SUKHDEV SINGH V. BHAGATRAM ||CASE SUMMARY||AIR 1975 SC 1331, 1975 (30) FLR 283 ||

Sukhdev vs Bhagat Ram

1976 AIR 1975 SC 1331, 1975 (30) FLR 283

Case Summary

[Civil Appeal No. 2137 of 1972]

FACTS:

An employee, Bhagat Ram Singh Raghuvanshi had been removed from his services by a corporation which followed the regulations given under Oil and Natural Gas Commission Act, 1959; the Industrial Finance Corporation Act, 1948; and the Life Insurance Corporation Act, 1956. Bhagat Ram filed a civil appeal under High court to ask for relief and possibly get his service back. The High court declared that removal of Bhagat Ram Singh from service was null and void and that he be given his job back. The High Court issued a writ of mandamus, ruling that the corporation performed functions akin to those of the state and, therefore, should be considered a state entity.

In 19724, the High court in appeal no. 1879 declared that the rules and regulations which were laid down by the corporation had no force of law and that the corporation should not be permitted to enforce the regulations mentioned in Clauses (1) & (4) of Regulation 25.

KEY LEGAL PROVISIONS:

1. Oil and Natural Gas Commission Act, 1959

• Section 5: Power to make regulations – This section gives the Oil and Natural Gas Commission (ONGC) the authority to make regulations governing the employment of its officers and employees.

• Section 16: Employees of the Commission – This section addresses the conditions of employment for employees of ONGC, including their appointment and removal, and may set out provisions regarding disciplinary actions.

  
  

2. Industrial Finance Corporation Act, 1948

• Section 24: Power to make regulations – Similar to the ONGC Act, this section allows the Industrial Finance Corporation (IFC) to make regulations for the management and operations of its employees.

• Section 25: Employees of the Corporation – This section deals with the terms and conditions of employment within the IFC, including the removal or disciplinary action against employees.

3. Life Insurance Corporation Act, 1956

• Section 16: Power to make regulations – Similar to other statutory corporations, the Life Insurance Corporation (LIC) is granted power to frame regulations for the management of its employees, including their removal or disciplinary actions.

• Section 49: Employees and their conditions of service – This section outlines the terms and conditions of employment in the LIC, which would include procedures for employee termination.

4. Regulation 25 (Clauses 1 & 4)

• Regulation 25, Clauses (1) & (4): These specific clauses relate to the rules governing the discipline, removal, and other conditions of service for employees within the corporation in question.

5. Constitution of India

• Article 12: Definition of "State" – This article is used to determine whether an entity is considered a "state" under the scope of fundamental rights. In Bhagat Ram's case, the court concluded that the corporation acted as a state function and, therefore, should be treated as a "state" entity, making it subject to constitutional principles.

6. Writ of Mandamus (Under Article 226 of the Constitution of India)

• Article 226: Power of High Courts to issue writs – This article gives High Courts the power to issue writs, including writs of mandamus, to compel public authorities or statutory bodies to perform their legal duties.

ISSUES  :

1. Are statutory corporations considered as states under the ambit of Article 12 of the Constitution of India?

2. Whether the regulations framed under the statutory act through delegation have the force of law and are binding on the parties?

3. Whether employees of the statutory corporation claim protection under Article 14 and Article 16 of the Constitution of India?

4. Whether dismissing an employee contrary to the regulation framed under the specific Act would merely entitle damages or a declaration of continuance of service?

JUDGEMENT:

The Court determined that, for the purposes of article 12 of the indian constitution, statutory corporations such as ONGC, LIC, and IFC are “States.” It reasoned that these businesses carry out public tasks, are established by Acts of Parliament, and had the power to enact laws and regulations. According to the ruling, workers at these statutory corporations have a right to the defense of their fundamental liberties, especially Articles 14 and 16. This implies that these companies’ activities have to adhere to the ideals of equality and non-discrimination.

The Court stressed that statutory corporations carrying out public tasks and duties are not allowed to operate in an arbitrary manner and are required to abide by the constitutional requirements that guarantee fairness and equality of treatment in public employment. Since it establishes that even fundamental rights are enforceable against these organizations and clarifies the character of such groups under article 12 of the indian constitution, the ruling is also significant to Indian legal jurisprudence.