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A.J. Aramha Vs. Mysore Road Transport Corporation and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKarnataka High Court
Decided On
Judge
Reported in(1974)IILLJ262Kant
AppellantA.J. Aramha
RespondentMysore Road Transport Corporation and ors.
Excerpt:
.....supreme court said at page 1365: the order of termination passed against the appellant is bad in law since it contravenes the provisions of clause 4(b) of the regulations and also the principles of natural justice. and (ii) the corporation (the road transport corporation) is a statutory corporation like the airlines corporation while sirsi municipality is a local authority. it is well settled that a writ can be issued to such public authority to compel performance of a statutory duty or to 'prevent violation of a statutory obligation......two subsequent cases the supreme court declined to interfere with the dismissal of employees of statutory corporations in spite of such dismissal being in violation of regulations framed by those corporations.18. in u.p. state warehousing corporations. chandra kiran tyagi (supra) the validity of dismissal of the respondent-employee of the appellant-corporation, came up for consideration. the supreme court did not disturb the finding of the high court of allahabad that the order of dismissal was in violation of clause (3) of regulation 16 of the regulations framed by the appellant-corporation under the co-operative societies and agricultural produce (development and warehousing) corporation act. 1956.19. nevertheless, the supreme court reversed the order of the high court which had.....
Judgment:

Chandrashekhar, J.

1. The following two questions have been referred by a Division Bench under Section 7 of the Mysore High Court Act, 1961:

(1) Whether the regulations framed by the Mysore State Road Transport Corporation regulating the conditions of appointment and service and the scales of pay of officers and servants of the Corporation other than the chief executive officer, or general manager and the chief accounts officer under Section 45(2)(c) of the Road Transport Corporations Act, 1950, have statutory force? and

(2) Whether a writ in the nature of mandamus can be issued under Article 226 of the Constitution to the Mysore State Road Transport Corporation, to obey the regulations framed under Section 45(2)(c) of the Road Transport Corporations Act, 1950?

2. This writ petition had come up in the first instance before Malimath, J., who referred it to a Division Bench under Section 9 of the Mysore High Court Act, as his Lordship noticed conflicting decisions of this Court on the aforesaid questions. In N.B. Siddaiah v. State of Mysore W.P. 4343/68 decided on 4-12-1970, the Division Bench consisting of Narayana Pai, C J., and one of us, Bhimiah, J., held that this Court has power to issue a writ under Article 226 of the Constitution to correct flagrant disobedience of the cadre and Recruitment Rules framed under Section 45 of the Road Transport Corporation Act, 1950, (hereinafter referred to as the Act), But, in K.N. Shivananjappa v. Mysore State Road Transport Corporation W. P. 278/69, decided on 24-7-1972, another Division Bench consisting of Goviuda Bhat, J. (as he then was), and Datur, J., held that a petitioner cannot seek the relief of mandamus to enforce the regulations framed under Section 45 of the Act prescribing the conditions of service of employees of the Road Transport Corporation.

3. The Division Bench consisting of two of us (Bhimiah and Venkataramiah, JJ.) agreed with the view expressed by Malimath, J., that there were conflicting decisions of Division Benches of this Court on the aforesaid questions. Hence the Division Bench considered it fit to refer the aforesaid two questions for the opinion of a Full Bench. That is how, this reference has come up before us.

4. Before considering the rival arguments of learned Counsel for the parties, it is necessary to look at the relevant provisions of the Act.

Clause(b) of Section 2 of the Act defines the word ''Corporation' as a Road Transport Corporation established under Section 3 of the Act.

Section 3 of the Act empowers the State Government to establish a Corporation for the whole or any part of the State.

Sub-section (1) of Section 14 of the Act provides that every Corporation shall have a Chief Executive Officer or General Manager and a Chief Accounts Officer appointed by the State Government. Sub-section. (2) of that section provides that the Corporation may appoint such other officers or servants as it considers necessary for the efficient performance of its functions.

