RAM SAHAN RAI versus SACHIV SAMANAYA PRABANDHAK AND ANR.

Citation: [2001] 1 S.C.R. 1145 · Decided: 21-02-2001 · Supreme Court of India · Bench: G.B. PATTANAIK · Disposal: Disposed off

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Judgment (excerpt)

RAM SAHAN RA! 
A 
SACHIV SAMANA YA PRABANDHAK AND ANR. 
FEBRUARY 21, 2001 
[G.B. PATTANAIK AND B.N. AGRAWAL, JJ.] 
B 
Service Law 
Constitution of India-Article 12-District Cooperative Bank-An 
instrumentality of State-Order of dismissal by employee-Not following the C 
mandatory provisions of lm1~Held, invalid. 
Civil Procedure Code. 1908-Speciflc Relief Act, 1963-Suit for 
enforcement of contract of personal service-Held, not barred when order of 
dismissal passed in gross violation of natural justice. 
The Appellant filed a suit for declaration that the order of his removal 
from service was illegal, arbitrary, null and void and without jurisdiction and 
D 
the same may be set aside and for a declaration that he was continuing in 
service and for all other consequential benefits. He contended that he was 
appointed as a Clerk in Defendant No. 2 Bank and was posted in the accounts 
·section, that while he was on leave and had left the bank after handing-over E 
charge to one V, the Acting Secretary, who was not competent to frame any 
charges against him, issued a set of charges, alleging mis-conduct of serious 
nature for illegal absence from duties and finally, it was indicated that the 
plaintiff has been removed from service on finding him guilty of the charges, 
without holding any inquiry and without affording an opportunity to the plaintiff F 
to defend himself. Defendant No. 2 filed a written statement, denying the 
assertions made in the plaint and further stated that continuous absence 
from duty without permission was a gross mis-conduct, which was established 
in the proceeding and, therefore, the order of termination was valid. The 
defendant No. 2 did not participate in any proceedings. The suit was ultimately 
dismissed. The Appellant preferred an appeal and even though the defendants G 
were served, they never contested and ultimately the appeal was heard ex 
parte. The lower Appellate Court rejected the contention that the Acting 
Secretary did not have the power of passing an order of termination, but it 
h~ld that the order of termination casting stigma being based on a set of 
charges of serious misconduct on the part of the delinquent, it was obligatory H 
l 145 
.I 146 
SUPREME COURT REPORTS 
[200 I) I S.C.R. 
A for the competent authority to follow the procedure prescribed for inflicting 
major punishment and since in the case in hand, no charge-sheet was served 
and no show cause notice was given, principles of natural justice and fair 
play had not been followed, the impugned order is illegal, invalid and inoperative 
and cannot be sustained. The Respondent-bank then moved the High Court in 
B Second Appeal. The Second Appellate Court though agreed with the findings 
of lower Appellate Court, set aside the Judgment and decree of the lower 
Appellate Court on a finding that the suit was essentially one for enforcement 
of a contract of personal service :md such a suit must be held to be not 
maintainable in the Civil Court, relying upon a decision of this Court. In 
Appeal to this Court, the Appellant contended that the U.P. State Co-operative 
C Land Development Bank has been held by the Court to be an instrumentality 
of the State and an authority under Article 12 and it is controlled by the 
State Government and service conditions of the employees, particularly in 
regard to the disciplinary proceedings, are statutory in nature, that if an 
order of termination of an employee of such bank is found to have been 
passed without compliance of the principle of natural justice and without 
D following the procedure prescribed by law, then the said order is null and 
void and, therefore, employee's right could be enforced notwithstanding the 
fact that service is one of contract, that the relationship between the plaintiff 
and defendant-bank being employment under a statutory body, which statutory 
body had acted in breach of mandatory obligation imposed by the statute, the 
E ultimate order is null and void and as such the plaintiff was entitled to the 
declaration sought for and the High Court committed serious error in 
interfering with the judgment of the lower Appellate Court, and that the 
order of dismissal passed by the statutory authority being a nullity for non-
compliance of the principle of natural justice as well as for not following the 
F 
procedure provided for imposing of a major penalty, the declaration sought 
for could be granted notwithstanding the contract of employment a

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