Case: Managing Director, Uttar Pradesh Warehousing Corporation Vs. Vijay Narayan Vajpayee

V. N. Vajpayee, respondent herein, was employed as a Warehouseman with the Corporation and at the relevant time was posted at the Kanpur Warehouse. There was a complaint of theft, misappropriation of stocks and various other irregularities against the respondent. A preliminary inquiry was held by the Managing Director of the Corporation and charges were framed against him and served upon him on November 28, 1960, requiring him to submit his explanation and to indicate the evidence, if any. On receiving the charge-sheet, the respondent addressed a communication, requesting the Managing Director to furnish him with certain papers, which were accordingly furnished. Thereafter, the respondent submitted his explanation on January 19, 1961. In this explanation, he specifically demanded that he wanted to cross-examine certain witnesses, the particulars of which were mentioned by him. He further gave the names and particulars of certain other witnesses, stating that he wanted to examine them, in defence. Nothing happened thereafter till April 18, 1961, on which date the Managing Director passed an order dismissing the respondent from service with effect from t he date of his suspension. Later on, a demand was made from the respondent, requiring him to remit a sum of Rs. 549.61 due to the Corporation on account of certain commodities said to have been misappropriated by the respondent on account of short realisation of storage charges by him.The respondent then filed a Writ Petition (No. 87 of 1962) under Article 226 of the Constitution, in the High Court praying for a writ of certiorari to quash the order of his dismissal on the ground that it was violative of the principles of natural justice, inasmuch as he had not been given an opportunity to cross-examine the witnesses and to establish his innocence. He further prayed for a direction that the Corporation be restrained from recovering the sum of Rs. 549.61 from him.In the counter-affidavit, the appellants stated that the respondent had also cross-examined the witnesses. It was further urged that there had also cross-examined the witnesses. It was further urged that there was no regulation provided for conducting an inquiry in aand, therefore, the remedy of the respondent was by way of a suit and he had no locus standi to invoke the extra-ordinary jurisdiction of the Court under Artic le 226 of the Constitution. It was further pleaded that the writ petition was delayed and should have been thrown out on that score,writ petition was heard by a learned Single Judge of the High Court, who dismissed it, holding that the Corporation was not required to act in a quasi-judicial manner and that the provisions of Article 311 of the Constitution were not applicable to the facts of thethe respondent carried a special appeal to a Division Bench of the High Court, which has reversed the judgment of the learned Single Judge, and has held that the Corporation was required to act in a quasi-judicial manner and, therefore, the writ petition was maintainable. The Division Bench remanded the case for a decision on merits. After the remand, the learned Single Judge by his judgment, dated December 7, 1966, allowed the writ petition, holding that the principles of natural justice had been violated. He, therefore, quashed the order of the respondents dismissal, but refused to grant an injunction restraining the appellant for realizing Rs. 549.61 from the respondent. The Corporation again preferred a Special Appeal No. 4 of 1967 to a Division Bench of the High Court, which dismissed that appeal by a judgment, dated August 6, 1969. Hence this appeal by the Corporation.

Court's reasoning:
The appellant is a Corporation constituted under the Uttar Pradesh State Warehousing Corporation (Act 28) of 1956, which was subsequently replaced by the Central Act 58 of 1962. It is a statutory body wholly controlled and man aged by the Government. Its status is analogous to that of the Corporations which were under consideration in Sukhdev Singhs case (ibid). The ratio of Sukhdev Singhs case, therefore, squarely applies to the present case. Even if at the time of the dismissal, the statutory regulations had not been framed or had not come into force, then also the employment of the respondent was public employment and the statutory body, the employer, could not terminate the services of its employee without due enquiry in accordance with the statutory Regulations, if any in force, or in the absence of such Regulations, in accordance with the rules of natural justice. Such an enquiry into the conduct of a public employee is of a quasi-judicial character. The respondent was employed by the appellant-Corporation in exercise of the powers conferred on it by the statute which created it. The appellants power to dismiss the respondent from service was also derived from the statute. The Court would therefore, presume the existence of a duty on the part of the dismissing authority to observe the rules of natural justice, and to act in accordance with the spirit of Regulation 16, which was then on t he anvil and came into force shortly after the impugned dismissal. The rules of natural justice in the circumstances of the case, required that the respondent should be given a reasonable opportunity to deny his guilt, to defend himself and to establish his innocence which means and includes an opportunity to cross-examine the witnesses relied upon by the appellant-Corporation and an opportunity to lead evidence in defence of the charge as also a show-cause notice for the proposed punishment. Such an opportunity was denied to the respondent in the instant case. Admittedly, the respondent was not allowed to lead evidence in defence. Further, he was not allowed to cross-examine certain persons whose statements were not recorded by the Enquiry Officer (Opposite Party No. 1) in the presence of the respondent. There was controversy on this point. But it was clear to the High Court from the report of enquiry by the Opposite Party No. 1 that he relied upon the reports of some persons and the statements of some other persons who were not examined by him. A regular departmental enquiry takes place only after the charge-sheet is drawn up and served upon the delinquent and the latters explanation is obtained. In the present case, no such enquiry was held and the order of dismissal was passed summarily after perusing the respondents explanation. The rules of natural justice in this case, were honoured in total breach. The impugned order of dismissal was thus bad in law and had been rightly set aside by the Highmust be remembered that in the exercise of its certiorari jurisdiction under Article 226 of the Constitution, the High Court acts only in a supervisory capacity and not as an appellate tribunal. It does not review the evidence upon which the inferior tribunal proposed to base its conclusion; it simply demolishes the order which it considers to be without jurisdiction or manifestly erroneous, but does not, as a rule, substitute its own view for those of the inferior tribunal. In other words, the offending order or the impugned illegal proceeding is quashed and put out of the way as one