Civil Appeal No 1 543 of 1974
Appeal by special leave from the Judgment and order dated the 30th July 1974 of the Allahabad High Court in Second Appeal No 2973 of 1972
SV Gupte J P Goyal P C Gupta and G section Chatterjee for the appellant
MK Ramamurthi and OP Rana for Respondent No 1
DP Mukherjee for Respondents 3 5
1010 The Judgment of H R Khanna and section Murtaza Fazal Ali JJ was delivered by Fazal Ali J P N Bhagwati J gave a separate opinion
FAZAL ALI J
This appeal by special leave is directed against the judgment of the Allahabad High Court affirming the decree of the First Additional Civil  Sessions Judge Muzaffarnagar by which the plaintiffrespondent s suit for injunction was decreed
The appeal arises in the following circumstances
The appellant which is the Executive Committee of Vaish Degree College in the District of Muzaffarnagar was registered under the Registration of Cooperative Societies Act as an institution for imparting education
The affairs of the College were managed by the Executive Committee of the Vaish College which is the appellant in this case
In the year the Vaish Degree College was affiliated to the Agra University and as a consequence thereof the College agreed to be governed by the provisions of the Agra University Act and the statutes and ordinances made thereunder
With the establishment of the Meerut University some time in the year 1965 the Vaish Degree College got affiliated to the Meerut University
The plaintiffrespondent was appointed as Principal of the College on permanent basis with effect from July 1 1964 and his appointment as Principal was formally approved by the Vice Chancellor of the Agra University
Two years later it appears that differences arose between the Executive Committee of the College and the plaintiffrespondent resulting in allegations and counter allegations and culminating in a notice served by the Executive Committee on October 24 1966 on the plaintiffrespondent directing him not to discharge the duties of the Principal and another letter was sent to defendant No 4 a member of the staff of the College to officiate as Principal in place of the plaintiffrespondent
This was fol lowed up by a counter notice by the plaintiffrespondent to the Executive Committee that the notice sent to him was illegal and the respondent also asked defendant No 4 not to assume charge of the Principal
On March 12 1967 the Executive Committee by a resolution terminated the services of the plaintiffrespondent with effect from October 24 1966 and this resolution was amended by another resolution on March 29 1967
Even before the formal resolution terminating the services of the plaintiffrespondent was passed it appears that the plain tiff had filed the present suit on October 28 1966 before the Court of the First Additional Civil  Sessions Judge Muzaffarnagar which was transferred for disposal to the Court of the Munsif Kairana
The plaintiff s case was that on being affiliated to the Agra University and thereafter to the Meerut University and adopting the provisions of the Acts and the statutes of the said Universities the appellant College became a statutory body and had no jurisdiction to terminate the services of the plaintiffrespondent without seeking the previous approval of the Vice Chancellor
The plaintiff further submitted that after his appointment he entered into an agreement with the Executive Committee in accordance with the statutes of the University and 1 appellant was bound by the terms and provisions of the statutes under 1011 which his services could not be terminated without the previous approval of the Vice Chancellor
The plaintiff therefore contended that his removal from service was without jurisdiction and he must be deemed to have continued in service
He also made some allegations of bias and mala fides against the Executive Committee and some other persons with which we are not concerned in this appeal
The plaintiff accordingly prayed for an injunction restraining the defendants from interfering with his duties as the Principal of the College
It appears however from the record that after the notice given to the plaintiff  respondent by the Executive Committee the plaintiff was bereft of all his powers and in spite of his attempts to get into the College and work as Principal he was not allowed to do so which led to some criminal proceedings also
It is therefore clear that at least after the resolution of the Executive Committee was passed termination the services of the plaintiff he has not been working as Principal of the College uptil now
This position is not disputed before us by counsel for the parties
The defence was that the Executive Committee was not a statutory body and therefore was not bound by the statutes and the provisions of the University Acts although as a matter of convention it had agreed to follow the same
The defendantappellant also denied the allegations of the plaintiffrespondent that the Executive Committee had entered into any agreement or contract of service with the plaintiffrespondent
The defendant further alleged that as the plaintiffrespondent remained habitually and perpetually absent from his duties without the permission of the concerned authority the defendantappellant was compelled to dispense with the services of the plaintiffrespondent
In fact the plea taken by the defendant was that the plaintiff himself by his remaining perpetually absent from duties abandoned the service and had put an end to the contract of service and therefore he could not be heard to say that the contract of service still subsisted
The Trial Court of Munsif Kairana framed a number of issues and after considering the evidence and the circumstances found i that the plaintiff had failed to prove that he ever executed any agreement with the defendantappellant and ii that the defendantappellant was not a statutory body and therefore was not bound by the provisions of the University Acts or the statutes made thereunder
The learned Munsif therefore found that a case for declaration or injunction had not been made out and he accordingly dismissed the suit of the plaintiff
The plaintiffrespondent went up in appeal against the judgment and decree of the Munsif and the appeal was heard by the First Additional Civil  Sessions Judge Muzaffarnagar who by his order dated December 3 1971 reversed the decision of the Munsif and decreed the plaintiff s suit and granted the injunction prayed for
lt may be noticed that so far as the plea of the plaintiffrespondent that be had executed an agreement with the Executive Committee of the College which formed the basis of the terms of his contract of service was concerned the learned Additional Civil  Sessions Judge also affirmed the finding of the Munsif on this point and held that there was no such 1012 agreement
Even before us this finding was not disputed by the learned counsel for the plaintiffrespondent who has proceeded on the assumption that there was no agreement executed between the plain tiff and the defendant as alleged by the plaintiff
The defendantappellant filed a second appeal hl the High Court of Allahabad against the decision of the First Additional Civil  Sessions Judge decreeing the plaintiff s suit
The matter was heard by a single Judge who however referred the case to a Full Bench framing the following issue Can the Civil Court grant the relief of injunction in view of the facts and circumstances of the present case  Consequently the matter was placed before the Full Bench of the Allahabad High Court which after hearing the arguments decided the following points in favour of the plaintiffrespondent 1 That the defendantappellant being a statutory body was bound by the provisions of the University Acts and the statutes made thereunder and therefore the termination of the services of the plaintiffrespondent without obtaining the sanction of the Vice Chancellor was illegal  invalid and 2 That in the facts and circumstances of the case the plaintiffrespondent was entitled to the injunction as prayed for
The case then came back before the Single Judge who in view of the decision of the Full Bench affirmed the decree of the First Additional Civil  Sessions Judge decreeing the plaintiff s suit with the modification that the suit was decreed only against defendants 2 4 6  7 but dismissed as against defendants 1  5
Hence this appeal by special leave before us
Mr Gupte learned counsel for the appellant submitted before us that it was not necessary to go into the complicated facts of the case because he adumbrated three propositions of law before us which in his opinion were sufficient to decide the case
In the first place it was contended that the finding of the Full Bench which formed the basis of the judgment of the High Court appealed against that the defendantappellant was a statutory body was legally erroneous secondly the counsel submitted that even if the appellant was a statutory body as no agreement was executed between the respondent and the appellant the statutes passed by the University would not apply and the termination of the services of the respondent would be governed by the usual master and servant relationship and thirdly it was contended that it is well settled that the courts do not enforce a contract of personal service in the absence of special circumstances as laid by several decisions of this Court and the case in hand does not fall within any of the exceptions laid down by this Court
Mr Ramamurthi learned counsel for the respondent rebutted the arguments of Mr Gupte and supported the judgment of the Full Bench of the Allahabad High Court that the appellant was a statutory body 1013 and therefore the termination of the services of the respondent was legally invalid
It was further contended that in view of the decision of this Court in Sirsi Municipality vs Kom Francis the scope of the exception laid down by this Court in various cases has been extended even to include within its fold non statutory bodies provided they are public or local bodies which the appellantdefendant was undoubtedly one
