FA/1017/1988 1/8 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 1017 of 1988 For Approval and Signature: HONOURABLE MR.JUSTICE M.R. SHAH =================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? =================================== GUJARAT HOUSING BOARD - Appellant(s) Versus GUJARAT HOUSING BOARD EMPLOYEES ASSOCIATION - Defendant(s) =================================== Appearance : MR YF MEHTA for Appellant(s) : 1, NOTICE SERVED for Defendant(s) : 1, =================================== CORAM : HONOURABLE MR.JUSTICE M.R. SHAH Date : 20/06/2008 ORAL JUDGMENT 1. The appellant Gujarat Housing Board, constituted under the Gujarat Housing Board Act, 1961 has preferred the present First FA/1017/1988 2/8 JUDGMENT Appeal under Section 96 of the Code of Civil Procedure against the judgment and decree passed by the learned City Civil Court No.15, Ahmedabad in Civil Suit No. 2452 of 1980 of dated 25.09.1987, whereby the learned Judge has decreed the suit by partly allowing the suit declaring the Gujarat Housing Board Service Classification and Recruitment Regulations, 1981 as illegal, void and inoperative so far as the allocated employees of the Gujarat Housing Board are concerned. The learned Judge has also granted the permanent injunction restraining the Gujarat Housing Board from implementing aforesaid Regulation so far as allocated employees of the Gujarat Housing Board are concerned. 2. That the original plaintiff instituted aforesaid Civil Suit No. 2452 of 1980 in the City Civil Court, Ahmedabad for the relief of declaration that the service rules and regulations moved for sanctioned before the State Government are arbitrary, unconstitutional and passed without giving an opportunity of hearing to the plaintiff-Gujarat Housing Board Employees Association and therefore, be declared bad and void. It was the case on behalf of the original plaintiff that it is registered trade union registered under the Indian Trade Union Act, 1947 and was recognized as trade union by the Gujarat Housing Board. That on bifurcation of State of Maharastra into State of Gujarat and State of Maharastra Housing Board in existence had come to end and employees in the Bombay Housing Board were allocated to the Gujarat and they constituted as employee of the Gujarat Housing Board. That in view of the provision contained in Section 86(2) of the Gujarat Housing Board Act, 1961, service condition of the FA/1017/1988 3/8 JUDGMENT allocated employees cannot be altered to their disadvantage etc. It is the case on behalf of the plaintiff that there was award of the Industrial Tribunal in (I.T.) No. 96 of 1973 which was accepted by the Housing Board and there were other Reference (IT) Nos. 7 of 1974 and 18 of 1974 to the effect that without previous sanction of the State Government service rules cannot be altered as contemplated under Section 86(2) of the Act. The sum and substance of the contention on behalf of the plaintiff was that the Gujarat Housing Board had no right to frame service rules and regulation for allocated employees and they stand governed by own rules only and no advantage get nor any movement for approval of Government sanction can be made by the Board and consequently Board again fill up the post by merit person on deputation from other department. It was the case on behalf of the plaintiff that approval taken by the Board in its meeting dated 9.5.1980 for revise service rules be declared null and void, without jurisdiction, incompetent and colourable exercise of powers and illegal. It was also the case on behalf of the plaintiff that finalizing the rules without taking the union and plaintiff into confidence is violative of principles of natural justice and mala fide. It was also contended that rules are hit by Section 115 of the State Reorganization Act. Plaintiff therefore, gave statutory notice dated 7.5.1980 that suit is required under Section 71 of the Act and according to the plaintiff as nothing was heard in reply, they were constrained to file aforesaid suit. As per the plaintiff the cause of action arise on 29.4.1980 when plaintiff protested against said proposed rules and when Civil Suit No. 1509 of 1980 was filed and that notice was served on 7.7.1980 and when statutory rules were produced on FA/1017/1988 4/8 JUDGMENT 10.09.1982, in the suit. The plaintiff ultimately prayed that Gujarat Housing Board Service Classification and Recruitment Regulation 1981 are illegal and void so far as allocated employees are concerned and in so far as they provide for taking deputation from foreign department. 3. Suit was resisted by the Gujarat Housing Board by filing written statement at Exh. 8. It was contended that the suit is false, bad and malafide. It was further contended that suit is required to be dismissed for non joinder of State as party. It was also contended that suit was barred by limitation in view of provision of Section 71 of the Act. It was also further contended that under powers conferred to board by Section 74(c) of the Act, it was competent for board to frame regulation as it did. It was also further contended that at the relevant time the suit was premature since the regulation required sanction of the Government. It was further ascertaining that Section 86(2) was implicitly clear to spell out the power of the board to make rules subject to sanction from State Government. That the learned trial Court framed the issues at Exh. 38 of dated 14.3.1984 and re-cast on 27.11.1984. After hearing the parties, the learned trial Court held issue Nos. 1 to 6 in negative and issue No. 7 to 9 in affirmative and decreed the suit and granted the injunction as prayed by the plaintiff against the present appellant. Hence, being aggrieved and dissatisfied with the judgment and decree passed by the learned City Civil Court, Ahmedabad passed in Civil Suit No. 2452 of 1980, the appellant -original plaintiff has preferred the present First Appeal. FA/1017/1988 5/8 JUDGMENT 4. Learned advocate for the respondent-original defendant has remained absent and this being old appeal of 1988, this Court has no other alternative but to proceed further with the same ex parte. 