PETITIONER: <ORG> LTD. & ANOTHER Vs. RESPONDENT: THEIR WORKMEN(and connected appeals) DATE OF JUDGMENT: 15/10/1957 BENCH: DAS, S.K. BENCH: DAS, S.K. BHAGWATI, NATWARLAL H. KAPUR, J.L. CITATION: 1958 AIR 130 1958 SCR 667 ACT: Industrial dispute-Illegal strike-Lock-out-Notice lock-out and asking workmen to resume work-Workmen's right to be taken back without condition-Workmen taken in custody by police--Refusal of leave-Discretion of the employer- Dismissal of workmen Powers of the Industrial <ORG> to interfere. HEADNOTE: On account of the continued illegal stoppage of work, 'glow down' tactics, and strikes indulged in by the workmen despite the advice of their Union, the appellant company issued a notice dated August 23, 1953, that in consequence of the illegal strike the Management has no option but to declare a lock-out of the entire works except the special shifts with effect from August 24, 953 The services of all other workers shall be deemed to be discharged with effect from August 24, 953." Subsequently, the company lifted the lock-out. and gave notice on September 17, 1953, to the effect that all employees on the <ORG> rolls of the <ORG> on August 23, 1953, and who wish to report for duty, must resume work on September 18, 1953 A third notice gave extension of time to the workmen to resume work. The question was whether the notice dated August 23, 1953, terminated the services of the respondents by discharging them with effect from August 24, 1953, and the notice dated September 17, 1953, merely gave them an opportunity of re- employment at the pleasure of the company on fulfilment of certain conditions. Held, that, on a construction of the notices, the expression "shall be deemed to be discharged" had to be read in the context of the declaration of a lock-out, and the intention of the company was that the employees whose employment bad been refused during the period of lock-out were to be permitted to resume work without any conditions if they reported for duty by a particular date, and on fulfilment of a condition if they reported for duty after that date. Where some of the workmen who were taken in custody by the police applied for leave when in custody but were refused leave by the company acting under Standing Order No. o, and <ORG> took the view that as the workmen were in custody the company was not justified in refusing leave, held, that whether in such circumstances leave should be granted or not must be left to the discretion of the employer, unless, it was proved, that it was a case of colourable or mala fide exercise of power under the Standing Order. 668 <CITATION> ,  S.C.R. 781, followed. The powers of <ORG> to interfere in cases of dismissal of workmen by the company, are not unlimited and the <ORG> does not act as a court of appeal and substitute its own judgment for that of the management. It will interfere (1) when there is want of good faith, (2) when there is victimisation or unfair labour practice, (3) when the management has been guilty of a basic error or violation of a principle of natural justice, or (4) when on the materials the finding is completely baseless or perverse. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 44,45, 336, and 337 of 1957.

Appeals by special leave from the decisions dated 29th June, 1956, of <ORG>, Calcutta in Appeals Nos. Cal.223, 226, 247 and 250 of 1955. <NAME>, Attorney-General for India, <NAME> and <NAME>, for the appellants in C. A. No. 44 and respondents in C. A. No. 45.

<NAME>, Attorney-General for India, <NAME> and <NAME>, for the appellants in C. A. Nos. 336 and respondents in C. A. No. 337.

<NAME>, <NAME>, <NAME> and <NAME>, for the appellants in C. A. Nos. 45 & 337 and respondents in C. A. Nos. 44 & 336.

1957. October 15. The Judgment of the Court was delivered by <NAME> four appeals by special leave arise out of certain labour disputes between the employer, Messrs. <ORG> and <ORG>, Burnpur, Asansol, (hereinafter compendiously referred to as the <ORG>) on one side and some of their employees on the other. Messrs. Martin Burn Limited, 12 Mission Row, Calcutta, are the Managing Agents of the <ORG>. Originally, the case out of which Civil Appeals 44 and 45 have arisen was known as the case of 144 workmen, and the other case out of which Civil Appeals 336 and 337 have arisen was known as the case of 74 workmen. At present, the number of workmen involved in the four appeals is much smaller. Civil Appeals 44 and 45 go together as they arise out of the same decision, Civil Appeal 44 being on behalf of the <ORG> in respect now of 104 respondent workmen, and Civil Appeal 45 on behalf of 103 out of the said 104 workmen. Similarly, Civil Appeals 336 and 337 go together and arise out of a common decision, Civil Appeal 336 being on behalf of the <ORG> in respect of 10 workmen in three groups and Civil Appeal No. 337 on behalf of 31 workmen. The facts of these two sets of appeals are somewhat different, and it will be conducive to convenience as also to clarity of discussion of the issues involved, if the two sets are dealt with separately.

Civil Appeals 44 and 45.

We take up first Civil Appeals 44 and 45. With regard to these appeals the relevant facts are these. In 1947 <ORG> with one Prof.` <NAME> as President was recognised by the <ORG>. On the death of Prof. <NAME>, one Mr. <NAME> became President and the <ORG> continued to be recognised by the <ORG>. In 1951 the <ORG> was declared a Public Utility Service under the Industrial Disputes Act , 1947. It was alleged on behalf of the <ORG> that on September 12, 1951, a procedure was established for an amicable settlement of such disputes as might arise between the <ORG> and its employees. The procedure was substantially this: in case of a dispute regarding an individual employee, the dispute would be referred first to <ORG>charge and then to <ORG>, and the <ORG> would discourage an individual approach to the management of the <ORG>; if <ORG> was able to effect a settlement, it would be final; but if it failed, the <ORG> could take up the case on merits, with the management of the <ORG>. The above procedure, it is stated, was accepted at a joint meeting of <ORG> held on November 13, 195 1. Then we come to 1953. The case of the company was that on January 18, 1953, certain workers of the, <ORG> section resorted to an illegal stoppage of work, and on the next day all the three shifts of the <ORG> section commenced a 'slow down' strike. This adversely affected the production of the <ORG>, and it addressed a letter to the Secretary of the <ORG> on January 27, 1953, drawing the attention of the <ORG> to the illegal stoppage of work and 'slow down' tactics; the letter further stated that if there was no improvement in the attitude of the workers, the <ORG> would be compelled to take such action as it considered necessary to bring about resumption of normal work. Two days later, the workers of the <ORG> section submitted certain demands, but not through the <ORG>. With regard to the demands made by the workers of the <ORG> section, they were informed that joint petitions, without reference to the <ORG> or <ORG>, would not be accepted and so long as normal work was not resumed, no consideration could be given to the demands made. It appears that the <ORG> also informed the <ORG> that the workers concerned had made no representation to the <ORG>, and the <ORG> did not support their activities. It is obvious that at this stage there was a cleavage between some of the workers of the <ORG> section and the <ORG>. The <ORG> then issued certain notices to the workmen advising them of the consequences of their action. The workers in their turn elected a committee of six men to press their demands; the <ORG>, however, refused to negotiate with this committee. The impasse continued and in March, 1953, there was a tripartite conference between the Labour Commissioner of <ORG>, the General Manager of the <ORG> and the President of the <ORG>. Before this, the <ORG> had issued a notice closing 'B' and 'C' shifts of the <ORG> section. The tripartite conference came to certain conclusions but failed to restore harmony, and one of the reasons for its failure was that the representatives of the workers of the <ORG> section were not included therein. The workers' committee protested against the closing of two shifts, and the trouble continued till April 8, 1953, when the <ORG> issued a notice to the workmen that unless they voluntarily recorded their willingness to do normal work, they would be considered as no longer employed by the <ORG> from 2 p.m. on April 10, 1953. It was stated that on April 11, 1953, some 700 workers resorted to an illegal stoppage of work. The Labour Minister, <ORG>, then visited <NAME>, and met the representatives of the workers, and of the <ORG> and the Management. He made some suggestions, which did not however end the trouble. Meanwhile, <ORG> was set up by the workmen. There was a strike on April 27, 1953. The Sub-Divisional Magistrate, <NAME>, promulgated an order under s. 144 of the Code of Criminal Procedure and the situation continued to worsen. Iron and Steel were declared to be essential to the life of the community under the provisions of the West Bengal Security Act, 1950, and leave to all employees was stopped by the <ORG>. Some 38 workers of different departments were discharged for alleged disobedience of orders, and on August 18,1953, <ORG> gave a strike notice to the <ORG>, stating that the workmen would resort to strike and abstain from duty from September 11, 1953. We now come to the crucial date, August 23, 1953. On this date the <ORG> declared a lock-out and issued a notice, which must be set out in full, because a good part of the argument of learned counsel for both parties has centred round this notice : " NOTICE.

Having regard to the continued existence of the <ORG>. slow strike and the unsatisfactory working of the <ORG> and in consequence of the illegal strike which took place on- (1) 18-1-53.

(2) 9-3-53.

(3) 11-4-53 to 20-4-53.

(4) 27-4-53 and 28-4-53.

(5) 15-7-53.

the Management has no option but to declare a lockout of the entire works except the special shifts in the Hot Mills Section of <ORG> with effect from Monday, the 24th August, 1953.

The following Departments will continue to operate: No. 3 Boiler Plant.

No. 2 <ORG>.

Nos. 1 and 2 Reservoir Pump Houses.

Riverside Pump Station.

<ORG>.

Town Sub-Station.

Coke Ovens.

Workers required in the above Departments will be notified. The services of all other workers shall be deemed to be discharged with effect from Monday, August 24th, 1953.

Bunpur (Sd.) <NAME> 23rd August, 1953. General Manager."

