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PATNA HIGH COURT
V.Ramaswami and Raj Kishore Prasad JJ.
Subodh Ranjan Ghosh
Versus
Sindri Fertilisers And Chemicals Ltd.
Miscellaneous Judicial Case No. 71 of 1956 ;
Decided On : JULY 03, 1956
CONSTITUTIONAL LAW - ARTICLES 311 AND 320 - APPLICABILITY - SERVICE UNDER COMPANY - TERMINATION OF SERVICE - NOTICE AND OPPORTUNITY TO SHOW CAUSE - PRINCIPLES OF NATURAL JUSTICE - IMPLIED CONTRACT - ARTICLE 69(4) OF ARTICLES OF ASSOCIATION.
Fact of the Case:
The petitioner, a Shift Charge Engineer in the Sindri Fertilizer Project, was appointed by the Government of India for a term of five years. After the project was transferred to a private limited company, the petitioner continued to serve under the company on the same terms and conditions as specified in the service agreement, except with regard to the condition of leave. On 22-12-1955, the petitioner received a notice of discharge from the company, terminating his service with effect from that date on payment of six months salary in lieu of notice. The petitioner challenged the order of discharge, contending that it was illegal and ultra vires since no notice was given to him and no opportunity was given to him to show cause against the termination of his service.
Finding of the Court:
The court held that the petitioner was not holding a civil post under the Union of India and that the provisions of Articles 311 and 320 of the Constitution did not apply to the case. The court further held that the petitioner was a servant of the company and not a servant of the Union Government, and that Articles 311 and 320 of the Constitution had no application to the case of the servant of the Sindri Fertilizers and Chemicals limited. The court also held that the petitioner was discharged by the company in terms of an ordinary service contract and that there was nothing in Article 69(4) of the Articles of Association which made it obligatory on the Directors to act Judicially or proceed judicially or give notice to the petitioner before terminating his service.
Issues: 1. Whether the petitioner was holding a civil post under the Union of India and whether the provisions of Articles 311 and 320 of the Constitution apply to this case. 2. Whether the petitioner was a servant of the company and not a servant of the Union Government, and that Articles 311 and 320 of the Constitution had no application to the case of the servant of the Sindri Fertilizers and Chemicals limited. 3. Whether the petitioner was discharged by the company in terms of an ordinary service contract and that there was nothing in Article 69(4) of the Articles of Association which made it obligatory on the Directors to act Judicially or proceed judicially or give notice to the petitioner before terminating his service.
Ratio Decidendi: 1. The company is an independent legal entity and has an independent legal existence and it cannot be said to be a department of the State Government or its delegate or agent. 2. The petitioner is only a servant of the Company and, cannot be deemed to be a servant of the Union Government and Articles 311 and 320 of the Constitution have no application to this ease. 3. The petitioner has been discharged by the Company ,in terms of an ordinary service contract. 4. There is nothing in Article 69(4) of the Articles of Association which made it obligatory on the Directors to act Judicially or proceed judicially or give notice to the petitioner before terminating his service. 5. There was no question in this case of condemnation of the petitioner for any offence or for any default. 6. The principle of the maxim audi alteram partern does not apply to this case.
Final Decision: The application accordingly fails and must be dismissed with costs. Hearing fee Rs. 150/-.
Ramaswami, J.
1. In this case the petitioner Subodh Ranjan Ghosh has obtained a rule in the High Court calling upon the respondents to show cause why a writ under Article 226 of the Constitution should not be issued for, quashing an order dated 22-12-1955, terminating the services of the petitioner with effect from that, date on payment of six months salary in lieu of notice. Cause has been shown by counsel on behalf of the respondents to whom notice of the rule was ordered to be given.
2. The petitioner was appointed as a Shift Charge Engineer in the Sindri Fertilizer Project on 35-11-1948, for a term of five years, by the Ministry of Industry and Supply of the Government of India. In the year 1851 a private limited company was constituted, called Sindri Fertilisers and Chemicals Limited, which was owned completely by the Government of India and the management of which was entrusted to a Board of Directors nominated by the President of India and acting under his direction and control.
The share capital of the Company was Rs. 30,00,00,000.00 consisting of three lakhs of shares valued at Rs. 1,900.00 each. The President of India was allotted 2,99,999 shares and the Secretary of the Production Ministry was allotted one share. Alter the Company was constituted, the assets of the Fertilizer Project were transferred to the said Company with effect from 15-1-1952.
The petitioner continued to serve as a Shift Charge Engineer under the Company and later he was employed as an Assistant Superintendent, Power Plant Maintenance. The service agreement between the petitioner and the Government of India is annexure J of the petitioners affidavit. It is necessary at this stage to quote the material portion of the service agreement: "ARTICLES OF AGREEMENT made the twentyseventh day of December one thousand nine hundred and fortyeight BETWEEN Mr. Subodh Ranjan Ghosh son of late R.L. Ghosh of the one part and the GOVERNOR GENERAL OF INDIA (hereinafter called the GOVERNMENT) of the other part.
WHEREAS THE GOVERNMENT have engaged the party of the first part and the party of the first part has agreed to serve the Government on the terms and conditions hereinafter contained. NOW THESE PRESENTS WITNESS and the parties hereto respectively agree as follows: (1) The party of the first part shall submit himself to the orders of the Government and of the Officers and authorities under whom he may from time to time be placed by the Government and shall remain in the service for the term of five years commencing from the fifteenth day of November 1948 during the first six months whereof (extensible to one year at the discretion of the Government) he shall be on probation, subject to the provisions herein contained.
(2) The party of the first part shall devote his whole time to his duties and at all times obey the rules including the Government Servants Conduct Rules prescribed from time to time for the regulation of the branch of the public service to which he may belong and shall, whenever required, proceed to any part of India and abroad and there perform such duties as may be assigned to him.
3. The service of the party of the first part may be terminated as follows:
(1) By the Government without notice during the said, probationary period.
(2) At any time (except during the said probationary period) on three calendar months notice in writing given to him by the Government if, in the opinion of the Government, the party of the first part proves unsuitable for the efficient performance of his duties during service under this agreement.
(3) By the Government without previous notice if the Government are satisfied on medical evidence that the party of the first part is unfit and, is likely for a considerable period to continue unfit by reason of ill health for the discharge of his duties. PROVIDED always that the decision of the Government that the party "of the first part is likely to continue unfit shall be conclusively binding on the party of t
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