- (1.) These civil appeals, special leave petitions and civil miscellaneous petitions deal with the question of constitutional validity of the right of the employer to terminate the services of permanent employees without holding any inquiry in certain circumstances by reasonable notice or pay in lieu of notice. The facts involved in these matters are diverse but the central question involved in all these is one, i.e. whether the clauses permitting the employers or the authori- ties concerned to terminate the employment of the employees by giving reasonable notice or pay in lieu of notice but without holding any inquiry, are constitutionally valid and, if not, what would be the consequences of termination by virtue of such clauses or powers, and further whether such powers and clauses could be so read with such conditions which would make such powers constitutionally and legally valid? In order to appreciate the question the factual matrix of these cases so far as these are relevant for the' determination of the aforesaid questions, will have to be borne in mind in the light of the actual legal provisions involved in the respective cases.
(2.) It will, therefore, be proper and appropriate to deal with the relevant facts in civil appeal No. 2876 of 1986 first. The appellant herein--the Delhi Transport Corpora- tion, is a statutory body formed and established under Section 3 of the Delhi Road Transport Act, 1950 read with Delhi Road Transport (Amendment) Act, 1971 (hereinafter called 'the Act'). The appellant carries out the objects of vital public utility, according to the appellant, i.e. transport of passengers in the Union Territory of Delhi and other areas. Respondent No. 2, Sri Ishwar Singh was appoint- ed as conductor therein on probation for a period of 1 year in 1970. The probation period was extended thereafter for a further period of one year and thereafter he was regularised in service of the appellant. Similarly, respondent No. 3--Sri Ram Phal was appointed as Assistant Traffic Incharge and after the probation period he was regularised in serv- ice. Respondent No. 4--Sri Vir Bhan was appointed as driver and after completing the probation period he was also regu- larised in service. It is stated that respondents Nos. 2 to 4 became, according to the appellant, inefficient in their work and started inciting other staff members not to perform their duties. They were served with termination notices on 4th June, 1985 under Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment & Service) Regulations, 1952. On 11th June, 1985 respondents Nos. 2 to 4 and their Union being respondent No. I-DTC Mazdoor Con- gress, filed writ petition No. 1422/85 in Delhi High Court, challenging the constitutional validity of Regulation 9(b) of the Delhi Road Transport Act. On 11th May, 1986 the division bench of the High Court of Delhi allowed the said writ petition and struck down Regulation 9(b) of the said Regulations, and directed the appellant to pay back respondents' wages and benefits within 3 months from the date of the said judgment. This is an appeal, therefrom, by special leave. The question, therefore, is, was the High Court justified in the view it took? It may be mentioned that regulations 9(a) & (b) were framed in exer- cise of the powers conferred u/s 53 of the said Act, which enables the formulation of Regulations. Regulation 9 of the said regulations, which is material for the present contro- versy, reads as follows: "9. Termination of service: (a) Except as otherwise speci- fied in the appointment orders, the services of an employee of the authority may be terminated without any notice or pay in lieu of notice: (i) During the period of probation and without assigning any reason thereof. (ii) For misconduct, (iii) On the completion of specific period of appointment. (iv) In the case of employees engaged on contract for a specific period, on the expiration of such period in accord- ance with the terms of appointment. (b) Where the termination is made due to reduction of estab- lishment or in circumstances other than those mentioned at (a) above, one month notice or pay in lieu thereof will be given to all categories of employees. (c) Where a regular/temporary employee wishes to resign from his post under the authority he shall give three/one month's notice in writing or pay in lieu thereof to the Authority provided that in special cases, the General Manager may relax, at his discretion, the conditions regarding the period of notice of resignation or pay in lieu thereof."
