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Doulatram Lekhraj Rupchandani Vs. the General Manager - Court Judgment

LegalCrystal Citation
SubjectService
CourtMumbai High Court
Decided On
Case NumberO.C.J. Miscellaneous Petition No. 270 of 1956
Judge
Reported in(1957)59BOMLR1210
AppellantDoulatram Lekhraj Rupchandani
RespondentThe General Manager
DispositionPetition dismissed
Excerpt:
.....no doubt brings about a termination of service but every termination of service does not amount to dismissal orremoval. with regard to the other class, termination of service by giving notice is well known in contracts of service between a master and a servant; it may well be, as was the caser in prasadi v. union of india air1954sc632 ,in which their lordships of the supreme court held that, where a railway employee is discharged from service after giving one month's notice according to the terms of his agreement of service, he cannot complain that no charge-sheet had been formulated against him and proceedings had not been taken thereunder as required by section 240 of the government of india act, 1935, which corresponds to article 311 of the constitution. and if the termination had the..........in this context das j., in delivering the judgment of the court, considers the distinction between removal, dismissal and termination. his lordship observes (p. 41) :removal, like dismissal, no doubt brings about a termination of service but every termination of service does not amount to dismissal orremoval.later on, his lordship observes (p. 41):.the question then is whether a termination of service brought about by compulsory retirement is tantamount to a dismissal or removal from service so as to attract the provisions of article 311 of the constitution. the answer to the question will depend on whether the nature and incidents of the action resulting in dismissal or removal are to be found in the action of compulsory retirement. then his lordship proceeded to consider two distinct.....
Judgment:

Tendolkar, J.

1. This is a petition by a servant of the Western Railway complaining against an order dated July 30, 1956, terminating his services under Rule 148 of the Indian Railway Establishment Code by giving one month's pay in lieu of notice. The petitioner was selected by the Joint Service Commission of Railways as Ticket Collector and appointed to that post on November 20, 1953, and was confirmed in the post on July 1, 1956. It appears that early in 1956 the Vigilance Branch of the Railway had certain suspicions against the conduct of the petitioner, the suggestion being that he waspassing, on used tickets as unused tickets to persons who were in a position to re-sell these tickets at the stations at which the tickets were issued and sharing the profits half and half. In this connection, there was admittedly a preliminaryenquiry, at which the petitioner was also called and asked certain questions; but as a result of this preliminary enquiry no charge-sheet was presented to the petitioner, nor was any enquiry held as required by the Indian Railway Establishment Codeif it was proposed to dismiss or remove him from service; but as now appeal's from the affidavit of the Deputy General Manager of the Western Railway, it was decided to terminate the services of the petitioner as the General Manager came to the conclusion that it was in the public interest that his services should he terminated. The Deputy General Manager in his affidavit states that the Vigilance Branch had held about 334 inquiries: in 230 cases the inquiries were not proceeded with as no wrongful conduct was disclosed; in 84 cases disciplinary inquiries were ordered under the Disciplinary and Appeal Rules; and in 20 cases, including that of the petitioner, their services were terminated either under Rule 148 or under Rule 1708 of the Indian Railway Establishment Code. The General Manager had come to the conclusion that it was in the public interest that the services of these persons should be terminated. It is, therefore, that the notice dated July 30, 1956, was given to the petitioner by the General Manager terminating his services by giving one month's notice.

2. This order of termination of service is challenged in this petition on the ground that no enquiry having been held as required by the Disciplinary and Appeal Rules, the order of termination of service was illegal and void and violated the provision of the safeguards under Article 311 of the Constitution. The answer of the respondents to this contention is that they have not proceeded to dismiss or remove the petitioner from service, but that they were merely exercising a contractual right to terminate his services by giving a month's notice and no question arose of following the procedure prescribed by the Disciplinary and Appeal Rules or of observing the provisions of Article 311 of the Constitution. It is further contended by the petitioner that assuming, without admitting, that the petitioner was under a contract of service and was liable to have his services terminated by a month's notice, such a rule in the Indian Railway Establishment Code is ultra vires of the Constitution as it is calculated to defeat the provisions of Article 311 of the Constitution. It is lastly urged in the petition that, even assuming that the rule was valid, the action taken against the petitioner was mala fide in that, having found no evidence on which the petitioner could have been held to be guilty in respect of the suspicion which the Vigilance Branch had against him, the power of termination was utilised for the purpose of getting rid of his services.

