A. Sambasiva Rao, Acting C.J.
1. This writ petition has travelled from a learned single Judge to a Division Bench and then to us sitting in a Full Bench. That is because of the objection raised by the 1st respondent, viz., the Visakapatnam Port Trust as to the maintainability of the writ petition against it. The highest Court of the land has itself spoken on the subject very many times, but not always uniformly. After several pronouncements on the question, the Supreme Court held in Sirsi Municipality v. C.K.F. Tellies 1973--I L.L.J. 226 : AIR 1973 SC 855, that though an ordinary relationship of master and servant is governed by contract, there are certain exceptions to that rule. If a dispute arises under the industrial law or if it is the case of a servant in the employment of State or public or local authority or bodies created under statute, the Court can step in if the dismissal is contrary to rules of natural justice or the provisions of the statute or mandatory procedural requirements and declare the dismissal to be a nullity. It was further held that such implication of public employment is thus distinguished from private employment in the case of master and servant. While rendering the decision the Supreme Court has distinguished its earlier decisions in Executive Committee of U.P. State Warehousing Corporation Ltd. v. Chandra Kiran Tyagi 1970--I L.L.J. 32 and Indian Airlines Corporation v. Sukhdeo Raj 1971--I L.L.J. 496 : (1971) 2 SCC 192 and followed its earlier decision in S.R. Tiwari v. Dish Board, Agra (1964) 2 SCJ 300 : AIR 1964 SC 1680. Even this decision did not give a quietus to the controversy. Many High Courts including this Court took different views. It was at that stage this writ petition came up for hearing and in view of the maze of these conflicting decisions, the Division Bench referred to the writ petition to a Full Bench saying 'that an authoritative pronouncement is necessary as to the applicability of the Sirsi Municipality's case (supra). This reference was on 5th November, 1974. Fortunately a Constitution Bench of the Supreme Court has given an authoritative pronouncement on this ticklish point in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi 1975--I L.L.J. 399, on 21st February, 1975.
2. Before we examine what exactly are the implications of Sukhdev Singh's case (supra) let us have a look at the facts of the writ petition. The petitioner claims to be an approved candidate and to have been appointed as a temporary typist with [effect from 17-5-1965. He was declared to have satisfactorily completed the period of probation with effect from 3-7-1965. On his request he was transferred as a trains clerk in the Traffic Department. The Traffic Manager approved and appointed him as a temporary typist in the service of the Visakapatnam Port Trust (Rule 1). The Traffic Manager declared on 17-4-1969 that he was suitable to be appointed in a quasi permanent capacity under the Visakapatnam Port Employees (Temporary Service) Regulations, 1964. He applied to the secretary of Port Trust for confirming him in the category of typist on Port Trust seniority basis. The petitioner again applied to the Chairman that his transfer to the Secretary's Office or to any other department preserved his seniority. He specifically requested that the period of service put in by him as trains clerk should be taken into account in fixing his seniority as typist. His request was acceded to and he was posted as typist in the Office of the Chief Engineer (Project). When five posts of typists were upgraded as senior typists, respondents 2 and 3, who were juniors, to him were promoted and his seniority was fixed after one Venkataraju. This decision was rested on his service in the category of typist only. His representation was rejected holding that his service as trains clerk could not be reckoned for the purpose of determining seniority in the category of typist. The Employees' Union took up his cause but their representations also met with the same fate. Consequently, the present writ petition is filed to quash the proceedings of the secretary dated 16-6-1971, to issue a consequential direction to the 1st respondent to restore his order of confirmation in the category of typist, to reckon his service as trains clerks for the purpose of seniority in the category of typist and to promote him as senior-typist with retrospective effect from 10-5-1971 with all consequential benefits.
