Allahabad High Court
Employees State Insurance Corporation ... vs R.P. Maurya Son Of Ajodhya Prasad on 21 August, 2007
Equivalent citations: 2008(2)AWC1676
Author: Tarun Agarwala
Bench: Tarun Agarwala
JUDGMENT Tarun Agarwala, J.
1. The plaintiff was working as a cashier and committed a misconduct on account of which a chargesheet was issued on the basis of which a domestic enquiry was initiated in which the enquiry officer submitted a report holding that the charges stood proved against the plaintiff. Based on the said report, a show cause notice was issued and thereafter, an order dated 25.3.1970 was passed for the removal of the plaintiff from the service of the Corporation. It transpires that the appellate authority also affirmed the order of removal.
2. The plaintiff filed a suit for a declaration praying that a decree for declaration be issued holding that the order of the removal passed by the Regional Director, as affirmed by the appellate order, was illegal and malafide and that the plaintiff continued to be in the service with full back wages. The plaintiff in the alternative also prayed for a decree for damages for wrongful removal from the services. The defendant resisted the suit and contended that the order of removal was justified and also submitted that the suit was not maintainable.
The trial court, after framing the issues, held that the removal of the plaintiff from the services of the corporation was illegal and violative of the principles of natural justice since no proper opportunity was given to him in the enquiry proceedings and therefore, decreed the suit. The trial court, while decreeing the suit, also found that the decree of damages was not an adequate and appropriate relief in the facts and circumstances of the case. The defendant, being aggrieved by the decree, filed an appeal, which was allowed against which, the plaintiff filed a second appeal which was allowed by a judgement dated 23.11.1981 holding that the court below did not consider nor decided Issue No. 7 with regard to the maintainability of the suit and accordingly, remanded the matter back to the lower appellate court to decide Issue No. 7 in the light of the observation made by the second appellate court. The operative portion of the order dated 23.11.1981 is quoted hereunder:
Under the circumstances, the appeal has to be allowed. It may be mentioned that for deciding the jurisdiction of the Civil Court, it was necessary to find that happened in the conciliation proceedings. If the matter was really referred to labour court or Industrial Tribunal under Section 10(2) of the Industrial Disputes Act, 1947, the position might be different, otherwise the suit would be maintainable in civil court under Section 9 C.P.C. Vide , The Premier Automobiles Ltd. v. Kamlakar Shantaram Wadke and Ors. Under the circumstances it was necessary for the court below to have decide issue No. 7 framed by it before deciding the appeal itself.
The appeal is allowed, the judgment and decree of the court below are set aside and the case is remanded to it for deciding issue No. 7 as well and thereafter decide the case in accordance with law and observations made above. It is made clear that in case the lower appellate court is of the opinion, that oral evidence has to be recorded on issue No. 7, it may do so. The case may not be remanded to the trial court as it is already very old and the parties will be prejudiced to further remand. The parties are directed to bear their own costs.
Upon remand, the lower appellate court decided the matter again and held that the suit was maintainable and was not barred. The lower appellate court further affirmed the findings of the trial court holding that the disciplinary proceedings was in gross violation of the principles of natural justice and that the relief of damages was not an appropriate relief. Consequently, the lower appellate court affirmed the findings of he trial court. The defendant, being aggrieved by the aforesaid decisions, has filed the present second appeal which was admitted on the following substantial question of law:
1. Whether the validity of the order of removal from service could not be adjudged on principles of natural justice and general principles regulating the procedure of domestic inquiry inasmuch as the entire field as to the procedure to be followed in such enquiry was covered by the Employees State Insurance Corporation (Staff and Condition of Service) Regulation, 1953?
2. Whether in the absence of any finding as to the breach or non compliance of any specific provision of the regulations mentioned above, the disciplinary proceedings could not be held to invalid for the breach of principles of natural justice?
3. Whether the court below erred in holding that the order dated 14.10.1968 passed by the disciplinary authority giving fresh opportunity of defence to the respondent did not cure the alleged irregularity in the proceedings before the Inquiry Authority?
4. Whether the disciplinary proceedings could not be held to be against principles of natural justice in the absence of proof of prejudice caused to the respondent by the disciplinary authority having appeared as a witness of the inquiry before his subordinate officer on a charge framed on his complaint?
Heard Sri B.N. Asthana, the learned Counsel assisted by Sri P.K. Asthana for the defendant appellant and Sri K.P. Agarwal, the learned Senior counsel assisted by Pooja Srivastava for the plaintiff opposite party.
