Delhi Stock Exchange Association ... vs Lt. Col. L. Oliver (Retd.) & Ors.
2012 Latest Caselaw 4983 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                        LPA No.1232 of 2006

                                     Reserved on: 3rd August, 2012
%                                     Pronounced on: 24th August, 2012

       DELHI STOCK EXCHANGE ASSOCIATION LTD.             . . . APPELLANT

                         through :           Mr. Kailash Vasdev, Sr.
                                            Advocate with Mr. Michael
                                            Dias, Advocate along with
                                            Mr.     Siddharth     Dias,
                                            Advocate,    Mr.   Shreyas
                                            Singvi, Advocate, Ms. Ekta
                                            Mehta and Ms. Joanne
                                            Pudussery, Advocates.

                               VERSUS

       LT. COL. L. OLIVER (RETD.) & ORS.              . . .RESPONDENTS

                         through:           Mr. Pravin H. Parekh, Sr.
                                            Advocate along with Ms.
                                            Suman Yadv and Ms. Ritika
                                            Sethi,    Advocates   for
                                            Respondent No.1.
                                            Mr. Shailendra K. Dahiya,
                                            Advocate for the respondent
                                            No.2.

CORAM :-
    HON'BLE THE ACTING CHIEF JUSTICE
    HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

A.K. SIKRI (Acting Chief Justice)

1. By means of this appeal, the appellant challenges the validity of orders dated 19.5.2006 passed by the learned Single Judge in W.P.(C) No.7720/2003, which was preferred by the Respondent No.1 herein. Respondent No.1 was working with

the appellant/Delhi Stock Exchange Association Ltd. (hereinafter referred to as „DSE‟) as Assistant General Manager. Perusal of the termination order dated 04.8.1998 reveals that the Board of Directors held a meeting on 04.8.1998 in which it decided to terminate the services of the respondent No.1 immediately, i.e., with effect from the same date invoking Clause 4 of the letter of appointment dated 22.9.1992. Clause 4 related to notice for termination reads as under:

"Notice

Your services shall be liable to be terminated on three months notice or salary in lieu thereof on either side except on disciplinary grounds, in which case, no such notice or payment in lieu thereof shall be necessary."

2. The Respondent No.1 challenged this termination by filing the aforesaid writ petition. The contention of the DSE was that such a writ was not maintainable as DSE is not "an authority" or "instrumentality" of the State which could file within the ambit of Article 12 of the Constitution of Indian and thus, it was not amenable to writ jurisdiction of this Court under Article 226 of the Constitution of India. It was also argued that the DSE, in terms of Clause 4 of the appointment letter dated 22.9.1992 could terminate the services of the respondent No.1 on giving three months‟ notice.

3. Insofar as maintainability of the writ petition is concerned, the learned Single Judge noted that the matter is squarely covered by the Division Bench ruling in the case of Delhi Stock Exchange Vs. K.C. Sharma & Ors. [2002 (VII) AD (Delhi)

432] wherein it was held that the DSE was a "State" within the meaning of Article 12 of the Constitution. In this very case, the Division Bench also held that Clause 4 of the appointment letter was arbitrary and violative of Article 14 of the Constitution. Going by the aforesaid dicta, the learned Single Judge held the termination to be bad in law and quashed the same. However, on the facts of this case, it was held that the reinstatement was not appropriate and compensation of `15 lacs has been awarded to the respondent No.1.

4. It would be pertinent to mention that the aforesaid judgment of the Division Bench of this Court in K.C. Sharma (supra) was challenged in the Supreme Court. The Supreme Court had upheld the judgment of this Court holding that the DSE to be a "State" within the meaning of Article 12 and amenable to the writ jurisdiction of the High Court. It is reported as K.C. Sharma v. Delhi Stock Exchange & Ors., AIR 2005 SC 2884. The learned Single Judge has taken note of this fact.

5. In the instant appeal, however, it is pointed out by the appellant that thereafter, review petition was filed before the Apex Court, which was disposed of leaving the question open viz. whether the DSE was covered by Article 12 of the Constitution or not. On this basis, it was argued that the learned Single Judge should not have relied upon the judgment in case of K.C. Sharma (supra).

6. We are not impressed by this argument. It is clear from the above that insofar as this Court is concerned, it has already taken a view in K.C. Sharma (supra) case holding that DSE is an „authority‟ within the ambit of Article 12 of the Constitution.

This judgment of co-ordinate Bench binds this Bench as well. Though the Supreme Court had initially upheld this view, but even thereafter, left the question open. That would only mean that this question remains open insofar as view taken by the Apex Court is concerned.

7. Following the Division Bench judgment in K.C. Sharma (supra) case, we hold that the DSE is a "State" under Article 12 of the Constitution. We may also like to record that in K.C. Sharma (supra), this Court also held that DSE carries out important/public state functioning that of completely controlling and transacting any securities in the country. On that basis, in any case DSE become amenable to writ jurisdiction under Article 226 of the Constitution, having regard to the law laid down in the Supreme Court in the case of Board of Control for Cricket, India and Anr. Vs. Netaji Cricket Club and Ors. AIR 2005 SC 592.

8. Faced with this position in law, Mr. Kailash Vasdev, learned Sr. Counsel appearing for the DSE argued that there was very serious charge upon the respondent No.1 and therefore, no relief even in the form of compensation should have been given to him. This argument is noted to be rejected. Even as per Clause 4 of the appointment letter, three months notice is required in case of termination simpliciter. Reason is obvious. When disciplinary action is taken against the employee, it has to be by holding regular inquiry and proving the charges in the said inquiry. In the instant case, this route was not resorted to. The appellant, therefore, cannot contend that there were serious charges against the respondent No.1. With such a plea

taken by the appellant, it is admitting that the termination is not simpliciter, but because of certain serious allegations against the respondent No.1 and in that eventuality, it was necessary to serve a charge-sheet and hold an inquiry giving full opportunity to the respondent No.1 to defend himself.

9. We, thus, find no merit in this appeal, which is accordingly dismissed.

ACTING CHIEF JUSTICE

(RAJIV SAHAI ENDLAW) JUDGE AUGUST 24, 2012 pmc