Madhya Pradesh High Court
Spm Employees Union vs Union Of India on 13 October, 2010
Author: Alok Aradhe
Bench: Alok Aradhe
(1)
HIGH COURT OF MADHYA PRADESH
PRINICIPAL SEAT AT JABALPUR
Writ Petition No.4856/2006
S.P.M. Employees Union and others..........................................Petitioners
Versus
Union of India and others .................................... ... Respondents
Shri K.C.Ghildiyal, learned counsel for the petitioners.
Shri Shekhar Sharma, learned counsel for the respondent no.1.
Shri K.K.Trivedi, learned counsel for the respondent no.2.
Writ Petition No.8711/2008
SPM Gazetted Officers Association, SPM,
Hoshangabad &anr. .... ................................................ Petitioners
Versus
Union of India and others .................................... ... Respondents
Shri K.C.Ghildiyal, learned counsel for the petitioners.
Shri Shekhar Sharma, learned counsel for the respondent no.1.
Shri K.K.Trivedi, learned counsel for the respondent no.2.
Shri O.P.Namdeo, learned counsel for the respondent no.4.
Writ Petition No.2167/2009
Bhartiya Bank Note Press Mazdoor Sangh and another... ...... Petitioners
Versus
Union of India and others .................................... ... Respondents
Shri Shishir Dixit, learned counsel for the petitioners.
Shri Shekhar Sharma, learned counsel for the respondent no.1.
Shri K.K.Trivedi, learned counsel for the respondent no.3.
Writ Petition No.15087/2008
Rajkumar Kirar ........................................ Petitioner
Versus
Union of India and others .................................... ... Respondents
Shri P.S.Nair, learned senior counsel with Shri Rajas Pohankar for the
petitioner.
Shri Shekhar Sharma, learned counsel for the respondent no.1.
Shri K.K.Trivedi, , learned counsel for the respondent no.2.
Shri O.P.Namdeo, learned counsel for the respondent no.3.
Present: Hon'ble the Chief Justice Shri S.R.Alam
Hon'ble Shri Justice Alok Aradhe
(2)
ORDER
(13/10/2010) PER S.R.ALAM, THE CHIEF JUSTICE As common questions of law and facts arise for consideration in the instant writ petitions and as agreed to by the learned counsel for the parties, the writ petitions were heard analogously and are being decided by this common order.
2. For the sake of convenience W.P.No.4856/2006 is taken as a leading case and its facts are being referred to. The petitioners of the said writ petition are registered trade unions of Security Paper Mills, Hoshangabad (hereinafter referred to as 'the SPM'). The SPM was set up in the year 1967 by the Union of India and has workforce of more than 2000 employees. It is under the administrative control of Ministry of Finance, Union of India. There are nine industrial units of the Government of India for minting coins and printing currency notes, namely, (i) India Government Mint, Noida, (ii) India Government Mint, Kolkata, (iii) India Government Mint, Hyderabad, (iv) India Government Mint, Mumbai, (v) Security Paper Mill, Hoshangabad, (vi) Bank Note Press, Dewas, (vii) Currency Note Press, Nashik, (viii) India Security Press, Nashik and (ix) Security Printing Press, Hyderabad. In pursuance of the decision of the Union Cabinet dated 2nd September, 2005, the Government of India decided to corporatise the functions of the aforesaid nine units. The petitioners immediately on coming to know about the proposal to transfer the units to the respondent no.2, issued a strike notice on 26.9.2005. Regional Labour Commissioner (C) issued a notice on 29.9.2005 to start conciliating proceedings. Thereafter, an office memorandum dated 10th February, 2006, (annexure P/1) was issued by which assets and liabilities of the aforesaid nine units were transferred to the respondent no.2, namely, Security Printing and Minting Corporation of India Limited which came into existence w.e.f. 13th January, 2006. The said Company (3) has been incorporated as fully owned Government company with limited liability by shares under the Companies Act, 1956, with its registered and corporate office in New Delhi. By another office memorandum (annexure P/2) of even date existing and subsisting contract and agreement of the said nine companies were transferred to the respondent no.2. Similarly, another office memorandum dated 10th Februrary, 2006 (annexure P/3) was issued regarding transfer of staff of aforesaid nine units. The petitioners have filed the instant writ petition in which they have sought the relief of quashing of office memorandums dated 10th Februrary, 2006 (contained in annexures P/1 to P/3).
