Sambasiva Rao (P) Vs. Hindustan Shipyard Ltd., Visakhapatnam - Court Judgment

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labour and industrial - termination - articles 12, 14 and 16 of constitution of india - termination order challenged - petitioners alleged such order arbitrary and illegal - petitioner working in respondent's undertaking not selected for appointment on regular basis - petitioner contended that after selection was over fresh condition for eligibility was introduced - petitioner was eliminated as he could not fulfill fresh condition - petitioner's services throughout the period were satisfactory - such order arbitrary, unreasonable and violate article 14 - respondent directed to reinstate petitioner and consider him for appointment on regular basis at earliest on reasonable pay scale - termination order liable to be quashed. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act, and no other grounds are available to it. the insurer is not allowed to contest the claim of the injured or heirs of the deceased on other grounds, which are available to the insured. if insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer and will be negation of the intention of the legislature and annihilate mandate of the provisions of sections 170 and 149 of the act. the insured can pursue appeal only after giving up the insurer as the appellant and not otherwise. in the instant case, the insurer has not withdrawn from party array but has remained prosecuting the appeal with the insured on the grounds which are available only to the insured. therefore, the joint appeal as filed by the insured and the insurer is not maintainable. section 166: [v. gopala gowda & jawad rahim, jj] claim for compensation accident due to mechanical defect in the vehicle held, it is not in dispute that the claimant suffered injuries in an accident, which occurred during the course of his employment, albeit due to his negligence but law does not render him remediless. statutory right is conferred on him, accruing by virtue of his employment under insured to claim compensation under workmens compensation act. the insurer is statutorily duty bound to discharge the liability of the owner of the vehicle, to pay such compensation to the employee, as mandated under the provisions of section 149 of the act. the right of an injured employee or his dependents as the case may be to be compensated, when injury is suffered or death occurs during his employment, is recognised not only under workmens compensation act, but also under benevolent provisions under section 166 and 167 of the m.v. act. the right of driver to seek compensation is not restricted only to the workmens compensation act, it has been enlarged to enable such person to seek just compensation (sections 166 and 168), conferring upon him the right of election engrafted under section 167 of the act to choose either of the two forum. the only defence which the insurer could take is limit of its liability as enumerated under section 147 of the act, leading to contest, inter alia, only between insured and insurer and does not impact claimants right to recover the compensation determined by the tribunal which crystallizes into enforceable right against both. in the instant case, the claimant/driver has exercised right of election under section 167 of the act to seek compensation under section 166 of the act resulting in award passed by the tribunal. therefore, the insured and the insurer have no escape but to discharge the said award as directed. undisputedly, in this case as deduced for proved facts, the vehicle in question was not properly maintained by the owner and despite faulty brake system, the claimant had undertaken the hazardous journey to his peril at the behest of and at the instruction of the owner. the owner is therefore, tortfeasor. section 168: [v. gopala gowda & jawad rahim, jj] insurers limit of liability - held, it is well settled that the liability of the insurance company for payment of compensation can be statutory or contractual. is for the insurance company to show that the insurance policy was a statutory policy and not a contractual policy to restrict its liability. that issue was neither raised before the tribunal nor is raised in this appeal requiring decision. thus, if at all the insurer has any valid ground to restrict its liability, it can proceed against the insured but firstly it has to discharge the award as required under section 149 (1) of the act. where the owner/insured has failed to maintain the vehicle as per prescribed safety standards and has caused the claimant to drive the vehicle with mechanical defects, the owner would be the tortfeasor and the claimant can maintain a petition seeking compensation under the provisions of the act, instead of seeking compensation under the workmens compensation act. on facts, held, the material evidence on record, particularly, with regard to the income of the claimant, his age, medical evidence and the evidence relating to pecuniary loss has not been considered by the tribunal in the correct perspective, which has resulted in passing of the impugned award, disproportionate to the pecuniary loss and the loss of future income of the victim. the settled principles governing determination of compensation has been given a go-bye. compensation of rs.4,15,150/- awarded by the tribunal was enhanced to rs.8,20,000/-. - 14 and 16 of the constitution are, therefore, clearly applicable to any action of the first respondent. employment under public corporations, like the first respondent, should have the protection which appertains to public employment, as observed by mathew j. there is no good reason why, if government is bound to observe the equality clauses of the constitution in the matter of employment and in its dealing with the employees, the corporations set up or owned by the government should not be equally bound and why, instead, such corporations could become citadels of patronage and arbitrary action .some element of public employment is all that is necessary to take the employee beyond the reach of the rule which denies him access to a court to enforce a contract of employment and denies him the protection of arts. a medical graduate rendering satisfactory service and putting in a service of nine years, like the petitioner, is entitled to be treated with greater consideration. 