Sarwar Ali, A.C.J:— In ten of the writ applications the petitioners are temporary employees of several departments of the Government. Only the petitioners in two writ applications are employees of Sone Command Area Development Agency and Bihar Hill Area Lift Irrigation Corporations. The departments of the Government with which we are concerned are the Forest Department, Agricultural Department, Health Department and Irrigation Department. Temporary appointments of the petitioners in the various writ applications have been terminated under orders which are challenged in these writ applications.
2. Two main controversies arise in these writ applications. They are:
(a) Whether the Departments, Agency or the Corporation concerned are industry within the meaning of the Industrial Disputes Act, 1947 (the Act), and as such the petitioners are entitled to the protection of S. 25F of the Act.
(b) Whether the petitioners in all these cases were entitled to be heard before the impugned orders of termination of their services were passed. In other words, whether the concerned respondents, who admittedly were acting administratively, had acted unfairly in passing the impugned orders without giving the petitioners an opportunity of being heard or having their say in the matter of the proposed action.
3. Before dealing with the facts of the individual cases it would be proper to consider the main contentions as noticed above, and then to consider whether the petitioners are entitled to any relief on the basis of the legal position as explained.
Applicability of Industrial Disputes Act:
4. After a series of controversies raised in a number of cases going up to the Supreme Court, the law is now authoritatively laid down by the decision of the Supreme Court in Bangalore Water Supply and Sewerage Boards. Rajappa, [1978 — I L.L.N 376, 657]. This decision in the words of Iyer, J., formulates “the principles deducible from our discussion, which are decisive, positively and negatively, of the identity of “industry” under the Act”. The decision clarifies that what was laid down was not exhaustive but confined to the extent covered by the debate at the Bar. I can do no better than to quote the relevant portions of Para. 163 which formulate the principles at pages 429 and 430:
“(a) Where—
(i) systematic activity;
(ii) organised by co-operation between employer and employee (the direct and substantial element is chimerical);
(iii) for the production and or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss, i.e, making, on a large scale, prasad or food) prima facie, there is an ‘industry’ in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, bs the venture in the public, joint, private or other sector.
(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on employer-employee relations….
II. Although S. 2 (j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to overreach itself:
‘(a) ‘Undertaking’ must suffer a contextual and associational shrinkage as explained in Banerji case, [A.I.R 1953 S.C 58], and in this judgment; so also, service, calling and the like. This yields the inference that all organised activity possessing the triple elements in I (supra), although, not trade or business, may still be ‘industry’ provided the nature of the activity, viz., the employer-employee basis, bears resemblance to what we find in trade or business. This takes into the fold ‘industry’ undertakings, callings and services, adventures ‘analogous to the carrying on of trade or business'. All features, other than the methodology of carrying on the activity, viz., in organizing the co-operation between employer and employee, may be dissimilar. It does not matter, if on the employment terms there is analogy’.
IV. The dominant nature test’.
‘(a) Where a complex of activities, some of which qualify for exemption, others not, involves emoloyees on the total undertaking, some of whom are not ‘workmen’ as in University of Delhi case, [A.I.R 1963 S.C 1873] (vide supra), or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in Corporation of Nagpur case, [A.I.R 1960 S.C 675] (vide supra), will be the true rest. The whole undertaking will be ‘industry’ although those who are not ‘workmen’ by definition may not benefit by the status.
(b) Notwithstanding the previous clauses, sovereign functions, strictly understood (alone), qualify for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies.
(c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within S. 2 (j)…”.
This decision rehabilitates the case of D.N Banerji v. P.K Mukherjee, [A.I.R 1953 S.C 58], as amplified by Corporation of City of Nagpur v. Its employees, [A.I.R 1950 S.C 675] and State of Bombay v. Hospital Mazdoor Sabha, [A.I.R 1960 S.C 610].
5. The learned Advocate-General advanced the extreme contention that none of the departments of the Government could be characterised as industry. He referred to the Observation of Beg, C.J, to the following effect in Para. 18, at pages 385:
“…Therefore, only those services which are governed by separate rules and constitutional provisions, such as Arts. 310 and 311 should, strictly speaking, be excluded from the sphere of industry by necessary implication”.
He contended that since the departments in question, and, in face, all other departments of the Government, are governed by Arts. 310 and 311 of the Constitution, they cannot be termed as industry.
6. Before considering the submissions made it would be appropriate to give the views of Krishna Iyer, J. (on behalf of himself, Bhagwati and Desai, JJ.), who in Para. 163 clearly stated:
“(b) Notwithstanding the previous clauses, sovereign functions, strictly understood (alone), qualify for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies”.
Earlier in Para. 74, at page 401 he observed:
“… Articles 309 to 311 of the Constitution of India, the enactments dealing with the Defence Forces and other legislation dealing with the employment under statutory bodies may, expressly or by necessary implication, exclude the operation of the Industrial Disputes Act, 1947. That is a question of interpretation and statutory exclusion; but, in the absence of such provision of law, it may indubitably be assumed that the key aspects of public administration like public justice stand out of the circle of industry”.
Chandrachud, J., (as he then was), dealing with this aspect of the matter saw no justification for excluding the activities undertaken by the Government in the exercise of its inalienable functions under the Constitution from the definition of “industry” and held that the true test was the nature of activity and not as to who engages in it. “The nature of the activity,” said the learned Judge, “is the determining factor and that does not change according to who undertakes it”. Jaswant Singh, J. (on behalf of himself and Tulzapurkar, J.), while concurring in the dismissal of the appeal, observed in Para. 108, at page 664:
“…We are inclined to think that the definition is limited to those activities systematically or habitually undertaken on commercial lines by private entrepreneurs with the co-operation of employees for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community…”.
7. In my view, the effect of the majority decision on this aspect of the matter is that if there are enactments, or rules framed under Art. 309 of the Constitution, which either expressly or by necessary implication exclude the operation for the industrial Disputes Act, no question of applicability of the provisions of the Act arises. Our attention was not drawn to any legislative provision, or to rules framed under Art. 309 of the Constitution, which exclude the applicability of the Act to Government Departments. The mere fact that there is a Service Code dealing with some of the aspects of the employer-employee relationship between the Government and its employes does not, in my opinion, amount by necessary implication to the exclusion of the provisions of the Act to Government Departments. If there were rules, for instance, specifically dealing with the manner in which temporary appointments could be terminated, it could legitimately be argued that S. 25 b of tae Act is excluded. For then, the rules framed under the constitutional provisions would have precedence over the provisions of the Act. I am, therefore, of the view that it is not possible to accept the extreme contention of the learned Advocate-General that the provisions of the Industrial Disputes Act do not at all apply to Government servants. Indeed, Hospital Mazdoor Sabha case, [A.I.R 1960 S.C 610] (vide supra), where the hospital run by the Health Department has been held by the Supreme Court to be industry, negatives the argument of the learned Advocate-General. Bangalore Water Supply case, [1978 — I L.L.N 376 and 657] (vide supra), invites the Government to clear the controversy raised relating to this branch of law by legislative interference. After this decision, S. 2 (j) of the Act has been amended. This section is in two parts. After defining “industry” it states as to whatare not included in the definition. The sixth provision thereof is as follows:
“any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space”.
[Emphasis added.]
A reading of the amended provision makes it clear that all Government Departments are not even now contemplated to be beyond the purview of the Act.
8. The triple test as laid down in Para. 163 of the judgment in Bangalore Water Supply, [1978 — I L.L.N 376 & 657] (vide supra), read with Para. 163, II (a), makes it quite clear that although an organised activity possesses the triple elements as mentioned above, yet in order to be characterised as industry the nature of activity must bear resemblance to what we find in trade or business. This aspect has been clearly explained in Sub-para. II (a) of Para. 163 of the judgment in Bangalore Water Supply case, which has already been quoted.