Sub-section (3) of Section 14 of the Act provides that the conditions of appointment and service and the scales of pay of the Chief Executive Officer or General Manager and the Chief Accounts Officer, shall be such as may be prescribed by the rules made under the Act and that in respect of other officers and servants of the Corporation the conditions of appointment and the scales of pay shall be such as may be determined by Regulations made under the Act, subject to the provisions of Section 34.

Section 34 of the Act provides, inter alia, that in exercise of its powers and performance and its duties under this Act, the Corporation shall not, except with the previous permission of the State Government, depart from any general instructions issued by the Government including directions relating to the recruitment, conditions of service and wages to be paid to the employees.

Sub-section (1) of Section 45 of the Act provides that the Corporation may, with the previous sanction of the State Government, make Regulations not inconsistent with the Act and the Rules made thereunder, for the administration of the affairs of the Corporation. Without prejudice to the generality of the powers under Sub-section (1), Sub-section (2) of that Section particularises the matters, in respect of which such Regulations may be framed. The matters particularised in clause (c) of Sub-section (2) are the conditions of appointment and service and the scales of pay of officers and servants of the Corporation other than the Chief Executive Officer or General Manager and the Chief Accounts Officer.

5. In exercise of the power under Section 45 of the Act the Mysore State Road Transport Corporation (hereinafter referred to as the Corporation) has, with the previous sanction of the State Government, made Regulations relating to matters specified in clause (c) of Section 45(2) of the Act.

6. We shall now take up the first of the aforesaid two questions referred to us.

7. The binding nature and enforceability of regulations framed by the Government and enactments, have been considered by the Supreme Court in a number of decisions.

8. In the State of U.P. v. Babu Ram Upadhya : 1961CriLJ773 , the effect of infraction of a regulation framed under Section 46(2) of the Police Act, 1861, came up for consideration before the Supreme Court. The respondent therein who was Sub-Inspector of Police, was dismissed from service after an enquiry was held into certain charges against him. He challenged the order of his dismissal in a petition under Article 226 of the Constitution. The High Court of Allahabad allowed his petition and set aside his dismissal on the ground that the authority had not followed the procedure laid down in para 486 of the Police Regulations. The Supreme Court, by its majority judgment, upheld the decision of the High Court. Subba Rao, J. (as he then was), who delivered the majority judgment, said thus at page 761:

'Rules made under a statute must be treated for all purposes of construction or obligations exactly as if they were in the Act and are to be of the same effect as if contained in the Act, and are to be judicially noticed for all purposes of construction or obligations'; see Maxwell 'On the Interpretation of Statutes', 10th Edn., pp. 50-51. The statutory rules cannot be described as, or equated with, administrative directions. If so, the Police Act and the rules made thereunder constitute a self-contained code providing for the appointment of police officers and prescribing the procedure for their removal. It follows that where the appropriate authority take disciplinary action under the Police Act or the rules made thereunder, it must conform to the provisions of the statute or the rules which have conferred upon it the power to take the said action. If there is any violation of the said provisions, subject to the question which we shall presently consider whether the rules are directory or mandatory, the public servant would have a right to challenge the decision of that authority.

9. Wanchoo, J., (as he then was), who delivered the minority judgment on behalf of himself and Gajendragadkar, J. (as he then was), did not express any contrary view regarding enforceability of those Regulations, but took the view that Regulation 486 was only directory and that failure to comply with it strictly or otherwise, did not vitiate the subsequent proceedings in that disciplinary enquiry. In the opinion of his Lordship there was substantial, though not strict, compliance with that Regulation in that enquiry.

10. In the Mysore State Road Transport Corporation v. Gopinatii Gundachar : (1968)IILLJ144SC , the Supreme Court, after explaining the scheme of the Act, observed thus:

If the State Government issues any directions under Section 34 relating to the recruitment and conditions of service of the employees, the Corporation must obey those directions, The conjoint effect of Sections 14(3)(b), 34 and 45(2)(c) is that the appointment of officers and servants and their conditions of service must conform to the directions, if any, given by the State Government under Section 34 and the regulations, if any, framed under Section 45(2)(c).

