TMI Blog2008 (5) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it is necessary to highlight it to understand the controversy raised in the present proceedings. 4. On March 23, 1974, U.P. State Mineral Development Corporation Ltd. ('Corporation' for short) was incorporated as a Government Company under Section 617 of the Companies Act, 1956. The Corporation was established with a view to provide acceleration in the field of mining and other incidental activities. Initially, the Corporation was floated with authorized share capital of ₹ 20 crores which was subsequently increased to ₹ 60 crores. It was a Government Company wherein 100% paid up share capital was by the State. It was thus completely owned by the Government. It was under the direct control and supervision of the State Government. The Corporation was thus an 'instrumentality' of the State. In the beginning, the Corporation showed profits. Subsequently, however, the financial status was deteriorated and it started incurring losses. The Board of Directors, therefore, on December 19, 1996 decided to retrench 460 employees. The Board was required to pay retrenchment compensation to those employees. Accordingly, a request was made to the State Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Court may deem just and proper in the circumstances of the case; and (iv) To allow the writ petition with all costs in favour of the petitioner. 6. It was the allegation of the Samiti in the writ petition that loss has been sustained by the Corporation because of various wrong policy decisions taken by the U.P. Government and the Corporation. Several employees of the Corporation were not paid their salary and they were facing great hardship. Their family members had also suffered a lot and they were on the verge of starvation. 7. A counter-affidavit was filed on behalf of the Corporation through its Managing Director. By way of preliminary objections, it was contended that the petition was premature inasmuch as no action of retrenchment was taken by the Corporation. Moreover, alternative and efficacious remedy under the U.P. Industrial Disputes Act was available to the petitioners. On merits, it was contended that in view of shrinkage in the activities of the Corporation and also increase of wage bill because of huge surplus manpower, the Board of Directors of the Corporation took a decision on December 19, 1996 to retrench excess employees in accordance with la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch prayer in a writ jurisdiction under Article 226 of the Constitution. It was also observed that in spite of the fact that virtually the Corporation had stopped its activities and the business had come to an end, by several interim orders passed from time to time, the High Court directed the Corporation and the State to pay salary to the workmen though they had not worked. By such interim orders, crores of rupees had been paid to the workmen. Highlighting the difficulties of the Government and Public Sector Undertakings in commercial establishments, His Lordship made larger and wider observations as to the policy of the Government in commercial matters. His Lordship recommended the Central and State Governments to rapidly privatize most of the public sectors and services like banks, telephone, electricity, water works, municipal services, etc. We, however, express no opinion on that issue. 9. As regards, the appellant-Corporation, His Lordship said that it was a 'totally sick' unit. On the prayers of the Samiti, it was observed that the workers had been treated over-indulgently. Most of them had been without work and were surplus and crores of rupees had been paid to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment Departments or Public Sector Undertakings. Various meetings were held for the said purpose and assurance was given to the Court by the Corporation as also on behalf of the Government. His Lordship, in the circumstances was of the view that the writ petition was required to be allowed. The petition was accordingly allowed and a writ in the nature of mandamus was issued directing the respondents to pay salary to the employees within four months from the date of the order and also to take necessary steps for their absorption in various organizations of the State Government/Public Sector Undertakings expeditiously. Liberty, however, was granted to the respondents to take appropriate steps for the retrenchment of the employees keeping in view the resolution passed by the Corporation. 13. In view of difference of opinion between two Hon'ble Judges of the Division Bench, an order was passed on the same day, signed by both the Hon'ble Judges to place the papers before the Hon'ble Chief Justice for constituting an appropriate Bench. 14. It appears that in view of cleavage of opinion, the matter was placed before a third Judge (Hon'ble Mr. Justice S.H.A. Raza), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 12153 of 2005. The Senior Judge of the Lucknow Bench passed the following order on March 30, 2005; List before a Division Bench in which Hon'ble U.K. Dhaon is a member in next week. 23. The matter was then placed before a Division Bench (Coram : U.K. Dhaon J.M. Paliwal, JJ.) The Corporation on May 9, 2005, filed supplementary counter-affidavit placing on record inter alia the following facts and materials; (i) Absorption Rules, 1991; (ii) Policy of the State Government regarding absorption of employees, dated July 10, 2000; (iii) Application for modification of undertaking of Harminder Raj Singh recorded in the order dated August 4, 1999; (iv) Absorption Rules, 2003. 24. On July 19, 2005, the Division Bench of the High Court, instead of deciding the writ petition decided the application, dated March 10, 2005 (which was for listing of the matter before a Division Bench). It was observed that the matter was heard and finally decided by the Hon'ble Third Judge in accordance with Rule 3 of Chapter VIII of the Allahabad High Court Rules, 1952 and, hence, no further order was required to be passed. The application was, therefore, rejected. 25. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for taking on record the supplementary counter-affidavit pointing out difficulties in absorption of the employees of the corporation, is not maintainable. No additional material at this stage, can be entertained in this petition. The application is, therefore, rejected. The writ petition is finally disposed of in the following terms; The writ petition is allowed and a writ of mandamus is issued directing the opposite parties to absorb the employees of the petitioners-association within four months from today in various organizations of the State Government/Public Sectors and to pay compensation, in accordance with law. However, it will be open for the opposite parties to take necessary steps for the retrenchment of the employees of the petitioners-association keeping in view the resolution dated 19.12.1996 of the Board of Directors of the Corporation. Parties shall bear their own costs. (emphasis supplied) 28. It is this order which is challenged by the appellants in the present appeal. 29. Notice was issued on December 11, 2006. The respondents appeared, accepted the notice and prayed time to file counter affidavit. Meanwhile, operation of the judgment was stayed. