No Acts & Articles mentioned in this case
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WEST BENGAL STATE ELECTRICITY BOARD & ORS.
v.
DESH BANDHU GHOSH AND ORS.
0. Cl!INNAPPA
R. B. MISRA, JJ,
February 26, 1985
REDDY, E. S. VENKATARAMIAH AND
Adminl•tratlre Law-
West Bengal State Electricity Board Reg•latlan" Regulation 34-Regu
latJ"on conferred full power on employer to terminate services of permanent
employee by serving 3 months notice or salary in lieu thereaf-No guidelines
provided for the exercise of such power-Held, Re1Mlatlon is arbitrary and
offend• Art. 14.
First Paragraph of Regulation 34 of West Bengal State Electricity
Board Regulations provides
that in case of a permanent employee his services
may be terminated by serving 3 months notice or on payment
of salary for
tho corresponding period ia lieu
thereof;
The Secretary of the appellant-Board terminated the services of first
respondent, a permanent employee with immediate effect on payment of
three months' salary in lieu of three months notice without giving any
reasons under Regulation
34 of the Board's
Regulatioos. There was nothing
in the
order which could possibly be said to attach any stigma to lhe
res~
pondent. The respondent filed a writ petition in the High Court for
quashing the impugned order. The High
Court came to the conclusion that
Regulation 34 was arbitrary in nature and suffered from the vice of enabling
discrirnination and therefore
it
struck down the first paragraph of Regulation
34 and as a consequence quashed the
order terminating the services of the
first respondent.
Ia an appeal to this Court, the appellant contended that section !SA
and 19 of the Electricity Supply Act laid down sufficient guidelines for the
exercise of the power under Regulation 34 and in any case the power to
terminate tho services of a permanent employee was vested in higher ranking
officials and might be expected to be exercised in a reasonable way and
therefore Regulation 34 did not offend Article 14 of the Constitution.
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STATE BLECI'IUC!Tl! BOARD v. D. B. GHOSH (Chinnappa Reddy, J.) 1015
Dismissing the appeal,
HELD : Article 14 has been interpreted in several decisions of this
Cou;t and conrerment and exercise of arbitrary power on and by the State
or its instrumentalities have been frowned upon and struck down by this
Court as offending Article 14. [10170]
In the instant case, on the face of it the Regulation is totally arbitrary
and confers on the Board a power which is capable of vicious discrimination.
It is a naked 'hire and fire' rule, the time for banishing which altogether
from employer~employee relationship is fast approaching. Its only parallel
is to be found in the Henry VIII class so familiar to administrative lawyers.
[1017E·F]
Workman, Hindustan Steel Ltd. v. Hindustan Steel Ltd., AIR 1985 SC
2SI, followed.
S.S. Muley v. J. R. D. Tata and Ors .• [1979) 2 S. L. R. 438,
approved.
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B
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Moti Ram Deka v. Nort~ East Frontier Railway, AIR 1964, SC 600, D
referred to.
Manohar P. Kharkhar v. Raghuraj, [1981] II L. L. J. 4S9, overruled.
CIVIL APPE~LATE JURISDICTION: Civil Appeal No. 562 of
1985.
From the Judgment and Order dated the 28th January, !985
of the Calcutta High Court in F. M. A. T. No. 970 of 1984.
Somnath Chatterjee, H. K. Puri for the Appellants.
S. N. Kacker, A. K. Ganguli for the Respondents.
The Judgment
of the Court was delivered by : CHINNAPPA REDDY, J. Special leave granted.
The West Bengal State Electricity Board is the principal appe
llant in this appeal by special leave which we have just now granted.
The first respondent, a permanent employee
of the West Bengal State Electricity Board, filed the writ petition out of which the
appeal arises in the Calcutta High Court to quash an order dated
March 22,
1984 of the Secretary, West Bengal
State,,Electticity
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1016 SUPRBMI! COURT REPORTS [1985] 2 S.C.R.
Board terminating his services as Deputy Secretary with immediate
effect
on payment of three month's salary in lieu of three month's
notice. The order
gave no reasons for terminating the services of
the respondent and there
was nothing in the order which could
possibly
be said to attach any stigma to the respondent. Apparently
the order
was made under Regulation 34 of the Board's Regulations
which enables the Board to terminate the services
of any permanent
employee 'by serving three months' notice or on payment
of salary
for the corresponding period in lieu there-of'. The High Court
contrasted Regulation
34 with Regulation 33 which provides for the
termination
of services of both permanent and temporary employees
of the Board on attaining the age
of superannuation, as a result of
the disciplinary action etc. For the sake of convenience we extract
below Regulation
33 and the first paragraph (which alone is relevant)
of Regulation 34 :
"33 (I) Unless otherwise specified in the appointment
order in any particular case, the services of a permanent
employee of the Board may be terminated without notice
(i) On his attaining the age of retirement or by reason
of a declaration by the competent medical authority that he
is unfit for further service; or
(ii) as a result of disciplinary action ;
(iii) if he remains absent from duty, on leave or other
. wise, for a continuous period exceeding 2 years.
