IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 1974 of 1988 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 : YES 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 1 to 4 : YES//5 : No ---------------------------------------------------------- DALSUKHBHAI KESHAVLAL Versus NATIONAL INSTITUTE OF DESIGN ---------------------------------------------------------- Appearance: DR MUKUL SINHA for Petitioners MR KS NANAVATI for Respondent No. 1 NOTICE SERVED for Respondent No. 2 ---------------------------------------------------------- CORAM : MR.JUSTICE H.K.RATHOD Date of decision: 7/07/2000 C.A.V JUDGEMENT In the present petition, rule has been issued by this Court on 21st April, 1988 and by way of ad-interim direction, the operation and implementation of order Annexure-III dated 18th March, 1988 is stayed. Suspension is dismissal mitgated at the discretion of the employer by a promise to re-employ. The principles of natural justice are easy to proclaim but their precise extent is far less easy to define. The rule against basis is one thing. The right to be heard is another. Those two rules are essential characteristics of what is often called natural justice. They are the twin pillars supporting it. The Romans put them in the two maxims : Nemo Judex in Causa Suo : and Audi Alteram Partem. They have recently been put in the two words : Impartiality and Fairness. But they are separate concepts and are governed by separate consideration. One of the great principles of civilized jurisdiction which is a part of the law in Britain and which has been adopted in this country is that no man shall be a judge of his own cause. Closely allied to this principle is the other salutary principle that it is of fundamental importance that justice should not only be done but manifestly and undoubtedly seem to be done. Justice must be rooted in confidence : and confidence : and confidence is destroyed when right minded people go away thinking. In the present petition, in all six petitioners are there. Out of these six petitioners, petitioner no. 1 Shri Dalsukhbhai Keshavlal has already retired from service; petitioners nos. 3-Manubhai Damjibhai and Jasubhai Patel have settled the issued finally with the Management. Now, the present writ petition relates to petitioner nos. 2, 4 and 6 i.e. S/Shri S.S Pillai, Alfred Dalgada and Suresh S. Kuntmal, and in respect to petitioner no. 1 Shri Dalsukhbhai Keshavlal who is concerned with the relief which has been sought in the present petition. So, except petitioners nos. 3 & 5, all the other petitioners are interested party in the present proceedings. In the present petition, the petitioners are challenging the suspension orders dated 30th November, 1987 passed by the respondent no. 2 and also challenges the action of the respondent-Management of reducing their `subsistence allowance' to 25% [twenty five percent] of their salary after the completion of three months' period of suspension vide order dated 18th March, 1988. It is contended by the petitioners that the very action of suspension is arbitrary and illegal in so far as it violates clause 4.3 of the Service Rules of the respondent-National Institute of Design [hereinafter referred to as, `the Institute'] which provides for a preliminary inquiry to be conducted after giving an opportunity to the employees before placing them under suspension. In the instant case, according to the petitioners, no preliminary inquiry was conducted nor were the petitioners given any opportunity to show cause, and therefore, the impugned action of the respondent-Institute is totally illegal and void. The second challenge is the action of reducing the `subsistence allowance' of the petitioners by the respondents to 25% of their salary, after the period of three months of suspension is malafide, illegal, unjust and in violation of the service rules of the respondent Institute, and also in contempt of the order of the City Civil Court staying the inquiry proceedings, during the pendency of criminal case against the petitioners. The petitioners further submit that the respondent Institute is a `State' within the meaning of Art. 12 of the Constitution of India, and therefore, amenable to the writ jurisdiction of this Court under Art. 226 of the Constitution. The case of the petitioners is that Government of India fully finances and control the activities of the respondent-Institute, through the Ministry of Industry and has all pervasive control over the affairs of the Institute. Further, this Court has admitted several petitions against the respondent Institute; including Special Civil Application No. 6443 of 1987, by the Division Bench. The dispute regarding implementation of IVth Pay Commission recommendations had arisen around May, 1987 between the respondent-Institute and NID Employees' Association and in support of the said demand of employees