3. Now, in the first instance, it is necessary to consider whether or not the petitioner was under a contract of service. There has been produced in these proceedings a letter of appointment that was addressed to the petitioner dated September 9, 1953, Sub-paragraph 3(i) of that letter states; 'You will have to conform to all Rules and Regulations applicable to Government Railway Servants.' When one turns to the Indian Railway Establishment Code, Rule 143 provides that every non-pensionable railway servant, except one in inferior service, shall be required to execute a service agreement with the President at the time of his substantive appointment in a form prescribed, and the forms are to be found in Appendix XXIV.. Form No. 1 is a 'Form of Service Agreement for Subordinate Staff' and was the appropriate form for the petitioner to sign. Sub-clauses 3 of this form of agreement sets out the conditions of service, and Sub-clauses (a) 'that such service is terminable at any time by either party on one month's notice in writing or by the Administration on one month's pay in lieu of notice'. The word ''Administration' is defined in Sub-clauses 1(6) as meaning 'the President acting by and through the General Manager or otherproper officer of the Railway'. In point of fact no such agreement has been signed by the petitioner. But by joining the service in pursuance of the offer made to him by the letter of appointment dated September 9, 1953, the petitioner impliedly accepted all the terms of the offer including the term that he shall conform to all the rules and regulations applicable to Government Railway Servants. This included Rule 143 and the obligation that arose under that rule to sign an agreement in Form No. 1 in Appendix XXIV. The fact that no such form was signed appears to be immaterial. The Court must consider that as done which ought to have been done, and although there is no written agreement executed, I have no hesitation in holding that there is an agreement effected by the petitioner accepting by his conduct the terms of the offer; and such agreement must be deemed to contain all the conditions on which alone he could be in the service of the Railway including the term that his service was terminable by one month's notice by the Administration.

4. In this view of the case, if what was being done was to terminate the services of the petitioner under the terms of his agreement or contract, quite obviously Article 311 of the Constitution has no application, nor have the Disciplinary and Appeal Rules any application. Mr. Nagrani on behalf of the petitioner has drawn my attention to a decision of the Calcutta High Court reported in Prasadi v. Works Manager : (1957)ILLJ272Cal . In that case also there was termination of the services of a railway employee by giving a month's notice, and Chakravartti C.J. held that no question of any penalty or punishment was involvedif, the termination was in terms of, the service agreement. But on the facts of that case, the Division Bench of the Calcutta High Court held that, although the Railway Administration had purported to terminate the services of the appellants under Rule 148, Sub-rule (3), which in terms provides what the agreement form incorporates, namely, that the services of a non-pensionable railway employee can be terminated on notice on either side for the periods shown in that Sub-rule, in fact the Railway Administration had proceeded by way of exercising their disciplinary jurisdiction and had passed an order of removal by imposing a penalty on the appellants; and as this had been done without giving an opportunity to the employees concerned, as required by the Disciplinary and Appeal Rules, the learned Judges set aside the order of removal from service. Undoubtedly, if it could be established in the present case that what has been done in the case of the petitioner is not a termination in terms of the contract of employment, but a penalty imposed, he would be equally entitled to succeed.