On September 17, 1953, another notice was issued by the <ORG> lifting the lock-out with effect from 6 a.m. on Friday, September 18, 1953. This notice stated inter alia: "All employees on the <ORG> rolls of the <ORG> on the 23rd August, 1953, and who wish to report for duty, must resume work between 6 a. m. on Friday, the 18th September, 1953, and 10 p.m. on Saturday' the 19th September, 1953, on their regular shift. If, however, any worker in the vicinity of the <ORG> is unable to resume duty on account of illness, he should report himself to the <ORG>'s Medical authorities or if unable personally to attend, send written intimation of his sickness to the <ORG> by Saturday, the 19th September, 1953. In the latter case the <ORG> will make arrangements for his medical examination. Such worker should resume duty from the date he is declared fit by the <ORG>'s Medical authorities.

Any worker who has left the vicinity of the Works may resume duty on or before Thursday, the 24th September, 1953, provided he produces evidence-satisfactory to the Company of his absence."

On September 23, 1953, the Company issued a third notice, which quoted a request received from the President of <ORG> for extension of the time given to the workmen to resume work, and then concluded as follows:

"The Company is pleased to accede to this request to the extent of one week's extension and its notice No. GM/CS- 3B/571 dated 17-9-53 may be considered amended accordingly, i.e., the extension will be until Friday, the 2nd October, 1953."

Of the workmen with whom we are now concerned, 98 workmen reported for duty on October 1, 1953, 4 reported for duty on October 2, 1953, and one on October 9, 1953. They were not, however, allowed by the <ORG> to resume their duties. This led to an industrial dispute which <ORG> referred to <ORG>. The two issues were-(1) whether the <ORG> was justified in keeping the workmen mentioned in three lists A, B & C, out of employment; and (2) whether the said workmen were entitled to employment and any other relief and/or compensation. The <ORG> held that all the workmen who turned up on or before October 2, 1953, in pursuance of the notices issued by the <ORG> were entitled to be taken back into employment without condition and of the two men who came later, one was ill of typhoid fever and had sufficient reason for reporting himself for duty on October 9, 1953. On the second issue, the <ORG> said:

" Accordingly, I award that these men, barring <NAME>, No. 5 of the list C, attached to the order of reference, would get half salary for the entire period from the 2nd October, 1953, up to the date of their actual return to duties after this award. I allow only half basic pay and no dearness allowance and no other allowance." From the decision of <ORG>, two appeals were preferred to <ORG>, Calcutta. The appeal on behalf of the <ORG> was mainly against the order directing that the employees who had turned up on or before October 2, 1953, must be taken back in employment, and the appeal on behalf of the workmen raised the question that full compensation should be given to the work., men who were directed to be taken back in employment. <ORG> dismissed both appeals-the appeal of the <ORG> on merits, and the appeal of the workmen on the ground that it did not involve any substantial question of law. Both parties then asked for and obtained special leave from this Court to appeal from the decision of <ORG>, Calcutta.

In Civil Appeal No. 44, Mr. <NAME>, Attorney- General, has appeared for the <ORG> and has argued that both the <ORG> below went wrong on principle in construing the notices dated August 23, 1953, and September 17, 1953, respectively. According to him, the continued illegal stoppages of work, 'slow-down' tactics and strikes indulged in by the workmen despite the advice of their <ORG>, left the <ORG> no alternative but to discharge the workmen, except in some essential departments, with effect from August 24, 1953, and the notice dated August 23, 1953, though it stated that the <ORG> declared a lock-out of the entire <ORG> except for some special shifts, really terminated the services of the respondents by discharging them with effect from August 24, 1953. He has further submitted that the notice dated September 17, 1953, did not revoke the earlier order of discharge, but merely gave the respondents an opportunity of reemployment at the pleasure of the <ORG> on fulfilment of certain conditions. The learned Attorney-General contends that if the notices are so construed, then the <ORG> below are wrong in holding that the respondents are entitled to be taken back in employment as of right. He has further submitted that <ORG> was wrong in law in holding that there could not be a lock-out and discharge at the same time.

In our view, the two notices in question are not capable of bearing the construction which the learned Attorney-General has pressed for our acceptance, apart altogether from the question if under the Industrial Disputes Act , 1947, there can be a simultaneous order of discharge and lock-out in respect of the same employees. The question of construction is really a question of intention-to be gathered primarily from the words used in the documents; and if the word-. used are ambiguous, then surrounding circumstances can be looked into for the purpose of construing the notices. It is worthy of note that the first notice states inter alia that in consequence of the illegal strikes which took place on several previous dates, the Management has no option but to declare a look-out of the entire Works except some special shifts with effect from Monday, August 24, 1953; then in the concluding portion the notice states-" The services of all other workers shall be deemed to be discharged with effect from Monday, August 24, 1953. The expression " shall be deemed to be discharged has to be read in the context of the declaration of a lock-out; such an expression is neither usually employed nor apt to effectuate an intention to terminate the services of the workmen altogether. A 'lock- out', according to the definition in the Industrial Disputes Act , 1947, means the " closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him ". In this context, the notice when it said that the services of all other workers shall be deemed to. be discharged with effect from the date of the lock-out really meant that the <ORG> refused to employ the respondent workmen during the period when the place of employment was closed. The second notice dated September 17, 1953, places the matter beyond any doubt. It starts by saying that the "management have reasons to believe that many workers are desirous of resuming work" etc.; then it states that "all employees on the Works rolls of the <ORG> on August 23, 1953, and who wish to report for duty, must resume work between 6 a.m. on Friday, September 18 1953, and 10 p.m. on Saturday, September 19, 1953." The expressions used in the second- notice clearly show that the intention was not reemployment of discharged workmen, but resumption of work by employees who desired to resume work and whose employment had been stopped on account of the 86 look-out. The third notice dated September 23, 1953, which extended the date of joining to October 2, 1953, again said that " a large number of workers might have been prevented from resuming their work for reasons beyond their control " and gave that as the reason for extending the date. If the three notices referred to above are read together against the background of events which bad happened prior to August 23, 1953, the only reasonable construction is the one adopted by the Tribunals, viz., that the employees whose employment had been refused during the lockout were permitted to resume work without any conditions if they reported for duty by a particular date, and on fulfilment of a condition if they reported for duty after that date. The learned Attorney-General has referred us to some oral and documentary evidence to show that the workmen themselves understood the notice dated August 23, 1953, as a notice of discharge. He has referred particularly to the letter dated September 2, 1953, written by <ORG> to the General Manager of the <ORG> in which the notice dated August 23, 1953, was referred to as " an illegal and unconstitutional notice of discharge". On the other side, Mr. <NAME> appearing for the respondent workmen has referred us to the evidence given by some of the <ORG>'s servants, which showed that no formal order of discharge was recorded in the service book of the employees, as required by the rules; nor any notice of one month given for discharging the workmen; but on the contrary the workmen were given continuity of service for the entire period of their absence. We do not, however, think that when the words used in the notices sufficiently and clearly bring out the intention of the <ORG>, it is necessary to refer to other evidence in the record. Moreover, this <ORG> does not sit as a regular <ORG> of appeal over Industrial Tribunals, and does not ordinarily subject the evidence given on behalf of the parties to a fresh review and scrutiny, unless it is shown that exceptional or special circumstances exist, or that substantial and grave injustice has been done or that the case in question presents features of sufficient gravity to warrant a review of the decision appealed from. It is necessary now to consider an alternative argument of the learned Attorney-General. He has contended that assuming that the notices bear the construction which we have put on them, the respondent workmen did not join on or before Saturday, September 19, 1953,--the latest day by which they could resume work without any condition; they reported for duty on October 1, 1953, or October 2, 1953, but failed to produce evidence satisfactory to the <ORG> of their absence as required by the notice dated September 17, 1953, and, therefore, they were not entitled to be taken back as of right and without any condition. It is necessary to state here what happened between November 1953, and April 1954. It appears that a large number of workmen who reported for duty on October 1, 1953, and October 2, 1953, were subsequently interviewed, and as a result of that interview 144 workmen were not taken back to employment. What happened at the interview was stated by <NAME>, witness for the <ORG>, who said : " Question: Why these 144 men were not taken ? Answer: These men were interviewed, but they could not give satisfactory explanation for not reporting for duty within the time given. These men did not comply with the condition laid down in the notice of the 17th September, 1953. Whatever happened during the interview has been put in writing."