3. On the other hand, the respondent no.1 in its return inter alia stated that Union Cabinet in its meeting held on 2nd September, 2005, has approved the proposal of corporatisation of security presses, mints, paper mill with the sole aim of improving efficiency and productivity by providing full operational autonomy. Joint Secretary (C & C) met all the representatives of the Union in the meeting held in I.G. Mint, Mumbai, on 16.9.2005 and also on 3.10.2005. After the meeting, the petitioners under an apprehension that their service conditions would be adversely affected approached the Regional Labour Commissioner, Bhopal/ Chief Labour Commissioner, New Delhi, by giving a notice of strike intending to go on strike from 18.2.2005. Chief Labour Commissioner seized the matter into conciliation and held first meeting on 6.10.2005. Subsequent meetings were held on 11.11.2005, 21.12.2005 and 14.2.2006. The Government of India represented by the Joint Secretary, Ministry of Finance, Department of Economic Affairs, held meeting on 2.3.2006 and 3.3.2006 wherein it was decided to form a core group comprising Government, Management of the Company and representatives of recognized and registered Unions to draft a tri-partite agreement. Accordingly, a core committee was constituted by order dated 1.2.2006. After formation of core committee number of meetings were held and deliberations on various issues took place. As per draft agreement, employees of nine industrial units in question were required to exercise their option by 31st March, 2008, (4) indicating their desire to continue as employees of the Government or the Corporation. It is further averred in the return that there would be no change in the service conditions of the employees. All the employees would be getting three advance increments with cumulative effect which would not be absorbed in future increments and lumpsum amount of Rs.35100/- would be paid and benefit of 6th Pay Commission would be given. A memorandum of settlement dated 5.2.2008 has also been prepared.
4. The respondent no.2 has filed the return inter alia reiterating the stand taken by the respondent no.1. It has been stated in the return that the petitioner no.2 representing the petitioner no.1, is a member of the core committee. Petitioners no.3, 4 and 5 are not in the core committee as per the decision taken in the meeting held on 2nd and 3rd March, 2006, to the effect that where employees are already represented by recognized unions in respect of any unit, representatives of the registered unions would not be included in the core committee. It has further been submitted that there would be no change in the service conditions to the detriment of the workmen. It has further been contended that petitioners have not brought any material on record to show that policy decision taken by the Cabinet is in violation of any statutory provision or the provisions of the Constitution of India.
5. We have heard learned counsel for the parties at length.
6. Shri P.S.Nair, learned senior counsel and Shri K.C.Ghildiyal, learned counsel for the petitioners have contended that the aforesaid nine establishments of the Central Government are established in exercise of sovereign function of the Union of India. The establishment carrying on sovereign functions cannot be transferred to corporation which is an independent entity. In support of the aforesaid proposition reference has been made to the decisions of the Supreme Court in the cases of S.K.Mathur and others Vs. Union of India and others, (1998)4 SCC (5) 134, Agriculture Produce Market Committee Vs. Ashok Harikuni and another, (2000)8 SCC 61 and judgment dated 18.9.2007 of Allahabad High Court in Public Sector Employees Cooperative Housing Society Ltd. Vs. State of U.P. It has further been submitted that transfer of an undertaking must have the sanction of Parliament. For this proposition reliance has been placed on the decision of Supreme Court in Centre for Public Interest Litigation Vs. Union of India and another, (2003)7 SCC
532.