9. My learned brother, Nagendra Prasad Singh, J., has examined whether the departments concerned and Sone Command Area Development Agency and Bihar Hill Area Lift Irrigation Corporation are industry in view of the decision of the Supreme Court, and the tests laid down therein. Substantially agreeing with his analysis, I am of the view that Forest and Agricultural Departments cannot, on the materials available, be held to be industry. On the other hand, the Irrigation Department as also the wing of the Health Department, with which we are concerned, are industry. So are the Agency and the Corporation as mentioned above. Thus the petitioners in Civil Writ Jurisdiction Cases Nos. 352, 618 and 621 of 1981 and 2015, 3322 and 4502 of 1982, except petitioners 25 to 27, 29 and 30 in Civil Writ Jurisdiction Case No. 4502 of 1982, who have not put in 240 days, are entitled to the benefit of S. 25F of the Act. Admittedly, there has been violation of this provision in the case of the petitioners. The impugned orders are, therefore, liable to quashed (except as stated above) on the ground of infraction S. 25F of the Act.
Natural justice and administrative orders:
10. It is not in dispute that the orders of termination of temporary services of the petitioners are administrative in nature. But that would not make any difference so far as the applicability of the rules of natural justice, or the duty to act fairly, is concerned. True it is that at one stage in England administrative actions were thought to be beyond the pale of the rule relating to natural justice. But that “heresy,” as pointed out by Lord Denning, M.R, “was scotched in Ridge v. Baldwin, [1964 A.C 40]”. This case, it is acknowledged, is a landmark in the development of administrative law in England. In India the controversy was set at rest in A.K Kraipak v. Union of India, [(1969) 2 SCC 262 : A.I.R 1970 S.C 150]. This case too constitutes a landmark. The position so far as administrative action is concerned, it can now be taken to be well settled, is that in order to test whether the principles of natural justice; or, in other words, the requirement to act fairly in administrative matters are applicable or not, it has to be examined whether the impugned action could be taken without giving an opportunity to the party concerned to have his say in the matter of the proposed action.
11. It would be pertinent to extract the views of De Smith and Sri Seervai in the context of the duty to act fairly in administrative matters. De Smith opines:
“Since 1967 the concept of a duty to act fairly has often been used by Judges to denote an implied procedural obligation. In general it means a duty to observe the rudiments of natural justice for a limited purpose in the exercise of functions that are not analytically judicial but administrative. Given the flexibility of natural justice, it may not have been strictly necessary to use the term ‘duty to act fairly’ at all, but its usage is now firmly established in the judicial vocabulary, its value has lain in assessing the extension of implied procedural obligations to the discharge of functions that are not analytically judicial, and in emphasising that acting in accordance with natural justice does not mean forcing administrative procedures into a strait-jacket. The comparatively recent emergence of this use of the ‘duty to act fairly’ may also enable the Courts to tackle constructively procedural issues that have not traditionally been regarded as part of the requirements of natural justice. It may, therefore, be less confusing to say that an immigration officer or a company inspector or a Magistrate condemning food as unfit for human consumption or an educational institution considering an application by a student for admission is obliged to act fairly rather than obliged to act judicially (or to observe natural justice, which means the same thing). However, close analyst of the relevant judgments is apt to generate its own confusion; for sometimes one judge will differentiate a duty to act fairly from a duty to act judicially and another will assimilate them, both Judges being in full agreement as to the scope of the procedural duty cast on the competent authority”.
See Re H.K, [(1967) 2 Q.B 617, 630-631] (Lord Parkar, C.J “fairly”), 632-33 (Salmon, L.J, “natural justice”), 636(Balain, J., “neutral);” Re Pergamon Press, Ltd., [1971 Ch. 388, 399-400] (Lord Denning, M.R, “fairly”), 402-403 (Sacha, L.J, “natural justice”), 407 (Buckly, L.J, “not a judicial function”); Breen v. A.E.U, [(1971) 2 Q.B 175, 190] Lord Denning, M.R “fairly”), 195 (Edmand Devies, L.J, “natural justice”), 200 (Megaw, L.J, neutral). See also Gurnwick Processing Laboratories, Ltd. v. A.C.A.S, [1978 A.C 655, 660, 677], per Lord Danning M.R, (“judicial,” “natural Justice,”) 677, per Geoffrey Lane, L.J, (“unfair or contrary to the rules of natural justice”); but on appeal Lord Diplock, speaking for the majority in the House of Lords, disposed of the questions of statutory interpretation in issue without reference to either term.
Occasionally, however, a duty to act fairly is clearly distinguished from a duty to observe natural justice: see e.g Pearlberg v. Varty, [(1972) 1 W.L.R 534], per Lords Dilhorne and Pearson; R. v. Race Relations Board ex-parte Servarajan, [(1975) 1 W.L.R 1686, 1695–1696] (per Lord Denning, M.R), 1700 (per Scarman, L.J,); Central Council for Education and Training in Social Work v. Edwards, The Times, dated 5 May, 1978. And see Re Webb and Ontrao Housing Corporation, [(1978) 93 D.L.R (3d) 187.]
De Smith's Judicial Review of Administrative Action, 4th Edn., page 238.]
Sri Seervai, after quoting De Smith says:
“This statement gains in force if it is remembered that in respect of a duty which is recognised to be clearly judicial or quasi-judicial, ordinarily that duty gives the aggrieved party very much more by way of procedural safeguards of natural justice than the duty to act fairly would give him. It is necessary to bear this in mind, lest the use of the words ‘duty to act fairly* as a synonym of ‘principles of natural justice’ should deprive the aggrieved party of safeguards which principles of natural justice have given him long before the doctrine of the duty to act fairly came into vogue after 1967”. (See Constitutional Law of India, 2nd Edn., page 904.)
In this judgment, however, the “principles of natural justice” have been used as synonym of the “duty to act fairly”.
12. It has, however, to be appreciated that all administrative decisions do not call for the applicability of the principles of natural justice. Many a decisions are, and must necessarily be taken, without having the view point of the person or the party likely to be affected. There is hardly any administrative decision which does not affect one person or the other. A decision, to start departmental proceeding on prima facie satisfaction, to prosecute a delinquent, to suspend a Govern ment servant as a holding action (and not as a measure of punishment), and like comes within the exceptional category. But this is on the ground that nothing unfair can be inferred by not affording an opportunity to the person likely to be affected to present his view point or meet the case against him. That is why it has been said that audi alteram partem rule is intended to inject justice into law and it cannot be applied to defeat the ends of justice or to make the law “lifeless, absurd, stultifying, self-defeating or plainly contrary to the common sense of the situation”.
[Emphasis supplied.]
13. Whether the principles of natural justice apply in a given situation depend on various factors. No rigid rules can be laid down. The circumstances in which or the occasion where the action under challenge has been taken determines the applicability of the rules of natural justice. See Daud Ahmad District Magistrate, [(1972) 1 SCC 655 : A.I.R 1972 S.C 896].
14. As to who can invoke the principle8 of natural justice has been considered in several cases. It has been held that if a person is visited with civil consequences, he may call in his aid principles of natural justice. Maneka Gandhi case, [(1978) 1 SCC 248 : A.I.R 1978 S.C 597], emphasised the aspect of the deprivation of life or property. Reference in this connection was made to the decision of Lord Denning, M.R in Schmid??? v. Secretary of State for ffome Affairs, [(1969) 2 Ch. D, 149], To these two categories Lord Danning added the category of a parson who had
“some legitimate expectations, of which it would not be fair to deprive him without hearing what he has to say”.
An illustration was given by referring to the decision of Lord Parkar, C.J, in Re: H.K (An infant) [(1967) 2 Q.B 617]. I would, therefore, summarise by saying that whether the rules of natural justice, in relation to an administrative decision, apply or not, depends on the task in hand. A generally accepted guiding test would be: Whether any person is being deprived of his life, property, right or legitimate expectation or is visited with civil consequences, and whether taking all the matters into consideration it would be unfair to deprive him of the same without having his view point presented to the decision making authority.
15. It is in the light of these that the problem now presented need be examined. The termination in the instant case can, on the fact of the impugned orders, be broadly classified into the following categories:
(a) Where it is termination simpliciter.
(b) Where the termination is on the ground that the appointment itself was irregular or illegal and/or Government instructions in relation to appointments had not been followed.