The writing which embodied the result of the interview was not, however, produced. The same witness said that some workmen who were also subsequently interviewed were taken back without any explanation of their absence. The evidence on this point is very Conflicting; one witness said that about 2,000 men came to the main gate of the <ORG> on October 1, 1953, and October 2, 1953, and from October 2, 1953, the instruction of the company was " to take back only those who were not harmful to the running of the factory". Another witness said that he did not remember if any of the respondent workmen appeared before him on October 1, 1953, or October 2, 1953, and if any of them gave any reasons for their absence. In view of the conflicting evidence on the point, it is not possible to proceed on the footing that the respondent workmen failed to produce satisfactory evidence of their absence, and that was the reason why they were not taken back by the <ORG>. The learned Attorney General drew our pointed attention to the evidence of <NAME>, witness No. 9 for the workmen, who said: "When the lock-out was lifted I did not think it proper to join immediately because most people were then outside, secondly, my colleagues and others had not then joined, and. lastly, my social status in the place combined with the above circumstances restrained me from joining." It may be that some of the workmen could have presented themselves earlier than they actually did, But that does not prove that the <ORG> refused to take only those workmen who had failed to produce satisfactory evidence of their absence. If that was the case of the <ORG>, then it should have produced the writing which embodied the result of the interview or given sufficient evidence to establish that in each case the respondent workmen failed to produce satisfactory evidence of absence. On the contrary, the <ORG> found that the <ORG> scrutinised the conduct of the workmen to find out how far they were associated with <ORG>, how far they took part in the meetings, etc., and on that basis, some workmen were taken back and some were not taken back. It is somewhat late in the day to try to make out a case that each of the respondent workmen in these two appeals failed to produce satisfactory evidence of their absence. For these reasons, we do not think that the appellant <ORG> in Civil Appeal 44 has made out any case for our interference with the decision appealed from. There was some argument before us as to the illegal nature of the strike declared by the workmen and also as to the legality of the lock-out declared by the <ORG>. We do not pause to decide those questions, because it is unnecessary to do so in the pre- sent appeals. We must make it clear, however, that our reluctance to pronounce on the conduct of the workmen prior to August 23, 1953, does not signify an approval of that conduct which rightly came in for a good deal of criticism by <ORG>. It has been somewhat faintly suggested that if the notice dated August 23, 1953, terminated the services of the workmen and the second notice, dated September 17, 1953, operated as a conditional revocation of the earlier notice, then there was no consideration for the condition imposed and the <ORG> could change its mind-: and ignore the condition. In the view which we have taken of the three notices, it becomes unnecessary" also to examine this submission. As to Civil Appeal 45 on behalf of the workmen in which the prayer is for payment of full compensation, it is sufficient to state that no question of principle is involved. <ORG> refused to give compensation, for the period anterior to October 2, 1953, on the. ground that the workmen themselves tried to coerce the <ORG> by 'slow- down' tactics etc.; for the period after October 2,'1953, the <ORG> allowed half the wage as compensation on the ground that some of the workmen were near Burnpur and might have joined earlier, some claimed to come back to their services as of right without any explanations and none of the workmen had done any actual work for the period. As we have said, no question of principle is involved and we do not think that the <ORG> has committed any error in the matter of awarding compensation.

Civil Appeals 336 and 337.

We now turn to the other two appeals. We have stated that the case out of which these two appeals have arisen dealt initially with 74 workmen who had been discharged or suspended by the <ORG> for" one reason or another.' The question which was referred to <ORG> was whether the discharge and/or suspension of these 74 workmen was justified if not, to what relief these men were entitled. The <ORG> classified these men in four categories--

(1)those whose services were terminated in accordance with the Standing Orders of the <ORG>, for absence without permission for 14 consecutive days; (2) those who were dismissed for major misdemeanor; (3) those who were suspended but whose cases could not be disposed of finally; and (4) those who were dismissed for disobedience of orders and other activities in pursuance of a concerted plan of "go-slow" strike. The <ORG> considered the case of each workman under the four categories mentioned above and ordered reinstatement of 25 out of 74 workmen and granted to 24 of the workmen directed to be reinstated compensation equal to half basic pay for the period of forced unemployment. From the decision of the Fifth Industrial <ORG> two appeals were taken to the Labour Appellate <ORG>, Calcutta,-one on behalf of the <ORG> and the other for the workmen. The Labour Appellate <ORG> dismissed both the appeals. Hence the two appeals before us by special leave.

In Civil Appeal 336 we are concerned with only 10 workmen, seven of whom fall in the category of those whose services were terminated in accordance with Standing Orders of the Company for absence without permission for 14 consecutive days. These seven men are-(1) <NAME>, (2) <NAME>, (3) <NAME>, (4) <NAME>, (5) <NAME>, (6) <NAME>, and (7) <NAME>. Two others, <NAME> and <NAME>, fall in the category of those who were said to have been dismissed for major misdemeanour. The tenth workman <NAME> falls in a class by himself.

In Civil Appeal 337 on behalf of the workmen there are 31 appellants, nine of whom (except <NAME>) are those who figure in the <ORG>'s appeal. The rest are those who were not ordered to be reinstated. The cases of two of these men <NAME> and <NAME>, have been specially placed before us by Mr. <NAME>, on the ground that <NAME>, stands on the same footing as <NAME> and <NAME> on the same footing as those whose leave was not granted and who were absent for 14 consecutive days without permission.

We now proceed to consider the cases of the 10 workmen in Civil Appeal 336. Let us first take the seven workmen who were absent without leave for 14 consecutive days. Standing Order No. 9 of the Company, which is the relevant Standing Order on the subject, is in these terms:

" Absenteeism--Workers absent without leave will be subject to disciplinary action. Overstaying leave will be considered as absence without leave.

Any worker who is absent for 14 consecutive days without permission will be automatically discharged. Also, any worker who is absent for 14 individual days during any period of 12 months is liable to discharge." What happened in the case of these men is that on diverse dates between July 5, 1953, and July 10, 1953, they were taken in custody by the police and remained in custody for some time; they applied for leave when in custody but leave was refused. <ORG> took the view that Standing Order No. 9 was not an inflexible rule, and a mere application for leave was sufficient to arrest the operation of the Standing Order. When the case was before <ORG>, Mr. <NAME> on behalf of the workmen conceded that he was not in a position to support the view of <ORG> in this respect; he contended, however, that <ORG> had in each case considered the justification for absence without leave, and in view of the circumstance that the men were in custody, the <ORG> was not justified in refusing leave. This contention found favour with <ORG>.

The point is now covered by a decision of this Court: <CITATION> (1). in that case one Ashimananda Bannerji was arrested tinder the West Bengal Security Act and detained in jail from January 25, 1949, to April '5, 1949. The Company terminated his services on April 22, 1949, on the ground of continued absence. <ORG> Ordered his reinstatement on the ground that he had been discharged without a charge and without holding (1)  S.C.R. 781, 798.

an enquiry. This Court observed:

"We are unable to agree with this decision. The ground of discharge is the continued absence of the employee, and his inability to do work, and it is difficult to see what purpose would be served by a formal charge being delivered to him and what conceivable answer he could give thereto. The order of <ORG> is manifestly erroneous and must be set aside."

The same principle should apply in the present case. It is true that the arrested men were not in a position to come to their work, because they had been arrested by the police. This may be unfortunate for them; but it would be unjust to hold that in such, circumstances the <ORG> must always give leave when an application for leave is made. If a large number of workmen are arrested by the authorities in charge of law and order by reason of their questionable activities in connection with a labour dispute, as in this case, the work of the <ORG> will be paralysed if the <ORG> is forced to give leave to all of them for a "more or less indefinite period. Such a principle will not be just; nor will it restore harmony between labour and capital or ensure normal flow of production. It is immaterial whether the charges on Which the workmen are arrested by the police are ultimately proved or not in a court of law. The <ORG> must carry on its work and may find it impossible to do so if a large number of Workmen are absent. Whether in such circumstances leave should be granted or not must be left to the discretion of the employer. It may be readily accepted that if the workmen are arrested at the instance of the <ORG> for the purpose of victimisation- and in order to get rid of them on the ostensible pretext of continued absence, the position will be different. It will-then be a colourable or mala fide exercise of power under the relevant Standing Order; that, however, is not the case here. We, are of the view that the two <ORG> below have misdirect- ed themselves as to the true scope and effect of the "Standing Order in question, and their decision-with regard to the seven workmen mentioned above cannot be supported.

We now turn to the two persons in the second category <NAME> and <NAME>, remembering what we have already stated as to the exercise of our jurisdiction on an appeal by special leave. <NAME> worked as the Manager of the Burnpur hotel, and one of the questions raised was if he was a 'workman' within the meaning of the relevant provisions of the Industrial Disputes Act , 1947. At the relevant time, `workman' was defined in the Act as follows: " Section 2(s) . " workman " means any person employed (including an apprentice) in any industry to do any skilled or unskilled manual or clerical work for hire or reward and includes, for the purposes of any proceedings under this Act in relation to an industrial dispute, a workman discharged during that dispute, but does not include any person employed in the naval, military or air service of the <ORG>."

The question is if <NAME> did any clerical work for hire or his duties were merely supervisory in nature. Both the <ORG> have referred to the evidence on this point and have concurrently found that <NAME> was a workman within the meaning of that word as used in the Industrial Disputes Act , 1947; they have referred to <NAME>'s own evidence which showed that he had to write ledgers, file correspondence, enter the cash book, etc. We see no reason to hold that the finding of the two <ORG> on this point is erroneous.

On merits, the case against <NAME> was that as a result of a regular and proper enquiry, he was found guilty of unauthorised absence and insubordination, etc., and, therefore, the <ORG> dismissed him. The argument before us is that the <ORG> having held a regular and proper enquiry in which <NAME> had an opportunity of meeting the charges against him, it was for the <ORG> to decide whether the charges had been proved and <ORG> should not have interfered with the decision of the <ORG>, unless it found that the decision was mala fide or amounted to victimisation. It is necessary to state here, in the words of <ORG>, its finding about <NAME>. <ORG> said: 87 "Next, I consider the merit of the case. On the 6th July, 1953, he went on leave. On the 16th July, he applied for extension of leave for one month (vide Ex. 6). He got a reply from the <ORG> on the 25th or 26th July, 1953. But as the <ORG> refused his leave, he jointed on the 1st August, 1953, with a medical certificate of fitness. So practically he was within 14 days' admissible grace period for joining one's duty. When he was on leave, he was suffering from blood pressure and fever. The doctor advised him to take rest. Of course, he should have consulted the <ORG>' doctor. But even if he had not done so, it did not matter as he was then on leave allowed by the <ORG>. So where was his fault? Yes, his fault was that he was the Secretary of the Act ion Committee at that time. The Act ion Committee to the <ORG> was like a red rag to the bull. I find absolutely no reason why this man should be dismissed. So I set aside the order of dismissal passed against him, and order his reinstatement. I grant him compensation at half basic pay for the period of his forced unemployment."

