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IN THE HIGH COURT OF DELHI
PRATHIBA M. SINGH, J.
Poonam Bhargava – Petitioner
Versus
Apparel Training & Design Centre Through: Director General & Another – Respondent
W.P.(C).No. 4287 of 2020 & CM. APPLs. Nos. 15432, 15433 of 2020
Decided On : 10-02-2021
Writ petition challenging termination of employment of Petitioners, who were regular/permanent employees working with Apparel Training and Design Centre (`ATDC’) at various positions such as Junior Assistant, Senior Principal, Regional Manager and Deputy Assistant, is maintainable as ATDC is not a `State’ under Art. 12 of the Constitution of India but is an `Other Authority’ as it performs a public function under the Exim Policy. ATDC is a monopolistic body through whom every exporter is bound to export garments to the quota countries, ATDC controls the export of garments, its decisions affect the rights and interests of garment exporters, it is a statutory body that receives support from the central government. ATDC exercises public functions and is therefore amenable to the jurisdiction of this Court under Article 226 of the Constitution. Termination of Petitioners is illegal and contrary to law as it was not by the appointing authority, no notice was given in accordance with the Rules and Service Conditions and a disciplinary enquiry was not held. Petitioners are entitled to reinstatement with continuity of service and full back wages.
Fact of the Case:
Petitioners were regular/permanent employees working with Apparel Training and Design Centre (`ATDC’) at various positions such as Junior Assistant, Senior Principal, Regional Manager and Deputy Assistant. ATDC is a society registered under the Societies Registration Act and is generally treated as a Government controlled organization. The appointments in the ATDC are made in accordance with the General Service Rules, 2011 and all the employees are governed by the said rules. Petitioners were terminated from service due to financial pressure and cash flow issues faced by ATDC during the COVID-19 pandemic lockdown. Petitioners challenged the termination orders.
Finding of the Court:
1. ATDC is not a `State’ under Art. 12 of the Constitution of India but is an `Other Authority’ as it performs a public function under the Exim Policy. 2. Termination of Petitioners is illegal and contrary to law as it was not by the appointing authority, no notice was given in accordance with the Rules and Service Conditions and a disciplinary enquiry was not held.
Issues: 1. Whether ATDC is a `State’ under Art. 12 of the Constitution of India or an `Other Authority’ amenable to writ jurisdiction under Article 226 of the Constitution of India? 2. Whether the termination of Petitioners is legal and valid?
Ratio Decidendi: 1. To determine whether an entity is a `State’ under Art. 12 or an `Other Authority’ under Article 226, the Court considers factors such as: (i) if the Government owns the entire share capital; (ii) financial assistance by the state to meet almost the entire expenditure; (iii) whether the Corporation enjoys a monopoly status; (iv) existence of a deep and pervasive state control; (v) functions are of public importance; (vi) if a Government department is transferred to a Corporation. In the present case, ATDC, though an independent society, registered under the Societies Registration Act is generally treated as a Government controlled organization. The appointments in the ATDC are made in accordance with the General Service Rules, 2011 and all the employees are governed by the said rules. A large portion of the assets of the ATDC belong to the State Government, Central Government and other schemes floated by the Government which are implemented through the ATDC. Various documents also show that various educational programs including that of skill development of the Government are generally implemented through the ATDC. The powers of the Central Government under Clause 16 of the MOA of the ATDC leave no doubt that directions of the Central Government prevailed over and above any directions issued by the AEPC. This shows that the Government has deep and pervasive control over the activities of the ATDC, though, it may choose not to interfere on a daily basis. Considering the various tests laid down in the case laws, a writ petition would be maintainable against the ATDC. 2. The termination of Petitioners is illegal and contrary to law as it was not by the appointing authority, no notice was given in accordance with the Rules and Service Conditions and a disciplinary enquiry was not held. The Petitioner was a regular employee who has been appointed on a permanent basis. He has been terminated without even a day’s notice. The note seems to suggest that these employees are superfluous and are termed as redundant. The treatment given to the Petitioners in these writ petitions has clearly been discriminatory inasmuch as similarly situated employees on the same posts have been retained by the ATDC. The termination is also not without stigma as the Petitioners have been described as `redundant’ employees. The entire intention appears to have been to terminate them on one ground or the other. No fair and transparent procedure was adopted. No attempt was made to enter into any negotiation with them to ask if they would be willing to accept a lower salary as was observed by the Supreme Court in Ficus Pax Private Limited (supra). In Delhi Transport Corporation (supra), the Supreme Court has categorically held that permanent employees enjoy a lien on their post and cannot be terminated without following the procedure established by the law. Employees like the Petitioner enjoy security of tenure and having worked for more than 24 years with the ATDC, the manner in which the Petitioner has been terminated is unacceptable. Termination of permanent employees without assigning any reason in the manner described above is also arbitrary and discriminatory.
