Nanik Awatrai Chainani versus Union of India

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i50

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A

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NANIK AWATRAI CHAINANI

v.

UNION OF INDIA

July 20, 1970

[A. N. RAY AND I. D. DUA, JJ.]

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B

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Indian Railways Act (9 of 1890), ss. 3(7), 138 and 1411(2) and Art. 311 _of the Constitui'ion,Licensee of Railv.:ay stall-Whether railway servant--Tennination of agreenient-Rights of licensee-Vhethr entitled to benefit of Art. 311-Relationship of master and servant.

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The appellant was running two stalls-a tea stall and a refreshment stall-at a railway station. They were allotted to him by the .Railway administration under two separate identical agreements of different dates. which provided that the appellant was to run the stalls in accordance with the directions of the Railway administration and among other terms for terminatio~ of the agreement<, they were also terminable by one month's notice on either .&ide without assigning any reason. As the appellant had committed certain irregularities in running the stalls, a fine was impoi;ed on him in terms of the agreements. Since the fine was not paid he was given notice to vacate and when be failed to do so, the agreement< were terminated, and possession was sought to be secured through the Magistrate under s. 138 of the Indian Railways Act. The appellant moved the Sessions Court and High Court on revision but without success.

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c

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D

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In appeal to this Court,

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E

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HELD : ( 1 ) In view of tho fact that the terms of the agreements which govern the parties exp'ressly reserve to the Railway administration extensive power of directing and regulating the appellant's work and also of controlling the manner of doing the work, which is necessary for affording amenities to the travelling public, the appellant would be a railway servant as defined in s. 3(7) read with s. 148(2) of the Indian Railways Act, against whom action can be taken under s. 138. [S. L. Puri v. Em~ror, A.I.R. 1937 Lahore 547 and R. L. Mazumdar v. Alfred Ernest, A.I.R. 1959 Cal. 64, approved.] [655 D-F]

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(2) By reason of being a railway servant the appellant did not •utomatically become entitled to the protection afforded to Government aervants by Art. 311 of the Constitution. He was neither a member of the civil service as contemplated by this Article nor was he dismissed, removed or reduced in rank so •• to attract Art. 311(2). His rights are confined to the terms of the written agreements and if he considered that they had been wrongfully terminated, he could challenge sl!Ch termination in c;viJ court• under the law. [654 E-0]

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(3) The e~press terms of the appellant's agreements exclude the heritable character of his right which is only 'a . contractual right of a bare licensee subject to the terms of the agreement.· No right outside these can be claimed by him. The fact that the appellant was allotted the stalls in order to rehabilitate him as a displaced person from Pakistan can- ' not over-ride the terms of the agreements and absolve him of his obligations thereunder and permit him to avoid the consequences of the alleged breaches of agreements on bis part. (655 B-D, G-H)

F

G

H

NANIK v. UNION (Dua, J.)

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651

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A

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( 4) Merely because a judicial Magistrate passed the order under s. 18. _Indian Railways Ac five days after the dismissal of the appellant's. application under Art. 226 of the Constitution by the Gujarat High Court does not "'tablish malice on the part of the Magistrate. [656 A-BJ

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(5). The .relationship of. mter and servant is charact0rised by agree i;nent ot serv1c~. e~press or 1.mphed, and whether or not a given agreement 1s one of servtce ts a question of fact depending on its t0rms considered B as a whole. [655 HJ

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CRIMINAL APPELLATE JuRISD!CTION : Criminal Appeal No. 51of1970.

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c

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Appeal by special leave from the order dated October 23, 1969 · of the Gujarat High Court in Criminal Revision No. 407 of 1969.

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The appellant appeared in person.

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S. P. Nayar, for the respondent.

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The Judgment of the Court was delivered by

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D Dua, J. In this appeal by special leave the appellant who· has appeared in person challenges the order of a learned single Judge of the Gujarat High Court (Shelat J.) dismissing in limine criminal revision against the order of the Sessions Judge dated October 4, 1969 dismissing the appellant's revision from the order of the Judicial Magistrate, Kaloi dated August 30, 1969 granting E the application of the railway administration under s. 138 of the Indian Railways Act and directing the P.S.I. Railways at SabarHlllti who is also the P.S.I. Railways at Kaloi to secure possession of the stalls in question from the appellant to the railway administration or to the person appointed by the administration in that behalf.