7. It is also urged by the learned counsel for the petitioners that orders of the Central Government dated 10th February, 2006, are bereft of reasons. The action of the respondent no.1 in transferring the assets and liabilities of nine industrial units to the respondent no.2 amounts to violation of fundamental rights of the employees. The order passed by the Central Government dated 10th February, 2006, suffers from the vice of non- application of mind. It has further been contended that policy decision is not beyond the realm of judicial review. In this connection reference has been made to the decision of the Supreme Court in D.D.A. Vs. Joint Action Committee, allottee of SFS Flats, (2008)2 SCC 672. It has further been contended that impugned action has been taken in flagrant violation of the principles of natural justice inasmuch as no opportunity of hearing was given to the employees who were affected by the decision. Reliance has been placed on the decision of the Supreme Court in Maneka Gandhi Vs. Union of India, AIR 1978 SC 597. It has also been contended that employees had a legitimate expectation that they would continue to serve the Government till they attain the age of superannuation. However, their legitimate expectation has been stifled in an arbitrary, unjust and unfair manner. Reliance has been placed on the decision of the Supreme Court in Tamil Nadu Electricity Board and another Vs. Status Spinning Mills Limited and another, (2008)7 SCC 353, Motilal Padampat Sugar Mill Co. Ltd. Vs. State of U.P., (1979)2 SCC 409, Olga Tellis Vs. BMC, AIR 1986 SC 180 and Bannari Amman Sugars Limited Vs. CTO, (2005)1 SCC 625. It has further been contended that procedure adopted for (6) corporatisation of nine units is not in accordance with law and while taking decision of corporatisation, welfare and service conditions of the employees have been taken care of inasmuch as service conditions of the employees have not been altered to their detriment. Respondents have not placed any material on record so as to justify the decision for corporatisation.
8. It has further been argued that transfer of employees on deputation to a corporation without their consent is legally not permissible and such a contract is violative of Section 23 of the Contract Act. The impugned action is violative of the provisions of Article 14 and 16 of the Constitution of India.
9. In sum and substance the contention made on behalf of the petitioners are that the functions which are being carried out by the nine units being of sovereign nature cannot be transferred to the respondent no.2 which is a corporation and has its separate entity in law. The decision for the corporation is arbitrary and suffers from the vice of non-application of mind and the service conditions of the members of the petitioners Union cannot be altered unilaterally without affording an opportunity of hearing.
10. On the other hand, Shri Shekhar Sharma, learned counsel for the Union of India submitted that decision has been taken by the Union Cabinet for corporatisation of the security presses, mints and paper mill with the sole object of improving the efficiency and productivity by providing full autonomy. It has further been contended that Government has not delegated any sovereign function. Government shall retain the functions of policy formulation regarding design and security features of and coins, administrative control of the company and issues relating to counterfeiting. Learned counsel has drawn our attention to the statement of object and reasons of amendment incorporated in the Coinage Act, 1906, by way of amending Act No.33 of 1985 to contend that Section 6 of the Coinage Act was enacted to enable the Central Government to import (7) coins from foreign countries. Thus, the statement of object and reasons of amending Act No.33 of 1985 clearly shows that function of minting the coins is not the sovereign function. Learned counsel while referring to the written statement filed before the Chief Labour Commissioner in conciliation proceeding has submitted that decision for corporatisation was taken after considering various recommendations and the reports. In support of his submissions learned counsel placed reliance on the decisions of the Supreme Court in N.Nagendra Rao and Co. v. State of A.P., (1994) 6 SCC 205, Chief Conservator of Forests and Another, etc. v. Jagannath Maruti Kondhare, etc., (1996) 2 SCC 293 and All India ITDC Workers' Union Vs. ITDC, (2006) 10 SCC 66.
11. Shri K.K. Trivedi, learned counsel for respondent No.2 has submitted that respondent No.2 - Corporation is fully owned by the Government of India and there is no intention of privatising the units through corporatisation. It has further been submitted that sovereign function of design, security features, production and issuing etc., of coins currency and other security documents has been retained by the Government of India and the respondent No.2 would function within the policy parameters as decided by the Government of India for the purpose of minting and printing of coins, currency and other security documents. It has further been submitted that service conditions of all the employees have been protected and there would be no change in the service conditions to their detriment. It is also submitted that the employees would be deemed to be on deputation in Corporation for a period of two years within which they can opt to be an employee of the Corporation. If an employee desires to continue in Government service he is at liberty to do so and would be absorbed in other Government department as per existing rules and regulations. Before formation of the Corporation the recognized employees' unions were taken into confidence. It has further been submitted that in Security Paper Mill, Hoshangabad, out of 1236 employees as many as 1172 employees have exercised the option in favour of the Corporation and 59 employees have opted to continue in the (8) Government. In case of Bank Note Press, out of 2109 employees, 1202 have exercised their option in favour of Corporation and 901 employees have opted to continue in Government. It has further been submitted that allegation made by the petitioners that employees were threatened to exercise their option is misconceived and baseless. It has further been submitted that the decision to corporatise nine industrial units is a policy decision and does not call for any interference by this Court in exercise of power under Article 226 of the Constitution of India. In support of his submissions learned counsel has placed reliance on the decisions of the Supreme Court in Balco employees Union v. Union of India, AIR 2002 SC 350, Prasar Bharti v. Amarjeet Singh and Others, AIR 2007 SC 1269 and BCPP Mazdoor Sangh and Others v. NTPC, AIR 2008 SC
336.
