Calcutta High Court
Union Of India & Others vs Subhojit Dutta & Others on 17 April, 2009
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
Present :
The Hon'ble Justice Debiprasad Sengupta
And
The Hon'ble Justice Debasish Kar Gupta
A. P. O. T. No. 31 of 2009
W. P. No. 936 of 2008
Union of India & Others
Versus
Subhojit Dutta & Others
Appearance :
Mr. K. P. Pathak, Additional Solicitor General,
Mr. R. N. Das, Sr. Advocate,
Mr. S. Mitra, Advocate,
Ms. Aparna Banerjee, Advocate,
... For the Appellants.
Mr. Kashi Kanta Moitra, Sr. Advocate,
Mr. R. N. Majumdar, Advocate,
Mr. Sandip Ghoshal, Advocate,
Mr. Susanta Pal, Advocate,
Mrs. Rupa Mukherjee, Advocate,
Mrs. Reshmi Mukherjee, Advocate,
Mr. Jaideep Dutta, Advocate,
... For the Respondents.
Mr. S. Pal, Sr. Advocate,
Mr. P. S. Sengupta, Advocate,
Mr. Soumya Majumdar, Advocate,
Ms. Vineeta Meheria, Advocate,
Mr. Pramod Kr. Mishra, Advocate,
... For the Proforma Respondents.
Judgement on : 17th April, 2009
DEBIPRASAD SENGUPTA, J. :
This appeal is directed against the judgment and order passed by the learned Single Judge on 23.12.2008 in W. P. No. 936 of 2008.
In the writ petition the subject matter of challenge was an order dated 29.02.2008 terminating the service of the writ petitioner / respondent, who was the Director (Project Management) of Bridge and Roof Company. By the impugned judgment and order, the order of termination was quashed and the respondent authorities were directed to take steps for compliance with the court's order within a period of four weeks from the date of communication of such order and hence, this appeal preferred by the Union of India.
In course of hearing of the application for stay of operation of the impugned judgment and order, a prayer was made before us that the appeal might be disposed of finally after dispensing with the filing of informal paper books. Accordingly, we took the matter for final disposal in presence of the learned Advocates of the respective parties.
Before entering into the merits of the case it would be proper to discuss about the factual background of the case.
By a notification dated 14.09.2004 the Secretary, Public Enterprises Selection Board (hereinafter referred to as PESB) informed the Bridge and Roof Co. (I) Limited that the Board (PESB) was in search of a suitable candidate for appointment in the post of Director (Project Management) in Bridge and Roof Company. It was requested that the names of suitable candidates might be forwarded to the office of the PESB.
The writ petitioner / respondent applied for the said post and the same was forwarded by the Bridge and Roof Company to its Holding Company Bharat Yantra Nigam Limited, who in turn forwarded the same to PESB. The writ petitioner / respondent appeared before the Board (PESB) on 22.12.2004. By memo no. 3(4)/2004-PE.IV dated 17.06.2005 issued by the Government of India, Ministry of Heavy Industries and Public Enterprises, Department of Heavy Industry informed the Company Secretary of Bridge and Roof Company that the President of India sanctioned the appointment of the writ petitioner / respondent as Director (Project Management) of the Bridge and Roof Company (I) Limited with effect from 12th April, 2005 on certain terms and conditions. Relevant portion of such order dated 17.06.2005 is quoted below :
" No. 3(4)/2004-PE.IV Government of India Ministry of Heavy Industries & Public Enterprises Department of Heavy Industry Udyog Bhavan, Maulana Azad Road, New Delhi, Dated 17.06.2005 To The Company Secretary Bridge & Roof Company (I) Limited Kolkata Subject : Appointment of Shri Subhojit Dutta as Director (Project Management) - terms & conditions of.
Sir, I am directed to convey the sanction of the President of India to the appointment of Shri Subhojit Dutta, as Director (Project Management) of M/s. Bridge & Roof Company (India) Limited (B&R), Kolkata w.e.f. 12.04.2005 on the following terms and conditions.
(i) Period : The period of his appointment will be till the date of his superannuation or until further orders, whichever is earlier and in accordance with the provisions of the Companies Act.
The appointment may, however, be terminated even during this period by either side on 3 months notice or on payment of three months salary in lieu thereof.
After the expiry of the first year, the performance of Shri Subhojit Dutta, will be reviewed to enable the Government to take a view regarding continuance or otherwise for the balance period of tenure."
At the time of appointment of the writ petitioner / respondent as Director (Project Management), the age of retirement of Board Level and below Board Level employees of the Bridge and Roof Company was 58 years. Government of India, Ministry of Heavy Industries and Public Enterprises by a memo dated 30.07.2007 conveyed to the Managing Director of the Bridge and Roof Company the approval of the competent authority to the enhancement of age of retirement from 58 to 60 years in respect of Board Level and below Board Level employees of Bridge and Roof Company.
It was the case of the writ petitioner / respondent that in terms of appointment letter dated 17.06.2005 and the terms and conditions mentioned therein, the writ petitioner's appointment would be till the date of his superannuation, i.e. on attaining the age of 60 years or until further order, whichever was earlier in accordance with the provisions of the Companies Act.
Chairman, Bharat Yantra Nigam Limited was requested by the Under Secretary, Govt. of India, Ministry of Heavy Industries and Public Enterprises, Department of Heavy Industries by letter dated 7.2.2008, to forward the ACR of the writ petitioner / respondent as the same was required for extension of his tenure. It was the case of the writ petitioner / respondent that when it was specifically mentioned in the terms and conditions of appointment that the period of appointment would be till the date of superannuation, the question of extension of tenure could not arise and such extension should be automatic.
By letter dated 29.02.2008, the Managing Director of Bridge and Roof Company was informed that since at the time of appointment of the writ petitioner / respondent as Director (Project Management), the age of retirement was 58 years and taking into consideration the fact that this period had not been extended by the competent authority, the writ petitioner / respondent would cease to be the Director (Project Management) of the company beyond 29th February, 2008. The writ petitioner was reverted to the post of Technical Advisor to the Managing Director.
The writ petitioner / respondent challenged the aforesaid order of termination dated 29th February, 2008.