Lastly it was submitted that once it is established that the termination of the services of the respondent was legally invalid inasmuch as the sanction of the Vice Chancellor was not obtained the declaration that the plaintiffrespondent continued in service and injunction prayed for must be granted as a matter of law
In the course of the arguments however the learned counsel for the appellant also suggested that the relief of injunction or declaration being an equitable relief and in the discretion of this Court this was not a fit case in which this discretion should be exercised in favour of the plaintiffrespondent
We would first deal with the important question which has been the sheet anchor of the arguments of the learned counsel for the respondent as also the main basis of the judgment of the Full Bench of the Allahabad High Court as to whether or not the appellant Executive Committee can be said to be a statutory body in the circumstances of the present case
It seems to us that before an institution can be a statutory body it must be created by or under the statute and owe its existence to a statute
This must be the primary thing which has got to be established
Here a distinction must be made between an institution which is not created by or under a statute but is governed by certain statutory provisions for the proper maintenance and administration of the institution
There have been a number of institutions which though not created by or under any statute have adopted certain statutory provisions but that by itself is not in our opinion sufficient to clothe the institution with a statutory character
In Sukhdev Singh  Ors
vs Bhagatram Sardar Singh Raghuvanshi  Others this Court clearly pointed out as to what constitutes a statutory body
In this connection my Lord A N Ray CJ observed as follows A company incorporated under the Companies Act is not created by the Companies Act but comes into existence in accordance with the provisions of the Act
It is not a statutory body because it is not created by the statute
It is a body created in accordance with the provisions of the statute
 It is therefore clear that there is a well marked distinction between a body which is created by the statute and a body which after having come into existence is governed in accordance with the provisions of the statute
In other words the position seems to be that the institution concerned must owe its very existence to a statute which would be the fountain head of its powers
The question in such cases to be asked is if there is no statute would the institution have any legal existence
If the answer is in the negative then undoubtedly it is a statutory body but if the institution has a separate existence of its own without any 1014 reference to the statute concerned but is merely governed by the statutory provisions it cannot be said to be a statutory body
The High Court in our opinion was in error in holding that merely because the Executive Committee followed certain statutory provisions of the University Act or the statutes made thereunder it must be deemed to be a statutory body
In fact the Full Bench of the High Court relied on three circumstances in order to hold that the Executive Committee was a statutory body viz i that it was affiliated to the Agra University which was established by the statute ii that there were certain mandatory provisions in the Agra University Act which were binding on the Executive Committee and iii that the Executive Committee was governed by the statutes framed by the Agra University
In our opinion none of these factors would be sufficient to alter the character and nature of the Executive Committee and convert it into a full fledged statutory body
To begin with the Executive Committee had an independent status having been registered under the Registration of Co operative Societies Act and was a self governed or an autonomous body
It was affiliated to the Agra University merely for the sake of convenience and mainly for the purpose that the courses of studies prevalent in the College may be recognised by the University
Statute 11 A of the Agra University Hand Book 1965 66 runs thus Each College already affiliated or when affiliated which is not maintained exclusively by Government must be under the Management of a regularly constituted Governing body which term includes Managing Committee on which the staff of the college shall be represented by the Principal of the college and at least one representative of the teachers of the college to be appointed by rotation in order of seniority determined by length of service in the college who shall hold office for one academic year
 All that the statute of the Agra University required was that the Managing Committee of the College must co opt the Principal of the College and one representative of the teachers of the college by rotation as members of the Committee
It is manifest that by co opting these members the Managing Committee did not lose its independent status but continued to remain a non statutory and autonomous body
Similarly the mere fact that the statutes of the University were adopted by the Managing Committee and it was as a matter of convention bound to follow the statutory provisions of the Act would not clothe the Managing Committee with a statutory status or character
In fact the adoption of the statutes was agreed to by the appellant Executive Committee for the better governance administration and extension of the educational activities of the institution
In fact an identical argument which forms the basis of the judgment of the Full Bench of the High Court had been advanced before this Court and rejected outright
For instance in Sabhajit Tewary vs Union of India  ors the question was whether the Council of Scientific and Industrial Research which 1015 was a society registered under the Societies Registration Act as the present appellant is was a statutory body
It was urged that because the Council of Scientific and Industrial Research had government nominees as the President of the body and derived guidance and financial aid from the Government it was a statutory body A N Ray CJ rebutted these arguments and observed as follows The Society does not have a statutory character like the Oil and Natural Gas Commission or the Life Insurance Corporation or Industrial Finance Corporation
It is a society incorporated in accordance with the provisions of the Societies Registration Act
The fact that the Prime Minister is the President or that the Government appoints nominees to the Governing Body or that the Government may terminate the membership will not establish anything more than the fact that the Government takes special care that the promotion guidance and co operation of scientific and industrial research the institution and financing of specific researched establishment or development and assistance to special institutions or departments of the existing institutions for scientific study of problems affecting particular industry in a trade the utilisation of the result of the researches conducted under the auspices of the Council towards the development of industries in the country are carried out in a responsible manner
Similar view was taken by this Court in Kumari Regina vs St Aloysius Higher Elementary School  Anr
where this Court observed as follows But it cannot also be gainsaid that as the Government has the power to admit schools to recognition and grants in aid it can de hors the Act lay down conditions under which it would grant recognition and aid
To achieve uniformity and certainty in the exercise of such executive power and to avoid discrimination the Government would have to frame rules which however would be in the form of administrative instructions to its officers dealing with the matters of recognition and aid
If such rules were to lay down conditions the Government can insist that satisfaction of such conditions would be condition precedent to obtaining recognition and aid and that a breach or non compliance of such conditions would entail either the denial or withdrawal of recognition and aid
The Management of a school therefore would commit a breach or non compliance of the conditions laid down in the rules on pain of deprivation of recognition and aid
The rules thus govern the terms on which the Government would grant recognition and aid and the Government can enforce these rules upon the management
But the enforcement of such rules is a matter between the Government and the management and a third party Hr such as a teacher aggrieved by some order of the manage 1016 ment cannot derive from the rules any enforceable right against the management on the ground of a breach or non compliance of any of the rules
 This is a case which is almost on all fours with the facts of the present case because there the case was whether the school after being recognised by the Government for the purpose of grant was bound to observe the rules
In Indian Airlines Corporation vs Sukhdeo Rai it was observed as follows The fact therefore that the appellant Corporation was one set up under and was regulated by Act XXVII of 1953 would not take away without anything more the relation ship between it and its employees from the category of purely master and servant relationship
 The Full Bench of the Allahabad High Court however appears to have placed great reliance on the decisions of this Court in Prabhakar Ramakrishna Jodh vs AL Pande  Anr
where this Court held that the Governing Body of the College in that case was a statutory body
In this connection this Court observed as follows On the other hand we are of opinion that the provisions of Clause 8 of the ordinance relating to security of the tenure of teachers are part and parcel of the teachers  service conditions and as we have already pointed out the provisions of the College Code  in this regard are validly made by the University in exercise of the statutory power and have therefore the force and effect of law