F

G

H

The appellant had, on February 9, 1964, entered into an agreement with the railway administration by means of which he was allotted a Tea Table (hereafter described as Tea Stall) at Kaloi railway station. This agreement came into force from May 18, L 96ii and subject to the provisions for earlier termination was to remain in force for three years. By a similar agreement dated February 20, 1965 the appellant was allotted a Refreshment Stall at the same railway station for a period of three years subject to the provision for earlier termination similar to the first agreement. In both the agreements the appellant was described as the licensee. Under these agreements the terms of which are identical the appellant was to run the two stalls in a,ccordance with the directions of the railway administration. In addition to other terms for earlier termination, the agreements were also terminable under clause 52 by one month's notice on either side without assigning any reason. On July 11, 1965:

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[1971] l S.C.R.

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SUPREME COURT REPORTS

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the two Stalls were inspected by the Commercial Inspector and the Station Master ;ind it was found that the appellant had commitkd irregularities and was not running them in accordance with the directiom of the railway administration. A fine of Rs. JOO was imposed on him in terms of the agreement, the fine being payable within one week under cl. 38(a). The amount of line having not been paid within the stipulated period a notice was given to the appellant on September 16, 1965 for vacating the railway premises by October 30. 1965. The appellant having failed to vacate the premises, the agreements were terrninateu with effect from Nove111hcr, 1965.

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As the po>Session of the Tea and Refreshment Stalls was not delivered by the appellanl to the railway administration, the latter applied to the Judicial Magistrate, Kaloi under s. 138 of the Indian Railways Act for securing possession of the aforesaid premises. Before the Magistrate it was not disputed that since the appellant had to work under the supervision and according to the directions of the railway administration he was a railway servant. This, according to the learned Magistrate. was not denied by the appellant even in his written statement; on the other hand it was claimed that the position of the appellant was at par with that of the railway servants. The appellant contestd the application principally on the ground that the contracts of the Tea and Refreshment Stalls had been entered into with the appellant with the object of rehabilitating him as a displaced p"rson from Pakistan and that. therefore, those contracts could not be terminated. After a lengthy discussion on the points raised the learned Magistrate expressed his final conclllsion in these words :

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"The opponent is proved to be railway servant. Also it is proved that his· service has been lawfully discharged. Mr. Thakursingh, the learned advocate for the opponent has contended that the applicant has terminated the agreement without any j\lstification and without assigning ·any reason. But that is not required to be done by either party to the agreement. It is argued by Mr. Thakursingh that the opponent is prepared to pay arrears of licence fees to the tune of Rs. _4.000 or so and he is prepared to pay the same to the railway. But that is not a good ground to disallow the application. Section 138 of !he Railways Act provides for summary remedy for delivery to Railway Administration of property <letained by a railway servant. The opponent who is proved to be a discharged railway servant refuses to deliver the stall and the place on which he is permitted to place a tea table though served

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E

F

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H

NANIK ', UNION (Dua, !.)

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G53

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A with not;ce. Hence he is liable to be summarily evicted. He has prolonged the matter for unreasonably long period uader different excuses. His services are terminated and so he has occupied the stall and the place for table unauthoriscdly .... "

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ll Reliance for holding the appellant to be a railway servant wa' placed on S. L. Puri v. Emp<'ror( ').

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The appellant took the matter in revision to the court of the Sessions Judge. There the appellant denied that he was a railway servant and urged as an alterMtive submission that even if he was a railway servant he had not been validly discharged. In any c event, so proceeded his contention, no notice to deliver possession of the Stalls having been given to him before filing the application under s. 138, he could not be dispossessed through the court. The Sessions Judge did not agree with these submissions and held that termination of the contract amounted to the appellant's discharge and, therefore, pr0ceedings could lawfully be initiated D against him under s. l 38 of the Indian Railways Act for summary delivery of property, in his possession or custody, to the railway administration. The appellant was held to have become a railway servant by virtue of ss. 3(7) and 148(2) of the Indian Railways Act. The Sessions Judge relied for his view both on S. L. Puri's case(') and R. L. Majumdar v. Alfred Ernest('). A revision to the 'High Court, as noticed earlier, was dismissed E in limine.