The finding really amounts to this that <NAME> was victimised as he was the Secretary of <ORG>; he was really ill and the only fault he committed was that he did not consult the Company's doctor. The learned Attorney-General has very seriously contested the aforesaid finding of the <ORG> and taken us through the relevant evidence including <NAME>'s own statements before <ORG>. He has pointed out that though <NAME> was said to be suffering from fever and blood-pressure, his statements before <ORG> showed that he was not taking complete rest as " advised by his doctor but was engaged in doing some " public work." The argument advanced by the learned Attorney-General might have been urged acceptably to a Court or <ORG> of first instance; but we are not such a Court or <ORG>, and in the absence of exceptional or special circumstances or of grave injustice, we shall not be justified in interfering with what really is a finding of fact.

This brings us to the case of <NAME>, where also the same principles apply. She was a nurse in <ORG> and the charge against her was that she had incited and instigated one <NAME>, a sweeper working in the hospital, not to attend his duties on the morning of September 5, 1953. An enquiry was held and she was found guilty of the charge. The <ORG> found that the charge against her was completely baseless, and the enquiry report against her made a mountain of a mole-hill. She made some comments to <NAME> with regard to a pass which had been issued to <NAME>, and the comments innocuous in themselves were magnified into a charge of intimidation. It is significant that before the Labour Appellate <ORG>, the Company did not even argue the case of <NAME>. Undoubtedly, the management of a concern has power to direct its own internal administration and discipline; but the power is not unlimited and when a dispute arises, Industrial <ORG>s have been given the power to see whether the termination of service of a workman is justified and to give appropriate relief. In cases of dismissal on misconduct, the <ORG> does not, however, act as <ORG> and substitute its own judgment for that of the management. It will interfere (i) when there is a want of good faith, (ii) when there is victimisation or unfair labour practice, (iii) when the management has been guilty of a basic error or violation of a principle of natural justice, and (iv) when on the materials the finding is completely baseless or perverse. In our view, <NAME>'s case comes under, clause (iv) above.

Lastly, we come to <NAME>. The Company's case against him was the following. It was alleged that since January, 1953, he incited other workmen to resort to 'slow down' tactics. On March 28, 1953, he was charged that he took an active part in the ` slow-down' strike in the Hot Mills section, and he initiated such action and instigated others to do the same. On March 29, 1953, he submitted his explanation. On March 31, 1953, he was suspended pending enquiries. On April 3, 1953 and April 4, 1953, some evidence was taken against several workmen including <NAME> in the course of the enquiry, but the evidence not being of an overwhelming character against <NAME>, the management postponed its decision pending further enquiry. In May 1953, the Sub-divisional Magistrate promulgated an order under s. 144 , Criminal Procedure Code , in which <NAME> was mentioned. In September, 1953, the dispute was referred to <ORG>, which included the case of <NAME>-there being a suspension order against him. It was stated that an application under s. 33 of the Industrial Disputes Act, 1947, was made for permission to dismiss <NAME> for activities subsequent to the charge-sheet of March 28, 1953. The <ORG> instead of dealing with that application made the following observations in its award regarding <NAME>: " He was, therefore, charged on the 28th March, 1953, along with others. There was an enquiry. But as the evidence against this man was not overwhelming, the management postponed their decision for the time being. This man, however, continued his activities with the result that the Sub-divisional Officer of <ORG> promulgated an order under section 144 , Cr. P.C., on the 15th May, 1953, and in which order his name was mentioned. This workman was again obstructing the loyal workers after the lock-out had been lifted. So in view of the above, the <ORG> decided to terminate his services. But it could not take any direct action as his case was referred to the <ORG>. So the position is that the charge-sheet on which this man was sought to be punished was not proved even according to the <ORG>' own version. For his other activities there is no charge-sheet. In such circumstances I do not think that the <ORG> were entitled to dismiss him. So regard being had to this aspect of the matter, I order his reinstatement. But as I am satisfied that. this man indulged in activities which were prejudicial to the interest of the <ORG>, I do not allow him any compensation during the period of his forced unemployment consequent upon suspension. This period of unemployment should be treated as leave without pay. He must be reinstated as soon as the award becomes operative." The Appellate <ORG> dealt with the case of this man very summarily by saying that his reinstatement was not open to any objection.

Before us, it has been argued that the decision that <NAME> should be reinstated is vitiated by a basic error. The only formal order against him was the order of suspension, which was certainly a valid order. <ORG> found that <NAME> indulged in activities prejudicial to the <ORG> and it is now recognised that deliberate 'slow-down' tactics and an incitement to other workmen to adopt such tactics both amount to misconduct. The lower <ORG> was apparently satisfied that <NAME> was guilty of such misconduct; yet it held that the charge-sheet on which <NAME> was suspended had not been proved. If the order of suspension was the only subject if reference, so far as <NAME> was concerned, the <ORG> could-not order his reinstatement till the enquiry was completed. If, on the contrary, the <ORG> proceeded on the footing that the company had decided to terminate the services of <NAME> on the ground of his prejudicial and subversive activities then on being satisfied that <NAME> was guilty of such activities the proper order would have been to give the <ORG> permission to dismiss <NAME>. In either view, the order of his reinstatement is unjustified.

Only a few words are necessary to dispose of Civil Appeal

337. The <ORG> had considered the case of each workman under the four categories mentioned previously and had refused reinstatement to those against whom it found that the <ORG> had good reasons for dismissal. Mr. <NAME> has not been able to satisfy us that the <ORG>s below committed any error with regard to the appellants of this appeal. He has pressed the case of two persons <NAME> and <NAME>. Against <NAME> there was a charge for slow-down tactics; later he was charged with assaulting the <ORG>'s driver. Though he was acquitted in a criminal proceeding, the <ORG> found that the decision of the <ORG> to terminate his services was justified.

<NAME> absented himself from duty from July 5, 1953, and was absent without leave for more than 14 days. His case was fully considered by the <ORG>, which found that his services were rightly terminated under the Standing Orders of the Company.

The result of the foregoing discussion is this: Civil Appeal 44, Civil Appeal 45 and Civil Appeal 337 are without merit and must be dismissed. Civil Appeal 336 succeeds in part, and the decision of the Tribunals below is set aside in respect of the following eight men, only-(1) <NAME> (2) <NAME>, (3) <NAME>, (4)Dhani Ram, (5) <NAME>, (6) <NAME>, (7) <NAME>, and (8) <NAME>. In all other respects, the decision appealed from will stand. In the peculiar circumstances of this case, the parties will bear their own costs here.

Appeal No. 336 partly allowed.

Others dismissed.


PETITIONER: <NAME> Vs. RESPONDENT: STATE NCT OF DELHI AND OTHERS DATE OF JUDGMENT: 12/03/1999 BENCH: <NAME>, <NAME> JUDGMENT:

<NAME>

Leave granted.

Appellant lodged an FIR with the police for the offence under Section 420, Indian Penal Code . <ORG> of <ORG> quashed the FIR on the premise that the complaint did not disclose the offence. <ORG> reminded themselves that jurisdiction under Article 226 of the Constitution or Section 482 of the Code of Criminal Procedure should be exercised sparingly and with circumspection for quashing criminal proceedings. Nevertheless, learned judges found that the case on hand could not pass the test laid down by this Court in <CITATION> [1992 Suppl.(1) SCC 335]. The appellant is obviously aggrieved by the aforesaid course of action adopted by <ORG> and hence he filed the special leave petition. In the complaint filed by the appellant before the police, on the strength of which the FIR was prepared, the following averments, inter alia, were made. Appellant belongs to a company (<ORG>) which manufactures and exports <ORG> garments. On 15.11.1994 fifth respondent (<NAME>) Managing Director of <ORG> <ORG> approached the complainant for purchase of <ORG> garments of various kinds and induced the appellant to believe that 5th respondent would pay the price of the said goods on receiving the invoice. Such payment was promised to be made within fifteen days from the date of invoice of the goods which complainant would despatch to Germany. Appellant believed the aforesaid representation as true and on that belief he despatched goods worth 4,46,597.25 D.M. (Deutsch Marks). In March/April 1995 respondent on receipt of 37 different invoices got the goods released and sold them to others. But the respondent paid only a sum of 1,15,194 D.M. Appellant further alleged in the complaint that respondent induced him to believe that he is a genuine dealer, but actually his intentions were not clear.

Appellant also mentioned in the complaint that one of the representatives of appellants company went to Germany in October 1995 for realising the amount on the strength of an understanding reached between them that respondent would pay 2,00,000 D.M. in lieu of the remaining part of the price. However, the respondent did not honour even that subsequent understanding.

Appellant further mentioned in the complaint that he came to know later about the modus operandi which respondent adopted in regard to certain other manufacturers who too were duped by the respondent to the tune of rupees ten crores. Learned Judges of <ORG> have put forward three premises for quashing the FIR. First is that the complaint did not disclose commission of any offence of cheating punishable under Section 420 of the Indian penal Code. Second is that there is nothing in the complaint to suggest that the petitioner had dishonest or fraudulent intention at the time the respondent exported goods worth 4,46,597.25 D.M. by 37 different invoices. There is also nothing to indicate that the respondent, by deceiving the complainant, induced him to export goods worth 4,48,597.25 D.M. The third is that on the face of the allegations contained in the complaint it is purely a commercial transaction which in a nut-shell is that the seller did not pay the balance amount of the goods received by him as per his assurance.

