Andhra HC (Pre-Telangana)
Anita Aidinyantz (Ms.) vs Dr. Ken. R. Gnanakan, Chairman ... on 21 November, 1996
Equivalent citations: (1998)IIILLJ1060AP
ORDER S.V. Maruthi, J.
1. This writ petition is filed for a declaration declaring the action of the first respondent i.e. Chairman, Evangelical Trust Association of South India terminating the services of the petitioner as Principal of Timpany High School by his order dated August 10, 1993 as illegal, arbitrary etc.
2. The brief facts of the case are that the petitioner is a M.A. B.Ed, and has an experience of 23 years in teaching. Out of 23 years of teaching experience, she was Principal for 18 years. She worked for 61/2 years and 111/2 years respectively at Timpany High School and Assembly of God Church School, Asansol, West Bengal. She was appointed as Principal of Timpany High School, Visakhapatnam managed by Timpany Christian Educational Trust by orders dated January 13, 1987 pursuant to which she took charge on February 5, 1987, Her Services were confirmed in August, 1987. On August 11, 1993 a notice was published in Telugu daily Eeenadu, Visakhapatnam Edition stating that she ceased to be the Principal of Timpany High School with effect from August 10, 1993. The petitioner says that on account of strained relations between the first respondent and the second respondent her services were terminated. Challenging the order of termination, the present writ petition is filed.
3. The learned Counsel for the petitioner raised the following contentions :
(1) that the petitioner is a confirmed employee and therefore, her services cannot be terminated without following the procedure contemplated under the Andhra Pradesh Education Act, 1982.
(2) the condition imposed while confirming her services as Principal by the letter dated September 26, 1987 stating that her services if found unsatisfactory, may be terminated by giving three months' notice in writing or three months' salary in lieu of notice, is arbitrary, illegal and opposed to public policy as held by the Supreme Court in Central Inland Water Transport Corporation Ltd. v. Brojo Nath (1986-II-LLJ-171), W.B.S.E. Board v. Desh Bandu Gosh (1985-I-LLJ-373), O.P. Bhandari v. Indian Tourism Development Corporation Ltd., (1986-II-LLJ-509) and Delhi Transport Corporation v. D.T.C. Mazdoor Congress (1991-I-LLJ-395).
(3) The respondent Institution is discharging public duties and therefore, it is amenable to writ jurisdiction under Article 226 of the Constitution of India. Unni Krishnan v. State of Andhra Pradesh .
(4) The allegation that the petitioner is drawing Rs. 8,000/- as salary and is also entitled for 10% of profits is not true and therefore, she is entitled to be reinstated with full back wages from the date of termination of her services.
4. While the counsel appearing for the respondent raised the following contentions :
(1) that the Andhra Pradesh Education Act is not applicable to the respondent-Institution as the Institution was established under Delhi School Education Act, 1973 under which a recognised school is defined under Section 2(t) as School recognised by the Appropriate Authority. Therefore, the appropriate authority in the case of the respondent Institution is the State Government and in the absence of recognition by the State Government under the A.P. Education Act, 1982, Section 79 of the Act is not applicable. Therefore, it is open to the respondent to terminate the service in accordance with the contract of employment.
(2) Even if the condition in the order confirming the petitioner as Principal empowering the respondent to terminate the services of the petitioner by giving three months' notice in the event of unsatisfactory service of the petitioner is violative of Article 14 of the Constitution of India, and, Section 23 of the Contract Act, the remedy available to the petitioner is by way of a regular suit and this Court in exercise of the power under Art. 226 of the Constitution of India cannot interfere with the impugned order.
(3) that under Section 14(1)(b) of the Specific Relief Act, 1963 the contract of employment cannot be enforced by an order against an employer and therefore, the remedy of the petitioner is only to sue for damages. He relied on the following Judgments. Vaish Degree College v. Lakshmi Narain AIR 1976 SC 888, J. Tiwari v. Jwala Devi Vidya Mandir , Dipak Kumar v. Director of Public Instruction (1987-I-LLJ-516), Kayastha Pathshala Allahabad v. Rajendra Prasad and Nandganj Sihori Sugar Co. Ltd., Rae Bareli v. Badri Nath Dixit .
