The enforcement of contractual terms does not constitute arbitrariness under Art.14 of the Constitution. The remedy for alleged violations of the Industrial Disputes Act is not under Art.226 of the Constitution.

Headnote:
State - Fertilisers and Chemicals Travancore Ltd. - Art.12 of the Constitution - [Art.12]
Fact of the Case:

The petitioner was appointed on a contract basis for a fixed term, which was terminable with one month's notice on either side. Her services were terminated at the end of the contractual period, as per the terms of her appointment order. The petitioner alleged hostile discrimination, attracting Art.14 and 16 of the Constitution, as other contract employees were given extensions. The management contended that the termination was in accordance with the terms of the contract.
Finding of the Court:

The court found that the termination of the petitioner's services did not violate any fundamental rights. The petitioner's termination was in accordance with the terms of her contract, and there was no violation of any rule or regulation made by the management. The court dismissed the petition, reserving the petitioner's rights under the Industrial Disputes Act.
Issues: The issues involved the termination of the petitioner's contract, alleged hostile discrimination, and the applicability of fundamental rights under Art.14 and 16 of the Constitution.
Ratio Decidendi: The enforcement of the clauses in the petitioner's contract of service did not constitute arbitrariness to attract Art.14. The petitioner's remedy, if any, was under the Industrial Disputes Act, not Art.226 of the Constitution.
Final Decision: The court dismissed the petition, reserving the petitioner's rights under the Industrial Disputes Act.

Judgment :-

1. Mr. Justice M. P. Menon made a reference order in the following terras:

"Is the Fertilisers and Chemicals Travancore Ltd., a "State" as defined in Art.12 of the Constitution of India? Assuming that it is a State, is it subject to the writ jurisdiction of this Court except for the purposes of alleged violations of fundamental rights? Assuming that S.25F of the Industrial Disputes Act was violated so far as the discharge of the petitioner was concerned, will it afford sufficient ground for this Court to grant a declaration regarding its nullity, in proceedings under Art.226, taking into account the character of the employer? These are some of the questions that arise in this writ petition; counsel submits that other writ petitions raising similar questions are before a Division Bench. This Original Petition is also therefore adjourned for being heard by a Division Bench.".

This is how this writ petition has come up for hearing before a Division Bench. The brief facts are these:

2. The petitioner was appointed to the temporary post of a Stenographer on 17-8-1981 in the F.A C.T. Engineering and Design Organisation (FEDO), a division of the Fertilisers and Chemicals Travancore Ltd. (FACT), a "Government of India enterprise". The appointment was "purely on contract basis for one year" and during the period of the contract was terminable with one month's notice on either side The petitioner was to be governed by the Standing Orders, service conditions and other rules and regulations in force in FEDO from time to time and the appointment "did not bestow any permanent lien" in the company. The petitioner joined duty on 21st August 1981. On 19th August, 1982, she was informed as per Ext. P4 as follows:

"Please refer to our appointment order No. MPA/F/814/81 dated 17th August, 1981. The period of your appointment expires at the close of working hours on 20th August, 1982. You may please note that your services will not be required beyond the expiry date mentioned above. Our Finance Department is being advised to settle your accounts accordingly."

3. The petitioner states that there were three other Stenographers who were similarly appointed on contract basis; but their services have not been terminated and therefore alleges that she has been subject to hostile discrimination, attracting Art.14 and 16 of the Constitution. Ext. P4 is thus challenged.

4. Apart from the management, respondents 1 and 2, the General Secretary, FACT Officers' Association has got themselves impleaded as the 3rd respondent and the President of the Association through its counsel was also heard at the time of hearing.

5. The Management, respondents 1 and 2, through its counsel Shri K. A. Nayar contends that FACT is only a Government owned Company, bound by its Articles of Association and beyond the reach of this Court under Art.226 of the Constitution. Respondent 3, through its counsel, Shri T.P.K. Nambiar, the President of the Officers Association through his counsel Shri Dharmadan and the FACT Officers' Federation and Organisation through Shri P. Balagangadhara Menon plead that FACT is a State under Art.12 of the Constitution and therefore within the range of the writ jurisdiction. We shall therefore proceed to consider these contentions and answer the reference also.

(1) Whether FACT is a State under Art.12 of the Constitution?

6. This question has to be answered with reference to the Memorandum and Articles of Association of the Company and in the light of the principles stated by the Supreme Court in several reported decisions. The Company has undertaken a commercial venture, manufactures chemicals and their bye-products and carries on trade and business. It is registered under the Companies Act. Let us now read some of the relevant Memorandum and Articles of Association of the Company.

"The Capital of the Company at present is Rs. 225,00,000 (Two hundred and twenty five crores) divided into 22,50,000 (Twenty two and a half crores only) equity shares of

Click Here to Read the rest of this document