12. We have considered the submissions made on both sides. Looking to the submissions made on behalf of the parties and in the facts and circumstances of the case, in our view following issues arise for consideration:
(i) what is a sovereign function
(ii) whether sovereign function in the instant case is being transferred
by the respondent No.1 to the respondent No.2
(iii) whether for transfer of nine industrial units to the respondent No.2, sanction of parliament is required;
(iv) whether orders dated 10.2.2006 passed by the Central Government are bereft of reasons and suffer from the vice of non-application of mind and are arbitrary and mala fide
(v) whether service conditions of the employees have been altered to their detriment without affording any opportunity of hearing to them.
We shall proceed to deal with the issues in seriatim.
13. The expression 'sovereign power' has been defined in Black's Law Dictionary, 6th Edition, to mean the power in a State to which none other is superior or equal and which includes all the specific powers necessary (9) to accomplish legitimate ends and purposes of the Government. The apex Court in Corporation of the City of Nagpur vs. Employees, AIR 1960 SC 675 while dealing with the question whether and to what extent activities of Corporation come within the definition of `industry' and whether Corporation can be said to exercise regal functions observed that those functions which are primary and inalienable of a constitutional Government, can be held to be sovereign functions of the State. In paragraph 11 of the judgment their Lordships observed as under:
"11. Before considering the positive aspects of the definition, what is not an industry may be considered. However wide the definition of "industry" may be, it cannot include the regal or sovereign functions of State. This is the agreed basis of the arguments at the Bar, though the learned counsel differed on the ambit of such functions. While the learned counsel for the Corporation would like to enlarge the scope of these functions so as to comprehend all the welfare activities of a modern State, the learned counsel for the respondents would seek to confine them to what are aptly termed "the primary and inalienable functions of a constitutional Government". It is said that in a modern State the sovereign power extends to all the statutory functions of the State except to the business of trading and industrial transactions undertaken by it in its quasi-private personality. Sustenance for this contention is sought to be drawn from Holland's Jurisprudence, wherein the learned author divides the general heading "Public Law" into four sub-heads and under the sub- head "Administrative Law" he deals with a variety of topics including welfare and social activities of a State. The treatment of the subject "Public Law" by Holland and other authors, in our view, has no relevancy in appreciating the scope of the concept of regal powers which have acquired a. definite connotation. Lord Watson, in Richard Coomber v. Justices of the County of Berks 5 describes the functions such as administration of justice, maintenance of order and repression of crime, as among the primary and inalienable functions of a constitutional Government. Isaacs, J., in his dissenting judgment in Federated State School Teachers' Association of Australia v. State of Victoria 6 concisely states thus at p. 585:
"Regal functions are inescapable and inalienable. Such are the legislative power, the administration of laws, the exercise of the judicial power. Non-regal functions may be assumed by means of the legislative power. But when they are assumed the State acts simply as a huge corporation, with its legislation as the charter. Its action under the legislation, so far as it is not regal execution of the law is merely analogous to that of a private company similarly authorised."
These words clearly mark out the ambit of the regal functions as distinguished from the other powers of a State. It could not have been, therefore, in the contemplation of the legislature to bring in the regal functions of the State within the definition of industry and thus confer jurisdiction on Industrial Courts to decide disputes in respect thereof. We, therefore, exclude the regal functions of a State from the definition of industry.
