CIVIL WRIT JURISDICTION CASE No.8915 OF 1992 ***** In the matter of an application under Articles 226 and 227 of the Constitution of India. ***** Life Insurance Corporation of India Limited, through its Senior Divisional Manager, Divisional Officer, Fraser Road, P.S. Kotwali, Patna-800 001. ...Petitioner. Versus 1. The Presiding Officer, Labour Court and an Authority under the Bihar Shops and Establishments Act, Bailey Road, Patna-800 001. 2. Ramesh Chandra Sinha, son of Late Lakshman Prasad, resident of village Sona-Gopalpur, P.S. Phulwarisharif, District Patna. .... Respondents. **** For The Petitioner : Mr. Umesh Prasad Singh, Senior Advocate with Mr. Rajeev Ranjan Prasad, Mr. Prakash Chandra Jha and Mr. Rajendra Kumar, Advocates. For Respondent no.2: Mr. Shivjee Pandey, Advocate. ******* P R E S E N T THE HON'BLE MR. JUSTICE SUDHIR KUMAR KATRIAR THE HON'BLE MR. JUSTICE KISHORE KUMAR MANDAL ****** S K Katriar, J. This writ petition is directed against the order dated 15.5.1992, passed by the learned Presiding Officer, Labour Court, and the Authority under the Bihar Shops and Establishment Act 1953 (hereinafter referred to as the „Bihar Act‟), whereby the order of dismissal from service passed against respondent no.2 herein has been set aside and he has been reinstated in service with full back-wages and other consequential benefits. 2 2. A brief statement of facts essential for the disposal of the writ petition may be indicated. Indeed the basic facts are not in dispute. It appears that respondent no.2 had originally joined the appellant Corporation way back in December 1955 as a Class IV employee. He was promoted to the clerical cadre, as Record Clerk, in July 1967. During the period October 1980 to July 1981, he had functioned as Record Clerk in the Despatch Section of Patna Branch No.1. He was served with charge- sheet dated 31.8.1982 (Annexure-1), whereby allegations were levelled against him that he had been pilfering/de-affixing postal stamps from the envelopes meant to be despatched the Corporation‟s office to the addressees. Departmental proceeding was conducted under the provisions of Life Insurance Corporation of India (Staff) Regulations 1960 (hereinafter referred to as the „Regulations‟), framed under the Life Insurance Corporation Act 1956 (hereinafter referred to as the „Central Act‟). Respondent no.2 participated in the enquiry proceedings. The learned enquiry officer submitted his enquiry report dated 10.5.1984 (Annexure-3), wherein he found respondent no.2 guilty of the charges. Second show-cause notice dated 6.12.1984 (Aannexure-4) was served on him to which he had shown cause by his communication dated 21.1.1985 3 (Annexure-5). On a consideration of the materials on record, the learned disciplinary authority dismissed respondent no.2 from the services of the Corporation by his order dated 19.3.1985 (Annexure-6). He preferred departmental appeal which was dismissed by order dated 28.8.1985 (Annexure-7). Aggrieved by the appellate order, respondent no.2 preferred memorial in terms of regulation 49 of the Regulations, which was also dismissed by the Corporation‟s Chairman by order dated 24.1.1986 (Annexue-8). Respondent no.2 thereafter preferred C.W.J.C. No.2128 of 1986, which was disposed of by this Court by the following order dated 30.8.1986: “Heard learned counsel for the petitioner and learned counsel for the L.I.C. It is stated on behalf of the learned counsel for the respondents that the remedy lies before the Central Administrative Tribunal. In this circumstances learned counsel for the petitioner seeks permission to withdraw the petition. He is permitted to do so and the petition is dismissed as withdrawn. Sd/-B.P. Jha. Sd/-R.C.P.Sinha. Respondent no.2 thereafter filed Original Application before the Patna Bench of the Central Administrative Tribunal, which was disposed of by order dated 20.10.1986, with the observation that the Tribunal did not have the jurisdiction to 4 adjudicate the dispute. Respondent no.2 approached this Court once again by preferring C.W.J.C. No.5092 of 1986, which was disposed of by the following order of 16.12.1986: “Learned counsel for the writ petitioner wishes to withdraw this writ application in order to resort to some other remedy that may be available in Industrial Law. The prayer is amended and the application is permitted to be withdrawn.” Sd/- S.S. Sandhawalia. Sd/- B.N. Sinha. Respondent no.2 thereafter filed a complaint under the provisions of Section 26(2) of the Bihar Act which has on contest been allowed, the order of dismissal has been set aside, and the service of respondent no.2 has been restored with full back-wages and consequential benefits. Hence this writ petition. 