(4) The respondent Institution was established by a Private Society and affiliated to C.B.S.E. It does not satisfy the requirement of the definition of Private Institution under Section 2(35) of the A.P. Education Act The Institution does not get any aid from the State or the Central Government and, therefore, Section 79 of the State Education Act, 1982 has no application. Since the petitioner was appointed under Contract between the petitioner and the respondent Institution, any breach of contract gives rise to a cause of action for civil suit and this Court cannot interfere under Article 226 of the Constitution of India.
5. The undisputed facts are that the petitioner was appointed as Principal on January 13, 1987 and her services were confirmed by an order dated September 26, 1987 as Principal, and according to the order of appointment, her services are liable to be terminated if her services are not satisfactory by giving three months' notice in writing or three months' salary in lieu of notice. However, neither three months' notice was given nor three months' salary in lieu of notice was paid and her services were terminated unceremoniously and the order of termination was not even communicated. No procedure contemplated under Section 79 of the A.P. Education Act was followed. Her services were terminated by publishing a notice in Eeenadu paper which is a Telugu daily.
6. It is now well settled that a contract which empowers an authority to terminate the services of an employee by giving three months' notice is not only arbitrary but also discriminatory and such a contract is against right and reason, as it has been entered into between parties between whom there is gross inequality of bargaining power. It is harmful and injurious to the public interest for it tends to create a sense of insecurity in the minds of those to whom it applied and it is against public good and opposed to public policy and therefore, void under Section 23 of the Contract Act. The Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable Clause in a contract, entered into between parties who are not equal in bargaining power. (Refer Inland Water Transport Corporation Ltd, v. Brojo Nath (supra) O.P. Bhandari v. Indian Tourism Development Corporation Ltd. (supra) Delhi Corporation v.
D.T.C. Mazdoor Congress (supra) and W.B.S.E. Board v. Desh Bandu Gosh (supra), :
7. If the condition empowering the respondent to terminate the services of the petitioner after giving three months' notice, is arbitrary and violative of Article 14 of the Constitution of India and opposed to public policy under Section 23 of the Contract Act, it follows that the respondent cannot terminate the services of the petitioner in exercise of the said power as the said power is deemed to be non est.
8. If the respondent has no power to terminate the services of the petitioner, the question that arises for consideration is, is it open to this Court to grant relief under Article 226 of the Constitution of India. It is now well settled that the relief under Article 226 of the Constitution of India is extraordinary and is discretionary. It is also well settled that no contract of personal service can be enforced and the exceptions to the said principles are : (1) where a public servant is sought to be removed from service in contravention of the provisions of Article 311 of the Constitution of India; (2) where a worker is sought to be reinstated on being dismissed under the Industrial law and (3) where a statutory body acts in breach of violation of the mandatory provisions of the statute.
9. If the termination of service of the petitioner fails in any one of the exceptions referred to above, a writ can be issued directing them to reinstate her in service. The main contention of the counsel for the petitioner is that the A. P. Education Act, 1982 is applicable to the petitioner and there is a failure to follow the procedure under Section 79 of the Act. The respondent's counsel contended that A.P. Education Act, 1982 is not applicable to the petitioner as it has not been recognised under the Act.
10. If the respondent-Institution has been recognised under the Act of 1982, then there is admittedly violation of Section 79 of the Act, a writ could be issued directing the respondent to reinstate the petitioner into service.
11. The question, therefore, is, is the Act of 1982 applicable to the Institution? The respondent-Institution was established under Delhi School Education Act, 1973. Under Section 2(t) of the Delhi School Education Act, 1973 a recognised school is defined as a School recognised by the appropriate authority. Section 2(e)(iv) defines "Appropriate authority" as "the Administrator or any other officer authorised by him in this behalf"; in other words, a recognised school is a school recognised by the Administrator or any other officer authorised by him.
12. It is not disputed that the School was established in the year 1934 and the school is affiliated to the Indian School. Certificate Examination. Prior to the commencement of 1982 Act, the School was recognised by granting no objection certificate perhaps in accordance with the law or rules in force prior to the commencement of the Act of 1982. Neither the counsel for the petitioner nor the respondent was in a position to clarify under which provision of law the no objection certificate was granted by the erstwhile Government of Madras and the Government of Andhra Pradesh before passing of Act, 1982. However, the fact remains that "no objection certificate" was issued by the Governments of both Madras and Andhra Pradesh for the continuance of the School. The only presumption to be drawn in that the said certificate was issued in accordance with the Law that was in force prior to 1982 Act. After commencement of 1982 Act the same procedure was followed. The Act of 1982 has regulated the establishment and recognition of the Educational Institutions. Section 20 of the A.P. Education Act, 1982 deals with the permission for establishment of Educational Institutions and Section 21 deals with grant or withdrawal of recognition of Institutions imparting education established under Section 20. In other words Section 21 deals with recognition of Institution imparting education established after the commencement of the Act. The proviso to Section 21 deals with cases of existing Institutions on the date of commencement of the Act. It says that in the case of existing institutions the deficiency, if any, in respect of the conditions to be fulfilled to establishment and recognition should be made good within the time specified therefor.