10. i am satisfied that the order, dated 6 june, 1985, effectively dispensing with the services of the petitioner with effect from 1 march, 1985 is extremely arbitrary, unreasonable and is violative of art.1. the petitioner herein seeks a declaration that the order passed on 6 june, 1985, by the hindustan shipyard ltd., visakhapatnam, the first respondent herein, terminating the petitioner's services with effect from 27th february, 1985, was arbitrary and illegal. the petitioner also seeks a declaration that he should be deemed to be continuing in service of the first respondent continuously. 2. the petitioner passed m.b.b.s., from the andhra university in the year 1975. he was appointed by the first respondent as a medical officer temporarily in october 1976. although the appointment was initially said to be for a period of ten weeks he was continued in service. in july 1980, the first respondent advertised for two posts of medical officers for appointment on regular basis. the petitioner submitted his representation on 10th july, 1980, requesting for absorption as regular medical officer. the first respondent sent a communication to the petitioner, dated 5th august, 1980, stating that he could not be absorbed on a regular basis as he was appointed purely on temporary basis and the petitioner, cannot, therefore, claim any right for regular appointment. the petitioner made an application for appointment as regular medical officer in response to the aforesaid advertisement and he was called for an interview on 12 march, 1981. although the petitioner had been working as a medical officer in the first respondent's undertaking he was not selected for appointment on a regular basis. the petitioner states that after the interviews were over the selection committee introduced a fresh condition that in order to be eligible for selection, the applicant should have obtained a degree in medicine by 1974. in as much as the petitioner obtained his medical degree in the year 1975, he was eliminated. the petitioner also states that in the advertisement no such stipulation has been made that in order to be eligible for selection the applicant should have obtained a degree in medicine by 1974. 3. in the aforesaid circumstances, the petitioner filed writ petition no. 2053 of 1981 on 31 march, 1981, seeking a declaration that the petitioner is entitled for absorption into the post of medical officer in the first respondent-undertaking. the petitioner sought directions in writ petition miscellaneous petition no. 3014 of 1981 filed in the aforesaid writ petition for considering the selection of the petitioner. at that stage, counsel for the first respondent gave an undertaking before this court that the petitioner would be considered as an eligible candidate for the post. having regard to that undertaking no orders were passed by this court. even so, the petitioner has not been selected. it is stated that the selection committee did not find him suitable. 4. according to the petitioner, a number of vacancies had been filed up subsequent to 1981 but the petitioner's claim had not been considered for regular appointment. it is stated that from time to time the first respondent has been issuing orders renewing the petitioner's temporary appointment. each order of appointment would give an impression that it was a fresh appointment. when the petitioner was initially appointed he was appointed on an honorarium of rs. 600 per month without any allowances. thereafter in respect of every renewed appointment it was shown that the petitioner would be entitled to an honorarium of rs. 20 per day without allowances. the last appointment given to the petitioner on 4 december, 1984, stated that the petitioner was temporarily appointed for the period 5 december, 1984 to 27 february, 1985. it appears the petitioner fell ill with jaundice and, therefore, applied for leave from 1 march, 1985. on 19 june, 1985, the first respondent issued proceedings which stated that the petitioner's appointment was an ad hoc appointment which expired on 27 february, 1985 and therefore, the question of sanctioning leave after 27 february, 1985 did not arise. it is this order, dated 6 june, 1985, issued by the first respondent-undertaking that has been questioned in the present writ petition. 5. the first respondent does not dispute that the petitioner has been in employment as a medical officer right from 1976. it is also not denied that right from 1976, the order of appointment whenever made was effective for 89 days and a fresh order of appointment was issued after giving a day's break on the 90th day. the first respondent points out that 'the petitioner was appointed for short time as honorary assistant medical officer and he is being informed every time that he would not be eligible for any leave and the petitioner has accepted the said terms of appointment and now he cannot turn round and say that though he is appointed on temporary basis he should be treated as permanent.' it is further contended that the appointment was only on part-time basis from time to time for specific period of 89 days as accepted by the petitioner and he was required to work for 4 1/2 hours a day without any claim or right for regular appointment. it is further pointed our that the petitioner was considered for selection by the selection committees for regular appointment in the year 1980, as also in the year 1984, but did not find him suitable. these are the grounds on which the first respondent justified the effective termination of the petitioner's services. learned counsel for the first respondent sri kalyan ram states that the appointment of the petitioner is governed by a contract and the petitioner having accepted the contractual employment and having joined on a specific condition that he shall not be entitled to claim any regular appointment, cannot now be permitted to contend that the first respondent was not within its power, in refusing to grant leave to him from 1 march, 1985, and in also refusing to appoint him on regular basis. 