3. This claim of the petitioner is opposed by the Port Trust represented by its Secretary not only on merits but also on the basis of the contention that a writ petition is not maintainable against the Visakapatnam Port Trust since it is neither a State within the meaning of Article 12 of the Constitution or any other authority contemplated by that Article or Article 226 of the Constitution. It is no better than a company authorised to carry on certain functions assigned to it under the provisions of the Major Port Trusts Act. The relationship of the petitioner with the port trust is purely that of a master and servant and thus contractual and no writ can lie for the alleged violation of purely contractual obligations.
4. The petitioner on the one hand contends that he was not given any notice before cancelling the order of his confirmation in the post of typist nor was that order of cancellation served on him. The procedure followed by the Port Authorities in this regard is against all principles of natural justice. Also the promotion of respondents 2 to 4 who are juniors to him, as senior typists is violative of Articles 14 and 16. These contentions are in addition to the merits of his claims. The 1st respondent's objection to the maintainability of the writ petition is that the Visakapatnam Port Trust is not a State or authority within the meaning of Articles 12 and 226 of the Constitution. It is no better than a company incorporated under the Companies Act. So, no writ petition is maintainable against it. They dispute the correctness of the petitioner's claim on merits as well. But with that we are not now concerned because the question that is referred to us, as we have stated, is as to the applicability of Sirsi Municipalities case (supra) to statutory bodies like the Visakapatnam Port Trust.
5. Prior to Sirsi Municipality's case (supra) the Supreme Court struck a different note from its earlier decisions in Warehousing Corporation (supra) and Air Lines Corporation, (supra) cases. Dealing with the case of termination of the service of an employee of U.P. Warehousing Corporation constituted under the Agricultural Produce (Development and Warehousing) Corporation Act of 1956, it found that the termination of the respondent's service was under Regulation 16 and the procedure prescribed by Regulation 16(3) was not followed by the enquiry officer. Then it was held that the Court's interference with personal service is not normal and there are only three exceptions to that normal rule. Those exceptions are: (i) When a public servant is dismissed from service in contravention of Article 311; (ii) when there is dimissal of workers under industrial and labour law and (iii) when a staturory body has acted in breach of a mandatory obligation imposed by a statute. Though in the case before the Court there was a breach of the regulations while conducting the enquiry, it was not a breach of any statutory obligation as the act did not guarantee any statutory status to the respondents. In other words, the Supreme Court took the view that regulations formulated by the Warehousing Corporation had no statutory force. In the Airlines Corporation's case (supra) it adopted that view having noticed that it was an admitted fact that the employee's service was terminated in breach of the procedural safeguards provided in the regulations made by the Indian Airlines Corporation constituted under the Air Corporation Act of 1953.
6. Then came the Sirsi Municipality case (supra). It arose out of a suit by a municipal employee, in addition to other reliefs, for a declaration that her dismissal was contrary to Rule 143 framed under Section 46 of the Bombay District Municipalities Act which required the Municipality to give an employee reasonable opportunity of defence against the charges. This contention was opposed by the Municipality saying that those rules were merely for guidance of the Municipality and not mandatory. Distinguishing the Warehousing Corporation, and Indian Airlines Corporation cases (supra) and following Tiwari's case (supra) the Supreme Court laid down the well accepted principles relating to Court's non-interference in regard to the relationship between master and servant and the exceptions to the general rule. At the same time, it took the view that where a State or a Public Authority dismisses an employee in violation of mandatory procedural requirements, or on grounds which arc not sanctioned or supported by statute, the Court may exercise juridiction to declare the act of dismissal to be a nullity. Public employment is distinguishable from private employment. Beg. J. in a separate but concurring opinion further held that neither the rules nor bye-laws of the Municipality could be made or altered unilaterally. Both operated as the laws which bound the local authority. Still the controversy ranged in different High Courts and so, the Supreme Court found it necessary to examine the question afresh and in detail in Sukhdev Singh's case (supra). Three Corporations constituted under statues, viz., the Oil and Natural Gas Commission, the Life Insurance Corporation and the Industrial Finance Corporation were either the appellants or respondents in three civil appeals brought up before the Supreme Court. Certain employees were either removed or dismissed from services of these Corporations. The employees filed suits challenging the validity of their dismissal or removal as being contrary to certain rules and regulations framed by the Corporations. They maintained that the regulations were made under the statute and the origin and source of the power to make them is statutory. In consequence, regulations are binding on the Corporations. So much so, they have the force of law and the Corporations, which are statutory authorities as they have been constituted under statutes, have no right to make any departure from the regulations. On the other hand, the Corporations argued that the regulations were framed under powers given by the statute and they affect only matters of internal arrangement. So, they do not have a statutory binding character. Terms and conditions of employees as laid down in the regulations are not a matter of statutory obligations, since those regulations are binding on the Corporation not as law but only as contract. They have no force of law at all. They merely furnish the terms and conditions of employment and thereafter the employment of each person is contractual. Four of the Jive learned Judges accepted these contentions of the employees but one learned Judge repelled them.