It follows therefore that the College Code  creates legal rights in favour of teachers of affiliated colleges and the view taken by the High Court is erroneous This case however is clearly distinguishable from the facts of the present case
To begin with in PR Jodh s case this Court was dealing with the College Code which was itself a creature of the statute namely the University of Saugar Act
Under ordinance No 20 Para 1 the Governing body was created by an ordinance passed under the University of Saugar Act
It is therefore clear that the statutes are the creature of the Act
Thus the distinction is that in PR Jodh s case the Governing Body was the Council of Management established under the Act while here the Managing Committee is not
It is obvious that the Governing Body was created under a statutory provision because the ordinance had undoubtedly a statutory force having been passed under the Act
Para 2i c of the College Code runs thus 2
i In this ordinance unless there is anything repugnant in the subject or context c Governing Body  means the Council of Management established under this ordinance for the control and general management of the College 
 1017 The Governing Body was therefore established under the ordinance itself and had no independent existence at all
Similarly under Para 3 of the ordinance the constitution of the Governing Body was laid down
It is therefore clear that not only was the Governing Body of the College established under the ordinance but even the constitution of the said Governing Body was laid down by the ordinance itself and the functions of the Governing Body were clearly defined by Para 4 of  ordinance No 20
The ordinance itself was called the College Code which came into legal existence by virtue of the ordinance
In other words the position is that before ordinance No 20 was passed under the University Act the Governing Body had no existence at all
The same however could not be said of the present Managing Committee which had its independent existence long before it was affiliated to the Agra University and had also its own constitution the only exception being that two members had to be taken ex officio in the Managing Committee
There is therefore world of difference between the nature and manner of the establishment of the Governing Body under the University of Saugar Act and the Managing Committee in the instant case
Further more this case was noticed and discussed by a later judgment of this Court in Vidya Ram Mishra vs Managing Committee Shri Jai Narain College and was distinguished
Speaking for the Court Mathew J observed as follows When once this Court came to the conclusion that the College Code  had the force of law and conferred rights on the teachers of affiliated colleges the right to challenge the order terminating the services of the appellant passed in violation of clause 8vi a of the College Code  in a proceeding under Article 226 followed as the night the day and the fact that the appellant had entered into a contract was considered as immaterial
    On a plain reading of statute 151 it is clear that only provides that the terms and conditions mentioned therein must be incorporated in the contract to be entered into between the college and the teacher concerned
It does not say that the terms and conditions have any legal force until and unless they are embodied in an agreement
To put it in other words the terms and conditions of service mentioned in Statute 151 have proprio vigore no force of law
They become terms and conditions of service only by virtue of their being incorporated in the contract
Without the con tract they have no vitality and can Confer no legal rights
Whereas in the case of Prabhakar Ramakrishna Jodh vs A L Pande and another 1965 2 SCR 713 the terms and conditions of service embodied in clause 8vi a of the College Code  had the force of law apart from the contract and conferred rights on the appellant there here the terms and conditions mentioned in Statute 151 have no efficacy unless they are incorporated in a contract
 1018 It is therefore clear that in P R Jodh s case the College Code was by itself a statutory Code so that the provisions of the statute operated proprio vigore and did not depend on the execution of the agreement between the employer and the employee in accordance with the statutes of the University
In the instant case which is very much like the case in Vidya Ram Mishra supra the statute merely enjoined that the agreement between the employer and the employee should be incorporated according to the form and conditions prescribed by the statute and until the said agreement is executed the provisions of the Statute would not apply proprio vigore
The Allahabad High Court no doubt tried to distinguish Vidya Ram Mishra s case but with due respect we might observe that the distinction drawn by the High Court is a distinction without any difference
The High Court has not considered the two basic facts which were present in PR Jodh s case but which were not present in the instant case viz 1 that the governing body in the case dealt with by this Court in P R Jodh s case was in itself a creature of the statute and 2 that in the instant case the statute did not apply proprio vigore but only after an agreement was executed between the employer and the employee in accordance with the terms and conditions of the statute
The High Court also failed to consider that there was a concurrent finding of fact by all the Courts below that the plaintiffrespondent never executed any agreement with the Executive Committee of the College in the form prescribed by the statutes of the Agra University Act
Thus in view of the decisions of this Court regarding the circumstances under which the institution can be treated as a statutory body we are unable to agree with the view taken by the Allahabad High Court that the Executive Committee was a statutory body merely be cause it was affiliated to the University or was regulated by the provisions of the University Act or the statutes made thereunder
We accordingly hold that the decision of the Full Bench of the Allahabad High Court on this point is legally erroneous and must be overruled
This brings us to the next point for consideration as to whether or not the plaintiffrespondent s case fell within the exceptions laid down by this Court to the general rule that the contract of personal service is not specifically enforceable
In this connection as early as 1964 in SR Tewari vs District Board Agra and Anr this Court observed as follows 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 1019 tribunals to compel the employer to employ a worker whom he does not desire to employ is recognised
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
 To the same effect is the decision of this Court in Executive Committee of UP State Warehousing Corporation Ltd vs Chandra Kiran Tyagi where it was observed as follows From the two decisions of this Court referred to above the position in law is that no declaration to enforce a con tract of personal service will be normally granted
But there are certain well recognized exceptions to this rule and they are To grant such a declaration in appropriate cases regarding 1 A public servant who has been dismissed from service in contravention of article 311
2 Reinstatement of a dismissed worker under Industrial Law by Labour or Industrial Tribunals
3 A statutory body when it has acted in breach of a mandatory obligation imposed by statute In Indian Airlines Corporation vs Sukhdeo Rai supra this Court also observed as follows It is a well settled principle that when there is a purported termination of a contract of service a declaration that the contract of service still subsisted would not be made in the absence of special circumstances because of the principle that courts do not ordinarily grant specific performance of service
This is so even in cases where the authority appointing an employee was acting in exercise of statutory authority
The relationship between the person appointed and the employer would in such cases be contractual ie as between a master and servant and the termination of that relationship would not entitle the servant to a declaration that his employment had not been validly determined
 To the same effect is the decision of this Court in Bank of Baroda v Jewan Lal Mehrotra where this Court observed as follows The law as settled by this Court is that no declaration r to enforce a contract of personal service will be normally granted
The well recognised exceptions to this rule are 1 where a public servant has been dismissed from service in contravention of article 311 2 where reinstatement is sought of a dismissed worker under the industrial law by labour or industrial tribunals 3 where a statutory body has acted in breach of a mandatory obligation imposed by statute 1020 In the Sirsi Municipality s case the matter was exhaustively reviewed and Ray J as he then was observed as follows The cases of dismissal a servant fall under three broad heads purely by contract of employment
Any breach of contract in such a case is enforced by a suit for wrongful dismissal and damages
Just as a contract of employment is not capable of specific performance similarly breach of contract of employment is not capable of founding a declaratory judgment of subsistence of employment
A declaration of unlawful termination and restoration to service in such a case of contract of employment would be indirectly an instance of specific performance of contract for personal service
Such a declaration is not permissible under the Law of 
The second type of cases of master and servant arises under Industrial Law
Under that branch of law a servant who is wrongfully dismissed may be reinstated
This is a special provision under Industrial Law
This relief is a departure from the reliefs available under the Indian Contract Act and the which do not provide for reinstatement of a servant
The third category of cases of master and servant arises in regard to the servant in the employment of the State or of other public or local authorities or bodies created under statute
