TMI Blog2006 (11) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... funded 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. - CIVIL APPEAL NO. 4767 of 2006 & 4768 OF 2006 - - - Dated:- 10-11-2006 - S.B. Sinha Dalveer Bhandari JJ. For Appellant: Ms. Akansha, Adv. Ms. Nina Gupta, Adv. Ms. Neha, Adv. Ms. Bina Gupta, Adv. For Respondent: Mr. Aribam Guneshwar Sharma, Adv. JUDGMENT: S.B. SINHA, J. Leave granted in S.L.Ps. Constitutionality and/ or validity of Regulation 13 of the Indian Airlines (Flying Crew) Service Regulations (for short the Regulations ) is in question in these appeals which arise out of a judgment and order dated 30th August, 2005 passed by the High Court of Bombay in Writ Petition No. 2030 of 2003. Indian Airlines Ltd. (Corporation) was constituted under the Air Corporation Act, 1953 (for short the 1953 Act). Regulations were framed by Appellant No. 1 in the year 1994 by Act No. 13 of 1994. The Parliament enacted Air Corporations (Transfer of Undertakings and Repeal) Act, 1994 (for short the 1994 Act ) whereby and whereunder, the right, title ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 SCC 156], the relevant portion whereof was as under: 9. Termination of employment for Acts other than misdemeanour. (i) The employment of a permanent employee shall be subject to termination on three months' notice on either side. The notice shall be in writing on either side. The Company may pay the equivalent of three months' basic pay and dearness allowance, if any, in lieu of notice or may deduct a like amount when the employee has failed to give due notice Constitution of India contains a provision for dispensing with an inquiry in terms of proviso (b) appended to clause (2) of Article 311 of the Constitution of India in regard to commission of a misconduct on the grounds specified therein. The question as to whether services of a permanent employee can be terminated on the ground that it was no longer expedient to continue to employ the employee concerned initially came up for consideration in the case of Workmen of Hindustan Steel Ltd. and Another v. Hindustan Steel Ltd. and Others [1984 Supp SCC 554]. A Division Bench of this Court while comparing the said provisions with the proviso (b) appended to clause (2) of Article 311 of the Constitution of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as observed: It is time for such a public sector undertaking as Hindustan Steel Ltd. to recast S.O. 32 and to bring it in tune with the philosophy of the Constitution failing which it being other authority and therefore a State under Article 12 in an appropriate proceeding, the vires of S.O. 32 will have to be examined. It is not necessary to do so in the present case because even on the terms of S.O. 32, the order made by the General Manager is unsustainable. The validity or otherwise of the said proviso came up for consideration before this Court in Union of India and Another v. Tulsiram Patel [(1985) 3 SCC 398] wherein inter alia it was held: Much as this may seem harsh and oppressive to a government servant, this Court must not forget that the object underlying the second proviso is public policy, public interest and public good and the Court must, therefore, repel the temptation to be carried away by feelings of commiseration and sympathy for those government servants who have been dismissed, removed or reduced in rank by applying the second proviso. Sympathy and commiseration cannot be allowed to outweigh considerations of public policy, concern for public intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, appears that it specially referred to the case of Air India Regulations which had a similar clause. It was observed: Undoubtedly, in certain circumstances the principles of natural justice can be modified and, in exceptional cases, can even be excluded as pointed out in Tulsiram Patel case. Rule 9(i), however, is not covered by any of the situations which would justify the total exclusion of the audi alteram partem rule. Air India and Indian Airlines who have similar regulations thereafter amended Regulation 13. A similar question came up for consideration before this Court in Delhi Transport Corporation v. D.T.C. Mazdoor Congress and Others [1991 Supp (1) SCC 600] wherein this Court specifically referred to Regulation 9(b) of Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations. Sabyasachi Mukharji, CJ who delivered the minority opinion noticed the regulation framed by Indian Airlines in the following terms: 13. The services of an employee are terminable at 30 days on either side or basic pay in lieu: Provided, however, the Corporation will be at liberty to refuse to accept the termination of his service by an employee where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trine of reading down is according to me singularly inapplicable to the present case and the arguments in support of the same have to be rejected. Sawant, J. while considering the doctrine of reading down noticed: In fact, one of the public undertakings, viz., Indian Airlines has come out with such regulation being amended Regulation 13 of its Employees' Service Regulations, and the same has been placed on record by them. What is necessary to note in this connection is that the reading of such circumstances in the existing regulation would require its extensive recasting which is impermissible for the court to do. I know of no authority which supports such wide reading down of any provision of the statute or rule/regulation. For all these reasons