Case: Sirsi Municipality By Its President Sirsi Vs. Cecelia Kom Francis Tellis

Ray, J. (for himself & on behalf of Sikri, C.J. & Palekar & Dwivedi, J.) :-1. The question which falls for determination in this appeal by special leave is whether the respondent is entitled to a declaration in a suit filed by her that her dismissal by the appellant Municipality referred to as the Municipality was illegal and void.2. The respondent was an employee of the Municipality. Her services were terminated by a resolution dated 23 March, 1955. She was dismissed from service. She filed this suit for a declaration that the resolution of the Municipality dismissing her from service was void and that she continued to be in service of the Municipality and was entitled to emoluments from the date of the resolution up to the date of the suit.3. The Municipality is governed by the Bombay District Municipalities Act, 1901 referred to as the Act. Section 46 of the Act provides that the Municipality shall make rules in respect of matters enumerated in that section. Clause (g) of Section 46 empowers the Municipality to frame rules regulating inter alia the period of service, the conditions of service etc.4. Rule 183 framed by the Municipality provides that except in the case of Chief Health Officer and the Engineer every Municipal officer or servant is liable to be discharged at one months notice. Rule 183 was not invoked by the Municipality in the present appeal. Therefore, Rule 183 is out of consideration.5. Rule 143 of the Municipality provides two things, First, no officer or servant shall be dismissed without a reasonable opportunity being given to him of being heard in his defence. Any written statement tendered shall be recorded and written order shall be passed thereon. Second, every order of dismissal or confirming dismissal shall be in writing and shall specify the charge or charges brought, the defence and the reasons for the order.6. Some time in February 1955 one Nayak brought his wife Nagamma to Pandit Cottage Hospital administered by the Municipality. Nagamma was admitted to the maternity section. On 15 February 1955 Nagamma died.7. Nagammas husband complained to the Municipality against the negligence of the staff of the hospital as the cause for the death of Nagamma. The Civil Surgeon held an enquiry. He gave a finding that the death of Nagamma was not due to the negligence of the staff. There was public agitation for a fresh enquiry.8. On 7 March 1955 the Municipality passed a resolution appointing a committee of four persons to hold an enquiry into the cause of the death of Nagamma and the alleged negligence of the staff of the hospital. The committee recorded the statements of several persons. The Committee submitted its report to the Municipal Council.9. On 23 March 1955 a meeting of the Municipal Council was held. The respondent alleged that though the consideration of the report of the sub-committee and the taking of a decision thereon were not included in the agenda of that meeting, yet the President of the Council sent a notice to the respondent. The communication to the respondent was to the effect that it had come to the notice of the President that the death of Nagamma was due to the negligence of the respondent, and, therefore, she was to appear before the Municipal Council at 4 p. m. on 23 March 1955 and give her explanation. The respondent received a notice on 23 March, 1955 at about 10.30 a. m. She sent her reply denying her negligence. The respondent also stated that if it was necessary for her to explain anything she should be asked questions in writing and she would give her answers in writing.10. The respondent did not appear before the Municipal Council at 4 p.m. The respondent came to the Municipal hall at about 6 p.m. By that time, the Municipal Council had passed a resolution dismissing the respondent from service. The President asked the respondent what her statement was about negligence. The respondent did not make any oral statement. The respondent insisted that the charge against her should be given in writing and that she would reply in writing. The Municipality did not accede to the respondents request. The resolution of the Municipality was communicated to the respondent on the same day. The respondent handed over charge on 24 March 1955.11. Broadly stated, the two contentions of the respondent were these. First, Rule 143 of the Municipality was violated. She was not given a reasonable opportunity of defending herself against the charge. Second, the resolution was passed by the Municipality on a day when the agenda before the Municipality did not contain any subject of dismissal of the respondent. On these grounds the respondent filed a suit for a declaration that the resolution was illegal, that the status of the respondent as mid-wife in the hospital remained unaffected and that the respondent was an employee of the Municipality as