- (1.) This is an appeal by special leave. The appellants before us are the Nagpur Electric Light and Power Co. Ltd. (hereinafter referred to as the Company), a public limited company having its registered office at Nagpur in Madhya Pradesh, its Manager, and Assistant Manager. The respondent, Shreepathi Rao, joined the service of the Company as a typist on a salary of Rs. 30 per month in July, 1936. He rose in rank from time to time and was appointed Deputy Head Clerk in 1947 in the grade of Rs. 120-10-225. Since 1952 he has been receiving a basic salary of Rs. 245 per month. On 28th November 1955, an explanation was called for from him with regard to the issue of certain bills to consumers of electricity called "high tension consumers", without having certain "notes for the information of consumers" printed at the back of the bills. The respondent submitted his explanation on the next day, marking a copy thereof to one of the directors of the Company. On 2nd December 1955, he was again asked to explain why he marked a copy of his explanation to one of the directors. The respondent submitted an explanation in respect of this matter also. On the same date, he was again asked to explain as to how and why certain "double adjustments" has been made in the accounts of 1954 relating to the consumers' department of the Company, the allegation being that a sum of Rs. 1,05,894-7-7 which represented the amount of bills of the Central Railway had been deducted twice in the accounts. The respondent submitted an explanation on 3rd December 1955, in which he said that the charge was vague and that, after 1949, he was not in any way concerned with the preparation of summaries and annual statements of accounts of the consumers' department. On 5th December 1955, an order of suspension was made against the respondent which stated that the order was to take immediate effect and to remain in force until further orders, pending some investigation against the respondent. Two days later, on 7th December 1955, a memorandum was served on the respondent terminating his services with effect from 31st January 1956. The memorandum, so far as it is relevant for our purpose, read- "we hereby give you notice under Standing Order 16 (1) that your service will stand terminated as from 31st January 1956. The Company's Managing Director is 'satisfied that it is not in the interests of the business of the Company to disclose reasons for terminating your services." On 19th December 1955, a notice was served on the Company on behalf of the respondent wherein it was stated that the order of suspension dated 5th December 1955, and the order of termination dated 7th December 1955, were illegal and ultra vires and a request was made to withdraw the said orders and reinstate the respondent within 24 hours, failing which the respondent said that he would take legal action in the matter. On 26th December 1955, the Company sent a reply to the notice denying the allegations, and the Company further stated that it had no desire to enter into a discussion with the respondent as to the propriety of the orders passed.
(2.) On 2nd January 1956, the respondent filed a petition under Art. 226 of the Constitution in the High Court at Nagpur in which he prayed for the issue of appropriate writs or directions quashing the orders of suspension and termination dated 5th December 1955, and 7th December 1955, respectively and asking for certain other reliefs. This petition was heard by a learned single Judge on certain preliminary objections raised by the present appellants, and, by an order dated 14th April 1956, he upheld the preliminary objections and dismissed the petition. The preliminary objections taken were these : it was urged that the service of the respondent was terminated in accordance with the Standing Orders of the Company approved by the relevant authorities under the provisions of the Industrial Employment (Standing Orders) Act (XX of 1946), hereinafter referred to as the central Act, and also under the provisions of the Central Provinces and Berar Industrial Disputes Settlement Act (C. P. and Berar Act XXIII of 1947) hereinafter called the local Act; and if the respondent had any grievance against the said Standing Orders, his only remedy was to get the Standing Orders amended as provided for in the relevant Act, but he had no right to move the High Court under Art. 226 of the Constitution for quashing the orders passed against him or for reinstatement etc. Alternatively, it was urged that if the Standing Orders did not apply in the case of the respondent as was the respondent's case, then the ordinary law of master and servant applied, and the only remedy of the respondent was to sue the Company in damages for wrongful dismissal. On these preliminary objections the learned Judge held (1) that the respondent was not an employee within the meaning of the Standing Order and therefore his case was not governed by the Standing Orders; (2) that the relationship between the appellants and the respondent was contractual and not statutory and the remedy of the respondent was to sue the Company in damages for wrongful dismissal; and (3) as for amendment of the Standing Orders so as to include the respondent and persons in his category, the only remedy open to the respondent was to take action under the relevant Act by approaching a recognised union to move in the matter.
(3.) On the dismissal of his petition, the respondent preferred an appeal under Cl. 10 of the Letters Patent. This appeal was heard and allowed by a Division Bench on 26th September 1956, on the findings that (1) the Standing Orders did not apply to the respondent, though he was an employee within the meaning of that expression in S. 2 (1) of the local Act; (2) the conditions of the respondent's service were governed by the provisions of the local Act and on a breach thereof, the respondent had a right to move the High Court for appropriate order under Art. 226 of the Constitution; and (3) as the termination of the service of the respondent was without statutory authority, it must be vacate. The Division Bench accordingly allowed the appeal, quashed the orders of suspension and termination of service and declared that the respondent continued to be an employee of the Company on terms which were applicable to him on the date of his suspension, namely, December 5, 1955. There was also a direction to the Company to pay back wages to the respondent.;