Termination simpliciter:
16. I would first consider the case of termination simpliciter. It can now be said to be firmly established that in case of a temporary appointee, who has no right to the post, termination can take place without giving him any opportunity of being heard before taking the decision. The reason is that he has no right to the post, and in most cases termination is in conformity with the terms of appointment itself. See Ram Gopal Chaturvedi v. State Of Madhya Pradesh , [(1969) 2 SCC 240 : A.I.R 1970 S.C 158], Oil and Natural Gas Commission v. Dr. Mohammed S. Iskander Ali, [1980 — I L.L.N 165]. Even in the case of a temporary appointment if the action taken is by way of punishment or casts a stigma the provisions of Art. 311 of the Constitution are attracted. Again, where on the face of the order, it is a termination stmpltciter, yet if the foundation of the order, as distinguished from the motive of the order, is infliction of punishment or casting of stigma, Art. 311 would be attracted. That is the extent to which the veil can be permitted to be pierced. Those cases apart, there can be a valid challenge where the impugned action is arbitrary. It then violates Art. 14 of the Constitution, as it unreasonably discriminates amongst those who are similarly situated. As pointed out in E.P Royappa v. State of Tamil Nadu, [(1974) 4 SCC 3 : A.I.R 1974 S.C 555]:
“Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is, therefore, violative of Art. 14”.
To quote the words of Bhagwati, J., in Maneka Gandhi case, [(1978) 1 SCC 248 : A.I.R 1978 S.C 597] (vide supra):
“Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non-arbitrariness pervades Art. 14 like a brooding omnipresence…”.
Termination with reasons:
17. I now come to the more difficult cases where reason has been given for the termination of temporary service. For the present purposes, I would subdivide this into two categories—one category consisting of cases “where the person, affected has not acquired any right in relation to future appointments by virtue of the impugned temporary appointment. The other class would constitute cases of persons who have by virtue of temporary appointment for a certain period of time acquired some further right.
18. Now, if the appointment of persons in the first category is terminated, I am of the view that it would not be unfair to terminate such appointments without hearing the persons affected. The illegality or irregularity is at the level of the administrator/appointing authority. No one has a right to be appointed irregularly. His position is that of a person who has no right to the post. There is no stigma attached in the removal. Of course, if the authorities proceed on some wrong factual basis or are actuated by malice, or guided by irrelevant considerations and the like, the order of termination may be open to challenge in a Court of law. It was argued that if an opportunity is given to the persons concerned, they may try to convince the authorities that in their discretion they should not take any action in spite of the infirmity or irregularity in the initial appointment. Here what an aggrieved party can say before the authorities is that although there is infirmness in the appointment yet please do not terminate the appointment as it would lead to hardship. Such a representation is an appeal to mercy. I do not think, therefore, that in such a situation there is anything unfair in taking the decision without hearing the person likely to be affected.
19. The other class of cases stands on a different footing. Where right to preferential treatment in the matter of future appointment and the legitimate expectation of the employees is wiped off as a result of the order of termination, I am of the view that the rules of natural justice would apply. It would not be just or fair, in such circumstances, to terminate the services without hearing the person likely to be affected and allowing him a chance to persuade the authorities that in spite of the alleged illegality and irregularity no one has really suffered. Neither the State has been harmed in any way nor the other prospective candidates have been adversely affected. I am, therefore, of the opinion that where rights are affected the rules of fair-play or natural justice require that hearing should be given to the person likely to be affected before an order of termination is passed. Not to do so would, in my opinion, strike a reasonable man as unjust.
20. Before considering the argument that the right of some of the petitioners to future appointment has been affected, it would be proper to consider as to what is the effect of saying that the appointment is irregular.
Reference in this connection may be made to two cases decided by Mathew, J., as a Judge of the Kerala High Court. The first case is that of P. Kunhikrishnan v. State of Kerala, [A.I.R 1965 Ker. 149]. There on facts it was found that the petitioner was ineligible for being appointed to the service. The impugned order was, therefore, held to mean that it was a termination of an appointment which was itself void. In Original Petition No. 973 of 1968, the same learned Judge pointed out that the order in question only declared that the petitioner was not validly appointed to the post and that he should be reverted. The learned Judge observed:
“It was not an order cancelling a valid or even a voidable order; it was merely a declaration that there has been no appointment of the petitioner to the post. In the circumstances, I do not think that natural justice required that the petitioner should have been given an opportunity of being heard by the first or the second respondent. I also do not think that in the circumstances there was any manifest injustice, so that interference under Art. 226 is required”.
This view was concurred to by a Bench decision of the Kerala High Court in Gopalan v. Managing Director, [1979 2 S.L.R 408]. In my view, the effect of the impugned orders, where the termination is on the ground of illegality or irregularity in the initial appointment, is to declare that from the beginning there was no valid appointment. Counter-affidavits explain that the appointments were made in the teeth of binding Government instructions. Such appointments, as between the appointing authority and the appointees, must be deemed to be invalid appointments in the eye of law. The effect would be that the continuance of the appointees in service, in such a situation, would not confer them with a right to preferential appointment in future vacancies even though the termination is not from a retrospective date but from the date of issue of the letter of termination. Of course, so far as acts done by these appointees are concerned, they would be valid so far as third parties are concerned. Further the appointees cannot be deprived of the right to receive salary, etc., provided they have worked on the posts on which they were appointed. Such being the effect of the termination of the service, it is necessary to consider whether rights have been created on account of actual continuance in service even on the basis of illegal or irregular appointment. It was accepted that a temporary employee has no right to the post. But it was urged that there are Government instructions, which, in the absence of statutory rules, are binding and which create right of preferential appointment to a person, whose services have been terminated after having served for a certain length of time.
21. Government Circular No. 8250F, dated 9 December, 1967 of the Finance Department of the Government of Bihar relates to absorption of surplus/retrenched employees of the State Government. It states:
“A Government servant who has served for a continuous period of six months and has been retrenched as a measure of economy/due to completion of work/expiry of sanction, on or after 1 March, 1967, should be deemed to be retrenched employee”.
The circular contemplates giving of preferential treatment in appointments to such employees on the basis as explained in Para. 7 of the circular. As between surplus and retrenched staff, higher priority is to be given to the surplus hands. Priority among surplus as well as retrenched staff is to be decided on the basis of length of service, qualifications and record of service. Thus it would be seen that surplus/retrenched employees of the State Government, who have worked for a certain length of time, have preferential right in future appointments. But these instructions can only apply to regular appointments. They cannot have any application to appointments that are illegal or irregular. Nor to appointments which are made purely on ad hoc or temporary basis, without consideration of merits, or without giving opportunity to all those who are eligible to be considered in the matter of appointment. This circular is of no help to the petitioners whose services have been terminated after assigning reasons for the termination. They are neither surplus staff nor retrenched employees. Retrenchment has a definite connotation in the circular. It means only those whose services have been terminated as a measure of economy, due to completion of work or expiry of sanction. The concerned petitioners do not come within any of these categories.
22. During the course of argument reliance was placed on annexure 12 to Civil Writ Jurisdiction Case No. 4718 of 1981, dated 5 September, 1979. This is a circular issued by the State Government in the Labour and Administrative Reforms Department dealing with general policy in relation to ad hoe employees employed for a specific work or schema. It states that those appointed for specific work or scheme should be retrenched on the completion of (the work or scheme, but before retrenchment it should be ascertained whether there are available posts in other works or scheme in the same department. If such posts are available then instead of retrenching such persons, they should be adjusted against vacant post in other schemes or project. This policy, in my view, is applicable to regularly appointed ad hoc employees of schemes or projects of temporary nature. None of the concerned petitioners comes under the category. The other relevant part of this circular requires a list of such class III and class IV employees to be prepared who have been retrenched or are likely to be retrenched. But only those are treated to be retrenched who have been continuously employed for six months and whose services have been terminated on or after S March, 1967, on account of completion of work, or expiry of sanction or as a measure of economy. As already mentioned, the concerned petitioners do not also come under these categories.
23. The concerned petitioners have thus not been able to show that they had acquired some rights in relation to future appoint ments which have been adversely affected by the action taken so as to attract the principles of natural justice.