Mr. R. N. Das, learned Senior Counsel, appearing on behalf of the appellant refers to the letter of appointment and submits that the writ petitioner / respondent was appointed as Director (Project Management) of M/s. Bridge and Roof Company (India) Limited with effect from 12.4.2005. Such appointment was purely a contractual appointment and the period of appointment, as mentioned in the said appointment letter, is quoted below :
"(I) Period : The period of his appointment will be till the date of his superannuation or until further orders, whichever is earlier and in accordance with the provisions of the Companies Act. The appointment may, however, be terminated even during this period by either side on 3 months notice or on payment of three months salary in lieu thereof.
After the expiry of the first year, the performance of Shri Subhojit Dutta, will be reviewed to enable the Government to take a view regarding continuance or otherwise for the balance period of tenure."
It is the contention of Mr. Das, learned Advocate that since the age of superannuation of the employees of Bridge and Roof Company was 58 years at the time of appointment of the writ petitioner / respondent as the Director (Project Management) and since this was a contractual appointment, the age of superannuation of the writ petitioner was fixed at 58 years. From the letter of termination also it appears that the date of retirement of the writ petitioner was mentioned as on 29.2.2008 i.e. on attaining the age of 58 years.
It is the further contention of Mr. Das, learned Counsel that although the age of superannuation of the Board Level and below Board Level employees of Bridge and Roof Company was enhanced from 58 years to 60 years by the competent authority, the writ petitioner / respondent was not entitled to get such benefit of 60 years as at the time of his contractual appointment, age of superannuation of the employees of Bridge and Roof Company was 58 years.
Mr. Das further submits that the initial appointment of the writ petitioner / respondent as Director (Project Management) was bad and illegal inasmuch as he did not have requisite qualification at the time of his appointment as he did not have actual experience of one year in the post of General Manager to become eligible for the post of Director (Project Management). It is the submission of Mr. Das, learned Counsel that the writ petitioner / respondent had no legally enforceable right to continue his service by treating the age of his superannuation to be 60 years since he accepted the offer of appointment to the post of Director (Project Management) with full knowledge that the contractual appointment would come to an end on attaining the age of 58 years. It is further contended that the appointment of a Director in the Bridge and Roof Company is regulated by contractual service condition and in the case of extension of age upto 60 years, it is based on some fixed criteria and cannot be automatically done like other employees below Board Level.
As regards the eligibility criteria for appointment as Director (Project Management) of the company, it is submitted by Mr. Das, learned Advocate that although the writ petitioner / respondent was fitted in Grade E-7 pay scale with effect from 1.4.2004 vide company office order dated 30.10.2004, he was actually promoted to the post of General Manager (Level E-7) on 30.10.2004. So on the date of his appointment i.e. 12.4.2005 he had no requisite qualification as he did not possess one year's experience in the feeder post of General Manager (E-7 scale). So, the writ petitioner / respondent was not at all eligible to apply for the post of Director (Project Management) as he was not having requisite experience of one year in the feeder post of General Manager in E-7 Grade. So, the order of termination, according to the learned Advocate of the appellant, was justified and by such order of termination, the writ petitioner / respondent was not penalized in any way as he was permitted by the company to keep lien and accordingly was placed in the pay scale of E-7 with effect from 1st March, 2008 and was designated as Technical Advisor to the Managing Director of the company.
It is submitted by Mr. Das, learned Advocate of the appellant that there is a difference between Board Level Directors and below Board Level employees. Appointments of Directors are regulated by contractual service conditions and any extension of the period of appointment upto the age of 60 years cannot be automatic and the question of extension of service from 58 to 60 years cannot arise, because approval of the competent authority was obtained in such a manner that his tenure as Director would come to an end on completing the age of 58 years.
The learned Advocate of the appellant submits that the writ petition was not maintainable. Where the appointment was purely on contract basis, the same is not specifically enforceable in view of Section 14 of the Act of 1963. Even if termination of contract of employment, by dismissal or otherwise, is found to be illegal or in breach, the remedy of an employee is to seek for damages. Writ jurisdiction cannot be invoked in such a case for proper remedy.
Finally, it is submitted by Mr. Das, learned Advocate that such appointment was given to the writ petitioner not having requisite qualification, due to mistake and when such mistake was detected at a subsequent stage, the respondent authority had every right to correct such mistake.
Mr. Das, learned Advocate, in support of his contention relies upon a judgment reported in (2008) 8 SCC 92 (State Bank of India & Ors. Vs S.N. Goyal). In the said judgment, it was held by the Hon'ble Supreme Court as follows :
"17. Where the relationship of master and servant is purely contractual, it is well settled that a contract of personal service is not specifically enforceable, having regard to the bar contained in Section 14 of the Specific Relief Act, 1963. Even if the termination of the contract of employment (by dismissal or otherwise) is found to be illegal or in breach, the remedy of the employee is only to seek damages and not specific performance. Courts will neither declare such termination to be a nullity nor declare that the contract of employment subsists nor grant the consequential relief of reinstatement."
On perusal of the said judgment it appears that the respondent, who was a Branch Manager of State Bank of India, was removed from service on account of misconduct proved against him during the course of enquiry. State Bank of India is a statutory body governed by the State Bank of India Act, 1955 and the officers and employees of the bank are governed by the rules framed under the said Act. The respondent approached the civil court alleging that the removal from service was in violation of rules. The point, which was for consideration before the Hon'ble Apex Court, was whether the court has power to order reinstatement in such a case. It was held that when an employee of a statutory body, whose service is terminated, pleads that such termination is in violation of statutory rules governing his employment, an action for declaration that such termination is invalid and that he should be deemed to continue in service is maintainable and will not be barred by Section 14 of the Specific Relief Act. In our considered view, the judgment referred to above has no manner of application in the present case as the facts and circumstances of the said case is totally different from the present case.
On the same point of maintainability of the writ petition, the learned Advocate of the appellant relies upon the judgments reported in AIR 1977 SC 1496 (M/s. Radhakrishna Agarwal Vs State of Bihar) and AIR 1989 SC 1076 (Bareilly Development Authority Vs Ajay Pal Singh). In the case of Radhakrishna Agarwal (supra), the petitioner's case was that the revision of the rate of royalty payable by the petitioners for lease to collect and exploit sal seed from forest area was illegal during the subsistence of the lease and thereafter cancellation of the lease itself was illegal. The petitioner also alleged mala fides on the part of conservator of forest in enhancing the royalty and then canceling the lease. It was held that contracts did not contain any statutory terms or obligations and no statutory power or obligation to attract the application of Article 14 of the Constitution of India.
