M.N. Roy, J.@mdashThe Institute of Cost and Works Accountants of India, Respondent No.1 (hereinafter referred to as the said Institute), is a body corporate and constituted u/s 2(f) of the Cost and Works Accountants Act, 1959 (hereinafter referred to as the said Act) and the appellant was appointed as a Director of Research of the same sometime in September 1969. He as a petitioner moved and obtained Civil Order No. 15007 (W) of 1981, challenging the validity of the decision of the Council of the said Institute, as communicated to him by the Secretary of the same, by his letter dated 19th October 1981, whereby the said Secretary, further to his letter dated 23rd September 1981, informed him that he was directed by the Council of the said Institute to regret to inform the appellant that the Council of the said Institute was unable to allow him to withdraw his resignation, which was already accepted with effect from 1st September 1981 and as such, requested the appellant to hand over the charge to the said Secretary and collect from the said Institute whatever amount was due to the appellant. In his writ petition, the appellant/petitioner also claimed that he having withdrawn his letter of resignation, in the facts and circumstances which would be referred to hereinafter, before the same became effective, the impugned order as mentioned above, was illegal and unwarranted.
2. It should be noted that the said Act was promulgated for the purpose of making provisions for the regulation of the profession of Cost and Works Accountants and the Cost, and Works Accountants Regulations, 1950 (hereinafter referred to as the said Regulations) have been framed under or in terms of the provisions of the said Act. There was or has been no dispute that the appellant had joined in the post as mentioned above, on or about the date as indicated herein before and was in the said post for a long time. It has been claimed by him that during his centre of employment as such, some attempt was resorted to with a view to get rid of him from the said Institute with effect from 1st September, 1981. It was the appellant''s claim that during his employment as above, he had rendered his services with reputation to the said. Institute and for promotion and guidance of research in the various branches of Cost and Management Accountancy and his original contributions in the field were richly accoladed and appreciated or recognised, both within and outside the country. It was the appellant''s further contention that he had a brilliant academic career and such brilliance was also reflected in the discharge of his duties so far as the said Institute was concerned and in fact, he had an unblemished career, apart from the fact that he had contributed, to the publications of different books and research papers of the said Institute.
3. It has also been stated by'' the appellant that in course of his tenure of service as above, he received the best award as an accounting scholar for the year 1975-76, in recognition of his distinguished career as an accounting scholar. He has also stated to have received his M.A. Degree in Commerce from the University of Calcutta in 1952 and thereafter, he got himself associated as a Research Officer to the Special, Committee for Commerce Education under the Ministry of Education of Social Welfare and then he became a member of the said Institute in 1964, after successful completion of the necessary course. The appellant has also given the particulars as to how and when he got his Ph.D. Degree in Management from Delhi University in 1965 and has started that before joining the services of the said Institute, he held important position as a professor of the Indian Institute of Foreign Trade and Faculty of Business Management in Delhi University. It was also his case that during his continuance of service under the said Institute he had to his credit various notable publications and was also commissioned by the Indian Council of Social Sciences Research, New Delhi, to prepare and survey of research in public enterprises in India. The appellant, has also given the other scholastic works done and performed by him and some decorations has receded by him for such work.
4. The said Act, in terms of section 2(c) postulates the formation of a "Council" for the said Institute and the functions to be performed by that Council, have been indicated in section 15 of the said Act to the following effect : -
(1) The duty of carrying out the provisions of this Act shall be vested in the Council.
(2) In particular, and without prejudice to the generality of the foregoing power, the duties of the Council shall include.
(a) the examination of candidates for enrolment and the prescribing of fees therefore
(b) the registration and training of students:
(c) the prescribing of qualifications for entry in the Register:
(d) the recognition of foreign qualifications and training for purposes of enrolment:
(e) the granting or refusal of certificates of practice under this act
(f) the maintenance and publication of a Register of persons qualified to practice as cost accountants:
(g) the levy and collection of fees from members, examinees and other persons:
(h) the removal of names from the Register and restoration to the Register of names which have been removed.
(i) the regulation and maintenance of the states and standard or professional qualifications of members of the Institute:
(j) the carrying out, by financial assistance to person other than members of the Council or in any other member, of research in accountancy;
(k) the maintenance of libraries and publication of books and periodicals relating to cost accountancy and allied subjects;
(l) the exercise of disciplinary powers conferred by this Act and the constitution of the Council of the said Institute is to be made in terms of Section 9 of the said Act which lays down:
(1) There shall be a Council of the Institute for the management of the affairs of the Institute and for discharging the Junctions assigned to it by or under this Act.
(2) Thee Council shall be composed of -
(a) not rare than twelve persons elected by members of the institute from, amongst the fellows of the 1nstitute chosen in such manner and from such regional constituencies as may be specified in this behalf by the Central Government by notification in the official Gazette: and
(b) not more than four persons nominated by the Central Government.
5. Such being the position, the said Council is really constituted by numerous persons and according to the appellant the present members of the Council under the said Act were impleaded as Respondents in the writ petition, for the purpose of avoiding any controversy with regard to non joinder of necessary parties. There is no doubt that no exception can be taken so far as the maintainability of the writ petition on the ground of non-joinder or mis-joinder of any party and the Secretary of the said Institute, who is a Chief Executive Officer of the same, has also been appropriately impleaded in the proceedings.
6. It was the case of the appellant that after his entry into the services, he had expected the assignments with all facilities to promote research in Management Accountancy since his association with the said Institute was primarily for the fulfillment of such object. The appellant has stated that he having brought up in the academic traditions as a researcher, he was expecting that he would be assigned to guide research work for promotion of original thinking into varied domains of particular academic discipline of Management Accountancy, but all his ideas and aspirations could not at all been satisfied in the manner in which he was asked to discharge his duties in his posting under the said Institute as mentioned above and it was his firm belief and assertion that he was not given chance to carry on with the research works as he had some disagreement with the Secretary of the said Institute, who, in fact, because of such disagreement was out to be little the appellant and, subject him to ignominy and in fact, the said Secretary, roulade the works of the appellant very difficult as a result whereof, his research works or the ideas for the happenings, as a result whereof the Secretary concerned behaved with him in the manner as indicated herein before and in fact, he has ultimately stated that because of such behaviour, he had no other alternative but to tender his resignation, the other particulars or the facts leading to the same would be indicated. hereinafter.
7. The appellant has stated that in terms of his appointment he could sever his relationship with the said Institute after clear three months notice and as such, he caused a letter of resignation from his post of Director of Research of the said Institute served with immediate effect by his letter dated 4th May 1981 and it was his cost that on receipt of that letter, the Secretary of the said Institute requested him to have his letter of resignation modified and accordingly, the appellant on 6th May 1981, sent another letter incorporating the necessary compliance of three months notice and therein, he specifically, mentioned that he wanted to be relieved from his-duties of the concerned post with effect from 1st September 1981. The letter of 4th May 1981, only indicated that the appellant wanted to submit his resignation from the post of Director of Research of the said Institute with immediate effect and the other letter of 6th May 1981, really gave the reasons in continuation of the said letter of 4th May 1981 and that too in our view, for severing all connections with the said Institute by an employee like the appellant. It would appear that during the maintenance period of notice as mentioned in the said letter of 6th May 1981, on or about 24th August 1981, the appellant withdrew the same and informed the President of the said Institute that about such intentions. It was his case that on receipt of the above mentioned subsequent letter, the Secretary of the said Institute on 29th August 1981, addressed a letter to his intimating thereby that the concerned letter of withdrawal of resignation has been referred to Executive Committee and the said Committee has decided to the referred matter by the Council of the said Institute for consideration and it was also informed to the appellant that thus a final decision in the matter, in whatsoever manner, would be communicated to him only after the next meeting of the Council of the said Institute, which was scheduled to be held on 17th October, 1981. The appellant has stated that by such communication, the decision in the matter of acceptance of the resignation was in fact postponed or kept in abeyance will 17th October 1981 and according to him, on the basis of such letter, he was allowed to carry on the functions of his once even after the expiry of the notice period, i.e., 1st September, 1981 and he, in fact, performed his functions as usual and after, the said notices period. According to the appellant the severance of relationships between the parties was not thus given effect to coinciding with. the last date of the expiry of the notice period and so the contractual relationship between the parties had revived as the appellant discharged his duties from on or after 1st September 1981. It was the appellant''s case that from the correspondence he was, given to understand that he would be required to wait till a final decision in the matter was taken, Apart from Section 15 of the said Act, the particulars thereof have been quoted herein before, the appellant also made a specific reference to Regulation 85(a) which has laid down that the Executive Committee of the said Institute shall amongst others perform the functions of (a) maintenance, of the office of the Council and for this purpose, the Executive Committee may employ, suspend, discharge or re-employ the necessary staff on such terms and conditions as it may deem fit:
(b) .......................................
