R.S.A.No. 968 of 1996 1 In the High Court of Punjab and Haryana at Chandigarh R.S.A.No. 968 of 1996 Date of decision: 14.10.2009 Ramesh Kumar Malik ......Appellant Versus The Rohtak Distt. Cooperative Milk Producers Union Ltd. Rohtak and another .......Respondents CORAM: HON'BLE MRS. JUSTICE SABINA Present: Mr. N.C.Kinra,Advocate, for the appellant. Mr.K.K.Gupta, Advocate, for the respondents. **** SABINA, J. Plaintiff Ramesh Kumar Malik filed a suit for declaration, which was dismissed by the Sub Judge, Ist Class, Rohtak vide judgment and decree dated 16.2.1993. In appeal, the said judgment and decree were upheld by the Additional District Judge, Rohtak vide judgment and decree dated 2.1.1996. Hence, the present appeal . Brief facts of the case, as noticed by the lower appellate Court in para Nos. 2 to 5 of its judgment, are as under:- R.S.A.No. 968 of 1996 2 “2. The plaintiff preferred the suit before the learned lower Court on 18.3.1985 on the allegations, briefly, stated thus: He was appointed as Clerk on ad hoc basis on 7.6.1975 in the office of defendant No.1. He was subsequently appointed as Junior Accountant on 12.8.1975. Subsequently, he was promoted as Accountant in 1979. On 26.7.1980, Board of Directors of defendant No.1 vide resolution No.2 directed him to hold additional charge of Chief Executive Officer (C.E.O. in short) in addition to his own duties as Accountant till further orders. He continued working as such uptill 28.10.1981 on which date, he was promoted as regular C.E.O. in the grade of Rs.700-1250/- and he assumed the duties as such. He continued working as C.E.O. Uptill 11.11.1982 when defendant No.2 describing himself as C.E.O. Suspending him. Subsequently, Sh.R.N.Arora was appointed as Enquiry Officer. Statement of charges and allegations were served upon him. The plaintiff was also served with a supplementary charge sheet vide order dated 16.12.1983 and after the conclusion of the enquiry, he was terminated vide order dated 22.1.1985. 3. The plaintiff challenged the suspension order, proceedings of enquiry and the termination order as illegal, null and void primarily on the ground that R.S.A.No. 968 of 1996 3 defendant No.2 was neither his appointing authority nor punishing authority, therefore, he could neither suspend him nor institute any enquiry nor terminate him. Allegedly, he was not given due opportunity in the enquiry. He alleged malafides against the Chairman of defendant No.1 and defendant No.2. 4. Upon notice, both the defendants appeared and filed a joint written statement, controverting the various pleas of the plaintiff. It was not disputed that the plaintiff was appointed as Clerk, then Junior Accountant and then promoted as Accountant. It was alleged that he was so appointed by the C.E.O. And not by Board of Directors. It was pleaded that the promotion of the plaintiff to the post of C.E.O. was illegal and in violation of the bye laws No.38 (xi) read with bye laws 42 of the Rohtak District Cooperative Milk Producers Union Ltd., Rohtak as the C.E.O. Could only be appointed by Haryana Dairy Development Cooperative Federation Ltd. And the Board of Directors of defendant No.1 had no authority to appoint C.E.O.; that no approval of the competent authority for appointment of the plaintiff as C.E.O. was ever received; that the plaintiff was rightly suspended, charge sheeted and terminated from the services on R.S.A.No. 968 of 1996 4 the ground of embezzlement involving thousands of rupees detected by the Auditors of the Union and he was negligent in performing his duties. The suit was also challenged on the grounds of estoppel, barred by ; law, mis-joinder of parties, valuation and being false and frivolous. 5. It would be pertinent to mention here that initially, the defendants had moved an application under Section 34 of the Arbitration Act with the request that the proceedings be stayed and the matter be referred to the arbitrator. The learned lower Court had accepted that application vide order dated 26.2.1986, but in appeal the said order was set aside by the then learned Additional District Judge, Rohtak, vide judgment dated 24.5.1986. Thereafter, the suit proceeded. On the pleadings of the parties, following issues were framed by the trial Court:- “1. Whether plaintiff was validly appointed as C.O.? OPP 2. Whether orders dated 22.1.1985 of the defendant are illegal, null and void, inoperative and without jurisdiction and void abnitio as alleged. If so its effect? OPP 3. Whether the suit is bad for mis-joinder of R.S.A.No. 968 of 1996 5 necessary parties as alleged in written statement? OPD 4. Whether improper court fee has been paid. If so its effect? OPD 5. Whether the suit of plaintiffs barred by law as