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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE P.S. MISHRA
V. S. RANGANATHA IYER
Versus
PRINCIPAL LABOUR COURT AND NEYVELI LIGNITE
W.P.Appeal No: 9907 of 1984
Decided On : 26-07-1994
CONSTITUTIONAL LAW - ARTICLE 12, 14, 16, 21 - INDUSTRIAL DISPUTES ACT, 1947 - SECTION 25FF - WORKMEN - STATE - INSTRUMENTALITY OF STATE - TERMINATION OF SERVICE - COMPENSATION - LACHES - DELAY - WRIT PETITION - ADMISSION - HEARING - DISMISSAL - LIMITATION ACT, 1963 - SECTION 14 - NEYVELI LIGNITE CORPORATION LTD. - EMPLOYEE - RETRENCHMENT - REINSTATEMENT - BENEFITS - QUANTIFICATION OF COMPENSATION - JUDICIAL CONSCIENCE - QUASHING OF ORDER - ENTITLEMENT TO BENEFITS.
Fact of the Case:
Petitioner, an Assistant Engineer employed by Neyveli Lignite Corporation Ltd. (Corporation), a Government of India instrumentality, challenged the termination of his services by the Corporation in 1975. He claimed retrenchment compensation under the Industrial Disputes Act, 1947, but the Labour Court dismissed his petition. The petitioner then filed a writ petition in the High Court, which admitted the petition and issued notice to the Corporation.
Finding of the Court:
The High Court held that the petitioner was an employee of a State under Article 12 of the Constitution of India and was entitled to the protection of Articles 14, 16(1), and 21 of the Constitution. The Court found that the Corporation's termination of the petitioner's services was arbitrary and unconstitutional, violating the petitioner's fundamental rights. However, the Court declined to order reinstatement or grant full benefits to the petitioner due to the delay in filing the writ petition.
Issues: 1. Whether the petitioner was an employee of a State under Article 12 of the Constitution of India and entitled to the protection of Articles 14, 16(1), and 21 of the Constitution? 2. Whether the Corporation's termination of the petitioner's services was arbitrary and unconstitutional? 3. Whether the petitioner was entitled to reinstatement or full benefits despite the delay in filing the writ petition?
Ratio Decidendi: 1. The Court held that the Corporation, although registered as a Government company under the Companies Act, was an instrumentality of the Government of India and accordingly a State under Article 12 of the Constitution of India. The petitioner, as an employee of the Corporation, was thus an employee of a State and entitled to the protection of Articles 14, 16(1), and 21 of the Constitution. 2. The Court found that the Corporation's termination of the petitioner's services was arbitrary and unconstitutional. The termination was not the result of any disciplinary proceedings or compulsory retirement under the Fundamental Rules. The Court held that the Corporation's act of termination of the petitioner's services in the course of implementing the policy decision of the Government of India was so arbitrary that it went against the very fundamentals of the fundamental rights under the Constitution. 3. The Court declined to order reinstatement or grant full benefits to the petitioner due to the delay in filing the writ petition. However, the Court held that the petitioner was entitled to compensation for the lost years of service under the Corporation, taking into account his employment or non-employment after the termination of service. The Court directed the Corporation to quantify the emoluments payable to the petitioner from the date of retrenchment minus any amount paid in lieu of termination of service up to the date of compulsory retirement, deduct the amount received by the petitioner from any other employment and income from any other source, and pay three-fourths of the amount so worked out to the petitioner.
Final Decision: The High Court quashed the order of the Corporation terminating the petitioner's services and directed the Corporation to quantify and pay compensation to the petitioner for the lost years of service.
P. S. MISHRA, J.
( 1 ) PETITIONER has moved this Court by the two writ petitions, in one (W. P. 9906/84) for quashing of the proceedings in CP. No. 966 of 1980 and the impugned order of the Principal Labour Court, Madras and in the other (W. P. No. 9907 of 1984) for quashing the order under which the Principal Labour Court, Madras, has dismissed his petition under Section 33c (2) of the Industrial Disputes Act (hereinafter referred to as the Act) and the order of the Chairman- cum-Man-aging Director of the Neyveli Lignite Corporation Ltd. (for short, the Corporation) under which he has been removed from service. Both these petitions have arisen because the respondent-Chairman-cum-Managing Director of the Corporation has, in a proceeding, dispensed with the services of the petitioner. The petitioner has contended that the order of the Chairman-cum-Managing Director in proceedings No. 17349/ri/3/7516 and dated November 7, 1975 is ultra vires, incompetent, void and without jurisdiction.
( 2 ) PETITIONER has been in the services of the Corporation as a Junior Engineer (Civil) and in due course promoted as Asst. Engineer (Civil) with effect from November 1, 1971. After sixteen years of continuous service only, however, he was suddenly subjected to the impugned order of the Chairman-cum-Managing Director of the Corporation and informed that his services were terminated with effect from the afternoon of November 10, 1975 and an amount equivalent to three months pay in lieu of three months notice was delivered to him. The removal from service, according to the Chairman of the Corporation and the Honble Minister, Energy and Power Ministry, Government of India, only to get a reply from the Director (Personnel) of the Corporation stating that his services were terminated in terms of the service conditions governing the Higher Grade Employees under the contractual obligation fulfilling and discharging on payments due and that there was no case for reconsideration. Petitioner moved the Central Government by filing C. P. No. 82/78 claiming relief under Section 33c (2) of the Act. The Management of the Corporation objected to the said petition and opposed the grant of relief for retrenchment compensation. The Central Government dismissed the application on September 11, 1980. The petitioner then moved the Principal Labour Court, Madras, in Claim Petition (C. P. No. 966/80), which was dismissed on April 23, 1984. The petitioner has, in the proceedings in C. P. 82/78 and in C. P. 966/80 however, claimed that he was a workman and was accordingly entitled to retrenchment compensation under Section 25ff of the Industrial Disputes Act. The Labour Court has recorded that at the time of the termination of the petitioners services by the respondent-Corporation, he was not a workman as defined under the Workmens Compensation Act. While moving this Court against the said proceedings and against the order of the Labour Court, the petitioner has chosen to move the other writ petition for quashing the order of the Corporation under which his services have been terminated.
( 3 ) THE respondent-Corporation, although registered as a Government company under the Companies Act, is an instrumentality of the Government of India and is accordingly a state under Article 12 of the Constitution of India. The petitioner thus is an employee of an instrumentality of the Government of India and accordingly, an employee of a State for the purposes of Part III of the Constitution of India.
( 4 ) THE above, however has been contested by learned counsel for the respondent-Corporation on the ground (1) that in the year 1975 when petitioner served under the Corporation, the Corporation for all purposes was treated as a company and thus, a separate legal entity and the realisation of knowledge that it is an instrumentality of the Government of India, according to the respondent-Corporation, also dawned only after the Supreme Court in the year 1979 extended the conc
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