13. Section 22 of the Act regulates the procedure for recognition of the existing institutions. It says all the Institutions imparting education which were established and recognised in accordance with Rules immediately before the commencement of 1982 Act and in existence at such commencement shall be deemed to be educational institutions, established and recognised under 1982 Act, provided they comply with the provisions of 1982 Act and rules made thereunder within such period and in accordance with such procedure as may be prescribed. In other words, the existing Institution is deemed to be recognised under the 1982 Act provided it was recognised under the Rules that were in existence prior to the commencement of 1982 Act, and also, provided that the provisions of 1982 Act are also complied with.
14. In this case, it is not disputed that the School was recognised under the Rules that were in force prior to 1982 Act, as is evident from no objection Certificate issued by the appropriate authority as per Section 2(c)(k) of the Delhi School Education Act, 1973. When once the School was recognised under the Rules that were in force prior to 1982 Act, unless the institution fails to comply with the provisions of 1982 Act, it is deemed to have been recognised under 1982 Act. It is not the case of the respondent that the Institution does not comply with the provisions of 1982 Act. The Government has not filed any counter stating that the school cannot be recognised as it has not complied with the provisions of the Act. Further, at no point of time, the Government pointed Out the Institution that it has not complied with the provisions of 1982 Act and therefore, it ceased to be a recognised institution under 1982 Act. It follows from the above that by virtue of Section 22 of the A.P. Education Act, the respondent Institution continues to be recognised institution as it is deemed to have been recognised under Section 22 of the Act.
15. If once it is recognised under A.P. Education Act, 1982 the provisions of the said Act will apply. If once the provisions of the Act, 1982 are applicable, the respondent has to follow the procedure contemplated under Section 79 of the Act. As pointed out in the earlier paragraphs, it is an admitted fact that the procedure contemplated under Section 79 of the Act has not been followed. It may be appropriate at this stage to refer to Section 79 of the Act. It says that "No teacher or member of the non-teaching staff employed in any private institution (hereinafter in this Chapter referred to as 'the employer') shall be dismissed, removed or reduced in rank except after an enquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges" (Provided that no order of dismissal, removal or reduction in rank shall be passed under this sub-section against an employee other than an employee of a minority educational institution without the prior approval of such authority or officer as may be prescribed for different classes of private institutions". Therefore, the impugned order removing the petitioner from service is in contravention of Section 79 of the Act, 1982. Therefore, a writ can be issued directing reinstatement of the petitioner into service.
16. The issue can also be examined from a different angle. Admittedly, the respondent institution is imparting education. The Supreme Court in Unni Krishnan v. State of A.P. (supra) held that:
"The term 'authority' used in Article 226 the context must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers powers on the High Court to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words' any person or authority' used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed, if a positive obligation exists mandamus cannot be denied."
The emphasis in this case is as to the nature of duty imposed on the body. It requires to be observed that the meaning of authority under Article 226 came to be laid down distinguishing the same term from Article 12. In spite of it, if the emphasis is on the nature of duty on the same principle it has to be held that these educational institutions discharge public duties. Irrespective of the educational institutions receiving aid it should be held that it is a public duty. The absence of aid does not detract from the nature of duty".
It follows from the above that imparting education is public duty even if it is a private institution not receiving aid from the Government. It is amenable to the jurisdiction of this Court under Article 226 of the Constitution of India as the institution is discharging public functions. It is true that the above observations were made by Sri S. Mohan., J whereas similar observations were not found by the other majority of judges. However, Sri S. Mohan., J concurred with the view expressed by the majority and there is no dissenting view as far as the above observation are concerned by the majority.