Some general observations:
24. Before considering the impact of what has been held by me, in respect to the individual cases, I would like to observe that where the temporary appointment is terminated on the ground of irregularity or illegality, and it is so stated in the order, it is only fit and proper that the alleged illegality or irregularity should be explained in the order. Not to do so would mean that the aggrieved persons would be entitled to ask the authorities as to what illegality or irregularity was committed. This is so because unless they know the reasons they cannot decide upon their future course of action. If the reasons are not supplied, the order would be liable to challenge on the ground that the non-supply of reasons raises a presumption that no good reasons exist.
25. The other general observation that I would like to make is that we have found that in a number of cases, perhaps, numbering over hundred by now, temporary employments have been terminated by the various departments of the Government or by Corporations like Biscomaun, Food Corporation and the like. In most of these cases we have found that there is no allegation against the petitioners. The guilty parties, if any, are the appointing authorities who are officers of the State or the Corporations. In such a situation the minimum that is expected is that the Government or the authorities concerned should take appropriate action against those who are guilty of the alleged illegality or irregularity. If the error is bona fide they may be excused. But where there are motives or considerations other than legal and proper considerations, not to take appropriate action against the delinquent persons, however, high they may be, is to encourage illegal and invalid appointments. I am, therefore, firmly of the view that the State or the authorities concerned would be failing in their duty if they do not take appropriate action against the persons concerned. Some cases may even invite investigation by agency like Central Bureau of Investigation and the launching of criminal prosecutions. Even in cases of officers retiring after making the appointments, the hands of the authorities are not tied. In the case of Government servants for instance, action for reduction or stoppage of pension can be taken after starting proceedings in accordance with law.
26. Another general observation that I feel should be made is in relation to the methodology of appointments in Government and semi-Government Departments or Institutions, particularly at district level and public corporations. Such a procedure for recruitment has to be evolved which eliminates favouritism, inspires public confidence and ensures appointments purely on the basis of merit. That there is a general dissatisfaction with the present state of affairs is what we can take judicial notice of. The solution must be found by those who have been endowed with the power and duty to ensure fairness and equality in recruitment in public and semi-public institutions. A combined competitive test for recruitment in public corporations, conducted through the agency of an independent body may eliminate the public dissatisfaction and uneasiness in this field. I would say no more for the present.
27. Yet another general observation is called for. It would be seen that no allegation has been levelled against any of the petitioners that they had obtained their temporary appointments by some underhand means. No stigma has been cast on their conduct. In these circumstances, although the petitioners have no such right, the Government may lay down that if any one of them is an applicant in future for a post which prescribes an age limit, the period for which they have worked on the basis of their temporary appointment should be excluded in computing their age limit. This is not a question of petitioner's right, but a matter of good grace, applicable to a well-defined class, which being rational and reasonable would, in my opinion, be legal and valid.
Conclusion:
28. The petitioners in Civil Writ Jurisdiction Cases Nos. 352 and 618 of 1981, 1502 of 1982 (except petitioners 25 to 27, 29 and 30), 3322, 2015 of 1982 and 621 of 1981 are entitled to the benefit of S. 25F of the Act. The provisions of this section were admittedly not complied with. The impugned orders in these writ applications except those relating to petitioners 25 to 27, 29 and 30 in Civil writ Jurisdiction Case No. 4502 of 1982 are, therefore, quashed on the ground of infraction of S. 25F of the Act. So far as petitioners 25 to 27, 29 and 30 in Civil Writ Jurisdiction Case No. 4502 of 1982, are concerned, they were in service for less than 240 days. Section 25F of the Act is, therefore, inapplicable in their eases. They have also not been able to show that any right of theirs was adversely affected on account of the impugned termination. They cannot, therefore, invoke the principles of natural justice. They have also not been able to show that their termination was arbitrary or suffers from any other legal infirmity. Their application is, therefore, dismissed.
29. The petitioner in Civil Writ Jurisdiction Case No. 3733 of 1982 was employed in Bihar Hill Area Lift Irrigation Corporation. The Corporation aforesaid is “industry” within the meaning of the Act, But the petitioner having left the service himself, as explained in the judgment of N.P Singh, J., is not entitled to the protection of S. 25F of the Act. His application is accordingly dismissed.
30. So far as the petitioners in Civil Writ Jurisdiction Cases Nos. 2354 and 2867 of 1980, 4178 of 1981 and 249 and 250 of 1982, being employees of Forest and Agricultural Departments, are concerned, we find that their termination of appointment is without assigning any reason. It is termination simpliciter. I have already held that there is no violation of the principles of natural justice if the order of termination does not assign any reason and is in conformity with the terms of appointment (as in these cases). Neither these departments nor the section of the departments with which we are concerned have been held to be industry. In this situation there is neither violation of S. 25F of the Act nor of the principles of natural justice. No other infirmity in the impugned orders could be shown during the course of argument. The aforesaid writ applications are, therefore, dismissed. It is, however, made clear that if any rights flow from some binding Government instructions, not brought to our notice during the course of hearing, on account of their continuance in service for a certain length of time, the petitioners would be entitled to claim the same before the appropriate authority. But it must be clearly understood that I am not expressing any opinion as to whether the petitioners are in fact entitled to the benefit of any Government instruction.
31. In the circumstances, there will be no order as to costs in any of the applications.
Lalit Mohan Sharma, J.:— I agree.
32. Nagendra Prasad Singh, J.:— Although so much has been said by the Supreme Court in the last three decades as to what is meant by “industry” under S. 2(j) of the Industrial Disputes Act, 1947, the same question has to be considered by this Full Bench in context of Departments of Forest, Agriculture, Irrigation and Health.
33. The petitioners in the different writ applications had been appointed on ad hoc or temporary basis. Their services have been terminated by orders which have been challenged in different writ applications. The main ground of challenge is that the orders of termination have been passed in contravention of S. 25F of the Industrial Disputes Act, 1947 (hereinafter to be referred to as the Act). In some of the writ applications, another ground have been taken on behalf of the petitioners, that even if it is held that the departments concerned are not “industry” within the meaning of S. 2 (j) of the Act, even then as the orders of termination have been passed against the principles of natural justice, they are invalid.
34. The expression “industry” as understood originally meant any business and trade in an organised manner where there is a relationship of employer and employee, its primary motive being to earn profit. But with the industrial growth even the meaning of that expression has undergone a change. Section 2 (j) defines “industry” as follows;
“2(j) ‘industry’ means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft or industrial occupation or avocation of workmen”.
On a plain reading, the definition never purports to comprehensively define what shall be meant by “industry”. The definition being an inclusive one, left much to be decided from time to time by the Courts. In one of the earliest cases on the point in the case of D.N Banerjee v. P.R Mukherjee, [A.I.R 1953 S.C 581 (vide supra), it was observed;
“…The definition was apparently intended to include within its scope what might not strictly be called a trade or business venture”.
In that case the Supreme Court was considering whether a municipality can be held to be an “industry” within the meaning of the Act. In that context, it was said:
“…Having regard to the definitions found in our Act, the aim or objective that the Legislature bad in view, and the nature, variety and range of disputes that occur between employers and employees, we are forced to the conclusion that the definitions in our Act include also disputes that might arise between municipalities and their employees in branches of work that can be said to be analogous to the carrying on of a trade or business…”
[Emphasis added.]
In the case of State of Bombay v. Hospital Mazdoor Sabha, [A.I.R 1960 S.C 61???] (vide supra), the same question was considered in connection with a hospital and it was pointed out that as a working principle it may be stated that:
“…an activity systematically or habitually undertaken for the production or distribution of goods or for the rendering or material services to the community at large or a part of such community with the help of employees in an undertaking… It must be organised or arranged in a manner in which trade or business is generally organised or arranged. It must not be casual nor must it be for one self nor for pleasure”.
