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2003 DIGILAW 49 (KER)

The Commanding Officer v. R. R. Pillai

2003-01-23

JAWAHAR LAL GUPTA, M.RAMACHANDRAN

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Judgment :- Jawahar Lal Gupta, C.J. The first respondent was working as a Junior Warrant Officer in the Indian Air Force. He had joined on October 7, 1967. He had taken premature retirement in October, 1988. On November 28, 1988, the first respondent applied for the post of Manager in the Southern Air Command Unit Canteen. Vide order dated January 9, 1989, he was appointed as Manager of the Canteen. This was done with retrospective effect from February 1, 1989. He was to be on probation for a period of six months, which could be extended to one year. The appointment was “subject to the terms and conditions of service issued vide Air Headquarter letter No.20728/P/Org as may be amended from time to time.” The first respondent was required to sign and accept the said terms and conditions of service. He had done so. A copy of this order is annexed as A-3 on the file. Vide order dated May 31, 2000 the Commanding Officer of the Unit terminated the services of the first respondent as Canteen Manager. Aggrieved by the order, the first respondent filed a petition under Article 226 of the Constitution. It was registered as O.P.No.15980 of 2000. It was dismissed vide judgment dated June 21, 2000 on the ground that “if the organization from which the petitioner’s services are terminated is, as contended by the petitioner, found to be a State or instrumentality of the State under Article 12 of the Constitution of India, he being admittedly a civilian, necessarily this court will not have jurisdiction to entertain this writ petition in terms of Section 14 of Administrative Tribunals Act as no other court except the Supreme Court will have jurisdiction to entertain a petition in relating to service matters of such employees.” 2. Thereafter the first respondent approached the Central Administrative Tribunal through a petition under Section 19. Vide order dated September 26, 2002 the Tribunal held that Rule 24(1) of the “terms and conditions is void and inoperative…” It further held that the order of termination dated May 31, 2000 “is also bad in law since it is issued in contravention of the terms and conditions… and also embedded with malafides and not in conformity with the principles of natural justice.’ Resultantly, the Tribunal directed that the first respondent was entitled to reinstatement with back wages. 3. 3. Aggrieved by the order passed by the Central Administrative Tribunal, the Commanding Officer, Headquarter, Southern Air Command (U) and the other respondents in the petition before the Tribunal have filed the present petition under Article 226 of the Constitution. 4. On behalf of the petitioners, Mr.Gopinath contended that the first respondent is an ex-serviceman. On retirement he was appointed in the Unit run Canteen on specific terms and conditions. He had voluntarily accepted those terms. Thus, he was bound by the terms of appointment. The order of termination was passed in accordance with the terms of appointment. Thus, the Tribunal has erred in holding that Rule 24(1) of the terms of appointment was unconstitutional and that the order of termination was bad in law. 5. On the other hand, Mr.Thottathil B.Radhakrishnan, learned counsel for the first respondent, contended that he was holding a civil post. Rule 24(1) by which his service was terminated is violative of Article 14 of the Constitution. Thus, the view taken by the Tribunal that the Rule was invalid and that the order of termination was illegal is perfectly legal and valid. 6. The two questions that arise for consideration are:- (i) Is Rule 24 (1) unconstitutional? and (ii) Was the order of termination liable to be set aside for the reasons stated by the Administrative Tribunal? Regarding(i):- 7. Admittedly, the terms and conditions of service governing the employees of the Unit run Canteens have not been laid down by any statutory rules. In fact, a complete copy of the Rules has been produced on record as A-10. It is a part of Ext.P1. The opening part of the Rules is relevant for the present case. It contains the following provision. “These rules shall be called ‘the Rules Regulating the Terms and Conditions of Service of civilian employees of Air Force URCs paid out of Non-Public Funds’….” Rule 2(2) provides that “all employees, whether under probation or temporary or permanent, do not get the status of a government employee at any stage. The employees are employees of N.P.F. (Non-Public Funds) and will remain so till the age of superannuation or till the date of resignation/termination of service.” (emphasis supplied) 8. The provision is self-explanatory. It clearly provides that the persons employed in the Unit Run Canteens are not paid out of public funds. They are not government employees. The employees are employees of N.P.F. (Non-Public Funds) and will remain so till the age of superannuation or till the date of resignation/termination of service.” (emphasis supplied) 8. The provision is self-explanatory. It clearly provides that the persons employed in the Unit Run Canteens are not paid out of public funds. They are not government employees. The other relevant provision is contained in Rule 24. It provides as under. “Rule 24: Termination of Service:- (1) The appointing authority may terminate the services of an employee by giving one month’s notice in writing or pay in lieu thereof without assigning any reason. (2) Nothing in Sub-rule (1) shall apply to removal/dismissal for miscondut.” 9. A perusal of the above provision clearly shows that the appointing authority has reserved to itself the power to terminate the services of an employee by giving one month’s notice in writing or pay in lieu thereof. It is not even bound to assign any reason. 