3. While assailing the validity of the impugned order, learned counsel for the petitioner submits that „insurance‟ is covered by entries 43 and 47 of the 7th Schedule to the Constitution. The Central Act was enacted under these entries. After amendment of the Central Act, whereby sections 2(cc), (2A), and (2C) were inserted in section 48 of the Central Act, by Act 1 of 1981, with effect from 31.1.1981. The question of its retrospectivity and enforcement has been discussed in the following 5 judgments of the Supreme Court. Learned counsel, therefore, submits that after these statutory amendments, Regulations will be deemed to have been framed by the Central Government in terms of Section 48(2A). In view of the said amendments, particularly Section 48(2) of the Central Act read with the Regulations, jurisdiction of the industrial courts is completely barred for the employees of the Corporation. He relies on the following reported judgments of the Supreme Court: (i) A.I.R. 1982 S.C. 1126 (A.V. Nachane and Anr. Vs. Union of India and another) (paragraphs 8 and 9); and (ii) (1994)2 SCC 323 (M.Venugopal Vs. Divisional Manager, Life Insurance Corporation of India, Machilipatnam, A.P. and Anr.) (paragraphs 11 and 12). If the disciplinary proceedings have been held as per the Rules/Regulations, then the employee will have to take recourse to the remedies provided under the Act read with the Regulations which will of course be subject to the supervisory jurisdiction of this Court, and that of the Supreme Court. The industrial courts have no jurisdiction whatsoever to adjudicate such disputes. He relies on the judgment of the Supreme Court, reported in (1997)5 SCC 125 (R.C. Tiwari Vs. M.P. State Cooperative Marketing 6 Federation Ltd. and others. He next submits that the Central Act read with the Regulations provides for the terms and conditions of service, disciplinary action against the employees of the Corporation and redressal of grievances. Disciplinary proceedings conducted as per the statutory provisions and the Rules are of quasi-judicial nature. He relies on the judgment of the Supreme Court reported in A.I.R. 1963 S.C. 395 (Bachhittar Singh Vs. State of Punjab and another) (paragraph 7). He submits in the alternative that, even if the forum under section 26 of the Bihar Act were available to the employee, a complaint before the Labour court would not be maintainable in view of the provisions of section 26(2)(iii) of the Bihar Act, if the employee has been found guilty of misconduct. He relies on the following reported judgments: (i) 1993 (1) P.L.J.R. 333 (Bihar State Cooperative Marketing Union Ltd., through its Administrator Vs. The State of Bihar and others); and (ii) 1993 (2) P.L.J.R. 710 (Narendra Kumar Singh and others Vs. Kendriya Vidyalaya Sangathan and others) (paragraph 6). He next submits that the Corporation is not „establishment‟ within the meaning of Section 2(6) of the Bihar Act. He also submits that, in view 7 of the combined effect of the laws applicable to the present situation, the Labour Court has no jurisdiction to sit in appeal over the disciplinary proceedings conducted by the Corporation. 4. Learned counsel for respondent no.2 submits that the question of jurisdiction of the Labour Court is a mixed question of facts and law and cannot, therefore, be permitted to be raised for the first time in writ jurisdiction. The Bihar Act has been enacted in terms of entries 22 and 24 of the concurrent list. He relies on a Division Bench judgment of this Court, reported in 1991 (1) P.L.J.R. 81 (Beldih Club, Jamshedpur Vs. The Presiding Officer, Labour Court, Jamshedpur and others). He submits that, in view of the provisions of section 2(4) of the Bihar Act read with item no.24 of the schedule thereto, the Corporation is within the sweep of the Bihar Act. He submits in the same vein that rule 20 of the Bihar Rules prescribes mis- conduct. He next submits that, on a consideration of the A.V. Nachane’s case and M.Venugopal’s case, the Supreme Court has held in the case of Life Insurance Corporation of India Vs. R.Suresh, reported in (2008)11 SCC 319, that disciplinary proceedings conducted by the Corporation can be agitated before the industrial courts. Law is well-settled that the employee should have the benefit of an independent 8 forum to agitate his grievances and the forums prescribed under the departmental rules are inadequate to prevent miscarriage of justice. He relies on the judgment of the Supreme Court in Life Insurance Corporation of India Vs. R.Suresh (supra). This has to be read with his submission that the Tribunal constituted under section 17 of the Central Act has not till date been constituted. He also submits that the sufferings of respondent no.2 may be considered in the perspective. He has been made to run from court to court, and cannot be deprived of the benefits of the impugned order in a situation where jurisdiction of the Labour Court