35. A larger Bench of the Supreme Court in the case of Bangalore Water Supply and Sewerage Board v. Rajappa, [1978 — I L.L.N 376 and 657] (vide supra), laid down the test for the determination as to what is meant by an “industry” within the meaning of S. 2 (j) of the Act. It was pointed out by Justice Sri Krishna Iyer in the majority judgment that in Para. 163, at page 429:
“Where—
(i) systematic activity;
(ii) organised by co-operation between employer and employees and
(iii) for the production and/of distribution of goods and services calculated to satisfy human wants and wishes, prima facie, there is an ‘industry’ in that enterprise…”
It was also made clear that absence of profit motive or gainful objective are irrelevant; the true focus should be on the nature of the activity with special emphasis on the employer-employee relation. It was also pointed out that there may be undertakings in which there is systematic activity, organised by co-operation between employer and employee but not for production and distribution of goods but for services calculated to satisfy human wants. In respect of such undertakings it was observed as follows in Para. 163, at page 429:
“…Undertaking must suffer a contextual and associational shrinkage as explained in Banerji case, [A.I.R 1953 S.C 58] (vide supra), and in this judgment, so also, service calling and the like. This yields the inference that all organised activity possessing the triple elements in I (supra) of although not trade or business, may still be ‘industry’ provided the nature of the activity, viz., the employer-employee basis, bears resemblance to what we find in trade or business. This takes into the fold ‘industry’, undertakings, callings and services, adventures ‘analogous to the carrying on of trade or business’…”
As such before an undertaking where there is systematic activity, organised by co-operation between employer and employee for services calculated to satisfy human wants and wishes is held as industry it must be shown that the nature of the activity is analogous to the carrying on of trade and business.
36. In Bangalore Water Supply and Sewerage Board case, [1978 — I L.L.N 376 and 657] (vide supra), the Supreme Court took note of the fact that the activity of some of the undertakings or the departments is so complex that part of it qualifies for exemption whereas the other calls for inclusion thereof in the definition of “industry”. In respect of such undertaking and department another test known as “dominant nature test” was pointed out in the following words in Para. 163, at page 430:
“(a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking, soma of whom are not ‘workmen’ as in University of Delhi case, [A.I.R 1963 S.C 1873] (vide supra), or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in Corporation of Nagpur, [A.I.R 1960 S.C 675] (vide supra), will be the true test…”
This dominant nature test has to be applied because many departments of the Government which at one time were concerned only with administrative functions have now to carry on systematic activities organised by co-operation between department and employees, some times for production or distribution of goods; on other occasion for services calculated to satisfy the wants of the citizen. It is not always very easy to say as to what is the dominant nature of the undertaking or the department. The matter may be simple when a particular department is discharging functions which have been described as the sovereign functions like legislative, law and order and administration of justice. In the case of State of Bombay, [A.I.R 1960 S.C 610] (vide supra), it was observed:
“It would be possible to exclude some activities from S. 2 (j) without any difficulty. Negatively stated the activities of the Government which can be properly described as regal or sovereign activities are outside the scope of S. 2(j). These are functions which a constitutional Government can and must undertake for governance and which no private citizen can undertake. This position is not in dispute…”
Again in Corporation of City of Nagpur v. Its employees, [A.I.R 1960 S.C 675], it was pointed out that:
“…the regal function described as primary and inalienable functions of the State though statutorily delegated to a Corporation are necessarily excluded from the purview of the definitions …”
In Bangalore Water Supply case (vide supra), also the departments dealing with such sovereign functions were held to be outside the purview of the Act.
37. But what are the primary and inalienable functions of a constitutional Government so as to be included in the sovereign functions? It has been held that legislative, judicial functions and administration of law are the inalienable functions of constitutional Government, on the basis of the observation of Lord Watson in the case of Coomber v. Berks Justices, [(1883) 9 A.C 61]. But do the three functions which were described as primary and inalienable functions of the constitutional Government by Lord Watson in 19th Century, still continue to be the only primary and inalienable functions of a constitutional Government? It cannot be disputed that in the areas where the Government was not required to act, now, by the mandate of the Constitution, the Government is required to function even in those fields which have been described as “fundamental in the governance of the country”. Article 37, which is under the Directive Principles of the State Policy says while referring to Part IV of the Constitution that “the principles therein laid down are nevertheless fundamental in the governance of the country”. Articles 45, 48 and 48A enjoin the State to make effective provisions for education, to organise agriculture, animal husbandry on modern and scientific lines, to improve and preserve the breeds of cows, to conserve forests. The contention that in view of different articles of the Constitution the primary and inalienable functions of Government have been enlarged was not accepted in the case of State of Bombay, [A.I.R 1960 S.C 610], (vide supra), but in Bangalore Water Supply case, [1918—I L.L.N 376 and 657] (vide supra), Justice Sri Krishna Iyer on that question observed in Para. 75, at pages 401 and 402:
“Although, we are not concerned in this case with those categories of employees who particularly come under departments charged with the responsibility for essential constitutional functions of Government, it is appropriate to state that if there are industrial units severable from the essential functions and possess an entity of their own it may be plausible to hold that the employees of those units are workmen and those undertakings are industries…”
It was said by Justice Sri Krishna Iyer in that context as, as follows in Para. 74, at page 401:
“…For instance, sovereign functions of the State cannot be included although what such functions are has been aptly termed ‘the primary and inalienable functions of a constitutional Government’. Even here we may point out the inaptitude of relying on the doctrine of regal powers. That has reference, in this context, to the Crown's liability in tort and has nothing to do with industrial law. In any case, it is open to Parliament to make law which governs the State's relations with its employees. Articles 309 to 311 of the Constitution of India, the enactments dealing with the defence forces and other legislation dealing with employment under statutory bodies may, expressly or by necessary implication, exclude the operation of the Industrial Disputes Act, 1947…”
38. However, even in department discharging sovereign functions there may be a unit severable which can be said to be “industry” within the meaning of the Act. The department of police, discharging sovereign functions may run a gun and ammunition factory. Can that unit be excluded from the definition of “industry”? Legislative Department may run a Press. That unit has to be included within the ambit of “industry”. As such, in my view, whenever a question arises as to whether a particular department of Government is an “industry,” the functions of the whole department should be examined in the light of the guidelines laid down by the Courts for answering the question as to whether the whole department or any unit thereof can be held to be an “industry” within the meaning of the Act. In many cases, the dominant nature test pointed out by the Supreme Court in Bangalore Water Supply case, [1978 — I L.L.N 376 and 657] (vide supra), may prove to be the useful test in view of the complex nature of the activity of a department. First on the material produced before the Court it should be examined as to whether the department concerned or any unit thereof has the triple elements mentioned above. If it is found that there is systematic activity, organised by co-operation between employee and employee, for the production and/or distribution of goods, then there should not be any difficulty in holding that the department concerned or unit thereof shall be deemed to be an “industry”. If, however, there is systematic activity, organised co-operation between employer and employee, for services to satisfy the human wants, then whether the services are in the nature of trade or business has to be examined. If services are analogous to the trade and business, then the department or unit thereof shall be deemed to be an “industry”. In cases, where a part of the department is exercising administrative function or sovereign function and the other part is engaged in activity analogous to trade or business, then the dominant nature of the department has to be ascertained. If on materials it is held that primary object of the department is to carry on activity which are in the nature of trade and business, then the whole department can be held to be an “industry”. On the other hand, if primary activity of the department is administrative in nature and incidentally some activities are analogous to trade or business then the whole department cannot be held to be “industry”. Even in such cases if a severable unit is primarily concerned with trade or business or engaged in activities analogous to trade and business then that unit can be held to be “industry”.
39. On behalf of the petitioners strong reliance was placed on the judgment of the Supreme Court in Nagpur Corporation case, [A.I.R 1960 S.C 675] (vide supra), in which different departments of the Corporation of the City of Nagpur were held as industry. From the judgment it shall appear that for holding different departments of the Corporation as industry, the predominant function test was applied. It will also appear from that judgment that in respect of some departments which had been held to be not “industry” by the Industrial Court, the Supreme Court did not express any opinion. Apart from that any decision in respect of a different departments of a municipality or Municipal Corporation cannot be held to be a decision in respect of a department of the Government. A Corporation or municipality is not primarily concerned with exercise of functions akin to the governmental functions. A municipality has been held to be an industry since the very beginning. In none of the cases referred to above, the Supreme Court has examined the question in context of a Department of Government. In Bangalore Water Supply case, [1978 — I L.L.N 376 and 637] (vide supra), although that question was not directly involved still a question was framed in Para. 47 of Justice Sri Krishna Iyer's judgment as follows at page 392:
“(4) Are governmental functions, stricto sonem, industrial and if not, what is the extent of the immunity of instrumentalities of Government?”
