Delhi High Court
Kanishk Sharma & Ors. vs University Grants Commission & ... on 22 October, 2013
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) No. 4071/2013
% 22nd October, 2013
KANISHK SHARMA & ORS. ......Petitioners
Through: Dr. Surat Singh and Mr. Brajesh
Kumar Sengh, Advocates.
VERSUS
UNIVERSITY GRANTS COMMISSION & ORS. ...... Respondents
Through: Mr. Amitesh Kumar, Adv. for R-
1/UGC.
Mr. Roshan Lal Goel, Adv. for R-3.
Mr. A.S.Rao, Law Officer for R-4/
DMRC
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
CM No. 14422/2013 (Delay)
For the reasons stated in the application, the same is allowed and
delay is condoned.
CM stands disposed of.
WPC 4071/2013 Page 1 of 14
Review Petition No. 533/2013 (for review of the order dated 2.7.2013) &
CM No. 14423/2013 (Stay)
1. This review petition is filed against the judgment dated
2.7.2013 dismissing the writ petition. For the purpose of filing the review
petition, reliance is placed upon the order of a Division Bench of this Court
dated 26.8.2013 passed in LPA No. 617/2013. LPA No. 617/2013 was
preferred against the judgment of this Court dated 2.7.2013 dismissing the
writ petition. The order of the Division Bench dated 26.8.2013 in LPA
No.617/2013 reads as under:-
"CM No. 12963/2013 (Exemption)
Allowed.
CM No. 12964/2013 (delay)
For the reasons stated in the application the delay is condoned.
LPA 617/2013
1. Impugned judgment would reveal that notwithstanding
various prayers made in the writ petition what was argued
before the learned Single Judge as the entitlement to be
regularized. Learned counsel states that notwithstanding this
being the principal argument the petitioner before the Single
Judge, the appellants before us, had also argued on lifting the
veil and considering the matter in light of the decision in Radha
Dubey's case.
2. Since the said aspect of the matter pertaining to Radha
Dubey's case does not find a reflection in the impugned order
and since learned counsel for the appellants states that said
aspect was argued before the learned Single Judge we permit
the appellants to withdraw the appeal observing that under the
WPC 4071/2013 Page 2 of 14
circumstances the correct course for the appellants would be to
move an application before the learned Single Judge pertaining
to the record of the Single Judge i.e. drawing attention of the
learned Single Judge that the appellants have made submissions
with respect to lifting the veil and the law declared in Radha
Dubey's case.
3. Needless to state that such an application filed would be
considered by the learned Single Judge as per law.
4. Observing as above the appeal is dismissed as not
pressed.
CM No. 12962/2013 (Stay)
Dismissed as infructuous.
Dasti."
2. It is clear that the limited review which was submitted before
the Division Bench for being filed was only and only on the basis of placing
reliance upon Radha Dubey Vs. Govt. of NCT of Delhi & Ors. in C.C.No.
10388/2010 dated 16.8.2010 and the doctrine of lifting of the corporate veil.
3. A reading of the order of the Division Bench shows that the
review petitioners/petitioners argued before the Division Bench that Radha
Dubey's case (supra) entitles the petitioners to lift the corporate veil and
claim appropriate consequential relief on the veil being lifted that petitioners
were employees of UGC/respondent no.1 and not of the private
employer/respondent no.2. No other ground was pressed for filing of the
review petition.
WPC 4071/2013 Page 3 of 14
4. No doubt the Division Bench has permitted filing of the review
petition, however, a review petition can only be filed if it is urged in the
review petition that a specific ground or argument was argued but not
considered at the time of passing of the judgment. It is not the case of the
petitioners in the review petition that Radha Dubey's case (supra) was
relied upon at the time of arguments before passing of the judgment on
2.7.2013 and which was not considered by this Court. The only argument
urged before me is that Radha Dubey's case (supra) is referred to in
Ground (D) of the writ petition and therefore, that aspect be now considered
in view of the review petition. I am doubtful if a review petition lies merely
because a ground is pleaded in the writ petition although no argument on
that basis is addressed. In any case I am deciding the review petition inspite
of that.