was not challenged. He also submits that this Court should not interfere in a situation where complete justice has been done to the parties. He relies on the judgment of the Supreme Court in A.M. Allison and another Vs. B.L. Sen and others, reported in A.I.R. 1957 S.C. 227, paragraphs 16 and 17. He lastly submits that section 48(2C) excludes the jurisdiction only of the Tribunal under the Industrial Disputes Act. 5. Learned counsel for the petitioner has submitted in reply that the judgment of the Supreme Court in Life Insurance Corporation of India Vs. R.Suresh (supra) was rendered by a Bench of two Judges, and has in substance overruled the earlier 9 judgments of the Supreme Court in the cases of A.V. Nachane and M.Venugopal, which were rendered by Bench of three Judges. He submits that the judgment is Per Incurium for the following reasons: (i) Paragraphs 20 and 22 of the judgment states that there is no clause in the Act which bars the jurisdiction of industrial courts which is completely overlooking the provisions of section 48(2C) of the Act. (ii) In paragraph 29 of the judgment, reliance has been placed on S.K.Verma’s case which has been held to be Per Incurium in the judgment of the Supreme Court in H.R.Adyanthaya and others Vs. Sandoz (India) Ltd. and others, reported in (1994)5, SCC 737. (iii) S.K. Verma’s case has been declared to be Per Incurium by the Supreme Court in the Case of Mukesh K. Tripathi Vs. Senior Divisional Manager, L.I.C. and others, reported in (2004)8 SCC 387, paragraph 16. (iv) The Supreme Court has held in the case of Mukesh K. Tripathi (supra) (paragraph 23), that a judgment which has been declared to be Per Incurium is not good law and does not bind anybody. 6. We have perused the materials on record and considered the submissions of learned counsel for the parties. The parties have indeed raised a 10 vital question of jurisdiction of the industrial courts, including the Labour Court under the Bihar Act, to adjudicate cases with respect to disciplinary proceedings against the employees of the Corporation. We must at the outset make it perfectly clear that the law governing the field prior to the insertions in Section 48 of the Central Act, by virtue of Act 1 of 1981, was fundamentally different than the one which now obtains after the legislative insertions. We are not concerned with the anterior period and, therefore, should not detain us to consider the earlier situation. The insertions have been the subject-matter of various decisions of the Supreme Court and, therefore, we are not required to undertake the task of interpretation of the relevant provisions. Our task has, however, been rendered difficult for the reason of two line of cases of Supreme Court governing the issues in hand, which are seemingly irreconcilable, and has fallen to our lot to be re-conciled and to find out as to which line of cases applies to the facts and circumstances of the present case. The issue is not free from difficulties. We have, however, take the view that we have taken for the reasons assigned hereinafter. 7. We must first of all notice the relevant insertions made in section 48 by Act 1 of 1981. 11 “48. Power to make rules.- (1) The Central Government may, by notification in the Official Gazette, make rules to carry out the purposes of this Act.” ... ... ... ... ... ... ... ... “(2)(cc)- the terms and conditions of service of the employees and agents of the Corporation, including those who became employees and agents of the Corporation on the appointed day under this Act”. xxx xxx xxx xxx xxx xxx “(2A) The regulations and other provisions as in force immediately before the commencement of the Life Insurance Corporation (Amendment) Act, 1981, with respect to the terms and conditions of service of employees and agents of the Corporation including those who became employees and agents of the Corporation on the appointed day under this Act, shall be deemed to be rules made under clause (cc) of sub-section (2) and shall, subject to the other provisions of this section, have effect accordingly.” Xxx xxx xxx Xxx xxx xxx (2C) The provisions of clause (cc) of sub-section (2) and sub-section (2B) and any rules made under the said clause (cc) shall have effect, and any such rule made with retrospective effect from any date shall also be deemed to have had effect from that date, notwithstanding any judgment, decree or order of any court, tribunal or other authority and notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or any other law or any agreement, settlement, award or other instrument for the time being in force.” 