This question was answered in the words which I have already quoted in Para. 37 above saying that in such cases predominant nature test should be applied and the integrated nature of the department should be examined. A Full Bench of Punjab and Haryana High Court has considered whether the Public Works Department shall be deemed to be an industry, in the case of State of Punjab v. Sh. Guldip Singh, [1983 — I L.L.N 576]. It has been pointed out therein that the construction and maintenance of National and State Highways is an essential governmental function and it is in no way even remotely analogous to trade and business and, as such, it shall not come within the ambit of industry as defined.
40. Now I shall examine the activities and functions of different departments with which we are concerned to find out as to whether they are “industry” within the meaning of the Act.
Re: Department of Forest:
41. On behalf of the petitioners ia Civil Writ Jurisdiction Cases Nos. 2354 and 2867 of 1980, it has been asserted that the Department of Forest shall be deemed to be an “industry” because the systematic activity organised by co-operation between the department and its employees for production and distribution of forest products is carried out. On behalf of the respondent-State it was stated that primary activity of the Forest Department is not related to the production of forest products or sale thereof, but to conservation of the forest and afforestation. This is enjoined on the department by Art. 48A of the Constitution and several directives have been issued by the Government of India in that respect. It was submitted that mere sale of leaves or trees by the department are incidental and subsidiary functions. In the supplementary counter-affidavit filed on behalf of the respondents it has been stated that the main activity of the Division in which the petitioners were employed is plantation which is undertaken by the Government to improve environment. Learned Additional Advocate-General also made reference to different publications of reputed authors about the role of forest in the life of the nation. On the materials produced it is difficult to hold that the primary activity of the department is analogous to trade or business. As such, the whole department cannot be held to be an industry. However, I may hasten to add that even such a department if any unit is severable and satisfies the tests mentioned above then that unit certainly should be held to be an industry. For example, a lac manufacturing factory run by the Department of Forest can certainly be held to be an industry taking it as a separate unit.
42. From the statements made in the writ applications it appears that the petitioners had been appointed as forest guard and mali in the Forest Division in question. There is no in averments in the writ application that any one of them was engaged in any unit of the department which can be held to be an industry so as to attract the provisions of S. 25F. As such, the orders of termination cannot be quashed on the ground that there has been contravention of the requirement of S. 25F of the Act. Whether they have been passed against the principles of natural justice, I shall deal with that aspect of the matter later.
Re: Department of Health:
43. The petitioner in Civil Writ Jurisdiction Case No. 2015 of 1982 was appointed as a male guard attendant in the State Dispensary, Sonali, by the Civil Surgeon-cum-Chief Medical Officer, Katihar, by his order, dated 3 March, 1981, a copy whereof is annexure 2 to the writ application. His services were terminated by an order, dated 23 April, 1982, a copy whereof is annexure 5.
44. The Department of Health is primarily concerned with the medical care of people in general. With that object it has to establish and maintain hospitals and dispensaries in the different parts of the State. The department from its highest level to the lowest rank is engaged in the aforesaid activity. Hospitals and Dispensaries have been held to be industries in the case of State of Bombay, [A.I.R 1960 S.C 610] (vide supra) and Bangalore Water Supply case, [1978 — I L.L.N 376 & 657] (vide supra). It may be pointed out that now they have been excluded under the new definition which has been introduced by the Industrial Disputes (Amendment) Act, 1982. But as the order of termination in question has been passed before the enactment of the amending Act aforesaid it has to be examined in the light of the definition of “industry” as it was before the amendment. In view of the fact that the primary function of the Department of Health is to maintain the different hospitals and dispensaries, it shall be deemed to be an “industry and its employees fulfilling the definition of workman shall be entitled to the protection of S. 25F of the Act. It has not been disputed that the petitioner fulfils the definition of a workman and he has been in continuous service for not lass than one year within the meaning of S. 25F. It is also not in dispute that requirements of S. 25F have not been complied with before passing the impugned order of termination which shall be deemed to be retrenchment within the meaning of S. 25F. It is well settled that the requirements of S. 25F are mandatory in nature. Reference in this Connection may be made to the case of the State Bank of India v. N. Sundaramony, [1976 — II L.L.N 5], where it was observed in Para. 8, at page is:
“Without further ado we, reach the conclusion that if the workman swims into the harbour of S. 25F, he cannot be retrenched without payment, at the time of retrenchment compensation computed as prescribed therein…”.
The definition of retrenchment given in S. 2(oo) of the Act makes it clear that termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment and the exceptions mentioned therein, shall be deemed to be retrenchment within the meaning of the Act. Reference in this connection may also be made to the case of Santosh Gupta v. State Bank Of Patiala, [1980 — I L.L.N 170]. Accordingly, the order of termination of the petitioner has to be quashed.
Re: Department of Irrigation:
45. Four writ application, Civil Writ Jurisdiction Cases Nos. 4502 of 1982 and 352, 618 and 621 of 1981, relate to the Department of Irrigation. According to the petitioners, Department of Irrigation should be deemed to be an “Industry”. In the reply filed on behalf of the petitioners to the supplementary counter-affidavit it has been stated on behalf of the petitioners that the Irrigation Department is involved in systematic activity with co-operation of its employees to satisfy the needs of the public in general by
(i) construction of canals for the irrigation of lands;
(iii) construction of barrage far storage of water for the purpose of irrigation;
(iii) construction of roads and bridges;
(iv) construction of dams for supply of water for industrial purposes;
(v) construction of barrage for control of floods;
(vi) construction of projects for generation of electricity; and
(vii) maintenance of workshops for repair of the equipments engaged in the construction of canals, barrages, embankments and roads.
It has also been asserted that the water is supplied to the cultivators for irrigating their lands and others on charges being paid by them.
46. On behalf of the respondents there is no denial of the aforesaid assertions, but it has been simply urged that as the aforesaid functions are governmental functions which the State Government is required to perform, the department cannot be held to be an “industry”. From the affidavits filed on behalf of the petitioners and the counter-affidavit on behalf of the respondents it appears that in the department there is a systematic activity organised by the State Government and its employees for satisfying the need of irrigation, supply of electricity, protection from flood. For supplying most of the aforesaid facilities people have to pay charges. As such it has to be held that such activities for satisfying human needs are analogous to trade and business. Therefore, there is no escape from the conclusion that the Department of Irrigation shall be deemed to be an “industry” within the meaning of the Act.
47. The petitioners of Civil Writ Jurisdiction Case No. 4502 of 1982, other than petitioners 25 to 27, 29 and 30 have completed 240 days of service and are entitled to the protection of S. 25F of the Act is not in dispute. It is an admitted position that while terminating the services of such petitioners, the requirements of that section have not been complied with. In that view of the matter their termination has to be held to be void. Same will be the position so far as the petitioners of the remaining three writ applications mentioned above are concerned. So far as petitioners 25 to 27, 29 and 30 of Civil Writ Jurisdiction Case No. of 4502 of 1982, are concerned, their grievance regarding the impugned order having been passed against the principles of natural justice shall be considered later.
Re: Department of Agriculture:
48. Civil Writ Jurisdiction Cases Nos. 2???9, 250 of 1982 and 4178 of 1981, relate to the employees of the Department of Agriculture. On behalf of these petitioners it has been asserted that the Department of Agriculture, which originally had to do some limited functions like research, administration, is now extensively involved in operations which are analogous to trade and business and as such, it has to be held as an “industry”. In this connection, reference has been made to the different Five-Years Plans of the Government of India issued from time to time. It was urged that the department has to implement agricultural production programme as envisaged by the different plans which involves economic activities at a mass scale.
