1969 (12) TMI 109 - SC - Indian Laws

Holder of a civil post under the Union - Held that - The corporation which is Hindustan Steel Limited in this case is not a department of the Government nor are the servants of it holding posts under the State. It has its independent existence and by law relating to Corporations it is distinct even from its members. In these circumstances, the appellant, who was an employee of Hindustan Steel Limited, does not answer the description of a holder of a civil post under the Union' as stated in the article. The appellant was not entitled to the protection of Art. 311. The High, Court was therefore right in not affording him the protection. The appeal fails and is dismissed.

Summary

Issues:
- Appellant's employment termination without Art. 311 protection
- Applicability of Art. 311 to employees of a Corporation

Analysis:
The appellant, an Assistant Surgeon, was appointed on probation by Hindustan Steel Ltd. and later employed on a 5-year contract. The contract allowed termination by either party with a notice period. The appellant's services were terminated after an incident where he was accused of misbehavior by a patient's husband. The termination led to a legal challenge under Art. 226, claiming wrongful termination without Art. 311 protection and breach of natural justice principles during the enquiry. The High Court ruled that Art. 311 protection did not apply to the appellant as he was not a civil servant. The appellant's appeal before the Supreme Court aimed to expand the case by alleging improper enquiry and lack of defense opportunity, which were not addressed in the High Court's judgment. However, the Supreme Court declined these new grounds and focused on the central issue of Art. 311 applicability to Corporation employees.

The key question before the Supreme Court was whether employees of a Corporation like Hindustan Steel Ltd. were entitled to Art. 311 protection. To be eligible for this protection, the appellant needed to hold a civil post under the Union or a State. The appellant argued that since the company was entirely financed by the Government and managed by the President, his post should be considered under the Government of India. However, the Court rejected this argument, emphasizing the distinction between a Corporation and a Government department. Previous cases, including State of Bihar v. Union of India, highlighted that a company majority-owned by the Government does not equate to a Government entity. The Court also referenced cases like Praga Tools Corporation v. C. V. Imanual, emphasizing the separate legal existence of corporations despite Government ownership.

In analyzing the appellant's claim, the Court considered the nature of the company's incorporation, management structure, and financial independence. The Court cited cases like Lachmi v. Military Secretary and Subodh Ranjan Ghosh v. Sindhri Fertilizers to support the view that employees of Government-owned corporations do not automatically fall under Art. 311 protection. The Court also compared the Hindustan Steel Ltd. case with English precedents, highlighting the independent legal status of corporations. Ultimately, the Court concluded that the appellant, as an employee of Hindustan Steel Ltd., did not hold a civil post under the Union, making him ineligible for Art. 311 protection. Consequently, the appeal was dismissed, and no costs were awarded due to the circumstances of the case.