2021 Supreme(Telangana) 10

IN THE HIGH COURT OF FOR THE STATE OF TELANGANA
R.S. CHAUHAN, B. VIJAYSEN REDDY, JJ.
The Managing Director, Indian Immunologicals Limited – Appellant
Versus
Narendra Agarwal – Respondent
Writ Appeal No. 143 of 2017
Decided On : 04-01-2021

Headnote:

WRIT PETITION - TERMINATION OF EMPLOYMENT - PUBLIC AUTHORITY - CONTRACTUAL EMPLOYMENT - PERMANENT EMPLOYMENT - SERVICE RULES - DISCIPLINARY PROCEEDINGS - WRIT JURISDICTION - WRIT APPEAL - DISMISSAL.

Fact of the Case:

The petitioner, employed as Manager Grade-III in the marketing department of the respondent company, was appointed for a period of three years with effect from 28.02.2007. The appointment letter mentioned that the petitioner was entitled to a monthly basic pay of Rs. 35,000/- and other allowances, including performance incentive @ 25% per annum based on performance. The petitioner's services were renewed for further periods of three years, with revisions in compensation. The petitioner was promoted to Manager Grade-II with retrospective effect and his compensation was revised. The petitioner was transferred to a lower role and his cabin and intercom line were removed. He was asked to submit a daily work report for the entire month starting 01.11.2014, which was not the normal practice in the company. The petitioner was admitted to the hospital and underwent treatment. While the petitioner was undergoing treatment, the respondent company issued the impugned termination order dated 24.01.2015, invoking clause 18 of the appointment letter dated 02.03.2007, with one month's basic pay in lieu of notice with immediate effect. The petitioner challenged the termination order, contending that he was a permanent employee and that the termination was illegal and in breach of service rules.

Finding of the Court:

The Court held that the respondent company was a State within the meaning of Article 12 of the Constitution of India and was amenable to writ jurisdiction. The Court further held that the petitioner was a permanent employee of the respondent company and that the termination order was illegal and in breach of service rules. The Court dismissed the writ appeal filed by the respondent company.

Issues: 1. Whether the respondent company was a State within the meaning of Article 12 of the Constitution of India and was amenable to writ jurisdiction. 2. Whether the petitioner was a permanent employee of the respondent company. 3. Whether the termination order was illegal and in breach of service rules.

Ratio Decidendi: 1. The Court held that the respondent company was a State within the meaning of Article 12 of the Constitution of India and was amenable to writ jurisdiction. The Court observed that the respondent company was a wholly owned subsidiary of NDDB, which was a body corporate owned by the Government of India constituted under the NDDB Act, 1987 (37 of 1987). The Court further observed that the respondent company had the right to appoint and remove directors on its Board of Directors, and that NDDB had absolute control over the management of the respondent company. The Court concluded that the respondent company was under the direct and effective control of NDDB, which was a public sector organization, and that the respondent company was discharging a public duty and functions of national importance. 2. The Court held that the petitioner was a permanent employee of the respondent company. The Court observed that the petitioner was initially appointed for a period of three years, but his services were renewed for further periods of three years, with revisions in compensation. The Court further observed that the petitioner was promoted to Manager Grade-II with retrospective effect and his compensation was revised. The Court concluded that the petitioner's employment was not temporary in nature and that he was a permanent employee of the respondent company. 3. The Court held that the termination order was illegal and in breach of service rules. The Court observed that the respondent company had service rules, which provided for disciplinary proceedings against employees. The Court further observed that the respondent company had not followed the service rules in terminating the petitioner's employment. The Court concluded that the termination order was illegal and in breach of service rules.

Final Decision: The Court dismissed the writ appeal filed by the respondent company.