(c) .......................................
(d) .......................................
(e) .......................................
(f) .......................................
(g) ......................................., and
indicated that the said provisions do not make provisions for any allocation of function of the Executive Committee for consideration of a letter of withdrawal of resignation and as such, the said Committee was not vested with the specific function and so they could not refer back the matter for consideration by the Council. In fact, the appellant has contended that the review which was done in the instant case by the Council, was not authorised and such power of review was not vested with the Council under the said Act; It was also the assertion of the appellant that before the expiry of the period of notice, in view of the letter of withdrawal of resignation as mentioned herein before, he gave a complete go-by to the concerned act of resignation and such act, being on his free volition, an element of mutuality would not come into play at all, as it was a voluntary act of withdrawal of resignation by him.
8. The appellant has pointed out that thereafter, the Secretary respondent No. 16 of the said Institute, by his letter of 19th October 1981, intimated that the Council regretted that they were enable to allow the appellant to withdraw his resignation and he was accordingly requested to hand over the Charge to the said secretary and to collect his dues as indicated herein before. The appellant has stated that he could not agree to comply with such dictates and thereafter he moved this court and according to him the Council of the said institute had transgressed and travelled beyond their jurisdiction by disallowing him to withdraw his resignation, because such act of withdrawal was an unilateral act of the appellant, out of him free and independent violation and the council was only requested to act with a sense of responsibility by reciprocating the said act. The appellant has further contended the act or actions ox the said Council in the instant cage, to be ex facie, without jurisdiction and any statutory sanction, apart from being contrary to their powers under the said Regulations.
9. Before the learned Trial Judge it was submitted on behalf of the Respondent that immediately after submission of the two letters dated 4th and 6th May 1981, respectively, the Executive Committee of the said Institute considered them and by the letter of 6th June 1981, intimated the appellant that his resignation letter had been accepted with effect from 1st September 1981 by that Committee. The above decision was admittedly communicated by the Secretary of the said Institute respondent No. 16. It was submitted on behalf of the Respondents that the Executive Committee, which was empowered under Sections 15 and 16 of the said Act read with Regulation 85(a) of the said Regulations to take decision in the matter had already taken a decision and as such, the appellant could not have any grievance in the matter. We have quoted the terms of Section 15 earlier and Section 16 which deals with staff, their remuneration, and allowances, read as thus:
(1) for the efficient performance of its duties, the Council may -
(a) appoint a Secretary who may also, if so decided by the council, act as Treasurer;
(b) appoint such other persons on its staff as it deems necessary;
(c) require and take from the. Secretary or from any other employee of the Council such security for due performance of his duties as the Council considers necessary;
(d) fix the salaries, fees allowances and other conditions of service of the Secretary and other employees of the Council;
(e) with the previous sanction of the Central Government fix the allowances of the President, Vice-President and other members of the Council and its Committees.
(2) The Secretary of the Council shall be entitled to participate in the meetings of the Council and the Committees thereof but shall not be entitled to vote thereat.
The terms of regulation 85(a) leave also been indicated herein before. On the basis of the provisions as mentioned above, the Respondent, contended before the learned Trial Judge that the appellant was employed as a Director of Research of the said Institute by the Executive Committee on certain terms and he accepted those terms. In fact, those terms were embodied in the letter dated 22nd July 1949 as issued by the Secretary of the said Institute to the appellant. It was submitted that the appellant''s terms of service and conditions of employment were strictly governed by the terms as embodied in the letter as mentioned above and the same was not governed or in other words regulated by any statutory Rules or statutory provisions or any statutory Regulations and in fact the appellant''s relationship with the said Institute was purely a relationship of master and servant, a contractual relationship and as such, for breach of such or any contractual relationship, the application for appropriate writs would not be maintainable.
10. On, the pleadings, the admitted facts before us are and before the learned Trial Judge were, that the appellant/petitioner was appointed as Director of Research of the said Institute and had joined his post on the date as mentioned herein before and according to him, he was duly discharging his duties and responsibilities of the concerned post. But, ultimately he could not fulfil his aims in the matter of such discharging of duties, because the Secretary Respondent No. I6 and other staff were ill-disposed towards him and they had created multifarious difficulties in the way to discharge, his connected duties and responsibilities duly and as a result whereof on 4th May 1981, the letter of resignation as mentioned above, was submitted and thereafter, by the subsequent letter of 6th May l981, the appellant/petitioner had really given a notice to the said Institute, covering the notice period and relinquishing his charge as Director of Research of the said Institute with effect from 1st September 1981. There is also no doubt that on 24th August 1981 i.e., before the notice of resignation became effective, the appellant/petitioner withdrew his resignation as mentioned above and on such facts, it was pleaded by him or on his behalf before the learned Trial Judge, that the Executive Committee of the said Institute which was empowered under Sections 15 and 16 of the said Act as quoted, herein before, read with Regulation 85(a) of the said Regulations as mentioned above and which were framed u/s 39 of the said Act, was alone competent to decide the matter in issue, but, instead of exercising such functions, they had referred the matter to the Council of the said Institute and the decision as impeached, was taken by that Council to the effect that the resignation as submitted by the writ petitioner was accepted and he could not be allowed to withdraw the same. Such communication was made to the writ petitioner by the Secretary of said Institute, by his letter dated 19th October 1981. The said action was also claimed to be wholly without jurisdiction on and unwarranted and it was also pleaded that the writ petitioner having been permitted to action in the said Institute even after the expiry of the period of notice, i.e., after 1st September 1981 for 2/3 days, it would be deemed that the relationship had not ended, but the same was allowed to continue and contract of employment subsisted.
11. It was the contention of the writ petitioner before the Learned Trial Judge that the order as impeached and made by the Council of the said institute being wholly illegal and unauthorised, the same could not be given elect to and since the writ petitioner intimated the authorities of the said Institute expressly that he withdrew and/or revoked his letter of resignation, prior to the same having became effective on 1st September 1981, the authorities of the said Institute were not authorised and incompetent to accept the resignation letter submitted by him even after such withdrawal and for revocation and as such, they also could not have passed the order as challenged. The said Institute on the other hand claimed and contended that they were empowered under Sections 15 and 16 of the said Act read with Regulation 85(a) of the said Regulations to take decision in the matter and in fact, such decision having been taken, the writ petitioner could riot have any grievance and it was also contended that the writ petitioner having been employed as Director of Research of the said Institute by the Executive Committee of the same on certain terms and he having accepted those terms which were embodied in the letter of 22nd July 1969, therefore, was bound by the terms and conditions of employment and his terms of employment and conditions of service not having been governed by any other statutory rules or provisions or any statutory regulations, the relationship between the writ petitioner and the said Institute was purely one of contractual relationship between master and servant and as such, his application for appropriate writs, was not maintainable.
12. On the question whether relationship between the writ petitioner and the said Institute his employment was one of contractual relationship or the same was governed by any statutory rules or regulations, the Learned Trial Judge firstly, considered the question as to whether the Executive Committee of the said Institute has considered letters of resignation, dated 4th May 1981 and 6th May and the decision was arrived at by them. On this score, the learned Trial Judge has observed that from the statements as incorporated in the affidavit-in-opposition and as affirmed by the Secretary of the said Institute, it would appear that those letters of resignation were considered by the Executive Committee of the said Institute and such resignation was accepted with effect from 1st September 1981 and from the way and manner in which the answer to such statements was given by the writ petitioner in his reply, dated 4th March 1982, the learned Trial Judge has observed that such specific statements of the said Respondent No.10 have not been specifically denied by the writ petitioner and the natural consequence would thus be, that he was duly intimated about the decision taken by the Executive Committee of the said Institute and to the effect that the resignation letters submitted by him were duly accepted and such resignation would be effective on and from 1st September 1981 and in that view of the matter the submissions of the writ petitioner that the resignation as submitted. by him was withdrawn before the same because effective, were of no avail or any assistance.