In the case of Bareilly Development Authority (supra) it appears that the authority (BDA) invited applications from intending candidates who were desirous to purchase flats. A brochure was issued by the BDA containing general terms and the estimated cost and it was made clear that it might increase or decrease according to the rise and fall in the price at the time of completion of flats. A notice was subsequently issued by the Development Authority increasing the price of the houses / flats. The allottees challenged the revised terms and conditions of BDA on the ground that the Development Authority was estopped from changing the conditions subject to which the allottees applied and deposited initial payment. The Hon'ble Apex Court observed in paragraph 16 of the said judgment as follows :
" 16.... From the above, it is clear that all the respondents who have sent their applications for registration with initial payment only after having fully understood the terms and conditions of the brochure inclusive of the Clauses 12 and 13 and Notes 1 and 2 of the General Information Table as per which the BDA has reserved its right to change, enhance or amend any of the terms and/or conditions as and when felt necessary, and also the right to relax any of the conditions at its discretion, and that the cost shown in the column 4 of the brochure was only estimated cost subject to increase or decrease according to the rise or fall in the price at the time of completion of the property. This is not only the case of the applicants of MIG scheme but also of the other applicants falling under the other categories i.e. HIG, LIG and EWS. So it cannot be said that there was a misstatement or incorrect statement or any fraudulent concealment in the information supplied in the brochure published by the BDA on the strength of which all the applicants falling under the various categories applied and got their names registered. In such a circumstance the respondents cannot be heard to say that the BDA has arbitrarily and unreasonably changed the terms and conditions of the brochure to the prejudice of the respondents."
The learned Advocate relies upon a judgment of the Hon'ble Supreme Court reported in (2008) 12 SCC 500 (Kisan Sahkari Chini Mills Ltd. Vs. Vardan Linkers). It was held in the said judgment that ordinarily the remedy available for a party complaining of breach of contract lies for seeking damages. But, where the contractual dispute has a public law element, the power of judicial review under Article 226 of the Constitution of India may be invoked.
As regards the eligibility of the writ petitioner / respondent the learned Advocate of the appellant relies upon a judgment reported in (1995) 1 SCC 138 (Ravinder Sharma (Smt) & Anr. Vs State of Punjab and Ors). In the said judgment it was held by the Hon'ble Apex Court that appointment of a person not having the qualification required by the relevant regulation on the date of appointment, was bad and hence termination of such appointment was not barred by estoppel. However, the question whether subsequent acquisition of requisite qualification entitles such person for being considered for regularization, was left open.
The next judgment relied upon by the learned Advocate of the appellant is reported in (1996) 7 SCC 118 (State of M.P. & Ors. Vs Shyama Pardhi & Ors.). In the said case some persons not having requisite qualification prescribed by the statutory rules, were given appointments. Since the initial appointment was illegal, it was held by the Hon'ble Apex Court that termination of their appointments did not attract the principle of natural justice.
The learned Advocate of the appellant relying upon an unreported decision of this court in W. P. No. 1366 of 2007 (Bridge & Roof Co. (I) Ltd. Executive Association Vs. Union of India & Ors.) submits that in similar circumstances in case of appointment in the post of Director (Finance) in the company, it was held by the learned Single Judge of this court that promotion with retrospective effect does not really add to 'experience'. In the said case, it is pointed out by the learned Counsel that two Officers were not eligible for appointment as Director (Finance) as they were not having minimum qualifying experience of one year and accordingly with the approval of the competent authority the panel recommended by the P.E.S.B. was scrapped and P.E.S.B. was requested to initiate fresh selection process.
We have gone through the aforesaid judgment and find that the subject matter of challenge was totally different in the said case, which was not against any order of termination. In the said case a list of 19 candidates was short-listed for consideration for appointment in the post of Director (Finance) in the B&R Company. But by a subsequent notification it appeared that the P.E.S.B. was looking out for a suitable candidate for the post of Director (Finance) in the company. Since two of the candidates were found ineligible, the panel recommended by P.E.S.B. was cancelled and fresh selection process started. But in the present case the subject matter of challenge is an order of termination and that too not on the ground of ineligibility, but on some other ground. The unreported judgment referred to above is not at all applicable in the present case as the facts and circumstances are totally different.
Relying upon the aforesaid judgment it is submitted by Mr. Das, learned Advocate of the appellant that since the writ petitioner / respondent did not have requisite qualification of one year's experience in the feeder post at the time of his appointment, his termination from service was justified on that ground. But we are unable to accept such contention because we find that in the order of termination there is no reflection of any such ground of ineligibility. The law laid down by the Hon'ble Supreme Court are all settled principles of law, but the judgments referred to above are not applicable in the present case as the writ petitioner / respondent was not terminated on the ground of ineligibility, but only on the ground that he had attained the age of superannuation at the age of 58 years. The facts and circumstances of the present case is totally different from the cases referred to above.
The learned Advocate appearing on behalf of the Bridge and Roof Company submits that the order of termination does not suffer from any illegality. Since the age of superannuation of the employees of Bridge and Roof Company was 58 years, for both Board Level and below Board Level employees, and since the appointment of the writ petitioner / respondent as Director (Project Management) was a contractual appointment, his date of superannuation was fixed on 29.02.2008. The approval of his appointment was also obtained from the competent authority in such a manner that his tenure as a Director would come to an end on attaining the age of 58 years. The writ petitioner cannot claim the benefit of 60 years as the age of superannuation, because at the time when such contractual appointment was given to the writ petitioner, the age of superannuation of both Board Level and below Board Level employees of the company was 58 years.
It is the submission of Mr. Sengupta, learned Counsel of the Bridge and Roof Company that two points were raised before the learned Trial Judge, which were not dealt with by the learned Judge. The first point was that the writ petitioner / respondent, when he was appointed as Director (Project Management), had no requisite qualification, i.e. one year's experience in the post of General Manager to become eligible for appointment in the said post. Since his initial appointment was bad and irregular, he should not be allowed to continue in the said post. The second point raised before the learned Trial Judge was the point of maintainability of the writ petition. It was urged that since the appointment was purely a contractual appointment, invoking writ jurisdiction was not proper and the proper remedy was to file a suit for damages. According to Mr. Sengupta, learned Advocate, these are the two points, which were raised before the learned Trial Judge, but the same were not dealt with.