After quoting Section 415 of  learned judges proceeded to consider the main elements of the offence in the following lines:

"A bare reading of the definition of cheating would suggest that there are two elements thereof, namely, deception and dishonest intention to do or omit to do something. In order to bring a case within the first part of Section 415 , it is essential, in the first place, that the person, who delivers the property should have been deceived before he makes the delivery; and in the second place that he should have been induced to do so fraudulently or dishonestly. Where property is fraudulently or dishonestly obtained, Section 415 would bring the said act within the ambit of cheating provided the property is to be obtained by deception."

It was thereafter that <ORG> scanned the complaint and found out that there is nothing in the complaint to suggest that the accused had dishonest or fraudulent intention at the time of export of goods.

It is not necessary that a complainant should verbatim reproduce in the body of his complaint all the ingredients of the offence he is alleging. Nor is it necessary that the complainant should state in so many words that the intention of the accused was dishonest or fraudulent. Splitting up of the definition into different components of the offence to make a meticulous scrutiny, whether all the ingredients have been precisely spelled out in the complaint, is not the need at this stage. If factual foundation for the offence has been laid in the complaint the court should not hasten to quash criminal proceedings during investigation stage merely on the premise that one or two ingredients have not been stated with details. For quashing an FIR (a step which is permitted only in extremely rare cases) the information in the complaint must be so bereft of even the basic facts which are absolutely necessary for making out the offence. <CITATION> (supra) this Court laid down the premise on which the FIR can be quashed in rare cases. The following observations made in the aforesaid decisions are a sound reminder:

"We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice."

It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction. But that is hardly a reason for holding that the offence of cheating would elude from such a transaction. In fact, many a cheatings were committed in the course of commercial and also money transactions. One of the illustrations set out under Section 415 of the Indian Penal Code (illustrations f) is worthy of notice now:

"(f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it. A cheats."

The crux of the postulate is the intention of the person who induces the victim of his representation and not the nature of the transaction which would become decisive in discerning whether there was commission of offence or not. The complainant has stated in the body of the complaint that he was induced to believe that respondent would honour payment on receipt of invoices, and that the complainant realised later that the intentions of the respondent were not clear. He also mentioned that respondent after receiving the goods have sold them to others and still he did not pay the money. Such averments would prima facie make out a case for investigation by the authorities.

<ORG> seems to have adopted a strictly hyper-technical approach and sieved the complaint through a cullendar of finest gauzes for testing the ingredients under Section 415 , IPC . Such an endeavour may be justified during trial, but certainly not during the stage of investigation. At any rate, it is too premature a stage for <ORG> to step in and stall the investigation by declaring that it is a commercial transaction simplicitor wherein no semblance of criminal offence is involved.

The appellant is, therefore, right in contending that the FIR should not have been quashed in this case and the investigation should have been allowed to proceed.

We, therefore, allow this appeal and set aside the impugned order.


PETITIONER: <NAME> AND <ORG>. Vs. RESPONDENT: STATE OF BIHAR AND <ORG>. DATE OF JUDGMENT10/04/1992 BENCH: KASLIWAL, N.M. (J) BENCH: KASLIWAL, N.M. (J) SAHAI, R.M. (J) CITATION: 1992 AIR 1348 1992 SCR (2) 516 1992 SCC Supl. (2) 343 JT 1992 (4) 155 1992 SCALE (2)817 ACT: Electricity (Supply) Act , 1948 : Section 15 and 78-A . <ORG> Junior Electrical Engineer (General) Cadre Rules, 1982-Rule 7-As amended by Notification dated 14.10.1988. <ORG>-Recruitment of Junior Electical Engineers-Panel-Appointment of some candidates in order of merit-But candidates lower in merit could not be appointed due to non-availability of vacancies-Appointment of such candidates on the lower post of Operator-Undertaking by them that they will not claim in future the post of Junior Electrical Engineer-Subsequent claim by such candidates and direction by <ORG> Government under Section 78-A to appoint and absorb them in the post of Electrical Engineer-Held direction given by <ORG> was encroachment on <ORG>s power under Section 15-Undertaking given by candidates would not estop them from being considered for future posts-Direction to fill the posts in the ratio of 75% by direct recruitment and 25% by absorption as contemplated under Rule 7. Service Law-Recruitment-Panel-Filing of vacancies-Mere existence of vacancies is not sufficient-Employer can decide how many posts are to be filled. HEADNOTE: The <ORG> invited applications for the posts of Junior Electrical Engineers and on the basis of a written test and oral test prepared a panel of 790 candidates in the year 1984 which was valid for one year. Out of this panel, 447 candidates were appointed according to merit but the remaining posts could not be filled due to non-availability of posts. Since the position of the appellants was lowerer in the merit list they were also not appointed. However, they were appointed against the vacant posts of Operators, for which the requisite qualifications was Diploma in Engineering, on their giving a specific undertaking that they would not make any claim for appointment as Junior Electrical Engineer. 517 By its advertisment dated 29.7.89 the <ORG> applications for the posts of Junior Electrical Engineers which feel vacant later. The appellants made their claim for appointment as Junior Electrical Engineers and <ORG> issued instructions under Section 78-A of the Electricity (Supply) Act, 1948 to the <ORG> to appoint and absorb them. The <ORG> failed to comply with <ORG>'s direction and the appellants filed petitions in <ORG> of Patna for quashing the advertisement dated 29.7.89 and for a direction to appoint and absorb them in the vacant substantive posts of Junior Electrical Engineers. <ORG> dismissed the petitions holding that (i) the power under Section 78-A is to be exercised by <ORG> Government only when some questions of policy are involved and it cannot be exercised for directing that a particular individual or a group of persons be appointed as officers of the <ORG> and; the board has power to make appointments under Section 15 and it was not bound to follow the directions of <ORG> because it would amount to encroachment on its power under Section 15 ; (ii) the appellants were appointed as Operators on their undertaking and at a later stage they could not claim appointment against the posts of Junior Electrical Engineers; (iii) in view of the amended rule 7 of the <ORG> Junior Electrical Engineer (General) Cadre Rules, 1982 the appellants could not be absorbed without consideration of inter-se merit by Selection Committee. In appeal to this <ORG>, it was contended on behalf of the appellants that (i) the direction issued by <ORG> under Section 78-A of the Act was no question of policy and was binding on the <ORG>; (ii) the undertaking given by the appellants cannot deprive them from being appointed on future vacancies and the undertaking was violative of Article 16 of the Constitution; (iii) the posts of Junior Electrical Engineers were vacant even before the expiry of panel and the <ORG> should have absorbed the appellants against the aforesaid posts. On behalf on the <ORG> it was contended that (i) under section 78-A of the Act the <ORG> can issue directions only on questions of policy and it cannot direct the <ORG> to make appointments dehors the Rules; (ii) the panel for Junior Electrical Engineers was valid for one year and the appellants had no legal right to be appointed on the basis of their 518 inclusion in the expired panel. Dismissing the appeals, this <ORG>, HELD :1. Section 78 of the Electricity (Supply) Act, 1948 clearly lays down that the <ORG> shall be guided by such directions on questions of policy as may be given to it by <ORG>. In the circumstances of the case the directions given by <ORG> cannot be considered as directions on any questions of policy. Therefore, the view taken by <ORG> that the direction given by <ORG> to the <ORG> to appoint the appellants as Junior Engineers does not involve any matter of policy and was an encroachment on the powers of the <ORG> under Section 15 of the Act is correct. [524D-H, 525A] 2. The life of the panel was one year which came to an end after one year and that being so no right can be claimed by the appellants after one year on the basis of inclusion of their names in the panel list for the posts of Junior Electrical Engineers. But the giving of any undertaking cannot estop the appellants from being considered for the future vacancies of Junior Electrical Engineers and the appellants cannot be deprived for all times to come. Therefore, the <ORG> cannot deny the right of the appellants for appointment on the posts of Junior Electrical Engineers sought to be filled on the ground that they had given any undertaking at the time of their appointment as Operators. [525A-C, 526B] 3. As contemplated in Rule 7 of the <ORG> Junior Electrical Engineer (General) Cadre Rules, 1982 read with modification made by Notification dated 14.10.1988 issued under Section 79(c) of the Act, the <ORG> has to make appointments for the posts of Junior Electrical Engineering and by adsorption of the <ORG>'s employees serving on lower posts in the ratio of 75 : 25 and the appellants would also have a right to be considered for such appointments. [525C, 526B-C] 3.1. Accordingly the <ORG> is directed to issue a fresh advertisement for filling of the posts of junior Electrical Engineers having fallen due and to make appointments in the ratio of 75 per cent by direct recruitment and 25 per cent by absorption as contemplated under Rule 7. Age bar should not be considered as disqualification in respect of all those persons who were included in the panel of 1984. [526E-F] 519 4. It is no doubt correct that vacancies in the general and GTO cadres of Junior Electrical Engineers were existing when the panel was operative but it lies with the <ORG> of decide as to how many posts are required to be filled. Merely existence of vacancies alone is not sufficient until the <ORG> considered it necessary as to how many posts were required to be filled in any year in order to carry out its function and duties. [527A- <CITATION> , A.I.R. 1968 Kerala 76; <CITATION> ., A.I.R. 1969 AP 328, cited. JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1627 & 1628 of 1992.

From the Judgment and Order dated 12.12.90 of <ORG> C.W.J.C. No. 7348 & Civil Writ Petition No. 7183 of 1989.

Dr. <NAME>, <NAME> and <NAME> for the Appellants.

<NAME>, <NAME> and <NAME> for the Respondents.

The Judgment of this Court was delivered by <NAME>, <NAME> Special leave granted.

