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PETITIONER: WEST BENGAL STATE ELECTRICITY BOARD & ORS.

       Vs.

RESPONDENT: DESH BANDHU GHOSH AND ORS.

DATE OF JUDGMENT26/02/1985

BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. CHINNAPPA (J) VENKATARAMIAH, E.S. (J) MISRA, R.B. (J)

CITATION:  1985 AIR  722            1985 SCR  (2)1014  1985 SCC  (3) 116        1985 SCALE  (1)297  CITATOR INFO :  RF         1986 SC1571  (61,98,109,110)  R          1987 SC 111  (4)  F          1988 SC 286  (5)  F          1991 SC 101  (6,20,45,48,84,172,182,223,263

ACT:       Administrative  Law-       West   Bengal   State   Electricity  Board  Regulation 34-Regulation   conferred   full   power   on   employer  to terminate services of permanent employee by serving 3 months notice or salary In thereof No  guidelines provided  for the exercise  of  such power-Held. Regulation   is arbitrary and offends Art. 14.

HEADNOTE:       First  Paragraph of Regulation 34 of West Bengal State Electricity Board  Regulations provides  that in  case of  a permanents  employee  his  services  may  be  terminated  by serving 3  months notice  or on  payment of  salary for  the corresponding Period  in lieu  thereof.      The      Secretary    of    the         appellant-Board terminated   the    services    of     first     respondent, a permanent  employee with  immediate effect  on payment  of three months’  salary in lieu of three months notice without giving any  reasons  under  Regulation  34  of  the  Board’s Regulations. There  was nothing  in the  order  which  could possibly be  said to attach any stigma to the respondent The respondent filed  a writ  petition in  the  High  Court  for quashing the  impugned order.  The High  Court came  to  the conclusion that  Regulation 34  was arbitrary  in nature and suffered  from  the  vice  of  enabling  discrimination  and therefore it  struck down  the first paragraph of Regulation 34 and  as a  consequence quashed  the order terminating the services of the first respondent.       In  an appeal  to this  Court, the appellant contended that section  18A and  19 of the Electricity Supply Act laid down sufficient  guidelines for  the exercise  of the  power under Regulation  34 and  in any case the power to terminate the services  of a  permanent employee  was vested in higher ranking officials and might be expected to be exercised in a reasonable way  and therefore  Regulation 34  did not offend

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Article 14 of the Constitution. 1015       Dismissing the appeal, ^       HELD:  Article 14  has  been  interpreted  in  several decisions of  the  Court  and  conferment  and  exercise  of arbitrary power on and by the State or its instrumentalities have been  frowned upon  and struck  down by  this Court  as offending Article 14. [1017G]       In  the instant case, on the face of it the Regulation is totally  arbitrary and confers on the Board a power which is capable  of vicious  discrimination. It  is a naked ’hire and fire’ rule, the time for banishing which altogether from employer-employee relationship  is fast approaching Its only parallel is  to be found in the Henry VIII class so familiar to administrative lawyers.                                                 [10 1017E-F]       Workman, Hindustan Steel Ltd. v. Hindustan Steel Ltd., AIR 1985 SC 251. followed       S.  S. Muley v. J. R. D. Tata and Ors., [1979] 2 S. L. R. 438, approved.       Moti  Ram Deka  v. North  East frontier  Railway,  AIR 1964, SC 600, referred to.      Manohar p.  Kharkhar v.  Raghuraj, [1981]  II L-  L- J. 459, overruled.

JUDGMENT:       CIVIL  Appellate JURISDICTION: Civil Appeal No. 562 of 1985 From  the Judgment  and Order  dated the  28th January, 1985 of  the Calcutta  High Court  in F. M. A. T. No. 970 of 1984.       Somnath Chatterjee, H. K Puri for the Appellants.       S. N. Kacker, ,4. K Ganguli for the Respondents.       The Judgment of the Court was delivered by:       CHINNAPPA REDDY, J Special leave granted.        The  West  Bengal  State  Electricity  Board  is  the principal appellant in this appeal by special leave which we have just  now granted.  The first  respondent, a  permanent employee of  the West  Bengal State Electricity Board, filed the writ  petition out  of which  the appeal  arises in  the Calcutta High  Court to  quash an order dated march 22, 1984 of the Secretary, West Bengal State Electricity 1016 Board terminating  his services  as  Deputy  Secretary  with immediate effect  on payment of three month’s salary in lieu of three  month’s notice.  The order  gave  no  reasons  for terminating the  services of  the respondent  and there  was nothing in  the order which could possibly be said to attach any stigma  to the respondent. Apparently the order was made under Regulation 34 of the Board’s regulations which enables the  Board  to  terminate  the  services  of  any  permanent employee ’by  serving three  months’ notice or on payment of salary for  the corresponding  period in lieu there-of’. The High Court contrasted Regulation 34 with Regulation 33 which provides for  the termination  of services of both permanent and temporary employees of the Board on attaining the age of superannuation, as  a result of the disciplinary action etc. For the  sake of  convenience we extract below Regulation 33 and  the  first  paragraph  (which  alone  is  relevant)  of Regulation 34:                  "33 (1)  Unless otherwise  specified in the      appointment order  in any particular case, the services      of a  permanent employee of the Board may be terminated