6. there can be no dispute that the hindustan shipyard, ltd, the first respondent herein, who employed the petitioner is a 'state' within the meaning of article 12 of the constitution. the limitations prescribed by arts. 14 and 16 of the constitution are, therefore, clearly applicable to any action of the first respondent. arbitrary action of an employer affecting the right to public employment would be hit by arts. 14 and 16 of the constitution. employment under public corporations, like the first respondent, should have the protection which appertains to public employment, as observed by mathew j. in sukhdev singh v. bhagatram sardar singh raghuvanshi (1975-i-llj-399). the following observations of chinnappa reddy j., in uttar pradesh warehousing corporation v. vijayanarayan vajpayee : (1980)illj222sc are relevant. '... there is no good reason why, if government is bound to observe the equality clauses of the constitution in the matter of employment and in its dealing with the employees, the corporations set up or owned by the government should not be equally bound and why, instead, such corporations could become citadels of patronage and arbitrary action ... some element of public employment is all that is necessary to take the employee beyond the reach of the rule which denies him access to a court to enforce a contract of employment and denies him the protection of arts. 14 and 16 of the constitution ....' mathew, j., in sukhdev case (supra) observed that a declaration can be obtained even in such cases for continuance in service in as much as the question is one of status and not of a contract simpliciter. a full bench of the delhi high court held in r. m. joshi v. reserve bank of india (1982-i-llj-77) that even where the regulations were non-statutory and were to be treated as part of a contract of service in a standardised form entered into by the state or public authorities, the services is one of status in as much as the employer is subject to constitutional obligation. 7. having regard to the aforesaid principles governing the employment of persons by state and public corporations, all that has to be examined in the present case is : whether the first respondent acted arbitrarily in dispensing with the services of the petitioner with effect from 1 march, 1985, and in refusing to consider the petitioner's case for regular appointment. if it can be said that the action of the first respondent is arbitrary, in the facts and circumstances of the present case, it must then be held that the first respondent's actions violate art. 14 of the constitution of india and the petitioner is entitled to a direction for continuance in service. let me, therefore, examine the facts in the present case. in the counter filed, the respondent repeatedly claimed that the petitioner was appointed as an 'honorary' medical officer. it is claimed that the petitioner was being paid only 'honorarium' and not 'salary.' it is not clear what exactly the first respondent means by saying that the petitioner was appointed as an 'honorary' medical officer and there is any amount of distinction between 'honorarium' and 'salary.' it may be pointed out that the description of the remuneration as 'honorarium' by the first respondent in the order of appointment does not alter the real character of the remuneration being paid to the petitioner. it is not denied that right from 1976 the petitioner was being appointed continuously as a medical officer giving a break on every 90th day. the order of appointment issued every time was made effective for eighty-nine days, the break was given on 90th day, reappointment was made on the next day. it is also not denied that the petitioner has been working for not less than 4 1/2 hours every day throughout the period. these facts undoubtedly establish the relationship between the petitioner and the first respondent with the character of respondent describes the petitioner as 'honorary' medical officer and remuneration paid to him as 'honorarium' the fact remains that the petitioner as an employee of the first respondent and was being paid remuneration for the services rendered. but for the break in service given on every 90th day by the first respondent, the petitioner has been in continuous service of the first respondent between 1976 and 1985, for nearly a period of nine years. no explanation is forthcoming as to why the first respondent considered it necessary to give a break of service to the petitioner on every 90th day when his services were really required by the first respondent throughout. it is not possible to escape the conclusion that the action of the first respondent in giving a break on every 90th day is deliberate and for the ulterior purpose of denying the petitioner the continuity of service which would have otherwise conferred on him benefits by way of regularisation of service, etc. had it not been for the break of service given on every 90th