5. But Mr. Nagrani goes a little further than this and his submission is that Rule 148, Sub-rule (3), which, provides that the services of railway servants who are non-pensionable are terminable by giving notice on either side for the periods prescribed under that rule, is ultra vires of the Constitution. His contention is that this provision enables the Railway Administration to by-pass the provisions of Article 311 of the Constitution and without holding any enquiry or even levelling any charge to get rid of the services of any of its employees. He says-and this is not disputed--that almost every servant of the Railway Administration to-day falls within the class of non-pensionable railway servants and everyone alike is liable to have his service terminated in this manner. There would have been great force in this argument if the termination contemplated by the agreement was termination which amounts to dismissal or removal from service, which is what is dealt with in Article 311; and in that connection it becomes necessary carefully to consider the distinction, if any, between dismissal, removal and termination. In Shyam Lal v. The State of Uttar Pradesh and the Union of India : (1954)IILLJ139SC their Lordships of the Supreme Court were dealingwith a case of compulsory retirement. It appears from the judgment at p. 28 that the employee concerned had been called upon to show cause why he should not be compulsorily retired as it appeared that he had been guilty of corrupt practices therein enumerated of a somewhat serious character. But the ultimate order of compulsory retirement was not made on the basis of these charges. It was urged before their Lordships of the Supreme Court that compulsory retirement was nothing but removal from service within the meaning of Article 311, and as the relevant rule for compulsory retirement sanctioned such retirement without assigning any reasons, it was repugnant to Article 311 of the Constitution and the rule was, therefore, void. This argument was negatived by their Lordships, and in this context Das J., in delivering the judgment of the Court, considers the distinction between removal, dismissal and termination. His Lordship observes (p. 41) :

Removal, like dismissal, no doubt brings about a termination of service but every termination of service does not amount to dismissal orremoval.

Later on, his Lordship observes (p. 41):.The question then is whether a termination of service brought about by compulsory retirement is tantamount to a dismissal or removal from service so as to attract the provisions of Article 311 of the Constitution. The answer to the question will depend on whether the nature and incidents of the action resulting in dismissal or removal are to be found in the action of compulsory retirement.

