Ramesh Kumar Malik v. The Rohtak Distt. Cooperative Milk Producers Union

Here a distinction must be made between an institution which is not created by or under a stature but is governed by certain statutory provisions for the proper maintenance and administration of the institution. There have been a number of institutions which though not created by or under any statute have adopted certain statutory provisions, but that by itself is not, in our opinion, sufficient to clothe the institution with a statutory character. In Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi, AIR 1975 SC 1331 at p.1339 this Court clearly pointed out as to what constitutes a statutory body. In this connection my Lord A.N.Ray, C.J., observed as follows:- “A company incorporated under the Companies Act is not created by the Companies Act but comes into existence in accordance with the provisions of the Act. It is not a statutory body R.S.A.No. 968 of 1996 7 because it is not created by the stature.

It is a body created in accordance with the provisions of the statute.” It is, therefore, clear that there is a well marked distinction between a body which is created by the statute and a body which after having come into existence is governed in accordance with the provisions of the stature. In other words the position seems to be that the institution concerned must owe its very existence to a statute which would be the fountainhead of its powers. The question in such cases to be asked is, if there is no statute would the institution have any legal existence. If the answer is in the negative, then undoubtedly it is a statutory body, but if the institution was a separate existence of its own without any reference to the stature concerned but is merely governed by the statutory provisions it cannot be said to be a statutory body. The High Court, in our opinion, was in error in holding that merely because the Executive Committee followed certain statutory provisions of the University Act or the statutes made thereunder it must be deemed to be a statutory body.

In fact, the Full Bench of the High Court relied on three circumstances in order to hold that the Executive Committee was a statutory body, viz., (i) that it was affiliated to the Agra University which R.S.A.No. 968 of 1996 8 was established by the statute; (ii) that there were certain mandatory provisions in the Agra University Act which were binding on the Executive Committee; and (iii) that the executive Committee was governed by the statutes framed by the Agra University. In our opinion, none of these factors would be sufficient to alter the character and nature of the Executive Committee and convert it into a full fledged statutory body. To begin with the Executive Committee had an independent status having been registered under the Registration of Co-operative Societies Act and was a self-governed or an autonomous body. It was affiliated to the Agra University merely for the sake of convenience and mainly for the purpose that the courses of studies prevalent in the College may be recognised by the University.” It is a settled proposition of law that where the relationship of master and servant is purely contractual then the contract of personal service is not specifically enforceable, having regard to the bar contained in Section 14 of the Specific Relief Act, 1963.

Even if the termination of contract of employment is found to be illegal or in breach, the remedy of an employee is to seek damages and not specific performance. Courts will neither declare such termination to be nullity nor declare that the contract of employment subsists nor grant the consequential relief of re-instatement. The three well R.S.A.No. 968 of 1996 9 recognized exceptions to this rule are: (i) Where a civil servant is removed from service in contravention of the provisions of Article 311 of the Constitution of India (or any law made under Article 309); (ii) Where a workman having the protection of Industrial Disputes Act, 1947 is wrongly terminated from service; and (iii) Where an employee of a statutory body is terminated from service in breach or violation of any mandatory provision of a statute or statutory rules. There is, thus, a clear distinction between public employment governed by statutory rules and private employment governed purely by contract.

The test for deciding the nature of reliefs- damages or reinstatement with consequential relief- is whether the employment is governed purely by contract or by a stature or statutory rules. Even where the employer is a statutory body, where the relationship is purely governed by contract with no element of statutory governance, the contract of personal service will not be specifically enforceable. In the present case, the plaintiff had challenged his removal on the ground that the enquiry conducted against him was opposed to principle of natural justice and the authority, who had passed the order was not competent to do so as per the old rules. R.S.A.No. 968 of 1996 10 However, in this case, the Society was established under the Cooperative Societies Act and the Society itself does not have a statutory character. In these circumstances, the contract of personal service could not be specifically enforced and the learned Additional District Judge, has rightly held that the suit of the plaintiff was not maintainable.

The relief claiming damages in the alternative was sought by the plaintiff after ten years of the filing of the suit. It was also found that the amendment sought was vague as no actual damages had been assessed by the appellant. Hence, the prayer for amendment of the suit was rightly declined. The judgment relied upon by learned counsel for the appellant in State Bank of India and others v. S.N.Goyal, AIR 2008 SC 2594 fails to advance the case of the appellant as in the said case, the bank was held to be statutory body, whereas, in the present case the society is not a statutory body. No substantial question of law arises in this regular second appeal. Accordingly, the same is dismissed. October 14, 2009 (SABINA) JUDGE