8. The combined effect of these insertions was considered by a Bench of three Hon‟ble Judges of the Supreme Court in A.V. Nachane Vs. Union of India (supra). The Same was considered by a Bench of three Hon‟ble Judges of the Supreme Court in M.Venugopal 12 (supra), and the enunciation of law in A.V. Nachane (Supra), was reiterated. Paragraph 11 and 12 of the judgment in M.Venugopal (supra), is reproduced hereinbelow: “11...In view of the amendments aforesaid introduced in Section 48 it has to be held that Regulation 14 referred to above in respect of termination of the service of an employee of the Corporation within the period of probation shall be deemed to be a rule framed under Section 48(2)(cc) having overriding effect over Section 2(oo) and Section 25-F of the Industrial Disputes Act.” “12. The Industrial Disputes Act as well as the Corporation Act both have been framed by the Parliament. But the amendments aforesaid have been introduced in the Corporation Act in Section 48 with effect from January 31, 1981 with a non-obstante clause. In sub- section (2-C), the intention of the Parliament has been made apparent and obvious. It was pointed out in Aswini Kumar Ghose v. Arabinda Bose4, A.V. Fernandez v. State of Kerala5 and South India Corporation (P) Ltd. v. Secretary, Board of Revenue, Trivandrum6 that the effect of non obstante clause is to obliterate in regard thereto the provisions which were earlier applicable. The framers of the Corporation Act through the amendments aforesaid have given the provisions of the Corporation Act an overriding effect over the provisions of the Industrial Disputes Act, so far as the provisions relating to the terms and conditions of employment, which are in conflict with the provisions of the Industrial Disputes Act are concerned. Unless the said attempt is held to be ultra vires being in conflict with any of the provisions of the Constitution it was open to the Parliament to treat the employees and agents of the Corporation as a separate class for purpose of 13 fixing their terms and conditions of service.” (Emphasis added) It is thus evident that the Supreme Court has in the two judgments held to the same effect and it has been laid down that section 48(2C) read with section 48(2)(cc) authorise the Central Government to make rules to carry out the purposes of the Act notwithstanding the Industrial Disputes Act or any other law. This means that the provisions of the Industrial Disputes Act or any other Act, will not be operative with respect to the matters covered by the rules. In other words, in view of the aforesaid amendments introduced in section 48, it has been held by the Supreme Court that regulation 14 in respect of termination of service of employee of the Corporation within the period of probation shall be deemed to be a rule framed under Section 48(2)(cc), having overriding effect over industrial laws. In view of the non-obstante clause engrafted in section 48(2C) of the Central Act, the framers of the Act have given the provisions of the Act an overriding effect over the provisions of the industrial laws in so far as the provisions relating to the terms and conditions of employment obtaining in the Regulations are concerned. It has further been held that it was open to the Parliament to treat the employees and agents of the Corporation as a 14 separate class with respect to their terms and conditions of service. In other words, the Supreme Court has in the two judgments, both rendered by Bench of three Judges, held that in view of the provisions of section 48(2C) of the Central Act, the jurisdiction of the industrial courts is completely ousted in so far as the terms and conditions obtaining in the Regulations are concerned. 9. This takes us on to the consideration of the scheme of the Regulations. Regulation 21 is headed „Liability to abide by the Regulations‟, and, inter alia, stipulates that every employee of the Corporation shall at all times maintain absolute integrity and devotion to duty etc.. Regulation 36 provides for suspension of an employee in contemplation, or during the pendency of, disciplinary proceedings. Regulation 38 provides for treatment of the period of suspension. Regulation 39 provides the penalties, clause (g) of which is dismissal. Detailed provisions have been made as to the manner in which the departmental proceeding has to be conducted. Regulation 40 provides the right of appeal against an order of punishment. Regulation 48 provides the procedure in which the appeal has to be considered and disposed of. Regulation 49 provides for memorial before the Chairman of the Corporation. It thus appears to us that the Regulations 15 constitutes a complete code for disciplinary action against the employees of the Corporation, and also provides a hierarchy of forums of appeal, revision etc. The Supreme Court has held in Bachhittar Singh v. State of Punjab (supra) that any action taken against a Government servant under Rules akin to the Civil Services (Classification, Control and Appeal) Rules, where the