 On a consideration of the authorities mentioned above it is there fore clear that a contract of personal service cannot ordinarily be specifically enforced and a Court normally would not give a declaration that the contract subsists and the employee even after having been removed from service can be deemed to be in service against the will and consent of the employer
This rule however is subject to three well recognised exceptions i where a public servant is sought to be removed from service in contravention of the provisions of article 311 of the Constitution of India ii where a worker is sought to be reinstated on being dismissed under the Industrial Law and iii where a statutory body acts in breach or violation of the mandatory provisions of the statute
In view of our finding that the Executive Committee of the College in the instant case was not a statutory body the present case does not fall within any of the excepted categories mentioned above and hence prima facie the plaintiffrespondent is not entitled to any declaration or injunction
The learned counsel for the respondent however placed great reliance on the decision of this Court in Municipality s case supra in order to contend that this decision had included within the fold of its exceptions a fourth category namely an institution which even though was a non statutory body but was a local 1021 or a public authority
Reliance was placed particularly on the following observations of Ray J as he then was in that case The third category of cases of master and servant arises in regard to the servant in the employment of the State or of other public or local authorities or bodies created under statute
In the case of servant of the State or of local authorities or statutory bodies courts have declared in appropriate cases the dismissal to be invalid if the dismissal is contrary to rules of natural justice or if the dismissal is in violation of the provisions of the statute
 Assuming for the sake of arguments but not deciding that this decision has extended the scope of the exceptions so that the appellant Executive Committee though a non statutory body will still be bound by the statutory provisions of law let us see what is the position
It would appear that under section 25 C 2 of the Agra University Act corresponding to similar provisions in Kanpur and Meerut Universities Act of 1965 which runs thus Every decision by the Management of an affiliated college other than a college maintained by Government to dismiss or remove from service a teacher shall be reported forthwith to the Vice Chancellor and subject to provisions to be made by the Statutes shall not take effect until it has been approved by the Vice Chancellor
 it was incumbent on the Executive Committee of the College to have taken the previous approval of the Vice Chancellor before terminating the services of the plaintiffrespondent
Reliance was placed by the learned counsel for the respondent on the words shall not take effect until it has been approved by the Vice Chancellor
It was urged that there has been an infraction of a mandatory provision of the Act itself which is undoubtedly binding on the appellant Executive Committee and the resolution of the Executive Committee terminating the services of the respondent is not only invalid but completely without jurisdiction and therefore the plaintiffrespondent is entitled to the injunction sought for
It is common ground that the procedure enjoined in sub section
2 of section 25 C of the Agra University Act was not at all followed by the Executive Committee and there can be no doubt that the Executive Committee has been guilty of this default
The question remains whether even if there has been a violation of the mandatory provisions of the statute should we in the exercise of our discretion grant a declaration or an injunction to the plaintiffrespondent in the peculiar facts and circumstances of the present case  It is well settled that a relief under the is purely discretionary and can be refused where the ends of justice do not require the relief to be granted
Mr Ramamurthi learned counsel for the plaintiffrespondent submitted that the question of discretion would arise only in case where the High Court or this Court is acting in a writ jurisdiction and not in a suit
We are however unable to agree with 1022 this argument because the exercise of discretion is spelt out from the provisions of the and the common law and it applies as much to the writ jurisdiction as to other action at law
In Jerome Francis vs Municipal Councillors of Kuala Lampur1 Lord Morris observed as follows In their Lordships  view when there has been a purported termination of a contract of service a declaration to the effect that the contract of service still subsists will rarely be made
This is a consequence of the general principle of law that the courts will not grant specific performance of contracts of service
Special circumstances will be required before such a declaration is made and its making will normally be in the discretion of the Court
In their Lordships  view there are no circumstances in the present case which would make it either just or proper to make such a declaration Further more under similar circumstances though the dismissal of the employee was by an authority which was not competent to dismiss him namely the Municipal Council their Lordships of the Privy Council refused to grant the declaration in view of the peculiar facts and circumstances of the case which caused hardship
The Privy Council in A Francis vs Municipal Councillors of Kuala Lampur1 observed as follows Accepting however the decision of the Court of Appeal which as has been pointed out has not been the subject of any cross appeal the position on Oct 1 was that the removal of the appellant was a removal by the council and not by the president
The council were his employers but having regard to the provisions of the ordinance their termination of his service constituted wrongful dismissal
Their Lordships consider that it is beyond doubt that on Oct 1 1957 there was de facto a dismissal of the appellant by his employers the respondents
On that date he was excluded from the council s premises
Since then he has not done any work for the council
In all these circumstances it seems to their Lordships that the appellant must be treated as having been wrongly dismissed on Oct 1 1957 and that his remedy lies in a claim for damages
It would be wholly unreal to accede to the contention that since Oct 1 1957 he had continued to be and that he still continues to be in the employment of the respondents
 As against this position Mr Ramamurthi counsel for the plaintiff respondent submitted that in Hill vs C A Parsons  Co Ltd 3 a declaration that the termination was invalid was granted by the Court
In that case however it was pointed out that the declaration was 1023 granted under very special circumstances of that case where the employee was said to be removed from service almost at the fag end of his career after serving for 35 years when he was due to retire only two years later
In that case however Lord Denning laid down that in the absence of any special circumstances a declaration should not be granted
It is clear that in the instant case the respondent had worked in the College for only two years
In these circumstances therefore this case does not appear to be of any assistance to the respondent
In R T Rangachari vs Secretary of State for India in Council1 the Privy Council observed as follows But although their Lordships differ in this important matter from the reasoning and conclusions of the Courts below they are not on the whole prepared to direct that a declaration on this point should be made
The questions of fact and law are now decided and a declaration could have no greater effect than the decision itself
After this lapse of time and having regard to his health no one suggests that the appellant can now be restored to his office and the matter of pension and the responsibility of doing right in that regard rests with the Government
Accordingly their Lordships agree in the view of the Courts below that no order or declaration should be made in this action
 A Division Bench of the Allahabad High Court in Mahant Indra Narain Das vs Mahant Ganga Ram Das  Anr2 observed as follows The second thing to be noted is that the court is given a discretion to make the declaration sought and the plaintiff need not ask for any further relief
The relief being discretionary no person can claim the declaration as of right
 Similarly in Bhairabendra Narayan Bhup vs State of Assam 3 a Division Bench of the Assam High Court observed as follows It must be remembered that the declaration claimed under section 42 lies entirely within the judicial discretion of the Court and is to be exercised with caution according to the exigencies of a particular case
A party cannot as of right claim such a declaration because such a relief is more in the nature of an equitable relief than a legal remedy
It has been repeatedly held that a Court should be circumspect as to the declaration it makes and futile declarations should be always avoided
 Apart from these decisions it would appear that section 201 of the clearly codifies this principle and may be extracted as follows 20
1 The jurisdiction to decree specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so but the discretion 1024 of the court is not arbitrary but sound and reasonable guided by judicial principles and capable of correction by a court of appeal
 Similarly section 34 of the also gives a discretion to the Court to give a declaration of the legal character
Section 34 runs thus Any person entitled to any legal character or to any right as to any property may institute a suit against any person denying or interested to deny his title to such character or right and the court may in its discretion make therein a declaration that he is so entitled and the plaintiff need not in such suit ask for any further relief Provided that no court shall make any such declaration where the plaintiff being able to seek further relief than a mere declaration of title omits to do so