Then his Lordship proceeded to consider two distinct matters, and the first was whether there was any stigma attaching to the person who had been compulsorily retired by reason of such compulsory retirement; for, in his Lordship's opinion, if there was, retirement might amount to a dismissal or removal. The second criterion that was applied was to determine whether the person who had been compulsorily retired had been deprived of any benefits which he had earned by reason of his service, and it was specifically held that being deprived of the right to continue in service was not deprivation of any benefit earned. His Lordship held, notwithstanding the fact that a charge-sheet in respect of gross allegations of corrupt practices had been levelled against the employee, that as the order of compulsory retirement did not require any finding as to any misbehaviour, and as the order actually did not refer to any charges against the employee, the compulsory retirement carried no stigma or implication of misbehaviour or incapacity against the employee, and this his Lordship held after conceding the possibility that the authority exercising the power may be resorting to that power because it was unable to substantiate the misconduct that had been alleged against the employee. Therefore, what emerges from this decision is, even if there may be allegations of misconduct against an employee, if they are not made the basis of termination of service-or, in other words, they are abandoned-no stigma can attach to the employee by reason of such termination and the termination does not amount to either dismissal or removal, unless of course it becomes dismissal or removal on the basis of the other criterion that his Lordship set out, namely, that the employee had been deprived, by reason of the termination, of any benefit that he had earned. Now, applying these tests to the case of the petitioner and taking the second criterion first, it is conceded by Mr. Nagrani that his client has not been deprived of any benefits that he had earned during the time that he was in service. The benefit to which he had become entitled is with regard to the provident fund, and under Rule 1337 there is power conferred on the appropriate authority to deduct from the credit of the provident fund any contribution made from railway revenues with interest therein if a subscriberas been dismissed from service for grave misconduct. This is not such a case, nor is the petitioner sought to be deprived of the amount standing to his credit as a subscriber to a provident fund. But in respect of the first criterion, Mr. Nagrani urges that, having regard to the circumstances in which the order of termination of service was made, a stigma does attach to his client. There is no dispute as to the facts which led to the termination of service, because, as I have already pointed out, it is as a result of the preliminary enquiry that was heldto the General Manager came to toe conclusion that there was no case to present a charge against the petitioner, but that in the public, interest he should not be retained in service. On those facts, can it be said that asting attaches to the order of termination? It appears to me that the facts in Shyam Lal v. The State of Uttar Pradesh and the Union of India were much stronger than in this case, and actually charges graver than the charge in this case had been levelled against Shyamlal and he had been called upon to answer them. But because the charges were not made the ground for the order of compulsory retirement, their Lordships of the Supreme Court held that no stigma attached to the compulsory retirement. Therefore, in this case it seems to me to be quite impossible to hold that, merely because there was the background, of a preliminary enquiry against the petitioner on the report of the Vigilance Branch, any stigma attaches to the order of termination. Mr. Nagrani urges that anyone who reads the order of termination of service or comes to know of it is bound to feel that his client had done something wrong or improper. Now there are two classes of people who are likely to come to know of the order: those who know all about the petitioner and those who may know nothing about him. The class that knew him would possibly consider that he had been unfairly treated by the authorities, for there is nothing on the face of the order to indicate that he had done anything wrong. With regard to the other class, termination of service by giving notice is well known in contracts of service between a master and a servant; and the mere fact of termination cannot carry with it any stigma and the class of persons who did not know the petitioner could not, by looking at the order of termination or by learning about it, possibly think that he had necessarily done something wrong. Indeed, if there was any person who was conversant with the rules in the Indian Railway Establishment Code and with Rule 148, which in terms enable the Railway Administration to terminate the services and equally enable the Railway servant to give notice of termination, he certainly could not think that there was any stigma attached to the order of termination. In my opinion, therefore, it seems to me to be very difficult to hold that there was any stigma attaching to the petitioner by reason of the termination of. his services, The result is that neither of the two criteria laid down by their Lordships of the Supreme Court for determining whether an order of termination amounts to an order of dismissal or removal is present in this case, with the result that the provisions of Article 311 of the Constitution or of the Disciplinary and Appeal Rules are not attracted at all. It may well be, as was the caser in Prasadi v. Works Manager, that what purports to be an order of termination may in fact be, judged by the criteria I have referred to, an order of dismissal or removal, in which case, notwithstanding the fact that the power of termination exists in the contract between the Railway Administration and the employee and there is a purported termination of service, the provisions of Article 311 would be attracted and also the provisions of the Disciplinary and Appeal Rules which are substantially in conformity with the provisions of Article 311 of theConstitution.

6. Their Lordships, of the, Supreme Court, in the case of Satish Chandra v. The Union of India : [1953]4SCR655 , were dealing, with the case of a civil servant who had been engaged on the basis of a special contract for. a specified term and he was discharged in accordance with the rules that governed his employment as part of his. contract after, notice, and their Lordships held that the provisions of Article 311 did not apply, Bose J., in bis judgment, observed (p. 252):.But of course the State can enter into contracts of temporary employment and impose special terms in each case, provided they are not inconsistent with the Constitution, and those who chose, toaccept those terms and enter into the contract are bound by them(even as the Stateis bound.

But Mr. Nagrani relies on a passage in this judgment which follows (p. 252) : .When the employment is permanent there are certain-statutory guarantees but in the absence of any such limitations Government is, subject to' the qualification mentioned above, as free to make special contracts of service with temporary employees, engaged in works of a temporary nature, as any otheremployer.

Mr. Nagrani says that his client was in permanent service and their Lordships have laid down in this passage that in the case of permanent servants a contract cannot be legal which contravenes the statutory guarantees in Article 311. Mr. Nagrani is right in that contention; but the question is: 'Does anything in the agreement of the petitioner with the Railway Administration contravene the constitutional guarantees?' If it did, to that extent the Constitution will prevail. If the termination that is contemplated by the agreement does not amount to dismissal or removal, then nothing in the agreement contravenes Article 311, while on the other hand, if under the guise of termination what is sought to be done is removal or dismissal, it would offend against Article 311 of the Constitution.

