Case: Prabha D. Kanan Vs. Indian Airlines Ltd. &amp; Another

Bangalore exonerated Respondent.53. However, having regard to the fact that there was no evidence as to why she carried the suit case from Mumbai or she had been handed over the suitcase at Hyderabad and keeping in view the nature of investigation carried out by the Customs Authorities, the penalties imposed on her under Section 114 (i) of the Customs Act was held to be not sustainable stating: "Summing up, we find:-(i) The investigation into this episode is not very thorough;(ii) The reason for abandoning the currency has not been brought out;(iii) There is no evidence to establish that the Appellants made an attempt to export the currency.(iv) The statements do not appear to have been given voluntarily;(v) The currency was neither seized from the possession of the Appellants nor from the aircraft;(vi) The test to prove an attempt to illegally export as laid down in the case of Mohd. Yakub has not been proved." In the criminal case, no charge was framed. Respondent was discharged only on the ground that she had not been found liable in the civil proceedings.54. Appellant in the said proceedings had no role to play. We, therefore, are of the opinion that Regulation 13 is intra vires. We are bound by the decision of this Court in Ajit Kumar Nag (supra). The Board of Directors, in the aforementioned fact situation, must be held to have public interest in mind.55. In Kanhaiyalal Agrawal and Others v. Factory Manager, Gwalior Sugar Company Ltd. [(2001) 9 SCC 609] , whereupon Mr. Lalit placed strong reliance, this Court upheld the findings of the Industrial Court as also the High Court that the principles for invoking loss of confidence in the employee based on objective criteria , viz., (i) that the workman is holding a position of trust and confidence; (ii) by abusing such position, he commits acts which results in forfeiting the same; and (iii) to continue him in service would be embarrassing and inconvenient to the employer or would be detrimental to the discipline or security of the establishment; stood satisfied.56. True, loss of confidence cannot be subjective but there must be objective facts which would lead to a definite inference of apprehension in the mind of the employer regarding trustworthiness of the employee and which must be alleged and proved. But, then all the criteria mentioned therein are present in the instant case.57. The question which now arises is as to whether the Regulation 13 is applicable to the case of Respondent. Section 45 of the 1953 Act provides for regulation making power of the Corporation. It extends to the terms and conditions of service of officers and other employees of the Corporation other than the Managing Director and officers of any other categories referred to in Section 44 of the 1953 Act. Regulations were framed pursuant to or in furtherance of the said regulation making power. Regulation 13, as it stood earlier, did not contain any power in the Board of Directors to terminate the services of an employee. Regulation 13 speaks of lack of confidence. Regulation 13 came into force with effect from 1.3.1993. Respondent indisputably was appointed prior thereto.58. A question arose as to whether by reason of the repealing provisions contained in the 1994 Act, the Regulations framed under the 1953 Act survives and consequently the exercise of powers under Regulation 13 shall be void ab initio.59. Our attention has been drawn to a decision of this Court in Air India v. Union of India and Ors. [JT 1995 (5) SC 578 ] wherein it was held: "Section 8 of the 1994 Act does not in express terms save the said Regulations, nor does it mention them. Section 8 only protects the remuneration, terms and conditions and rights and privileges of those who were in Air Indias employment when the 1994 Act came into force. Such saving in undoubtedly "to quieten doubts" of those Air India employees who were then in service. What is enacted in Section 8 does not cover those employees who joined Air Indias service after the 1994 Act came into force. The limited saving enacted in Section 8 does not, in our opinion, extent to the said Regulations." 60. The said decision was rendered when a question was raised as to whether standing orders framed under Industrial Employment (Standing Orders) Act, 1946 survives the regulation making power. It was held that the regulations have ceased to be effective on 29th January, 1994 and, thus, regulation making power no longer survives.61. Mr. Bhasin would submit that the provisions of the Regulations would apply to Respondent as:(i) She never disputed the application of the Regulations.(ii) A Special Leave Petition covering the same area being SLP (C) No. 2230-31 of 2005 is pending before this Court.62. As at present advised, we do not intend to enter into the said controversy. The judgment of this Court in Air India (supra) is binding on us. We have, therefore, no other option but to hold that Regulation 13 would not apply to the case of Respondent. However, despite the same, we are of the opinion that the interest of justice would be subserved if the nature of relief to Respondent granted by the High Court is upheld.63. We, therefore, hold that although Regulation 13 is not unconstitutional but the same is not applicable in case of Respondent. However, we are furthermore of the opinion that in the peculiar facts and circumstances of this case and keeping in view the fact that she had put in 20 years of service she be paid eight years salary towards both back wages as well as for loss of employment in future. This will be on the basis of her last drawn basic pay and dearness allowance. The Corporation will pay Respondent the amount refunded by her towards the provident fund and gratuity at the rate of interest provided under the Statutes governing them. The relief granted to Respondent shall, in our opinion, subserve the interest of justice.