11. In the above case there was no infraction of any regulation made under Section 45 of the Act. As a matter of fact, no regulations had yet been framed by the Corporation in regard to conditions of appointment of officers and servants of the Corporation, but the Corporation had made certain appointments. The Supreme Court repelled the contention that until such regulations were made, the Corporation could not appoint any officer or servant.

12. In Life Insurance Corporation of India v. Sunil Kumar Mukherjee 1964-I L.L.J. 442, the validity of orders made by the Life Insurance Corporation terminating the services of certain employees whose services had been transferred to that Corporation on nationalisation of Life Insurance business, came up for consideration. Section 11 of the Life Insurance Corporation Act, 1956, confers power on the Central Government to alter the remuneration and the other terms and conditions of service of such transferred employees for the purpose of securing uniformity in the scales of remuneration and other terms and conditions of service applicable to such employees. In exercise of such power the Central Government had issued an order for the aforesaid purpose. The Supreme Court declared that the orders terminating the services of respondents-employees therein, were invalid on the ground that such orders had not been passed in conformity with Sub-Clause (a) or (b) of Clause 10 of the Order issued by the Central Government.

13. In S.R. Tewari v. District Board, Agra (supra), the appellant was an Engineer under the District Board, Agra. His services were terminated by the District Board after giving him salary for 3 months in lieu of notice. He challenged unsuccessfully before the High Court of Allahabad the order terminating his services. In his appeal before the Supreme Court it was contended on behalf of the District Board that his remedy, if any, was only to institute a suit for damages for wrongful termination of his employment and that he was not entitled to ask for a declaration that the termination of his employment was unlawful and for a consequential order for restoration of his services. Repelling that contention, this is what Shah, J. (as he then was), who spoke for the Court, said at pages 1682 and 16S3:

Under the common law the Court will not ordinarily force an employer to retain the services of an employee whom he no longer wishes to employ. But this rule is subject to certain well recognized exceptions. It is open to the Courts in an appropriate case to declare that a public servant who is dismissed from service in contravention of Article 311 continues to remain in service, even though by so doing the State is in effect forced to continue to employ the servant whom it does not desire to employ. Similarly under the industrial law, jurisdiction of the labour and Industrial Tribunals to compel the employer to employ a worker, whom he does not desire to employ, is recognized. The Courts are also invested with the power to declare invalid the act of a statutory body, if by doing the act the body has acted in breach of a mandatory obligation imposed by statute, even if by making the declaration the body is compelled to do something which it does not desire to do....

It must be pointed that the powers of a statutory body are always subject to the statute which has constituted it, and must be exercised consistently with the statute, and the Courts have, in appropriate cases, the power to declare an action of the body illegal or ultra vires, even if the action relates to determination of employment of servant.

14. However, the Supreme Court did not permit the appellant's counsel to contend that the termination of services was, in fact, a dismissal as such a plea was not taken in the High Court. The Supreme Court did not interfere with the termination of service of the appellant.

15. Mafatlal Narandas Barot v. J.D. Rathod was a case in which enforceability of the regulations framed under the Road Trans-port Corporations Act, came up for consideration. Therein the services of the appellant were terminated by the Divisional Controller on the ground of his long absence in spite of his being directed to join duty. He complained that he was not given an opportunity to show cause against the proposed punishment as required by Regulation No. 161 of the Regulations framed by the Gujarat State Transport Corporation, governing the conditions of service of its employees.

16. Clause 4(b) of Schedule A to those Regulations provided that a person against whom action was proposed to be taken for an act of misconduct, should be provided with a copy of the charge or charges as well as the statement of allegations that have been made against him and over which the enquiry was being held. The respondent-Corporation therein had not framed any charge against him nor had conducted any enquiry. Allowing the appeal, this is what the Supreme Court said at page 1365:

The order of termination passed against the appellant is bad in law since it contravenes the provisions of Clause 4(b) of the Regulations and also the principles of natural justice....

17. However, in the following two subsequent cases the Supreme Court declined to interfere with the dismissal of employees of statutory Corporations in spite of such dismissal being in violation of regulations framed by those Corporations.

