IMPORTANT POINT
A Writ petition which is premature inasmuch and involves disputed questions of fact cannot be maintained.

Headnote:(a) Allahabad High Court Rules, 1952 – Rule 3, Chapter VIII – When owing to the cleavage of opinion between the two Judges of the Division Bench the matter was referred to third Judge who ordered the matter to be placed before the Division Bench for final orders, it ought to have been done – Even if Review was rejected against the order passed by the third Judge, proper procedure was required to be followed. (Para 25)
        (b) Constitution of India – Article 226 – Writ petition being premature inasmuch as no retrenchment had been effected and involving several disputed questions of fact, was not maintainable – Moreover, the Samiti had its remedies under Industrial law against illegal closure of Undertaking or non-payment of wages by the employer. (Para 35)
        (c) Constitution of India – Article 226 – It is not a legal position that once a petition is admitted, it cannot be dismissed on the ground of alternate remedy. (Para 36)
        (d) Judicial Review – Reporting of judgments – In the ‘head note’ of All India Reporter (AIR), it is stated that “petition cannot be rejected on the ground of availability of alternative remedy of filing appeal” – But it has not been so held in the actual decision of the Court. (Para 36)
        (e) Constitution of India – Article 226 – Keeping in view the reduced work of the Corporation, its financial condition resulting in its decision of retrenchment, it would have been appropriate for the High Court not to entertain the petition. (Para 39)
        (1998) 6 SCC 549 – Relied upon.
        AIR 1992 All 331; AIR 1988 All 151 – Referred.
        (f) Constitution of India – Article 226 – If there were statutory rules and such rules provided for absorption of employees on certain grounds and on fulfillment of some conditions laid down in those rules; before ordering absorption, High Court ought to have considered those rules – In absence thereof impugned order cannot be sustained – Any assurance given by the Secretary was of no relevance in the teeth of the rules – Well settled that there can be no estoppel against a statute. (Paras 42 and 44)
        (g) Constitution of India – Article 226 – High Court directing payment of compensation without assigning an reason – No such blanket direction could have been issued by the High Court which was not even capable of implementation. (Para 47)
       Facts of the case :
        1. The respondent-Corporation is an ‘instrumentality’ of the State. In the beginning, the Corporation showed profits. Subsequently, however, the financial status deteriorated and it started incurring losses.
        2. The Board of Directors, therefore, on December 19, 1996 decided to retrench 460 employees.
        3. Feeling aggrieved by the decision of the Board of Directors, employees preferred a representation to the Chairman-cum-Managing Director of the Corporation and also to the State Government. No final order of retrenchment was, however, passed.
        4. Since neither the Corporation nor the Government gave assurance with regard to continuation or otherwise of the Corporation, nor as to absorption of employees working in the Corporation in the State Government or any other Corporation, the Samiti was constrained to file a writ petition in the High Court which was ultimately allowed.
       Findings of the Court :
        The impugned judgment is fit to be set aside and the writ dismissed.
       Result : Appeal allowed.

Judgement Key Points

Key Points: - The High Court entertained a writ petition under Article 226 despite disputed facts and availability of alternative remedy; judgment discusses whether this was appropriate and the role of alternative remedy (!) (!) . - Absorption of retrenched employees is governed by statutory rules framed under certain constitutional provisions; High Court was required to consider such rules before directing absorption (!) (!) . - The Court held that mandamus directing absorption or compensation must be grounded in law and implementable; blanket directions without statutory basis or implementability are vulnerable (!) (!) (!) . - Observations on whether the petition was premature due to lack of retrenchment and the proper forum for disputes (Industrial/Labour proceedings) (!) (!) . - The decision notes that where there is no enforceable right to absorption or where absorption is contingent on statutory rules, relief cannot be granted via writ mandamus (!) (!) . - The outcome sets aside the High Court’s mandamus directions and allows potential future relief only through appropriate legal channels (!) (!) .

What is the legality of entertaining a writ petition under Article 226 when there are disputed questions of fact and an available alternative remedy?

What is the extent of a High Court’s obligation to consider statutory absorption rules before issuing mandamus directing absorption of retrenched employees?

What are the limits of judicial review in mandamus regarding absorption and compensation when statutory rules govern absorption and the petitioner seeks relief under writ jurisdiction?

JUDGMENT

C.K. Thakker, J. —

1. Leave granted.

2. The present appeal is directed against the judgment and final order dated July 14, 2006 passed by the High Court of judicature at Allahabad, (Lucknow Bench) in Writ Petition No. 338 (S/B) of 1997. By the said order, the writ petition filed by Uttar Pradesh Rajya Khanij Vikas Nigam Sangharsh Samiti (‘Samiti’ for short) and Others against the U.P. State Mineral Development Corporation Ltd. and the State of U.P. was allowed and a writ of mandamus was issued to the respondents to absorb the employees of the Corporation in various organizations of State Government/ Public Sector Undertakings and to pay compensation in accordance with law.

3. The case has a chequered history and 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 Rs.20 crores which was subsequently increased to Rs.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 to advance loan of Rs.5 crores to enable the Corporation to pay retrenchment compensation to the employees. A resolution to that effect was also passed by the Board of Directors. In the resolution, reasons were indicated which impelled the Corporation to take a decision to retrench more than 50% of its staff. There were 838 employees out of which 744 were regular employees and 94 were on consolidated salary.

5. Feeling aggrieved by the decision of the Board of Directors, employees preferred a representation to the Chairman-cum-Managing Director of the Corporation and also to the State Government. In the representation, grievance was made by them that the proposed action was illegal and they should not be retrenched. It was indicated that financial position of the Corporation could be improved. A prayer was also made to absorb employees of the Corporation in other Departments of the State or other Public Sector Undertakings if they were to be relieved. No final order of retrenchment was, however, passed. Since neither the Corporation nor the Government gave assurance with regard to continuation or otherwise of the Corporation, nor as to absorption of employees working in the Corporation in the State Government or any other Corporation, the Samiti was constrained to file a writ petition in the High Court of Judicature at Allahabad, (Lucknow Bench) in 1997 for the following reliefs;

Whereas, it is most respectfully prayed that this Hon’ble Court may kindly be pleased to-

(i) To issue a writ, order or direction in the nature of mandamus directing the respondent to absorb the services of the employees of the Corporation on suitable posts in any of the Corporation under its control in any of its department;

(ii) To issue a writ, order or direction in the nature of mandamus commanding the State of U.P. to prepare a list of retrenched employees of the various Corporations and absorb them in accordance with length of their services;

In the alternative, issue a writ, order or direction in the nature of mandamus commanding the State of U.P. and the Corporation to pay compens

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2008 Supreme(SC) 761

IMPORTANT POINT A Writ petition which is premature inasmuch and involves disputed questions of fact cannot be maintained.

What is the legality of entertaining a writ petition under Article 226 when there are disputed questions of fact and an available alternative remedy?

What is the extent of a High Court’s obligation to consider statutory absorption rules before issuing mandamus directing absorption of retrenched employees?

What are the limits of judicial review in mandamus regarding absorption and compensation when statutory rules govern absorption and the petitioner seeks relief under writ jurisdiction?

Cases Referred (3)

IMPORTANT POINT
A Writ petition which is premature inasmuch and involves disputed questions of fact cannot be maintained.