The above view was again endorsed by the apex Court in Chief (10) Conservator of Forests and another, etc. etc. vs. Jagannath Maruti Kondhare, etc. etc., AIR 1996 SC 2898.
14. A Division Bench of this Court in The `Ad Hoc' Committee, the Indian Insurance Company Association Pool, Bombay vs. Smt. Radhabai, AIR 1976 MP 164 while considering the question of liability of the State in respect of the tortuous acts of the servants of the State where the plea of immunity based on employment referable to sovereign functions is raised observed in paragraph 12 by relying on Corporation of the City of Nagpur vs. Employees (supra) and an Australian judgment reported in (1883) 9 AC 61 (HL) [Coomber vs. Justice of Berks] held that traditional sovereign functions are the making of laws, the administration of justice, the maintenance of order, repression of crime, carrying on war, the making of treaties of peace and other consequential functions. Therefore, it can safely be held that those functions which are inalienable cannot be parted with by the State and all its sovereign functions.
15. In case of N.Nagendra Rao and Co. v. State of A.P., AIR 1994 SC 2663, the Supreme Court held that distinction between the sovereign and non- sovereign powers were neither relevant either before or after the Constitution came into force. It was further held that the old and archaic concept of sovereignty does not now survive. Sovereignty now vests in the people. It was further held that in the modern sense distinction between sovereign and non-sovereign does not exist. It all depends on the nature of power and manner of its exercise. One of the tests which has been laid down by the Supreme Court in the aforesaid case to determine whether the legislative or executive function is sovereign in nature is whether the State is answerable for its actions in the Court of Law. For instance, such as defence of the country, raising armed forces and maintaining it, making peace or war and power to acquire and retain territory are the functions which are indicative of sovereignty and are political in nature, therefore, they are not amenable to the jurisdiction of (11) ordinary civil Courts. It has further been held that in welfare State, functions of the State are not only defence of the country or administration of justice or maintaining law and order but it extends to regulating and controlling the activities of people in almost every sphere, like educational, commercial, social, economic, political and even martial. The demarcating line between sovereign and non-sovereign powers for which no rational basis survives has largely disappeared. Similar view was reiterated by the Supreme Court in Chief Conservator of Forests and Another, etc. v. Jagannath Maruti Kondhare, etc., AIR 1996 SC 2898. In case of Agriculture Produce Marketing Committee v. Ashok Harikuni and another, AIR 2000 SC 3116, it was observed by the Supreme Court that sovereign function in the new sense may have very wide ramification but essentially sovereign functions are primary inalienable functions which only the State could exercise. Thus, from the exposition of law made by the apex court it could be held that though various functions of the State may have ramifications of 'sovereignty' but they all cannot be construed as primary inalienable functions. Broadly it is taxation, eminent domain and police power which cover its field. It may cover its legislative functions, administration of law, eminent domain, maintenance of law and order, internal and external security, grant of pardon. So, the dichotomy between sovereign and non-sovereign function could be found by finding which of the functions of the State could be undertaken by any private person or body. The one which could be undertaken cannot be sovereign function. In a given case even in subject on which the State has the monopoly may also be non-sovereign in nature. Mere dealing in subject of monopoly of the State would not make any such enterprise sovereign in nature.