The learned Counsel for the appellant has not addressed the Court on the questions of law framed aforesaid and submitted that the only substantial question of law that arises for consideration was whether the civil court had the jurisdiction to try the suit or not. Accordingly, the following substantial question of law was framed, namely,
(i) whether the civil court had the jurisdiction to try the suit?'
3. The learned Counsel for the appellant submitted that the civil court had no jurisdiction to try the suit since there was no violation of any statutory Rules or Regulations and that the Regulations framed by the Corporation did not have any statutory force. In support of his submission, the learned Counsel for the appellant has placed heavy reliance upon a decision of the Supreme Court in the case of Executive Committee of U.P. State Warehousing Corporation Ltd. v. Chandra Kiran Tyagi in which the Supreme Court held that the reinstatement in service could not be granted since Rules had no statutory status.
4. On the other hand, Sri K.P.Agarwal, the learned Senior counsel submitted that the Regulations framed by the Corporation had statuatory force and non compliance of the provisions made the order void, against which, a suit was maintainable in view of the decision in the matter of Executive Committee of Vaish Degree College, Shamli and Ors. v. Lakshmi Narain and Ors. 1976 SCC (L & S )176. He further placed reliance upon a decision of the Supreme Court in The Premier Automobiles Ltd. v. Kamlakar Shantaram Wadke and Ors. in which it was held that if the dispute was an industrial dispute arising out of a right or liability under the general common law and not under the Act, the jurisdiction of the civil court was alternative, leaving it to the election of the suitor concerned to choose his remedy for the relief which was competent to be granted in a particular remedy.
5. Taking the second submission of the learned Counsel for the opposite party the second appellate court, while remanding the matter to the court below had confined Issue No. 7 to be decided as per the observation made by the second appellate court. The second appellate court held that if the matter was referred to the labour court or the Industrial Tribunal under the Industrial Disputes Act, in that case, the suit was not maintainable. The lower appellate court while deciding Issue No.7 held that no evidence had been filed by the defendant to prove that the matter was referred by the State Government for adjudication of the labour court or Industrial Tribunal.
6. In view of the aforesaid, the lower appellate court held that the suit was maintainable. I am in complete agreement with the aforesaid finding. In my opinion, in view of the second condition contained in the case of Premier Automobiles [supra ]. the action was clearly upon the plaintiff to choose his forum either under the Industrial law or by filing a suit for declaration. In view of the aforesaid, the suit was maintainable at the instance of the plaintiff in relation to this aspect of the matter.
7. The learned Counsel for the appellant submitted that the suit was also not maintainable, since there was no violation of any statutory Rules or Regulations and that the Regulations framed by the Corporation had no statutory force. Consequently, violation of a condition of service or a breach of the conditions of service laid down in the Regulations would only attract the general law of master and servant, but could not result in filing a suit for declaration. The learned Counsel submitted that the present suit was squarely barred and was covered by the decision of the Supreme Court in the case of Executive Committee of U.P. State Warehousing Corporation Ltd. v. Chandra Kiran Tyagi [supra].
8. In my opinion, the judgment of the Supreme Court in Executive Committee of U.P. State Warehousing Corporation Ltd. v. Chandra Kiran Tyagi [supra] is clearly distinguishable, inasmuch as the Regulations in that case were framed by the Central Warehousing Board in exercise of its powers which was not legislative in character. In the present case, Employees' State Insurance Corporation (Staff and Conditions of Service ) Regulations, 1959 [herein referred to as the Staff Regulations) the Staff Regulations framed are statutory provisions and has the force of law. To elaborate this issue, it would be appropriate to consider the provisions of the Employees' State Insurance Act, 1948.
Section 17(2) of the Act provides for the method of the recruitment. salary, allowances, discipline and other conditions service of the members of the Staff of the Corporation which is quoted hereinunder:
17.(2)(a) The method of recruitment, salary and allowances, discipline and other conditions of service of the members of the staff of the ' Corporation shall be such as may be specified in the regulations made by the Corporation in accordance with the rules and orders applicable to the officers and employees of the Central Government drawing corresponding scales of pay.
9. Section 97 provides the power to the Corporation to make Regulations. Section 97(1), (2) (xxi), (3) and (4) reads as under:
97(1) The Corporation may, subject to the condition of previous publication, make regulations, not inconsistent with this Act and the rules made thereunder, for the administration of the affairs of the Corporation and for carrying into effect the provisions of this Act.
(2)(xxi) the method of recruitment, pay and allowances, discipline, superannuation benefits and other conditions of service of the officers and servants of the Corporation other than the [Director General and Financial Commissioner] (3) Regulations made by the Corporation shall be published in the Gazette of India and thereupon shall have effect as if enacted in this Act.
