1985 (2) TMI 250 - SC - Indian Laws

Supreme Court strikes down Regulation allowing termination without cause, upholding fairness and due process

The Supreme Court upheld the High Court's decision to strike down Regulation 34 of the West Bengal State Electricity Board as arbitrary and ... Termination of services as Deputy Secretary of West Bengal State Electricity Board Held that:- Not impressed with the submission of the learned counsel for the Board that Regulation 34 did not offend Art. 14 of the Constitution as on the face of it, the regulation is totally arbitrary and confers on the Board a power which is capable of vicious discrimination- It is a naked ’hire and fire’ rule, the time for banishing which altogether from employer-employee relationship is fast approaching. Art. 14 has been interpreted in several decisions of this Court and conferment and exercise of arbitrary power on and by the State or its instrumentalities have been frowned upon and struck down by this court as offending Art. 14. Issues:1. Validity of Regulation 34 of the West Bengal State Electricity Board2. Constitutionality of Regulation 34 under Article 143. Comparison between Regulations 33 and 344. Interpretation of arbitrary power in employer-employee relationships5. Precedents related to arbitrary power in employment regulationsAnalysis:The judgment by the Supreme Court revolves around the validity of Regulation 34 of the West Bengal State Electricity Board, which allows for the termination of services of permanent employees by serving three months' notice or on payment of salary in lieu thereof. The first respondent, a permanent employee, challenged an order terminating his services under this regulation. The High Court found Regulation 34 arbitrary and struck down its first paragraph, leading to the quashing of the termination order. The appellant argued that Regulation 34 did not violate Article 14 of the Constitution and that sufficient guidelines were provided by the Electricity Supply Act. However, the Court disagreed, labeling the regulation as arbitrary and discriminatory, akin to a 'hire and fire' rule.The Court cited previous cases like Moti Ram Deka v. North East Frontier Railway and S. S. Muley v. J.R.D. Tata and Ors., highlighting the trend of striking down regulations conferring arbitrary power on employers. The judgment emphasized the importance of natural justice and the need to avoid uncanalized and drastic powers that bypass due process. The Court also referenced the Bombay High Court's decision on Air India Employee's Service Regulations, where a similar regulation was struck down, reinforcing the stance against arbitrary power in employment regulations.In contrast to the Delhi High Court's reasoning in Manohar P. Kharkhar v. Raghuraj, the Supreme Court favored the judgments of the Bombay High Court and the Calcutta High Court in the present case. The Court dismissed the appeal, upholding the High Court's decision to strike down the arbitrary Regulation 34 and quash the termination order. The ruling signifies a stance against regulations that enable unfair discrimination and arbitrary exercise of power in employer-employee relationships, emphasizing the principles of natural justice and constitutional rights.