18. In U.P. State Warehousing Corporations. Chandra Kiran Tyagi (supra) the validity of dismissal of the respondent-employee of the appellant-Corporation, came up for consideration. The Supreme Court did not disturb the finding of the High Court of Allahabad that the order of dismissal was in violation of Clause (3) of Regulation 16 of the Regulations framed by the appellant-Corporation under the Co-operative Societies and Agricultural Produce (Development and Warehousing) Corporation Act. 1956.

19. Nevertheless, the Supreme Court reversed the order of the High Court which had declared that the dismissal of that employee was null and void and that he was entitled to be reinstated in service. Vaidialingam, J., who spoke for the Court, said thus at page 1255:

The Act does not guarantee any statutory status to the respondent, nor does it impose any obligation on the appellant in such matters. It is not in dispute that, in this case, the authority who can pass an order of dismissal has passed the same. Under these circumstances, a violation of Regulation 16(3), as alleged and established in this case, only result in the order of dismissal being held to be wrongful and, in consequence, making the appellant liable for damages. But the said order cannot be held to be one which has not terminated the service, albeit wrongfully or which entitles the respondent to ignore it and ask for being treated as still in service.

20. His Lordship distinguished the case4 Life Insurance Corporation of India v. Sunil Kumar Mukherjee (supra), on the ground that in that case the order terminating the services of respondents therein was a nullity as it had not been effected in terms of the statute. His Lordship said that the services of those employees had been crystallised by the statute, i. e. Sub-sections (1) and (2) of Section 11 of the Life Insurance Corporation Act, and that by not complying with the provisions of Clause 10 of the order of the Central Government, the Life Insurance Corporation of India must be considered to have acted in gross violation of the mandatory provisions of the statute.

21. His Lordship distinguished the case, State of U.P. v. Babu Ram Upadhya (supra) on the ground that the employee therein was a member of the public service who had been given protection under the Constitution.

22. In Indian Airlines Corporation V. Sukhdeo Rai (supra) the respondent who was a motor driver was found guilty of certain charges on enquiry and was dismissed. He filed a suit contending that his dismissal was illegal and void as the enquiry against him had been conducted in breach of the procedure laid down by the Regulations made by the Corporation under Section 45 of the Air Corporation Act, 1953. The suit was decreed and that decree was upheld by the High Court in second appeal. The Supreme Court reversed the decision of the High Court and set aside the declaration that the dismissal of the respondent therein was illegal. This is what Shelat, J., who spoke for the Court, observed at page 1834:

The Regulations contain the terms and conditions which govern the relationship between the Corporation and its employees. Though made under the power conferred by the statute, they merely embody the terms and conditions of service in the Corporation but do not constitute a statutory restriction as to the kind of contracts which the Corporation can make with its servants or the grounds on which it can terminate them. That being so, and the Corporation having undoubtedly the power to dismiss its employees, the dismissal of the respondent was with jurisdiction, and although it was wrongful in the sense of its being in breach of the terms and conditions which governed the relationship between the Corporation and the respondent it did subsist.... The respondent was only entitled to damages and not to the declaration that this dismissal was null and void.

His Lordship distinguished the case, Life Insurance Corporation v. Sunil Kumar Mukherjee (supra) on the ground that the impugned dismissal in that case, made inconsistently with the provisions of the order made by the Central Government under Section 11(2) of the Life Insurance Corporation Act, was without jurisdiction and, therefore, a nullity.

23. Referring to the decision in Mafatlal Barot v. S.T. Corporation (supra), his Lordship said that in that case the question whether the Regulations framed by the Road Transport Corporation under the Road Transport Corporation Act, constituted a statutory obligation subject to which only the power to terminate employment could be exercised or not on the question whether they (the regulations) took the employment out of master and servant relationship, was not canvassed.