the doctrine of reading down is according to me singularly inapplicable to the present case and the arguments in support of the same have to be rejected. Sawant, J. and Ramaswamy, J. adopted the reasonings of Ray, J. The learned Judges, however, did not deal with the question as to whether Regulation 13 could be said to be ultra vires. Amended Regulation also came up for consideration before this Court in Hari Pad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, that the audi alteram partem facet of natural justice is also a requirement of Article 14, for natural justice is the antithesis of arbitrariness. In the sphere of public employment, it is well settled that any action taken by the employer against an employee must be fair, just and reasonable which are the components of fair treatment. The conferment of absolute power to terminate the services of an employee is an antithesis to fair, just and reasonable treatment. This aspect was exhaustively considered by a Constitution Bench of this Court in Delhi Transport Corpn. v. D.T.C. Mazdoor Congress1. 11. In the light of these principles of law, we have to examine the scope of the provision of Section 35(3) which reads as follows: 35. (3) Any appointment or promotion made contrary to the provisions of the Act, statutes, rules or regulations or in any irregular or unauthorised manner shall be terminated at any time without notice. 12. The said provision provides that an appointment could be terminated at any time without notice if the same had been made contrary to the provisions of the Act, statutes, rules or regulations or in any irregular or unauthorised manner. The con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sharjah. When the flight landed at Hyderabad, she along with other crew members went for customs clearance from the Departure Hall to board the connecting flight being Flight No. 961 from Hyderabad to Sharjah via Bangalore. Immediately after take off, it was called back at the request of the Customs Authorities. Respondent was asked to deplane by Custom Authorities. She was arrested for carrying Indian currency amounting to ₹ 22,07,978/- along with foreign currency, viz., 180 UAE Dirhams, 13 Kuwaiti Dirhams, 3 Bahraini Dirhams and 20 Nepali Rupees. She is said to have made a confessional statement before the Custom Authorities in terms of Section 108 of the Customs Act that she had been carrying unauthorisedly the said amount. Her husband on the basis of her statement was also arrested. The arrest of Respondent and her involvement in a racket of dealing in foreign exchange in violation of Foreign Exchange and Regulation Act was extensively reported in newspapers on 19th June, 2002. Respondent was released on bail on 3rd July, 2002. Her services were terminated invoking Regulation 13 of the Regulations by the Board of Directors of the Corporation by a letter dated 9th August ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility and (c) security. Regulation, thus, provides for the specific contingencies specified therein. (iii) An assessment of such contingencies is required to be made by the highest available authority. What would be the material for arriving at a conclusion is a reasonable apprehension that the act on the part of the employee would be detrimental to the interest of the country. (iv) The High Court also failed to take into consideration the history of the precedents of this Court as also how the Regulation was amended having regard to the directions issued by this Court in Hindustan Steel Ltd. (supra). Strong reliance in this behalf has been placed on Ajit Kumar Nag v. General Manager (PJ) Indian Oil Corporation Ltd. Haldia and Others [(2005) 7 SCC 764]. Mr. Uday Umesh Lalit, learned senior counsel appearing on behalf of Respondent, per contra would submit: (i) that Regulation of Air India was not saved by Section 8 of the 1994 Act. (ii) Reference of the amended Regulation in Delhi Transport Corporation (supra) itself would not be a ground for upholding the validity thereof. (iii) Regulation 13 is arbitrary as no reason is required to be assigned as to which of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch, however, remained unclaimed. The Custom Authorities found the same. Only Respondent was singled out as the owner of the suit case. It is not in dispute that the suit case contained a large sum of money including foreign currencies. Whoever be the owner thereof did not make any declaration is regard thereto. ₹ 22 lakhs were recovered. She was arrested only on her confession. Thereafter only, the impugned order was passed. The Board of Directors consisting of five directors, viz., Shri Sunil Arora , Chairman Managing Director, IAL, Shri V. Subramanian, Jt. Secretary Financial Advisor, Ministry of Civil Aviation, Shri J.N. Gogoi, Offg. Managing Director, Air India, Shri S.K. Narula, Chairman, Airports Authority of India and Shri P.P. Vora, Chairman, IDBI, passed the impugned order. Evidently, there is no provision for appeal since the decision is taken by the highest authority of the corporate entity, viz., Board of Directors which includes the Chairman also. Appellant is a body corporate. No appeal can be made against the order passed by the Chairman and the Board of Directors. The order being passed by a highest authority, the question of providing for appeal wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registration of a criminal case against the workman, obviously, this Court was justified in observing that when the action was taken on the