5. In order to decide the review petition, let me again set out
certain facts of the case. The facts of the case are that petitioners at no point
of time were ever employees of UGC. Petitioners as per their own case were
appointed by respondent no.2-M/S JMD Consultants and M/s JMD
Consultants thereafter posted them for work with UGC/respondent no.1.
Petitioners for this reason claim that the lifting of corporate veil theory be
WPC 4071/2013 Page 4 of 14
applied and petitioners instead of being treated as employees of respondent
no.2-JMD Consultants be treated as employees of respondent no.1/UGC. As
per the writ petition on succeeding in claiming lifting of the corporate veil,
entitlement was then claimed to be regularized as employees of
UGC/respondent no.1. Challenge was also laid to the letter dated 31.5.2013
issued by respondent no.2-JMD Consultants of newly posting the petitioners
for working with DMRC instead of UGC. The case set up was that the
impugned letter was prejudicial to the petitioners because not only the terms
of service with DMRC were less favourable than UGC, respondent no.2 was
in fact asking for a bond of ` 25,000/-. These factual aspects are
reconfirmed by me today from the counsel for the petitioners before
dictation of this judgment. Therefore, in sum and substance, mainly and
essentially what the petitioners claimed was that though they were formally
appointed by respondent no. 2-M/s JMD Consultants, corporate veil of JMD
Consultants be lifted and petitioners should be taken as direct employees of
respondent no.1/UGC and thereafter regularized with respondent no.1/UGC.
6. Let us now turn to the reliefs which are prayed for as per the
prayer clauses in the writ petition. These reliefs read as under :-
"a) Issue a writ of certiorari or any other writ of like nature
declaring the letter dated 31st May 2013 and letter dated 18th June
WPC 4071/2013 Page 5 of 14
2013 as unconstitutional and violative of fundamental rights of
fairness in the matters of employment under article 14,16,19 & 21 of
the constitution of India and quash the same.
b) Issue writ of mandamus or any other writ of like nature
directing the respondents to consider the regularization of the services
of the petitioners with respondent no.1 as Lower division clerk/Peon
as per the relevant law with all the consequential benefits. Petitioner
no. 10,11,12 &23 are still working with the respondents continuously.
c) In alternative direct the respondents to relax the upper
age for applying for Lower division clerk vacancies and give the
benefit of age relaxation of years served with UGC and thus render
them eligible to apply for the very post on which they have been
working since last several years.
d) Direct the respondents to take into consideration the past
services rendered by the petitioners to UGC and thus giving them the
benefit of the same is the selection process.
e) Issue writ of prohibition or any other writ of like nature
restraining respondent no.1 & 2 from terminating the services of the
petitioner without due process of law.
f) Pass any other order which this Hon'ble Court may deem
fit and proper to do complete justice to the matter/case."
7. Let us now consider the review petition in the light of firstly the
order of the Division Bench of this Court dated 26.8.2013, secondly Radha
Dubey's case (supra) which is relied upon by the petitioners and thirdly the
reliefs which have been prayed for in the writ petition and which are argued
that the same can be again prayed for and argued in spite of the limited
review permitted by the Division Bench.