13. While dealing with the second submissions of the writ petitioner as mentioned herein before, the learned Trial Judge has observed that the said Act has been promulgated or made in order to make provisions for the regulation of the profession of Cost and Works Accountants and Section 3 of the same provides that all persons whose names are entered in the Register at the commencement of the said Act and all persons whose names may, hereafter, be entered in the Register under the provisions of that Act, are hereby constituted a body corporate by the name of the said Institute and all those persons shall be known as members of the said Institute. On such, the learned Trial Judge has observed that it is thus quite clear and evident that the said the said Institute and also for providing for the formation of Various Committees and thus, to run the administration and management of the same. The learned Trial Judge has also referred to Sections 15 and 16 of the said Act,. the particulars whereof have been quoted herein before, apart from referring to Section 17 of the same, which provides for formation, of Committees from amongst the members of the Council and has indicated that one of. such Committees named thereunder is an Executive Committee. Section 17 of the said Act, in, fact, lays down that (1) the Council shall constitute from amongst its members the following Standing Committees, namely : -
(i) an Executive Committee;
(ii) a Disciplinary Committee; and
(iii) an Examination Committee.
(2) The Council may also form a Training and Educational facilities Committee and such other Committees from amongst its members as it, deems necessary for the purpose of carrying out the provisions of this Act.
(3) The Executive Committee shall consist of the President, and the Vice-President, ex-officio, and three other members of the Council elected by the Council.
(4) The Disciplinary Committee shall consist of the president, ex officio, one member to be nominated by the Central Government from amongst. the members nominated to the Council by that Government and one member to be elected by the Council.
(5) The Examination Committee shall consist of the President or the Vice-President, ex-officio, as the Council may decide, and two other members of the Council elected by the Council.
(6) Notwithstanding anything contained in this section, any Committee formed under Sub-section (2), may, with the sanction of the Council, co-opt such other members of the Institute not exceeding two thirds of total membership of the Committee as the Committee thinks fit, and any member so co-opted shall be entitled to exercise all the rights of a remember of the Committee.
(7) The President shall be the Chairman of every Committee of which he is a member, and in his absence, the Vice-President, if he is a member of the Committee, shall be the Chairman.
(8) The Standing Committees and other Committees formed under this Section shall exercise such functions and be subject to such condition in the exercise thereof as may be prescribed and in addition to the above reference has also been made by the learned Trial Judge to Regulation 85(a) of the said Regulations as quoted herein before and which has been framed u/s 39(4) of the said Act which postulates that............ notwithstanding anything contained, in Sub-sections (1) and (2), the Central Government may frame the first regulations for the purposes mentioned in this Section, and such regulations shall be deemed to have been made by the Council; and shall remain in force until they are amended, altered or revoked by the Council. Regulation 85(a) of the said Regulations, the learned Trial Judge has pointed out, have made provisions for the Executive Committee for the purpose of maintaining the office of the Council and for that purpose, they may employ, suspend, discharge or re-employ the necessary staff on such terms and conditions as it may deem fit. It was the learned Trial Judge''s observations that thus those provisions clearly indicate that the staff of the office are employed by the Executive Committee and their terms and conditions are determined by the Executive Committee and therefore, according to the learned Trial Judge, the terms and conditions of service of the employee are not determined by any statutory rules or regulations Act as such, following the well established principles, the employee appointed by the Executive Committee of the said Institute would not acquire a statutory status. On such findings the learned Trial Judge has further observed that therefore, even if there is a wrongful termination of the service or a wrongful termination of contract of employment, for that the employees remedy would be by way of damages in a evil action and not by a petition before this Court, meaning thereby a writ proceedings. It has also been indicated by the learned Trial Judge that in this case there is nothing to show that by accepting the resignation as submitted by the writ petitioner, there has seen any violation of the provisions of the statute and/or statutory regulations, because in that case undoubtedly a writ petition would be maintainable against a statutory body. He has also pointed out that even assuming for agreement''s sake that the impugned order has not been made by the Executive Committee, but the said Committee referred the matter to the Council and they had made the decision, still then, it cannot be said that the order has wholly illegal or without jurisdiction because Regulation 85(a) of the said Regulation. which lays down that nothing in this chapter shall affect the power of the Council to review any decision of the Standing or other Committees, clearly confiace in the Council, inspite of formation of the Standing Committee and other Committees, the power to review any decision of any standing or other Committees. Such power, in the opinion of the learned Trial Judge, included also, the power of the Council to make appropriate orders iri regard to any matter when the same is referred to the Council by the Committee concerned and in that view of the matter, it was observed by the learned Trial Judge that the decision of the Council was neither illegal nor unwarranted. On such findings as above, the writ petition was dismissed.
14. In this appeal as taken from the said decision, Mr. Sundarananda Paul, submitted amongst others that the impugned order was passed on surmises about probability of alternative and in that view of the matter, the vital foundation of the said order should be deemed to have been taken and as such the same should be set aside. Mr. Paul also contended that holding the relationship between the parties to the list was one of contractual one, without taking into account the actual facts, which established that the writ petitioner was an employee of the statutory body within the meaning of Section 2(f) of the said Act there was certainly a statutory relationship which could have been established by taking recourse to a writ proceedings. He further contended that the learned Trial Judge failed to appreciate that the said institute, on the face of the records, was a statutory body within the meaning of Section 2(f) of the said Act and Section 39(2) (a) confer powers on the Council of the same to provide for regulations relating to the terms of office, its powers, duties and functions of the employees of the petitioner''s class and those regulations are to be governed by or in terms of Regulation 85{a) of the said Regulations and thus the terms and conditions as offered by the Executive Committee to the writ petitioner, acquired the status of the regulations of a statute and no employee could be discharged m the absence of (he provisions as provided in his concerned letter of appointment. It was also contended by Mr. Paul that the learned Trial Judge erred in holding that the terms and conditions of service of the writ petitioner were not determined by any statutory regulations and as such, he had not acquired a statutory status and such observations by the learned. Trial Judge would not withstand the tests of the reasonable scrutiny, because the relationship between the appellant/petitioner and the said Institute cannot be conceived of, apart from being a creature of the statute and all functions carried on by the Executive Committee on behalf of the said Institute are regulated in accordance with Section 39 of the said Act arid in consequence with the spirit of the provisions as contemplated u/s 39 read with Regulation 85 as mentioned above. Mr. Paul further claimed that the learned Trial Judge should have held that the appellant/petitioner Was entitled to due relief from the Writ Court, as no remedy, in a case of the present nature, lay in civil action or by way of damages as observed by him and more particularly when the said Institute which is a juristic entity has its existence in terms of the provisions of Section 2(f) of the said Act. It was also contended by Mr. Paul that in making his determinations on the basis of the relationship, which according to his, was not purely one of ordinary relationship of master and servant, the Learned Trial Judge was not only wrong, but he misconstrued and misconceived the provisions of the said Act and the Regulations.
15. In addition to the above, Mr. Paul contended that the learned Trial Judge was wrong and he observed erroneously, that the service relationship between the writ petitioner and the said Institute stood terminated on the date as alleged as on the face of the record, the appellant/petitioner withdrew his resignation prior to the expiry of the notice period and in view of the admitted fact of resumption of duties by the appellant/petitioner after 1st September 1981 and also on the patent fact that the writ petitioner was intimated that the matter was referred to the Council and the decision ''would be taken on the subsequent meeting, there was no justification for the learned Trial Judge to hold or conclude that the relationship in the instant case had served. Mr. Paul claimed that in any event, the learned Trial Judge should have held that the order as impeached and as made by the Council was wholly illegal and unauthorised and as such the same could not be given effect to the more so when, the Council had no power of review in a case of the present nature. Mr. Paul further contended that in view of the provisions in the said Regulations, the learned Trial Judge ought to have held that. the withdrawal of resignation by the writ petitioner in this case was unilateral and the said Institute''s role ought to have been positive and they were left with no other alternative but to initiate a proper proceedings in accordance with law to discharge him m terms of Regulation 85(a) of the said Regulations. It was further indicated by Mr. Paul that the order of acceptance of resignation in this case was, nothing but an attempt to discharge and/or terminate the appellant, petitioner from the services of the said Institute when he unilaterally withdraw his resignation before the expiry of the notice period as mutually accepted by the parties and the said termination or discharge was not done in accordance with law and such action was also repugnant to principles of natural justice and furthermore, the order complained of was based on profound misconception about the patent line of distinctions between discharge and/or termination and acceptance of resignation. Mr. Paul contended that the reference of the matter to the Council by the Executive Committee was highly improper, illegal and unauthorised and such being the position, the decision as taken on the said reference was also improper, void and bad.