for the implementation of the IVth Pay Commission recommendations, the Association led by the petitioners had stage peaceful demonstrations and other legitimate forms of protests. The respondent-Institute and the respondent no. 2 refused to negotiate with the only Association of the employees in respect of the demand of IVth Pay Commission pay scales, and therefore, the Association and the employees were constrained to continue their peaceful and legitimate direct action in support of their demand. On 30th November, 1987 at about 10.30 a.m. during the tea-break, while the employees were demonstrating in peaceful manner, the private security guards lead by the so-called Security Contractor Shri Naranappa and the Campus Warden Shri Bhagwat P. Shah attacked the employees injuring many, including the petitioners herein. The said attack was solely aimed at breaking the peaceful demonstration and help the management to take action against the leaders of the Association on trumped up charged. According to the petitioners, immediately after the incident i.e. on 30th November, 1987, the Campus Warden Shri Bhagwat P Shah filed a criminal complaint with the Ellisbridge Police Station and a case was registered against the petitioners and one other temporary employee Shri Bhimjibhai. The petitioners and said Shri Bhimjibhai were placed under arrest and a criminal case was instituted against them, which is pending trail before the Metropolitan Magistrate, Court No. 15 at Ahmedabad. The petitioners no. 1 & 2 had also filed a complaint with the Ellisbridge Police Station against Shri Naranappa and his security guards on 30th November, 1987 in respect of the same incident, complaining that they were attacked by the so-called security contractor and his men and that they had suffered severe injuries. One of the petitioners Jasubhai Patel was admitted in the V.S Hospital with injuries but the police has not taken any action so far on the complaint filed by the petitioners. Considering these facts, the respondent-Institute has decided to suspend the petitioners and petitioner no. 2 as a General Secretary of the Association by an order dated 30th November, 1987 on the date of the incident itself. The said suspension order in respect to petitioner no. 2 has been produced on record at page 15 Annexure-I to the petition. The said suspension order has been issued by the respondent no. 2 under the rules of respondent-Institute applicable to the petitioner no. 2. The petitioners have further pointed out in the petition that against the order of suspension, which was clearly illegal since it violates clause 4.3 of the Service Rules of the respondent-Institute, has made representation to the respondent-Institute and similarly all the petitioners have also submitted representation against the suspension orders. It is contended that the Service Rules of the respondent Institute was formulated by way of a Bipartite settlement registered under Section 2 (p) read with Section 18 of the Industrial Disputes Act, 1947 [hereinafter referred to as, `the Act']. A copy of the relevant Service Rules has been produced at Annexure-III to the petition. It is contended that the provisions regarding disciplinary proceedings agreed to by the parties vide clause 6 of the said settlement read alongwith Annexure-II to the said Settlement were adopted by the service rules in so far as the disciplinary proceedings are concerned, and therefore, according to the petitioners the said service rules have statutory force and are binding on the parties as per the said 2-P settlement. Thereafter, the respondent no. 2 issued notices to all the petitioners declaring the intention of holding domestic inquiry in respect of the charges levelled against them vide Chargesheet dated 7th December, 1987. A copy of the said charges as well as notice of domestic inquiry are annexed at Annexures IV & V respectively. Thereafter, the petitioner had filed a Civil Suit No. 908 of 1988 before the City Civil Court, Ahmedabad opposing the action of the respondent Management in initiating the departmental inquiry, pending the criminal case against them, on the very same charges which were levelled against them vide Chargesheet dated 7th December, 1987. The City Civil Court has granted stay against the departmental inquiry, pending the criminal case. A copy of the order below Notice of Motion in Civil Suit No. 908 of 1988 is annexed at Annexure VI of the petition. Thereafter, the respondent no. 2 has passed an order dated 18th March, 1988 [Anneuxre VII] reducing the subsistence allowance of the petitioners to 25% of their salary. Though the petitioners preferred a representation against the said reduction in the subsistence allowance to the respondent Institute, no response as yet has been given, and therefore, the petitioners have challenged both - the order of their suspension dated 