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Ajit Prasad Mukherjea Vs. Life Insurance Corporation of India and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKolkata High Court
Decided On
Judge
Reported in(1975)ILLJ110Cal
AppellantAjit Prasad Mukherjea
RespondentLife Insurance Corporation of India and ors.
Cases Referred and Mafatlal Narandas Barot v. Divisional Controller S.T.C.
Excerpt:
- .....the appellant challenges an order of dismissal made on the 20th april, 1968, by the zonal manager, life insurance corporation of india. the appellant was originally an employee of an insurance company. after the coming into operation of the life insurance corporation act, 1956, the appellant became an employee of the corporation by virtue of section 11 of the act.3. before the order of dismissal an enquiry was made into certain alleged charges against the appellant. the appellant was found guilty and the order of dismissal was passed. he preferred an appeal to the appropriate authority. the appeal was rejected.4. the appellant in paragraph 21 of his petition before the trial court has stated that in conducting the enquiry there were violations of the principles of natural justice. the.....
Judgment:

Sankar Prasad Mitra, C.J.

1. This is an appeal from a judgment of Mr. Justice Sabyasachi Mukharji delivered on February 13, 1973, on an application under Article 226 of the Constitution.

2. The appellant challenges an order of dismissal made on the 20th April, 1968, by the Zonal Manager, Life Insurance Corporation of India. The appellant was originally an employee of an Insurance Company. After the coming into operation of the Life Insurance Corporation Act, 1956, the appellant became an employee of the Corporation by virtue of Section 11 of the Act.

3. Before the order of dismissal an enquiry was made into certain alleged charges against the appellant. The appellant was found guilty and the order of dismissal was passed. He preferred an appeal to the appropriate authority. The appeal was rejected.

4. The appellant in paragraph 21 of his petition before the trial Court has stated that in conducting the enquiry there were violations of the principles of natural justice. The appellant contended further that the enquiry was conducted in violation of the requirements of the relevant regulations.

5. Mr. Justice Sabyasachi Mukharji has hot gone into the merits of the appellant's grievances. The learned Judge has dismissed the application on a preliminary ground, namely, that the appellant has been dismissed under regulations which have no statutory force and an application under Article 226 was not maintainable at all.

6. To appreciate the preliminary point on (which the trial Court dismissed the application, it would be necessary to set out the provisions of Sections 48 and 49 of the Life Insurance Corporation Act, 1966. These are as follows:

48. Power to make rules.-

(1) The Central Government may, by notification in the Official Gazette make rules to carry out the purposes of this Act.

* * *49. Power to make regulations.-

(1) The Corporation may, with the previous approval of the Central Government, by notification in the Gazette of India, make regulations not inconsistent with this Act and the rules made thereunder to provide for all matters for which provisions are expedient for the purpose of giving effect to the provisions of this Act. * * *

7. The case of an employee of the Life Insurance Corporation who was dismissed on the ground of misconduct came up before the Allahabad High Court in an application under Article 226 of the Constitution in Ram Babu Rathaur v. Divisional Manager Life Insurance Corporation of India and Ors. : AIR1961All502 . The decision of Mr. Justice Jagadish Sahai of the Allahabad High Court in this case was approved by the Supreme Court in S.R. Tewari v. The District Board, Agra : (1964)ILLJ1SC in these words:.In Ram Babu Rathaur's case A.I.R. 1961 All. 502, the Court had to consider the question whether to employee of the Life Insurance Corporation whose employment was terminated could claim a writ of mandamus restoring him to the service of the Corporation, or a writ of certiorari quashing the proceeding of the Corporation. The Corporation is an autonomous body and is not a department of the State, and the relation between the Corporation and its employees is governed by contract, and no statutory obligation is imposed upon the Corporation in that behalf. The Court was, therefore, right it holding that the relationship between the employee and the Corporation had to be determined in the absence of any statutory provision or t special contract, by the general law of master and servant....