Explanation
A trustee of property is a person interested to deny a title adverse to the title of someone who is not in existence and for whom if in existence he would be a trustee
 It seems to us that neither the First Additional Civil  Sessions Judge nor the High Court while decreeing the plaintiff s suit considered this aspect of the matter whether this was a fit case in which the discretion should have been exercised in favour of the respondent
It is manifestly clear from the authorities discussed above that the relief of declaration and injunction under the provisions of the is purely discretionary and the plaintiff cannot claim it as of right
The relief has to be granted by the Court according to sound legal principles and ex debito justitiae
The Court has to administer justice between the parties and cannot convert itself into an instrument of injustice or an engine of oppression
In these circumstances while exercising its discretionary powers the Court must keep in mind the well settled principles of justice and fairplay and should exercise the discretion only if the ends of justice require it for justice is not an object which can be administered in vacuum
The admitted facts in the present case which will put the Court on its guard while exercising its discretion to grant a declaration or injunction are as follows 1 That the plaintiffrespondent served the institution for a short period of two years only ie from 1964 to 1966 and thereafter he was bereft of all his powers and did not work in the College for a single day
2 That if the declaration sought for or the injunction is granted to the plaintiffrespondent the result would be that he would have to be paid his full salary with interest and provident fund for full nine years ie from 1966 to 1975 even though he had not worked in the institution for a single day during this period
1025 3 That consequent upon the declaration the appellant would have to pay a very huge amount running into a lakh of rupees or perhaps more as a result of which the appellant and the institution would perhaps be completely wiped out and this would undoubtedly work serious injustice to the appellant because it is likely to destroy its very existence
4 It is true that the plaintiffrespondent is not at fault but the stark realities hard facts and extreme hardship of the case speak for themselves
5 It appears that by virtue of the interlocutory orders passed by this Court the appellant has already deposited Rs 9000 before the High Court which was to be withdrawn by the respondent after giving security and a further sum of Rs 9100 being the salary of 13 months has also been deposited by the appellant before the Trial Court under the orders of this Court
It is also stated by counsel for the appellant that the appellant has deposited Rs 3000 more
We feel that in the circumstances the respondent may be permitted to keep these amounts with him and he will not be required to refund the same to the appellant
The amount of deposit in the High Court if not withdrawn by the respondent may now be withdrawn by him without any security and if he has already withdrawn the amount he will be discharged from the security
This will vindicate the stand of the respondent and compensate him for any hardship that may have been caused to him by the order terminating his services and will also put a stamp of finality to any further litigation between the parties
In view of these special and peculiar circumstances of this case we feel that it will not be a proper exercise of discretion to grant a decree for declaration and injunction in favour of the respondent
The appeal is accordingly allowed
We set aside the order passed by the High Court and the First Additional Civil  Sessions Judge dismiss the plaintiff s suit and restore the judgment of the Trial Court
In the circumstances of the case the parties will bear their own costs throughout
BHAGWATI J
I agree with the final order proposed by my learned brother Fazal Ali J but I would like to state my own reasons for reaching that conclusion
The facts giving rise to the appeal have been fully set out in the judgment of my learned brother and it would be a futile exercise to restate them
I will straight away proceed to consider the question of law which arises for determination in the appeal
The question is whether the termination of the service of the first respondent by the appellant was in violation of Statute 30 of the Statutes of the Agra University which applied to the appellant at 1026 the material time and in any event the termination was ineffective and inoperative as it was not approved by the Vice Chancellor as required by section 28 sub section
3 of the Kanpur and Meerut Universities Act 1956 and in either case whether the first respondent was entitled to a declaration that the termination was null and void so as to warrant a declaration that he continued in the service of the appellant or his claim merely lay in damages
It is a question of some importance
I will first take up the first part of the question
On this part there was no dispute between the parties that the requirements of Statute 30 were not complied with by the appellant in terminating the service of the first respondent
The controversy merely centered round the question whether the termination of service in breach of the requirements of Statute 30 rendered the termination null and void so as to entitle the first respondent to a declaration that he continues in service or it amounted merely to a breach of contract giving rise to a claim for damages
Let me first examine this question on principle before turning to the decided cases
There are two distinct classes of cases which might arise when we are considering the relationship between employer and employee
The relationship may be governed by contract or it may be governed by statute or statutory regulations
When it is governed by contract the question arises whether the general principles of the Law of Contract are applicable to the contract of employment or the law governing the contract of employment is a separate and sui generis body of rules
The crucial question then is as to what is the effect of repudiation of the contract of employment by the employer
If an employer repudiates the contract of employment by dismissing his employee can the employee refuse to accept the dismissal as terminating the contract and seek to treat the contract as still subsisting  The answer to this question given by general contract principles would seem to be that the repudiation is of no effect unless accepted in other words the contracting party faced with a wrongful repudiation may opt to refuse to accept the repudiation and may hold the repudiator to a continuance of his contractual obligation
But does this rule apply to wrongful repudiation of the contract of employment  The trend of the decisions seems to be that it does not
It seems to be generally recognized that wrongful repudiation of the contract of employment by the employer effectively terminates the employment the termination being wrongful entitles the employee to claim damages but the employee cannot refuse to accept the repudiation and seek to treat the contract of employment as continuing
What is the principle behind this departure from the general rule of law of contract  The reason seems to be that a contract of employment is not ordinarily one which is specifically enforced
If it cannot be specifically enforced it would be futile to contend that the unaccepted repudiation is of no effect and the contract continues to subsist between the parties
The law in such a case therefore adopts a more realistic posture and holds that the repudiation effectively terminates the contract and the employee can only claim damages for wrongful breach of the contract
Now a contract of employment is not specifically enforced because ordinarily it is a contract of personal service and 1027 as pointed out in the first illustration to clause b of section 21 of the  a contract of personal service cannot be specifically enforced
Of course this illustration has now been omitted in the new and what would be the effect of such omission may be a point which may require consideration some day by this Court
But for the purpose of this case I will proceed on the assumption that even under the new Act the law is the same and it frowns on specific enforcement of a contract of personal service
Now what is the rationale behind this principle  That is found stated in the locus classicus of Fry LJ in De Francesco vs Barnum1 For my own part I should be very unwilling to extend decisions the effect of which is to compel persons who are not desirous of maintaining continuous personal relations with one another to continue those personal relations
I have a strong impression and a strong feeling that it is not in the interest of making that the rule of specific performance should be extended to such cases
I think the Courts are bound to be jealous lest they should turn contracts of service into contracts of slavery and therefore speaking for myself I should lean against the extension of the doctrine of specific performance and injunction in such a manner
 This rationale obviously can have application only where the contract of employment is a contract of personal service involving personal relations
It can have little relevance to conditions of employment in modern large scale industry and enterprise or statutory bodies or public authorities where there is professional management of impersonal nature
It is difficult to regard the contract of employment in such cases as a contract of personal service save in exceptional cases
There is no reason why specific performance should be refused in cases of this kind where the contract of employment does not involve relationship of personal character
It must be noted that all these doctrines of contract of service as personal non assignable unenforceable and so on grew up in an age when the contract of service was still frequently a personal relation between the owner of a small workshop or trade or business and his servant
