IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 10251 of 2001 For Approval and Signature: Hon'ble MR.JUSTICE H.K.RATHOD ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : YES of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO @ GIRISHBHAI VALJIBHAI CHUDGAR Versus GUJARAT ELECTRICITY BOARD (G. E. B.) -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 10251 of 2001 MRS VASAVDATTA BHATT for Petitioner No. 1 MR SP HASURKAR for Respondent No. 1-2 -------------------------------------------------------------- CORAM : MR.JUSTICE H.K.RATHOD Date of decision: 09/04/2002 ORAL JUDGEMENT #. Heard learned advocate Ms.Vasavadatta Bhatt appearing on behalf of the petitioner and Mr.S.P.Hasurkar, learned advocate for respondent Board. #. In the present petition, the petitioner workman has challenged the award passed by the Labour Court, Surendranagar in Reference No.9/1995, wherein the Reference has been rejected by the Labour Court by order dated 23rd July, 2001. The petitioner workman was working as Line man on probation with effect from 13-9-1993 and his probation period was over on 13-3-1994. Thereafter, he was not taken on duty on the ground of remaining absent and therefore, the respondent Board has passed termination order dated 16-11-1994 stating that the petitioner remained absent with effect from 4th June, 1994 till the date of termination and inspite of various notices served on the petitioner, the respondent did not give any answer and thus, the petitioner workman was dismissed from service with effect from 4th June, 1994 while exercising the powers under Service Rules 113 and 236 of the respondent Board. Learned advocate Mrs.Vasavadatta Bhatt has submitted that the petitioner workman had remained absent and on the basis of the misconduct of remaining absent, service of the petitioner has been terminated by the respondent Board under Service Rule 113 and 236 of the Service Rules without holding any departmental inquiry against the petitioner. Therefore, the order of termination is illegal, contrary to the principles of natural justice. She has further submitted that under Service Rule 113 which gives powers to the respondent Board to terminate the services of any permanent employee from service but that service rule itself violates principles of natural justice while not holding the departmental inquiry at the time of dismissing the services of the workman concerned on the basis of the misconduct without proving the same against the workman and therefore, the dismissal order passed by the respondent board against the workman which is contrary to the principles of natural justice. Therefore, according to the petitioner, the labour court has committed gross error in rejecting the Reference of the petitioner. #. Learned advocate Mr.S.P.Hasurkar on behalf of the respondent Board has submitted that the respondent Board has powers under Service Regulation 113 and if any employee remains continuously absent on his duty or overstay inspite of warning to return on duty, in such eventuality, the respondent Board can summarily discharge such employee from service of the respondent without necessity of proceedings under the Gujarat Electricity Board [Conduct and Discipline] Proceedings. Accordingly, the petitioner workman who remained absent for the period from 4th June, 1994 continuously without any prior permission of the authority and though notices were served on the petitioner, no reply has been given by the petitioner and not reported for duty and therefore, ultimately the respondent Board has exercised the powers under Service Rule 113 and dismissed the petitioner workman from service with effect from 4th June, 1994 which is legal and valid order and the labour court has rightly rejected the Reference. #. It is necessary to quote relevant service Rule 113 under which dismissal order was passed. "Continued absence from duty or overstay, inspite of warning, to return to duty, shall render the employee liable to summarily discharged from service without the necessity of proceedings under the Gujarat Electricity Board Conduct, Discipline and Appeal Procedure." #. I have considered submission made by the learned advocates for the parties. The statement of claim has been filed by the petitioner workman vide Exh.3 and the respondent Board has filed reply vide Exh.5. Thereafter, the respondent has produced File Page No.1 to 347 before the Labour court and the petitioner workman has produced five documents vide Exh.6 which also includes letter of Deputy Engineer. The respondent Board has also produced 23 documents which are exhibited as Exh.14 to 35 and thereafter, the petitioner workman has produced copy of ration card vide Exh.37. Exh.43 produced by the respondent Board is muster roll and the petitioner has produced two documents Exh.44. Thereafter, the labour court has considered merits of the matter. The labour court has framed the issue, whether the petitioner workman is entitled reinstatement with full backwages or not ? According to the petitioner, as per the evidence, he was continued with respondent Board upto 16th November, 1994 and admitted that he has not given any reply to the notice which are annexed by the respondent Board. He has disputed that his presence was not marked in muster roll by the respondent Board. The petitioner remained absent from June, 1994 upto November, 1994 and on the basis of said misconduct of remaining absent, while exercising the powers under Service Rule 113, the petitioner workman was dismissed from service. The labour court has come to the conclusion that in para-10 that there was no victimization against the petitioner workman and no witness has been examined and therefore, termination is found to be legal and valid. #. Bare perusal of the termination or dismissal order dated 16th November, 1994 which has been annexed by the petitioner at pg.18 - Annexure-B shows that said dismissal