8. This decision of the Allahabad High Court was again approved by the Supreme Court in Indian Airlines Corporation v. Sukhdeo Rai 1971-I L.L.J. 496. TheSupreme Court said:

In S.R. Tewari's case 1964-I-L.L.J. 1, this Court noticed with approval the decision of the High Court of Allahabad in Ram Babu Rathaur v. Life Insurance Corporation : AIR1961All502 , that though the Corporation was a statutory body, the relations between it and its employees were governed by contract and were of master and servant and not subject to any statutory obligation although the Corporation had framed under its power under the Act regulations containing conditions of service in the Corporation....

9. The aforesaid decision of the Allahabad High Court which has twice been approved by the Supreme Court lays down, (a) that the relationship between the Life insurance Corporation of India and its employees were governed by contract and were of master and servant, and (b) that the regulations containing the conditions of service of the Corporation do not impose any statutory obligation on it.

10. Section 49 of the Life Insurance Corporation Act, 1956, was considered also by a Division Bench of this Court in Life Insurance Corporation of India and Ors. v. Nilratan Banerfee 75 C.W.N. 26. It was held, inter alia, that the Staff Regulations of the Life Insurance Corporation of India, are not statutory provisions. This Zonal Manager in dismissing an employee and the enquiry officer in conducting an enquiry under the provisions of the said Staff Regulations are not, amenable to the jurisdiction of the (Courts under Article 226 of the Constitution. In cases where the Life Insurance Corporation affects the rights of its employees by action in violation of the statutory provisions a writ under Article 226 of the Constitution would lie against the Life Insurance Corporation. But for violation of Staff Regulations, 1960, no writ under Article 226 of the Constitution lies.

11. This decision of our Division Bench was also approved by the Supreme Court in the Indian Airlines Corporation's case reported in A.I.R. 1971 S.C.1828 at page 1832 in paragraph 10 along with that of the Allahabad High Court in Ram Babu Rathaur's case, reported in A.I.R, 1961 All. 502.

12. We have, therefore, to come to the conclusion on the basis of the aforesaid judgments, particularly the judgment of our Division Bench that the Staff Regulations framed under Section 49 of the Life Insurance Corporation Act. 1956, have no statutory force. And an application under Article 226 of the Constitution does not lie on the ground of violation of any of the terms of the Staff Regulations in dismissing an employee.

13. Our attention, however, has been drawn to a number of other decisions of the Supreme Court and we shall fail in our duty if we do not refer to them in this judgment. In the case of Mafatlal Narandas Barot v. Divisional Controller, State Transport Mehsana and Anr. : (1966)ILLJ437SC , the provisions of Section 45 of the Road Transport Corporation Act, 1950 which were similar to those in Section 49 of the Life Insurance Corporation Act, 1956, were considered. The said Section 45 runs thus:

45. Power to make regulations.-

(1) A Corporation may, with the previous sanction of the State Government, make regulations not inconsistent with this Act and the rules made thereunder, for the administration of the affairs of the Corporation....

14. The Supreme Court in a judgment delivered by a Bench of five learned Judges entertained an application of a dismissed employee under Article 226 of the Constitution-The High Court of Gujarat had dismissed the application in limine. The Supreme Court held that the order of termination passed against the employee without giving him opportunity to show cause against the action proposed to be taken against him was bad in law since it contravened the provisions of Clause 4(b) of the regulations and also the (principles of natural justice. The Supreme Court was of the view that a writ of certiorari in such a case must issue quashing the order of dismissal, but this would not preclude the Corporation from making a fresh enquiry against the employee after giving him reasonable opportunity to show cause as provided by Clause 4(b) of the regulations.

15. Comparing the language of Section 49 of the Life Insurance Corporation Act, 1956 with that of Section 45 of the Road Transport Corporation Act, 1950, it seems to us that in Mufatlal Narandas Barot's case the Supreme Court was taking a view different from that which was taken in the other decisions cited above giving its approval to the decisions of the Allahabad High Court and of the Calcutta High Court, as we have stated.