WPC 4071/2013 Page 6 of 14
8. Straightway let us first come to the Radha Dubey's case
(supra) which is relied upon by the petitioners. It may be noted that Radha
Dubey's case (supra) is referred to above in the writ petition as Radha
Dubey's case (supra) simplicitor without any citation being given. No
citation was given because today it becomes clear that this Radha Dubey's
case (supra) is not a judgment of a Supreme Court disposing of a case and
laying down a ratio but the so called Radha Dubey's case (supra) is simply
an order by which notice is issued in an SLP and interim orders were
granted. Therefore, surely, the Radha Dubey's case (supra) is not a ratio
or precedent which can be relied upon for disposal of a case. Also, the issue
in the Radha Dubey's case (supra), if I can allow that as a case precedent,
the same had nothing to do with lifting of corporate veil but really of
observations of Supreme Court at the time of issuing notice in the SLP that
contractual workers should not be continued for a long period of time by the
government which is a model employer. However, it bears mention that the
Constitution Bench judgment of the Supreme Court in the case of Secretary,
State of Karnataka & Ors Vs. Umadevi & Ors. 2006(4) SCC 1, and ratio of
which has been given in detail in the judgment of this Court dated 2.7.2013,
has specifically and categorically observed that contractual employees
irrespective of long services cannot be regularized and are not entitled to
WPC 4071/2013 Page 7 of 14
claim regularization. Supreme Court has clarified and laid down the ratio in
the case of Umadevi (supra) that public employment can only take place if
there is a sanctioned post, there is a vacancy in that sanctioned post, duly
qualified persons are appointed against the sanctioned post and such
appointment is through the regular recruitment process wherein the
candidates are called through advertisement in newspapers and/or
employment exchange. The only exception created by Umadevi's case
(supra) for regularization of persons was where persons had worked for 10
years prior to passing of the judgment in Umadevi's case (supra) in the year
2006 against vacancies in sanctioned post and were duly qualified only then,
qua such persons State /instrumentalities of State were asked to frame
schemes for regularization of this limited class of persons. Therefore, the
limited exception was that those persons who had worked for 10 years with
the State/instrumentality of State in the vacancies in sanctioned posts were to
be regularized and no other class of persons could be regularized. Therefore,
the issue of regularization was accordingly addressed and relief in this
regard denied in the judgment dated 2.7.2013, and finality as regards
disentitlement to regularization which was not questioned before the
Division Bench in LPA No. 617/2013 and even before me today. What is
really argued before me is actually arguments on Radha Dubey's case
WPC 4071/2013 Page 8 of 14
(supra) and with respect to other prayers which have been prayed for in the
review petition.
9. Now coming to the issue if Radha Dubey's case (supra) can be
treated as a laying down precedent with respect to lifting of corporate veil.
This order issuing notice in the SLP however had nothing to do with the
issue of lifting of the corporate veil. This will become clear from order
issuing notice in the writ petition in Radha Dubey's case (supra) and which
order reads as under:-
"UPON hearing counsel the Court made the following
ORDER
Delay condoned.
Heard Shri L.N.Rao, learned senior counsel for the petitioner
and perused the record.
By an order dated 12.1.1996, the petitioner was
appointed as Medical Officer on contract basis for one year in
the Directorate of Health Services, Government of N.C.T.,
Delhi.
She continued in service for next ten years without any break.
However, the nature of her employment continued to be
contractual. She proceeded on sanctioned leave on 3.4.2006.
At the end of sanctioned leave, she applied for extension of
leave due to domestic difficulties. Her request was rejected
vide letters 13.6.2006 and 31.7.2006 and she was asked to join
duty. The petitioner again applied for extension of leave by
stating that her widowed mother was suffering from Parkinson
and there was none to look after her, but her request was
rejected and the Director, Health Services, Government of
N.C.T., Delhi terminated her service vide order dated
23.11.2007.
The petitioner challenged the termination of her service on the
ground that the termination of her service was punitive but the
Central Administrative Tribunal and the Division Bench of the
High Court dismissed the original application and the writ
petition without properly appreciating the issue raised by her
and without considering the important question whether the
State has the power to employ a person on contract basis and
continue her/him for a period of ten years.
We are prima facie of the view that appointment of a person on
contract basis for an uninterrupted of a person on contract basis
for an uninterrupted period of ten years amounts to exploitation.
The State, as a model employer in a welfare State, is not
expected to take advantage of its position and impose wholly
unequitable and unreasonable condition of employment on the
prospective employees, who do not have the choice but to
accept the appointment on terms and conditions offered by the
employer. This practice seems to be contrary to the ratio of the
judgments of this Court in Central Inland Water Transport
Corporation Ltd. and another versus Brajo Nath Ganguly and
another [AIR 1986 Supreme Court 1571] and Delhi Transport
Corporation versus D.T.C Mazdoor Congress [AIR 1991
Supreme Court 101].
Issue notice to the respondents on the special leave petition as
also on the petitioner's prayer for interim relief, returnable in
16 weeks. Dasti, in addition, is permitted.
Having regard to the peculiar facts of the case, we deem it
proper to direct the respondents, by an interim order, to take the
petitioner back in service.
A copy of this order be served upon the respondents
along with the notice."