Final Decision: Writ petition is allowed. The order of termination dated 19th June 2020 is quashed and set aside. The Respondent is accordingly directed to reinstate the Petitioner within a period of four weeks and pay all her emoluments for the previous period of June, 2020 till date within a period of four weeks thereafter.
JUDGMENT :
1. This judgment has been pronounced through video conferencing.
Brief Background
2. The present writ petition under Article 226/227 of the Constitution of India has been filed by the Petitioner seeking appropriate writ/order or direction for setting aside the letter dated 19th June, 2020 issued by the respondent No. 2 whereby the services of the Petitioner were terminated. A total of four writ petitions have been heard together by this Court. The same were filed by four regular/permanent employees working with the Apparel Training and Design Centre (`ATDC’) at various positions such as Junior Assistant, Senior Principal, Regional Manager and Deputy Assistant.
3. Ld. Counsel for the Respondent has raised issues of maintainability on the ground that a writ petition would not lie against ATDC as it is not `State’ under Art. 12 of the Constitution of India and is also not `Other Authority’ as it does not perform a public function. Vide order dated 17th August 2020, the Apparel Export Promotion Council (hereinafter “AEPC”), of which the Respondent ATDC is a part, was impleaded as Respondent no.2. Various affidavits and documents have been filed on record by all parties. Detailed written submissions along with copies of all judgments relied upon have also been filed. All counsels consented for the matters to be finally heard as recorded in order dated 3rd September 2020. The Court accordingly heard the counsels for the parties both on the question of maintainability as also on merits.
Submissions of the Petitioner
4. Ms. Makhija, ld. Senior counsel appearing on behalf of the Petitioner firstly relies upon the judgment of a ld. Single Judge of this Court rendered in the context of the AEPC. In the said judgment, being All India Garment Exporters Common Cause Guild And Ors v. UOI & Anr, [WP(C) 5093/ 1998 decided on 18 January, 2011, Delhi High Court], the Court held that the AEPC is performing a public function under the Exim Policy. Specific reliance was placed upon paragraphs 24, 25 and 30 of the said judgment. She submitted that though this judgment has been subsequently considered by the ld. Division Bench and overruled, the overruling only related to the merits of the petition i.e., in respect of the regulation of membership to the AEPC. On the question of public function of AEPC, the ld. Division Bench judgment was silent. She further submitted that the AEPC is a parent organisation of the ATDC. AEPC functions as a monopolistic body and the ATDC is nothing but a unit of the AEPC which is performing a public function.
5. Ms. Makhija, thereafter, took this Court through the various clauses of the Memorandum of Association, (hereinafter “MOA”) and the Articles of Association, (hereinafter “AOA”) to show that the AEPC is fully controlled by the Central Government. Reliance was placed upon clauses 23, 24, 36, 26(5)b,42,81, 83, 88, 89, 100 (of the AOA of the AEPC). She submitted that the executive committee is appointed by the Government. There are various Government nominees. The entire funding is from the Government. The executives and employees are appointed after the prior approval of the Central Government as per clause 89. On the basis of all these clauses she submitted that the AEPC is fully controlled by the Government itself. The powers of the Central Government under clause 101 are extremely wide. The entire functioning is under the Government. She, thereafter, relied upon the minutes of meeting to show that almost all the AEPC meetings are presided over by the Government nominees.
6. Now coming to the ATDC, it was submitted by Ms. Makhija that in the balance sheet of the AEPC, specific contributions were made to set up ATDC. Reliance was placed upon the balance sheets (Income and Expenditure Account) dated 31st March 1996, 2001, 2002, 2003 and 2004 wherein the contributions made to ATDC were specifically recorded. She then relied upon the Statement of review of working of the AEPC during the year 2008-09 which was laid
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