before. The respondent claimed other reliefs.12. The contention of the Municipality on the other hand was that the rules and bye-laws of the Municipality were only for the guidance of the Municipality and that the respondent could not challenge the resolution or action of the Municipality on the ground of violation of rules and bye-laws.13. The High Court upheld the findings of the trial Court and the first Appellate Court that the respondent was not given a reasonable opportunity of defending herself against the charge on which she was dismissed and that the Municipality thus violated Rule 143. The High Court however did not accept the finding of the Courts below that the Municipal Council was not competent to pass the resolution on the ground of want of notice on the agenda. The High Court also set aside the findings of the Courts below that the charge had not been proved against the respondent. The High Court found that the resolution of the Municipality was clearly in violation of Rule 143 and declared it as invalid and inoperative. The High Court maintained the declaration that the respondent was deemed to have continued in service from the date of dismissal to the date of the suit.14. Counsel on behalf of the Municipality contended that the respondent was not entitled to any declaration. In short, it was said on behalf of the Municipality that if the dismissal was wrongful the remedy lay in damages.15. The cases of dismissal of a servant fall under three broad heads. The first head relates to relationship of master and servant governed purely by contract of employment. Any breach of contract in such a case is enforced by a suit for wrongful dismissal and damages. Just as a contract of employment is not capable of specific performance similarly breach of contract of employment is not capable of finding a declaratory judgment of subsistence of employment. A declaration of unlawful termination and restoration to service in such a case of contract of employment would be indirectly an instance of specific performance of contract for personal services. Such a declaration is not permissible under the law of Specific Relief Act.16. The second type of cases of master and servant arises under Industrial Law. Under that branch of law a servant who is wrongfully dismissed may be reinstated. This is a special provision under Industrial Law. This relief is a departure from the reliefs available under the Indian Contract Act and the Specific Relief Act which do not provide for reinstatement of a servant.17. The third category of cases of master and servant arises in regard to the servant in the employment of the State or of other public or local authorities or bodies created under statute.18. Termination or dismissal of what is described as a pure contract of master and servant is not declared to be a nullity however wrongful or illegal it may be. The reason is that dismissal in breach of contract is remedied by damages. In the case of servant of the State or of local authorities or statutory bodies, Courts have declared in appropriate cases the dismissal to be invalid if the dismissal is contrary to rules of natural justice or if the dismissal is in violation of the provisions of the statutes. Apart from the intervention of statute there would not be a declaration of nullity in the case of termination or dismissal of a servant of the State or of other local authorities or statutory bodies.19. The Courts keep the State and the public authorities within the limits of their statutory powers. Where a State or a public authority dismisses an employee in violation of the mandatory procedural requirements or on grounds which are not sanctioned or supported by statute the Courts may exercise jurisdiction to declare the act of dismissal to be a nullity. Such implication of public employment is thus distinguished from private employment in pure cases of master and servant.20. Counsel on behalf of the municipality relies on the decisions of this Court in Executive Committee of U. P. State Warehousing Corpn. Ltd. v. Chandra Kiran Tyagi, (1970) 2 SCR 250 = (AIR 1970 SC 1244 ) and Indian Airlines Corporation v. Sukhdeo Rai (1971) 2 S.C.C. 192 = (AIR 1971 SC 1828 ) in support of the contention that even in cases of statutory authorities or bodies a dismissal would only sound is damages and not entitle the dismissed servant to the reliefs of a declaratory judgment against the order of dismissal or termination.21. In Tyagi case, (1970) 2 SCR 250 = (AIR 1970 SC 1244 ) (supra) the Warehousing Corporation was competent to make regulations not inconsistent with the Agricultural Produce (Development) and Warehousing) Corporation Act, 1956. The Warehousing Corporation framed regulations. Regulation 11 dealt with termination of the service of an employee other than by way of punishment. Regulation 16 dealt with penalties imposed on servant Regulation 16 (3) stated that no punishment