16. Mr. Paul also contended that on the basis of. the character and formations of the said Institute in terms of the provisions of the said Act and the said Regulations, the same was, if not a State, but at least an authority, agency or instrumentality of the same under Article 12 of the Constitution of India. While, on the point, apart from relying on the other cases of the Supreme Court, Mr. Paul referred the unreported judgment of the Supreme Court in the case of Central Inland Water Transport Corporation Limited & Anr.-Vs-Brojo Nath Ganguly & Anr. (Civil Appeal No, 4412 of 1085) and the unreported judgment in the case of Central Inland Water Transport Corporation Limited & Anr.-Vs-Tarun Shanti Sengupta & Anr. (Civil Appeal No. 4413 of 1985), which cases were heard and disposed of analogously by the judgment dated 6th April 1986. Since the determinations as mentioned above, have not as yet been reported, Mr. Paul made available, copies of them for the use of the Court and also supplied copies of them to Mr. Banerjee, who opposed this appeal. The points involved in those appeals related to the important questions as to the position of the Government Companies and their employees including their officers and whether a Government Company as defined in Section 617 of the Companies Act, 1956, is the "the State" within the meaning of Article 12 of the Constitution of India and whether an unconsciable term in a contract of employment. is void u/s 23 of the Indian Contract Act, 1872, as being opposed to public policy and when such a term is contained in a contract of employment entered into with a Government Company, is also void, as infringing Article 14 of the Constitution of India, in case a Government Company is. "the State" under Article 12 of the Constitution of India. The appellant in those appeals, viz., the Central Inland Water Transport Corporation Limited, was incorporated on 22nd February 1967 and the majority shares of the same were at all times held by the Union of India, who were Respondents in the appeals and the remaining shares were held by the State of West Bengal and the State of Assam in the respective appeals. On the basis of the definition u/s 167 of the Companies Act, 1956, it was indicated that as all the shares of the Corporation were held by different Governments as mentioned above, the same was not only a Government Company as defined by the said Section 167, but would be a Company wholly owned by the Central Government and the two State Governments as mentioned above. In the judgment as indicated above and the Rule which was under consideration, was the Central Inland Water Transport Corporation Limited Services Discipline and Appeal Rules, 1979, as framed by the Corporation and which were applicable to all the employees in the services of the Corporation in all units in West Bengal, Bihar, Assam or in other State or Union Territory, except those employees, who were covered by the Standing Orders under the Industrial Employment (Standing Orders) Act, 1946, or those employees in respect of whom, the Board of Directors has issued separate orders. Rule 9 of that Rules deals with termination of employment for acts other than disconduct and under Rule 10, an employee is required to retire on completion of the age of 58 years, though in exceptional cases and in the interest of the Corporation, an extension may be granted with the prior approval of the Chairman-cum-Managing Director and the Board of Directors. Rule 11 postulates that employees, who wish to leave the Company''s service, must give the Company the same notice as the Company is required to give them under Rule 9. Rule 83 as mentioned the provisions for suspension and Rule 87 deals with acts of misconduct, while Rule 38 provides procedure for imposing major penalty and sets out in detail how a disciplinary enquiry is to be held and special procedure has been laid down in Rule 43 in respect of certain cases.
17. The powers conferred under Rule 9 has net only been found to be arbitrary, but has also been observed to be discriminatory as it enables the Corporation to discriminate between the employee and employee and can pick up one employee and apply to him clause (i) of Rule 9 and apply clause (ii) of Rule 9 against another employee. It has also been observed that yet the Corporation can pick up another employee and apply in his case sub-clause (iv) of clause (b) of Rule 86 read with Rule 38 and further, they can apply Rule 37 in respect of another employee. It has also been indicated that all that the Corporation can do when the same circumstances exists as would justify them in holding under Rule 38 a regular disciplinary inquiry into the alleged misconduct of the employee. It has been pointed out that both the employees in the concerned appeals had, in fact, been asked to submit their explanation to the charges made against ''them and one of them informed that a disciplinary inquiry was proposed to be held in his case although the charges made against both the employees were such, that a disciplinary enquiry could easily have been held but the same was, however, not held, but instead, Rule 9(i) was resorted to.
18. The Supreme Court has further observed that the Corporation is a large organisation. It has offices in various parts of West Bengal, Bihar and Assam under the Rules, arid possibly in other States also. The Rules as mentioned above, form part of the contract of employment between the Corporation or its employees who were not its workmen. These employees had no powerful workmen''s Union to support them. They had no voice in the framing of the said Rules. They had no choice but to accept the said Rules as part of their contract of employment. There was gross disparity between the Corporation and its employees, whether they be workmen or officers. The Corporation can afford to dispense with the services of an officer. It will find hundreds of others to take his place, but an officer cannot afford to lose his job because if he does so, there were not hundreds of jobs waiting for him. A clause, such as clause (i) of Rule 9 is against right and reason. It is wholly unconscionable. It has been entered into between parties, between whom there is gross inequality of bargaining of powers.
19. The Supreme Court has further held and found that the Corporation in that ease to be "a State" and has also observed that as the Corporation is "the State" within the meaning of Article 12, if it would be amenable to the writ jurisdiction of the High Court under Article 220 and it is now well established that an instrumentality or agency of the "State" being in "the State" under Article 12 of the Constitution, is subject to the Constitutional limitations, and its actions are State action and must be judged in the light of the Fundamental Rights guaranteed by Part III of the Constitution of India. Such observations have been made on the basic of the determinations as made in the cases of
20. The principles of natural justice have thus come to be recognized as being a part of the guarantee contained in Article 14 because of the new and dynamic interpretation given by this Court to the concept of equality which is the subject-matter of that Article. Shortly put, the syllogism runs thus violation of a rule of natural justice results in arbitrariness which is the same as discrimination; where discrimination is the result of State action, it is violation of Article 14; therefore, a violation of a principle of natural justice by a State action is a violation of Article 14. Article 14, however, is not the sole repository of the principles of natural justice. What it does is to guarantee that any law or State action violating them will be struck down. The principles of natural justice, however, apply not only to legislation and State action but, also where any tribunal; authority or body of men, not coming within the definition of "State" in Article 12, is charged with the duty of deciding a matter, have been indicated by the Supreme Court and it has also been indicated that as pointed out earlier, Rule 9(1) of the Rules under consideration, would be both arbitrary and unreasonable and the same also wholly ignores and sets aside the andi alteram partem rule and the same therefore, violates Article 14 of the Constitution of India.
21. On the basis of the determinations of the Supreme Court in the unreported cases as mentioned above and also on the basis of their determinations, there is no doubt that the employees of the large organisations having the attributes of government employees form a separate and distinct class and the contract or employment or the contract of the employees of "the State" cannot be equated with the contract of employment of small employers, which was involved in case of a lease in the case of Radhakrishna Agarwal Ors vs. State of Bihar & Ors (1977) 3 R.C.R. 249.
22. The above two appeals of the Central Inland Water Transport Corporation Limited and another were taken from the two determinations of this Court, whereby the impugned order dated 26th February 1983, terminating the services of the employee Respondents was set aside and the Corporation was directed to reinstate them and to pay all arrears of salaries, on consideration that Rule 9(1) as mentioned above, in its entirety was ultra vires Article 14 at the Constitution of India. The Supreme Court in the two appeals as indicated above, has upheld the determination of this Court with the observations that the High Court was, however, not right in declaring sub-rule 1 of Rule 9 ultra vires in its entirety as mentioned above or in striking down the same being void as a whole on that ground with the further observations that the High Court over-looked the fact that Rue 9 also confers upon a permanent employee the right to resign from the service of the Corporation, While making such determinations, apart from the cases as mentioned herein before, the Supreme Court had also considered the cases of S. S. Mulle Vs J. R. D. Tata & Ors., (1980) Lab and I.C. II and
23. The Supreme Court has of course, found in the appeal under consideration that as the definition of "the State" in Article 12 is for the purpose of both Part-III and Part-IV of the Constitution, State actions, including action of the instrumentality and agencies of the States must not only be unconformity with the fundamental rights guaranteed by Part-III, but must also be in accordance with the Directive Principles of State policy prescribed by Part-IV. The fundamental rights and the Directive Principles - both are complimentary to each other. It has also been indicated that Article 39(a) provides that the State shall, in particular, direct its policy towards securing that the citizen, men and women, equally have the right to adequate means of livelihood". Article 41 requires the State, within the limits of its economic capacity and development, to make effective provision for securing the right to work." An adequate means of livelihood can not be secured to the citizen by taking away without reasons the means of livelihood. The mode of making "effective provision for securing the right to work" cannot and does not mean that giving employment to a person will involve throwing him out of employment without any reason. The action of an instrumentality or agency of the State, if it frames a service rule such as Rule 9(1) or Rules analogous thereto, would, therefore, not only be violative of Article 14 but would also have contrary to the Directive Principles of State policy contained in Article 39(a) and in Article 41 of the Constitution of India.
