TMI Blog1987 (10) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, drew the attention of the authorities to these complaints by addressing letters to the General Manager. It is submitted that the quality of the bread did not improve, but on account of the petitioner bringing to the notice of the authorities complaints made by the customers and merchants, the petitioner incurred the wrath of the Chairman-cum-Managing Director of the Company. Petitioner's case is that in the seniority list of Sales Manager Grade-II issued in December 1978, he was at the top of the list of nine officers. 3. In the Confidential Report for the year ended on March 31, 1978, the general evaluation of the petitioner's performance was Sincere, able and hard working. He has the market sense. In column No. 9 regarding fitness for promotion to a higher grade, in the Confidential Report it was stated Quite fit . The entries made in the other column of this Confidential Report are stated in paragraph 5 of the petition. The Chief Marketing Manager agreed with the aforesaid remarks made by the Chief Manager in his Confidential Report. However, the Chairman-cum-Managing Director, respondent No. 2 herein who is the reviewing authority made a note to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed this Court challenging the legality and validity of the said order. 5. The petitioner contends that respondent No. 1 is a Government Company in which 21293 shares of ₹ 1,000/- each are held by the Central Government. The Food Corporation of India. Delhi Administration and States of Gujarat, Kerala, Maharashtra, Tamilnadu and West Bengal each hold one share of ₹ 1,000/- in the Company. According to the petitioner, 99% of the shares are held by the Central Government and remaining shares are held by the State Governments and Statutory Corporations controlled by the Central Government. It is submitted that there are no private share-holders and the Company is wholly owned by the Central Government. The Directors of the Company are also nominated by the Central Government. There is complete financial control of the Central Government and all decisions of the Company are also controlled by the Central Government. It is stated that the Company performs public functions in as much as one of its objects is to manufacture and distribute nutritious bread at cheap rates to the hungry millions of India. It is submitted that having regard to the principles laid down by variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this Court. It is submitted on behalf of the respondents that no part of cause of action having arisen within the jurisdiction of this Court, this Court has no jurisdiction to entertain this petition. On the other hand it is submitted on behalf of the petitioner that part of cause of action has arisen within the jurisdiction of this Court in as much as the impugned order Annexure 'I' terminating the services of the petitioner was served on the petitioner at Ahmedabad, where he was staying while on leave. 9. In State of Punjab v. Amar Singh Harika, one of the questions which arose for consideration before the Supreme Court was when does dismissal of Government servant become effective ? Does it become effective on the mere passing of the order of dismissal or only after it is published and communicated to the officer concerned ? Respondent Amar Singh Harika, in the appeal before the Supreme Court, was Assistant Director, Civil Supplies in the Patiala and East Punjab States Union ('Pepsu' for short). He was dismissed from service by an order purported to have been passed on June 3, 1949. Respondent Amar Singh was informed on May 28, 1951 by Bishan Chand, Assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns which were raised before the Supreme Court was as to when the order of dismissal became effective. The evidence disclosed that respondent Amar Singh came to know about the order dismissing him from service on May, 28, 1951, when he was informed by Bishan Chand, Assistant Comptroller, Pepsu that the record of the office showed that he had been dismissed from Government service with effect from the date of his suspension. It was, however, urged before the Supreme Court that though respondent Amar Singh came to know about the order of his dismissal for the first time on May 28, 1951, the said order must be deemed to have taken effect from June 3, 1949 when it was actually passed. The High Court had rejected this contention. The Supreme Court also rejected this contention. It was held at pp 191-192 that mere passing of the order of dismissal would not be effective unless it is published and communicated to the officer concerned. If the appointing authority passes the order of dismissal but does not communicate it to the officer concerned, theoretically, it is possible that unlike in the case of judicial order pronounced in Court, the authority may change its mind and decide to modif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t his Calcutta residence. The appellant's appeal against the order of removal was dismissed by the Board of Directors. Both the orders of removal and dismissing appeal were passed at New Delhi. The appellant filed a writ petition in the Calcutta High Court challenging the validity of the order of removal and the order of Board of Directors dismissing the appeal. The learned single Judge who heard the writ petition took a view that the Calcutta High Court had no jurisdiction entertain and hear the writ petition for the appellant served all along in Madhya Pradesh and the order of removal and order of dismissal of the appeal were both passed in New Delhi. In the opinion of the learned judge either the Madhya Pradesh High Court or Delhi High Court but not the Calcutta