H.L. TREHAN AND ORS. ETC. versus UNION OF INDIA AND ORS. ETC.

Citation: [1988] SUPP. 3 S.C.R. 925 · Decided: 22-11-1988 · Supreme Court of India · Bench: M.M. DUTT · Disposal: Dismissed
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Judgment (excerpt)

I( 
H.L. TREHAN AND ORS. ETC. 
v. 
UNION OF INDIA AND ORS. ETC. 
NOVEMBER 22, 1988 
A 
[MURARI MOHON DUTT, S. NATARAJAN AND 
B 
N.D. OJHA, JJ.] 
The Caltex (Acquisition of shares of Caltex Refining (India) Ltd. 
and of the Undertakings in India ofCaltex (India) Ltd.) Act, I977, ss. 3 
and 
11-Management staff-Rationalisation of perquisites and 
allowances-Whether permissible without affording opportunity to C 
staff. 
Administrative Law-Existing conditions of service-No depriva-
tion or curtailment of any existing right, advantage or benefit enjoyed by 
a government servant without affording an opportunity-Post-
decisional opportunity-Whether subserves rules of natural justice. 
D 
The Caltex (Acquisition of Shares of Caltex Refining (India) Ltd. 
and of the Undertakings in India ofCaltex llndia) Ltd.) Act 17of1977, 
by Section 3 provides for the acquisition of shares of Caltex Oil Refinery 
(India) Ltd. (for short CORIL). Section 11(2) of the Act provides that 
subject to rules made in this behalf under section 23, every whole time 
E 
.officer or other employee of CORIL would, on the day of acquisition, 
contillue to be an officer or other employee .of CORIL on the same terms 
and conditions and with the same rights to pension, gratuity and other 
matters as are admissible to him immediately before that day and shall 
continue to hold slicb office unless and until his employment under 
CORIL is duly terminated or, until his remuneration and conditions of F 
service are duly altered by that company. 
Consequent upon the taking over of the CORIL on December 30, 
1976, the Chairman of the Board of Directors of CORIL issued a cir-
cular dated 8th March, 1978 to the effect that the perquisites admissible 
to the management staff of CORIL should be rationalised in the manner G 
stated in the said circular. At this stage the undertaking of CORIL was 
transferred and vested in the Hindustan Petroleum Corporation Ltd.-
the appellant in C.A. No. 3214of1979. 
Respondent Nos. 1 to 4, employees of CORIL in the said appeal, 
filed a ·.writ petition before the High Court challenging the legality and H 
925 
926 
SUPREME COURT REPORTS 
[1988] Supp. 3 S.C.R. 
A validity of the impugned circular on the ground, inter alia, that the 
employees had not been given any opportunity of being heard before 
altering to their prejudice the terms and conditions of service and there-
fore the impugned circular should be struck down as void being 
opposed to the principles of natural justice. The High Court accepted 
the aforesaid contention of the respondents and quashed the impugned 
B circular. Hence this appeal by special leave. Civil Appeal 3212 of 1979 
has been preferred by the respondents. 
Dismissing the appeals, 
HELD: 1. The High Court was perfectly justified in quashing the 
C 
impugned circular. Even if any hearing was given to the employees 
of CORIL after the issuance of the impugned circular that would 
not be any compliance with the rules of natural justice or avoid 
the mischief of arbitrariness as contemplated by Article 14 of the 
Constitution. [932A-B] 
O 
2(i) It is now a well established principle of law that there can be 
no deprivation or curtailment of any existing right, advantage or 
benefit enjoyed by a Government servant without complying with the 
rules of natural justice .bY giving the government servant concerned an 
opportunity of being heard. Any arbitrary or whimsical exercise of 
power prejudicially affecting the existing conditions of service of a 
E government servant will offend against the proviSien of Article 14 of the 
Constitution. [930F-G I 
2(ii) The post-decisional opportunity of hearing does not subserve 
the rules of natural justice. The authority who embarks upon a post-
decisional hearing will naturally proceed with a closed mind and there 
F 
is hardly any chance of getting a proper consideration of the representa-
tion at such a post-decisional opportunity. [931A-B] 
K.l. Shephard &. Ors. v. Union of India & Ors., JT 1987 600, 
followed. 
G 
In view of the reasons given ig the above appeals, the Court 
dismissed C.A. No. 3518of1979. 1932C] 
ClvtL APPELLATE JURISDICTION: Civil Appeal No. 3212 
of 1979 etc. 
H 
From the Judgment and Order dated 20.8.1979 of the Delhi High 
··'~ 
H .L. TREHAN v. U.0.1. !DUTT, J,] 
927 
Court in Civil Writ Petition No. 426 of 1978. 
. 
Rajinder Sachar, G.B. Pai, Narayan Shetty, K.T. Ananthara-
man, Mrs. P.S. Shroff, S. Shroff, Ms. Girija Krishan, C.C. Mathur, 
A.M
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