basis of pendency of a criminal case, the action of dismissal of the workman must abide by the result of the trial. The facts of the case before us are totally different. In this case, the General Manager has exercised the power under the second part of Standing Order 20(vi) which empowered him to take action on satisfaction for reasons to be recorded in writing that it was not in the interest of security to continue the workman in service. The direction in Hari Pada Khan therefore, does not apply to the factual matrix of the present case for claiming relief by the appellant. Referring to Tulsiram Patel (supra), this Court held that as security of a State is not involved and a limited power is conferred upon the General Manager being the highest administrative head of the Corporation, it cannot be contended that the power had been conferred upon a petty officer of the Corporation. It was further opined: 35. We are equally not impressed and hence unable to uphold the contention that clause (vi) of Standing Order 20 confers a blanket or unca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question whether the law implies a hearing to the member at that stage. It was further observed: 17. It is then urged by learned counsel for the appellant that the provision of an appeal under Section 22-A of the Act is a complete safeguard against any insufficiency in the original proceeding before the Council, and it is not mandatory that the member should be heard by the Council before it proceeds to record its finding. Section 22-A of the Act entitles a member to prefer an appeal to the High Court against an order of the Council imposing a penalty under Section 21(4) of the Act. It is pointed out that no limitation has been imposed on the scope of the appeal, and that an appellant is entitled to urge before the High Court every ground which was available to him before the Council. Any insufficiency, it is said, can be cured by resort to such appeal. Learned counsel apparently has in mind the view taken in some cases that an appeal provides an adequate remedy for a defect in procedure during the original proceeding. Some of those cases as mentioned in Sir William Wade's erudite and classic work on Administrative Law 5th Edn. But as that learned author observes (at p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d may indicate that the power so conferred is unreasonable or arbitrary but it is obvious that providing such corrective machinery is only one of the several ways in which the power could be checked or controlled and its absence will be one of the factors to be considered along with several others before coming to the conclusion that the power so conferred is unreasonable or arbitrary; in other words mere absence of a corrective machinery by way of appeal or revision by itself would not make the power unreasonable or arbitrary, much less would render the provision invalid. Regard will have to be had to several factors, such as, on whom the power is conferred whether on a high official or a petty officer, what is the nature of the power whether the exercise thereof depends upon the subjective satisfaction of the authority or body on whom it is conferred or is it to be exercised objectively by reference to some existing facts or tests, whether or not it is a quasi-judicial power requiring that authority or body to observe principles of natural justice and make a speaking order etc.; the last mentioned factor particularly ensures application of mind on the part of the authority or b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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. In S.N. Chandrashekar v. State of Karnataka [(2006) 3 SCC 208], this Court observed: 33. It is now well known that the concept of error of law includes the giving of reasons that are bad in law or (where there is a duty to give reason) inconsistent, unintelligible or substantially inadequate. (See de Smith's Judicial Review of Administrative Action, 5th Edn., p. 286.) 34. The Authority, therefore, posed unto itself a wrong question. What, therefore, was necessary to be considered by BDA was whether the ingredients contained in Section 14-A of the Act were fulfilled and whether the requirements of the proviso appended thereto are satisfied. If the same had not been satisfied, the requirements of the law must be held to have not been satisfied. If there had been no proper application of mind as regards the requirements of law, the State and the Planning Authority must be held to have misdirected themselves in law which would vitiate the impugned judgment. 35. In Hin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtionality issue. Although it is of not much relevance but the history in relation to such regulation assumes importance in view of the fact that this Court in Hindustan Steel Ltd. (supra) directed framing of Regulation in the light of proviso (b) appended to Clause (2) of Article 311 of the Constitution of India. Regulation 13 has been amended accordingly. So far as the justifiability of the impugned order is concerned, we are of the opinion that the following facts are required to be taken into consideration. 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... detrimental to the discipline or security of the establishment; stood satisfied. 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. 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. A questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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