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rules framed by the State in exercise of power under proviso to Article 309 of the Constitution, viz. Uttar Pradesh Absorption of Retrenched Employees of Government or Public Corporations in Government Service Rules, 1991, as amended from time to time. A public authority cannot act inconsistent with or contrary to statutory rules. It was stated that no statement was made by any officer on behalf of the Corporation that the employees of the Corporation would be absorbed by the Government either in Government service or in any Public Sector Undertaking. But, even if some statement was made, it had no legal force and binding effect and cannot be enforced inasmuch as no statement could have been made which is not in consonance with law or against statutory rules. In the instant case, an application was also made by the Secretary of the Corporation stating therein that no assurance was given by him to the Court that the retrenched employees would be absorbed nor such assurance could be given by any one else. But the High Court, unfortunately, rejected the said application and proceeded to decide the matter on so-called assurance. According to the learned counsel, there can be no estoppe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts or other Public Sector Undertakings and such a decision cannot be said to be contrary to law. On behalf of the Corporation, an assurance was given that the employees would be absorbed. The Court was requested to grant time for the said purpose which has been done. No fault can be found against such an action and the grievance raised by the Corporation is not well-founded. The Court, considering all the facts and circumstances, issued certain directions which are in consonance with law. It was also stated that several interim orders which were passed by the Court from time to time were confirmed even by this Court. It was only because the matter was not placed before a Division Bench of the High Court and the earlier order was not complied with that this Court allowed the appeal filed by the State and remitted the matter to the High Court to be dealt with and decided by a Division Bench. But once the Division Bench has decided the matter and passed an order, no interference is called for. It was also submitted that the Government has absorbed several employees by adopting 'pick and choose' method which shows that it wants to oblige 'fortunate few' without any lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the ground that the impugned order was an appealable one and, therefore, before approaching this Court the petitioner should have approached the appellate authority. Though there is much substance in the above contention, we do not feel inclined to reject this petition on the ground of alternative remedy having regard to the fact that the petition has been entertained and an interim order passed . (emphasis supplied) 38. Even otherwise, the learned Judge was not right in law. True it is that issuance of rule nisi or passing of interim orders is a relevant consideration for not dismissing a petition if it appears to the High Court that the matter could be decided by a writ-Court. It has been so held even by this Court in several cases that even if alternative remedy is available, it cannot be held that a writ- petition is not maintainable. In our judgment, however, it cannot be laid down as a proposition of law that once a petition is admitted, it could never be dismissed on the ground of alternative remedy. If such bald contention is upheld, even this Court cannot order dismissal of a writ petition which ought not to have been entertained by the High Court under Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record and to consider them. The Court, however, rejected the prayer. In our opinion, the High Court was not right in rejecting such prayer. If there were statutory rules and such rules provide for absorption of employees on certain grounds and on fulfillment of some conditions laid down in those rules, it was the duty of the High Court to consider those rules and to decide whether under the statutory rules, such absorption could be ordered. 43. After all, the High Court was considering the prayer of the petitioners to grant a writ in the nature of mandamus. It was, therefore, expected of the High Court to keep in view the relevant provisions of law. The High Court mainly relied upon an assurance said to have been given by the Secretary on behalf of the Corporation that excess employees would be absorbed either in the Government Department or in other Public Sector Undertakings. From the record it appears that it was the case of the Secretary of the Corporation that no such assurance was given by him to the Hon'ble Court. But even if he had given such assurance, it was of no consequence since in the teeth of statutory rules, such assurance had no legal efficacy. Moreover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Court and a writ of mandamus was issued. 46. It is well settled that a Court of Law can direct the Government or an instrumentality of State by mandamus to act in consonance with law and not in violation of statutory provisions. Unless a Court records a finding that act of absorption of all employees of the Corporation either in Government Department or in any other Public Sector Undertaking is in accordance with law, no writ can be issued. Therefore, even on that ground, the directions of the High Court deserve to be set aside. 47. Regarding payment of compensation to the employees also, the High Court was not right. We have extracted the operative part of the order of the High Court in earlier part of the judgment. The High Court has stated that the appellants herein would absorb the employees of the Corporation and would pay compensation in accordance with law . It was contended by the Corporation that there was no foundation in the entire writ petition as to the provisions of law under which such compensation could be claimed and violation of the law by the Corporation or by the State. No finding has been recorded by the High Court that a specific or particular provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foregoing reasons, the appeal deserves to be allowed and the order passed by the High Court is liable to be set aside and is accordingly set aside. 52. Since we are of the view that one of the Hon'ble Judges of the Division Bench of the High Court which decided the matter at the initial stage was right in relegating the petitioners to avail of alternative remedy under the Industrial Law and as we hold that the High Court should not have entertained the petition and decided the matter on merits, we clarify that though the writ petition filed by the petitioners stands dismissed, it is open to the employees to approach an appropriate Court/Tribunal in accordance with law and to raise all contentions available to them. It is equally open to the Corporation and the State authorities to defend and support the action taken by them. As and when such a course is adopted by the employees, the Court/Tribunal will decide it strictly in accordance with law without being influenced by the fact that the writ petition filed by the writ petitioners is dismissed by this Court. 53. The appeal is allowed accordingly. Considering the facts and circumstances of the case, however, there shall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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