23A. On the basis of the views as expressed and indicated herein before, the Supreme Court of India has observed that the appeal before them should fail and as such, they were dismissed and the orders as made by this Court, more modified by substituting for the declaration given, by observing that Rule 9(1) of the Service, Discipline and Appeals Rules, 1979 of the Central Inland Transport Corporation Limited was void u/s 25 of the Indian Contract Act, 1872 as being opposed to public policy and so also ultra wires Article 14 of the Constitution of India to the extent that the same confers upon the Corporation the right to terminate the employment of a permanent employee by giving him three months notice in writing or by paying him the equivalent of three months'' basic Pay and Dearness Allowance in lieu of such notice.
24. Section 9 of the said act which is to following effect:
(1) There shall be a Council of the Institute for the management of the affairs of the Institute and for discharging the functions assigned to it by or under this Act.
(2) The Council shall be composed of -
(a) not more than twelve persons elected by members of the Institute from amongst the fellows of the Institute chosen in such manner and from such regional constituencies as may be specified in this behalf by the Central Government by notification in the Official Gazette; and
(b) not more than four persons nominated by the Central Government, deals with and lays down the provisions for Constitution of the said Council and Section 39 deals with power of the said Council to make regulation In fact, Sub-section (1) of Section 39 postulates that the Council may, by notification in the Gazette of India make regulations for the purpose of carrying out the objects of this Act, and a copy of such regulations shall be sent to each member of the Institute and Sub-section (2) lays down the matters in particular, where and without prejudice to the generality of the foregoing power, provisions may be made for exercise of such power. Mr. Paul pointed out and submitted that the said Regulations, were framed by the Central Government in exercise of the power conferred by Sub-section (3) of Section 39 as quoted herein before and: they were first notified by Notification No. 10 (13) - Inst./59, dated. 25th May 1959, published in part IV Section 2 Sub-section (i) of the Gazette of India Extraordinary, dated 25th May 1059 being G.S.R. No. 611 and as such, the said, Regulations according to him had statutory force and the said Institute is, if not, a State, but at least an Instrumentality or agency of the same under Article 12 of the Constitution of India, To establish that the said Regulations had the impact as mentioned herein before or the statutory effect as claimed, reference was made my Mr. Paul to the case of
24A. It has also been observed by the Supreme Court that another office memorandum providing for certain benefits to ex-military personnel on re-employment on the basis of their length of actual military service confers a right relating to condition of service and the Court can enforce the right. Thereafter Mr. Paul referred to the decision in the case of
25. On the basis of the decisions in the appeals in the cases of Central Inland Water Transport Corporation Limited & Anr. as indicated herein before and also the other cases as mentioned above, Mr. Paul claimed and contended that the said Institute was admittedly a statutory body and as such, being their employee, the writ petitioner had also the right to maintain his writ petition against the said Institute and to claim that their action was illegal, inoperative, irregular and violative of Article 14 of the Constitution of India. It was also his contentions that the contractual provisions if any, .can also be challenged in a case of the present nature as the said Institute was, as mentioned herein before, if not a State, but at least an instrumentality or an agency of the same under Article 12 of the Constitution of India.
26. Section 4 (1) of the said Act lays down that persons mentioned in Sub-section (1) to (V) thereunder, to be entitled to if he is entered in the register of the said Institute. Section 4(i) says that any person who has an associate or a fellow of the dissolved company (other than an. honorary associate or honorary fellow thereof immediately before the commencement of the Act, except any such person who is not a permanent resident of India and is not at such commencement practicing as a Cost Accountant in India and Sub-section (iii) speaks of any person who, at the commencement of the Act, is engaged in the practice of Cost Accountancy in India and who fulfills such conditions as the Central Government or the Council may specify in this behalf and Sub-section (iv) contemplates of any person who has passed sued other examinations and completed such other training within India and he recognised by the Central Government or the Council as being equivalent to the examinations and training prescribed for members of the Institute; provided that in the case of any person who is not permanently residing in India, the Central Government or the Council may impose such other conditions as it may deem fit. On the basis of the above, Mr. Paul also wanted to establish that the said Institute should be deemed to be a State and if not so, an instrumentality or an agency of the same under Article 12 of the Constitution of India.
27. Initially Mr. Banerjee who appeared for the said Institute and its authorities claimed, that the same was not a statutory body and the petitioner not having a statutory employment, his writ petition was not maintainable. He referred to the communication dated 29th August 1981 from Shri S. N. Ghosh, the Secretary of the Institute to the petitioner to the effect "further to this office letter to you No. K/146/6/81, dated 8th June, 1981, I am directed by the President to inform you that in the light of your letter, dated 24th August, 1981, the matter will be given further consideration by the Executive Committee on 6th September, 1981 till such time you will be considered to be on leave" and stated that the terms of that letter would show and establish a cause for review, which was sought to be made by the Executive Committee of the said Institute. 1t must be noted here that from another document dated 8th June, 1981 from the said Secretary to the writ petitioner, it would appear that his resignation was accepted by the Executive Committee with effect from 1st September, 1981 and there is also no doubt that after the other letter, dated 29th August, 1981, the petitioner was really allowed to discharge his duties and he was paid upto 1st September, 1981 and the said subsequent letter, dated 29th August, 1981, also showed that en though, earlier there was communication about the acceptance of the resignation, but subsequently the same was stated not to have been accepted and thereafter, on 23rd September 1981, by a communication from the said Secretary of the said Institute the writ petitioner was informed, further to the office letter, dated 29th August, 1981 that his letter of 24th August 1981 i.e. the letter whereby he withdrew his resignation from the post of Director of Research of the Institute, was considered by the Executive Committee and the Committee had decided to refer the matter to the Council of the said Institute for consideration. In fact, the petitioner was also informed that thus a final decision in the matter in whatsoever manner, would be communicated to him only after the next Council meeting, which was scheduled to be held on 17th October 1981 and in fact on 19th October 1981 the Secretary concerned of the said Institute informed the petitioner that the Council was unable to allow him to withdraw his resignation, which was already been accepted with effect 1st September 1981 and as such, he was requested to hand over the charge of his office to the Secretary concerned and collect from the said Institute whatever amount was due to him.
28. Section 15 of the said Act deals with the functions of the Council and Regulation 85 of the said Regulation lays down the duties to be performed by the Executive Committee of the said Institute. The respective provisions of the sections and the Regulations as indicated above, have been quoted herein before. It was Mr. Banerjee''s submissions that even if the said Institute was an Authority, the contract as involved in this case between the said Institute and the writ petitioner could not be interfered with or enforced by this Court, as the same was in the nature of a private contract and he further claimed that when the resignation, as in this case was duly accepted, this Court also had no power to interfere. We have already indicated that Section 15 of the said Act lays down the different functions of the Council of the said Institute. While on the question of the effect of the resignation or the withdrawal of the same as m this case. Mr. Banerjee referred to the case of
29. It was also the submissions of Mr. Banerjee that the order, dated 29th August, 1981 as mentioned herein before, not having been challenged in the petitioner anywhere, but the resolution at the Council of the said Institute as contained in. two letters, dated 17th October, 1981 and 19th October, 1981 having only been challenged, the Court should not have entertain the writ petition and more particularly when, according to him, the Council of the said Institute at all material times had and still has the right to adopt the concerned resolution under the provisions of the said Act or the regulation as framed thereunder.
30. On the facts of the present case and so the pleadings as available, Mr. Banerjee contended that when and if a statutory body or authority under Article 12 of the Constitution of India like the said Institute, enters into a contractual obligation in respect of employment and such exigencies and not provided for in the statute, such act or actions cannot and should not be interfered with by a writ proceedings. Then he contended that a writ of certiorari cannot go in a ease like this to set aside illegality, if any, in case of employment which is governed by the principles of master and servant. According to him this case was really governed by such principles and not by any statutory contract or authority. He also contended that a resignation after acceptance as in his case, would not be open for withdrawal. It was Mr. Banerjee''s further contention that the resolution, dated 6th September 1981 of the Executive Committee of the said Institute was valid and the other question would be whether the letter, dated 24th August, 1981, had revived a relationship between the petitioner and the authorities, meaning thereby the said Institute. The other question that was posed by Mr. Banerjee was that, the Council of the said Institute in the instant case at all material times had and still has the authority to adopt the resolution as involved regarding the resignation of the petitioner.