16. In the backdrop of the aforesaid well settled legal principles, we may now examine whether sovereign function in the instant case is being transferred by the respondent No.1 to the respondent No.2. From perusal of Office memorandum dated 10.2.2006 it is clear that Management, (12) control, operations and maintenance of production, printing, manufacturing of security papers, coins and medallions, currency and bank notes, stamps, non-judicial stamp papers, etc. have been transferred to the respondent No.2 Company with effect from 10th February, 2006. However, the Government has retained the functions of policy formulation regarding design, and security features of currency and coins, administration control of the company, issues relating to counterfeiting etc. Perusal of paragraph 3 of office memorandum dated 10th February, 2006, further reveals that the respondent No.2 company will carry out the duties and responsibilities regarding production, supply and all issues pertaining to currency, coins, security documents, etc. in accordance with the rules and such other directions as may be given by the Central Government from time to time. Thus, if the test evolved by the Supreme Court is applied to the facts of the case at hand, then the inevitable conclusion is that production, printing, manufacturing of security papers, coins and medallions, currency and bank notes, stamps and non-judicial stamp papers cannot be held to be sovereign function as the State is answerable for its actions in respect of aforesaid matters in the Court of Law. Thus, for the aforementioned reasons, we hold that no sovereign function has been delegated to the respondent No.2. Reliance placed by learned counsel for petitioners in the case of S.K. Mathur v. Union of India, (1998) 4 SCC 134 to contend that printing of bank note is a sovereign function, is of no assistance to the petitioners. A careful reading of the aforesaid decision reveals that the Supreme Court has neither recorded a finding that printing of bank notes is a sovereign function nor the same is the ratio decidendi of the case. We may also refer to the provisions of the Coinage Act, 1906. The statement of object and reasons appended to the amending Act No.33 of 1985 reveals that section 6 was amended with a view to enable the Central Government to import coins from foreign countries. Section 6(2) of the Act empowers the Central Government to authorize the coining in like manner as it provided in that sub-section, of coins by any person, including Government of any (13) foreign country, beyond the limits of India and to import such coins issued under its authority under that sub-section provided that it is necessary and expedient in the public interest so to do. Thus, our conclusion to the effect that sovereign function has not been delegated to the respondent No.2 also finds support from the provisions of the Coinage Act, 1906.
17. We may now advert to the third issue, namely, whether for transfer of nine industrial units to the respondent No.2, sanction of parliament is required. At the cost of repetition, we may state here that by office memorandum dated 10th February, 2006, only management, control, operations and maintenance of production, printing, manufacturing of security papers, coins and medallions, currency and bank notes, stamps, non-judicial stamp papers, etc. have been transferred to the respondent No.2 company with effect from 10th February, 2006. The Government has retained the functions of policy formulation regarding design and security features of currency and coins, administration, control of the company, issues relating to counterfeiting etc. Perusal of paragraph 3 of office memorandum dated 10th February, 2006, further reveals that The respondent No.2 company will carry out the duties and responsibilities regarding production, supply and all issues pertaining to currency, coins, security documents, etc. in accordance with the rules and such other directions as may be given by the Central Government from time to time. The respondent No.2 is a company owned by the Government of India and is a Government Company within the meaning of Section 617 of the Companies Act, 1956. Thus, parts of functions of aforesaid nine industrial units have been delegated to a Government company with a view to improve efficiency and productivity. Learned counsel for the petitioners failed to point out any statutory provision which requires the Central Government to obtain the sanction of the Parliament before transferring certain functions of nine industrial units to the respondent No.2. Reliance placed by the learned counsel for petitioners on the (14) decision of the Supreme Court in Centre for Public Interest Litigation (supra) is of no assistance, as in the facts of that case the Supreme Court disapproved the method adopted by the Government in exercise of executive powers to disinvest Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. without repealing or amending the law. As stated supra, in the instant case there is no statutory provision which requires that approval of the Parliament has to be obtained before transfer of certain functions of the nine industrial units to the respondent No.2.
18. Now, we may examine the next issue, i.e, whether the orders dated 10.2.2006 passed by the Central Government are bereft of reasons and suffer from the vice of non-application of mind and are arbitrary and mala fide. As is perceptible from the return filed on behalf of respondent No.1, the Union Cabinet in its meeting held on 2nd December, 2005, has approved the corporatisation of nine industrial units with the sole intention of improving efficiency and productivity by providing full autonomy. Joint Secretary (C & C) met representatives of all the unions in a meeting which was held in IG Mint, Mumbai, on 16.9.2005 and on 3.10.2005 by the Government. Thereafter, a core committee was also constituted consisting the representatives of the Government, Management of the companies and representatives of the recognized unions of the units of SPM vide order dated 17th March, 2006. From perusal of the written statement filed by the Government of India in conciliation proceedings we find that salient features of the proposed corporatisation were informed to various registered and recognized unions of all the nine units and they were requested to submit specific comments about implementation of the cabinet decision. The subject was discussed at the level of each unit as well as at the level of Ministry on different occasions. Though during the discussions, corporatisation of the units was opposed by the unions, however, no substantial points were raised by them regarding implementation framework of the corporatisation. The (15) decision to corporatise the nine industrial units was taken for improving productivity, costs and other related issues, the decision has been arrived at by the Cabinet after considering various earlier recommendations mentioned in the report of 5th Central Pay Commission, Economic Reform Commission, IFCI etc.