The conditions have now vastly changed and these doctrines have to be adjusted and reformulated in order to suit needs of a changing society
We cannot doggedly hold fast to these doctrines which correspond to the social realities of an earlier generation far removed from ours
We must rid the law of these anachronistic doctrines and bring it in accord with the felt necessities of the times
It is interesting to note that in Fry s classic work on Specific Performance contracts of service appear in a small group under the sub heading Where enforced performance would be worse than non performance
We may ask ourselves the question for whom it would be worse and for whom it would be better
Where in a country like ours large numbers of people are unemployed and it is extremely difficult to find employment an employee who is discharged from service may have to remain without means of subsistence for a long period of time
Damages equivalent to one or two months wages 1028 would be poor consolation to him
They would be wholly insufficient to sustain him during the period of unemployment following upon his discharge
The provision for damages for wrongful termination of service was adequate at a time when an employee could without difficulty find other employment within the period of reasonable notice for which damages were given to him
But in conditions prevailing in our country damages are a poor substitute for reinstatement they fall far short of the redress which the situation requires
To deny reinstatement to an employee by refusing specific performance in such a case would be to throw him to the mercy of the employer it would enshrine the power of wealth by recognising the right of the employer to fire an employee by paying him damages which the employer can afford to throw away but which would be no recompense to the employee
It is therefore necessary and I venture to suggest quite possible within the limits of the doctrine that a contract of personal service cannot be specifically enforced to take the view that in case of employment under a statutory body or public authority where there is ordinarily no element of personal relationship the employee may refuse to accept the repudiation of the contract of employment by the statutory body or public authority and seek reinstatement on the basis that the repudiation is ineffective and the contract is continuing
That is in effect what happened in the case of McClalland vs Northern lreland General Health Service Board1
The plaintiff s contract in this case was really one of master and servant the only special condition being that her post had been advertised as permanent and pensionable and it provided specific reasons such as gross misconduct and inefficiency for which she might be dismissed
The defendant Board introduced a rule after her appointment that women employees must resign on marriage and since the plaintiff got married the respondents terminated her service by giving what they thought was a reasonable notice
The plaintiff contended that the defendant Board was not entitled to terminate her service and claimed a declaration that the purported termination was null and void and she continued in service
The House of Lords held that the contract was exhaustive as regards the reasons for which the defendant Board could terminate the service of the plaintiff and since none of those reasons admittedly existed the termination of service of the petitioner by the defendant Board was nullity and the plaintiff continued in service of the defendant Board
This was a case of a pure contract of master and servant and yet the House of Lords held that the termination of employment of the plaintiff by the defendant Board which was not accepted by the plaintiff was ineffective and the plaintiff was entitled to a declaration that she continued in service
It should thus be possible to hold that even if a statutory body or public authority terminates the service of an employee in breach of a contractual obligation the employee could disregard the termination as ineffective and claim a declaration that his service is continuing
But this would be a somewhat novel and unorthodox ground which has not been recognised by any decision of this 1029 Court so far and moreover I do not think that on facts this is a proper case in which it would really be applicable and hence I do not propose to finally pronounce upon it
The second category of cases are those where the relationship between the employer and the employee is governed by statute or sub ordinate legislation and where such is the case the termination which is the same thing as repudiation may in a given situation be null and void and in that event it would not have the effect of putting an end to the contract and the employee would be entitled to a declaration that his service is continuing
The doctrine that a contract of personal service cannot be specifically enforced would not stand in the way of the employee because the termination being null and void there being no repudiation at all in the eye of the law there would be no question of enforcing specific performance of the contract of employment
What the employee would be claiming in such a case is not enforcement of a contract of personal service but declaration of statutory invalidity of an act done by the employer
The case would be of a kind similar to that decided by the Judicial Committee of the Privy Council in High Commissioner for India vs I M Lail1 the essential feature of which was aptly and succinctly described by this Court in Dr section B Dutt vs University of Delhi2 in these words That was not a case based on a contract of personal service
The declaration did not enforce a contract of personal service but proceeded on the basis that the dismissal could only be effected in terms of the statute and as that had not been done it was a nullity from which the result followed that the respondent had continued in service
All that the Judicial Committee did in this case was to make a declaration of a statutory invalidity of an act which is a thing entirely different from enforcing a contract of personal service
 Where for example the termination is outside the powers of a statutory body either because the statutory body has no power to terminate the employment or because the termination is effected in breach of a mandatory obligation imposed by law which prescribes that the termination shall be effected only in a particular manner and no other it would be a nullity and the employee would be entitled to ignore it and ask for being treated as still in service
such was the case in Life Insurance Corporation of India vs Sunil Kumar Mukherjee3 where an order of termination of service of certain employee by the Life Insurance Corporation in breach of clauses 10a and 10b of an order passed by the Central Government under section 11g of the  was held to be null and void on the ground that it was not effected in terms of clauses 10a and 10b of the Statutory Order
So also in Mafatlal Barot vs Divisional Controller State Transport Mahsana4 this Court held that an order of termination of service passed against the petitioner in contravention of 1030 clause 4b of Schedule A  to the Regulations made by the State Road Transport Corporation in exercise of powers conferred under section 45 of the was bad in law and it was quashed by issuing a writ of certiorari
This principle was also approved by this Court in B N Tewari vs District Board Agra1 though it was held there on facts that the dismissal of the employee was proper and justified
Shah J speaking on behalf of this Court in that case recognised this principle and treated it as a third exception to the general rule in the following words 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 recognised 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 recognised
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
 This position in law was reiterated by this Court in UP State Warehousing Corporation vs C K Tyagi2 where after referring to Dr Dutt s case and section R Tewari s case Vaidialingam J observed From the two decisions of this Court referred to above the position in law is that no declaration to enforce a contract of personal service will be normally granted
But there are certain well recognised exceptions to this rule and they are To grant such a declaration in appropriate cases regarding 1 a public servant who has been dismissed from service in contravention of article 311
2 Reinstatement of a dismissed worker under Industrial Law or Labour or Industrial Tribunals
3 A statutory body when it has acted in breach of a mandatory obligation imposed by statute
 This statement of law was reaffirmed again by this Court in Indian Airlines Corporation vs Sukhdeo Rai 3 and Bank of Baroda vs Jewan Lal Mehrotra4
Now two questions immediately arise for consideration on this statement of law
The first is what is the statutory body  contemplated in these decisions and the second is are the three exceptions formulated by this Court intended to be exhaustive  When we are trying to understand what is the statutory body  which this Court had in 1031 mind when it laid down this statement of law it must be remembered that a statement of law enunciated by this Court must be read in the light of the principle which it seeks to effectuate and it should not be construed as if it were a section
The third exception is intended to cover cases where by reason of breach of mandatory obligation imposed by law as distinct from contract the termination of service is null and void so that there is in law no repudiation at all
That is the principle on which the third exception is based and it is in the light of this principle that the expression statutory body  used by this Court has to be understood