order is based upon misconduct of remaining absent without prior permission and not reported for duty inspite of notices though served on the petitioner workman and therefore, the respondent Board has exercised the powers under Service Rule 113 and adopted summary procedure to terminate services of the petitioner on the basis of the misconduct alleged against the petitioner. However, fact remains that no departmental inquiry has been initiated before passing the dismissal order against the petitioner. This aspect has been examined by the Apex Court in case of D.K.YADAV Vs. J.M.A. INDUSTRIES LTD. reported in JT 1993 [3] SC 613, wherein the Apex Court has held that the action of the management in terminating the appellant's service is violative of the principles of natural justice. Under clause 13 (2) (iv) of Certified Standing Orders, on completion of eight calendar days' absence from duty an employee shall be deemed to have abandoned the services and lost his lien on his appointment. Thereafter, the management is empowered to strike off the name from the Muster Rolls. But it is not correct to say that expiry of eight days' absence from duty brings about automatic loss of lien on the post and nothing more need be done by the management to pass an order terminating the service and per force termination is automatic. The principles of natural justice must be read into the Standing Order No. 13 (2) (iv). Otherwise, it would become arbitrary, unjust and unfair violating Article 14. The relevant observations of the Apex Court in para - 12 to 15 aforesaid case are reproduced as under :- "12. Therefore, fair play in action requires that the procedure Therefore, fair play in action requires that the procedure adopted must be just, fair and reasonable. The manner of exercise of the power and its impact on the rights of the person affected would be in conformity with the principles of natural justice. Art. 21 clubs life with liberty, dignity of person with means of livelihood without which the glorious content of dignity of person would be reduced to animal existence. When it is interpreted that the colour and content of procedure established by law must be in conformity with the minimum fairness and processual justice, it would relieve legislative callousness despising opportunity of being heard and fair opportunities of defence. Art. 14 has a pervasive processual potency and versatile quality, equalitarian in its soul and allergic to discriminatory dictates. Equality is the antithesis of arbitrariness. It is, thereby, conclusively held by this Court that the principles of natural justice are part of Art. 14 and the procedure prescribed by law must be just, fair and reasonable. 13. In Delhi Transport Corpn. v. D. T. C. Mazdoor Congress and Ors, [1991] Suppl. 1 SCC 600 this court held that right to public employment and its concomitant right to livelihood received protective umbrella under the can copy of Arts. 14 and 21 etc. All matters relating to employment includes the right to continue in service till the employee reaches superannuation or until his service is duly terminated in accordance with just. fair and reasonable procedure prescribed under the provisions of the constitution and the rules made under the provisions of the constitution and the rules made under proviso to Art. 309 of the Constitution or the statutory provisions or the rules, regulations or instructions having statutory flavour. They must be conformable to the rights guaranteed in Part III and IV of the Constitution. Art. 21 guarantees right to life which includes right to livelihood, the deprivation thereof must be in accordance with just and fair procedure prescribed by law conformable to Arts. 14 and 21 so as to be just, fair and reasonable and not fanciful, oppressive or at vagary. The principles of natural justice is an integral part of the Guarantee of equality assured by Art. 14. Any law made or action taken by an employer must be fair,just and reasonable. The power to terminate the service of an employee/workman in accordance with just, fair and reasonable procedure is an essential inbuilt of' natural justice. Arts. 14 strikes at arbitrary action. It is not the form of the action but the substance of the order that is to be looked into. It is open to the court to lift the veil and gauge the effect of the impugned action to find whether it is the foundation to impose punishment or is only a motive. Fair play is to secure justice, procedural as well as substantive. The substance of the order is the soul and the affect thereof is the end result. 14. It is thus well settled law that right to life enshrined under Art. 21 of the Constitution would include right to livelihood. The order of termination of the service of an employee/workman visits with civil consequences of jeopardising not only his/her livelihood but also career and livelihood of dependents. Therefore, before taking any action putting an end to the tenure of an employee/workman fair play requires that a reasonable opportunity to put forth his case is given and domestic enquiry conducted complying with the principles of natural justice. In D. 7. C. v. D. T.C. Mazdoor Congress and Ors. (supra) the constitution bench, per majority, held that termination of the service of a workman giving one month's notice or pay in lieu thereof without enquiry offended Art. 14. The order terminating the service of the employees was set aside. 