1969 (3) TMI 40 - HC - Companies Law

Summary

Issues Involved:

1. Whether the respondent-company is a "State" or "authority" within the meaning of Article 12 of the Constitution.
2. Competence of the personnel officer to terminate the petitioner's services under clause 7 of the terms and conditions of appointment.
3. Applicability of clause 7 to the petitioner.
4. Whether the termination procedure violated the standing orders.
5. Discrimination under Article 14 of the Constitution.
6. Jurisdiction of the High Court to issue writs against the respondent.

Issue-wise Detailed Analysis:

1. Whether the respondent-company is a "State" or "authority" within the meaning of Article 12 of the Constitution:

The court examined whether the respondent, Indian Oil Corporation Limited, qualifies as a "State" or "authority" under Article 12. The petitioner argued that the company, being wholly owned by the Government, should be considered a "State" or an instrument of the State. The court referred to the memorandum and articles of association of the company, which indicated that it is a private company registered under the Companies Act with all shares held by the Union Government. The court concluded that despite government ownership, the company operates under the Companies Act and is not a statutory corporation or a constitutional entity. The court cited several Supreme Court decisions, including Tata Engineering and Locomotive Co. Ltd. v. State of Bihar and Rajasthan State Electricity Board, Jaipur v. Mohan Lal, to support the view that the respondent is not a "State" or an "authority" under Article 12.

2. Competence of the personnel officer to terminate the petitioner's services under clause 7 of the terms and conditions of appointment:

The petitioner contended that the personnel officer who terminated his services was not competent to do so under clause 7 of the terms and conditions of appointment. The respondent argued that the termination was competently passed by the managing director and there was no contravention of clause 7. The court did not delve deeply into this issue, as it found that the primary question was whether the company is a "State" or an "authority" under Article 12, which it concluded negatively.

3. Applicability of clause 7 to the petitioner:

The petitioner claimed that clause 7, which allowed termination with one month's notice, did not apply to him as he had been confirmed in service. The respondent maintained that clause 7 was applicable. The court noted that the petitioner had accepted the terms of service, including clause 7, by his letter of acceptance. The court found no merit in the petitioner's contention that clause 7 was inapplicable.

4. Whether the termination procedure violated the standing orders:

The petitioner asserted that his termination violated the standing orders. The respondent countered that the standing orders did not apply to the terms and conditions of the petitioner's service. The court did not find it necessary to decide on this issue, given its conclusion that the respondent is not a "State" or an "authority" under Article 12, and thus, writ jurisdiction was not applicable.

5. Discrimination under Article 14 of the Constitution:

The petitioner argued that applying clause 7 to him but not to grade III officers was discriminatory and violated Article 14. The court observed that Article 14 prohibits the State from denying equality before the law. Since the respondent was not a "State" or an "authority," Article 14 was not applicable. Additionally, the court noted that the petitioner belonged to a different class than grade III officers, and there was no merit in the discrimination claim.

6. Jurisdiction of the High Court to issue writs against the respondent:

The respondent contended that the High Court lacked jurisdiction to issue writs against it, as the head office was located outside the court's jurisdiction and the relationship was contractual, not statutory. The court agreed, stating that a writ could not be issued against the respondent because the termination order was neither judicial nor quasi-judicial, nor was it passed under any statute or law. The court cited the Supreme Court decision in Praga Tools Corporation v. C.A. Imanual to support this conclusion.

Conclusion:

The court dismissed the writ petition, concluding that the respondent-company is not a "State" or an "authority" under Article 12, and therefore, the writ jurisdiction was not applicable. The court found no merit in the petitioner's other contentions and made no order as to costs.