THE HONOURABLE SMT. JUSTICE P. MADHAVI DEVI
WRIT PETITION NO.14155 OF 2022
ORDER
In this Writ Petition, the petitioner is seeking a Writ of Mandamus declaring the termination order passed by the 3rd respondent dt.14.03.2022 as illegal, arbitrary, malafide, intentional, contrary to the employment contract and in violation of principles of natural justice and consequently to set aside the same and to pass necessary orders for the said purpose.
2. Brief facts leading to the filing of the present Writ Petition are that the petitioner was appointed as a Manager - People (HR) at India Alliance of the 3rd respondent organisation after an interview. A contract of employment was entered on 17.12.2020 and as per the terms and conditions of the said contract, it was agreed to pay a salary of Rs.15,00,000/- per annum to the petitioner and the contract period was up to 31.03.2024. As per the terms and conditions of the contract, there was a probation period which was successfully completed by the petitioner and the said fact had been intimated to the petitioner by the 3rd respondent on 16.09.2021 in writing. After completing the probation W.P.No.14155 of 2022 2 period, the petitioner was discharging his duties as HR-Manager without any complaint from any quarter.
3. It is submitted that the 3rd respondent all of a sudden, without assigning any reasons, terminated the services of the petitioner on 14.03.2022. It is submitted that the present CEO who has passed termination order had joined the organisation recently after her retirement in CCMB and she wanted to depute the persons of her choice and therefore all of a sudden, terminated the services of the petitioner. It is submitted that Clause-5 of the contract of employment dealt with termination and the impugned termination order did not fit into or conform with any of the Clauses mentioned therein. It is submitted that only if the petitioner wants to discontinue the employment, he has to give three months written notice, but if the respondents want to terminate his services, it could only be upon occurrence of certain events mentioned in Clause-5 and since none of those conditions were fulfilled, the termination order was clearly illegal and arbitrary. It is further submitted that after passing of the impugned order, the 3rd respondent has not appointed anybody but the charge was given to the Personal W.P.No.14155 of 2022 3 Secretary of the CEO. Therefore, challenging the termination order, the present Writ Petition has been filed.
4. At the stage of admission itself, an objection was raised about the maintainability of the Writ Petition. Learned counsel for the petitioner, Sri K.V. Bhanu Prasad, had submitted that the 3rd respondent is substantially funded by Union of India and therefore it is a 'State' within the meaning of Article 12 of the Constitution of India and hence, the Writ Petition is maintainable. In order to examine the issue, the 1st respondent was directed to file a note about the funding, constitution and management of respondent No.3.
5. A counter affidavit has been filed by respondent No.2 on behalf of respondents No.1 and 2 stating that the 3rd respondent is a Public and Charitable Trust and was founded in the year 2008 by the Department of Biotechnology (DBT) and the Wellcome Trust (WT) under an MoU signed by both parties for implementation of the Biomedical Research Career Programme in India and that the Biomedical Research Career programme was established with the approval accorded by the Cabinet. It is submitted that the Trust, in the current phase, is autonomous in its operations with both funders exercising equal patronage and W.P.No.14155 of 2022 4 governance. It is submitted that the joint equal commitment has been up to UK £ 16 million per year, amounting to a total of Rs.1296 Crore/UK £ 160 million over a 10-year period. It is submitted that the said programme was extended further for next 5 years from April 2019-20 to March 2024 with DBT increasing its commitment to two times that of the WT with the approval of the Cabinet. It is further submitted that the Trust Deed signed on 09.09.2008 between the Department of Biotechnology and Wellcome Trust empowers the Trustees to administer and manage the Trust. It is further submitted that the Trust shall, at all times, be managed by up to four Trustees, two each to be appointed by the Department of Biotechnology of the Ministry of Science and Technology, Government of India and the Wellcome Trust or such other ratio as may be decided from time to time by mutual agreement amongst the Settlers. It is submitted that the Trustees, in consultation with the Settlers, may appointment a suitable person as the Chief Executive Officer (CEO) of the Trust, who shall act upon the directions of the Trustees. It is further submitted that the petitioner has failed to submit sufficient evidence that the formation and functioning of respondent No.3 are under the control and management of the Government or that its objects and purpose in the MoU and therefore, W.P.No.14155 of 2022 5 this Writ Petition is liable to be dismissed against respondents No.1 and