7. Ray, Chief Justice, speaking for himself and two of his learned brothers posed two questions for consideration in the appeals. They are, (1) Whether the Acts, under which the Corporations came into being, would enable the employees to a declaration against the statutory corporation for continuance in service or would only give rise to a claim for damages and (2) whether an employee of such corporation is entitled to claim protection of Articles 14 and 16 against the Corporation. The learned Chief Justice's opinion summarised the core of the two questions as to whether these statutory corporations are authorities within the meaning of Article 12 and whether the regulations framed under the statutes have the force of law. Referring to the provisions of the Acts under which the Corporations were constituted, the learned Chief Justice found that they are bodies corporate having perpetual succession and a common seal. The Central Government may appoint one of the members as Vice-Chairman of the Commission. The functions, terms and conditions of service of their employees shall be such as may be provided by regulations made under the Acts. There were already existing organisation and their employees became employees of the Corporations. The Central Government may itself make rules to give effect to the provisions of the Act. Every such rule shall be laid down before each House of the Parliament and the Houses may agree to or annul the rule or modify it. The Corporation, with the previous approval of the Central Government may make regulations inconsistent with the Act and the rules made thereunder for enabling it to discharge the functions under the Act. The regulations provide, among other things the terms and conditions of appointment and service and the scales of pay of the employees. The Central Government is given the power to vary or rescind any regulation which it has approved. With some insignificant variations the provisions of the three Acts are similar. In the judgment of Ray, C.J. it was held that the Corporations are required by the statute to frame rules, also for the purpose of the duties, conduct and conditions of service of officers and other employees. Those regulations impose obligations on the statutory authorities and they cannot deviate from those conditions of service. If there is any such deviation they will be enforced by legal sanction of declaration by Courts to invalidate actions in violation of rules and regulations. The very purpose of the rules and regulations under the statutes is to ensure regular conduct and they give the employees a statutory status and impose restriction on the employer and the employee with no option to vary the conditions. The case may be different in respect of ordinary relationship of master and servant arising out of a contract, but in cases of statutory bodies, there is no personal element whatsoever. That is because of the impersonal character of statutory bodies. In the case of statutory bodies the element of public employment or service is present and the statute requires observance of rules and regulations. If their requirements are not observed, then the Courts declare such dismissal as being in violation of rules and regulations and so void. These legal conclusions are based on the basic concepts that the State may undertake commercial functions in addition to the Governmental functions under the constitution and in the course of pursuing its commercial function, the State undertakes commercial- activities and constitutes statutory bodies. Those bodies are authorities within the meaning of Article 12 of the Constitution. The rules and regulations are in the nature of subordinate legislation made by the Corporations to which the power to make them is delegated. Such delegation is justified under the Constitution. At the same time the learned Chief Justice made a distinction between statutory bodies and those which come into existence in accordance with the provisions of a particular enactment. A clear distinction is drawn between statutory corporations of this nature and a company which is incorporated in accordance with the provisions of the Companies Act. A company is not created under the Companies Act but only comes into existence in accordance with the provisions of the Act. So, it is not a statutory body. But these Corporations are created by statutes. Mathew, J., in a separate but concurring opinion has gone a step further and opined that these Corporations are agencies or instruments of the State and are, therefore, ('State') within the meaning of Article 12. It may be noted that the other three learned Judges took the view that they are authorities within the meaning of that article. Alagiriswamy, J., however, dissented from the majority views expressed by the four learned Judges and held that the regulations have no statutory force.