17. The next question is, is it open to this Court to direct enforcement of contract of Personal Service?
18. I have already dealt with this issue in the earlier paragraphs. In my view, though the respondent is a private institution, the relationship between the petitioner and the respondents is regulated by the statute i.e. Andhra Pradesh Education Act, 1982 and therefore, this Court in exercise of the power under Article 226 of the Constitution of India can direct the respondents to follow the procedure contemplated under the statute before terminating the services of the petitioner. In my view the petitioner's case is governed by the third exception to the Rule that a contract of personal service cannot ordinarily be enforced by a Court of Law namely, where a statutory body acts in breach of violation of mandatory provisions of law.
19. In Vaish Degree College v. Lakshmi Narain (supra) while considering the issue whether the contract of personal service can be enforced, the Supreme Court after referring to the principle referred to above observed that the relief under the Specific Relief Act is purely discretionary and can be refused where the ends of justice do not require the relief to be granted and even if the management has not followed the procedure contemplated under the Act while terminating the service of the employee if the Court is of the opinion that it is a fit case for exercising the discretion then only the relief for enforcement of contract of personal service can be granted. Therefore, while exercising the discretion, the Court must keep in mind the settled principle of justice and fair play and should exercise the discretion only if the ends of justice require it i.e. that justice is not the object which can be administered in vacuum. The Supreme Court refused to exercise the discretion in favour of the employee on the ground that granting relief of specific performance of contract would result in hardship to the employer. The Court took into account the fact that the employee worked for two years in the College and that if he is reinstated into service, he would have to be paid his full salary with interest and Provident Fund for full nine years is from 1966 to 1975, even though he had not worked in the institution for a single day during the said period and the Management have to pay a very huge amount running into lakhs of rupees or perhaps more as a result of which the appellant and the institution would perhaps be completely wiped out and this would undoubtedly work serious injustice to the Management because it is likely to destroy its very existence. Having regard to the stark realities, hard facts and extreme hardship the learned Judges refused to exercise the discretion in favour of the employee by reinstating him into service.
20. It is interesting to refer to the observations of Sri P.N. Bhagavathi., J who agreed with the view expressed by Sri H.R. Khanna., J and Sri S. Murtaza Fazi Ali., J for different reasons. The learned Judge is of the view that the principle of contract of personal service cannot be enforced is no longer relevant to conditions of modern large scale industry and enterprise or statutory bodies or public authorities where there is professional management of impersonal nature. It is difficult to regard the contract of employment in such cases as a contract of personal service save in exceptional cases. The learned Judge also observed that there is no reason why specific performance should be refused in cases of this kind where the contract of employment does not involve relationship of personal character. According to the learned Judge all these doctrines of contract of service as personal, non-assignable, unenforceable and so on, grew up in an age when the contract of service was still frequently a "personal relation" between the owner of a small workshop or trade or business and his servant. The conditions have now vastly changed and these doctrines have to be adjusted and reformulated in order to suit needs of a changing Society. He is of the view that in a country like ours, large number of people are unemployed and it is extremely difficult to find employment, an employee who is discharged from service may have to remain without means of subsistence for a long period of time. Damages equivalent to one or two months wages would be poor consolation to him. They would be wholly insufficient to sustain him during the period of unemployment following upon his discharge. The provision for damages for wrongful termination of service was adequate at a time when an employee could without difficulty find other employment within the period of reasonable notice for which damages were given to him. But in conditions prevailing in our country, damages are a poor substitute for the reinstatement. The learned Judge held that :
"It is, therefore, necessary and I venture to suggest, quite possible, within the limits of the doctrine that a contract of personal service cannot be specifically enforced, to take the view that in case of employment under a statutory body or public authority, where there is ordinarily no element of personal relationship, the employees may refuse to accept the repudiation of the contract of employment by the statutory body or public authority and seek reinstatement on the basis that the repudiation is ineffective and the contract is continuing."
Following the judgment in Mc. Clelland v. Northern Ireland General Health Service Board 1957-2 All ER-129, the learned Judge held that:
"It should thus be possible to hold that even if a statutory body or public authority terminates the service of an employee in breach of a contractual obligation, the employee could disregard the termination as ineffective and claim a declaration that his service is continuing"
He also observed that :
"this would be a somewhat novel and unorthodox ground which has not been recognised by any decision of this Court so far and moreover I do not think that on facts, this is a proper case in which it would really be applicable and hence I do not propose to finally pronounce upon it."
