BINNY LTD Vs. V SADASIVAN

JUDGEMENT

(1.) Leave granted in SLP(C) No. 6016/2002 and the appeal is heard along with Civil Appeal No.1976/1998. In these two appeals, common questions of law arise for consideration.

(2.) In Civil Appeal No.1976/1998, narration of brief facts is necessary to understand whether the reliefs as prayed for by respondents 2 to 36 could have been granted by the High Court. Each of the respondents was working as member of the management staff of the appellant company, which was engaged in the manufacture of cloth. The respondents were originally appointed in the appellant-company in various jobs such as Clerks, Machine Overlookers, Supervisors, etc. According to these respondents, from 1981 onwards, the appellant company started insisting on them to be designated as management staff with the object of avoiding payment of overtime wages. The respondents signed an agreement with the Management acceding to the request of the appellant company, but they continued to perform the same duties as before. The appellant company contended that there was incessant rain in the night of 12-6-1996 when the entire company premises was flooded with water and it caused serious damage to the plant and machinery and finished-stock and the appellant company stayed all the operations and informed the Commissioner of labour that water had entered the mill premises causing serious damage to the plant and machinery and management had no other alternative but to suspend the operations of the mill. Order of termination was issued to the respondents invoking Clause 8 of the agreement dated 12-3-1991 entered into by the respondents with the appellant company. As per clause 8 of the agreement, the Management had a right to terminate the services without assigning any reason by just giving one months notice or salary in lieu thereof. Appellant contended that all these respondents were drawing salary of more than Rs.1,600/- per month and they were not workmen under the Industrial Disputes Act, 1947. The respondents filed Writ petition No.11862/1996 for a Declaration that Clause 8 of the Agreement read with Order of termination date 31-7-1996 issued by the appellant company was void and illegal and violative of Section 23 of the Indian Contracts Act. The respondents had also contended that the agreement entered into by the respondents with the appellant company was violative of Article 21 of the Constitution and the closure of the mill was against Section 25F and 25N of the Industrial Disputes Act, 1947, and they sought for a direction to reinstate them in service with continuity of service and all consequential benefits. The appellant-company contended that the Writ Petition was not maintainable as the appellant company was a private body; therefore, the question of granting the declaration sought would not arise. It was also contended that there was alternative efficacious remedy available to them and therefore, the discretionary jurisdiction under Article 226 of the Constitution of India should not be exercised. The appellant company also contended that the respondents were not entitled to seek a Writ of Mandamus as the appellant was a private company and the decision of the appellant company to terminate the services of the respondents is not liable to be the subject matter or judicial review. According to the appellant company, they were neither public authorities nor their action involved public law element, for which remedy of Writ of Mandamus was available. The Writ Petition was considered by the Division Bench of the Madras High Court. The Court held that Clause 8 of the agreement entered into between the respondents 2 to 36 and the appellant was void and unenforceable against the respondents as being violative of Section 23 of the Indian Contracts Act. Reliance was placed on Central Inland Water Transport Corporation Ltd. vs. Brojo Nath Ganguly (1986) 3 SCC 156 and the High Court ultimately held that in the proceedings under Article 226, the respondents herein would not be entitled to get the relief of reinstatement and back wages and the Court granted only a declaratory relief to the effect that the termination order was illegal and the respondents had to work out an appropriate remedy before the appropriate forum.

(3.) In the appeal arising out of SLP (Civil) No.6106/2000, the appellant was employed as a Corporate Legal Manager with the 1st respondent company, which is a private limited company engaged in the manufacture of chemicals. The services of the appellant were terminated with effect from 1-6-1998. The appellant sought for the issue of a Writ or other appropriate Order to quash or set aside the Termination Order dated 1-6-1998. He also sought for a Writ of Mandamus directing the respondents to allow the appellant to report for work in the same grade and pay-scale to which he was originally employed. The respondent company contended that the Writ Petition was not maintainable as the respondent company was a private employer and the appellant was working under a private contract of employment. The Writ Petition filed by the appellant was referred to a larger Bench in view of the important question of law raised by the parties and the Full Bench of the Bombay High Court elaborately considered the question and held that the appellant was not entitled to the remedy sought for and the Writ Petition was not maintainable. The Full Bench held that by terminating the services of the appellant, the Company was not discharging any public function and, therefore, the action sought to be challenged by the appellant was not amenable to the jurisdiction of judicial review.