High Court had jurisdiction in the matter. In that view of the matter, the learned Judge discharged the rule nisi issued on the writ petition of the appellant. In the background of these facts, the question which arose for consideration before the Division Bench of the Calcutta High Court was whether the order of removal became effective only when it was served on the appellant in Calcutta or when it was put into the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent from service. The respondent received a copy of the order by registered post on September 11, 1982 while he was in Badagara within the State of Kerala. The respondent filed a writ petition in the Kerala High Court for quashing the order removing him from service and consequential reliefs. One of the contentions which was raised on behalf of the appellant before the learned single Judge, who heard the respondent's petition, was that Kerala High Court had no jurisdiction to entertain the respondent's petition in as much as no part of cause of action had arisen within the jurisdiction of that Court. The learned single Judge, however, rejected this contention, holding that the respondent was apprised of the order of removal from service only on receipt thereof when he was at Mayyabhoor in Badagara, that the order of removal became effective so far as the respondent was concerned only on his being apprised of the order, and that therefore part of the cause of action had thus arisen within the territorial limits of Kerala High Court. The learned single Judge held that the order of removal was illegal and consequently allowed the writ petition of the respondent. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been served on the petitioner at Calcutta, where he was working as Sales Manager. However, since the petitioner was on leave, it was served on him at his Ahmedabad address, where he was staying, during his absence on leave. However, the mere fact that the petitioner happened to be in Ahmedabad and the impugned order happened to be served at Ahmedabad would not confer jurisdiction on this Court. The petitioner, it may be recalled, was working as Sales Manager at Ahmedabad before he was transferred to Calcutta. After his transfer to Calcutta, it appears, the petitioner had kept his family at Ahmedabad for the education of his children. It was, therefore, that when he proceeded on leave, the petitioner came to Ahmedabad to live with his family. The fact that the petitioner was at Ahmedabad was known to the respondents and that is evident from the order Annexure 'I' wherein the residential address of the petitioner where the order was served is stated. It is not as if the petitioner got the order served on him at Ahmedabad so as to confer jurisdiction on this Court. In other words, he did not come to Ahmedabad to see that the impugned order was served on him there so that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from service. It was held that in case of a claim arising out of the order of termination, the cause of action would arise at a place where the order of termination of service was made and also at a place where the consequence fell on the servant. It was urged that in the instant case, the impugned order was passed at New Delhi and the consequence thereof fell at Calcutta in as much as the petitioner would stand removed from service at Calcutta. The impugned order having been made outside the jurisdiction of this Court and consequence there of also having fallen outside the jurisdiction of this Court, this Court will have no jurisdiction to entertain this petition. I am unable to accept this submission. I fail to see how the Bombay decision would help the respondents. As held by the Bombay High Court, the consequence of the impugned order would be actual removal from service. In other words, the petitioner has to establish that not only the order removing him from service was passed, but the consequence thereof, namely actual removal from service, had fallen on him. The petitioner has established both these facts. There is no dispute that the impugned order has been passed and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les and to the rights of the President, the shares shall be under the control of the Directors, who may allot or otherwise dispose of the same to such persons on such terms and conditions as they think fit. Article 7 provides for increase of capital by the Company, but it makes it clear such increase shall be subject to the approval of the President. Similarly under Art. 9, the approval of the President is necessary for reduction of the capital. Sun-division and consolidation of shares also requires the approval of the President under Art. 10. Under Art. 61, payment or repayment of moneys borrowed could be secured only with the approval of the President. Issue of debentures is also made subject to the approval of the President under Art. 62. Article 72 provides for the right of the President to appoint any person as his representative at all or any meetings of the Company and the person so appointed is deemed to be a member of the Company with all the rights and powers including right to vote by proxy. Article 96 confers powers on the President to appoint Directors. Clause (1) of the said Art. 96 provides that the Directors shall be appointed by the President in consultation with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the conditions that the schemes are included in the capital budget of the Company and approved by the Government. x x x x x x (11) To invest in the State Bank of India or in such securities as may be approved by the President and ........... x x x x x x (14) Subject to the approval of the President, to distribute by way of bonus or