Delhi District Court
Rca No.34/04 vs Hotel Corporation Of India Ltd. & Ors ... on 15 December, 2008
IN THE COURT OF MS. SUKHVINDER KAUR, LD. ADJ/DELHI
RCA No.34/04
Prakash Chand Aggarwal
s/o. Late Sh. Ram Niwas Ji Aggarwal,
r/o. E-14/20, Vasant Vihar, New Delhi-57
.....................appellant.
vs.
1. Hotel Corporation of India Ltd. & Ors through its Secy.
Registered office, 5th Floor, The Centaur Hotel,
Bombay Airport, Bombay-400099.
2. Delhi Branch: Centaur Hotel,
Indira Gandhi International Airport,
New Delhi-110037
.....................respondents.
JUDGMENT
In this appeal, the appellant who was the plaintiff in the suit is aggrieved with the judgement and the decree dt. 25.09.04 passed by Sh. Sameer Bajpai, Civil Judge, Delhi whereby the suit of the plaintiff has been dismissed on the basis of preliminary issues framed by ld Civil Judge on 04.09.1992. The preliminary issues on the basis of which the suit of the plaintiff was dismissed are:-
1) Whether the present suit of the declaration, is, in fact for specific performance of contract of service? And if so, whether such a suit is maintainable?OP parties.
2) Whether the present suit is not maintainable in view of Section 14(1) (b) of the Specific Relief Act?OPP Before taking up the grounds of appeal, the relevant facts of the case 1 in brief are:- The plaintiff has filed the suit for declaration praying for a decree of declaration in his favour and against the defendants as under:-
a) Declaring the plaintiff to be the employee of the defendant.
b) Declaring that the plaintiff neither applied for resignation and the letter dt. 18/21.05.1987 does not terminate the services of the plaintiff.
c) Declaring that the plaintiff is entitled to remain in service of the defendant till his services are terminated according to the law and the defendant is not entitled to implement the said letter dt. 18/21.05.1987 and the plaintiff is entitled to continuity in service and all the benefits to which he was enjoying prior to 18/21.05.1987, accruing to the plaintiff being in service. It is stated that the plaintiff is an employee of the defendant having its registered office at Centaur Hotel Santa Cruz Bombay and having its branches at various places including at New Delhi. It is further stated that the defendant is duly incorporated under the Indian Companies Act. The plaintiff joined the services of the defendant in December,1980 initially as a Project Manager at Centaur Hotel, Delhi Airport, New Delhi in the pay scale of 1600-100-2100 vide their letter dt.29/30.12.1980. It is further stated that he rendered the satisfactory service to the defendant and vide their letter dt. 18/25.10.1985, the defendant was promoted to the post of Controller of Projects, SCI effective from 24.10.1985 and was posted at Bombay. He was asked to join at Bombay and was further informed that he had been allotted the unfurnished company's residential accommodation at flat no.A-501, Average Department, Church Road, Marol, Bombay. It is stated that the plaintiff although who was promoted on a higher post, the accommodation provided to him was much smaller to the accommodation being occupied by him on a junior post, intentionally to harass him in contravention of Bureau Public Enterprises rules. The plaintiff requested the defendant for proper accommodation as per his entitlement under BPE Rules/instructions but as a matter of fact, 2 defendant did not make efforts to find suitable accommodation intentionally and made the plaintiff travel frequently from Delhi to Bombay for completion of Cantaur Hotel Juhu Beach Project which was nearing completion and since there is no other project or site, the defendant wanted the plaintiff to leave the organization and started harassing intentionally by allotting a small and substandard house refusing even the TE claims already counter signed by the appropriate Controlling Authority. The plaintiff wrote a letter dt. 06.11.1986 requesting the defendant that in case the defendant was not interested in continuing his services, the plaintiff was prepared to relinquish the appointment and before the plaintiff took such action he would like to avail the leave to his credit. It is stated that this request was made by the plaintiff because of the continuous insistence of the defendant to shift to Bombay without providing the proper accommodation and conveyance. The plaintiff has also mentioned about the subsequent correspondence between the plaintiff and the defendant. It is further stated that on 18/31.05.1987 the plaintiff received a letter from the defendant wherein it was stated that as per the letter dt. 06.11.196 of the plaintiff, the defendant had accepted his resignation effective from 01.06.1987. It is stated that the defendant vide his letter dt.