24. In the latest decision of the Supreme Court in Sirsi Municipality v. C.K.P. Tellis (supra) the Supreme Court held that the dismissal of the respondent-employee of the appellant-Municipality in violation of Rule 143 framed by that Municipality under Section 46 of the Bombay District Municipalities Act, was void. The Supreme Court upheld the declaration by the High Court that the dismissal was illegal and void. After reviewing the earlier decisions of the Supreme Court, Ray, J., (as he then was), who delivered the majority judgment, said thus at page 860:

In the present appeal, the pre-eminent question is whether the dismissal is in violation of Rule 143. Rule 143 imposes a mandatory obligation. The rules were made in exercise of power conferred on the municipality by statute. The rules are binding on the municipality. They cannot be amended without the assent of the State Government. The dismissal of the respondent was rightly found by the High Court to be in violation of Rule 143 which imposed a mandatory obligation...

25. His Lordship explained the decision of the Supreme Court in Tyagi's case by saying that the Supreme Court held in that case that an order made in breach of Regulation 16(3) of the Regulations framed under the Agricultural Produce (Development and Warehousing) Corporation Act, 1956, was not in breach of any statutory obligation.

26. His Lordship explained the decision of the Supreme Court in Indian Airlines Corporation's case by saying that the dismissal in that case was found to be wrongful but not to fall within the vice of infraction of statutory limitation or statutory obligation as the regulations framed under Section 45 of the Air Corporation Act, 1953, were regarded by the Supreme Court to be terms and conditions of service but the same did not constitute any statutory restriction as to the kind of contracts which the Airlines Corporation could make with the servants or the grounds on which it could terminate.

27. Beg, J., in his separate but concurring judgment in Sirsi Municipality's (supra), said that although Indian Airlines Corporation's case (supra) could be distinguished on facts, he was unable to reconcile the decision of the Supreme Court in Tyagi's case (supra) with the view taken by the Supreme Court in Sirsi Municipality's case (supra). His Lordship added that in Tyagi's case (supra) as in Sirsi Municipality's case (supra), no express statutory provision was contravened by the impugned dismissal, but that a rule made under the powers conferred by statute, which protects the servants concerned from punishment by way of dismissal contrary to the rules of natural justice, was violated.

28. Thus, according to the unanimous view of their Lordships who decided Sirsi Municipality's case (supra), the decision in Airlines Corporation's case (supra) was distinguishable from Sirsi Municipality's case (supra). While according to the majority of learned Judges who decided Sirsi Municipality's case (supra), Tewari's case (supra) was also distinguishable from Sirsi Municipality's case (supra), according to Beg, J., the two decisions are irreconcilable. If several decisions of the Supreme Court are irreconcilable then, according to the ruling of this Court in New Krishna Bhavan v. Commercial Tax Officer (I960) Mys. L..T. 720, the latest pronouncement of the Supreme Court would be binding on other Courts in the country.

29. In Sirsi Municipality's case (supra) Ray, J. (as he then was), has stated the legal position of statutory bodies thus at pace 857:

The Courts keep the State and the public authorities within the limits of their statutory powers. Where a Slate or a public authority dismisses an employee in violation of the mandatory procedural requirements or on grounds which are not sanctioned or supported by statute the Courts may exercise jurisdiction to declare the act of dismissal to be a nullity. Such implication of public employment is thus distinguished from private employment in pure cases of master and servant.

30. Mr. B. Thilak Hegde, learned Counsel for the Corporation, contended that in deciding the questions referred to us, we should follow the ruling of the Supreme Court, in Airlines Corporation case (supra) and not that in Sirsi Municipality's case (supra). The grounds on which he contended so were:

(i) Section 45 of the Act is in pari materia with Section 45 of the Air Corporation Act; and

(ii) The Corporation (The Road Transport Corporation) is a statutory Corporation like the Airlines Corporation while Sirsi Municipality is a local authority.

31. It is true that there is close similarity between Section 45 of the Act and Section 45 of the Air Corporation Act, both of which empower the respective Corporations to frame regulations relating to conditions of appointment and service of their employees. But there is no material distinction between Section 45 of the Act and Section 46 of the Bombay District Municipalities Act, 1901, which empowers the Municipality to make rules, inter alia, regarding the period of service and the conditions of service.

32. However, Mr. Tilak Hegde argued that there is a material distinction between Section 45 of the Act and Section 45 of the Air Corporation Act on the one hand and Section 46 of the Bombay District Municipality Act on the other, inasmuch as the former empower making regulations while the latter empowers making of rules.