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On appeal in this Court the principal point urged by the appellant is that by reason of being a railway servant he was automatically entitled as a matter of law to the protection afforded to Government servants by Art. 311 of the Constitution. This F submission is wholly misconceived. Article 311 is in the follow- ing terms :-

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" (I) No person who is a member of a civil service of the Union or an all-India service or a civil service of a State or holds a civil post under the Union or a State shall be dismissed or removed by an authority subordiG nate to that by which he was appointed.

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(2) No such person as aforesaid shall be dismissed or removed or reduced in rank except after an inquliy in which he has been informed ·1f the charges a,_ains'. him and given a reasonable opportunity of being hard in respect of those charges and where it is proposed, H after such inquiry, to impose on him any such penaity, until he has been given a r<,asonable opportunity uf (I J A .l.R. 1937 Lahore <4'. (2) AJ.R. 1959 Cal. 64.

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. [1971] l S.C.R.

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SUPREME COURT REPORTS

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654

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making representationonthe penalty proposed, but only on the basis of the evidence adduced during suck inquiry : Provided that this clause shall notapply- (a) where a personisdismissed or removed orre- duced in rank on the ground of conduct which has led tohisconviction on a criminal charge; or
(b) where the authority empowered to dismiss or remove a personortoreduce him in rankis satisfied that for some reason, to be recorded by that authority in writing, itisnot reasonably practicable to hold such inquiry; .or _(J:)_where the President or the Governor,asthe case may be,issatisfied thatinthe interest of the se- .curity of the State itisnot expedient to hold such inquiry. (3)If,in respect of any such personasaforesaid, a question arises whether itisreasonably practicable to hold such inquiryasis referred to in clause(2),the decision thereon of the authority empowered to dismiss orremove such· person or to reduce himinrank shall be final."
A plain reading of this Article would show that the appellant cannot claim its benefit. The appellant is neither a member of the civil serviceascoJJtemplated by this Article nor hashebeen dismissed, removedorreduced in rank soasto attract the pro- tection of sub-Art (2)of this Article. The appellant's rights are clearly confinea to the written agreements ar.d if he feels aggrievedbyanything done by the railway administration which he considers to beinbreach of the terms -of the agreements, he isat full liberty to seek redress in accordance with law in the ordinary civil courts. In other words, if he considers that his agreements have been wrongfully terminated then he can chal- lenge such termination in the civil courts and claim whatever relief is available to him under theJaw.

making representationonthe penalty proposed, but
only on the basis of the evidence adduced during suck
inquiry :
Provided that this clause shall notapply-
(a)
where a personisdismissed or removed orre-
duced in rank on the ground of conduct which
has led tohisconviction on a criminal charge;
or

(b)
where the authority empowered to dismiss
or
remove a personortoreduce him in rankis
satisfied that for some reason, to be recorded by
that authority in writing, itisnot
reasonably
practicable to hold such inquiry; .or
_(J:)_where the President or the Governor,asthe case
may be,issatisfied thatinthe interest of the se-
.curity of the State itisnot expedient to hold
such inquiry.
(3)If,in respect of any such personasaforesaid,
a question arises whether itisreasonably practicable
to hold such inquiryasis referred to in clause(2),the
decision thereon of the authority empowered to dismiss
orremove such· person or to reduce himinrank shall
be final."

A plain reading of this Article would show that the appellant
cannot claim its benefit.
The appellant is neither a member of
the civil serviceascoJJtemplated by this Article nor hashebeen
dismissed, removedorreduced in rank soasto attract the pro-
tection of sub-Art (2)of this Article.
The appellant's rights
are clearly confinea to the written agreements ar.d if he feels
aggrievedbyanything done by the railway administration which
he considers to beinbreach of the terms -of the agreements, he
isat full liberty to seek redress in accordance with law in the
ordinary civil courts.
In other words, if he considers that his
agreements have been wrongfully terminated then he can chal-
lenge such termination in the civil courts and claim whatever
relief is available to him under theJaw.