18/21.05.1987 has confirmed the resignation of the plaintiff without any basis whatsoever, though in the said letter the plaintiff had only stated that he was prepared to relinquish his post in the event the other things are not granted to him as was required under the Service Rules to which the plaintiff was entitled. It is stated that the plaintiff had never submitted his resignation vide his letter dt. 06.11.1986 and 17.11.1986 on which the defendant relied upon and took the action. Hence the said suit for declaration has been filed. The defendant in his written statement besides contesting the case of merits has also taken the preliminary objection with regard to the maintainability of the suit since the 3 relationship between the parties to the suit was purely contractual and of master and servant and termination of such relationship will not entitle the plaintiff for declaration that his employment had not been validly determined.
In appeal it has been contended that the impugned judgment and decree is erroneous, illegal and against the law and facts of the case. The precedents cited in the case are inapplicable to the present case. It is stated that the suit for declaration and findings of the court below that the suit for declaration is illegal. It is stated that the hon'ble Court has not applied the correct ratio of the Supreme Court's decision referred in the case.
It is pertinent to mention here that the ld counsel for the appellant had also moved an application u/o.6 Rule 17 CPC wherein the appellant prayed for incorporating the preliminary submissions in the plaint that the plaintiff was employed in the Ministry of Defence from 1964 and remained in service upto 1981. The period from 1981 to 1984 served in the Hotel Corporation of India(public sector undertaking) was considered on lien(deputation)being public sector undertaking and the pension of the appellant was approved by the Ministry of Defence upto 1984. He further proposed to add in plaint that the defendant being the Govt. company is 'state' within the meaning of Article 12 of Constitution of India under article 311 of the Constitution of India. The application of the appellant however was dismissed by the ld predecessor of the Court vide orders dt.14.03.08 after giving a finding that the sole question being raised in the present appeal is that the respondent is a 'state' and if the appellant can be said to the public servant. He however gave the liberty to the plaintiff to agitate on the said point during the course of arguments on the appeal and opined that no amendment was required to be made in the plaint which were originally filed before the ld. trial court.
In the reply to the appeal, respondent has alleged that the appellant 4 was alloted an accomodation at flat no.4, plot no.44, Sher-a punjab Corporating Housing Society, Andheri East by the respondent and subsequently on the request of the appellant an accommodation in Everest Apartment Church Road was alloted to him. It is stated that the appellant was further informed vide letter dt. 29.07.86 that a proposal for purchase of a flat near Sahara Airport was likely to be finalised and the same would be alloted to him as soon as the possession of the same is obtained. Inspite of that the appellant refused to shift to Bomaby office on the one pretext or the other and submitted his resignation on 17.11.86 which was accepted by the respondent vide their letter dt.18/21.05.1987 w.e.f 01.06.1987. The respondent has also taken the preliminary objection that the suit in substance is for specific performance of contract of service and not maintainable since the relationship between the parties to appeal is purely contractual of master and servant and the termination of such relationship will not entitle the appellant to declaration or injunction or specific performance that his employment has not been validly determined. It is stated that the in case the relief prayed for by the appellant that he still continues to be in the service of the respondent is granted then it would amount to enforcement of contract of personal services which is hit by the provision of section 14 1(b) of the Specific Relief Act. Respondent has also taken the objection that the appellant is not at all entitled for the relief claimed in the suit as the Hon'ble Supreme Court has laid down in several judgments that such kind of declaration can be sought firstly against the statutory body, secondly when the petitioner is a public servant and his service is dismissed in contravention of article 311 of the Constitution of India and thirdly when the prayed petitioner is a worker covered under the Industrial Law, Labour and Industrial Tribunals. In the reply on merits also the respondent has denied the averments made by the appellant . It is denied that the impugned judgment and decree is erroneous, illegal and against law and facts of the case or the precedents cited in the present 5 case are inapplicable. It is stated that the appellant vide his letter submitted to respondent on 17.12.86 himself requested for consideration of his resignation and in pursuance of the same it was accepted by the respondent. It has therefore been prayed to dismiss the appeal with cost.