33. Though the nomenclature for the subordinate legislation under Section 45 of the Act and Section 45 of the Air Corporation Act, is 'Regulations' while that under the Bombay District Municipalities Act, is 'Rules', we do not see any distinction in the character of respective subordinate legislation under these Sections. Hence, the use of the Word 'Regulations' in Section 45 of the Act and Section 45 of the Air Corporal ion Act and the use of the word 'Rules' in Section 46 of the Bombay District Municipalities Act, cannot make any difference as to the nature and character of subordinate legislation under these provisions.

34. Regarding the second ground of distinction urged by Mr. Tilak Hegde, it is true that Sirsi Municipality is a local authority while the Road Transport Corporation and the Air Corporations are not local authorities, but are only statutory authorities. But we do not see how this distinction has any bearing on the question whether the Regulations framed by those authorities under the relevant enactments have or do not have statutory force. In Sirsi Municipality's case (supra) Ray, J. (as he then was), observed that the Courts keep the State and the Public authorities within the limits of their statutory powers. His Lordship further observed that in the case of servants of the State or of local authorities or statutory bodies, Courts have declared in appropriate cases the dismissal to be invalid if the same is in violation of provisions of the statute. His Lordship made no distinction between local authorities and other statutory bodies in regard to keeping them within the limits of their statutory powers or in regard to their acts being declared as invalid by the Courts.

35. In the light of the pronouncements of the Supreme Court, it appears to us that the Regulations made by the Corporation within the ambit of Section 45(2)(c) of the Act, must be treated for all purposes of construction or obligation exactly as if they (such Regulations) were in the Act and have the same effect as if they are contained in the Act and such Regulations cannot be described as, or equated with administrative directions; and if there is any violation of such Regulations, unless they are only directory, an employee of the Corporation would have the right to challenge the decision of the Corporation.

36. We shall next consider the second question referred to us. Mr. Tilak Hegde contended that even if the Corporation acted in violation of any Regulation framed under Section 45(2)(c) of the Act, an employee of the Corporation could not seek relief under Article 226 of the Constitution and that his remedy, if any, was only by way of a suit. For this contention, Mr. Tilak Hegde again sought to derive support from the decisions of the Supreme Court in Tyagi's case (supra) and the Airlines Corporation's case (supra).

37. As explained by Ray, J. '(as he then was), in Sirsi Municipality's case (supra), the decisions in Tyagi's case (supra) and the Airlines Corporation's case (supra) proceeded on the basis that in each of them there was no violation of any statutory obligation but there was only a breach of the terms and conditions of the relationship between master and servant. Hence, those two decisions of the Supreme Court do not support the contention of Mr. Tilak Hegde that a writ cannot be issued under Article 226 if there is violation of the Regulations under Section 45(2)(c) of the Act.

38. Once the Regulations made under Section 45(2)(c) of the Act, are held to have statutory force, we do not see why a writ, order or direction cannot be issued under Article 226 of the Constitution to the Corporation to obey such Regulations and why an aggrieved employee should seek his remedy only in a suit.

39. The Corporation is undoubtedly a public authority. It is well settled that a writ can be issued to such public authority to compel performance of a statutory duty or to 'prevent violation of a statutory obligation. Whether a writ should be issued to the Corporation in a particular case, will be in the judicial discretion of the Court.

40. In the light of the above discussion, our answers to the two questions referred to us, are as hereunder:

(i) The Regulations framed by the Mysore (now Karnataka) State Road Transport Corporation regulating the conditions of appointment and service and the scales of pay of officers and servants of the Corporation other than the Chief Executive Officers or General Manager and the Chief Accounts Officer, under Section 45(2)(c) of the Road Trans-port Corporations Act, 1950, have statutory force.

(ii) A writ in the nature of mandamus can be issued under Article 226 of the Constitution to the Mysore (now Karnataka) State Road Transport Corporation, to obey the Regulations framed under Section 45(2)(c) of the Road Transport Corporations Act, 1950.


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