ex-gratia payment in the form of cash awards amongst the staff of the Company a share in the profits of the Company, and to give to any officers or other person employed by the Company a commission on the profits of any particular business or transaction, and to charge such bonus or commission as part of the working expenses of the Company. Declaration of dividend under Art. 124 also is to be with the approval of the President. The mode of auditing accounts is provided for in Art. 143. The Comptroller and Auditor General of India has been empowered to direct the manner in which the Company's accounts shall be audited by the Auditor/Auditors and to give such Auditor/Auditors instructions in regard to any matter relating to the performance of his/their functions as such; and to conduct a supplementary or test audit of the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The question as to when a Corporation can be regarded as 'authority' within the meaning of Art. 12, arose for consideration before the Supreme Court in R. D. Shetty v. The International Airport Authority of India. The tests for determining as to when a Corporation can be said to be an instrumentality or agency of Government were culled out from the said judgment by the Supreme Court in its another judgment in Ajay Hasia v. Khalid Mujib. The relevant tests were summarised as follows at pp. 112-113 of: (1) One thing is clear that if the entire share capital of the Corporation is held by Government it would go a long way towards indicating that the Corporation is an instrumentality or agency of Government. (2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the Corporation, it would afford some indication of the Corporation being impregnated with Government character. (3) It may also be a relevant factor .... whether the Corporation enjoys monopoly status which is the State conferred or State protected. (4) Existence of 'deep and pervasive' State control may afford an indication that the Corporation is a Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court under Art. 226 of the Constitution. 21. This brings me to the question of validity of Regulation 2.18 of the Staff Regulations. This Regulation reads as under : 2.18 Termination of service (i) The services of any confirmed employee may be terminated by the competent authority on giving him : (a) 90 days' notice or pay in lieu thereof in case of an employee belonging to Cat. I or II. (b) 60 days' notice or pay in lieu thereof in the case of employees belonging to Cat. III. (ii) The authority competent to appoint shall be the competent authority for the purpose of this regulation. It is contended on behalf of the petitioner that the aforesaid regulation confers absolute and unguided power on the Company in the matter of termination of confirmed employees. It is submitted that this provision is clearly arbitrary, discriminatory and violative of Arts. 14, 16, 38 and 39 of the Constitution and contrary to public policy. 22. Rule similar to the aforesaid regulation had come up for consideration before the Supreme Court in Central Inland Water Transport Corporation Ltd. Anr. v. Brojo Nath Ganguly Anr. (supra). There the Supreme Court was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nciples of natural justice are not the creation of Art. 14. Article 14 is not their begetter but their constitutional guardian. There was no justification for exclusion of audi alteram partem rule in Rule 9(i). The Supreme Court further held that power conferred by Rule 9(i) was not only arbitrary but was also discriminatory for it enabled the Corporation to discriminate between employee and employee. It could pick up one employee and apply to him clause (i) of Rule 9. It could pick the another employee and apply to him clause (ii) of Rule 9. It could pick up yet another employee an apply to him sub-clause (iv) of clause (b) of Rule 36 read with Rule 38 and to yet another employee it could apply Rule 37. It was observed that all this the Corporation could do when the same circumstances existed as would justify the Corporation in holding under Rule 38 a regular disciplinary inquiry into alleged misconduct of the employee. The Supreme Court further held that a clause such as Rule 9(i) in a contract of employment affecting large sections of the public is harmful and injurious to the public interest for it tends to create a sense of insecurity in the minds of those to whom it applies a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the I.T.D.C. Rules, the constitutional validity of which was challenged before the Supreme Court, provides as follows : 31. Termination of services-The services of an employee may be terminated by giving such notice or notice pay as may be prescribed in the contract of service in the following manner : (v) Of an employee who has completed his probationary period and who has been confirmed or deemed to be confirmed by giving him 90 days' notice or pay in lieu thereof. It would appear that aforesaid Rule 31(v) of the I.T.D.C. Rules in similar to Regulation 2.18 under consideration in the instant case. For the reasons stated in C.I.W.D.C. v. B. N. Ganguly (supra) and O. P. Bhandaria's case (supra) which apply with equal force to Regulation 2.18 in the instant case, Regulation 2.18 must be held to be illegal and ultra vires and violative of Arts. 14 and 16(1) of the Constitution of India. Once Regulation 2.18 is held to be illegal and ultra vires, the impugned order Annexure 'I' founded on it must consequently fail. In other words, order Annexure 'I', by which the petitioner's services were terminated under Regulation 2.18 must be held to be i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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