K C SHARMA Vs. DELHI STOCK EXCHANGE

JUDGEMENT

(1.) This appeal by special leave impugns the judgment of the Delhi High Court in Letters Patent Appeal No. 331/1999.

(2.) The appellant joined the service in Delhi Stock Exchange - the First Respondent in this appeal - as General Manager with effect from 5-5-1992. Initially, he was in-charge of the Market Division and later on made in-charge of Investor Grievances Cell. He is highly qualified academically, holding two first class Masters Degrees in Commerce and Arts, and three core professional Degrees of Chartered Accountant, Company Secretary and Cost Accountant. In the initial stages, the appellants service was very much appreciated by the First Respondent as a result of which he was granted accelerated increments. While he was in charge of the Investors Grievances Cell, he took strict action against certain members of the Respondent Stock Exchange. This caused some dissatisfaction in the minds of some of the brokers. On 9th June, 1995 there was a murderous assault on the appellant and an FIR was lodged with the police. It is the case of the appellant that till about October 1995 the Executive Director, in-charge of the First Respondent appreciated the appellants merits and was supportive. Thereafter, there was a period of time when there was no Executive Director between 25th October, 1995 and 13th December, 1995. During this period the First Respondents affairs were managed by elected member-Directors. The appellant contends that, because of strict action taken by him against some of the member-Directors, the member-Directors were waiting for an opportunity to get rid of him. The appellant claims that during the period 26th October, 1995 to 12th December, 1995 he was subjected to continuous humiliation and victimization. In the meanwhile, the Delhi Police after investigation gave out a press release on 7th March, 1996 naming one of the brokers, Shiv Charandass Aggarwal, as having engineered the assault on the appellant by paying money to some hooligans. The said Shiv Charandass Aggarwal was arrested by the Delhi Police and during interrogation he admitted that he was involved in the incident, as the appellant had been harsh against him and imposed a penalty of Rs.2 lakhs in a public grievance appeal filed against him. On 7-3-1996 the office of the Deputy Commissioner of Police issued a press release stating these facts. According to the appellant, despite periodic notes put up by him indicating how some of the brokers were acting contrary to the rules of the Exchange and of legal provision, no action was either proposed or taken against such erring brokers by the First Respondent. After the press release was published, the member-Directors felt that the appellant was responsible for maligning one of the members. In the meanwhile, on 22-5-1996, the appellant, in accordance with the guidelines of the Ministry of Finance, issued notices to various brokers including the President, Vice-President and senior Directors of the Stock Exchange. This, perhaps, was the last straw on the camels back. On 23-5-1996 the First Respondent issued a notice to the appellant terminating his service with immediate effect on payment of three months salary. The termination was purportedly in exercise of the power vested in the Board of Directors, vide Para 4 of the appointment letter of the appellant dated 12-11-1993.

(3.) The appellant challenged the termination of his service by a writ petition under Article 226 of the Constitution before the Delhi High Court. The learned single Judge allowed the writ petition on 7-7-1999 holding that the First Respondent is State within the meaning of Article 12 of the Constitution; and that the termination of the services of the appellant was mala fide and illegal. In this view of the matter, the learned single Judge quashed and set aside the order of termination of the appellants service and declared that the appellant shall be continued in the service of the First Respondent with all consequential benefits. The First Respondent challenged this order of the learned single Judge by a Letters Patent Appeal. It was argued before the Division Bench in appeal that the termination of the contract of employment of the appellant was on account of loss of confidence and that the learned single Judge had failed to address himself to this issue despite the material on record being pointed out. The Division Bench remitted the matter to the learned single Judge to give his findings on the following two issues :