2. The copies of the Trust Deed and the supplementary Trust Deed are also filed along with the counter affidavit.
6. Respondent No.3 has also filed a counter affidavit raising an objection about the maintainability of the Writ Petition stating that the 3rd respondent is not an instrumentality or agency of the State under Article 12 of the Constitution of India so as to be amenable to writ jurisdiction of this Court. It was submitted that the burden lies on the petitioner to establish to the satisfaction of this Hon'ble Court that the authority against which the relief has been claimed in this Writ Petition by the petitioner under Article 226 of the Constitution of India, is a 'State' or 'Instrumentality of State' or an 'Agency' under Article 12 of the Constitution of India. It is submitted that since the petitioner has failed to show that the Government has any pervasive control in the administration of the 3rd respondent and that it would fall within the purview of Article 12 of the Constitution, the Writ Petition is liable to be dismissed against all the respondents with exemplary costs.
7. In view of the above, the preliminary objection of the respondents has to be dealt with first.
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8. Article 12 of the Constitution of India reads as under:
"12. Definition.--In this part, unless the context otherwise requires, "the State" includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India."
9. Though a constitutional or statutory authority would be within the meaning of the expression "other authorities" in Article 12, if it has been invested with statutory power to issue binding directions to third parties, the disobedience of which would entail penal consequence, or it has the sovereign power to make rules and regulations having the force of law, and it has been recognised that the body concerned can also be considered as "State" if it is financially, functionally and administratively under the control of the Government and such control must be particular to the body in question, and not general in nature and that it is deep and pervasive and not merely regulatory, as has been held by the Hon'ble Supreme Court in the case of Balmer Lawrie & Co. Ltd. Vs. Partha Sarathi Sen Roy1. In the case of Zee Telefilms Vs. 1 (2013) 8 SCC 345 W.P.No.14155 of 2022 7 Union of India2, the Hon'be Supreme Court has held that the test for whether the entity is financially, functionally and administratively under Government control is that the control must be pervasive and not merely regulatory. Therefore, it has to be seen whether the 3rd respondent is financially, functionally and administratively under the Government control to be considered as "State".
10. In the Trust Deed, the Department of Biotechnology is one of the Settlers and along with the 3rd respondent has agreed to settle a pubic charitable trust to receive, hold and disburse, for the purpose of funding scientific and technological research and education in India, such monies or money's worth, as may be agreed between the Settlers, to be released to the Trust from time to time. As admitted by respondent No.2, the funding was initially equal and subsequently it has been increased to double the investment made by the 3rd respondent. Therefore, financially, respondent No.2 is holding the financial control over respondent No.3. As regards the control of the Trust, the Trust Deed empowers the Trustees to administer and manage the Trust. Initially, there were two Trustees, one each from DBT and Wellcome Trust and 2 (2005) 4 SCC 649 W.P.No.14155 of 2022 8 thereafter, number of Trustees was increased from two to four, two each from DBT and Wellcome Trust. The ownership, management and control of the Trust vests in these Trustees. The Trustees have power, on passing a unanimous resolution, to amend, alter, supplement or revoke any such rule, regulation policy or bye-law relating to the management of the Trust. The ownership, management and control of the Trust, the Reserve Fund, the Core Fund and any other Trust property will vest in the Trustees. It is further submitted that the Trust shall, at all times, be managed by up to four Trustees, two each to be appointed by Department of Biotechnology of the Ministry of Science and Technology, Government of India and Wellcome Trust or in such other ratio as may be decided from time to time by mutual agreement amongst the Settlers and unless specified otherwise, all decisions in respect of the Trust shall be taken by a minimum of two Trustees, provided that at least one Trustee appointed by each of the Settlers approves such decision except those decisions in respect of the provision Sub-Clauses
3.d, 3.g, 3.j, 7.f and which shall be made on a unanimous basis. With regard to meetings of the Trustees, it is also provided that each meeting of the Trustees shall mandatorily require the presence of at least one Trustee nominated and appointed by each of the Settlers.