So far as the point of maintainability of the writ petition is concerned, the learned Advocate of the Bridge and Roof Company adopts the arguments advanced by the learned Advocate of the appellant / Union of India.
It is the contention of Mr. Sengupta, learned Advocate that the appointment of the writ petitioner / respondent on the face of it was illegal. It is pointed out by Mr. Sengupta that the writ petitioner / respondent was required to possess one year's experience in the post of General Manager (E-7 scale) to become eligible for appointment in the said post. But it was revealed that he was promoted as General Manager (E-7 scale) on 30.10.2006 and he was designated as General Manager with immediate effect, i.e. from 30.10.2004. However, he was fitted in Grade E-7 pay scale with effect from 1.4.2004. So, it is clear that on the date of application for appointment in the said post and even on the date of appointment in the post of Director (Project Management) the writ petitioner / respondent had no requisite qualification, i.e. one year actual experience in the post of General Manager (E-7 scale). Since the initial appointment was an irregular appointment, the service of the writ petitioner was rightly terminated by the competent authority. It is the contention of Mr. Sengupta that if the order of termination is quashed by this court, the same will amount to revival of an illegal order of appointment.
Relying upon the judgment of the Hon'ble Supreme Court reported in (1996) 4 SCC 416 (Union of India & Ors. Vs M. Bhaskar & Ors.), the learned Advocate of the company submits that persons promoted to higher grade cannot gain experience from the date of notional promotion and it has to be computed from the date of actual promotion. But, this judgment, in our considered view, is not applicable in the present case as the basis of termination order was not ineligibility of the writ petitioner / respondent, but attainment of the age of superannuation.
Next judgment relied upon by Mr. Sengupta, learned Advocate of the company is reported in AIR 1966 SC 828 (Gadde Venkateswara Rao Vs Govt. of Andhra Pradesh) to substantiate his point that setting aside of wrong order would amount to revival of another wrong order. On perusal of the said judgment we fail to understand how this judgment of the Hon'ble Supreme Court is applicable in the present case, where the facts and circumstances are totally different from the case referred to above.
The other two judgments relied upon by Mr. Sengupta are reported in (1988) 1 SCC 40 (Md. Swalleh Vs. Third Addl. District Judge) and (1999) 6 SCC 237 (M.C. Mehta Vs. Union of India & Ors.). In the case of M. C. Mehta (supra), it was held by the Hon'ble Supreme Court that if on the admitted or indisputable factual position, only one conclusion is possible and permissible, the court need not issue a writ merely because there has been a failure of the principle of natural justice. In the decision of Md. Swalleh (Supra), it appears that where despite absence of provision in the statute for appeal to the District Judge against an erroneous order of the statutory authority, the District Judge entertained such an appeal and rightly set aside the order, it was held by the Hon'ble Apex Court that High Court in exercise of jurisdiction under Article 226 of the Constitution of India was justified in upholding a view taken by the District Judge in the interest of justice as in any case it had jurisdiction to set aside the improper order of the authority directly. These two judgments are also not applicable in the present case and those, in our considered view, are not at all relevant for deciding the present appeal.
It is submitted by Mr. Sengupta that the writ petitioner's case is a case of fresh appointment and it is not a case of promotion. Notional effect can be given in case of promotion, but not in case of experience. When the qualification required for appointment in the post was one year's experience in the post of General Manager (E-7 scale) and when the writ petitioner was given appointment in the said post without having such requisite qualification, such appointment must be held to be illegal.
It is also the submission of Mr. Sengupta that such appointment in the post of Director (Project Management) was given to the writ petitioner due to mistake on the part of the respondent authority and such mistake can always be corrected by such authority if it is detected at a subsequent stage.
Mr. Kashikanta Moitra, learned Counsel appearing on behalf of the writ petitioner / respondent submits that the authority concerned in an illegal and arbitrary manner has taken steps terminating the service of the writ petitioner from the post of Director (Project Management) thereby downstaging the status of the writ petitioner. The age of retirement of the employees of Bridge & Roof Company was enhanced from 58 years to 60 years and the writ petitioner / respondent was also entitled to get the benefit of 60 years as the age of superannuation when all other employees were also given the same benefit. Therefore, the contention of the learned Advocate of the appellant that the general enhancement of the age of retirement upto 60 years does not include all contractual services, does not have any basis and the same is devoid of any merit. It is submitted by Mr. Moitra that at the time of appointment of the writ petitioner as Director (Project Management) in 2005, the age of retirement of both at the Board Level and below Board Level was 58 years and accordingly the period of appointment could not have been beyond 29th February, 2008 and as such, approval was sought for upto 29th February, 2008, which was the date of retirement prior to the roll forward of the age of superannuation from 58 years to 60 years in terms of order dated 30th July, 2007 issued by the competent authority. Mr. Moitra, submits that the decision to roll forward the date of retirement of both Board Level and below Board Level employees was a Cabinet decision and such benefit, which is also available to the writ petitioner, cannot be taken away by a particular Ministry of the Government of India.
Mr. Moitra, learned Counsel refers to the letter of appointment dated 17th June, 2005 appearing at page 75 of the stay application, relevant portion of which has already been quoted hereinabove, and submits that Clause ( i ) of the appointment letter clearly indicates that the tenure of service of the writ petitioner / respondent as Director (Project Management) was upto the age of superannuation, which implies that whatever would be the age of superannuation, the appointment of the writ petitioner as Director (Project Management) would continue upto that age. Since the age of superannuation was enhanced from 58 to 60 years during the tenure of service of the writ petitioner in the said post, he is entitled to continue till his attaining the age of 60 years.
As regards the allegation of not having the requisite qualification of one year experience and suppression of such fact by the writ petitioner in his application for appointment in the said post, it is submitted by Mr. Moitra that such allegation cannot be taken into consideration as the foundation of the order of termination was not the ineligibility of the writ petitioner. Mr. Moitra submits that such allegation of suppression of fact is very much stigmatic in nature and the same was not preceded by any opportunity of hearing to the writ petitioner / respondent. According to Mr. Moitra, when a public authority makes an order based on certain grounds, its validity must be judged by the reasons so mentioned in the said order and cannot be supplemented by fresh reasons in the form of affidavit. It is pointed out by Mr. Moitra that in the order of termination it is nowhere mentioned that such termination was due to the reason of not having the requisite qualification at the time of appointment or that his initial appointment was bad or illegal. The only reason given in the order of termination was that he had attained the age of superannuation at the age of 58 years. Mr. Moitra draws our attention to the order of termination, appearing at page 92 of the stay application, which is quoted below :
"To The Managing Director, Bridge & Roof Co. (India) Ltd.