(2) In the case of a temporary employee, his service
may be terminated by serving of-
(a) one month's notice on other side or on payment of
a month's salary in lieu thereof; or
(b) notice on either side for the period specified in the
G appointment order or contract or on payment
of salary in
lieu thereof,
as the case may be.
(c) the service
of a temporary employee shall also be
deemed to have been terminated automatically if the period
of extraordinary leave without pay and/or
of unauthorised
absence from duties exceeding(s) a maximum period
of
90 days.
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STATE BLECTlUCITY BOARD v. D. B. GHOSH (Chinnappa keddy, J.) 101'?
"34. Jn case of a permanent employees, his services
may
be terminated by serving three months' notice or on
payment of salary for the corresponding period in lieu
thereof."
Contrasting Regulations
;3 and 34 the High Court came to
the conclusion that Regula!1on 34 was arbitrary in nature and
suffered from the vice of enabling discrimination. The High Court,
therefore, struck down the first paragraph of Regulation 34 and as
a consequence quashed the order terminating
the services of the first
respondent.
The learned counsel for the West Bengal State Electricity
Board submitted that Regulation
34 did not offend Art. 14 of the
Constitution, that sec.
I SA and 19 of the Electricity Supply Act
laid down sufficient guidelines . for the exercise of the power under
Regulation 34 and in any case the power to terminate the services
of a permanent employee was vested in higher ranking officials and
might be expected to
be exercised in a reasonable way.
We are not impressed with the submission of the learned
counsel for the Board.
On the face of it, the regulation is totally
arbitrary and confers
on the Board a power which is capable of
vicious discrimination. It is a naked 'hire and fire' rnle, the time
for banishing which altogether from employer-employee relationship
is fast approaching. I
ts only
parallel is to be found in the Henry
VIII class so familiar to administrative lawyers.
In Moti
Ram Deka
v. Nnrth East Frontier Railway(
1
l Rules 148 (3) and 149 (3) of the
Indian Railway Establishment Code were challenged on the ground
that they were contrary to Art. 3!1
(2) of the Constitution. The
challenge was upheld though no opinion
was expressed on the
question whether the rule offended
art 14 of the Constitution.
Since
then Art. 14 has been interpreted in several decisions of this Court
and conferment and exercise of arbitrary power on and by the State
or its instrumentalities have been frowned upon and s!Juck down
by this court as offending Art. 14.
In
S. S. Muley v. J. R. D. Tata
and Ors.(
1
)
P.
B. Sawant, J. of the Bombay High Court considered
at great length Regulation
48 (a) of the Air India Employee's
Ser
vice Regulations which conferred similar power on the Corporation
(1) AIR 1964, S.C. 600,
(2) (1979] 2 S.L.R. 438.
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1<ns SUPRBMH COURT REPORTS (1985) 2 s.c.R.
as Regulation 34 confers on the Board in the present case~ The
learned judge struck down Regulation
48 {a) and we
agre·e with his
reasoning and ·conclusion. In Workman, Hindustan Steel Ltd. v.
Hindustan Steel Ltd.{
1
)
this Court bad occasioned to hold that a
Standing
Order which conferred such arbitrary, uncanalised and
drastic power to enable the employer to dispense with an inquiry
and to dismiss an employee, without assigning any reason,
by merely
stating that it
was expedient and against the interest of the security
to continue to employ
tho workman was violative of the basic
requirement
of natural justice.
The learned counsel for the appellant relied upon
A1anohar
P. Kharkhar v. Raghuraj(
2
) ·to contend that Regulation 48 of the
Air India Employee's Service Regulations was valid. it is difficult
to agree with the reasoning of the Delhi High Court that because
of
the complexities of modern administration and the unpredictable
exigencies arising in the course
of such administrat:on
1t is necessary
for an employer to be vested with such powers as those under
Regulation 48.
We prefer the reasoning of
Sa want, J. of the Bom
bay High Court and that of the Calcutta High Court in the judg
ment under appeal to the reasoning
of the Delhi High Court. In
the result the appeal is dismissed with costs.
M.L.A.
(!) A.I.R. 1985 $.C. 251.
(2) [1981) II L.L.J. 459.
Appeal
d•smissed.
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This landmark judgment in WEST BENGAL STATE ELECTRICITY BOARD & ORS. v. DESH BANDHU GHOSH AND ORS., now authoritatively documented on CaseOn, serves as a cornerstone in Indian service jurisprudence. It meticulously scrutinizes the constitutional validity of Regulation 34 of the West Bengal State Electricity Board Regulations against the fundamental right to equality guaranteed under Article 14 of the Constitution. The Supreme Court's decision decisively struck a blow against arbitrary employment practices within state instrumentalities, reinforcing that public employment cannot be governed by the whim of the employer.