49. In the supplementary counter-affidavit filed on behalf of the respondent-State history of the department has been traced since the year 1880. It has been stated that even today the primary object of the department is
“to evolve more profitable methods and system of agriculture and to help and guide the cultivators in their day-to-day agriculture practices,”
It has been further stated that the department has to carry on research activities for supplying better guidance to the cultivators and public in general. It has also been asserted that the department is sub-divided into different wings like the Directorate of Agriculture, Directorate of Soil Conservation, Marketing, Command Area activity, Agro Industries Development, Agriculture University, etc. The Directorate of Agriculture being the administrative head has to lock after the administration side. For purpose of the administration, there are District Agriculture Officers, Sub-divisional Agriculture Officers, posted at different levels for execution of different schemes and programmes of the Government. At the district level there are also Plant Protection Officers. Similarly, under the Director of Soil Conservation different officers have been posted at different levels who have to execute the scheme of the Government of conserving soil and analysis thereof. It was submitted that so far as the activities of the department which can be held to be analogous to the trade and business are now being carried on by different corporate bodies, like, Bihar State Agro Industries Development Corporation, Bihar State Seed Co-operation, Bihar State Fruits and Vegetables Development Corporation. It was pointed out that even the fertilisers are being sold through an independent registered society known as Bihar State Co-operative Marketing Union (Biscomaun) and, as such, it cannot be said that the dominant nature of the department is industry. I am inclined to accept the assertion made on behalf of the State that many of the functions of the department which are analogous to trade and business are now being carried on by different Corporations. As such, the whole department, in my view, cannot be held to be an “industry”; of course, if any unit thereof which fulfils the tests mentioned above and if its activities are analogous to trade and business then certainly that unit can be held to be “industry”.
50. Petitioners in Civil Writ Jurisdiction Case No. 249 of 1982, were appointed in the Office of the Joint Director, Agriculture. Tirhut Range, as class II and class IV employees on ad hoc basis and their services have been terminated. There is nothing on the record to show that they were employed in any such unit which can independently be, held to be an “industry”. In such a situation, there is no question of applicability of S. 25F of the Act. Same is the position so far as the petitioners in Civil Writ Jurisdiction Case No. 250 of 1982, are concerned. Petitioners in Civil Writ Jurisdiction Case No. 4178 of 1981, were appointed in the Office of the Joint Director, Agriculture, North Chotanagpur at Hazaribagh, and their case is similar to the petitioners of the other two writ applications. Whether such orders have been passed against the principles of natural justice, shall be examined later.
Re: Sone Command Area Development Agency:
51. Petitioners in Civil Writ Jurisdiction Case No. 3322 of 19???2, are employees of Sone Command Area Development Agency, a statutory authority established under the Bihar Agricultural and Rural Area Development Agency Act, 1978. The primary duty of the said Agency is to utilise the water resources of the Sone Canal System for irrigation. It has to modernise the distribution system and to utilise the sub-soil water, provide for marketing facilities within the Sone Command Area. It has been submitted that from the provisions of the Act itself it shall appear that the establishment of the Agency is for carrying on the systematic activity in co-operation with its employees for satisfying human needs and such activities are in the nature of trade and business. On behalf of the respondents the object and function of the Agency has not been disputed, but it has been asserted that the schemes which ate being executed by the Agency are in the nature of welfare schemes and cannot be held to be analogous to the trade and business.
52. From the records it appears that in specified area the Agency is carrying on the functions which the Department of Irrigation is carrying on in the other part of the State. The Agency has been established to carry on the activities in a more intensive and inte grated manner. Whether the function of the Agency is for a profit motive is irrelevant. It has to be held to be an “industry” within the meaning of the Act and its employees who can be held to be workmen are entitled to the benefit of S. 25F. The petitioners of this writ application (Civil Writ Jurisdiction Case No. 3322 of 1982) have completed the requisite period for deriving the benefits of S. 25F, is not in dispute and there is no assertion on behalf of the respondents that the requirement of S. 25F have been complied with. As such their termination has to be held to be void.
Re: Bihar Hill Area Lift Irrigation Corporation:
53. Civil Writ Jurisdiction Case No. 3733 of 1982, has been filed on behalf of sole petitioner who claims to be an employee of Hill Area Lift Irrigation Corporation saying that his service has been terminated orally. The Corporation shall be deemed to be an industry is not in dispute. But in the counter-affidavit it has been stated that no termination or retrenchment order has been passed against the petitioner, orally or in Writing. According to the respondents the petitioner was engaged on muster-roll as pump operator on daily wages and he has not completed service even for 180 days. It has also been asserted that the petitioner himself left the Corporation without any information. In view of the materials produced on behalf of the parties, it is not possibie to hold that there is retrenchment of the petitioner within the meaning of the Act, so as to attract the provisions of S. 25F of the Act.
54. Now it has to be examined as to whether the orders of termination in respect of the petitioners who have no protection of S. 25F of the Act, either because the department in which they were employed is not an “industry” or because they have not completed the requisite period for deriving the benefit of S. 25F, have been passed in contravention of the requirements of the principles of natural justice. It is an admitted pasition that all such petitioners had been appointed on temporary or on ad hoc basis. As was pointed out in the well known case of Parshottam Lal Dhingra v. Union of India, [A.I.R 1958 S.C 36], that one of the basic differences between a person who has been appointed on permanent basis and one who has been appointed on temporary basis is that the appointment on substantive basis gives him a right to hold the post until, under the rules he attains the age of superannuation or is compulsorily retired in accordance with the rules. It was also pointed out that any order of termination passed against such an employee is prima facie a punishment “for it operates as a forfeiture of his right to hold that post”. In such cases, Art. 311 of the Constitution is attracted, and such termination must be in accordance with that article. On the other hand, in case oi a temporary employee, he has no right to the post because his appointment itself is temporary. As such the order of termination per se does not amount to dismissal, removal or punishment.
55. Broadly speaking, orders of termination of temporary employees can be under three heads:
(i) Termination simplicter. i.e, without any reason being given in the order;
(ii) the order saying that the service of the temporary employee was being terminated because he was found to be dishonest or insubordinate or some other similar reason which can be held to be stigma; and
(iii) order saying that the appointment of the temporary employee had been made in an illegal or irregular manner.
So far as category (i) is concerned, it is settled on all counts that neither Art. 311 is attracted in such a case nor the principles of natural justice require the Government to give any show-cause notice. So far as category (ii) is concerned, it is equally settled by series of judgments of the Supreme Court that such order of termination amounts to punishment or casting a stigma against the person concerned and if the order has been passed without giving opportunity to the person concerned to show cause, the order not only contravenes Art. 311, but also the principles of natural justice. The difficulty is in respect of the third type of the order where there is no stigma against the person concerned, but, at the same time, the order is not in form of an order of termination simpliciter.
56. When service of an employee is terminated saying that he had been appointed against a non-existing post or by person having no authority or without following the procedure prescribed for such an appointment, is notice to show cause a must? In olden days such types of appointments were inconceivable, but it is a matter of common knowledge that in these days sometimes appointments are made against posts which do not exist, by persons who have no authority and in many cases without following the procedure prescribed. Whenever steps are taken to terminate the services of such persons the propriety of the action cannot be questioned. On behalf of the petitioners it was submitted that although they had no right to the post, but, at the same time, they might have continued in service, but for the orders of termination having been passed on the ground of alleged infirmity in their appointment, and, as such, the rule of fair-play required that before issuance of the orders in question, they ought to have been told about the infirmity in their appointments, and should have been given an opportunity to satisfy the authorities concerned that the alleged irregularity and illegality in their appointments were non-existent or were of such minor nature, which shall be deemed to have been waived by the appointing authority.