The learned Judge observed that the Management followed Section-28 Sub-section (3) of the Kanpur and Meerut Universities Act, 1965 and therefore, the Court must refuse to recognise the termination as valid and effective, and when the Court does so, it merely enforces the law and there is no question of transgressing the principle that a contract of personal service cannot be enforced. Having held that even in the case of private organisation if the relationship of the parties is governed by the statute, and, that, if the management in violation of the statutory provision terminates the service of an employee though in a contract, it is open to the Court not to recognise the termination of service and grant declaration that the employee is continuing in service, the learned Judge refused to exercise the discretion for the very same reasons for which the other two learned Judges refused to exercise the discretion in favour of the employee. A reading of the judgment makes it clear that there is change in the thinking namely, that a contract of personal service is not enforceable and in the appropriate case a contract of personal service can be enforced. It is no doubt true that Sri P.N. Bhagavathi., J though held that on account of changing circumstances, the principle of contract of personal service cannot be enforced is no longer relevant refused to exercise the discretion for the very same reasons for which the other two judges refused to exercise jurisdiction. It is pointed out that the learned Judge also relied on the omission of the Illustration under Section 21(b) of the Specific Relief Act, 1877 while enacting the Specific Relief Act of 1963.
21. In Dipak Kumar v. Director of Public Instruction (supra) the Supreme Court held that the College in which the appellant was appointed as Lecturer was not statutory body because it has not been created by any statute and its existence was not dependent upon any statutory provisions. It was also held that the Director of Public Instruction proceeded on an erroneous assumption that the Assam Aided College Employees Rules, 1960 and the Assam Aided College Management Rules, 1965 had been adopted by the State of Meghalaya and therefore, the action of the Director of Public Instruction could not be sustained. Holding as above, the authority refused to grant any relief of reinstatement into service or continued him in service. The Judgment of the Vaish Degree College v. Lakshmi Narain (supra) was referred to. This judgment is distinguishable on facts as the relationship of the appellant and Director of Public Instruction is not regulated by any statute or statutory Rules.
22. The next decision to be considered is the judgment in Nandganj Sihori Sugar Co. Ltd., Rae Bareli v. Badri Nath Dixit (supra). In this case, the Supreme Court refused to enforce the contract entered into between the plaintiff and the Sugar Company for appointment of the plaintiff to a certain post. It was held that "neither from the plaint nor from the evidence it is possible to identify any concluded contract to which the plaintiff was party or which the plaintiff could enforce. The suit for specific performance filed by the plaintiff was therefore, liable to be dismissed. Even if there was a contract in terms of which the plaintiff was entitled to seek relief, the only relief which was available in law was damages and not specific performance. There cannot be any dispute about the proposition referred to above. However, the judgment is distinguishable on facts as the relationship of the employee and the employer are not governed by any statute or statutory relief.
23. Similar is the case in Kayastha Patshala, Allahabad v. Rajendra Prasad (supra).
24. Even if the judgment of the Supreme Court in Vaish Degree College (supra) is relevant to the facts of the present case, it is pointed out that the Supreme Court refused to exercise discretion having regard to the facts and circumstances of that case. Further, the principle that the contract of personal service cannot be enforced under the Specific Relief Act is not absolute Rule and there can be an exception to the said Rule and the Court can in a given case enforce the contract of personal service having regard to the observation of Sri B.N. Bhagavathi., J. Further the circumstances relied upon by the learned Judges in Vaish Degree College (supra), for refusing to exercise discretion are not present in the instant case. The petitioner was appointed in 1987. She worked without any cause for complaint for six years. The reinstatement does not create any hardship to the respondent unlike Vaish Degree College (supra) where the institute itself would have to be closed resulting in injustice as the amount to be paid to the petitioner would run into lakhs. Therefore, it is a fit case for exercising the discretion in favour of the petitioner.
25. The counsel for the respondent submitted that the petitioner is employed elsewhere and therefore, she is not entitled for any relief and that even if she is reinstated, she cannot be granted any back wages.
26. This is a question of fact which cannot be gone into in this Writ Petition. However, while reinstating the petitioner, the petitioner is directed to file the amount of wages she has earned while she was out of service and the same may be deducted by the respondent while paying back, wages.
27. With the above observation, the writ petition is allowed with costs. The respondents are directed to reinstate the petitioner to service forthwith. Advocate's fee is Rs. 1000/-.