7. Mr. Nagrani has also quite fairly drawn my attention to a decision in Gopal Krishna v. Union of India : AIR1954SC632 , in which their Lordships of the Supreme Court held that, where a railway employee is discharged from service after giving one month's notice according to the terms of his agreement of service, he cannot complain that no charge-sheet had been formulated against him and proceedings had not been taken thereunder as required by Section 240 of the Government of India Act, 1935, which corresponds to Article 311 of the Constitution. Mr. Nagrani attempts to distinguish this case on the footing that the order of termination in this case does not appear to have been made as a result of any suggestion of misconduct by the employee. But, as I have already pointed out, unless the order of termination involved a stigma, it does not cease to he an order of termination and become an order of dismissal or removal.

8. Mr. Nagrani has also relied upon a decision of the Calcutta High Court in Broja Gopal v. Commr. of Police : AIR1955Cal556 , in which Bose J. appears to have held that the word 'discharge' has the same connotation as 'removal' and should be construed so as to be included within the term 'dismissal'. When one turns to the judgment of the learned Judge, he observes (p. 558):-

A removal or dismissal from the office of a Special Constable may have the effect of casting a slur on the character of the officer concerned or may affect him materially in respect of any other office which he may be holding under the Government or any otheremployer.

Having said this, the learned Judge proceeds to say (p. 558) :-

It has been held that the word 'discharge' has the same connotation as 'removal' and should be construed so as to be included within the term'dismissal'.

Obviously the learned Judge is thinking of a discharge which has the effect, to use his own language, 'of easting a slur on the character of the officer concerned'. Such a discharge would, as pointed out by their Lordships of the Supreme Court in Shyam Lal v. The State of Uttar Pradesh and the Union of India, undoubtedly be an order of removal or dismissal. But the case is no authority for the proposition that every order of discharge is necessarily an order of removal or dismissal: and even if it were, it could have no binding effect on any other Court after the decision of their Lordships of the Supreme Court in ShyamLal v. The State of Uttar Pradesh and the Union of India. which in terms holds under what circumstances an order of termination amounts to an order of removal or dismissal, and an order of discharge is certainly an order of termination.

9. The position as it appears to me to emerge from the decisions in the cases to which I have referred is that under Article 310 of the Constitution the tenure of office of persons serving either the Union or a State is during th6 pleasure of the President or of the Head of the State, as the case may he; but if it is sought to dismiss any servant of the Union or the State, the procedure prescribed in Article 311(2) must be followed, The guarantee conferred by the Constitution, therefore, is not a guarantee of continuance in service, but merely a guarantee that, if the servant is sought to be dismissed or removed from service, then the provisions of Article 311 shall come into play. Dismissal or removal from service is, to be judged by the consequences that the order brings about and by the tests laid down in ShyamLal's case. It is open to the Union or the State to enter into a contract of service and to provide for termination of the service by such notice as may be agreed upon as a term of the contract; and if there is termination of service under the terms of the contract, which does not cast a, slur s on the employee or deprive him of any benefits already earned by him, such termination cannot attract the provisions of Article 311 of the Constitution. In the case before me, notwithstanding the fact that there was a suggestionof? some misconduct against the petitioner by the Vigilance Branch and a preliminary enquiry was held, it is clear that the Railway Administration did not frame a charge against him, nor did they terminate his services on any charge. The termination is under the contract of service and, therefore, did not, in my opinion, attract the provisions of Article 311 of the Constitution.

10. That brings me to the argument that the action is mala fide. This is really another way of saying that the termination was in fact a dismissal or removal; and if the termination had the effect of being either a dismissal or removal, a charge of mala fides may well be sustained, because in that event the Railway Administration would be utilising the contractual power of termination of service for the collateral purpose of dismissing or removing him from service, which they could not do without following the procedure prescribed by the Disciplinary and Appeal Rules and the provisions of Article 311 of the Constitution. There is, therefore, no substance in the plea of mala fides as well.

11. In my opinion, therefore, the petition fails and ought to be dismissed. Having regard to the fact that the petitioner is a refugee and was a servant of the subordinate category, I make no order as to the costs of the petition.


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