Government servant is found guilty of misconduct, is a judicial order and as such cannot be varied at the will of the authority who is empowered to punish. The Supreme Court proceeded to observe that it would be wholly erroneous to characterise the taking of action against a person found guilty of any charge at a departmental proceeding as an administrative order. And to this has to be added the powers of this Court under Articles 226 and 227 of the Constitution, apart from the right of intra-court appeal, or before the Supreme Court under Article 136 of the Constitution as well as the powers of the Supreme Court under Article 32 of the Constitution. We are thus convinced that in the scheme of the Regulations, a detailed statutory scheme has been put in place to take action against an employee of the Corporation, and the employee has adequate remedy to ventilate his grievance with respect to the departmental proceeding. 16 10. We should now consider the judgment of the Supreme Court in L.I.C. v. R.Suresh (supra), rendered by a Bench of two Judges wherein, after noticing the aforesaid judgments in A.V. Nachane (supra), and M.Venugopal (supra), it has been held that in spite of the amendment brought about by Act 1 of 1981, the industrial courts will continue to have jurisdiction over such disputes. Learned counsel for the petitioner in reply places particular emphasis on paragraphs 20 and 22 the judgment, and submits that the non-obstante clause engrafted in Section 48(2C) of the Central Act has been overlooked in L.I.C. v. R.Suresh, which are reproduced hereinbelow: “20. Section 48 provides for a rule- making power. Clause (cc) of sub-section (2) whereof only empowers the Central Government to lay down the terms and conditions of service of the employees and agents of the Corporation. The Act does not contain any provision in terms whereof the jurisdiction of the civil court and/or Industrial Court is taken away. It is now a well-settled principle of law that any provision taking away the jurisdiction of a court shall be strictly construed. A presumption arises against the ouster of jurisdiction. Having regard to the provisions contained in Section 9 of the Code of Civil Procedure and as also the provisions of the 1947 Act, an endeavour should be made to construe the provisions in such a manner so as to retain the jurisdiction subject, however, to the ouster of jurisdiction either expressly or by necessary implication.” 17 “22. We have noticed hereinbefore that the 1956 Act does not contain any provision ousting the jurisdiction of the civil court or the Industrial Court. The question, therefore, would be as to whether the jurisdiction is ousted by necessary implication. For the said purpose, construction of clause (cc) of sub-section (2) of Section 48 of the Act is necessary. It is one thing to say that rules may provide for the terms and conditions of service of the employees but it is another thing to say that a person is entitled to avail his human right of access to justice to get his grievances adjudicated before an independent fora. Access to justice as is well known is a valuable right.” (Emphasis added) It will bear repetition to state that the earlier two judgments have been rendered by Benches of three Hon‟ble Judges of the Supreme Court, whereas that of the L.I.C. vs. R. Suresh has been rendered by a Bench of two Judges, which seems to be the determining factor. 11. The Supreme Court had the occasion to consider such a situation in its judgment in the case of Official Liquidator Vs. Dayanand and others, reported in (2008)10 SCC 1. The issue for consideration has been indicated in paragraph 75 of the judgment, wherein it is indicated that the judgment of a Constitution Bench of the Supreme Court in the case of State of Karnataka Vs. Uma Devi (3) [(2006)4 SCC 1] has been followed by various Benches of the Supreme Court comprising of lesser number of Judges mentioned therein. However, the 18 judgment in U.P. SEB v. Pooran Chandra Pandey [(2007)11 SCC 92] attempted to dilute the Constitution Bench judgment by suggesting that the said decision cannot be applied to a case where regularisation has been sought for in pursuance of Article 14 of the Constitution and that the same is in conflict with the judgment of the seven Judge Bench in Menka Gandhi Vs. Union of India [(1978)1 SCC 248]. The Supreme Court in paragraph 78 of the judgment has stated as follows: “78. There have been several instances of different Benches of the High Courts not following the judgments/orders of coordinate and even larger Benches. In some cases, the High Courts have gone to the extent of ignoring the law laid down by this Court without any tangible reason. Likewise, there have been instances in which smaller Benches of this Court have either ignored or bypassed the ratio of the