Appeal in SLP No. 3859 of 1991 arises out of the Judgment of <ORG> dated 12.12.1990 in Writ Petition No. 7348 of 1989 and Appeal in SLP No. 7642 of 1991 arises out of the judgment dated 12.12.1990 given by <ORG> in Writ Petition No. 7183 of 1989. Both the above appeals are disposed of by one single order as both arise in identical circumstances and are intimately connected with each other.

<NAME> and 120 other persons working as Operators in <ORG> filed a Writ Petition No. 7348 of 1989 in <ORG> for quashing the advertisement dated 29.7.1989 issued by <ORG> (in short 'the <ORG>') for filling up vacancies of Junior Electrical Engineers by direct recruitment and for a direction to the <ORG> to comply with the directions of <ORG> dated 18.7.1988 and 5.5.1989 to appoint/absorb the petitioners in the vacant substantive posts of Junior Electrical Engineers.

The Board issued an advertisment No.1/83 dated 26.5.1983 in newspapers inviting applications form eligible candidates for appointment to 447 posts of Junior Electrical Engineers. The petitioners applied for the said posts of Junior Electrical Engineers. On 22.10.1983 a competitive written test was held and 840 candidates including the petitioners were declared successful in the written test. The successful candidates were called for an interview which was held on different dates in the year 1984. On the basis of the above written and oral test a panel of 790 candidates was prepared. Out of the aforesaid panel, 447 candidates, according to the merit list were given appointment on the aforesaid on the posts of Junior Electrical Engineers. As no posts of Junior Electrical Engineers were available for the remaining 343 candidates which included the petitioners, they could not be appointed on the posts of Junior Electrical Engineers. As number of posts of Operators were also vacant and for which the requisite qualifications was Diploma in Electrical Engineering, it was, therefore, decided that the vacant posts of Operators may also be filled up by such candidates who were willing to opt for that employment but would not claim the post of Junior Engineer on the ground that they had applied for appointment to the post of Junior Engineer. The petitioners opted for the posts of Operators with a specific undertaking that they would not claim for the posts of Junior Electrical Engineers by virtue of their having applied for appointment to the posts of Junior Engineers and having technical qualifications. The petitioners subsequently made claim before the Board and <ORG> that they should be absorbed against the vacant posts of Junior Electrical Engineers on the basis of the merit list and panel prepared in the year 1984. <ORG> having convinced with the claim of the petitioners by communication dated 18.7.1988 wrote to the Board that as the petitioners had appeared in the written test for being appointed against the posts of Junior Electrical Engineers, any undertaking given by them on the eve of their appointments as Operators was an unreasonable restriction, as such they may be absorbed against the posts of Junior Electrical Engineers, which became available later during the years 1984 and 1985. It was mentioned in the above communication that the said direction was being issued in exercise of the power under Section 78-A of the Electricity (Supply) Act, 1948 (hereinafter referred to as 'the Act'). Another communication of a similar nature was issued by <ORG> on 5.5.1989 reiterating the earlier direction given vide letter dated 18.7.1988. The board did not comply with the aforesaid direction of <ORG> as such the petitioners filed a Writ Petition in <ORG> with the prayer to quash the advertisement dated 29.7.1989 and to appoint/absorb the petitioners to the vacant substantive posts of Junior Electrical Engineers.

The stand taken by the <ORG> in the counter affidavit before <ORG> was that only 447 posts of Junior Electrical Engineers were advertised for appointment and according to the merit list 447 posts were filled and the position of the petitioners being lower in the merit list, they could not be appointed. Thereafter, on the recommendation of a committee, the petitioners were appointed against the posts of Operators in Thermal Power Stations with a specific condition that they shall not later make any claim for appointment as Junior Electrical Engineer. When the petitioners accepted the said condition, they were appointed as Operators. The panel/merit list which was prepared in the year 1984 lost its validity on 13.9.1985 after the lapse of one year. The posts of Junior Electrical Engineers which fell vacant later have been advertised by the advertisement dated 29.7.1989 and fresh applications have been invited to fill the posts in accordance with the Rules. It was further stated by the <ORG> that <ORG> had no power to give such direction under Section 78-A of the Act. The <ORG> itself has power to make appointments of officers and employees under Section 15 of the Act.

<ORG> held that the <ORG> is a statutory authority constituted by <ORG> under Section 5 of the Act. Section 15 of the Act in clear and unambiguous words vests power in the <ORG> to appoint its officers and employees as may be required to enable the <ORG> to carry out the functions under the Act. The appointment of the Secretary of the <ORG> alone is subject to the approval of <ORG>. So far as other officers and employees of the <ORG> are concerned, no approval is required to be taken from <ORG>. <ORG> further held that the power under Section 78- A of the Act is to be exercised by <ORG> only when some questions of policy are involved. Such power is not to be exercised for directing that particular individual or a group of persons be appointed as officers of the <ORG>. The <ORG> being an autonomous authority clothed with the power to make appointments of its officers and employees under Section 15 of the Act is not bound to follow the directions given by <ORG> which amounted to an encroachment on the power of the <ORG> vested under Section 15 of the Act. <ORG> in taking the aforesaid view placed reliance on a Full Bench authority of <ORG> in <CITATION> , AIR 1968 Kerala P.76 and a Division Bench authority of <ORG> in <CITATION> , AIR 1969 Andhra Pradesh P.328. <ORG> also held that whenever vacancies exist in public offices an opportunity should be given to all persons eligible on the date such posts are to be filled up, for being considered for appointed as Operators on undertaking being given by them individually that at later stage they shall not claim for being appointed against the posts of Junior Electrical Engineers. <ORG> further held that under Rule 7 of the Bihar State Electricity <ORG> Junior Electrical Engineer (General) Cadre Rules, 1982 as amended by a new Rule 7 by Notification dated 14.10.1988 issued under Section 79(c) of the Act <ORG> has to consider the cases of Diploma holders who had acquired the Diploma before joining the lower posts under the <ORG> or have acquired Diploma while in the service of the <ORG> for being appointed against the posts of Junior Electrical Engineers. In view of this amended Rule which had come into force on 14.10.1988, now there was no question of absorption of the petitioners outright without consideration of inter se merit by <ORG>. <ORG> in the view taken above passed the following order :

"For the reasons mentioned above, it is not possible to hold that the two communications dated 18.7.1988 and 5.5.1989 shall be deemed to be a direction on question of policy by <ORG> so that this Court may issue a writ of mandamus directing the <ORG> to comply with those Directions. It is also not possible for this Court to issue a direction to the <ORG> to absorb the petitioners straightway against the posts of Junior Electrical Engineers : of course, it will be open to the <ORG> to consider the cases of the petitioners along with others for appointments to the posts of Junior Electrical Engineers in accordance with the new Rule 7 referred to above. This writ application is, accordingly, dismissed. In the circumstances of the cases, there shall be no order for costs."

We have heard learned counsel for the parties at length and have perused the record. Dr. <NAME>, Learned Senior Advocate appearing on behalf of the appellants contended that the direction issued by <ORG> vide letters dated 18.7.1988 and 5.5.1989 under Section 78-A of the Act was binding on the <ORG>. It was contended that the directions given in the aforesaid letters was on questions of policy and <ORG> was fully authorised to give such directions to the <ORG> in exercise of its power conferred under Section 78-A of the Act. It was further submitted that the appellants were selected for the posts of Junior Electrical Engineers after passing the written and oral examination and were kept in the merit/panel list of 1984. It was contended that merely because the appellants have an undertaking while being appointed as Operators that they would not lay any claim on the posts of Junior Electrical Engineers, cannot deprive them from being appointed on future vacancies of Junior Electrical Engineers. The undertaking was unconscionable and violative of Article 16 of the Constitution. It was submitted that some of the appellants have become over age and it would not be possible for the appellants to compete with the fresh incumbents in case the posts are filled by direct recruitment. It was contended that all the appellants are Diploma holders and have additional advantage of experience on the post of Operators and in these circumstances the appellants should be absorbed against the vacant posts of Junior Electrical Engineers without competing with the direct recruits.

On the other hand, Learned Counsel appearing for the <ORG> supported the judgment of <ORG> and contended that the panel of 1984 exhausted after one year and thereafter the appellants had no right or claim whatsoever on the posts of Junior Electrical Engineers to be filled now through advertisement issued on 29.7.1989. It was further submitted that the <ORG> had shown a gesture of goodwill by giving appointment to the appellants on the post of Operators and now the appellants cannot put forth a legal right for being appointed as Junior Electrical Engineers after a period of more than 4 years on the basis of inclusion in the panel of 1984. They have to compete with other fresh competitors who have become eligible for such posts to be filled by direct recruitment according to the Rules. It has been submitted that Section 78-A of the Act empowers <ORG> to issue directions of policy and no direction under such power can be given to the <ORG> to make appointment of the appellants dehors the Rules.

Section 78-A of the Act reads as under :-

"Directions by <ORG>. - (1) In the discharge of its functions, the Board shall be guided by such directions on questions of policy as may be given to it by <ORG>.

(2) If any dispute arises between the <ORG> and <ORG> as to whether a question is or is not a question of policy, it shall be referred to the <ORG> whose decision thereon shall be final."

The above provision clearly lays down that the <ORG> shall be guided by such directions on questions of policy as may be given to it by <ORG>. In the circumstances of the case before us the directions given under letters dated 18.7.1988 and 5.5.1989 cannot be considered as directions on any question of policy. So far as the appointment of staff is concerned, Section 15 empowers the <ORG> to appoint such officers and employees as may be required to enable the <ORG> to carry out its functions under the Act. Section 15 of the Act reads as under :-

"Appointment of staff. - The <ORG> may appoint a Secretary and such other officers and employees as may be required to enable to <ORG> to carry out its functions under this Act :

Provided that the appointment of the Secretary shall be subject to the approval of <ORG>."