8. It is at once seen that the majority view of the four learned Judges answers all the objections raised by the Visakapatnam Port Trust in this case, provided the Major Port Act is substantially the same as the three Acts that were under consideration before the Supreme Court. The question whether it is a State or an authority within the meaning of Article 12 is an exercise in futility in this case. Relying on the opinion of Mathew, J., Sri Suryanarayana for the petitioner argues that the Port Trust is not merely an ('authority') but ('State') itself. Whether it is State as such or an authority under Article 12 the consequences in this case will be the same. Moreover Article 12 gives an inclusive definition for the expression ('the State') so far as Part III of the Constitution is concerned. Unless the context otherwise requires, it includes the Government and Parliament of India, the Government and the Legislature of each of the States, and all local or other authorities within the territory of India or under the control of the Government of India. Be it the Government and Parliament of India, or the Government and the Legislature of a State, or local or other authority in India or under the control of the Government of India, it comes within the amplitude of the expression ('the State') in so far as Part III is concerned. So, we do not propose to go deeper into this question which, in our opinion, is wholly unnecessary at least as far as this case is concerned. Consequently, we do not express any opinion thereon.
9. As we have said, the same consequences would follow whether the Port Trust is a ('State') as such or ('other authority').
10. Now we will notice the material pro visions of the Major Port Trusts Act (XXXIII of 1963). The preamble, makes the intendment of the Act clear by saying that it is made to make provision for the constitution of port authorities for certain major ports in India and to vest the administration, control and management of such ports in such authorities and for matters connected therewith. According to Section 1(3) it applies to in the first instance to the major ports of Cochin, Kandla and Visakapatnam and it may be later applied by the Central Government to other major ports. In exercise of its power, the Central Government extended the Act to Marmogoa Port with effect from 1-7-1964. It may be noted here that these three major ports mentioned in Section 1(3) were existing for a long time and the Parliament thought that port authorities should be constituted for each port, obviously with the intention of providing for more effective management and control. Until then these ports were directly under the control of a department of the Central Government. We may also point out here that three other major ports in the country viz., Bombay, Calcutta and Madras were already under the control of separate Trust Boards constituted under three Acts relating to them. Section 3 provides for the constitution of Board of Trustees. The Central Government is given the responsibility to cause the constitution of Board of Trustees. Its Chairman and also a Deputy Chairman if one is required are to be appointed by the Central Government. In addition, that Government had to appoint not more than 10 persons as members of the Board. The Government shall notify their appointments. Section 4 confers power on the Central Government to constitute the first Board of Trustees and that Board holds office during the pleasure of the Central Government until such time the Board is constituted under Section 3. Under Section 5 the Board is a body corporate having perpetual succession and a common seal with power to acquire, hold or dispose of property and may sue or may be sued. The Central Government, in exercise of its powers under Section 8, has power to remove trustees if certain events take place. The conditions of service of Chairman and Deputy Chairman, if any, are to be determined by the Central Government as laid down by Section 15. Under Section 29, all the assets, properties and funds relating to the port and vested in the Central Government will vest in the Board. Likewise debts, obligations and liabilities also would be transferred to the Board. The employees, who have been working under the Central Government in the ports, become employees of the Board. Sections 31, 35, 36, 40, 66, 67, 77, 89, 92, 96, 98, 99 and 100 - 105 arc some of the provisions which confer extensive powers on the Central Government over the affairs of the Trust Board and they relate to capital, budgets, loans, amounts, etc. Chapter IX consisting of Section 106 - 111 deals with supervision and control of Central Government. Section 112 treats persons employed under the Act to be public servants for certain purposes. The other provisions of Chapter X provide for penalties for contravention of some provisions. It is thus seen that the Trust Boards, right from the beginning of their first constitution, are under the aegis supervision and control of the Central Government and for every thing important the Central Government's sanction will have to be obtained.