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So far as the impugned order of the High Court and the order of the Sessions Judge is concerned we are unable to find any legal infirmity which would justify interference by this Court under Art. 136 of the Constitution. The relationship of master and servant is characterised by agreement of service, express or implied, and whether or not a given agreement is one of service is a question of fact depending on its terms considered as a whole.

B

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D

E

F

H

,

NANIK I'. UNION (Dua, I.)

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65S

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A Indeed, it is not the appellant's case before us that he was not a railway servant. On the contrary, the main plank al his challenge is that as a railway servant he is entitled to claim the protection of Article 311 of the Constitution. This submission, as already observed by us, i~ clearly based on a misunderstanding of the scope and effect of that Article.

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The appellant's next submission that the two agreements mentioned above clothed him with an independent vested right to do his business of running the two stalls in question, which right is heritable and not open to termination is equally misconceived and unacceptable. The express terms 81' . the agreements exclude the heritable character of the appellant's right. The only c right which the appellant could claim is a contractual right of a bare licensee and that right is subject to the tenns contained in his agreements. He cannot claim any right outside or beyond those agreements. The terms which govern the parties expressly reserve to the railway administration extensive power of directing and regulating the appellant's work and also, to an extent, of D controlling the manner of doing the work. Keeping in view the purpose and object of these agreements, namely, that of affording necessary amenities to the travelling public, retention of this over• all power by the railway administration is not only appropriate but necessary. The retention of this power by the railway administration, in our view, constitutes relevant material for sustaining the conclusion of the courts below that the appellant is a railway servant, as defined in s. 3(7) read with s. 148(2). Indian Railways Act. against whom action can be taken under s. 138 of the said Act. This conclusion is in accord with the view expressed in the decisions of the Lahore and Calcutta High Courts to wltich reference has been made earlier. We do not find any cogent grou.nd for disagreeing with that view which seems to F . have prevailed all these years. May be that the appellant was allotted two stalls under the agreements with the object of rehabilitating him as· ,a displaced (person. But that consideration

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cannot over'.ride the terms of the agreements and absolve him of his obligations thereunder and permit him to avoid the conseql!ences of the alleged breaches Of agreements on hiS part. In

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G 1h1s appeal we are not concerned with the question of violation of the terms of his agreements by the appellant nor can we consider the legality of the termination of his agreements. For'tbat grievance the appellant has to seek relief elsewhere by a different process. ·

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H It m~y. in this connection, be pointed o.ut that the appellant had also appro<).Ched the Gujarat High Court by certiorari challenging the order of fine imposed on him, relying on the objection that the imoosition of the fine was in violation of Art. 311 of

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(1971] l S.C.R.

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SUPREME COURT REPORTS

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65i

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A

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the Constitution. This writ petition was rejected on August 25, l 969. ln the special leave application, the appellant has averred that the Judicial Magistrate passed the order under s. 138 of the Indian Railways Act on August 30, 1969- only five days after the order o[ the High Court dismissing his writ petition-and it is contended that the impugned order must for that reason be .he'd to have been inspired by malice against the appellant. We do not find any warrant for this assumption.

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The appellant had also filed several miscellaneous applications in this Court which were dismissed by us after hearing him. He wanted to summon some witnesses and also some documents for proving that the allotment of the stalls had been made to him for the purpose of rehabilitating him as a displaced person. We did not consider it necessary to take evidence in this Court on that point. The written agreements, in our view, conclude the matter. The appellant also sought adjournment of this appeal on the ground that he wanted to engage a senior counsel to argue his appeal, but that counsel could only appear after the summer vacation. We did not consider that to be a sufficiently cogent ground fJr adjourning the appeal, the hearing of which was expedited on April 13, 1970. The appellant also applied for referring this case to the Constitudon Bench because, according to him, the question raised was of great constitutional impor·tance. We did not find any cogent ground for acceding to this prayer.

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The appellant has, in his arguments, laid repeated stress on the submission that the impugned action of the railway administration would deprive him and his family of the only source of livelihood. That consideration has little relevance because this appeal has to be decided on the merits on the existing record in accordance with law. That indeed is a matter between the appellant and the railway administration. His request for allotment, we have no doubt, will be considered on its merits in accordance with the law and the relevant departmental practice. It is not for us in these proceedings to express any opinion OI' t:1e merits of his claim.

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F

This appeal fails and is dismissed.