30th November, 1987 and the order of reduction in subsistence allowance dated 18th March, 1988. The respondent-Institute has filed affidavit-in-reply by one P.S.V Kurup on 10th December, 1999. In the said reply, the respondent has raised a contention that the suspension orders of the petitioners have been issued by the Institute on 30th November, 1987 due to their rioting disorderly behaviour and violence in the campus and causing damage to the property of the Institute. It is stated that the petitioners were also charge sheeted on 7th December, 1987 for the charges of violence and physical harm to others and causing bloodshed in the campus and committing criminal offence as well as abetting others to do criminal acts and commit riotous and disorderly behaviour during the working hours at the Institute. The respondent has also pointed out that they have appointed a retired High Court Judge, Mr. Justice A.D Desai, as the Inquiry Officer and entrusted the departmental inquiry to him. The Inquiry Officer had issued notice to the present petitioners for proceeding with the inquiry, however, instead of appearing before the Inquiry Officer, the petitioners had instituted a Civil Suit being Civil Suit No. 908 of 1988 on 22nd February, 1988 before the City Civil Court at Ahmedabad inter alia praying for permanent injunction against the respondent Institute from acting in furtherance with the departmental inquiry or taking any disciplinary action in pursuance of the charge sheet dated 7th December, 1987. The City Civil Court has granted injunction against the respondent to conduct the departmental inquiry in view of the fact that criminal trial in respect of the very same incident was pending for decision. Now, against the order of injunction passed by the City Civil Court, the respondent-Institute had filed an Appeal from order being A.O No. 217 of 1988 before this Court. However, this Court did not interfere with the interim order passed by the City Civil Court in view of the fact that it was at interlocutory stage. It is clarified in the reply that the criminal trial commenced before the Metropolitan Court at Ahmedabad and on request being made by the respondent Institute, the Government of Gujarat appointed a senior Advocate Shri R.J Trivedi as Special Public Prosecutor of the said case. However, when Mr. Trivedi appeared in the matter, the present petitioners raised an objection and as a result, the Court decided to continue with the trial of the criminal case and asked the Public Prosecutor to hand over all the papers of the case to the learned Special Public Prosecutor Mr.Trivedi. Instead of proceeding with the trial, the petitioners challenged the appointment of Special Public Prosecutor by filing Special Civil Application before this Court wherein this Court granted stay of the proceedings in the criminal case pending final hearing of the writ petition. The said petition is also pending for final hearing before this Court. It is also pointed out in the reply that in the meanwhile, the petitioners have filed the present petition and this Court has admitted the matter on 21st April, 1988 and granted ad-interim relief staying the operation and implementation of the order dated 18th March, 1988. Thereafter, the petitioners moved a Civil Application No. 1282 of 1988 inter alia praying for 75% of the wages as subsistence allowance. On the said Civil Application, this Court vide order dated 31st August, 1988 gave directions to the respondent Institute to pay 75% of the wages as `subsistence allowance' to the petitioners with effect from 1st March, 1988. Against the said order dated 31st August, 1988, the respondent preferred Letters Patent Appeal No. 348 of 1988 before this Court which was also dismissed vide order dated 8th February, 1990. Accordingly, the respondent has been paying 75% of the wages as `subsistence allowance' to the petitioners. Respondent, in its reply has pointed out that besides the present petition, there are various disputes pending before various Courts of law. The Civil Suit No.908 of 1988 filed by the petitioners challenging the validity of the departmental inquiry before the City Civil Court is also pending for final hearing. The criminal proceedings before the Metropolitan Magistrate, Court No. 15 against the petitioners is stayed pursuant to the order passed by this Court. The special Civil Application filed by the petitioners challenging the validity of the appointment of Special Public Prosecutor by the State of Gujarat is pending for final hearing and Special Civil Application No. 5510 of 1999 filed by the petitioner no. 1 inter alia praying for retirement benefits is also pending before this Court. The respondent has also pointed out in the reply that during the pendency of the present proceedings, the petitioners no. 3 & 5 gave letter of apology dated 25th July, 1999 and 16th August, 