other than fine, censure or postponement of increments or promotion was to be imposed on an employee without giving him an opportunity for tendering an explanation in writing and cross-examining the witnesses against him and of producing evidence in defence. Tyagi in that case complained that at the enquiry he was not given opportunity to adduce evidence in defence and the persons from whom the Enquiry Officer gathered information were not tendered for cross-examination. The question for consideration by this Court in that case was whether the dismissal of Tyagi could support the grant of a declaration that the dismissal was null and void and that Tyagi was entitled to be reinstated. This Court held that an order made in breach of regulation 16 (3) was not in breach of any statutory obligation. It was also held in Tyagis case (supra) that the relevant Act did not guarantee any statutory status to Tyagi nor did it impose any obligation on the Warehousing Corporation in the matter of dismissal. The ratio in Tyagis case (supra) was that violation of regulation 16 (3) was a breach of terms and conditions of relationship of master and servant and the master was liable for damages for wrongful dismissal. This Court did not find any violation of statutory obligation in Tyagis case (supra).22. In the Indian Airlines Corpn. case, (1971) 2 SCC 192 = (AIR 1971 SC 1828 ) (supra) Sukhdeo Rai was suspended on certain charges. Later on he was found guilty of those charges in an enquiry. He was thereafter dismissed. He filed a suit alleging that the enquiry had been conducted in breach of the procedure laid down by regulations made by the Corporation under Section 45 of the Act, and, therefore, the dismissal was illegal and void. The High Court held that the Corporation was under a statutory obligation to observe procedure laid down in the regulations and gave the relief of a declaratory judgment. This Court set aside the declaration granted by the High Court. The ratio in Indian Airlines Corporation case, was stated thus :"The employment of the respondent not being one to an office or status and there being no obligation or restriction in the Act or the rules subject to which only the power to terminate the respondents employment could be exercised, could the respondent contend that he was entitled to a declaration that the termination of his employment was null and void ?"23. In the Indian Airlines Corporation case, (1971) 2 SCC 192 = (AIR 1971 SC 1828 ) (supra) regulations framed under Section 45 of the Act were said by this Court to be terms and conditions of service but the same did not constitute a statutory restriction as to the kind of contracts which the Corporation could make with the servants or the ground on which it could terminate. The dismissal in that case was found to be wrongful and not to fall the vice of infraction of statutory limitation or statutory obligation.24. This Court in S. R. Tewari v. District Board, Agra, (1964) 3 SCR 55 = (AIR 1964 SC 1680 ) Life Insurance Corpn. of India v. Sunil Kumar Mukherjee (1964) 5 SCR 528 = (AIR 1964 SC 847 ) Calcutta Dock Labour Board v. Jaffar Imam (1965) 3 SCR 463 = (AIR 1966 SC 282 ) and Mafatlal Naraindas Barot v. Divisional Controller, S.T.C. (1966) 3 SCR 40 = (AIR 1966 SC 1364 ) dealt with power of statutory authorities and bodies to dismiss servants. These decisions establish that the dismissal of a servant by statutory including local authorities or bodies in breach of the provisions of the statutes or orders or schemes made under the statute which regulate the exercise of their power is invalid or ultra vires and the principle of pure master and servant contractual relationship has no application to such cases.25. In Tewaris case (1964) 3 SCR 55 = (AIR 1964 SC 1680 ) (supra) this Court said that dismissal, removal or reduction of an officer or servant might be effected under the rules only after giving the servant a reasonable opportunity of showing cause against the action proposed to be taken. This Court held in Tewaris case (supra) that in three instances a dismissed employee might in appropriate cases obtain a declaratory judgment that the dismissal was wrongful. Those three instances are : first, cases of public servants falling under Article 311 (2) of the Constitution; secondly, cases falling under the Industrial Law and, thirdly, cases where acts of statutory bodies are in breach of mandatory obligation imposed by a statute.26. In Mafatlal Naraindas Barots case, (1966) 3 SCR 40 = (AIR 1966 SC 1364 ) (supra) this Court held that the order of termination was bad in law since it contravened the provisions of clause 4 (b) of the regulation and also the principles of natural justice.27. This Court has held in the decisions referred to that the dismissal or termination of the services of employees without complying with the provisions of statute or scheme or order is invalid. This Court has quashed the