57. Now it is almost settled that in many situations before passing even an administrative order, which is likely to affect a citizen in an adverse manner, the authority concerned is required to give such person opportunity to show cause. Reference in this connection may be made to the Well known cases of A.K Kraipak v. Union of India, [(1969) 2 SCC 262 : A.I.R 1970 S.C 150], D.F.O, South Kheri v. Ram Sa???ehi Singh, [(1973) 3 SCC 873 : A.I.R 1973 S.C 203] and Smt. Maneka Gandhi v. Union of India, [(1978) 1 SCC 248 : A.I.R 1978 S.C 597] (vide supra). The distinction between quasi-judicial orders and administrative orders while applying the doctrine or natural justice has been obliterated. In the case of A.K Kraipak (vide supra), it was observed:
“The aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words, they do not supplant the law of the land but supplement it…”
In the case of Smt. Maneka Gandhi (vide supra), it was observed:
“We may commence the discussion of this question with a few general observations to emphasise the increasing importance of natural justice in the field of administrative law. Natural justice is a great humanising principle intended to invest law with fairness and to secure justice and over the years it has grown into a widely pervasive rule affecting large areas of administrative action”.
The same requirement of fair-play has been further reiterated in the case of National Textile Workers' Union v. P.R Ramakrishnan, [1983 — I L.L.N 229], where it has been pointed out that in the winding up proceeding of a company, the workmen of such a company can have a say on the principles of natural justice.
58. Learned Additional Advocate-General submitted that whenever tae services of person appointed on temporary basis is terminated saying that the appointment had been made in an illegal manner it only amounts to judging the suitability of the person taking into consideration the legality of the appointment, which is permissible in view of the judgments of the Supreme Court in the cases of Samsher Singh and Ishwar Chand Agarwal v. State of Punjab, [1975 — I L.L.N 4], Oil and Natural Gas Commission v. Dr. Mohammed S. Iskander Ali, [1980 — II L.L.N 165] (vide supra) and Commodore Commanding, Southern Naval Area, Cochin v. V.N Rajan, [1981 — I L.L.N 593], where it has been held that the decision to terminate the service of a temporary servant on the ground of his unsuitability in relation to the post held by him, will not attract Art. 311(2) of the Constitution. Learned Additional Advocate-General also placed reliance on the case of Union of India v. P. Subrahmonia Bhatt, [1981 — I L.L.N 585]. In that case, the person concerned was reverted to the post of Announcer in All India Radio during the period of probation saying that he had not been found to be suitable for the post of Producer. Dating the hearing, the petitioner of that writ application had prima facie shown that as he was alleged to have indulged in loose talks and fifthly and abusive language, the reversal order had been passed. In that context, it was observed that even if the conduct of the petitioner had been taken into consideration or might be the inducing factor, it cannot be held to be punishment. In this connection reference was also made on behalf of State to the case case of Somnath Sahu v. State of Orissa, [1981 2 S.L.R 550], where the Supreme Court had to consider the case of termination of a Welfare Officer by the Indian Aluminium Company, Ltd., on allegations of certain charges. It was observed that there was no violation of principles of natural justice because the termination was effected under the terms of contract.
59. Is cannot be disputed that whenever the service of a parson appointed on temporary basis is terminated saying that the appointment in question had been made in an irregular or illegal manner, it does not amount to any stigma or penalty. In my view, such orders cannot be held to be invalid because before passing such orders opportunity to show cause was not given to the person concerned. Such employees know very well that their services could be terminated at any time even without notice. Merely because in the order there is reference to the nature of their appointment will not change the legal position. The position, however, will be different where the authority concerned is purporting to terminate the service with effect from the data of appointment. In that event, the employee has to refund the salary and allowances received by him, and in that event, an opportunity has to be given before passing such order. But where the order purports to terminate the service from the date of the issuance of the order it for all practical purposes amounts to an order of termination simpliciter. In the case of Oil and Natural Gas Commission, [1980 — II L.L.N 165] (vide supra), it was observed as follows In Para. 12, at page 169:
“The fact the present case appear to be on all ???urs with those of the aforesaid decisions. From the undisputed facts detailed by us in an earlier part of the judgment, it is manifest that even if misconduct, negligence, inefficiency may be the motive or the inducing factor which influences the employer to terminate the services of the employee, a power which the appellants undoubtedly possessed, even so as under the terms of appointment of the respondents such a power flowed from the contract of service it could not be termed as penalty or punishment”.
Similarly, in the case of State of Maharashtra v. Veerappa R. Sibaji, [1983 — I L.L.N 17], (vide supra), it was observed in Para. 10, at page 23:
“…Ordinarily and generally the rule laid down in most of the cases by this Court is that you have to look to the order on the face of it and find whether it casts any stigma on the Government servant. In such a case there is no presumption that the order is arbitrary or mala fide unless a very strong case is made out and proved by the Government servant who challenges such an order…”
60. It is open to the competent authority to terminate the service of a temporary employee on the ground of irregularity or illegality of his appointment, but I am not able to appreciate as to why the illegality of appointment is not discovered at the earliest occasion and in many cases steps are taken after several years. Such temporary employees may not have the right to be heard before issuance of order of termination on the ground of illegality in their appointment, but they can challenge such orders on the ground of discrimination, malice or non-existence of the illegality in their appointment, and in appropriate cases this Court may call upon the authorities concerned to justify their action.
61. Now coming to the merit of different cases so far as to the petitioners in Civil Writ Jurisdiction Case No. 2354 and 2867 of 1980, are concerned, they had been employed by the Forest Department, as already stated above, which department has not been held to be an “industry”. In their order of termination it has been simply stated that the temporary appointments of those petitioners made on the basis of the recommendation of the Divisional Appointment Board were being terminated. In my opinion, such orders are orders of termination simpliciter and the petitioners were not entitled to any show-cause notice. I am also not inclined to attach much importance to the expression radd (cancelled.) For all practical purposes it means that the appointments were being terminated.
62. So far as Civil Writ Jurisdiction Case No. 4502 of 1982 in which petitioners 23 to 27, 29 and 30 have been held to be not entitled to the protection of S. 25F of the Act because they have not completed 240 days of service in the Irrigation Department, is concerned, in the orders of their termination it has been mentioned that after enquiry it has been found that their appointment had been made illegally and, as such, it was being cancelled. The aforesaid petitioners have not been able to satisfy that the order of termination passed against them is arbitrary or the illegality alleged was non-existent.
63. So far as Civil Writ Jurisdiction Cases Nos. 249, 250 of 1982 and 4178 of 1981 relating to Department of Agriculture are concerned, the orders impugned are orders of termination simpliciter without assigning any reason. As such, the petitioners of those writ applications cannot make a grievance in respect of breach of the principles of natural justice.
64. In the result, as the Department of Health and So???e Command Area Development Agency have been held to be “industry,” Civil Writ Jurisdiction Cases Nos. 2015 and 3322 of 1982, are allowed and the impugned orders of termination are quashed.
65. Civil Writ Jurisdiction Case No. 4502 of 1982, relating to Irrigation Department so far as the petitioners, other than petitioners 25 to 27, 29 and 30 are concerned, their applications are allowed on the ground of contravention of S. 25F of the Act. The orders of termination passed against them are quashed, So far as petitioners 25 to 27, 29 and 30 are concerned, the writ application is dismissed.
66. So far as Civil Writ Jurisdiction Cases Nos. 352, 618 and 621 of 1981, are concerned, which also relate to the Department of Irrigation in respect of some of the petitioners it has been said in the counter-affidavit that they are going to be reinstated. However, as the petitioners of those writ applications have been held to be entitled to protection of S. 25F of the Act, their termination in absence of the compliance of the said section has to be held as invalid and those writ applications are also allowed and the impugned orders are quashed.
67. Civil Writ Jurisdiction Case No. 3733 of 1982, which relates to Hill Area Lift Irrigation Corporation, for the reasons given above, is dismissed. Civil Writ Jurisdiction Cases Nos. 249, 250 of 1982 and 4178 of 19???1, which related to the Department of Agriculture, are also dismissed. Civil Writ Jurisdiction Cases Nos. 2354 and 2867 of 1980, relating to the Department of Forest are also dismissed. The parties shall bear their own costs in all the writ applications.
68. It is made clear that it will be open to the respondents in cases where the orders of termination have been quashed being in contravention of S. 25F of the Act to issue fresh orders of retrenchment in accordance with law.