1999 admitting various charges levelled against them and requested the Institute to consider the matter sympathetically and to revoke the suspension order with immediate effect and direct the petitioners no. 3 & 5 to report for duty latest by 1st September, 1999. It is also pointed out by the respondent that in the aforesaid Civil Suit No. 908 of 1988 which is pending, if ultimately the petitioners succeed in that event, the petitioners will get all the consequential benefits, and therefore, this petition is required to be rejected and same should not be entertained. It is pertinent to note that in the present reply, the respondent has not raised contention about the maintainability of the present petition. The respondent has not raised contention specifically to the effect that the respondent Institute is not a `State' or `other authority' within the meaning of Art. 12 of the Constitution of India. Such a contention has also not been raised by the respondent Institute in its reply dated 10th December, 1999. Against the said reply, the petitioner has filed affidavit-in-rejoinder. The said rejoinder has been filed by the petitioner no. 2 on 15th December, 1999. The petitioners in the said rejoinder have pointed out that sometime back, the respondent no. 1 has given a draft letter to the petitioners for being signed by them and based on the said letter, the petitioners were to be reinstated in service and the inquiry proceedings were to be dropped. The said letters have been given to the respondent Institute duly signed by the petitioners, however, the Management wants to settle other issues which were enumerated in the draft settlement points before suspension was revoked. After signing the said letter, the petitioners have received a communication from the respondent on 15th April, 1998 from the Executive Director of the respondent Institute stating that the letters submitted by the petitioners were still under consideration. The said letters had been signed by the petitioners on 10th of February, 1988; after protracted discussions, however, the Management had gone back on their assurance to revoke suspension because it was not possible for the petitioners to agree to the settlement points on other issues; including the issue of SEWA which were being insisted upon. It is also pointed out by the petitioners that the Apex Court has already rejected Special Leave Petition filed by the respondent Institute against the judgment and order of the Division Bench of this Court the SEWA case. An affidavit-in-reply to the Affidavit dated 23rd December, 1999 has been filed by the respondent-Institute. In the said reply, the respondent has raised contention in paragraph 2 that the present petition is not maintainable inasmuch as the respondent Institute is not a `State' within the meaning of Art. 12 of the Constitution of India and the respondent Institute is a Society registered under the Societies Registration Act and a Trust registered under the Bombay Public Trusts Act, imparting education to the students engaged in the field of research and development in various disciplines of design, and offering consultancy services as a part of education and research. In the said reply, it is also pointed out that the service conditions of the employees in the Institute are governed by the Model Standing Orders; since there are no certified standing orders. Clause 25 (5) of the Model Standing Orders empowers the respondent Institute to place an employee under suspension, by an order in writing, and a relevant sub-clause (5) (a) of Clause 25 has been incorporated in the said reply. Further, in the said reply, three contentions have been raised viz., that the 2-P settlement has not been registered, and therefore, it has not statutory force. Moreover, in any case, the said settlement does not supersede the provisions of the Model Standing Orders, which has the statutory force. It is also made it clear that the situation at the relevant time was so tense that it was impossible for the Institute to act exactly as per the 2-P settlement as the petitioners were demonstrating in the corridors of the main building of the Institute during the working hours and tried to force the entry into the administrative department of the respondent Institute, and in the process, the petitioners pelted stones breaking glass panes of the administrative department thereby injuring security and administrative personnel available on duty and also physically assaulted the security staff, as a result whereof the security staff and administrative staff sustained grievous injuries. Therefore, the respondent Institute was not able to act exactly as per the 2-P settlement which ultimately amounts to breach of provisions of said settlement for which an alternative efficacious remedy under the Industrial law is available to the petitioners. The said reply has