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11. From the above Clauses of the MoU/Trust Deed, it is clear that respondents No.1 and 2 are functionally and administratively also involved in the management of the Trust and without the agreement of the Trustees of the 2nd respondent, no decision can be taken by respondent No.3. Thus, there is both deep and pervasive control of the 2nd respondent over the management and administration of respondent No.3.
12. Learned counsel for the petitioner, Sri K.V. Bhanu Prasad, has placed reliance upon the Full Bench judgment of Hon'ble Delhi High court in the case of Ar Abdul Gaffar Vs. Union of India and others3, wherein the question was whether National Book Trust was a 'State' or 'another authority' under Article 12 of the constitution of India and it was considered that formation of NBT was on the basis of decision of the Government of India which decided to establish NBT and the government is empowered to impose conditions on NBT in respect of expenditure of grants and the Government of India is also given power to appoint one or more persons to work and progress of Trust in such manner as the Government of India may stipulate and the Government is 3 LPA No.600 of 2010 dt.01.06.2012 W.P.No.14155 of 2022 10 empowered to decide term of members of NBT and Representatives of the Government participated in the meetings of the Trust. The Delhi High Court therefore held that there is a deep and pervasive control of the Government over the functioning of NBT and the Trust owes its existence to the resolution passed by the government and it is primarily run by the funds provided by the Government and therefore all pervasive administrative control rests with the Government at every stage and thus it is 'other authority' and thus, "State" within the meaning of Article 12 of the Constitution of India.
13. Further, the Hon'ble Supreme court in the case of Pardeep Kumar Biswas Vs. Indian Institute of Chemical Biology4 has also laid down the tests of determination whether the 'Body' falls within the definition of the 'State' under Article 12 of the Constitution of India.
14. Therefore, this Court holds that respondent No.3 is 'other authority' and thus a 'State' within the meaning of Article 12 of the Constitution of India and hence, the Writ Petition is maintainable. 4 Civil appeal No.992 of 2002 dt.16.04.2002 W.P.No.14155 of 2022 11
15. Coming to the merits of the issue on hand, this Court finds that the appointment of the petitioner has been terminated by order dt.14.03.2022 and the order has been passed by the Chief Executive Officer. The contract of employment provides for the term of employment up to 31.03.2024, which may be renewed at the end of initial term upon a written agreement between the petitioner and India Alliance. Clause 5 refers to termination and Sub-clause (i) thereof provides for termination of appointment by the petitioner in writing by giving not less than 3 months' written notice of termination. Sub-clause
(ii) thereof deals with the termination of services of the petitioner or any employee by the organisation upon occurrence of any of the events mentioned therein. Item (a) of Sub-clause (ii) is not applicable to the petitioner, but Item (b) thereof refers to written notice stating that the employee's employment is being terminated for the acts mentioned therein. Item (c) thereof provides for issuance of a written notice of termination from the India Alliance of three months, or forthwith by the India Alliance on payment, in lieu of notice, of an amount equal to three months instalments of the petitioner's salary, in lieu of the notice period, for any reason deemed sufficient by the India Alliance. According to the W.P.No.14155 of 2022 12 learned counsel for the petitioner, the Trust Deed empowers the Trustees only, to appoint officers and staff members to serve the Trust and to set their conditions of service and to sanction any payments towards salaries and expenses and also to appointment, remove or transfer, from time to time and on such terms and conditions as they may determine, any employee of the Trust, including Team Managers, Finance Officers, System Managers, Administration Officers, Grants Advisors and other officers or staff members for carrying out the activities of the Trust. It is submitted by the learned counsel for the petitioner that it is not the Trustees but the Chief Executive Officer of the Trust, who has terminated the services of the petitioner and therefore, it is in violation of the Trust Deed. He further submitted that since he does not fall in any of the circumstances mentioned in Sub-clause (b) of Clause 5 of the Trust Deed, the termination of the services of the petitioner even with three months' pay in lieu of notice is not sustainable.