11. We must then refer to certain provisions which relate to making of regulations and rules by the Trust Board as well as by the Central Government, Section 28 confers on the Board to make regulations, which are not inconsistent with the Act, to provide for the matters mentioned therein. All these matters relate to the appointment, promotion, suspension, removal and dismissal and other service conditions of the employees. Under Section 76 the Board can also make regulations relating to loans and securities. Under Section 126 the Central Government has power to make the first regulations. The Central Government by itself may make rules regulating the meetings, perquisites, etc., of the members of the Board of Trustees. Such rules shall be placed before each House of Parliament. If the Houses agree with those rules, then they become enforceable rules. If they reject them or make amendments, the rules will have no force or have force accordingly. Under Section 123 the Board itself has the general power to make regulations in regard to the holding of meetings and affairs of the port. Very significant is the provision in Section 125 under which whenever the Central Government considers necessary in the public interest so to do it may, by order in writing together with a statement of reasons therefor, direct any Board to make any regulations for all or any of the matters specified in Section 28 or 76 or Section 123 or to amend any regulations within such period as the Central Government may specify in this behalf. The Board is bound by those regulations. It should be noticed that even in respect of matters specified in Section 28, i.e., matters relating to the appointment and services of the port's employees also, the Central Government may make regulations if it considers necessary in the public interest. When such is the irresistible force of all these provisions, it is wholly untenable, in our opinion to argue that the regulations relating to the service conditions of the employees have no statutory force. They are clearly made under the provisions of the Major Port Trusts Act either by the Board itself or by the Central Government. They, therefore, certainly have the force of law, that is to say, statutory force. That is what the Supreme Court held by overwhelming majorty. There is no escape from this consequence.
12. Sri Srinivasamurthy for the port trust, while accepting the absolutely binding nature of the decision in Sukhdev Singh's case 1975--I L.L.J. 399, attempts to wriggle out of its ambit by contending that the Visakapatnam Port Trust is not a Corporation constituted under the Major Port Trusts Act, but a port trust which came into being in accordance with that Act just like a company comes into existence under the Companies Act. We have already referred to the preamble Section 1(3) and Section 5. We have also noted the fact that there were already three major ports which formed part of the Central Government department. It is only when the Act came into force these port trusts are constituted under that Act. The preamble itself makes it clear by saying that the Act is for the purpose of making provision for the constitution of port authorities. Section 5 makes that trust a body corporate and under Section 29 all the properties and assets vested in the Government relating to the port stood transferred to the Trust Board along with the then existing employees. Therefore, it is unquestionable that the Visakapatnam Port Trust has come into being under the Major Port Trusts Act.
13. The consequence is that the employees of the Visakapatnam Port Trust are employees of a statutory body and have a statutory status and they are entitled to declaration of being in employment if their dismissal or removal is in contravention of the statutory provisions which, it is obvious, include not only the actual provisions of the Act but also the regulations made thereunder. They are also consequently entitled to raise the question of discrimination under Article 14 and 16 of the Constitution. This is the answer we give to the question that is referred to us by the Division Bench.
14. A full Bench cannot expend its valuable time on considering the actual merits of the writ petition which can easily be disposed of by a learned single Judge. So, after answering this important question, we direct that the writ petition be posted before a learned single Judge for disposal on merits.