(3.) The said Regulation, as set out hereinbefore, deals with termination of services. Four contingencies are contemplated vide clause (a) of Regulation 9, whereupon the services of employees may be terminated without any notice or pay in lieu thereof except as otherwise provided in the appointment order. Apart from these four contingencies where termination is made due to reduction of establishment or in circumstances other than those mentioned in clause (a) above, one month's notice of pay in lieu thereof is required to be given to all categories of employees. Therefore, except in the said four cases, if there is reduction of establishment or there is any termination uncovered by these four contingencies referred to in clause (a) the same shall be by giving one month's notice or pay in lieu thereof to all categories of employees. Clause (c) postulates when a regular or temporary employee wishes to resign from his post under the authority then in such a situation one month's notice in writing or pay in lieu thereof to the authority may be provided. The High Court in the judgment under appeal noted that since the filing of this petition the notices issued by D.T.C. to its various employees have been withdrawn and all these persons have been reinstated, therefore, the court was not concerned with the validity of clause (a) of Regulation 9 but respondents Nos. 2 to 4 against whom action had been taken by the appellant by issuing notices of termination under Regulation 9(b) had not been reinstated and the court considered the validity of Regulation 9(b). It was held by the court that the said provision gave absolute, unbridled and arbitrary powers to the Management to terminate the services of any permanent or temporary employee. It was contended that such power was violative of Article 14 of the Constitution. In support of this contention, reliance had been placed, on which the High Court also relied upon, on the decision of this Court in Workmen of Hindustan Steel Ltd. & Anr. v. Hindustan Steel Ltd. & Ors., 1985 2 SCR 428. In that case, Standing Order 31 of M/s. Hindustan Steel Ltd., a public sector undertaking, had prescribed for a detailed procedure for dealing with cases of misconduct; and for imposing major penalty, the employer had to draw up a chargesheet and give an opportunity to the delinquent workman to make his repre- sentation within 7 days. If the allegations were controvert- ed, an enquiry had to be held by an officer to be nominated by the management and in such an enquiry reasonable opportu- nity of explaining and defending the alleged misconduct had to be given to the workman. Suspension of the delinquent workman pending enquiry was also permitted. At the end of the enquiry, if the charges were proved, and it was provi- sionally decided to impose any major penalty, the delinquent workman had to be afforded a further reasonable opportunity to represent why the penalty should not be imposed on him. Standing Order 32 provided for a special procedure in case a workman was convicted for a criminal offence in a court of law or where the General Manager was satisfied for reasons to be recorded in writing that it was inexpedient or against the interests of security to continue to employ the workmen' viz. the workman could be removed or dismissed from service without following the procedure laid down in Standing Order No. 31. There the appellant was an Assistant in the respondent's undertaking, who was removed from service on the ground that it was no longer expedient to employ him. The management dispensed with the departmental enquiry, after looking into the secret report of one of their officers that the appellant therein had misbehaved with the wife of an employee and that a complaint in respect thereof had been lodged with the po- lice. In the reference to the Industrial Tribunal, the Tribunal held that as the employer dispensed with the disci- plinary enquiry in exercise of the power conferred by Stand- ing Order 32, it could not be said that the dismissal was unjustified, and that if there were allegations of miscon- duct, the employer was quite competent to pass an order of removal from service without holding any enquiry in view of the provisions contained in Standing Order 32, and rejected the reference. There was an appeal to this Court. This Court held that the reasons for dispensing with the enquiry do not spell out what was the nature of the misconduct alleged to have been committed by the appellant and what prompted the General Manager to dispense with the enquiry. As there was no justification for dispensing with the enquiry, imposition of penalty of dismissal without the disciplinary enquiry as contemplated by Standing Order 31 was illegal and invalid. It was directed that the respondent should recall and cancel the order dated 24th August, 1970 removing the appellant from service, and reinstate him and on the same day the appellant was directed to tender resignation of his post which should be accepted by the respondent. The respondent should pay as and by way of back wages and future wages, a sum of Rs.1.5 lakhs to the appellant within 2 months which should be spread over from year to year commencing from the date of removal from service. It was reiterated that where an order casts a stigma or affected livelihood, before making the order, principles of natural justice of a reason- able opportunity to present one's case and controvert the adverse evidence must have full play. Even under the Consti- tution which permits dispensing with the inquiry under Article 311(2) a safeguard is introduced that the concerned authority must specify reasons for its decision why it was not reasonably practicable to hold the inquiry. Standing Order 32 nowhere obligates the General Manager to record reasons for dispensing with the inquiry as prescribed by Standing Order 31. On the contrary, it was held that the language of Standing Order 32 enjoins a duty upon the Gener- al Manager to record reasons for his satisfaction why it was inexpedient or against the interest of the security of the State to continue to employ the workman. Reasons for dispensing with the enquiry and reasons for not continuing to employ the workman, stand wholly apart from each other. This Court finally observed that it was time for the public sector undertaking to recast Standing Order, and to bring it in tune with the philosophy of the Constitution failing which the vires of the said Standing Order ,would have to be examined in an appropriate proceeding.;