16. The learned counsel representing respondent No.3, Ms. Rubina S. Khatoon, however, refuted this argument and submitted that the appointment of the petitioner was by the then Chief Executive Officer and therefore, the termination order signed by the Chief Executive W.P.No.14155 of 2022 13 Officer is also legal and valid. It is submitted that if the petitioner's contention that it is the Trust alone which could appoint and remove the petitioner from services is to be accepted, then his appointment itself has to be held as invalid and therefore, the question of termination also would not arise. She further submitted that the administration of the Trust is entrusted to the CEO who has been appointed by the Trustees and accordingly, respondent No.3 has exercised the powers. It is submitted that the contract employment of the petitioner has been terminated under Clause 5 (ii) (c) of the employment contract which enables respondent No.3 to terminate the employment contract of the petitioner for any reason deemed sufficient to the employer by issuing a three-month written notice or by paying a sum equal to three months instalments of the petitioner's salary. It is submitted that on 14.03.2022, respondent No.3 had issued an e-mail along with formal letter of termination, terminating the services of the petitioner in accordance with Clause 5 (ii) (c) of the employment contract. It is submitted that the employment contract was terminated as respondent No.3 was reorganising its structure and a separate HR manager was no longer needed as there were already two other HR executives working in addition to the petitioner. It is submitted that as per the industry W.P.No.14155 of 2022 14 standards, the rule of thumb ratio is 1:4 full time HR staff per 100 employees and currently, respondent No.3 consists of two other HR executives for a staff population of 40 employees and thereby, the respondent organisation, keeping in mind the overall interests of the organisation, was left with no other option but to terminate the services of the petitioner as a separate HR Manager's role was no longer needed. It is further submitted that after the termination of the petitioner's services, there has been no new appointment made. In support of her contention that the petitioner was informed of the reason for termination of services by way of an e-mail dt.14.03.2022, the learned counsel for respondent No.3 has also filed a copy of the e-mail which is addressed to the petitioner stating as under:
"Dear Ajay, As discussed with you in the just-concluded meeting online, in the presence of Vishy, India Alliance is reorganizing and a separate HR manager is no longer part of the structure. Please find attached a formal letter of termination.
Kindly cooperate with the handover process by March 16th, 2022. India Alliance thanks you for your service.
Regards, Jyotsna"
Therefore, the learned counsel for respondent No.3 prayed for dismissal of the Writ Petition with costs.
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17. Having regard to the rival contentions and the material on record, this Court observes that the contract of employment clearly provides a clause for termination of services and Sub-clause (ii) (c) of Clause 5 provides that for any reason deemed sufficient by India Alliance, the employment contract can be terminated with a written notice of three months or three months pay in lieu of notice. The contention of the petitioner that his services can be terminated only by the Trustees and not by the CEO also cannot be entertained because the appointment letter of the petitioner itself has been signed by the CEO. Therefore, it is settled principle of law that an appointing authority also has the power of termination. Further, the respondents have intimated the reason of termination that services of an HR Manager are no longer required in the organisation which is having a population of 40 employees and the employer always has the right to consider the requirement of the employees and can appoint or terminate the services of its employees as per the terms of the contract.
18. In view of the same, this Court does not find any illegality or irregularity committed by respondent No.3 in terminating the services of W.P.No.14155 of 2022 16 the petitioner by issuing a notice of termination with three months' salary.
19. In view of the same, this Writ Petition is dismissed. No order as to costs.
20. Pending miscellaneous petitions, if any, in this Writ Petition shall stand closed.
___________________________ JUSTICE P. MADHAVI DEVI Date: 22.11.2022 Svv