5. Shri YF Mehta,learned Advocate has appeared on behalf of the appellant-original defendant. It is submitted by Shri Mehta, learned Advocate for the appellant that the impugned judgment and decree passed by the learned trial Court is absolutely illegal which deserves to be quashed and set aside. It is submitted that learned Judge has materially erred in not properly appreciating the relevant provision more particularly, Section 71 of the Gujarat Housing Board Act, 1961. It is submitted that the learned Judge ought to have dismissed the suit on the ground that no legal and valid statutory notice as contemplated under Section 71 of the Act of 1961 was given by the plaintiff before filing the suit and within six months of arising of cause of action. 6. It is further submitted that learned Judge ought to have appreciated that at the relevant time when the suit was filed it was absolutely premature as at the relevant time there was no sanction by the State Government and at the relevant time there were proposed regulation. It is further submitted that even otherwise the learned trial Court ought to have appreciated the fact that the Gujarat Housing Board was well within its power to frame the recruitment rules and regulations. It is further submitted that even otherwise the impugned judgment and decree passed by the learned trial Court quashing and setting aside the statutory regulation is without jurisdiction. It is further submitted that the FA/1017/1988 6/8 JUDGMENT learned Judge has not at all examined the factum of the rules at all and as to how they are arbitrary and illegal. It is submitted that the learned Judge has failed to appreciate the fact that admittedly the plaintiff has submitted his objection of dated 26.12.1980 and the rules were framed and published on 26.5.1982, there was sufficient compliance of principles of natural justice. It is further submitted that the learned Judge ought to have appreciated that framing of the rules of governing the employees is a matter of a policy and only on limited ground of the legislation competence it could have been questioned. It is submitted that the learned trial Court ought not to have examined legislation competence since it is not a Court under the Constitution of India but Court under the Civil Court Act. 7. Shri Mehta learned advocate for the appellant has heavily relied upon the following decision in support of his above submissions and in respect of his request to quash and set aside. 1. SCC 2005(4) 613. 2. AIR 1995 SC 1715. 3. AIR 1968 SC 292. 4. AIR 1971 SC 1828. 5. AIR 1974 SC 259 6. AIR 1976 SC 888. 7. AIR 1998 SC 2276. 8. Heard the learned Advocate Shri YF Mehta on behalf of the appellant and having considered the impugned judgment and decree passed by the learned trial Court and record and proceedings of the case. It appears to the Court that learned trial FA/1017/1988 7/8 JUDGMENT Court has materially erred in decreeing the suit and by quashing and setting aside and declaring that the Gujarat Housing Board Service and Classification Recruitment Rules, 1981 in so far as the allocated employees of the defendant board are concerned, as illegal, void and inoperative. First of all it is to be noted that when the suit was filed the recruitment rules/ regulation were at draft stage only and were sent to the State Government for its sanction. It is also required to be noted that at the relevant time the objections were raised against said draft rules. It is also not in dispute that during the pendency of the suit, the draft rules have been sanctioned by the State Government and they were produced on record. Once the draft rules have been sanctioned by the State Government and the same are published thereafter so far as Civil Court is concerned, the Civil Court would have a very limited scope to consider the legality and validity of the same. On considering the entire judgment and decree passed by the learned trial Court, it appears that there is no finding given by the learned trial Court how the recruitment rules are arbitrary and / or illegal. The learned Judge has not addressed itself on merits of the rules and regulations which have been sanctioned by the State Government. So far as the power of the Board to frame the recruitment regulation are concerned, the same cannot be disputed. It appears that the learned trial Court has held that the said recruitment rules are against the principles of natural justice as no opportunity of hearing has been given to the plaintiff and the members. However, it is to be noted that when statutory rules and regulation are to be framed there is no question of personal hearing. Inviting objections to the proposed rules is sufficient. In the present case as stated above against the FA/1017/1988 8/8 JUDGMENT draft rules the plaintiff did submit the objection. Therefore, it cannot be said that the recruitment rules are in breach of principles of natural justice. The contrary finding of the learned trial Court cannot be sustained and which deserves to be quashed and set aside. 9. Even otherwise considering the decisions relied upon by the learned Advocate for the appellant referred to herein above the impugned judgment and decree passed by the learned trial Court is without jurisdiction and / or it can be said that the learned trial Court has exceeded the jurisdiction vested in it and the same cannot be sustained. 10. In view of the above and for the reasons stated above, the judgment and decree passed by the learned trial Court deserves to be quashed and set aside and is hereby quashed and set aside. First Appeal is accordingly allowed. No costs. (M.R.SHAH, J.) kaushik