which should not be used to the detriment of the writ petitioner. Thus in matters of employment, while exercising its supervisory jurisdiction under Article 226 of the Constitution, over the order and quasi-judicial proceeding of an administrative authority-not being a proceeding under the industrial law/labour law before an industrial/labour tribunal-culminating in dismissal of the employee, the High Court should ordinarily. in the event of t he dismissal being found illegal, simply quash the same and should not further give a positive direction for payment to the employee full back wages (although as consequence of the annulment of the dismissal, the position as it obtained immediately before the dismissal is restored), such peculiar powers can properly be exercised in a case where the impugned adjudication or award has been given by an Industrial Tribunal or Labour Court. The instant case is not one under Industrial/Labour Law. The respondent employee never raised any industrial dispute, nor invoked the jurisdiction of the Labour Court or the Industrial Tribunal. He directly moved the High Court for the exercise of its special jurisdiction under Article 22 6 of the Constitution for challenging the order of dismissal primarily on the ground that it was violative of the principles of natural justice which required that his public employment should not be terminated without giving him a due opportunity to defend himself and to rebut the charges against him. Furthermore, whether a workman or employee of a statutory authority should be reinstated in public employment with or without full back wages, is a question of fact depending on evidence to be produced before the tribunal. If after the termination of his employment the workman/employee was gainfully employed elsewhere, that is one of the important factors to be considered in determining whether or not the rein statement should be with full back wages and with continuity ofe was dismissed from service. The employer dismissed him, without observing the principles of natural justice. This has been found by the High Court who quashed the order of dismissal in a proceeding under Art. 226 of the Constitution. The employer has appealed. The employer claims that a declaration to enforce a contract of personal service cannot be granted by the Court. The only remedy of the employee, he pleads, is to file a suit for damages for wrongful dismissal. The answer of the employer is that the employer is a statutory Corporation whose employees have statutory status, and that the employer is bound by the regulations made under the statute as also to observe the principles of natural justice. Breach of the regulations or failure to observe the principles of natural justice entitles the employee to invoke the jurisdiction of the High Court under Article 226 of thequestion whether breach of statutory regulations or failures to observe the principles of natural justice by a statutory Corporation will entitle an employee of such Corporation to claim a declaration of continuance in service and the question whether the employee is entitled to the protection of Arts. 14 and 16 against the Corporation were considered at great length in Sukhdev Singh &Ors. v. Bhagatram Sardar Singh Raghuvanshi &Anr.(1) The question as to who may be considered to be agencies or instrumentalities of the Government was also considered, again at some length, by this Court in Rama na Dayaram Shetty v. The International Airport Authority of India &Ors.(2)I find it very hard indeed to discover any distinction, on principle, between a person directly under the employment of the Government and a person under the employment of an agency or instrumentality of the Government or a Corporation, set up under a statute or incorporated but wholly owned by the Government. It is self evident and trite to say that the function of the State has long since ceased to be confined to the preservation of the public peace, the exaction of taxes and the defence of its frontiers. It is now the function of the State to secure `social, economic and political justice, to preserve `liberty of thought, expression, belief, faith and worship, and to ensure `equality of status and of opportunity. That is the proclamation of the people in the preamble to the Constitution. The desire to attain these objectives has necessarily resulted in intense Governmental activity in manifold ways. Legislative and executive activity have reached very far and have touched very many aspects of a citizens life. The Government, directly or through the Corporations, set up by it or owned by it , now owns or manages, a large number of industries and institutions. It is the biggest builder in the country. Mammoth and minor irrigation projects, heavy and light engineering projects, projects of various kinds are undertaken by the Government. The Government is also the biggest trader in the country. The State and the multitudinous agencies and Corporations set up by it are the principal purchasers of the produce and the products of our country and they control a vast and complex machinery of distribution. The Government, its agencies and instrumentalities, Corporations set up by the Government under statutes and Corporations incorporated under the Companies Act but owned by the Government have thus become the biggest employers in the country. There is no good reason why, if Government is bound to observe the equality clauses of the constitution in the matter of employment and in its dealings with the employees, the Corporations set up or owned by the Government should not be equally bound and why, instead, such Corporations could become citadels of patronage and arbitrary action. In a country like ours which teems with population, where the State, its agencies, its instrumentalities and its Corporations are the biggest employers and where millions seek employment and security, to confirm the applicability of the equality clauses of the constitution, in relation to matters of employment, strictly to direct employment under the Government is perhaps to mock at the Constitution and the people. Some element of public employment is all that is necessary to take the employee beyond the reach of the rule which denies him access to a Court so enforce a contract of employment and denies him the protection of Arts. 14 and 16 of the Constitution. After all employment in the public sector has grown to vast dimensions and employees in the public sector often discharge as onerous duties as civil servants and participate in activities vital to our countrys economy. In growing realization of the importance of employment in the public sector, Parliament and the Legislatures of the States have declared persons in the service of local authorities, Government companies and statutory corporations as public servants and, extended to them by express enactment the protection usually extended to civil servants from suits and prosecution. It is, therefore, but right that the independence and integrity of those employed in the public sector should be secured as much as the independence and integrity of civil servants.I agree with what has been said by my brother Sarkaria J. I have added a few lines to emphasise some aspects of the problem.