Kolkata Subject : Completion of tenure of Shri Subhojit Dutta, Director (Project Management), Bridge & Roof Co. (India) Ltd. (B&R), Kolkata Sir, I am directed to invite your attention to this Department's Order of even No. dated 12.4.2005 appointing Shri Subhojit Dutta as Director (Project Management), Bridge & Roof Co. (India) Ltd. (B&R), Kolkata till the date of his superannuation or until further orders, whichever event occurs earlier. At the time of his appointment, the superannuation age in B&R was 58 years. Shri Dutta was appointed as Director (Project Management), B&R taking into consideration the age of his superannuation as 58 years only i.e. upto 29.2.2008 and this period has not been extended by the Competent Authority.
In view of above, Shri Dutta ceases to be Director (Project Mangement) B&R beyond 29.2.2008. Suitable action may please be taken accordingly.
Yours faithfully, (R.P. Goyal) Director "
Mr. Moitra submits that for the first time in their affidavit, the appellant came up with such an allegation, which was also stigmatic in nature, that the writ petitioner did not have requisite qualification of one years experience and there was suppression of fact in the application made by the writ petitioner to get such appointment. Mr. Moitra submits that before bringing such allegation no opportunity of hearing was given to the writ petitioner thereby violating the principle of natural justice. In support of his contention, Mr. Moitra relies upon a judgment of the Hon'ble Supreme Court reported in AIR 1978 SC851 (Mohinder Singh Gill & Anr. Vs. The Chief Election Commissioner, New Delhi & Ors.). In the said judgment, it was held by the Hon'ble Apex Court in paragraph 8 as follows :
"8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji (AIR 1952 SC 16) (at p.
18) :
"Public orders publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself...."
Referring to paragraph 25 of the affidavit-in-opposition filed by the respondent no. 1 / appellant, it is submitted by Mr. Moitra that in the said paragraph a statement was made that such fact of irregular appointment without requisite qualification came to notice of the appellant later on from a complaint received against the petitioner and these facts are now being scrutinized in consultation with the Central Vigilance Commission. It is submitted by Mr. Moitra that it was never disclosed even before this court, what was the complaint against him. Mr. Moitra further points out that a statement was made in the said paragraph 25 of the affidavit that such facts of irregular appointment were being scrutinized. So the work of scrutiny was not complete on the date when the affidavit-in-opposition was affirmed by the deponent on 14th July, 2008. When the scrutiny was not complete on 14th July, 2008, how it was possible for the concerned authority to issue order of termination on 29.2.2008 without ascertaining the genuineness of allegation. This itself shows that the concerned authority acted in an arbitrary manner in terminating the service of the writ petitioner / respondent.
Mr. Moitra relies upon a judgment of the Hon'ble Supreme Court reported in AIR 1967 SC 1889 (Roshan Lal Tandon Vs. Union of India & Ors.), wherein it was held by the Hon'ble Apex Court that the legal position of a Government servant is more one of status than of contract. The hallmark of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement.
Mr. Moitra, learned Counsel relies upon a judgment of the Hon'ble Supreme Court reported in AIR 1991 SC 2219 (State of Punjab Vs. Gurdev Singh). The learned Advocate refers to paragraph 6 of the said judgment, which is quoted below :
"6. But none the less the impugned dismissal order has at least a de facto operation unless and until it is declared to be void or nullity by a competent body or Court. In Smith v. East Elloe Rural District Council, (1956) AC 736 at p. 769 Lord Redcliffe observed :
"An order even if not made in good faith is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders."
Mr. Moitra next relies upon a judgment of the Hon'ble Apex Court reported in AIR 1981 SC 1473 (Gokaraju Rangaraju Vs. State of A.P.). On perusal of the said judgment, we find that the point, which fell for consideration before the Hon'ble Apex Court, was what would be the effect of the declaration by the Supreme Court that the appointment of an Additional Sessions Judge was invalid on the judgments pronounced by the Judge prior to such declaration. In paragraph 12 of the said judgment it was held by the Hon'ble Apex Court as follows :
"12. The de facto doctrine has been recognized by Indian Courts also. In Pulin Behari v. King Emperor, (1912-15 Cal LJ 517) Sir Asutosh Mukerjee, J. after tracing the history of the doctrine in England observed as follows :
"The substance of the matter is that the de facto doctrine was introduced into the law as a matter of policy and necessity, to protect the interest of the public and the individual where these interests were involved in the official acts of persons exercising the duties of an office without being lawful officers. The doctrine in fact is necessary to maintain the supremacy of the law and to preserve peace and order in the community at large. Indeed, if any individual or body of individuals were permitted, at his or their pleasure, to collaterally challenge the authority of and to refuse obedience to the Government of the State and the numerous functionaries through whom it exercised its various powers on the ground of irregular existence or defective title, insubordination and disorder of the worst kind would be encouraged. For the good order and peace of society, their authority must be upheld until in some regular mode their title is directly investigated and determined."
On the point of power of judicial review of the High Court Mr. Moitra, learned Advocate relies upon a judgment of the Hon'ble Supreme Court reported in AIR 2007 SC 548 (Indian Airlines Limited Vs. Prabha D. Kanan). From a reading of the said judgment it appears that the service of the respondent was terminated invoking Regulation 13 of Service Regulation without any enquiry and prior notice. There was no provision of appeal against such order of termination. It was held by the Hon'ble Supreme Court in paragraphs 42 and 43 as follows :
"42. But, in a case of this nature although there is no provision for appeal, but even in a judicial review, the court may require the employer to produce the records, on a perusal whereof the court may come to a finding as to whether the order passed by the Board of Directors was bona fide or not."
"43. A judicial review of such an order would be maintainable. In a case of judicial review, where no appeal is provided for, the High Court in exercise of its jurisdiction under Article 226 of the Constitution of India would not confine its jurisdiction only to the known tests laid down therefor, viz., illegality, irrationality, procedural impropriety. It has to delve deeper into the matter. It would require a deeper scrutiny."
