1975 (2) TMI 111 - SC - Indian Laws

Whether an order for removal from service contrary to regulations framed under the Oil and Natural Gas Commission Act, 1959; the Industrial Finance Corporation Act, 1948; and the Life Insurance Corporation Act, 1956 would enable the employees to a declaration against the statutory corporation of continuance in service or would only give rise to a claim for damages? Whether an employee of a statutory corporation is entitled to claim protection of Articles 14 and 16 against the Corporation? Held that - Rules and regulations framed by the Oil and Natural Gas Commission, Life Insurance Corporation and the Industrial Finance Corporation have the force of law. The employees of these statutory bodies have a statutory status and they are entitled to declaration of being in employment when their dismissal or removal is in contravention of statutory provisions. By way of abundant caution we state that these employees are not servants of the Union or the State. These statutory bodies are authorities within the meaning of Article 12 of the Constitution. The employees of these statutory bodies have a statutory status and they are entitled to a declaration of being in employment when their dismissal or removal is in contravention of statutory provisions.

Issues Involved:
1. Whether an order for removal from service contrary to regulations framed under the Oil and Natural Gas Commission Act, 1959; the Industrial Finance Corporation Act, 1948; and the Life Insurance Corporation Act, 1956, entitles employees to a declaration of continuance in service or only a claim for damages.
2. Whether an employee of a statutory corporation is entitled to claim protection under Articles 14 and 16 against the Corporation.
3. Whether regulations framed under the aforementioned statutes have the force of law.
4. Whether statutory corporations are authorities within the meaning of Article 12 of the Constitution.

Detailed Analysis:

1. Order for Removal from Service Contrary to Regulations:
The judgment discusses whether an order for removal from service contrary to regulations framed under the Oil and Natural Gas Commission Act, 1959; the Industrial Finance Corporation Act, 1948; and the Life Insurance Corporation Act, 1956, entitles employees to a declaration of continuance in service or only a claim for damages. The court held that the regulations framed by these statutory bodies have the force of law. Therefore, employees removed in contravention of these regulations are entitled to a declaration of continuance in service.

2. Protection under Articles 14 and 16:
The court examined whether employees of statutory corporations are entitled to claim protection under Articles 14 and 16 against the Corporation. It was held that since these statutory bodies are authorities within the meaning of Article 12, their employees are entitled to protection under Articles 14 and 16 of the Constitution.

3. Force of Law of Regulations:
The court analyzed whether the regulations framed under the statutes have the force of law. It was concluded that regulations framed by the Oil and Natural Gas Commission, Life Insurance Corporation, and Industrial Finance Corporation have the force of law. This conclusion was based on the statutory nature of the regulations and the fact that the statutory authorities have no right to deviate from these regulations.

4. Statutory Corporations as Authorities under Article 12:
The court discussed whether statutory corporations are authorities within the meaning of Article 12 of the Constitution. It was held that the Oil and Natural Gas Commission, Life Insurance Corporation, and Industrial Finance Corporation are authorities within the meaning of Article 12. The judgment emphasized that these corporations are created by statutes, perform public functions, and are subject to government control, thereby bringing them within the ambit of Article 12.

Separate Judgments:
Majority Judgment:
The majority held that the rules and regulations framed by the Oil and Natural Gas Commission, Life Insurance Corporation, and Industrial Finance Corporation have the force of law. Employees of these statutory bodies have a statutory status and are entitled to a declaration of being in employment when their dismissal or removal is in contravention of statutory provisions. These statutory bodies are authorities within the meaning of Article 12 of the Constitution.

Concurring Judgment by Mathew, J.:
Mathew, J. concurred with the majority, emphasizing the evolving concept of the state and the role of public corporations in modern governance. He argued that public corporations set up under statutes to carry on businesses of public importance are agencies or instrumentalities of the state and are subject to constitutional limitations.

Dissenting Judgment by Alagiriswami, J.:
Alagiriswami, J. dissented, arguing that the Oil and Natural Gas Commission, Life Insurance Corporation, and Industrial Finance Corporation are not authorities within the meaning of Article 12 of the Constitution. He contended that the regulations framed by these corporations do not have the force of law and that employees of these statutory bodies do not have a statutory status entitling them to a declaration of being in employment when dismissed or removed in contravention of statutory provisions.

Conclusion:
The appeals were disposed of accordingly, with the majority judgment prevailing. The parties were ordered to bear their own costs in all the appeals.

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