I have heard the arguments addressed by the counsels for parties and thoroughly perused the record. A perusal of the judgement/order dt. 25.09.04 reveals that the lower court has given the finding that the plaintiff wants firstly declaring him to be employee of the defendant and secondly declaring that he did not apply for resignation and the letter dt.18/21.05.1987 had not terminated his services and declaring that he is entitled to remain in service of the defendant. He further observed that the plaintiff is not at all entitled for the relief claimed as the Hon'ble Supreme Court has laid down in several judgments that such kind of declaration can be sought firstly against the statutory bodies, secondly if the petitioner is public servant and his service is dismissed in contravention of the article 311 of the Constitution of India and thirdly when the petitioner is a worker covered under the Industrial Law, Labour and Industrial Tribunals. He also placed reliance on the judgments of the Hon'ble Supreme Court in Indian Airlines Corporation vs. Sukhdev Rai 1971(2) Supreme Court cases 192 and Vidya Ram Mishra vs. Managing Committee Sh. Jai Narain College(1972) 1SCC 623. In both the cases it was held that when there is a purported termination of a contract of service, the declaration that the contract of service is still subsistent would not be made in the absence of special circumstances because of the principle that the Courts do not ordinarily enforce the specific performance of contract of service. In Vidya Ram Mishras case(supra) it was also observed by the Hon'ble Supreme Court if the master wrongfully ends the contract then the servant can pursue a claim of damages. So even if the master wrongfully dismisses the servant in breach of contract, the employment is effectively terminated. It was also held in the said case that the declaration can be sought only in 6 the following circumstances:-
1) To declare that the public servant who is dismissed in contravention of the article 311 continues to be remain in service.
2) Under the Industrial Law, jurisdiction of labour and Industrial Tribunals to compel the employer to employ a worker.
3) When any statutory body acted in breach of a mandatory obligation imposed by the statute.
He also relied upon the judgment of the Hon'ble Supreme court an Executive Committee UP State where Housing Corporation Lukhnow vs. Chander Kiran Tyagi, AIR 1970 Supreme Court 1244(V57CV)261 wherein it was held that the contract of personal service will not be enforced by an order of specific performance nor it will be open for the servant to refuse to accept the repudiation of a contract of a service by his master and say that the contract has never been terminated. Ld. Civil Jude observed that the aforesaid rulings cited by the defendant support the averments made by defendant and the plaintiff had failed to show that he falls in any one or more of the three exceptions given in the cited ruling. He further observed that the plaintiff was not a public servant and governed by an article of 311 of the Constitution. He further observed that the plaintiff was neither governed by the industrial Law nor was employed under a statutory body. He was employed with the defendant under a contact of service hence the relief claimed by the plaintiff would certainly amount to declaration of specific performance of a contact of a service which is barred by law.
Ld counsel for the appellant has mainly argued that the respondent is a statutory body and covered within the meaning of 'state' under article 12 of the constitution. He has also placed on record the Memorandum and Articles of Association of the respondent company. He has drawn my attention to the constitution of the company which shows that out of the total shares of Rs.5,00,000/-, Air India is a holder of Rs.4,99,994 shares of 7 the company. It has also been pointed out that as per Article 33 of the Memorandum of Association Air India has a control over the finances and conduct of business and affairs of the company. Article 33 of the memorandum of association of the defendant company gives the powers to Air India to issue such directions and instructions as it may think fit in regard to the finances and conduct of the business and affairs of the company from time to time. Further, Article 23 empowers the Air India in consultation with Govt. of India to remove the Directors from the office before the expiry of the period and appoint another Director in his place. Thus there is a sufficient material on the record to show that the respondent is a sister concerned of Air India and Air India has the direct control over the conduct of business, finances and affairs of the company. He has also pointed out that the 'Air India' has been incorporated by the Central Government by notification in the official gazette under the section 3 of the Air Corporation Act,1953. He has also pointed out that the Central Government has the control over the finance, accounts and audit of the Corporation as is obvious from chapter 3 of the Act. Reference has been made to section 10 of the Act which lays down that all the non-recurring expenditure incurred by the Central Government for or in connection with, each of the Corporations up to date of establishment of that Corporation and declared to be the capital expenditure by that Government, shall be treated as capital provided by the Central Govt. to the Corporation and the Central Govt. may provide any further capital that may be required by either of the Corporations for carrying on the business of the Corporation or for any purpose connected there with on such terms and conditions as the Central Government may determine. He has also referred to section 8 of the Act in support his arguments that the appointment of the Managing Director and such other categories of the officers of the Corporation is governed by the rules subject to approval by the Central Government.