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    without  notice-  (i)  On  his  attaining  the  age  of      retirement  or  by  reason  of  a  declaration  by  the      competent  medical  authority  that  he  is  unfit  for      further service; or       (ii) as a result of disciplinary action;       (iii)  if he  remains absent  from duty,  on leave  or other wise, for a continuous period exceeding 2 years.       (2)  In the  case of a temporary employee, his service may be terminated by serving of-       (a) one month’s notice on other side or on payment of‘ a month’s salary in lieu thereof; or       (b)  notice on either side for the period specified in the appointment order or contract or on payment of salary in lieu thereof, as the case may be.       (c)  the service of a temporary employee shall also be deemed to  have been  terminated automatically if the period of extraordinary  leave without  pay and/or  of unauthorized absence from  duties exceeding(s)  a maximum  period  of  90 days. 1017                  "34. in  case of a permanent employees, his      services A  may be  terminated by serving three months’      notice or  on payment  of salary  for the corresponding      period in lieu thereof."       Contrasting  Regulations 33 and 34 the High Court came to the conclusion that Regulation 34 was arbitrary in nature and suffered  from the  vice of enabling discrimination. The High Court,  therefore, struck  down the  first paragraph of Regulation  34  and  as  a  consequence  quashed  the  order terminating the services of the first respondent.        The   learned  counsel  for  the  West  Bengal  State Electricity Board  submitted  that  Regulation  34  did  not offend Art.  14 of the Constitution, that sec. 18A and 19 of the Electricity  Supply Act  laid down sufficient guidelines for the exercise of the power under Regulation 34 and in any case the  power to  terminate the  services of  a  permanent employee was vested in higher ranking officials and might be expected to be exercised in a reasonable way.       We  are not  impressed  with  the  submission  of  the learned counsel  for the  Board- On  the  face  of  it,  the regulation is  totally arbitrary  and confers on the Board a power which  is capable  of vicious  discrimination- It is a naked ’hire  and fire’  rule, the  time for  banishing which altogether  from   employer-employee  relationship  is  fast approaching. Its  only parallel  is to be found in the Henry VIII class so familiar to administrative lawyers In Moti Ram Deka v. North East frontier Railway(l) Rules 148 (3) and 149 (3) of the Indian Railway Establishment Code were challenged on the ground that they were contrary to Art. 311 (2) of the Constitution. The challenge was upheld though no opinion was expressed on  the question  whether the rule offended art 14 of the Constitution. Since then Art. 14 has been interpreted in several  decisions  of  this  Court  and  conferment  and exercise of  arbitrary power  on and  by the  State  or  its instrumentalities have  been frowned  upon and struck down < by this  court as  offending Art. 14. In S. S. Muley v. J.R. D. T(Tata  and Ors.(2)  P. B-  Sawant, J- of the Bombay High Court considered  at great  length Regulation  48 (a) of the Air India  Employee’s Service  Regulations  which  conferred similar power on the Corporation (1) AIR 1964, S C. 600. (2) [1979] 2 S.L.R. 438. 1018 as Regulation  34 confers  on the Board in the present case. The learned judge struck down Regulation 48 (a) and we agree

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with his  reasoning and  conclusion. In  Workman,  Hindustan Steel  Ltd.  v.  Hindustan  Steel  Ltd.(l)  this  Court  had occasioned to  hold that  a Standing  Order which  conferred such arbitrary,  uncanalised and drastic power to enable the employer to  dispense with  an inquiry  and  to  dismiss  an employee, without  assigning any  reason, by  merely stating that it  was expedient  and  against  the  interest  of  the security to  continue to employ the workman was violative of the basic requirement of natural justice.       The  learned counsel  for the  appellant  relied  upon Manohar  P.   Kharkhar  v.   Raghuraj(2)  to   contend  that Regulation  48   of  the   Air  India   Employee’s   Service Regulations was  valid. It  is difficult  to agree  with the reasoning of  the Delhi  High  Court  that  because  of  the complexities of  modern administration and the unpredictable exigencies arising  in the  course of such administration it is necessary  for an  employer to be vested with such powers as those  under Regulation  48. We  prefer the  reasoning of Sawant, J. Of the Bombay High Court and that of the Calcutta High Court  in the judgment under appeal to the reasoning of the Delhi  High Court. In the result the appeal is dismissed with costs. M. L. A.                                   Appeal dismissed. (1) A.I.R. 1985 S.C. 251 (2) [1981] II L.L.J. 459. 1019