16. The view taken in Mafatlal Narandas Barot's case was distinguished by a Bench consisting of three learned Judges in Indian Airlines Corporation v. Sukhdeo Rai at page 1833 in paragraph 11 in these words:.But the decision in Barot v. St. Corporation : (1966)ILLJ437SC , would seem to support the respondent. There, the order of termination of the appellant's service by the Corporation, a body set up under the Road Transport Corporations Act, 1950, was held to be bad in law on account of its being in contravention of Clause 4(b) of the Regulations containing service conditions framed by the Corporation under the power given to it by the Act. But the question whether the said Regulations constituted a statutory obligation subject to which duty the power to terminate the employment could be exercised or not, or the question whether they took out the employment out of master and servant relationship was not canvassed. Neither the decision in S.R. Tewari's case A.I.R. 1964 S.C. 1680, nor any other similar decision was also, it seems, brought to the notice of the Court.

17. In this decision delivered by three learned Judges, therefore, the earlier decision in Mafatlal Narandas Barot of five learned Judges was not accepted on the ground, inter alia that in Mafatlal Narandas Barot's case whether or not the regulations framed by the Road Transport Corporation had statutory force was not considered at all.

18. We have also to refer in this connection to two other decisions of the Supreme Court dealing with similar provisions in two other statutes. (Executive Committee of U. P, State Warehousing Corporation, Lucknow v. Chandra KiranTyagi : (1970)ILLJ32SC , Section 54 of the Agricultural Produce (Development and Warehousing) Corporation Act, 1956, came up for consideration. Section 54 gives power to the Warehousing Corporations to make regulations not inconsistent with the Act and the rules made thereunder and those regulations may provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of the Act. Again, the language of Section 54 of this Act was similar to the language' used in Section 49 of the Life Insurance Corporation Act, 1956 and Section 45 of the Road Transport Corporation Act, 1950. In paragraph 31 at page 1254 the Supreme Court observes:.As pointed out by us, the regulations are made under the power reserved to the Corporation under Section 54 of the Act. No doubt they lay down the terms and conditions of relationship between the Corporation and its employees. An order made in breach of the regulations would be contrary to such terms and conditions but would not be in breach of any statutory obligation, as was the position which this Court had to deal with in the Life Insurance Corporation's case A.I.R. 1964 S.C. 847. In the instant case, a breach has been committed by the appellant of Regulation 16(3) when passing the said order of dismissal, inasmuch as the procedure indicated therein has not been followed. The Act does not guarantee any statutory status to the respondent, nor does it impose any obligation on the appellant in such matters....

19. In this judgment, Mafatlal Narandas Barot's case cited above, was not considered at all and the view taken does not appear to be in conformity with that in Mafatlal Narandas Barot's case.

20. We next come to the cage of Indian Airlines Corporation v. Sukhdeo Rai : (1971)ILLJ496SC . In this case, Mafatlal Narandas Barot's case was noted but was distinguished. The Court was considering the provisions of Section 45 of the Air Corporation Act, 1953. The section reads:

45. Power of Corporations to make regulations.-

(1) Each of the Corporations may, with the previous approval of the Central Government, by notification in the Official Gazette, make regulations not inconsistent with this Act or the rules made thereunder for the administration of the affairs of the Corporation and for carrying out its functions. * * * *

21. The wordings of Section 45 of this Act of 1953 are strikingly similar to those of Section 45 of the Road Transport Corporation Act, 1950. At page 1834 in paragraph 12 the Supreme Court says:.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 on the ground 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 present case, therefore, did not fall under any of the three well recognised exceptions, and, therefore, the respondent was only entitled to damages and not to the declaration that his dismissal was null and void.

22. In this judgment, therefore, the Supreme Court was taking the same view of Section 45 of the Air Corporation Act, 1953 as that taken with respect to Section 53 of the Agricultural produce(Development and Ware-housing) Corporation Act, 1956 in the case reported in A.I.R. 1970 S.C. 1244.

23. It appears, therefore, that in Mafatlal Narandas Barot's case, the Supreme Court was of opinion that an application under Article 226 of the Constitution was maintainable for violation of regulations framed under the statute. But in the other decisions we have referred to, the Supreme Court's view is that such an application is not maintainable inasmuch as the regulations, though framed under the statute, have no statutory effect and do not impose any statutory obligations. They impose on the other hand, contractual obligations on the parties.