31. In support of his first submissions as indicated above, Mr. Banerjee referred to Section 9, Sub-sections (1) and (2) of Section 15 and Sub-section (d) of Section 16(1) of the said Act. The earlier two provisions have been quoted herein before end Section 16(1) (d) lays down that for the efficient performance of duties, the Council may -
(A) .....................................................................................................
(B) .........................................................................................................
(C) ......................................................................................................
(D) fix the salaries fees, allowances and other conditions of service of the Secretary and other employees of the Council;
(E) ....................................................................................................
(2)...........................................................................................................
In fact, Section 16(1) (a) speaks of appointment of a Secretary for the said Institute by the Council and the terms and powers so far of the Secretary and other employees as in Sub-clause (d) have been indicated herein before Mr. Banerjee on construction of the sections as mentioned above, contended that even if the posts of the said Institute are created by the Council in exercise of their Statutory powers, even then all resolutions as passed, will not and cannot have statutory force. On the basis of the observations in the case of
33. On the above question, Mr. Banerjee''s answer was that the petitioner was appointed by the Executive Committee and not by the Council and the Council appoint the Secretary and he also pointed out that on the basis of the formation of the Executive Committee u/s 17, there functions have not been dined but in Chapter IX of the Regulations the powers and functions of the Executive Committee are indicated.
34. The submission of two appointing authorities of the employees of the said Institute as made by Mr. Banerjee, were difficult for us to be accepted.
35. After referring to the provisions of the Regulation 85 of the said Regulations, Mr. Banerjee also contended that delegation, if any, would not ipso facto take away the powers of the Council of the said Institute and in support of such submissions, he firstly, referred to the case of G. Vasantha Pal -Vs- C. K. Ramaswamy & Anr., A.LR. 1978 Mad 342 , where a learned Single Judge of the Madras High Court was considering the question of jurisdiction of the Governor''s powers under Article 188 of the Constitution of India and has observed that when the Governor in exercise of his powers under Article 188 of the Constitution appoints some person or persons before whom the members may make and subscribe their oath/or affirmation he does not thereby abdicate his own power under the Article but the jurisdiction of both is concurrent and the option lies with the member in Council to choose between the two be ore wham he would like to make the oath/or affirmation, apart from holding that such conclusion follows both from the construction of the constitutional provisions of Articles 188 and 367 read with Sections 14 to 16 of the General Clauses Act, 1897 and the general accepted theory that an authority which delegates its power does not divest itself of its powers and can resume them in full or in part. The mere fact that the Governor is the constitutional head of the State does not make any difference on his question as the constitution itself envisages the very making and subscribing of the obligation before the Governor and then to the Case of
36. On the above facts and; on the question of the prospective resignation or withdrawal thereof and the validity of the same, the Supreme Court has observed that the general principal regarding resignation is that in the absence of a legal, contractual or constitutional bar, a ''prospective'' resignation can be withdrawn at any time before it becomes effective, and it becomes affective when it operates to terminate the employment of the office-tenure of the resignor. This general rule is equally applicable to Government servants and constitutional functionaries. In the case of a Government servant/or functionary who cannot under the conditions of the Service/or office, by his own unilateral act of tendering resignation, give up his service/or office, normally, the tender of resignation becomes effective and his service/or office-tenure terminated when it is accepted by the competent authority. In the case of a Judge of a High Court, who is a constitutional functionary and under proviso (a) to Article 217(1) has a unilateral right or privilege to resign his office, his resignation becomes effective and tenure terminated on the date from which he, or his own volition, chooses to quit office. If in terms of the writing under his hand addressed to the President, he resigns in praesento the resignation terminates his office-tenure forthwith, and cannot, therefore, be withdrawn or revoked, thereafter. But, if he by such writing, chooses to resign from a future date, the act of resigning office is not complete because it does nest terminate his tenure before such date and the Judge can at any time before the arrival of that prospective date on which it was intended to be effective, with draw it, because the Constitution does not bar such withdrawal.
37. It was really contended by Mr. Banerjee that the case as involved in this appeal, was not one for review, but really a case of general supervision either by the said Institute or their Council and according to him, reference of the matters to the Council was done as the case was of one withdrawal of resignation and not one coming under Regulation 85 as quoted herein before. A point arose as to whether such resolution of the said Institute or the Council was really ratified or if really the said Institute''s President''s action was actually ratified on the submissions of Mr. Paul, that the same was not so. In reply to the same, Mr. Banerjee slated that there was no evidence in support of Mr. Paul''s contentions and the Secretary of the said Institute, who was the signatory of the latters as involved in this case and the particulars whereof have been disclosed herein before, have not stated about any wrong action of the President of the said Institute. It was also submitted by Mr. Banerjee that none of the Executive Committee members of the said Institute have also come up to take such plea and a reference to the letter of 29th August, 1981, without any exception, would also show that the act as involved in this case, was due and competent. Mr. Banerjee further contended that u/s 12(2) of the said Act, the President of the said Institute shall be the Chief Executive authority of the Council and he acted duly in the matter. It should be noted that the effect of the submission of Mr. Banerjee, on the basis of the affidavits as filed and so also the record as disclosed, would mean nothing but castigation of the acts of the President of the said Institute or his acts of actions, by either the Secretary of the same or the members thereof and that being the position, a further question arose as to whether such castigation would be allowed or was possible. Really such attack would not be possible in view of the decision of the Supreme Court in the case of State of Assam & Anr., -Vs- Ragbag Rajagopalachari, 1972 S.L.R. 44, where in the facts of that case, the Supreme Court has observed that an authority cannot attack its own order as Respondent. On the analogy of such decision, we hold that the present attempt of the Secretary of the said Institute to contend that any action of the President of the same, was improper and not justified, as not proper. It should also be noted that the letter, dated 6th May, 1981 whereby the Writ petitioner had asked for liberty to resign from a given date, shows that he was availing of his leave and perhaps with pay, which act may also appear from a reference to the letters, dated 24th August, 1981 and 29th August, 1981. There is however no doubt rather it is an admitted fact that the writ petitioner was paid upto 1st September 1981 but he was not paid for five days from 1st September, 1981, i.e., upto 6th September 1981, although he had discharged his duties, in terms of the direction received by him from the Secretary of the said Institute.
38. Mr. Banerjee made a further reference to the case of Raj Kumar -Vs- Union of India (Supra) and contended that for the purpose of finding out the elective date of resignation in this case, the observations as made in that case should be looked into and to support those submissions, he referred to the relevant facts of this case as mentioned and indicated in paragraphs 1 and 2 of the report and contended further that in finding out the effective date in this case, the learned Trial Judge did not at all or appropriately applied the tests as laid down in that decision. It was further claimed by Mr. Banerjee that the Secretary of the said Institute in the irritant case did act in terms of or within the scope and ambit of its powers under Regulation 99 of the said Regulations, which deals with the powers and duties of the Secretary and Mr. Banerjee in fact, made a specific reference to sub-clause (k) and (t) of Regulation 99, which lays down, subject to the general supervision of the President and the Committee concerned, the Secretary shall exercise and perform, in addition to the powers and duties specially assigned to him in the Act of this Regulation, the following powers and duties, viz.
......................................................................................................
......................................................................................................
(k) payment of salary and allowances to the members of the staff, granting of leave to them, and sanctioning their increment within the prescribed scale subject to the approval of the President.
..................................................................................................................