day designedly by the first respondent, the petitioner would have been automatically entitled to continuance of service and be regularised. there is not a whisper in the counter filed or in the argument addressed before this court by the counsel for the first respondent that the petitioner's services were found unsatisfactory over a long period of nine years. indeed the petitioner's services throughout the period were satisfactory. it is exceedingly unfortunate that notwithstanding such a long period of service, the selection committees did not consider fit to select the petitioner for regular appointment, but chose to appoint in the regular vacancies only outsiders. it is not without significance that when the posts of medical officers for appointment on regular basis were first advertised in july 1980, the chief medical officer of the first respondent endeavoured to screen the applications by putting in a condition of passing m.b.b.s., before 1974, a condition of eligibility that did not appear in the advertisement issued. the petitioner's grievance that the elimination of candidates who passed m.b.b.s., after 1974 was done for purpose of eliminating the petitioner does not seem to be lack of bona fides. when the petitioner questioned the aforesaid action of screening out the petitioner, hastily an undertaking was given before this court by the learned counsel for the first respondent that the petitioner would be considered eligible. on 20th october, 1981, this court passed the following orders in writ petition miscellaneous petition no. 3012 of 1981 in writ petition no. 2058 of 1981 : 'sri kalyan ram, appearing for the hindustan shipyard, represents that among the candidates to be considered for permanent appointment, sri sambasiva rao (the petitioner) will be considered as an eligible candidate for the post. having regard to this undertaking no further orders need be passed' the petitioner contends before this court that it was because of the petitioner approaching this court by filing writ petition no. 2058 of 1981, the first respondent was annoyed which unfortunately resulted in his not being selected by the two successive selection committees. 8. the first respondent is a government of india undertaking and should act as a model employer without giving even the slightest apprehension that its employees are being exploited. the petitioner is a medical graduate and has put in service of nearly nine years. calling it 'honorarium', the petitioner was being paid a paltry sum of rs. 600 throughout the period without any increase. indeed after the petitioner approached this court by filing writ petition no. 2058 of 1981 his 'honorarium' was reduced to rs. 20 per day which works out to less than rs. 600 for the number of working days. a medical graduate rendering satisfactory service and putting in a service of nine years, like the petitioner, is entitled to be treated with greater consideration. even an attender employed in a nationalised bank, a peon in life insurance corporation and a durwan in indian airlines corporation gets a salary of more than rs. 600 per month. it is unfortunate that the petitioner, who secured a medical degree, does not even compare favourably with a low-paid employee else-where. obviously for want of employment else-where and decent prospects to set up private practice the petitioner compromised himself to a break of service on every 90th day. in asking for continuity of service and regularisation of his appointment after a period of nine years, the petitioner was really not asking for the moon. 9. learned counsel for the first respondent, sri kalyan ram, submits that the cessation of service of the petitioner in this case is in conformity with the terms of appointment and relies on a decision of the supreme court in subba reddy v. andhra university : [1976]3scr1013 . it is true that in subba reddy case (supra) the supreme court upheld the termination of the service of a university employee as being in conformity with the terms of the appointment by giving the requisite notice. but it is clear that their lordships in that case were not considering the question under arts. 14 and 16 of the constitution. the supreme court had no occasion to consider in that case whether the power of termination was arbitrarily exercised violating art. 14 of the constitution. that was the view taken by my learned brother jeevan reddy, j., in ranga rao v. hindustan aeronautics (1981) 2 aplj 17 (soc) and p. a. choudary, j., in seshachalam (d. p.) v. administrative staff college of india 1984 lic 875 and also by a bench of this court in v. rajagopala reddy v. andhra pradesh state electricity board (1984-ii-llj-176). the decision of the supreme court in subba reddy v. andhra university (supra), is not applicable in case where the services of an employee are dispensed with arbitrarily, as in the present case. 10. i am satisfied that the order, dated 6 june, 1985, effectively dispensing with the services of the petitioner with effect from 1 march, 1985 is extremely arbitrary, unreasonable and is violative of art. 14 of the constitution. it is accordingly quashed. the first respondent is directed to reinstate the petitioner forthwith and consider with him for appointment on regular basis at the earliest. the first respondent shall also put the petitioner on a reasonable scale of pay. having regard to the facts of the case however, the petitioner would not be entitled, to claim any remuneration for the period between 1 march, 1985 till this day. 11. the writ petition is accordingly disposed of. no costs. 12. writ petition no. 2058 of 1981 : 13. in view of the orders passed by this court in writ petition no. 9844 of 1985 of even date, no further orders are necessary in this writ petition. it is accordingly closed.