10. The doctrine of lifting of corporate veil is employed for the
purpose of preventing a fraud by the corporate entity. In the present case, I
do not understand that how any case of fraud can be set up for lifting of the
corporate veil of the JMD Consultants by effectively making as the
petitioners want to argue that M/s JMD Consultants/respondent no.2 is an
alter-ego of a government organization namely UGC. I do not think that in
law it is permissible for this Court to hold that JMD Consultants-respondent
no.2, a private organization which employs people and further places them
with entities for employment as placement agency, can be treated as an alter
ego of UGC. Therefore, the doctrine of corporate veil has no application in
the facts of the present case because there is no governmental ownership of
JMD Consultants.
11. Even assuming for the sake of arguments, that corporate veil
can be pierced and respondent no.2 can be taken to be an alter ego of
respondent no.1, yet, the same will at best mean that petitioners would claim
for being taken to be treated as employees of respondent no.1,yet, this
argument actually was only with respect to the issue of seeking
regularization, and which regularization cannot be granted in view of
Umadevi's case(supra).
12. So far as the various other reliefs which were prayed for in the
writ petition is concerned, and which are now once again argued before me
for rearguing the petition as a whole which was disposed of by the judgment
dated 2.7.2013, it must be noted that before the Division Bench no argument
was urged that that various other reliefs be also allowed to be urged before
this Court in terms of the review petition, and which prayers are in addition
to the argument of lifting of corporate veil relying upon Radha Dubey's
case (supra). The order of the Division Bench dated 26.8.2013 and which
has been reproduced above, only shows that the appeal was withdrawn with
liberty to draw the attention of this Court to Radha Dubey's case (supra)
and nothing more. Therefore, I cannot permit petitioners to re-argue their
whole case as regards various other reliefs.
13. I may also state that in fact and reality petitioners were always
the employees of a private entity namely respondent no.2/JMD Consultants.
As against the private employer no writ petition lies. There cannot be
allegation of violation of a fundamental right against a private entity. In
extremely limited circumstances Courts do entertain writ petitions against
private entities where blatant violations of legal provisions contained in
important welfare legislation are shown to be violated, however, otherwise
no writ petition lies against a private entity. Therefore, the claim of the
petitioners being re-posted by respondent no.2 from respondent no.1/UGC to
DMRC and other reliefs against respondent no.2 even if allowed to be
argued cannot be the basis for invoking writ jurisdiction of this Court under
Article 226 of the Constitution of India and granting of reliefs against
respondent no.2. This aspect was considered and rejected as per para 7 of
the judgment dated 2.7.2013
14. There is a disturbing tendency of certain litigants in this county
of never being satisfied. I can say so with respect to the Supreme Court
judgment or proceedings disposing of a case are treated as final only because
there is no further Court of appeal thereafter, otherwise surely if there were
further Courts, certain litigants would want to continue to keep on
approaching not one Court above the Supreme Court but many such Courts
if they existed. There has to be a limit to unnecessary litigation. Firstly, the
argument on the basis of Radha Dubey's case (supra) is a most
misconceived argument because Radha Dubey's case (supra) as already
stated is only and only an order issuing notice in an SLP. Not only in the
order only notice was being issued in the SLP, however with all due respect
the observations of the Division Bench, observations with respect to
regularization of contractual employees, except as per exception in para 53
of Umadevi's case (supra) will fall foul of the Constitution Bench judgment
in Umadevi's case (supra). In fact after Umadevi's case (supra) a Division
Bench of two judges in the case of UPSEB Vs. Pooran Chandra Pandey &
Ors., 2007 (11) SCC 92 sought to take a different path on the ground of
equity, however that judgment was specifically overruled by a Division
Bench of three judges in the case of Official Liquidator Vs. Dayanand &
Ors., 2008 (10) SCC 1 stating that the ratio of Umadevi's case (supra) is
inviolable.
15. In view of the above, neither any of the reliefs as prayed for in
the writ petition could have been granted for the reasons already contained
in the judgment dated 2.7.2013, but they also cannot be granted as prayed in
the present review petition. Giving the benefit of lifting of the corporate veil
doctrine was discussed and denied in para 8 of the judgment dated 2.7.2013.
16. The review petition being wholly without any merit is
accordingly dismissed with costs of ` 50,000/-. Costs can be recovered by
respondent no.1 in accordance with law.
OCTOBER 22, 2013 VALMIKI J. MEHTA, J.
ib