orders of dismissal and granted appropriate declarations.28. There have been recent English decisions on this subject. These are Vine v. National Dock Labour Board, (1956) 3 All ER 939; Barber v. Manchester Hospital Board, (1958) 1 All ER 322; Ridge v. Baldwin 1964 AC 40; Malloch v. Aberdeen Corpn, (1971) 2 All ER 1278 and McClelland v. Northern Ireland General Health Services Board (1957) 1 WLR 594.29. These decisions indicate that statutory provisions may limit the power of dismissal. Where such limitation is disregarded a dismissal may be held invalid. In this respect employment under statutory bodies differs from ordinary private employment. Where a public body is empowered to terminate employment on specified grounds or where a public body does not observe the procedure laid down by legislation e.g. improperly delegates power of dismissal to another body the Courts have declared such dismissal from public employment to be invalid.30. The cases of a statutory status of an employee can also form the subject matter of protection of the rights of an employee under the statute. In Vines case, (1956) 3 All ER 939 (supra) the removal of Vines name from the register was held to be a nullity. The statutory scheme of employment was held to confer on the worker a status. An unlawful act of the Board was found to be interference with status. The status of the dock worker was recognised by this Court in Jaffar Imams case (1965) 3 SCR 453 = (AIR 1966 SC 282 ) (supra). In Jaffar Imams case (supra) the termination of the employment in breach of clause 36 (3) of the scheme made by the Central Government in exercise of the power conferred on it by Section 4 (1) of `the Dock Workers (Regulation of Employment) Act 1948 was held to be bad. The ground given by this Court was that before any disciplinary action was taken under cls. 36 (1) and (2) of the scheme in Jaffar Imams case (supra) the person concerned was to be given an opportunity to show cause as to why the proposed action should not be taken against him.31. Again in Barbers case (1958) 1 All ER 322 (supra) under the memorandum issued by the Minister of Health the Hospital Board was not to carry into effect the dismissal of a consultant before a certain appeal procedure had been completed. Barber was dismissed without the prescribed procedure being followed. It was held that despite the strong statutory flavour attaching to the plaintiffs contract this was an ordinary contract between master and servant. The House of Lords in McClellands case, (1957) 1 WLR 594 held that the dismissal of the plaintiff by the Board in that case on the ground of redundancy of staff was not one of the grounds specified in the terms and conditions of service. It was found that the dismissal could be on specified grounds e.g. gross misconduct. A declaration was granted in favour of McClelland on an originating summons as to whether the agreement of service was validly terminated. It was not a case of a Government servant. There was no question of breach of statutory provisions. The employment was based on contract. The Court found that the express power of the Board did not include reduction on the ground of redundancy. The Court spelt out security of status in employment. The legal basis of the decision in McClellands case (supra) is that the post was terminable only on certain specified grounds.32. In the present appeal, the pre-eminent question is whether the dismissal is in violation of Rule 143. Rule 143 imposes a mandatory obligation. The rules were made in exercise of power conferred on the municipality by statute. The rules are binding on the municipality. They cannot be amended without the assent of the State Government. The dismissal of the respondent was rightly found by the High Court to be in violation of Rule 143 which imposed a mandatory obligation. The respondent was dismissed without a reasonable opportunity of being heard in her defence. The dismissal by the municipality was without recording any written statement which might have been tendered. The dismissal by the municipality was without written order. The dismissal was ultra vires.

Decision reasoning: 1[ds]32. In the present appeal, the pre-eminent question is whether the dismissal is in violation of Rule 143. Rule 143 imposes a mandatory obligation. The rules were made in exercise of power conferred on the municipality by statute. The rules are binding on the municipality. They cannot be amended without the assent of the State Government. The dismissal of the respondent was rightly found by the High Court to be in violation of Rule 143 which imposed a mandatory obligation. The respondent was dismissed without a reasonable opportunity of being heard in her defence. The dismissal by the municipality was without recording any written statement which might have been tendered. The dismissal by the municipality was without written order. The dismissal was ultra vires.