In the case of State of Orissa Vs. Dhaniram Luhar reported in (2004) 5 SCC 568, the High Court while dismissing an application for leave to appeal against an order of acquittal passed by the learned Magistrate, failed to record any reason although it was required to indicate reasons for refusal to grant leave. In paragraph 8 of the said judgment, it was held by the Hon'ble Supreme Court as follows :
"8. Even in respect of administrative orders Lord Denning, M.R. in Breen v. Amalgamated Engg. Union5 observed : "The giving of reasons is one of the fundamentals of good administration." In Alexander Machinery (Dudley) Ltd. v. Crabtree6 it was observed. : "
Failure to give reasons amounts to denial of justice." " Reasons are live links between the mind of the decision-taker to the controversy in question and the decision or conclusion arrived at." Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the "inscrutable face of the sphinx", it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system; reasons at least sufficient to indicate an application of mind to the matter before court....."
Relying upon the aforesaid judgment, it is submitted by Mr. Moitra that nothing was communicated to the writ petitioner / respondent as to why his service in the said post could not be extended by the competent authority. Mr. Moitra further submits that the writ petitioner was allowed to continue in the said post of Director (Project Management) for four years without any complain from any corner whatsoever. All of a sudden his service was terminated on such a ground, which can never be said to be valid ground for termination. Referring to the order of termination, it is submitted by Mr. Moitra, learned Advocate that such termination was only on the ground that the writ petitioner attained the age of 58 years, which was the age of superannuation at the time of his appointment and that this period could not be extended by the competent authority. Mr. Moitra submits that enhancement of age of superannuation from 58 to 60 years was made for the 'post' and not for any particular individual. So, the question of any extension of period of service does not arise at all. Mr. Moitra submits that when the benefit of enhancement of age of superannuation from 58 to 60 years has been extended to all the employees of Bridge & Roof Company, there cannot be any reason for denying such benefit to the writ petitioner / respondent.
Mr. Moitra refers to the Policy and Procedures for appointment for the Board Level functionaries, appearing at pages 85 to 91 of the stay application, which provides that the Board Level functionaries will be considered for appointment for a period of 5 years or till the age of superannuation, whichever is earlier. Nowhere it is indicated in the said policy that period is to be extended during the tenure of service of such Board Level functionaries.
Mr. Moitra submits that in the four corners of the termination order it is nowhere stated that the writ petitioner / respondent was ineligible for appointment in the said post or that he had no requisite qualification of one year's experience to become eligible for the said post. Since there is no reflection of such ground in the order of termination, this court should not take into consideration such ground.
Mr. Moitra, learned Advocate relies upon a judgment of the Hon'ble Supreme Court reported in AIR 1979 SC 429 (Govt. Branch Press Vs. D. B. Belliappa). From a reading of the said judgment, it appears that the service of a temporary government servant was terminated without giving any reason while some other employees junior to him were retained in service. The employee was earlier served with a show cause notice questioning his integrity and fidelity, but the Government ultimately adhered to the stand that there was no nexus between the show cause notice and termination of service. It was held by the Hon'ble Apex Court that the termination of service was made arbitrarily and not on the ground of unsuitability or other reason and the power reserved to the employer had been exercised arbitrarily.
Relying upon the aforesaid judgment it is submitted by Mr. Moitra that the authority concerned has given one ground for such termination in the order of termination and they cannot deviate from that and cannot come with a new ground of ineligibility for such termination in their affidavit-in-opposition.
As regards maintainability of the writ petition Mr. Moitra relies upon a judgment of the Hon'ble Supreme Court reported in 2007(3) Supreme 52 M/s. Popcorn Entertainment & Anr. Vs. City Industrial Development Corporation & Anr.). From a reading of the said judgment, it appears that an appeal was preferred before the Hon'ble Apex Court against the judgment and order passed by the High Court of Judicature at Bombay whereby the High Court rejected the writ petition only on the ground that the appellants had an equally efficacious remedy of filing a civil suit and thus, the writ jurisdiction could not be invoked. It was held by the Hon'ble Apex Court that writ petitions can be entertained even in contractual matter if the action of the respondents is illegal and without jurisdiction ; if the principles of natural justice are violated and if the petitioners' fundamental rights have been violated. The matter was sent back to the High Court with a direction to restore the writ petition and to decide the same in time bound manner. Mr. Moitra refers to paragraph 14 of the said judgment, which is quoted below :
"14. He invited our attention to the Whirlpool Corporation case (supra) wherein this Court has held that there are three clear-cut circumstances wherein a writ petition would be maintainable even in a contractual matter.
Firstly, if the action of the respondent is illegal and without jurisdiction.
Secondly, if the principles of natural justice have been violated and Thirdly, if the appellants' fundamental rights have been violated." Relying upon the aforesaid judgment it is submitted by Mr. Moitra, learned Counsel that all the three principles as laid down in the case of Whirlpool Corporation [ 1998 (8) SCC 1 ] have been made out in the present case because the action of the authority concerned, as it has already been pointed out, is wholly illegal and arbitrary. Secondly, such authority has violated the principle of natural justice as an order of termination affecting the right of the writ petitioner has been passed without giving an opportunity of hearing to the writ petitioner. Thirdly fundamental rights of the writ petitioner / respondent as guaranteed under Article 14 of the Constitution of India have been violated.
On the point of maintainability of the writ petition the learned Senior Counsel also relies upon a judgment of the Hon'ble Supreme Court reported in (1986) 3 SCC 156 (Central Inland Water Transport Corporation Vs. Brojonath Ganguli). In the said judgment, it was held that the appellant corporation was the 'State' within the meaning of Article 12 of the Constitution of India and one must necessarily see through the corporate veil to ascertain whether behind that veil was the face of an instrumentality or agency of the state. Relevant portion from paragraph 69 of the said judgment is quoted below :
"69......For the purposes 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. The Corporation, which is the Appellant in these two Appeals before us, squarely falls 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 inland water transportation is not sufficient to divest it of its character of an instrumentality or agency of the State. It 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 Corporation is "the State" within the meaning of Art. 12 of the Constitution."