24. All the above decisions of the Supreme Court were considered recently by a Bench consisting of five learned Judges in Sirsi Municipality v. Cecelia Kom Francis Tellis, (Supra) In paragraph 21 of this judgment at page 858. Tyagi's case (supra) has been discussed with approval. In paragraphs 22 and 23 the Indian Airlines Corporation's case (Supra) has also been discussed with approval. The Court observes that in Tyagi's case and in the Airlints Corporation's case it was held, inter aila, that an order of dismissal made in breach of regulations framed under the respective statutes was not in breach of any Statutory obligation. Then in paragraph 24 it is stated:

This Court in S.R. Tewari v. District Board, Agra : (1964)ILLJ1SC ; Life Insurance Corporation of India v. Sunil Kumar Mukherjee : (1964)ILLJ442SC , Calcutta Dock Labour Board v. Jaffar Imam : 1966CriLJ189 and Mafatlal Narandas Barot v. Divisional Controller S.T.C. : (1966)ILLJ437SC , dealt with power of statutory authorities and bodies to dismiss servants. These decisions establish that the dismissal of a servant by statutory including local authorities or bodies in breach of the provisions of the statutes or orders or schemes made under the statute which regulate the exercise of their power is invalid or ultra vires and the principle of pure master and servant contractual relationship has no application to such cases.

In paragraph 26 it is observed:

In Mafatlal Narandas Barot's case A.I.R. 1966 S.C. 1364, this Court held that the order of termination was bad in law since it contravened the provisions of Clause 4(b) of the regulation and also the principles of natural justice.

Then in paragraph 27 the Supreme Court says:

This Court has held in the decisions referred to that the dismissal or termination of the services of employees without employing with the provisions of statute or scheme or order is invalid. This Court has quashed the orders of dismissal and granted appropriate declarations.

Lastly in paragraph 32 it is observed:

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. The respondent was dismissed without a reasonable opportunity of being heard in her defence. The dismissal by the municipality was without recording any written statement which might have been tendered. The dismissal by the municipality was without written order. The dismissal was ultra vires.

25. On the basis of the above paragraphs in Sirsi Municipality's case, learned Counsel for the appellant has argued before us that a Bench of five learned Judges of the Supreme Court has given its approval to the earlier view taken in Mafatlal Narandas Barot's case and we should come to the conclusion that an application under Article 226 of the Constitution is maintainable in the case of a breach of regulations framed under the statute. Learned counsel for the respondents, however, has urged that the Supreme Court has given in this decision of a larger Bench its approval to the views taken in Tyagi's case (supra) and in Airlines Corporation's case (supra).

26. We do not, however, intend to enter into the controversy raised on behalf of the parties. In our case it is clear that a Division Bench of our Court has held that regulations framed under Section 49 of the Life Insurance Corporation Act, 1956, have no statutory force and do not impose statutory obligations and, as such, no application under Article 226 of the Constitution is maintainable for breach of any regulations. This decision of our Division Bench has been expressly approved by the Supreme Court, as we have indicated above. In these circumstances, in view of the provisions of Article 141 of the Constitution we have to hold that the appellant in the instant case had no right to make an application under Article 226 of the Constitution and the learned trial Judge was right in dismissing the application.

27. We make it clear, however, that our decision in this case must necessarily be restricted to the provisions of Section 49 of the Life Insurance Corporation Act, 1956 and we are expressing no opinion whatsoever on similar provisions in other statutes.

28. In the result, this appeal is dismissed. There will be no order as to costs.

29. On the oral application of learned Counsel for the appellant, we grant a certificate for leave to appeal to the Supreme Court under Article 133(1) of the Constitution. The substantial question of law that arises in this case is whether Mafatlal NarandasBarot's case (supra) was rightly decided and as such whether the appellant was entitled to maintain an application under Article 226 of the Constitution. This is a question of law of general importance and, in our opinion, it needs to be decided by the Supreme Court.

30. We also make all consequential orders incidental to the said certificate.

Salil K. Roy Chowdhury, J.

31. I agree.


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