entire by the Union of India and is completely under the control of the Central Government. In every respect it is thus a Government Company and it can safely be held that behind the veil is the face of an instrumentality or agency of the State. Moreover, the activities carried on by the corporation are of vital national importance. It is ridiculous to describe the corporation merely as a trading company. The activities of the corporation are of great importance of public interest and welfare, and are activities of the nature carried on by a modern State particularly a modern Welfare State.
Moreover, the activities carried on by the corporation are of vital national importance. It is ridiculous to describe the corporation merely as a trading company. The activities of the corporation are of great importance of public interest and welfare, and are activities of the nature carried on by a modern State particularly a modern Welfare State. Naturally a statutory status is given to an employee of the petitioner company and therefore, in my view the opposite party being an employee of such a company is entitled to bring a suit framed by him before the Civil Court and such a suit is quite maintainable in law. In this connection the observation of the Supreme Court made in the case of Executive Committee of U. P. State Warehousing Corporation, Lucknow -vs- Chandra Kiran Tyagi, reported in A. I. R. 1970, S. C. 1244 may be referred to. The Supreme Court in the said case has observed inter alia, that normally a contract of personal service will not be enforced by an order for specific performance nor will it be open for a servant to refuse to accept the repudiation of a contract of service by his master and say that the contract has never been terminated. The remedy of the employee is a claim for damages for wrongful dismissal or for breach of contract. But when a statutory status is given to an employee and there has been a violation of the provisions of the statute while terminating the services of such an employee, the latter will be eligible to get the relief, by way of declaration that the order is null and void and that he continues to be in service, as it will not then be a mere case of a master terminating the service of a servant. In the facts and circumstances of the case and also view of my observations as made above, I find no reason to interfere with the order under challenge and the Civil Order is therefore dismissed without any order as to costs. Let this order be communicated to the Trial Court forthwith. Application dismissed