Thus, under the proviso to Section 15 , it is only the appointment of the Secretary which is subject to the approval of <ORG>. So far as other staff is concerned, it lies with the <ORG> to make appointment of all officers and employees as may be required to enable the <ORG> to carry out its functions under the Act. Thus, we agree with the view taken by <ORG> in this regard that the direction given by <ORG> to appoint the appellants as Junior Engineers by the <ORG> does not involve any matter of policy and it would be an encroachment on the powers of the <ORG> given under Section 15 of the Act. It is not in dispute that the life of the panel was one year which came to an end on 13.9.1985 and that being so no right can be claimed by the appellants after 13.9.1985 on the basis of inclusion of their names in the panel list of 1984 for the posts of Junior Electrical Engineers. So far as giving of any undertaking is concerned, we are in agreement with the contention of the Learned Counsel for the appellants that such undertaking cannot estop the appellants from being considered for the future vacancies of Junior Electrical Engineers and the appellants cannot be deprived for all times to come. The post of Junior Electrical Engineer is now governed by the Bihar State Electricity Junior Electrical Engineer (General) Cadre Rules, 1982 and specially Rule 7 read with modification made by Notification dated 14.10.1988 issued under Section 79 (c) of the Act which reads as follows :-

"Appointments to the posts of Junior Electrical Engineers from amongst the employees of the <ORG> having Diploma in Electrical Engineering will be made on the basis of the recommendations of <ORG> which will be constituted by the Chairman for the purpose. <ORG> will examine the records and interview the candidates who obtain diploma in Electrical Engineering while in the service of the <ORG> along with those employees who had obtained diploma in Electrical Engineering before joining the service of the <ORG>."

Thus, by a combined reading of Rule 7, posts of Junior Electrical Engineers (General) Cadre shall be filled by direct recruitment from Diploma holders in Electrical Engineering and by absorption of the board's employees serving on lower posts. Appointment by direct recruitment and by absorption shall be made against vacancies in a calendar year in the ratio of 75-25. Now in case of appointment to the posts of Junior Electrical Engineers if made by absorption from amongst the employees of the <ORG> serving on lower posts that has to be made through a process of screening by <ORG>. So far as appointment to be made by direct recruitment, the candidates have to be selected on the basis of merit after going through the process of written and oral examination and the appellants shall have to compete with all the Diploma holders who would compete for such posts of Junior Electrical Engineers to be filled by direct recruitment. The <ORG> in this regard has clearly stated in the counter affidavit filed before this Court that the appellants who apply for the posts of Junior Electrical Engineers as and when advertisement is issued and appear at the competitive examination to be held again by the <ORG> for appointment on the posts of Junior Engineers and in case they Compete, they would be appointed against the posts of Junior Electrical Engineers. The <ORG>, of course, cannot deny the right of the appellants for appointment on the posts of Junior Electrical Engineers now sought to be filled on the ground that the appellants had given any undertaking at the time of their appointment as Operators. The <ORG> has to make appointments for the posts of Junior Electrical Engineers both by way of direct recruitment from Diploma holders in Electrical Engineering and by absorption of the <ORG>'s employees serving on lower posts in the ratio of 75- 25 as contemplated in Rule 7 and the appellants would also have a right to be considered for such appointments. We have been informed during the course of argument on behalf of the <ORG> that no written or oral examination has been conducted to fill the posts of Junior Electrical Engineers in pursuance to the advertisement issued on 29.7.1989.

Thus, taking in view the entire facts and circumstances of the case and in order to do full justice to all the persons concerned, we direct the Board to issue a fresh advertisement for filling of the posts of Junior Electrical Engineers having fallen due upto 31st March, 1992 and to make appointments in the ratio of 75 per cent by direct recruitment and 25 percent by absorption as contemplated under Rule 7. It is further directed that age bar would not be considered as disqualification in respect of all those persons who were included in the panel list of 790 persons prepared in 1984.

So far as appeal in SLP No. 7642 of 1991 is concerned, it arises out of the writ petition No.7183 of 1989 filed before <ORG> by 65 persons. These 65 persons are also those persons who were included in the panel of 790 person prepared in 1984 and who did not qualify in merit for being appointed on 447 posts of Junior Electrical Engineers. Thus, they are also falling in the same category as that of 121 appellants of appeal arising out of SLP No.3859 of 1991. The appellants in this case have put forth an additional ground that 116 posts of Junior Electrical Engineers had fallen vacant even before the expiry of one year and the <ORG> ought to have absorbed the appellant against the aforesaid 116 posts of Junior Electrical Engineers. It is no doubt correct that 116 vacancies in the general and GTO cadres of Junior Electrical Engineers were existing as on 31.12.1985, but in our view it lies with the <ORG> to decide as to how many posts of Junior Electrical Engineers are required to be filled to enable the <ORG> to carry out its functions under the Act. Merely existence of vacancies alone is not sufficient until the <ORG> considered it necessary as to how many posts were required to be filled in any year in order to carry out its functions and duties. There is no allegation that the posts were not released for appointment with any mala fide intention or in order to give benefit to any person by virtue of postponement of filling such vacancies. Thus, in our view the appellants of this case also would be governed by the same direction which has been given in the case of appeal arising out of SLP No. 3859 of 1991.

Both the appeals are therefore dismissed in the manner indicated above. There will be no order as to costs in the circumstances of the case.

T.N.A. Appeal dismissed.


PETITIONER: S. L. AGARWAL Vs. RESPONDENT: GENERAL MANAGER, HINDUSTAN STEEL LTD. DATE OF JUDGMENT: 19/12/1969 BENCH: <NAME>, M. (CJ) BENCH: <NAME>, M. (CJ) GROVER, A.N. RAY, A.N. REDDY, P. JAGANMOHAN DUA, I.D. CITATION: 1970 AIR 1150 1970 SCR (3) 363 1969 SCC (1) 177 CITATOR INFO : RF 1972 SC1324 (12) F 1975 SC1239 (5) MV 1975 SC1331 (124,128) D 1979 SC1628 (30) RF 1981 SC 212 (38,44) D 1981 SC 487 (12) C 1984 SC 161 (27) RF 1986 SC1571 (49,52,56) ACT: Constitution of India, Art. 311- Civil post under <ORG> held under <ORG> whether such a post-Holder whether entitled to protection of Article. HEADNOTE: The services of the appellant as Assistant Surgeon in the <ORG>, Ranchi were terminated purportedly in terms of his contract of employment. In a petition under Art. 226 he claimed that the termination was wrongful inasmuch as it was really by way of punishment and Art. 311 of the Constitution had not been complied with. The company resisted the ground by saying that Art. 311 was not applicable to the appellant since he was employed by a corporation and neither belonged to the civil service of the <ORG> nor held a civil post under the union. <ORG> dismissed the' appellant's petition. In appeal before this Court by certificate, the appellant contended that since <ORG> was entirely financed by the <ORG> and its management was directly the responsibility of the President, the post was virtually under the <ORG> of India. HELD : (i) The protection of Art. 311(2) is available to the categories of persons mentioned in cls.-(a)(b) and (c) of Art. 311(l). . The appellant did not fall in the categories mentioned in cls, (a) and (b). He did hold a civil post as opposed to a military post but cl. (c) further required that it must be under the <ORG> or a <ORG>. In view of the existence of shareholders, of capital raised by the issuance of shares, and the lack of connection between the finances of the corporation and the Consolidated Fund of the <ORG>, it must be held that <ORG> was not a department of the <ORG> nor were the servants of it holding posts under the <ORG>. It had its independent existence and by the law relating to corporations it was distinct even from its members. In these circumstances the appellant, as an employee of <ORG>, did not answer the description of a holder of 'a civil post under the <ORG>' as stated in Art. 31 1. <ORG> was therefore right in not affording him the protection of that Article. [367 D; 369 C-E] <ORG> of Bihar v. <ORG> of India, C.A. Nos. 512-513/69 dt. 19- <CITATION> . 612 1966 dt. 19-2-1969, applied. <CITATION> . A.I.R. 1957 Pat. 10, approved. <CITATION> . A.I.R. 1963 Cal. 421, <CITATION> , A.I.R. 1956 Pat. 398 <CITATION> , A.I.R. 1961 All. 503, <CITATION> , ILX C.W.N. 1023 and Tamlin v. Hannaford,  1 K.B.D. 18, referred to. 364 (ii)The contentions sought to be raised by the appellant regarding the validity of the departmental enquiry -against him were not touched upon in the High Court's judgment nor mentioned in the proposed grounds filed with the application for certificate. The appellant could not be allowed to urge them for the first time in this Court. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 524 of 1967. Appeal from the judgment and order dated July 19, 1966 of <ORG> in Misc. Petition No. 33 of 1965.

<NAME> and <NAME>, for the appellant. <NAME>, for the respondents.

<NAME>, <NAME> and <NAME>, for the intervener.

The Judgment of the Court was delivered by <NAME> The appellant, who appeals :by certificate granted by <ORG>, was appointed as Assistant Surgeon on probation, for one year by <ORG>, <ORG>,Ranchi with effect from October 22, 1959. After completing his period of probation he was employed on a contract for 5 years. Ex. P-3 is the Contract of Service which he entered into with the Company. Under the terms of the contract there. was a further period of probation. During the period of probation the Company could terminate his service without notice and without assigning any reason. On the completion of the period of probation, either side could terminate the contract by 3 months' notice without assigning any reason. The Company could also terminate the employment by 'giving in lieu of notice, three months' salary. This term was .applicable till three months immediately before the end of the period of 5 years. If a notice terminating the service was not ven three months before the close of the end of 5 years the contract was automatically extended till the incumbent became superannuated on reaching the age of 55 years. The appellant -passed the probation period and he was en- titled to three months' notice if his services were to be terminated. The Company maintains certain set, of Rules governing the employment of its workmen, in addition to the Standing. Orders of. the. Company. Ex. P-4 represents the procedure for imp sing major penalties - and for punishment and appeal. These are .extracts from the Disciplinary and Appeal Rules.