The case originated when the first respondent, Shri Desh Bandhu Ghosh, a permanent employee holding the post of Deputy Secretary in the West Bengal State Electricity Board, had his services abruptly terminated. The termination order was issued with immediate effect, offering three months' salary in lieu of a notice period. Crucially, the order cited no reasons for the termination and attached no stigma to the employee. The Board exercised its power under the first paragraph of Regulation 34 of its service regulations, which permitted the termination of a permanent employee by simply serving a three-month notice or paying the corresponding salary.
Aggrieved by this arbitrary action, the respondent challenged the order in the Calcutta High Court. The High Court, after contrasting the unguided power in Regulation 34 with the specific grounds for termination laid out in Regulation 33 (such as superannuation or disciplinary action), found Regulation 34 to be arbitrary and a source of potential discrimination. Consequently, it struck down the regulation and quashed the termination order. The West Bengal State Electricity Board then appealed this decision to the Supreme Court.
The central issue before the Supreme Court was whether a service regulation that grants a public sector employer the absolute and unguided power to terminate a permanent employee without assigning any reason is constitutionally valid. In essence, could such a provision withstand the test of non-arbitrariness enshrined in Article 14 of the Constitution?
The legal principles at the heart of this case were:
The Supreme Court delivered a resounding and unequivocal judgment, dismissing the Board’s appeal. The court's analysis was sharp and multi-faceted.
First, the Court declared Regulation 34 to be "totally arbitrary" on its face. It provided no guidelines, no principles, and no criteria for the exercise of the power to terminate. This absence of a guiding framework made the regulation capable of "vicious discrimination," allowing the Board to fire an employee for any reason or no reason at all. The appellant’s argument that the power was vested in high-ranking officials who would act reasonably was summarily rejected; the Court emphasized that the potential for abuse in the law itself is what makes it unconstitutional.
Second, the Bench famously described the provision as a "naked 'hire and fire' rule." It drew a parallel to the infamous "Henry VIII clauses" in administrative law, which grant the executive sweeping powers without accountability. The Court opined that the time for banishing such rules from the employer-employee relationship, especially in the public sector, was "fast approaching."
Third, the Court aligned its decision with its evolving jurisprudence on Article 14. It followed its recent decision in Workman, Hindustan Steel Ltd. v. Hindustan Steel Ltd. (1985), where a similar standing order was struck down. It also expressly approved the reasoning of the Bombay High Court in S. S. Muley v. J. R. D. Tata (1979), which had invalidated a similar regulation of Air India.
Understanding the nuances between these conflicting High Court judgments is crucial. Legal professionals can quickly grasp the core arguments by listening to the 2-minute audio brief for West Bengal State Electricity Board & Ors. v. Desh Bandhu Ghosh & Ors. on CaseOn.in.
Significantly, the Supreme Court overruled the Delhi High Court's decision in Manohar P. Kharkhar v. Raghuraj (1981). The Delhi High Court had upheld a similar rule, reasoning that the "complexities of modern administration" made such powers necessary. The Supreme Court found this reasoning difficult to accept, preferring the logic that protected employee rights against arbitrary executive power.
The Supreme Court concluded that Regulation 34 was anathema to the principles of equality and natural justice. It affirmed the Calcutta High Court's judgment, striking down the first paragraph of Regulation 34 as unconstitutional and void for violating Article 14. The appeal was dismissed with costs, and the termination of the respondent's service was consequently quashed.
In this case, the Supreme Court held that a regulation empowering a public employer to terminate the services of a permanent employee by merely giving a notice or salary in lieu thereof, without providing any guidelines for the exercise of this power, is arbitrary and unconstitutional. Such a "hire and fire" policy gives unbridled power to the employer, making it discriminatory and violative of the equality clause under Article 14 of the Constitution. The Court reinforced the principle that security of tenure for public employees is a matter of constitutional protection, not administrative whim.
For lawyers and legal professionals, this judgment is a foundational authority in service and administrative law. It establishes a clear precedent against clauses that grant arbitrary dismissal powers to the state or its instrumentalities. It is a vital tool for challenging unfair termination and for arguing that any power conferred upon a public authority must be structured, guided, and reasonable.
For law students, this case is a masterclass in the practical application of Article 14. It demonstrates how the concept of equality extends beyond mere classification to combat arbitrariness in state action. It perfectly illustrates the judiciary's role as a guardian of fundamental rights against potential executive overreach and is essential reading for understanding the constitutional safeguards available to public servants.
Disclaimer: The information provided in this article is for informational purposes only and does not constitute legal advice. For legal counsel, please consult with a qualified professional.
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