(4) every regulation shall, as soon as may be after it is made by the Corporation, be forwarded to the Central Government and that Government shall cause a copy of the same to be laid before each House of Parliament, while it is in session for a total period of thirty days, which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation or both Houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be, so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.] In exercise of the powers under sub Clause (xxi) of Section 2 of Section 97 of the Act, the Corporation framed the Employees' State Insurance Corporation (Staff and Conditions of Service ) Regulations, 1959. The Regulations provides for disciplinary proceedings and contemplates that a major penalty of the removal of the services of an employee would only be passed after providing the employee an opportunity of hearing.
10. The submission of the learned Counsel for the appellant is, that these Regulations, framed under Section 97 of the Employees' State Insurance Act. has no statutory force. Consequently, any violation of the provisions of these Regulations, is at best, only a breach of the Regulations which cannot result in the filing of a declaratory suit. In my opinion, the submission is bereft of merit. Sub Clause (3) of Section 97 indicates that the Regulations framed by the Corporation are published in the gazette which shall have the effect as if it was enacted in the Act. It clearly implies that the provisions made by the Corporation would have statutory force once it was published in the gazette. This view is further fortified by the insertion of sub Clause (4) of Section 97 which provides that every Regulation would be placed in each house of the Parliament. Therefore, in my opinion, the Staff Regulations framed by the Corporation has statutory force. Consequently, in the opinion of the Court, the judgment of the Supreme Court in Executive Committee of U.P. State Warehousing Corporation Ltd. v. Chandra Kiran Tyagi [supra is clearly distinguishable.
In Air India Statutory Corporation v. United Labour Union AIR 1997 SC 654 at Page 674 the Supreme Court held Though, right to employment cannot, as a right, be claim -d but after the appointment to a post or an office, be it under the State, its agency. instrumentality, juristic person or private entrepreneur it is required to be dealt with as per public element and to act in public interest assuring equality, which is a genus of Article 14 and all other concomitant rights emanating therefrom are species to make their right to life and dignity of per on real and meaningful.
In Vaish Degree College [supra] the Supreme Court observed On consideration of the authorities mentioned above, it is therefore, clear that a contract of personal service cannot ordinarily be specifically enforced and a Court normally would not give a declaration that the contract subsists and the employee, even after having been removed from service can be deemed to be in service against the will and consent of the err Moyer. This rule, however, is subject to three well recognised exceptions:
(i) whether a public servant is sought to be removed from service in service in contravention of the provisions of article 311 of the Constitution of India;
(ii) where a worker is sought to be reinstated on being dismissed under the Industrial Law; and
(iii) where a statutory body acts in breach or violation of the mandatory provisions of the statute.
11. A Division Bench in Pujari Yadav v. Ram Briksha Yariav 2007(2) AWC 1302 framed two additional grounds where a suit could he maintainable namely,
(iv) Whether a body which is non-statutory but is 'State' within the meaning of Article 12 of the Constitution acts contrary to the Rules, Regulations and bye-laws framed by it;
(v) Whether a private body (which is neither statutory no; 'State' within the meaning of Article 12 of the Constitution) acts in violation of any mandatory provision of statutory law.
12. In my view, the suit was maintainable in view of condition No. 3 made by the Supreme Court in Vaish Degree college, namely, that a stautory body had acted in breach or violation of the mandatory provision of the statutes.
In the opinion of the Court, the Regulations framed by the Corporation has statutory force. The court below has given a categorical finding of fact that the principles of natural justice had been violated by the Corporation in the disciplinary proceedings and therefore, decreed the suit leaving it open to the defendant to proceed afresh in accordance with law. The court below was also justified in holding that the damages was not an adequate or an appropriate relief.
In Malloch v. Aberdeen Corporation 1971 [2] All ER 1278, it was held that where an employer failed to take the preliminary steps which the law regarded as essential he had no power to dismiss an employee and any purported dismissal was a nullity. In Vine v. National Dock Labour Board 1956(3) All ER 939 it was held that since damages was not an adequate remedy, the discretion exercised by the trial court granting the relief of declaration was properly made.
Further, in my view, awarding damages would have been wholly inadequate. In any case, it has come on record that pursuant to the judgment of the lower appellate court, the plaintiff was reinstated in service and during the pendency of the second appeal. The only question that remains to be considered is the arrears of wages and post retiral benefits. Consequently, as appropriately argued by the learned Counsel for the opposite party the present second appeal is nothing but flogging a dead horse.
13. In view of the aforesaid, this Court is of the opinion, that the suit filed by the plaintiff was maintainable. The question of law so framed is answered accordingly.
In view of the aforesaid, the second appeal fails and is dismissed. In the circumstances of the case, parties shall bear their own cost.