In the present case, it is submitted by Mr. Moitra, learned Advocate that the President of India is the approving, sanctioning and appointing authority and is also disciplinary authority of the writ petitioner / respondent. So, even admitting that the service of the writ petitioner / respondent was contractual one, it was not an ordinary contract between the two private individuals. It was a contractual appointment in which appointment was given to the writ petitioner / respondent in the post of Director (Project Management) with the sanction of the President of India. It is submitted by Mr. Moitra, learned Counsel that the court sitting in writ jurisdiction can always interfere in the contractual field where the State or its instrumentality acts in an arbitrary manner. A judicial review cannot be denied even in contractual matters in which the State or its instrumentalities exercise its contractual power. The judicial review is intended to prevent arbitrariness and it must be exercised in large public interest.
It is the further contention of Mr. Moitra, learned Senior Counsel that the concerned authority has now come forward with a new plea before the appellate court for the first time that the appointment of the writ petitioner / respondent in the post of Director (Project Management) was given due to mistake on the part of the concerned authority and such mistake can always be corrected when the same is detected at a subsequent stage. On this point, Mr. Moitra, learned Counsel relies upon a judgment of the Hon'ble Supreme Court reported in (2008) 2 SCC 750 (Union of India & Anr. Vs. Narendra Singh). In the said case respondent was given promotion mistakenly. After about four years it was detected that the promotion given to the respondent was erroneous as he was not eligible to be promoted. The mistake was sought to be corrected. It was held by the Hon'ble Supreme Court that mistakes are mistakes and they can always be corrected by following due process of law. But before such action is taken and a person is actually reverted, he must be given an opportunity to show cause as to why the proposed action should not be taken against him. He may be able to satisfy the authorities that there was no such mistake. Principle of natural justice and fair play requires giving of such opportunity.
Reliance is also placed on the judgment reported in (2007) 1 SCC 331 (Shekhar Ghosh Vs. Union of India & Anr.). From a reading of the said judgment it appears that the respondents had admitted that a mistake had occurred in making an entry in the service book, which was detected on the basis of the complaint made by four employees. It was held by the Hon'ble Apex Court that even such a mistake was sought to be rectified and if by reason thereof an employee had to suffer civil consequences, ordinarily the principle of natural justice were required to be complied with.
Relying upon the aforesaid two judgments, it is submitted by Mr. Moitra, learned Counsel that in the present case the authority in their affidavit-in- opposition stated for the first time that such irregular appointment came to the notice of the concerned authority on the basis of a "complaint" received against the writ petitioner. But no copy of such complaint was supplied to the writ petitioner. No disciplinary proceeding was initiated against him. No charge was framed nor was any witness examined. No Enquiry Officer was appointed to conduct an enquiry into the allegation made against him in the said "complaint". He was never given any opportunity of hearing. These are sufficient to indicate that the principles of natural justice were not complied with.
Mr. Moitra also relies upon a judgment reported in AIR 1964 SC 600 (Moti Ram Deka Vs. N.E. Frontier Railway) and refers to paragraph 26 of the said judgment, which is quoted below :
"(26) Reverting then to the nature of the right which a permanent servant has under the relevant Railway Rules, what is the true position ? A person who substantively holds a permanent post has a right to continue in service, subject of course, to the rule of superannuation and the rule as to compulsory retirement. If for any other reason that right is invaded and he is asked to leave his service, the termination of his service must inevitably mean the defeat of his right to continue in service and as such, it is in the nature of a penalty and amounts to removal. In other words, termination of the services of a permanent servant otherwise than on the ground of superannuation or compulsory retirement, must, per se amount to his removal, and so, if by R. 148(3) or R. 149(3) such a termination is brought about, the Rule clearly contravenes Article 311 (2) and must be held to be invalid. It is common ground that neither of the two Rules contemplates an enquiry and in none of the cases before us has the procedure prescribed by Art. 311(2) been followed. We appreciate the argument urged by the learned Addl. Solicitor-General about the pleasure of the President and its significance, but since the pleasure has to be exercised subject to the provisions of Art. 311, there would be no escape from the conclusion that in respect of cases falling under Art. 311(2), the procedure prescribed by the said Article must be complied with and the exercise of pleasure regulated accordingly."
It is submitted by Mr. Moitra, learned Counsel that there cannot be any reason or justification in compelling the petitioner to go on retirement at the age of 58 years when the age of retirement of all the employees, both Board Level and below Board Level, was enhanced from 58 years to 60 years. When other Board Level employees are given the benefit of 60 years as the age of retirement, there cannot be any reason to deny such benefit to the writ petitioner / respondent.
Mr. Moitra further points out that the writ petitioner / respondent by his letter dated 4th March, 2008 requested the concerned authority to let him know the reason as to why such a punitive action was taken against him by terminating his appointment to the post of Director (Project Management) and reverting him to the post of Technical Advisor to the Managing Director of the company. But no reply was given to such letter by the concerned authority. Again by a letter dated 28th April, 2008 same request was made by the writ petitioner / respondent, but there was no reply to such letter.
Finally, it is submitted by Mr. Moitra that the allegation of suppression of material fact at the time of furnishing particulars at the time of appointment should not be taken into consideration by this court and such point does not deserve to be entertained and there is no reflection of such ground in the order of termination.
In reply to the arguments advanced by Mr. Moitra, learned Counsel it is submitted by the learned Additional Solicitor General that appointment of Director in the company is regulated by the contractual service condition and in the case of extension of age upto 60 years and extension of contractual service beyond 58 years is based on some fixed criteria and cannot be done automatically. It is submitted by the learned Additional Solicitor General that such termination of service should not be treated as punitive. No punitive action was taken against him, rather he was allowed to keep his lien and was placed in the pay scale of E-7 scale and was designated as Technical Advisor to the Managing Director of the company by an order dated 13th March, 2008. He was allowed to continue to serve the company from 1st March, 2008 till his superannuation at the age of 60 years in the post he held prior to appointment as Director (Project Management) protecting his last pay drawn.
As regards the maintainability of the writ petition, the learned Additional Solicitor General adopts the arguments advanced by Mr. R. N. Das, learned Senior Counsel appearing for the appellant / Union of India and submits, in his usual fairness, that this was a mistake on the part of the concerned authorities in giving appointment to the writ petitioner / respondent, who was not eligible for being appointed in such a post. It is his further contention that when such mistake was detected at a subsequent stage, the concerned authority should be given opportunity to correct such mistake.