On September 17, 1964 the appellant. was on duty in <ORG>. He examined one Mrs. <NAME> I who complained of cold, headache and weakness. It appears that Mrs. <NAME> complained of some misbehaviour on the part of the appellant and her husband reported the matter to the Chief Medical Officer of <ORG> where the appellant was then posted. The Chief Medical Officer asked for the explanation of the appellant on September 21, 1964, but the appellant denied the allegation. Some enquiry was then held. The appellant in his appeal submits that he was not given a copy of the written complaint received from Mr. and Mrs. <NAME>. On October 5, 1964 some witnesses were examined in the presence of the appellant. Two days previously the statements of Mr. and Mrs. <NAME> were also recorded. The enquiry was being held by the Commercial Manager. The appellant then sent a notice to Mr. and Mrs. <NAME> charging them with defamation and actually filed a suit on November 17, 1964 demanding damages. On December 15, 1964 the General Manager ter- minated his services with effect from March 15, 1965, that is to say, after the expiry of three months' notice under the contract. It was stated in the order that the services were being terminated in terms of his employment. The appellant thereupon filed a petition under Art. 226 of the Constitution in <ORG> claiming inter-alia that his services were wrongly terminated without giving him the protection granted by Art. 311 of the Constitution. He also complained of breach of the principles of natural justice inasmuch as the enquiry was not proper. His contention was that although the action was ostensibly taken according to the terms of the contract of employment, he was really punished and he was entitled, therefore, to the protection of Art. 3 1 1 of the Constitution. The Company resisted the ground by saying that Art. 311 was not applicable to the appellant inasmuch as he was employed by a <ORG> and neither belonged to the civil service of the <ORG> nor held a civil post under the <ORG>. <ORG> in its judgment ruled that the protection of Art. 311 of the Constitution was not available in the case because the appellant was not entitled to it. It appears that this was the only point urged in <ORG>. In the appeal before us attempt was made to enlarge the case by arguing other points, namely, that the enquiry was not properly conducted, that the principles of natural justice were violated and that the appellant had no opportunity of defending himself. None of these points is- touched upon in <ORG> judgment and it appears that in <ORG> only the constitutional question was raised. Otherwise, one would expect <ORG> to have said something about it, or the appellant to have said so in the application for certificate or in the proposed grounds filed with that, application. We decline to allow these fresh grounds to be urged. The question that arises in this case is : whether the em- ployeesof a <ORG> such as <ORG>, are entitledto the protection of Art. 31 1 ? This question can only be answered in favour of the appellant if we hold that the appellant held a civil post under the <ORG>. It was conceded before us that the appellant could not be said to belong to the civil service of the <ORG> or the <ORG>. Art. 31 1 , on which this contention is based, reads as follows :

"31-1. Dismissal, removal or reduction in rank of persons employed in civil capacities under the <ORG> or a <ORG>. (1) No person who is a member of a civil service of the <ORG> or an all-India service or a civil service or a <ORG> or holds a civil post under the <ORG> or a <ORG> shall be dismissed or removed by an authority subordinate to that by which he was appointed.

(2)No such person as aforesaid shall be dismissed or

-removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action- proposed to be taken in regard to him;

Provided that this clause shall not apply-

(a)where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge;

(b)where an authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that some reasons, to be recorded by that authority in writing, it is not reasonably practicable to give to that person an opportunity of showing cause; or

(c) where the President or Governor, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to give to that person such an opportunity.

(3)If any question arises whether it is reasonably practicable to give to any person an opportunity of showing cause under clause (2), the decision thereon of the <ORG> empowered to dismiss or remove such person or to reduce him in rank, as the case may be, shall be final."

Clause (2) of the article, which gives the protection opens with the words "no such person as aforesaid" and these words take one back to clause (1) which describes the person or persons to whom the protection is intended to go. Clause (1) speaks of (i) persons who are members of (a) <ORG>, or (b) <ORG> or (c) <ORG>, or (ii) hold a civil post under--the <ORG> or a <ORG>. (a), (b) and (c) refer to the standing services which have been created in the <ORG> and the <ORG>s and which are permanently maintained in strength. In addition to the standing services there are certain posts which are outside the permanent services. The last category in Art. 311(l) therefore speaks-of such posts on the civil side as opposed to the military side. Incumbents of such posts also receive protection.

In the present case the appellant did not belong to any of the permanent services. He held a post which was not borne on any of the standing services. It was, however,, a civil post as opposed to a military post. So far the appellant's case is clear but the clause speaks further that such posts must be under the <ORG> or a <ORG>. - The question thus is whether the servant employed here can be said to have held the post under the <ORG> or a <ORG> ? The appellant contends that since <ORG> is entirely financed by

-the <ORG> and its management is directly the responsibility of the President, the post is. virtually under the <ORG> of India.

This argument ignores some fundamental concepts in relation to incorporated companies. In support of the contention that the post must be regarded as one under the <ORG> the appeliant relies on some obiter observations of a single Judge in <CITATION> ( 1). In that case the petitioners were drivers working for <ORG> under <ORG>. The learned Judge considered the question by analysing the set up of <ORG>. He found that it was a <ORG> company and a private limited company, although it did not include in its name any notice Jr that it was a private company. He referred in detail to the various provisions in the Articles of Association as also in the Indian Companies Act which rendered the ordinary company law in applicable in certain respects and conferred unlimited powers. of management on the President of India and his nominees. He also found that <ORG> was entirely owned by the <ORG> of India. From this the learned Judge wished to infer that <ORG> was really a department of" the <ORG> but he did not express this opinion and decided

-the case on another point. The appellant contends that the conclusion which the learned single Judge did not draw in the Calcutta case is the conclusion to draw in this appeal. We must, according to him, hold that there is no difference between <ORG>-and <ORG> and that the service under <ORG> is a service under the <ORG>.

On the other hand, in <CITATION> and

-Anr.(1) <ORG> was not held to be a "State" for purposes of Art. 131. The question whether <ORG> was subject to the jurisdiction of <ORG> under Arts. 226 and 227 was left open. In dealing with the above -conclusion, reference was made to the incorporation of <ORG> as an independent company and thus a distinct entity. <CITATION> .(2) it was pointed out that a company in which 88 % of -,the capital was subscribed by the <ORG> and the State Governments could not be regarded as equivalent to Government because being registered under the Companies Act it had a separate legal existence and could not be said to be either a Government Corporation or an industry run by or under the authority of the <ORG> Government. Similar views were also expressed in <ORG>s. <CITATION> ('), the expression "civil post under the <ORG> or the-State" was held to mean that the civil post must be in the control of the State and that it must be open to the State to 'abolish the post or regulate the conditions of .service. Although the case concerned a Mali employed in Rai Bhavan, it was held that it was not a post under the State even -though the funds of the State were made available for paying, his salary. In a later case- <CITATION> .(')-the employees of <ORG> were held not entitled to the protection of Art. 31 1. Our brother <NAME> (then Chief Justice) noticed that the corporation was completely owned by the <ORG> Government; that the Directors were to be appointed by the President of India -who could also issue directions. He nevertheless held that in the eye of law the company was a separate entity and had a separate legal existence. In our judgment the decision in the -Patna case is correct. . It has also the support of a decision re-ported in <CITATION> (5) and another in <CITATION> ('). Our brother <NAME> relied (1)Civil Appeals Nos. 512-513 etc. of 1969 decide on 19.9.1969.

(2) Civil Appeal No. 612 of 1966 decided on February 19, 1969.

(3) A.I.R. 1956 Pat. 398.

(4) A.I.R. 1957 Pat. 10.

(5) A.I.R. 1961 All. 503.

(6) LX C.W.N. 1023.

in particular upon an English case <NAME> v. Hannaford(1). In that case it was held in relation to a business that although the minister was really incharge, the corporation was different from. the <ORG> and the services of the corporation were not civil services. Justice <NAME> of <ORG>, to. whose judgment we referred earlier distinguished the English, case by pointing out certain differences between the <ORG> in that case and <ORG>. He pointed out that (a)-in the English <ORG> no shareholders were required to, subscribe the capital or to have a. voice in the affair, (b) the capital was raised by borrowing and not by issuance of shares, (c) the loss fell upon the consolidated fund and (d) the corpo-ration was non-profit making. In our judgment these differences rather accentuate than diminish the applicability of the principle laid down in the English case to our case. The existence of shareholders, of capital raised by the issuance of shares, the lack of connection between the finances of the corporation and the consolidated fund of the <ORG> rather make out a greater independent existence than that of the corporation in the English case. We must, therefore, hold that the corporation which is <ORG> in this case is not a department of the <ORG> nor are the servants of it holding posts under the <ORG>. It has its independent existence and by law relating to <ORG>s it is distinct even from its members. In these circumstances, the appellant, who was an employee of <ORG>, does not answer the description of a holder of " a civil post under the <ORG>' as stated in the article. The appellant was not entitled to the protection of Art. 311. <ORG> was therefore right in not affording him the protection. The appeal fails and is dismissed but in the circumstances of the,case we make no order about costs.

G.C. Appeal dismissed.-, (1) [1950] 1 K.B.D. 18.