10. Mr.Radhakrishnan contended that in view of the decision of their Lordships of the Supreme Court in Delhi Transport Corpn. v. D.T.C.Mazdoor Congress (AIR 1991 SC 101), the provision of the rule is ultra vires of Article 14 of the Constitution. Is it so? 11. This was a case where the validity of a Rule providing for the termination of the services of a permanent employee working with the State or an instrumentality of the State had fallen for the consideration of the Court. It was observed by that Rule 9 can be aptly called the “Henry VIII clause.” Its validity was tested on the touchstone of Article 14 of the Constitution. It was held that the Rule was unconstitutional. Can the ratio of this decision be attracted to the facts in the present case? 12. It is the admitted position that in the present case the Rules merely embody the terms and conditions of the employees paid out of Non-Public Funds. The employees do not hold civil posts. They do not have the status of a government employee. They do not have the constitutional protection embodied in Article 14 of the Constitution. Thus, they are not at the same pedestal at which persons holding civil posts are. In such a situation, the rule laid down in the Delhi Transport Corporation’s case (supra) shall not be attracted. 13. They do not have the status of a government employee. They do not have the constitutional protection embodied in Article 14 of the Constitution. Thus, they are not at the same pedestal at which persons holding civil posts are. In such a situation, the rule laid down in the Delhi Transport Corporation’s case (supra) shall not be attracted. 13. Mr.Radhakrishnan contended that even if the Rule is assumed to be merely a term of appointment embodied in a contract of service, it would be unconscionable. Is it so? 14. Admittedly, the first respondent had enjoyed a full tenure of service of about 21 years with the Indian Air Force. He had retired. He was getting pension. He had joined the service in the Canteen only after completing his tenure of service with the Indian Air Force and earning his pension. He had voluntarily taken premature retirement. In such a situation, it cannot be said that a Rule, which empowers the employer to terminate the services of an employee by giving notice of one month, is unconscionable. If the contention as raised by the counsel for the first respondent was to be accepted, the principle of hire and fire will loose all meaning. The relationship of master and servant would become meaningless. In the very nature of things, there has to be a difference between the position of a civil servant and a purely contractual appointment made out of non-public funds. 15. There is another aspect of the matter. The first respondent as accepted the terms of appointment voluntarily. That having happened, he was estopped from contending that these are violative of the rule enunciated in Delhi Transport Corporation’s case (supra). Still further, it has been suggested on behalf of the petitioners that the first respondent has been doing business interests. Taking all these factors into consideration, it cannot be said that in the circumstances of this case, the condition as incorporated in Rule 24 is unconscionable. 16. The order of termination has been annulled by the Tribunal on a two-fold basis. Firstly, it has been held that the first respondent was holding a civil post. The rule laid down by Their Lordships in Union of India v. M.Aslam (AIR 2001 SC 526) was applicable. Secondly, the action has been branded as malafide. 17. 16. The order of termination has been annulled by the Tribunal on a two-fold basis. Firstly, it has been held that the first respondent was holding a civil post. The rule laid down by Their Lordships in Union of India v. M.Aslam (AIR 2001 SC 526) was applicable. Secondly, the action has been branded as malafide. 17. A perusal of the rules governing the conditions of service of the respondent clearly shows that he was a Non-Public Fund employee. The rule specifically provided that he shall not get the status of a government employee at any stage. Still further, a perusal of the document at A-2 produced by the first respondent himself shows that the Canteen was “started in November 1984 with a capital of Rs.65,000/-….” It had “acquired assets worth Rs.15 lakhs in F.D. (Fixed Deposit) and Rs.10 lakhs working capital.” This was the position on October 31, 1989. It is thus clear that the Canteen was being run purely with Non-Public Funds as a commercial organization. Its income was not being credited to the Public Funds. 18. It is in view of this factual position that the applicability of the rule as laid down in Aslam’s case (supra) has to be considered. This was a case where it was held (at page 530) that “the Canteen Stores Department forms part of the Ministry of Defence and if their funds form a part of the Consolidated Fund of India and it is the said Canteen Stores Department which provides fund as well as different article through the retail outlets of Unit-Run Canteens then the employees who discharge the duties of salesmen in such retail outlets must be held to be employees under the Government.” Such is not the position in the present case. In fact, to the case in hand, the rule enunciated by Their Lordships of the Supreme Court in Union of India v. Chotelal (AIR 1999 SC 376) shall be attracted. 19. Mr.Radhakrishnan contended that the first respondent had been duly confirmed. Thus, he had a right to the post. The contention is misconceived. It is true that after his joining as a Manager on February 1, 1989, the first respondent was confirmed in May 1989. 19. Mr.Radhakrishnan contended that the first respondent had been duly confirmed. Thus, he had a right to the post. The contention is misconceived. It is true that after his joining as a Manager on February 1, 1989, the first respondent was confirmed in May 1989. However, the confirmation gave him no right in view of the provision contained in Rule 24 which empowered the appointing authority to terminate his services at any time by giving one month’s notice. 20. Mr.Radhakrishnan contended that the action was malafide. The second petitioner had appointed his relative as an Assistant Manager. This was calculated to terminate the services of the first respondent. 21. The contention is untenable. Firstly, there is nothing to show that the second petitioner was in any way biased or prejudiced against the first respondent. Secondly, the alleged appointment of his nephew was not as a Manager. It was to the post of Assistant Manger. Still further, he was not even impleaded as a party. In this situation, the view taken by the Tribunal that the action was malafide cannot be sustained. In view of the above, we are unable to uphold the order of the Tribunal. Resultantly, the Writ Petition is allowed and the order of the Tribunal is set aside.