Now obviously a body or authority created by statute would be a statutory body but even a body or authority which is created under a statute as for example the State Road Transport Corporation which is created by the State under the Road Transport Corporation Act 1950 would also be a statutory body
What other kinds of statutory bodies would be included is a matter not free from difficulty
But in any event it does appear to me that the three exceptions formulated in the statement of law laid down by this Court in the above decisions are not intended to be and cannot be exhaustive
The categories of exceptions to the general rule should not be closed because any attempt at rigid and exhaustive formulation of legal rules any attempt to put law in a strait jacket formula is bound to stifle the growth of law and seriously cripple its capacity to adapt itself to the changing needs of society
In fact Ray J as he then was speaking on behalf of this Court in Sirsi Municipality vs Kom Francis1 pointed out that the third exception applied not only to employees in the service of bodies created under statutes but also to those in the employment of other public or local authorities
It may be a possible view and some day this Court may have to consider it that where law as distinct from contract imposes a mandatory obligation prescribing the kind of contract which may be entered into by an employer and the manner in which alone the service of an employee may be terminated any termination of service effected in breach of such statutory obligation would be invalid and ineffective and in such a case the court may treat it as null and void
But I do not think it necessary to pursue this line of discussion any further and come to a positive conclusion whether the appellant is or is not a statutory body or a public authority nor do I consider it necessary to go into the question whether the Statutes of the Agra University had the force of law and conferred rights on the Principal and teachers of affiliated colleges as in Prabhakar Ramakrishna Jodh vs A L Pande  Anr2 or they only set out the terms and conditions which had no validity and conferred no legal rights unless and until they were embodied in the contract between the principal or teacher on the one hand and the affiliated college on the other as in Vidya Ram Mishra vs Managing Committee Shri Jai Narain Conege3
I take the view that on the second part of the question the case of the first respondent is well founded
It was common ground between the parties that at the material time the Statute which was applicable to the appellant was the Kanpur and 1032 Meerut Universities Act 1965
Section 28 sub section
3 of this Act declares that every decision by the management of an affiliated college to dismiss or remove from service a teacher shall be reported forthwith to the Vice Chancellor and subject to the provisions contained in the Statutes shall not take effect unless it has been approved by the Vice Chancellor
The language of this section is absolute and peremptory and leaves no doubt as to its meaning and effect
It provides in terms clear and unambiguous that the termination of service of a teacher by the management shall not take effect that is it shall be ineffective and inoperative unless the Vice Chancellor on being informed has approved of it
When this section which is a law made by the Legislatures has enacted that the termination of service shall be ineffective or in other words it shall have no validity or force unless it has been approved by the Vice Chancellor it is difficult to see how it can be regarded as effectively terminating the service
To take such a view would be to refuse to give effect to the law enacted by the Legislature
The law enacted in this section operates irrespective whether the management is or is not a statutory body
Such a consideration is entirely irrelevant to the applicability of this section
When the section says that the termination of service shall not have any effect the Court must refuse to recognise the termination as valid and effective and when the Court does so it merely enforces the law and there is no question of transgressing the principle that a contract of personal service cannot be enforced
There can therefore be no doubt that the termination of service of the first respondent by the appellant was ineffective and void and it did not operate to put an end to the employment even wrongful by reason of section 28 sub section
3 of the Kanpur and Meerut Universities Act 1965
The first respondent on this view would ordinarily be entitled to the declaration and injunction prayed for by him but the relief of declaration and injunction being discretionary I agree with the view taken in the judgment of my learned brother Fazal Ali J that having regard to the peculiar facts and circumstances of the present case as set out in his judgment this is not a proper case where such relief of declaration or injunction should be granted to the first respondent instead the aggregate amount of Rs 21100 deposited by the appellant in the Court would be fair and just compensation to the first respondent
However I must hasten to make it clear that ordinarily an employee whose termination of service is found to be null and void or ineffective by reason of a statutory provision and that would include subordinate legislation which has the force of law should be awarded a declaration that he continues in service and it should be no ground for refusing him such declaration that before his purported termination of service he was in employment only for a short period
That would be denying him security of tenure which the law seeks to give him in clear and unambiguous terms
But in the present case the circumstance which weighs most with me in refusing to exercise my discretion in favour of the first respondent is that if the relief of declaration and injunction is granted to the first respondent it will involve the appellant in a financial liability of over Rs One lakh and that would wipe out the educational institution of the appellant or in any 1033 event seriously cripple it and that in its turn would prejudicially affect the interests of the student community which is an important consideration which the Court cannot fail to take into account while determining what are the broad considerations of social justice which must guide its exercise of discretion
I accordingly agree with the final order proposed by my learned brother
VPS Appeal allowed


Summary:
The appellant is the Executive Committee of an Educational Institution a college registered under the Registration of Co operative Societies Act and the college was affiliated to a University
The provisions of the University Act require that every decision of the management of an affiliated college to remove from service a teacher shall be reported forthwith to the Vice Chancellor and subject to the provisions contained in the Statutes made by the University shall not take effect unless approved by the Vice Chancellor
The respondent was appointed by the appellant as a Principal of the college but no agreement as prescribed by the University Act and the Statutes was executed between the parties
Two years after his appointment
the appellant served a notice on the Principal directing him not to discharge the duties of the Principal and shortly thereafter terminated his services
Thereafter the respondent did not work as Principal
The respondent filed a suit contending that he must be deemed to be continuing in service as there was no sanction of the Vice Chancellor for the termination of his services and prayed for an injunction restraining the appellant from interfering with his duties as Principal of the institution
The trial Court dismissed the suit but the first appellate Court reversed the decision and the High Court affirmed the decision of the first appellate Court
In appeal to this Court it was contended that 1 the appellant was not a statutory body 2 in the absence of an agreement the requirement regarding the approval by the Vice Chancellor would not apply and the termination of the respondent s services would be governed by the usual master and servant relationship
3 there are no special circumstances for enforcing the contract of personal service and 4 the present case was not a fit one for granting the reliefs prayed for they being equitable reliefs and in the discretion of the Court
Allowing the appeal to this Court  HELD
Per Khanna and Fazal Ali JJ
1 Merely because the appellant followed certain statutory provisions of the University Act or the Statutes made thereunder it cannot be held to be a statutory body
1014 A B a Before an institution can be a statutory body it must be created by or under the statute and owe its existence to a statute
There is a well marked distinction between a body which is created by the statute and a body which after having come into existence is governed in accordance with the provisions of the statute
The question in such cases to be asked is if there is no statute would the institution have any legal existence
If the answer is in the negative then undoubtedly it is a statutory body but if the institution has a separate existence of its own without any reference to the statute concerned but is merely governed by the statutory provisions it cannot be said to be a statutory body
1013 D 1014 A 1007 Sukhdev Singh  Ors
vs Bhagatram Sardar Singh Raghuvanshi  Others   followed
b Merely because it was affiliated to the University
that there were certain mandatory provisions of the University Act which were binding on the appellant and the appellant was governed by the Statutes of the University would not be sufficient to alter the character and nature of the appellant and convert it into a statutory body
1014 B C i The appellant had an independent status having been registered under the Registration of Co operative Societies Act and was a self governed or an autonomous body
It was affiliated to the University merely for the sake of convenience and mainly for the purpose of recognition of its courses of study by the University