It has been further argued that under Article 12 of the Constitution of 8 India the term 'state' has not been defined. It is merely an inclusive definition and includes all other authorities within the territory of India or under the control of the Govt. of India. Reliance has been placed by the counsel for the appellant in Ravinder Kumar Srivastav vs. UP Rajaya Karamchari Kalyan Nigam AIR 2005 Supreme Court 411 wherein it was held that UP Rajaya Karamchari Kalyan Nigam is nothing but an instrumentality and agency of the State and the control of the State is not only regulatory but it is deep and persuasive in the sense that it is formed with the object of catering to the needs of Govt. employees as a supplement to their salary and other perks and thus was covered within the definition 'State' under article 12 of the Constitution. Ld counsel has also relied on the judgement of Hon'ble Supreme Court in Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology(2002) 5 SCC 111wherein it was held that when the Corporation body is financially, functionally and administratively dominated by or under the control of the Govt, the body is a state within article 12 of the constitution. Reliance has also been placed on Sukhdev Singh vs. Bhaga Ram Jardar Singh Raghu Kaushi 1975) AIR 1995 Supreme Court 1331. In the cited judgement it was held that Oil and Natural Gas Commission, the Life Incorporation and Industrial Finance Corporation all are required to frame regulations by statute and cannot deviate and any deviation will be enforced by legal sanction of declaration by Courts. In Brahma Chellaney vs. Union of India 2002(63) DRJ 792 it was held that there are general principles but not exhaustive tests to determine whether body is instrumentality or agency of the Government. If the Government operates behind a corporate veil, carrying out, all government activity and function, there may be a little difficulty in identifying a body as a 'state' within the meaning of the article 12 of the constitution.
Ld counsel has further argued that the judgements relied upon by the civil judge in executive committee of UP Warehousing Corporation, 9 Lukhnow vs. Chander Kiran AIR 1970 Supreme Court 1244(V)57C 261 and Indian Airlines Corporation vs. Sukhdev Rai 1971 (2) Supreme Court Cases 192 has been over ruled by the Hon'ble Supreme Court in Managing Director UP Warehousing Corporation vs. Vijay Narain Vajpaee 1980(3) SCC 459. In the cited judgement the respondent was employeed as a warehouse man with the Corporation and dismissed from the service without an inquiry and full and fair opportunity was denied to defend himself. It was held that the statutory bodies were 'authorities' within the meaning of article 12 of the constitution and their employees have statutory status. In part II at page no.4 of the judgement it was also observed that the UP Warehousing Corporation and Indian Airlines Corporation cases were wrongly decided. It was further observed that the Govt., its agencies, Corporation incorporated under the Companies Act, etc have become the biggest employer as the employment in the public sector has grown vast dimension, it is therefore right that the independence and integrity of those employed in the public sector should be secured as much as the civil servants.
It appears that the memorandum of association of the defendant company and the Air Corporation Act,1953 was not brought to the notice of the ld Civil Judge Delhi at the time of arguments and ld Civil Judge has concluded that the plaintiff i.e the appellant herein was not covered in any of the three exceptions discussed in Sh. Vidya Ram Mishra vs. Managing Committee, Jai Narain College(1972) 1SCC 623 on the basis of the judgement of the Hon'ble Supreme Court in Indian Airlines case(supra). There is absolutely no bar on filing the suit of declaration in case of determination of the services if the case falls within the purview of the three exceptions as discussed earlier in the various judgments relied upon by the lower court. In view of the facts and circumstances in my considered opinion, the preliminary issues can decided only after giving the parties an opportunity to adduce evidence to establish that the plaintiff was 10 covered/not covered within the three exceptions as already discussed. Accordingly the appeal is allowed and the order dt. 25.09.04 passed by Ld. Civil Judge is set aside. The case is remanded back to the ld. Civil Judge with the directions to also frame the other issues and disposed of the case on the basis of the evidence adduced by the parties. Ld. Civil Judge shall endeavour to dispose of the case expeditiously. Nothing herein shall tantamount to expression of opinion on the merits of preliminary issues framed by ld. Civil Judge.
Announced in open Court (Sukhvinder Kaur) today i.e. 15.12.08. ADJ/Delhi/15.12.08 11 RCA No.34/04 08.12.08. Present: Counsel for the parties. Orders have been partly dictated. The order could not be completed as no time is left. Put up for announcement of orders on 15.12.08. ADJ/Delhi/08.12.08 15.12.08. Present: None for the parties.
The appeal has been vide separate judgement. The file be remanded back to the lower Court and parties are directed to appear before the lower court on 20.12.08. Ahlmad is directed to send to the file complete in all aspects to the lower court immediately.
ADJ/Delhi/15.12.08 12 13