19. Thus, from the facts narrated supra, it is apparent that decision taken by the Cabinet to corporatise the nine industrial units is a well considered decision which has been taken after due deliberation. Therefore, the decision can neither be termed as arbitrary or mala fide nor can be said to suffer from the vice of non-application of mind. The scope of judicial review while examining the policy decision is well settled. While examining the policy, the Court has a duty to see that while taking a decision, no law is violated and people's fundamental rights are not transgressed upon except to the extent permissible under the Constitution. In other words, the power of judicial review can be exercised only if the policy is shown to be contrary to the constitutional or statutory provisions, or is patently arbitrary or vitiated by mala fide. The apex Court in Kanhaiya Lal Sethia vs. Union of India, (1997) 6 SCC 573 while considering the scope or interference of judicial review in the matter of policy-decision observed that unless the policy so formulated either violates the mandate of the Constitution or any statutory provision or is otherwise actuated by mala fides, the same cannot be interfered with. Similar view has been taken by the Supreme Court in Narmada Bachao Andolan v. Union of India, (2000) 10 SCC 664, Union of India v. Pushpa Rani and Others, (2008) 9 SCC 242, and Dilip Kumar Garg v. State of U.P. and others, (2009) 4 SCC 753. In Delhi Development Authority, N.D. & Anr Vs. Joint Action Committee, Allottee of SFS Flats & Ors. (supra) it has been observed in paragraph 60 of the judgment that broadly, a policy decision is subject to judicial review on the grounds, viz. (i) if it is unconstitutional; (ii) if it is dehors the provision of the Act and the Regulations; (iii) if the delegate has acted (16) beyond its power of delegation; and (iv) if the executive policy is contrary to the statutory or a larger policy.
20. The apex Court in Balco Employees Union (Regd.) (supra) in paragraph 45 observed that it is neither within the domain of the Courts nor within the scope of judicial review to embark upon the enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. The Courts, therefore, will not strike down a policy at the behest of a petitioner merely because other or different policy would have been fairer or wiser or more scientific or more logical. Their Lordships further observed that the workers of the companies have also to accept the decision of the employer which is taken bona fide and honestly and if the same is not contrary to law. We are, therefore, of the view that the workers who are the members of the petitioners' Employees' Union or Association have to accept the decision of the employer which is taken bona fide. In the instant case the decision to corporatise the nine industrial units and handover certain functions to the respondent No.2 while retaining the overall control cannot be held to be without any basis or reason nor the same could be said to be arbitrary or mala fide. The reason for corporatisation is rational and logical and, therefore, the same is neither arbitrary nor violative of any constitutional or statutory provisions or against the public policy. On the contrary, as stated above, the same being a well considered decision and bereft of vice of non- application of mind, cannot be held to be arbitrary or mala fide.
21. We may now come to the next issue, namely, whether service conditions of the employees have been altered to their detriment without affording any opportunity of hearing to them. In H.L. Trehan and Others v. Union of India and Others, (1989) 1 SCC 714 it has been held by the Supreme Court that there can be no deprivation or curtailment of any existing right, advantage or benefit enjoyed by government servant without complying the rules of natural justice. Similar view has been expressed in B.C.P. P. (17) Mazdoor Sangh v. NTPC, AIR 2008 SC 336.