alleged in additional objection No.5 of written statement? OPD 6. Whether the plaintiff is estopped by his act and conduct from claiming his appointment as C.O. as alleged in the written statement? OPD 7. Whether the suit of plaintiff is false and frivolous, entitling the defendant to special costs under Section 35-A CPC? OPD 8. Relief. ” After hearing learned counsel for the parties, I am of the opinion that the present appeal is devoid of any merit and deserves dismissal. The suit filed by the plaintiff was not maintainable. It has been held by the Apex Court in Executive Committee of Vaish Degree College, Shamli and others v. Lakshmi Narain and others AIR 1976 SC 888, in para 9, as under:- “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 R.S.A.No. 968 of 1996 6 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 stature 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 stature 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 v. Bhagatram Sardar Singh Raghuvanshi, AIR 1975 SC 1331 at p.1339 this Court clearly pointed out as to what constitutes a statutory body. In this connection my Lord A.N.Ray, C.J., 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 R.S.A.No. 968 of 1996 7 because it is not created by the stature. 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 stature. In other words the position seems to be that the institution concerned must owe its very existence to a statute which would be the fountainhead 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 was a separate existence of its own without any reference to the stature 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 R.S.A.No. 968 of 1996 8 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.” It is a settled proposition of law that where the relationship of master and servant is purely contractual then the contract of personal service is not specifically enforceable, having regard to the bar contained in Section 14 of the Specific Relief Act, 1963. Even if the termination of contract of employment is found to be illegal or in breach, the remedy of an employee is to seek damages and not specific performance. Courts will neither declare such termination to be nullity nor declare that the contract of employment subsists nor grant the consequential relief of re-instatement. The three well R.S.A.No. 968 of 1996 9 recognized exceptions to this rule are: (i) Where a civil servant is removed from service in contravention of the provisions of Article 311 of the Constitution of India (or any law made under Article 309); (ii) Where a workman having the protection of Industrial Disputes Act, 1947 is wrongly terminated from service; and (iii) Where an employee of a statutory body is terminated from service in breach or violation of any mandatory provision of a statute or statutory rules. There is, thus, a clear distinction between public employment governed by statutory rules and private employment governed purely by contract. The test for deciding the nature of reliefs- damages or reinstatement with consequential relief- is whether the employment is governed purely by contract or by a stature or statutory rules. Even where the employer is a statutory body, where the relationship is purely governed by contract with no element of statutory governance, the contract of personal service will not be specifically enforceable. In the present case, the plaintiff had challenged his removal on the ground that the enquiry conducted against him was opposed to principle of natural justice and the authority, who had passed the order was not competent to do so as per the old rules. R.S.A.No. 968 of 1996 10 However, in this case, the Society was established under the Cooperative Societies Act and the Society itself does not have a statutory character. In these circumstances, the contract of personal service could not be specifically enforced and the learned Additional District Judge, has rightly held that the suit of the plaintiff was not maintainable. The relief claiming damages in the alternative was sought by the plaintiff after ten years of the filing of the suit. It was also found that the amendment sought was vague as no actual damages had been assessed by the appellant. Hence, the prayer for amendment of the suit was rightly declined. The judgment relied upon by learned counsel for the appellant in State Bank of India and others v. S.N.Goyal, AIR 2008 SC 2594 fails to advance the case of the appellant as in the said case, the bank was held to be statutory body, whereas, in the present case the society is not a statutory body. No substantial question of law arises in this regular second appeal. Accordingly, the same is dismissed. (SABINA) JUDGE October 14, 2009 anita