1014 C D ii All that Statute 14A of the University required was that the Managing Committee of the college must co opt the Principal of the college and a representative of the teachers
By co opting them the appellant did not lose its independent status but continued to remain a non statutory and  autonomous body
1011 F G iii Similarly the fact that the Statutes of the University were adopted by the appellant and it was as a matter of convention bound to follow the provisions of the University Act would not clothe the appellant with a statutory status or character
The adoption of the Statutes was only for better governance and administration and extension of the educational activities of the institution
1014 G H D Sabhajit Tewary vs Union of India  ors
and Kumari Regina vs St Aloysius Higher Elementary School  Anr
1971 Supp
SCR 6 followed
2 The case of PR Jodh vs AL Pande 1965 2 SCR 713 on which the High Court relied is distinguishable
The High Court has not considered the basic facts present in that case but which are not present in the instant case namely a the governing body in Jodh s case was itself a creature of the statute b in the instant case the Statutes did not apply proprio vigore but only after an agreement was executed between the employer and the employee as required by those provisions
and c no agreement was ever executed between the parties in the prescribed form
1018 C D Vidya Ram Mishra vs Managing Committee Shri Jai Narain College   326 followed
3a A contract of personal service cannot ordinarily be specifically enforced and a Court normally would not give a declaration that the contract subsists and that the employee even after having been removed from service can be deemed to be in service against the will and consent of the employer
This rule is subject to three exceptions i where a public servant is sought to be removed from service in contravention of the provisions of article 311
ii Where a worker after dismissal is sought to be reinstated under Industrial Law
and iii Where a statutory body acts in breach or violation of the mandatory provisions of the Act
1020 E G Sirsi Municipality vs Kom Francis  Indian Airlines Corporation vs Sukhdeo Rai 1971 Supp
SCR 510 514
R Tewari vs District Board Agra and Anr   59 Executive Committee of UP State Warehousing Corporation Ltd vs Chandra Kiran Tyagi
  265 and Bank of Baroda vs Jewan Lal Mehrotra  55 referred to
Since the appellant is not a statutory body the present case does not fall within any of the excepted categories and the respondent is not entitled to any declaration or injunction
1020 G H b Assuming that the Sirsi Municipality case has extended the scope of the exceptions to public or local bodies even if they are non statutory bodies so that the appellant though a non statutory body will still be bound by the statutory 1008 provisions of law in view of the special circumstances of this ease it will not be a proper exercise of discretion to grant a decree for declaration and injunction in favour of the respondent The grant of specific relief is under sections 20 and 34 of the as well as under the Common Law purely discretionary and can be refused where the ends of justice do not require the relief to be granted
The exercise of discretion applies as much to a Court exercising writ jurisdiction as well as in suits
The relief has to be granted by the Court according to sound legal principles and ex debito justitiae
The Court has to administer justice between the parties and cannot convert itself into an instrument of injustice or an engine of oppression
The Court must keep in mind the well settled principles of justice and fairplay and should exercise the discretion only if the ends of justice require it
1021 C D 1022 A 1023 H 1024 D E F 1025 F Jerome Francis vs Municipal Councillors of Kuala Lumpur A Francis vs Municipal Councillors of Kuala Lumpur  637 and RT Rangachari vs Secretary of State for India in Council LR 64 IA 40 53 54 applied
Mahant Indra Narain Das vs Mahant Ganga Ram  Anr AIR 1965 All 683 684 and Bhairabendra Narayn Bhup vs State of Assam AIR 1953 Assam 162 165 referred to
Hill vs CA Parsons  Co Ltd 1971 3 All
ER 1345 distinguished
In the present case neither the first appellate Court nor the High Court while decreeing the respondent s suit considered whether it is a fit case in which the discretion should be exercised in favour of the respondent
1024 D E i The respondent served the institution only for two rears
If relief as prayed for is granted to him he would have to be paid salary and interest for nine years which would amount to more than a lakh of rupees even though he had not done any work for the college during those years
and ii though the respondent is not at fault the payment of such a large sum would undoubtedly work serious injustice to the appellant because it is likely to destroy the very existence of the Institution
1024 G 1025 B Therefore instead of granting the relief to the respondent as prayed for it he is allowed to withdraw and keep the sum of about Rs 21000 deposited by the appellant by virtue of interlocutory orders towards the salary of the respondent it will vindicate his stand and compensate him for any hardship caused to him by terminating his services and will put a stamp of finality to any further litigation between them 1025 C F Per Bhagwati J This Court has laid down three exceptions to the rule under the Common Law that the Court will not ordinarily force an employer to retain the services of an employee whom he no longer wishes to employ 1 In the case of a public servant dismissed from service in contravention of article 311 2 Under the Industrial Law
and 3 When a statutory body has acted in breach of a mandatory obligation imposed by a statute
1030 B C F G Dr SB Dutta vs University of Delhi AIR 1958 SC 1050
Life Insurance Corporation of India vs Sunil Kumar Mukherjee AIR 1961 SC 847
Mafatlal Barot vs Divisional Controller State Transport Mahsana  BN Tewari vs District Board Agra  UP State Warehousing Corporation vs CK Tyagi  Indian Airlines Corporation vs Sukhdeo Rai 1971 Supp
SCR 510 and Bank of Baroda vs Jewan Lal Mehrotra referred to
But these 3 exceptions formulated in the statement of law laid down by this Court are not intended to be and cannot be exhaustive
The categories of exceptions to the general rule should not be closed because any attempt at rigid and exhaustive formulation of legal rules is bound to stifle the growth of law and cripple its capacity to adapt itself to the changing needs of society
In fact in the Sirsi Municipality vs Kom Francis   this Court 1009 pointed out that the third exception applied not only to employees in the service of bodies created under statutes but also to those in the employment of other public or local authorities
This exception is really intended to cover cases where by reason of breach of mandatory obligation imposed by law as distinct from contract the termination of service is null and void so that there in law no repudiation at all
1031 C F Where the relationship between the employer and his employee is governed by statute or statutory regulations the termination of the service of the employee may in a given situation be null and void and in that event it would not have the effect of putting an end to the contract and the employee would be entitled to a declaration that his service is continuing
What the employee would be claiming in such a case is not enforcement of contract of personal service but declaration of statutory invalidity of an act done by the employer
1029 A D In the present case it is not necessary to decide whether the appellant is or is not statutory body or a public authority or whether the Statutes of the University had the force of law conferring rights on the respondent as in the case of P R Jodh vs A L Pande 1965 2 SCR 713 or that they only set out the terms and conditions which conferred no legal rights unless and until they were embodied in a contract between the appellant and the respondent as in the case of V R Mishra vs Managing Committee Shri Lal Narain College   326 because the termination of the respondent s services was ineffective and inoperative as it was not approved by the Vice Chancellor as required by the University Act
The language of the section of the University Act is absolute and peremptory and provides in unambiguous terms that the termination shall be ineffective and inoperative unless approved by the Vice Chancellor and this rule of law enacted by the Legislature operates irrespective of whether the management is or is not a statutory body
When the Court refuses to recognise the termination as valid it only enforces the law and there is no question of transgressing the principle that a contract of personal service cannot be enforced
1031F 1032 D Therefore the termination of the services of the respondent by the appellant was ineffective and void and did not operative to put an end to the employment
Hence ordinarily the respondent whose termination of service is thus null and void or ineffective by reason of a statutory provision or subordinate legislation which has the force of law should be awarded a declaration that he continues in service and the fact that he was in employment only for a short period of two years should be no ground for refusing him the declaration
1032 D F But in view of the Peculiar facts and circumstances this case and since the grant of tho relief is in the discretion of the Court it must be held that this is not a proper case for the grant of such relief
If the relief of declaration and injunction is granted to the respondent it will involve the appellant in a financial liability of mere than a lakh of rupees and that would wipe out the educational institution of the appellant or in any event seriously cripple it and that in its turn would prejudicially affect the interests of the student community
That is an important consideration which the Court cannot fail to take into account in exercising its discretion
Moreover the aggregate amount of about Rs 21000 deposited by the appellant in Court would be a fair and just compensation to the respondent
1032 F G H 1033 B