(t) performing such other duties and functions as are incidental and exercising such other powers as may be delegated to him by the Council, a Committee of the President from time to time. Thereafter, Mr. Banerjee also made reference to the case at Appeal Committee Ankapali Municipality, represented by its Convenor, V. N. Sagar -Vs- Commissioner, Ankapali Municipality & Anr. (Supra) the relevant findings where have been indicated herein before and then referred to the Case of G. Vasantha Pal -Vs-G. K. Ramaswamy & Anr. (supra), the other particulars whereof have been indicated herein before and also to the determinations in the case of Huth -Vs- Clarke (1890) 25 Q.B.D. 391, where it has been observed that under Schedule 6, Clauses 5 and 6, of the Contagious Diseases (Animals) Act, 1878, a Local Authority may appoint an Executive Committee which. is to have all the powers of the Local Authority, except rating powers, and the Executive Committee may appoint Sub-committees and delegate to them all or any of the powers of the Executive Committee with or without restrictions, any may from time to time revoke or alter any such delegation and, duly appointed, Executive Committee of a country council which, by virtue of the Local Government Act, 1888, is the Local Authority for the purpose of the Contagious Diseases (Animals) acts, made an order delegating to Local Sub-committees its power under the Contagious Diseases (Animals) Acts and under certain Orders in Council, including the Rabies Order, 1887. Subsequently to such delegation the Executive Committee, without expressly revoking the delegation, issued certain regulations under the Rabies Order, 1887, as to the muzzling of the dogs and keeping them under control no regulations under the Rabies Order 1887 had been issued by the Local Sub-Committee and on such fact it has been held that the delegation was not equivalent to a resignation by the Executive Committee of its own powers, that the delegated authority was subject to resumption at any time, and that the regulations were therefore valid and then to the case of Manton -Vs-Brighton Corporation (1951) 2 K.B 393 where it has in which case it has been observed that a standing order of the defendant corporation provided that Standing Committees were to be appointed annually, in May for the ensuing year to perform such duties as shall be then delegated to them by the council of the Corporation. In may, 1950, the plaintiff, an alderman of the country brough, was appointed to serve on three Standing Committees by a resolution of the Council of the Corporation appointing the Committee for "the period ending with the next annual meeting of the council". On December 21, 1950, the Council appointed an ad hoc Committee to inquire into certain alleged conduct of the plaintiff and the Committee recommended that the plaintiff should no longer serve on any Committee of the Corporation. Their recommendation was on March 29, 1951, adopted at a meeting of the Council, who thereafter treated the plaintiff as having been removed from each of the three Committees on which he had been previously appointed to serve, and on a summons by the plaintiff for an interlocutory injunction to restrain the Corporation from interfering with the exercise by he had been appointed until his term of office should expire. It has Hen held that (1) that the words in the Council''s resolution shall be appointed for the ensuing year provided a limit to the holding of the appointment; they did not mean that he should continue in all circumstances in that office in the ensuing year, but merely indicated that in normal practice he would do so; and (2) that. the Corporation, as a delegating authority, could not only at any time resume their won authority, with which they had never in fact parted, but could revoke that authority even arbitrarily or capriciously; that if there was then power in the Corporation to revoke the authority of a Committee as a whole, there must be power to revoke that of a single member of it; and that the plaintiff was accordingly not entitled to an injunction.
38A. The above cases were cited by Mr. Banerjee, in support of his contentions that the Council of the said Institute in the instant case, at all material times had and still has the authority to adopt the resolution in respect of the resignation of the petitioner or acceptance thereof.
39. While elaborating the summissions as to whether the letter, dated 29th August, 1981 has revived the relationship between the said Institute and the writ petitioner and if the said Institute has authorised by acted in that matter, firstly, reference was made by Mr. Banerjee to the case of
40. By his letter of 6th May, 1981, the writ petitioner admittedly offered a conditional resignation which was accepted and such acceptance was communicated to him on 8th June, 1981. Mr. Banerjee contended that even though the above facts are available from the records of the proceedings, but in fact, the writ petitioner was subsequently allowed to continue in the service in the manner as indicated herein before, on a fresh negotiation. It should be noted that no pleading of such facts as mentioned now by Mr. Banerjee was available and it was claimed by him, on the basis of the determinations in the case of Jai Ram -Vs- Union of India (supra), the relevant particulars whereof have been indicated herein before, that the writ petitioner in this case was not competent to change his mind and apply for cancellation of his resignation which again was accepted and it was Mr. Banerjee''s further submissions that the observations in the case of Raj Kumar -Vs- Union of India (supra), would not also appropriately help the petitioner. We must note and remember that in the letter of 23rd September 1981, the question of re-employment of the writ petitioner was specifically referred.
41. While on the question of review and the powers of the authority for the same, Mr. Banerjee made a pointed reference to the case of
42. In reply and while on the question of delegation on the validity or otherwise of the same, Mr. Paul referred to ''Administrative Law'' (4th Edition) by H.W.R. Wade which has observed that closely akin to delegation, and scarcely distinguishable from it in some cases, is any arrangement by which a power conferred upon one authority is in substance exercised by another. The proper authority may share its power with some one else, or may allow some one else to dictate to it by declining to act without their consent or by submitting to their wishes or instructions. The effect then is that the discretion conferred by Parliament, is exercised, at least in part, by the wrong authority, and the resulting decision is ultra vires and void. So strict are the Courts in applying this principle that they condemn same administrative arrangements which must seen quite natural and proper to those who make them. In this class might be included the case of the cinema licensing authority which, by requiring films to be approved by the British Hoard of Film Censors, was held to have surrendered its power of control into unauthorised hands. In fact, on a reference to the document, dated 19th October, 1981, whereby the Secretary of the said Institute informed the writ petitioner, the Council''s regret to accept his withdrawal of resignation, was unauthorised, void, improper, irregular and had since they had reference to case of Mohinder Singh Gill & Anr.-Vs-The Chief no such power in the case. It was also claimed by Mr. Paul on, a Election Commissioner, New Delhi & Ors., 1978 S.C.G. 405 that it is no longer relevant to consider the distinction between administrative and quasi-judicial functions and the question of hearing on application of principles of natural justice or the requirement thereof, would very in different facts and situations. It may be that in some cases even a hearing after the passing of the order may, on facts, satisfy the requirements or natural justice and'' administrative actions are as such subject to natural justice as judicial and quasi-judicial ones. In, that case it has further been indicated that in cased of judicial review-the necessary action is to be judged by the reasons as stated while making the order and supplementary reasons in the shape of affidavits must be excluded. On the basis of the above observations Mr. Paul claimed and contended that the subsequent improvement to the case, as has been sought to be made now by Mr. Banerjee must not be allowed to be agitated.
43. It was the further ease of Mr. Paul that overall power in the instant case, in the matter of acceptance or non-acceptance of the resignation was with the said Institute or their. Executive Committee and not the Council and to establish such submissions, reference was made by him to the case of
44. The determinations in Central Inland Water Transport Corporation''s appeals have since been reported in
45. While on the question of instrumentality of the State, the determinations as cited before us in that case and more particularly in those of Sukhdev Singh-Vs-Bhagatram Sardar Singh Aaghuvanehi (supra)
46. It has further been observed that the trading and business activities of the State constitute "Public Enterprise." The structural forms in which the government operates in the field of public enterprise are many anal varies. These may consist of government departments, statutory bodies, statutory corporation, government companies, etc. The immunities and privileges possessed by bodies so set up by the Government under Article 298 are subject to Fundamental Rights and exercisable in accordance with and in furtherance of the Directive Principles of State Policy and for the purposes of Article 12, Court must necessarily see through the corporate veil to ascertain whether behind that veil is the face of an instrumentality or agency of the State. If there is an instrumentality or agency of the State which assumed the grab of a Government company as defined in Section 617 of the Companies Act, it does not follow that it thereby ceases to be an instrumentality or agency of the State, apart from holding that applying the above test to the present case, it is clear that the appellant Corporation is ''the State'' within the meaning of Article 12. It is nothing but the Government operating behind a corporate veil, carrying out a Governmental activity and Governmental functions of vital public importance through the instrumentality of a Government Company. Merely because it has so far not the monopoly of inland water transportation is not sufficient to divest it of its character of an instrumentality or agency of the state.
47. Dealing with the other question of the effect of unconscionable contract of employment, Clause 9(1) of the Service Discipline and Apple Rules, 1979 of the Central Inland Water Transport Corporation Limited has been held to be void u/s 23 of the Contract Act, 1872, as being opposed to public policy and is also ultra vires Article 14 of the Constitution to the extent that it confers upon the Corporation the right to terminate the employment of a permanent employee by giving him three notices or pay in lieu of the notice. such a condition or provision is unconscionable, unfair, unreasonable and opposed to public policy, apart from holding that an unconscionably bargain or contract is one which is irreconcilable with what right or reasonable or the terms of which are so unfair and unreasonable that they shock the conscience of the Court.