15. In this case admittedly no opportunity was given to the appellant and no enquiry was held. The appellant's plea put forth at the earliest was that despite his reporting to duty on December 3, 1980 and on all subsequent days and readiness to join duty he was prevented to report to duty, nor he be permitted to sign the attendance register. The Tribunal did not record any conclusive finding in this behalf. It concluded that the management had power under Cl. 13 of the certified Standing Orders to terminate with the service of the appellant. Therefore, we hold that the principles of natural justice must be read into the standing order No. 13 (2) (iv). Otherwise it would become arbitrary. unjust and unfair violating Arts. 14. When so read the impugned action is violative of the principles of natural justice." #. In case of Central Inland Water Transport Corporation Ltd and another v. Brojo Nath Ganguly and another reported in AIR 1986 SC 1571, powers to terminate services summarily has been examined by the Apex Cout and ultimately the Apex Court has decided that such powers exercised for the misconduct to remove the workman concerned without holding departmental inquiry is contrary to the principles of natural justice and hit by Article 14 of the Constitution of India. Relevannt observations made by the Apex Court in para-26, 28, 71, 100, 105, 106 and 113 are referred as under :- "26. Men's concept of the State as a polity or a political Men's concept of the State as a polity or a political unit or entity and what the functions of the State are or should be have changed over the years and particularly in the course of this century. A man cannot obstinately cling to the same ideas and concepts all his life. As Emerson said in his essay on "Self-Reliance", "A foolish consistency is the hobgoblin of little minds". Man is by nature ever restless, ever discontent, ever seeking something new, ever dissatisfied with what he has. is inherent trait in the nature of man is reflected in the society in which he lives for a society is a conglomerate of men who live in it. Just as man by nature is dissatisfied, so is society. Just as man seeks something new, ever hoping that a change will bring about something better, so does society. Old values, old ideologies and old systems are thus replaced by new ideologies, a new set of values and a new system, they in their turn to be replaced by different ideologies, different values and a different system. The ideas that seem revolutionary become outmoded with the passage of time and the heresies of today become the dogmas of tomorrow. What proves to be adequate and suited to the needs of a society at a given time and in particular circumstances turns out to be wholly unsuited and inadequate in different times and under different circumstances. 28. The law exists to serve the needs of the society which is governed by it. If the law is to play its allotted role of serving the needs of the society, it must reflect the ideas and ideologies of that society. It must keep time with the heartbeats of the society and with the needs and aspirations Of the people. As the society changes, the law cannot remain immutable. The early nineteenth century essayist and wit, Sydney Smith, said, 'Then I hear any man talk of an unalterable law, I am convinced that he is an unalterable fool." The law must, therefore, in a changing society march in tune with the changed ideas and ideologies. Legislatures are, however, not best fitted for the role of adapting the law to the necessities of the time, for the legislative process is too slow and the legislatures often divided by politics, slowed down by periodic elections and overburdened with myriad other legislative activities. A constitutional document is even less suited to this task, for the philosophy and the ideologies underlying it must of necessity be expressed in broad and general terms and the process of amending a Constitution is too cumbersome and time-consuming to meet the immediate needs. This task must, therefore, of necessity fall upon the courts because the courts can by the process of judicial interpretation adapt the law to suit the needs of the society. 71. The first point which falls for consideration on this The first point which falls for consideration on this part of the case is whether Rule 9(i) is unconscionable. In order to ascertain this, we must first examine the facts leading to the making of the said Rules and then the setting in which Rule 9(i) occurs. To recapitulate briefly, each of the contesting Respondents was in the service of the Rivers Steam Navigation Company Limited. Their services were taken over by the Corporation after the Scheme of Arrangement was sanctioned by the Calcutta High Court. Under the said Scheme of Arrangement if their services had not been taken over, they would have been entitled to compensation payable to them, either under the Industrial Disputes Act, 1947, or otherwise legally admissible, by the said company, and the Government of India was to provide to the said company the amount of such compensation. Under the letters of appointment issued to these Respondents, the age of superannuation was fifty-five. Thereafter, Service Rules were framed by the Corporation in 1970 which were replaced in 1979 by new rules namely, the said Rules. The said Rules did not apply to employees covered by the Industrial Employment (Standing Orders) Act, 1946, that is, to workmen, or to those in respect of whom the Board of Directors had issued separate orders. At all relevant times, these Respondents were employed mainly in a managerial capacity. No separate orders were issued by the Board of Directors in their case. These Respondents were, therefore, admittedly governed by the said Rules. Under Rule 10 of the said Rules, they were to retire from the service of the Corporation on completion of the age of fifty-eight years though in exceptional cases and in the interest of the Corporation an extension might have been granted to them with the prior approval of the Chairman-cum-Managing Director and the Board of Directors of the Corporation. me said Rules, however, provide four different modes in which the services of the Respondents could have been terminated earlier than the age of superannuation, namely, the completion of the age of fifty-eight years. These modes are those provided in Rule 9(i), Rule 9(ii), sub-clause (iv) of clause (b) of Rule 36 read with Rule 38 and Rule 37. Of these four modes, the first two apply to permanent employees and the other two apply to all employees. Rule 6 classifies employees as either Permanent or Probationary or Temporary or Casual or Trainee. Clause (i) of Rule 6 defines the expression "Permanent employee" as meaning "an employee whose services have been confirmed in writing according to the Recruitment and Promotion Rules". Under Rule 9(i) which has been extracted above, the employment of a permanent employee is to be subject to termination on three months' notice in writing on either side. If the Corporation gives such a notice of termination, it may pay to the employee the equivalent of three months' basic pay and dearness allowance, if any, in lieu of notice, and where a permanent employee terminates the employment without giving due notice, the Corporation may deduct a like amount from the amount due or payable to the employee. Under Rule 11, an employee who wishes to leave the service of the Corporation by resigning therefrom, is to give to the Corporation the same notice as the Corporation is required to give to him under Rule 9, that is, a three months' notice in writing. Under rule 9(ii), the services of a permanent employee can be terminated on the ground of "Services no longer required in the interest of the Company" (that is, the Corporation). In such a case, a permanent employee whose service is terminated under this clause is to be paid fifteen days' basic pay and dearness allowance for each completed year of continuous service in the Corporation and he is also to be entitled to encashment of leave to his credit. Rule 36 prescribes the penalties which can be imposed, "for good and sufficient reasons and as hereinafter provided" in the said Rules, on an employee for his misconduct. Clause (a) of Rule 36 sets out the minor penalties and clause (b) of Rule 36 sets out the major penalties. Under sub-clause (iv) of clause (b) of Rule 36, dismissal from service is a major penalty. None of the major penalties including the penalty of dismissal is to be imposed except after holding an inquiry in accordance with the provisions of Rule 38 and until after the inquiring authority, where it is not itself the disciplinary authority, has forwarded to the disciplinary authority the records of the inquiry together with its report, and the disciplinary authority has taken its decision as provided in Rule 39. Rule 40 prescribes the procedure to be followed in imposing minor penalties. Under Rule 43, notwithstanding anything contained in Rules 38, 39 or 40, the disciplinary authority may dispense with the disciplinary inquiry in the three cases set out in Rule 43 and impose upon an employee either a major or minor penalty. We have reproduced Rule 43 earlier. Rule 45 provides for an appeal against an order imposing any of the penalties specified in Rule 36. Under Rule 37, the Corporation has the right to terminate the service of any employee at any time without any notice if the employee is found guilty of any insubordination, intemperance or other misconduct or of any breach of any rules pertaining to service or conduct or nonperformance of his duties. The said Rules do not require that any disciplinary inquiry should be held before terminating an employee's service under rule 37." 100. The power conferred by Rule 9(i) is not only arbitrary The power conferred by Rule 9(i) is not only arbitrary but is also discriminatory for it enables the Corporation to discriminate between employee and employee. It can pick up one employee and apply to him clause (i) of Rule 9. It can pick up another employee and apply to him clause (ii) of Rule 9. It can pick up yet another employee and apply to him sub-clause (iv) of clause (b) of Rule 36 read with Rule 38 and to yet another employee it can apply Rule 37. All this the Corporation can do when the same circumstances exist as would justify the Corporation in holding under Rule 38 a regular disciplinary inquiry into the alleged misconduct of the employee. Both the contesting Respondents had, in fact, been asked to submit their explanation to the charges made against them. Sengupta had been informed that a disciplinary inquiry was proposed to be held in his case. The charges made against both the Respondents were such that a disciplinary inquiry could easily have been held. It was, however, not held but instead resort was had to Rule 9(i). 105. As the Corporation is "the State" within the meaning of As the Corporation is "the State" within the meaning of Article 12, it was amenable to the writ jurisdiction of the High Court under Article 226. It is now well-established that an instrumentality or agency of the State being "the State" under Article 12 of the Constitution is subject to the Constitutional limitations, and its actions are State actions and must be judged in the light of the Fundamental Rights guaranteed by Part III of the Constitution (see, for instance, Sukhdev Singh and others v. Bbagatram Sardar Singh Raghuvanshi and another, The International Airport Authority's Case and Ajay Hasia's Case). The actions of an instrumentality or agency of the State must, therefore, be in conformity with Article 14 of the Constitution. The progression of the judicial concept of Article 14 from a prohibition against discriminatory class legislation to an invalidating factor for any discriminatory or arbitrary State action has been traced in Tulsiram Patel's Case (at pages 473-476). The principles of natural justice have now come to be recognized as being a part of the Constitutional guarantee contained in Article 14. In Tulsiram Patel's Case this Court said (at page 476) : "The principles of natural justice have thus come to be recognized as being a part of the guarantee contained in Article 14 because of the new and dynamic interpretation given by this Court to the concept of