been filed by the respondent-Institute on 23rd December, 1999. Thereafter, the respondent Institute has filed additional affidavit on 18th January, 2000. In the additional affidavit, it is contended that the respondent Institute is neither a `State' nor `an instrumentality of State' within the meaning of Art. 12 of the Constitution of India. In support of this contention, functions of the respondent Institute have been narrated just to satisfy the test that the respondent Institute is not a `State' or `other authority' within the meaning of Art. 12 of the Constitution of India. Alongwith the said affidavit, memorandum of association has been produced on record. Against that, the petitioners have filed additional Affidavit-in-Reply pointing out that the present petition was filed in the year 1988 and the respondent Institute did not file any Affidavit-in-Reply till December, 1999 i.e. about 11 years, and therefore, respondents cannot be permitted to file counter affidavit after a gap of 11 years and this Court cannot take into consideration such affidavits. It is also pointed out by the petitioners that after the arguments, such preliminary objections cannot be permitted to be raised viz., that the present petition is not maintainable and/or the respondent Institute is not a `State' or `other instrumentality of the State' within the meaning of Art. 12 of the Constitution. It is also pointed out by the petitioners that the respondent Institute has subjected itself to the writ jurisdiction of this Court in the present petition during past 11 years. Further, the respondent Institute has also submitted itself to the jurisdiction of this Hon'ble Court under Art. 226 of the Constitution in several other writ petitions; one of them being Special Civil Application No. 6443 of 1987. It is also pointed out by the petitioners that in number of petitions, interim orders have been made by this Court for and/or against the Institute. It is also made it clear that not only the interim orders but also at final stage, such orders have been complied with by the Institute from time to time. Further, such contention about the respondent Institute is not a `State' is an afterthought and wholly frivolous and ought to be rejected on the basis of the conduct of the respondents. It is also pointed out by the petitioners that if such contention could have been raised at the relevant time i.e. in the year 1988 and not after 11 years, then the petitioners might have explored any other remedy available to them instead of waiting for this question to be decided first by this Court. It is contended that yet in the past 11 years, the respondents not only did not raise any such preliminary objection but has not even challenged the interim order passed in the petition, and while challenging the order passed by this Court in Civil Application No. 1282 of 1988 before the Division Bench in LPA the respondent did not raise this preliminary issue which would have gone to the root of the matter. The petitioners have placed reliance upon a decision of the Apex Court in the matter of Ajay Hasia v. Khalid Mujid, reported in AIR (1981) SC 487 and the respondent Institute has placed reliance upon decision of Apex Court in the case of Re : NCERT, reported in AIR (1992) SC 76. The said rejoinder has been filed by the petitioners on 24th February, 2000. The petitioners have produced, alongwith the said rejoinder, Annual Report of the respondent Institute for the year 1996-97. The petitioners have also produced a copy of the Affidavit-in Reply filed by the respondent Institute in Misc. Civil Application NO. 820 of 1997 in Civil Application No. 1282 of 1988 and also produced Office Memorandum dated 27th September, 1993 dated 14th July, 1995 and 6th September, 1996. The petitioners have also produced Affidavit of the respondent Institute filed in Special Leave Petition No. 7003 of 1998. Thereafter, Affidavit-in-Sur-Rejoinder has been filed by the respondent Institute on 13th March, 2000. In the Sur-Rejoinder, the respondents have raised similar contention about the respondent Institute being not a `State' and `other instrumentality/authority of the State' within the meaning of Art. 12 of the Constitution and the averments have been made to the effect that it is not controlled by the Central Government and the source of income has been pointed out by the respondent Institute. According to the respondent Institute, it is an autonomous institution and has been a catalyst for design in Indian industry. It has its social commitment who help prepare students for rewarding careers in sectors of social need and for the said purpose the respondent Institute is actively involved in design projects, educating design professionals etc. The said functions carried by the respondent Institute are not the government functions. It is also pointed out by the respondent Institute