48. The Supreme Court has further observed that the doctrine of distributive justice is another Juries prudential concept which has affected the law of contracts, According to this doctrine, distributive fairness had justice in the possession of wealth and property can be achieved not only by taxation but also by regulatory control of private and contractual transaction even though this might involve some sacrifice of individual liberty. The doctrine has found constitutional recognition through the Preamble and Articles 38 and 39, apart from holding that the test of reasonableness or fairness of a clause in a contract where there is inequality of bargaining power is another theory recognised in the sphere of law of contracts. The courts will riot enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or a clause in a contract entered into between parties who are not equal. in bargaining power. Lord Diplock in A. Sebroeder Music Publishing Co. case has given the test of fairness that "Whether the restrictions are both reasonably necessary for, the protection of the legitimate interests of the promises and commensurates with the benefits scoured to the promise under the contract. For the purpose of this test all the provisions of the contract. must be taken into consideration." This is in conscience with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Article 14. There can be myriad situations which result in unfair and reasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances. The above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties or where .the inequality is the result of circumstances, whether of the creation of the parties or not or where the weaker party is in a position in which he can obtain goods or services or means of, livelihood only upon the terms imposed by the stronger party or go without them or where a man had no choice, or rather no meaningful choice: but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract however unfair, unreasonable and unconscionable a clause is that contract or form or rules may be. The principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. However, these are only illustrations as it is difficult to give an exhaustive list of all bargains of this type. In addition to the further observations that the contracts of the type to which the principle formulated above applies are not contract which are tainted with illegality but are contract which contain terms which are so unfair and unreasonable that they shock the conscience of the court. In the vast majority of eases such contracts are entered into by the weaker party under pressure of circumstances, generally economic which results in inequality of bargaining power. Such contracts will not all within the four corners of the definition of "undue influence" given in Section 16(1) of the Contract Act, even though at times they are between parties one of whom holds a real or apparent authority over the other. Contracts in prescribed or standard forms or which embody a set of rules as part of the contract are entered into by the party with superior bargaining power with a large number of persons who have far less bargaining power or no bargaining power at all. Such contracts which acct a large number of persons or a group or groups of persons, if they are unconscionable, unfair and unreasonable, are injurious to the public interest. Such a contract or its clause should be adjudged void u/s 23 of the Contract Act on ground of being opposed to public policy. It should be noted that while making the observations as above, the Supreme Court has also relied on the decision in the case of Union of India Vs Tulsiram Patel (supra) and so also of Swadeshi Cotton Mills Vs Union of India, (1981) 1 S.C. 664.
49. Applying the tests as indicated in the Central Inland Water Transport Corporation''s case (supra) or on the cumulative effect of the same and on due consideration of the relevant provisions of the said Act and the said Regulations has indicated herein before. In our view, there is no other alternative but to hold, that the learned Trial Judge was not right and justified in not returning a verdict to the effect, that the said Institute is an instrumentality or an, agency of the State under Article 12 of the Constitution of India and as such, the writ petition was maintainable, for the infraction of the rights emanating from the provisions of the said Act and the said Regulations as alleged or as involved in the case and the further particulars whereof have been discussed and indicated earlier. Such being the position, we are also of the view that the learned Trial Judge was not justified in not making any interference in the concerned writ proceedings and on the challenges as thrown, on the ground that the writ petitioner''s relationship with the said Institute was purely a relationship of master and servant, viz., a contractual relationship and for breach of such contractual relationship, the writ jurisdiction of this Court, was not available to him. There is no doubt that the relationship between the writ petitioner and the said, Institute and his employment was one of contractual relationship and governed by the statutory Rules and Regulations, The terms of employment or the contract and terms or employment in the stant case, being admittedly an unconscionable and one sided contract of employment, this case in our view, do also come within the purview of the Supreme Court''s decision in the Central Inland Transport Corporation''s case (supra).
50. The other point which remains for determination is whether the writ petitioner, who filed the conditional, resignation, had the right to withdraw the same and if the case of such withdrawal, was duly and appropriately, considered by a proper authority. As it is, we feel that a person holding such exalted position like a Director of Research of the said Institute like that on the petitioner, must not be hesitant or vacillating in his decisions, so it was expected, that when once he had expressed his unequivocal desire to resign from a given date, he should have adhered to the same and should not be heard to say that he withdrew the same subsequently. But, such view, in view of the determinations in the case of Union of India Vs Gopal Chandra Misra (supra), can no longer be adhered to, even though we feel, that in that case, the Hon''ble Supreme Court of India had not considered the effect of withdrawal of the, concerned resignation by the concerned learned Judge, before, the same become effective or his conduct and whether his conduct was hesitant or vacillating? It is true that the learned Judge in that case, before expiry of the date, from which his resignation could be effective, withdrew his letter of resignation and practically such withdrawal was allowed by the Supreme Court, applying the terms of proviso (a) to Article 217 (1) of the Constitution of India, under which a learned Judge has an unilateral right or privileges to resign his office and his resignation becomes effective and tenure terminated on the date from which he, of his own volition, chooses to quit office. The Supreme Court has observed in that case, that since the learned Judges concerned on his right, chose to resign from a future date, the act of resigning from the office was not complete and so it does not terminate his tenure before such date and the Judge can not any time before the arrival of that prospective date on which if was intended to be effective, withdraw it, because the Constitution does not bar such withdrawal. We feel that even inspite of the fact, that there is no bar to such withdrawal, the conduct of a resigning learned Judge, viz., his hesitancy and vacillation should have been considered. We are also of the view and really we fail to understand that if a learned Judge, who is so hesitant and vacillating is his own case, how he is expected to do justice in the case of others. However, the law having been laid down in the case as mentioned above, on application of the said principles, in the facts of this case also, we can hold that since the resignation was withdrawn before the same became effective, the writ petitioner was within his jurisdiction, authority and competence to have the same withdrawn.
51. There is no provisions embodied in the Rules as regards the right of the employee to resign from service. Similarly, there is no provisions regarding the acceptance of resignation. The resignation, therefore, was to take effect from a future date. The writ petitioner by his letter dated 6th May, 1981 changed his decision to effect his resignation in praesento which would be patent from the letter doted 6th May, 1981, whereby he postponed it to the future elate. So long as the resignation does not become effective, the appellant had a right to withdraw and in fact, he duly and properly exercised his right. The present case, if tested on the touchstone of the principle laid down in the case of Union of India-Vs-Gopal Chandra Misra (supra) would show that the general principle as regards resignation is that in absence of a legal contractual or constitutional bar, a resignation fashioned with prospectivity can be in actuality withdrawn at any point of time before it becomes operative or effective. When it, operates to terminate the employment of the office of the tenure of the resigner it becomes effective. If in the terms of writing as would appear in the facts and circumstances of the present case from the letter dated 6th May, 1981 the appellant, by such writing chose to resign from a future date the act of resigning office was neither final nor complete by reason of the fact it did not constitute termination of his tenure before such date and he could at any time before the arrival of that prospective date on which it was in actuality to be effective withdrew it. There is nothing either in the rules or any executive instructions which bars such withdrawal. It is very clear that in a case where the resignation tendered is to become effective from a future date the employee, who has tendered resignation has the right to withdraw the resignation before it becomes effective and he goes out of employment. In the letter dated 24th August, 1981, the petitioner in clear terms has stated that he was withdrawing the resignation. In view of the aforesaid withdrawal, the petitioner was entitled to continue in service. In other wards, the ration of the decision of the Supreme Court in Union of India-Vs-Gopal Chandra Mishra (supra) is opposite to the present case and not the one in Raj Kumar-Vs-Union of India (supra).
52. ''Then comes the question- as to whether the Council had any power to reconsider or review the case. On the facts of this case as indicated herein before, it is abundantly clear that on receipt of the resignation, the same was kept in abeyance at the dictates of the Executive Committee and ultimately, the Council of the said Institute had directed the Secretary of the same, to inform the writ petitioner, that they were not in a position to accept the writ petitioner''s prayer for withdrawal of the resignation. On the basis of the provisions of the said, Act and the Regulations as framed thereunder, we find that the Council of the said Institute had or has no power to review and since they were lacking in such power, they could not review the case of the writ petitioner or make any order contrary to the order as earlier made be the Executive Committee of the said Institute. It is needless to point out that unless the inherent power of review is recognised or conferred by the statute, no authority would have such power on the basis of the determinations in the case of
53. For the reasons as indicated herein before, we feel that the appeal should succeed and we order accordingly.
54. The appeal is thus allowed. The judgment and order of the learned Trial Court is set aside. Let appropriate writs be issue 9. The effect of this determination is virtually to make the Rule, being Civil Rule No.15007 (w) of 1981, absolute. There will be no order as to costs. Stay as prayed for, is refused.
Mohitosh Majumdar J.- I agree