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]47. We may notice that keeping in view the situational changes and, particularly, outsourcing of the sovereign activities by the State, this Court has been expanding the scope of judicial review. It includes the misdirection in law, posing a wrong question or irrelevant question and failure to consider relevant question. On certain grounds judicial review on facts is also maintainable. Doctrine of unreasonableness has now given a way to doctrine of proportionality.Respondent was holding a post of trust and confidence. She had been issued a Red Airport Entry Pass which gave unrestricted access to all civil airports in India and flying to other countries on the network of Indian Airlines. Any doubt on the integrity of the person holding such a post of trust and confidence may shake the confidence of the employer. If such activities are permitted, the same in a given case may provide for risk not only to the aircraft but also to a large section of people. The subjective satisfaction of the Board of Directors was based on the confession she made and the evidences collected by the Directorate of Enforcement. The fact that subsequently she had been exonerated or she had been discharged from the criminal case may not be of much significance as the validity of the order must be judged having regard to the fact situation as was obtaining on the day on which the same was passed. We have noticed in the final order dated 13th December, 2005, the Custom Excise and Service Tax Appellate Tribunal, South Zonal Branch at Bangalore exonerated Respondent.53. However, having regard to the fact that there was no evidence as to why she carried the suit case from Mumbai or she had been handed over the suitcase at Hyderabad and keeping in view the nature of investigation carried out by the Customs Authorities, the penalties imposed on her under Section 114 (i) of the Customs Act was held to be not sustainableup, we find:-(i) The investigation into this episode is not very thorough;(ii) The reason for abandoning the currency has not been brought out;(iii) There is no evidence to establish that the Appellants made an attempt to export the currency.(iv) The statements do not appear to have been given voluntarily;(v) The currency was neither seized from the possession of the Appellants nor from the aircraft;(vi) The test to prove an attempt to illegally export as laid down in the case of Mohd. Yakub has not beenthe criminal case, no charge was framed. Respondent was discharged only on the ground that she had not been found liable in the civil proceedings.54. Appellant in the said proceedings had no role to play. We, therefore, are of the opinion that Regulation 13 is intra vires. We are bound by the decision of this Court in Ajit Kumar Nag (supra). The Board of Directors, in the aforementioned fact situation, must be held to have public interest in mind.55. In Kanhaiyalal Agrawal and Others v. Factory Manager, Gwalior Sugar Company Ltd. [(2001) 9 SCC 609] , whereupon Mr. Lalit placed strong reliance, this Court upheld the findings of the Industrial Court as also the High Court that the principles for invoking loss of confidence in the employee based on objective criteria , viz., (i) that the workman is holding a position of trust and confidence; (ii) by abusing such position, he commits acts which results in forfeiting the same; and (iii) to continue him in service would be embarrassing and inconvenient to the employer or would be detrimental to the discipline or security of the establishment; stood satisfied.56. True, loss of confidence cannot be subjective but there must be objective facts which would lead to a definite inference of apprehension in the mind of the employer regarding trustworthiness of the employee and which must be alleged and proved. But, then all the criteria mentioned therein are present in the instant case.57. The question which now arises is as to whether the Regulation 13 is applicable to the case of Respondent. Section 45 of the 1953 Act provides for regulation making power of the Corporation. It extends to the terms and conditions of service of officers and other employees of the Corporation other than the Managing Director and officers of any other categories referred to in Section 44 of the 1953 Act. Regulations were framed pursuant to or in furtherance of the said regulation making power. Regulation 13, as it stood earlier, did not contain any power in the Board of Directors to terminate the services of an employee. Regulation 13 speaks of lack of confidence. Regulation 13 came into force with effect from 1.3.1993. Respondent indisputably was appointed prior thereto.58. A question arose as to whether by reason of the repealing provisions contained in the 1994 Act, the Regulations framed under the 1953 Act survives and consequently the exercise of powers under Regulation 13 shall be void ab initio.59. Our attention has been drawn to a decision of this Court in Air India v. Union of India and Ors. [JT 1995 (5) SC 578 ] wherein it was8 of the 1994 Act does not in express terms save the said Regulations, nor does it mention them. Section 8 only protects the remuneration, terms and conditions and rights and privileges of those who were in Air Indias employment when the 1994 Act came into force. Such saving in undoubtedly "to quieten doubts" of those Air India employees who were then in service. What is enacted in Section 8 does not cover those employees who joined Air Indias service after the 1994 Act came into force. The limited saving enacted in Section 8 does not, in our opinion, extent to the said Regulations.The said decision was rendered when a question was raised as to whether standing orders framed under Industrial Employment (Standing Orders) Act, 1946 survives the regulation making power. It was held that the regulations have ceased to be effective on 29th January, 1994 and, thus, regulation making power no longer survives.61. Mr. Bhasin would submit that the provisions of the Regulations would apply to Respondent as:(i) She never disputed the application of the Regulations.(ii) A Special Leave Petition covering the same area being SLP (C) No. 2230-31 of 2005 is pending before this Court.62. As at present advised, we do not intend to enter into the said controversy. The judgment of this Court in Air India (supra) is binding on us. We have, therefore, no other option but to hold that Regulation 13 would not apply to the case of Respondent. However, despite the same, we are of the opinion that the interest of justice would be subserved if the nature of relief to Respondent granted by the High Court is upheld.63. We, therefore, hold that although Regulation 13 is not unconstitutional but the same is not applicable in case of Respondent. However, we are furthermore of the opinion that in the peculiar facts and circumstances of this case and keeping in view the fact that she had put in 20 years of service she be paid eight years salary towards both back wages as well as for loss of employment in future. This will be on the basis of her last drawn basic pay and dearness allowance. The Corporation will pay Respondent the amount refunded by her towards the provident fund and gratuity at the rate of interest provided under the Statutes governing them. The relief granted to Respondent shall, in our opinion, subserve the interest of justice.