We have heard the learned Advocates of the respective parties. We have also perused the judgments of the Hon'ble Supreme Court relied upon by the learned Advocates of the respective parties. We have already discussed about the factual background of the case. In the appointment letter, it was indicated that the period of his appointment would be till the date of his superannuation or until further order, whichever was earlier and in accordance with the provisions of the Companies Act. The appointment might be terminated during this period by either side on three months notice or on payment of three months salary in lieu thereof. Thereafter, by an order dated 30th July, 2007 the age of retirement of all Board Level and below Board Level employees was enhanced from 58 years to 60 years. When such benefit was given to other employees of the company, there cannot be any valid reason why the writ petitioner / respondent should be denied of such benefit. In the order of termination the reason assigned was that at the time of appointment the age of retirement was 58 years, i.e., upto 29.2.2008 and such period was not extended by the competent authority. But nothing was communicated to the writ petitioner as to why such period could not be extended. The writ petitioner / respondent wrote two letters to the concerned authority, but no reply was given to such letters. It is also significant to note that before taking such decision of termination from service, the writ petitioner was not given any opportunity of hearing.
The decision referred to by the learned Advocate of the appellant in the case of State Bank of India Vs. S. N. Goyal (supra), in the case of Radhakrishna Agarwal (supra) and the case of Bareilly Development Authority do not have any manner of application in the present case, because the facts and circumstances of the present case is totally different from the cases referred to above. Judgment reported in (2008) 12 SCC 500 (Kisan Sahkari Chini Mills Ltd. Vs. Vardan Linkers) does not have any manner of application in the present case in view of different facts and circumstances and in view of the decision of the Hon'ble Apex Court in the case of Brojonath Ganguli (supra) and in the case of M/s. Popcorn Entertainment (supra). On the point of eligibility of the writ petitioner / respondent, learned Advocate of the appellant relied upon two judgments in the case of Ravinder Sharma (Smt) (supra) and the case of Shyama Pardhi & Ors. (supra). The principle of law laid down by the Hon'ble Apex Court are all settled principles of law. But, in our considered view, those judgments are also not applicable in the facts and circumstances of the present case, where the order of termination was not on the ground of ineligibility. Such ground of ineligibility was taken for the first time in the affidavit-in-opposition filed by the respondent no. 2 /company. But such a ground of ineligibility, which is not appearing in the order of termination and was taken at a subsequent stage, cannot be taken into consideration in view of the judgment of the Hon'ble Apex Court in the case of Mohinder Singh Gill (supra), wherein it was held that action to be judged by the reasons stated while making the order and supplementary reasons in the shape of affidavits are to be excluded.
It is also surprising to note that the name of the writ petitioner / respondent was forwarded by the Bridge & Roof Company for appointment in the post of Director (Project Management) after scrutinizing the particulars furnished by the writ petitioner and considering his eligibility. After about four years now they have come forward with a new plea that the writ petitioner was not eligible for appointment in such post and they committed a mistake in giving such appointment. Even assuming that this is a mistake and that such mistake can be corrected at a subsequent stage, it is the settled principle of law that it can be corrected by following due process of law after giving opportunity of hearing to the employee. In this regard, we find support from the cases of Narendra Singh (supra) and the case of Shekhar Ghosh (supra).
In deciding the present appeal, we refer to the judgment reported in JT 1996 (3) SC 722 (State Bank of Patiala Vs. S.K. Sharma). In paragraph 30(5) of the said judgment, it was held by the Hon'ble Supreme Court as follows :
"30(5). Where the enquiry is not governed by any rules / regulations / statutory provisions and the only obligation is to observe the principles of natural justice - or, for that matter, wherever such principles are held to be implied by the very nature and impact of the order/action - the Court or the Tribunal should make a distinction between a total violation of natural justice [rule of audi alteram partem] and violation of the facet of the said rule, as explained in the body of the judgment. In other words, a distinction must be made between "no opportunity" and no adequate opportunity, i.e., between "no notice"/"no hearing" and "no fair hearing". (a) In the case of former, the order passed would undoubtedly be invalid [one may call it "void" or a nullity if one chooses to]. In such cases, normally, liberty will be reserved for the Authority to take proceedings afresh according to law, i.e., in accordance with the said rule [audi alteram partem]. (b) But in the latter case, the effect of violation [of a facet of the rule of audi alteram partem] has to be examined from the standpoint of prejudice; in other words, what the Court or Tribunal has to see is whether in the totality of the circumstances, the delinquent officer/employee did or did not have a fair hearing and the orders to be made shall depend upon the answer to the said query."
Termination of appointment without following the rules of natural justice is illegal and such termination has adverse civil consequences and, therefore, before passing any order of cancellation, the employee concerned must be given an opportunity of making representation. Since the order of appointment conferred a vested right in the writ petitioner / respondent to hold the post of Director (Project Management), that right cannot be taken away without affording any opportunity of hearing to him. Any order of termination in violation of the principle of natural justice, in our considered view, is void and illegal.
Bridge & Roof Company is run and managed under deep and pervasive control of the Central Government. It is a government company within the meaning of the Companies Act, 1956 with substantial shareholding and control, both financial and administrative, of the government. It must be regarded as agency and instrumentality of the State. If the Government operates behind a corporate veil, carrying out governmental functions of vital public importance, there cannot be any difficulty in identifying such body as 'State' within the meaning of Article 12 of the Constitution of India as it has been held in the case of Central Inland Water Transport Corporation Ltd. Vs. Brojonath Ganguli (supra). The powers, functions, finances and control of the Government are the indicating factors to answer the question as to whether the body is 'State' or not. It is evident from records that in the company, Central Government has major share and its administrative control is covested in the Ministry of Heavy Industries & Public Enterprises, Department of Heavy Industries, Govt. of India. The company concerned, therefore, is a State within the meaning of Article 12 of the Constitution of India. Writ petition, in our considered view, is maintainable in the present case. A judicial review cannot be denied even in contractual matter in which the State or its instrumentalities exercise the contractual power. The power of judicial review is intended to prevent arbitrariness.
In view of the discussion made above, we find sufficient merit in the submission of Mr. Moitra, learned Advocate of the writ petitioner / respondent. The impugned judgment, in our considered view, does not suffer from any illegality and we do not find any reason to interfere with the same.
The present appeal, accordingly, fails and the same is dismissed. There will be no order as to costs.
Urgent Xerox certified copy of this judgment and order may be supplied to the learned Advocates of the respective parties, if the same is applied for.
(DEBIPRASAD SENGUPTA, J.) I agree, (DEBASISH KAR GUPTA, J.)