22. In the backdrop of the aforesaid well settled legal position, facts of the instant case may be examined. From perusal of office memorandum dated 10th February, 2006 it is clear that initially all the employees of the nine industrial units would be on deemed deputation to the company on existing terms and condition for the period of two years within which they will exercise their option for absorption in the company or redeployment through personnel and training. The aforesaid office memorandum in unequivocal terms provide that employees' remuneration, retirement benefits and other service conditions on absorption in the company shall not be in any manner inferior to existing one. The memorandum further provides that pay-scale, salary and allowances, medical facilities, leave, etc. will continue to be governed by existing rules, regulations and orders till such time they are absorbed in the company and the relevant rules are framed by the company. However, none of the abovementioned benefits to the employees would be less beneficial to what they were currently enjoying. The employees who do not opt for absorption will be referred to re-training and redeployment division of Department of Personnel and Training for redeployment. Thus, the employees have been given the option either to opt for Government service or the services of the Corporation. The memorandum in unequivocal terms provides that service conditions in no manner would be altered to disadvantage of the employees if they opt to serve in the Corporation. Thus, for aforesaid reasons we hold that the service conditions of the employees have not been altered to their disadvantage. Our conclusion is fortified by the fact that out of 1236 employees of the Security Paper Mill, Hoshangabad, 1172 employees have exercised the option in favour of the Corporation and only 59 employees have opted to continue in the Government. Similarly, in the case of Bank Note Press out of 2109 employees, 1202 have exercised their option in favour of the Corporation and 901 employees have opted to continue in the Government. Thus, majority of (18) the employees have opted to serve in the Corporation which goes to show that their service conditions are in no way being altered to their disadvantage.
23. So far as the contention of the petitioners that decision to coporatise the units has been taken in violation of principles of natural justice is concerned, as has been stated supra, Joint Secretary (C & C) in the meeting held in IG Mint, Mumbai, on 16.9.2005 and on 3.10.2005 met the representatives of the unions. Thereafter, the subsequent meetings were held on 2.3.2006 and 3.3.2006 wherein it was decided to form a core group comprising representatives of the Government, management of the company and recognized and registered unions, to draft a tri-partite agreement. Accordingly, a core committee was constituted vide order dated 17.2.2006, after formation of the core committee numbers of meetings were held and deliberation on various issues took place. Thus, from the facts stated supra it is apparent that opportunity of hearing was afforded to the recognized and registered unions. At this stage, we may refer to the decision rendered in BALCO employees' Union (supra) wherein the Supreme Court held that even though the workers may have interest in the manner in which the company is conducting the business inasmuch as its policy decision may have impact on workers' rights, nevertheless it is an incidence of service of an employee to accept a decision of the employer which has been honestly taken and which is not contrary to law. Even a Government servant having the protection of not only Articles 14 and 16 of the Constitution but also of Article 311 has no absolute right to remain in service. It has further been held that in taking of policy decision in economic matters at length principles of natural justice have no role to play. In the instant case, the meeting as well as negotiation was held with the recognized and registered trade unions and, therefore, it cannot be said that the decision to corporatise the nine units has been taken against the principles of natural justice. For another reason, no fault can be found with the decision, as employees have been (19) given the option either to remain in Government service or to serve in Corporation and their service conditions are not being altered to their disadvantage. Therefore, challenge to the decision on this ground also must fail.
24. Thus, for aforementioned reasons, we do not find any merit in the writ petitions. The same deserve to and are hereby dismissed. However, there shall be no order as to costs.
(S.R. Alam) (Alok Aradhe)
Chief Justice Judge
HS/ac.
(20)
HIGH COURT OF MADHYA PRADESH
PRINICIPAL SEAT AT JABALPUR
Writ Petition No.4856/2006
S.P.M. Employees Union and others..........................................Petitioners Versus Union of India and others .................................... ... Respondents Writ Petition No.8711/2008 SPM Gazetted Officers Association, SPM, Hoshangabad &anr. .... ................................................ Petitioners Versus Union of India and others .................................... ... Respondents Writ Petition No.2167/2009 Bhartiya Bank Note Press Mazdoor Sangh and another... ...... Petitioners Versus Union of India and others .................................... ... Respondents Writ Petition No.15087/2008 Rajkumar Kirar ........................................ Petitioner Versus Union of India and others .................................... ... Respondents ORDER FOR CONSIDERATION :
(S.R. Alam) Chief Justice 12/10/2010 HON'BLE SHRI JUSTICE ALOK ARADHE :
(Alok Aradhe) Judge 12/10/2010 ORDER POST FOR : 13-10-2010 (S.R. Alam) Chief Justice /10/2010 (21)