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Judgment
M. Karpagavinayagam, J.—R. Srinivasan, the Petitioner herein, in this Writ Petition, has sought for issue of writ of Certiorari calling for the
records from the file of the Respondents herein pertaining to O.O. No. 85 dated 25.3.91 and F. Admn.I/A3/91/407 dated 25.3.91 and to quash
the same.
The case of the Petitioner is as follows:
The Petitioner is an Internal Audit Officer in the Indian Institute of Technology. Madras, the first Respondent herein. Earlier, he was working as
Audit Officer in the Indian Audit and Accounts Department from which his services were borrowed by the Respondent-Institute on foreign service
terms for a period of one year from 30.4.87. Before the deputation term came to an end, the Respondent-Institute, desiring to retain his services
offered to appoint him on contract as Internal Audit Officer in their services, if he opted to retire from Government Service voluntarily. The terms
of the offer by the Respondents as regards the salary were that he would be paid an initial basic pay of Rs. 3,500/- per mensem provisionally and
the same will be fitted into the appropriate revised scale of pay for Rs. 1,200-1,900 as and when revised scales are implemented. Accepting the
said offer, the Petitioner took voluntary retirement from the Government service and joined the Respondent''s service on 28.4.88. On 27.3.90, the
revised scale for his post was duly determined as Rs. 3,700-125-4,950-150-5,700 by the Respondent-Institute and communicated the same to
the Petitioner in Circular No. F. Admn.I/A3/90/593 dated 24.4.90. The Respondents by their order O.O. No. 309 dated 10.10.90 fixed his pay
in that scale at Rs. 3,700/- from 30.4.87 and Rs. 3,825/- from 1.4.88 for the deputation period and at Rs. 3,700/- from 28.4.88, Rs. 3,825/-
from 1.4.89 and Rs. 3,950/- from 1.4.90 for the contract period. In pursuance of the said order, the Respondents also disbursed the arrears of
salary to the Petitioner for the period from 30.4.87 to 31.5.90. Thereafter, the Petitioner has been drawing the pay of Rs. 3,950/- plus allowances
through salary bills every month. All of a sudden, to the shock and surprise of the Petitioner, the Respondents issued an order O.O. No. 331 dated
30.11.90 placing the Petitioner in a lower time scale of Rs. 3,000-100-3,500-125-5,000 plus personal pay. On 10.12.90, the Petitioner sent a
representation to the Respondents against the reduction of the scale of pay ordered in O.O. No. 331 dated 30.11.90. Without considering the
same, on 23.1.91, the Respondents passed another order F. Admn.I/A3/91/121, which further reduced his pay by fixing it in the said Rs. 3,000-
5,000 scale without personal pay. Challenging these orders, the Petitioner preferred a writ petition in W.P. No. 1175/91 before this Court. On
29.1.91, this Court admitted the said writ petition and granted stay. Though the Respondents entered appearance in the said writ petition they did
not choose to file any counter affidavit. Instead, they filed a memo on 14.3.91 stating that the above impugned orders were withdrawn. On the
basis of the said memo which was served on the Petitioner, this Court ordered on 21.3.91 dismissing the said writ petition after recording the
memo filed by the Respondents. To the further shock of the Petitioner, within 3 days, i.e., on 25.3.91, the Respondents passed two fresh orders in
O.O. No. 85 dated 25.3.91 and F/Admn.I/A3/91/407 dated. 25.3.91 again placing the Petitioner in the lower scale of Rs. 3,000-50,00 and fixing
his initial pay as Rs. 3,500/- from 28.4.88 and Rs. 3,625/- from 1.4.89 and Rs. 3,750/- from 1.4.90. By these orders, the pay for the post of the
Petitioner was determined as Rs. 3,000-5,000 for the deputation period also. These two impugned orders passed by the Respondents are under
challenge in this writ petition.
The case of the Respondents in short, is as follows:
The first Respondent offered the Petitioner for the post of Internal Audit Officer on contract with terms that the initial pay would be Rs. 3,500, that
the scale would be provisional and that the pay would be fitted in the appropriate stage in the revised scale of pay. Accepting this offer, the
Petitioner joined duty on 28.4.88 in the Respondents service in terms of the contract. The earlier scale of pay determined as Rs. 3,500-5,700 for
the post of Internal Audit Officer was adopted by the Respondents erroneously. The office order No. 309 dated 10.10.90 was issued on the basis
of the error in the scale of pay. The error in adoption of the said scale of pay was first noticed upon on being pointed out at the meeting of the
Directors of the Respondents at Delhi. The matter was placed before the Board of Governors of the first Respondent at the meeting held on
8.11.90. The Board of Governors at the aforesaid meeting corrected the error in adopting the scale of pay of Rs. 3,700-5,700 by adopting the
scale of pay of Rs. 3,000-5,000. Only under the prescribed scale of pay of Rs. 3,000-5,000, the Petitioner was being placed and as such, it
cannot be construed as placing the Petitioner in a lower time scale of pay. Therefore, in order to correct the error earlier committed, it is but
necessary to pass the orders impugned herein. Moreover, since the rights and obligation of the Petitioner and the Respondents are rising out of a
contract, the proper and effective remedy of the Petitioner is the institution of Civil suit on the basis of the contract, in which the facts disputed can
be decided, on the evidence being recorded. Therefore, the writ petition is liable to be dismissed.
I heard Mr. Sivakumar, the counsel appearing for the Petitioner and Mr. Viswanatha Rao, the counsel appearing for the Respondents. Both the
counsel cite several authorities, in order to substantiate their submissions with reference to the maintainability of the writ petition, especially when
the rights arising out of the contract are involved. These decisions are as follows:
(1) V. Ramiah Vs. The State Bank of India, ;
(2) Divisional Superintendent, Eastern Railway, Dinapur and Others Vs. Shri L.N. Keshri and Others, ;
(3) L. Hirday Narain Vs. Income Tax Officer, Bareilly, ;
(4) Radhakrishna Agarwal and Others Vs. State of Bihar and Others, ;
(5) Jai Singh Vs. Union of India and Others, ;
(6) Divisional Forest Officer Vs. Bishwanath Tea Co. Ltd., ;
(7) Bareilly Development Authority and Another Vs. Ajay Pal Singh and Others, ;
(8) South India Flour Mills (P) Ltd. v. Employees State Insurance Corporation 1990 (83) L.W. 179;
(9) Dilip Kumar Ghosh Vs. New India Assurance Co. Ltd. and others, ;
(10) Arulmighu Devanatha Swami Devasthanam v. State of Tamil Nadu 1991 I M.L.J. 189;
(11) Bhagwan Shukla Vs. Union of India and others, ;
(12) V. Sadasivan v. Binny Ltd. 1998 (I) CTC 1.
Though these decisions would hold that the disputed facts arising in the contractual field could be decided only in the Civil Court, a Division
Bench of this Court in V. Sadasivan v. Binny Ltd. (supra) would specifically observe that the exercise of power under Article 226 of the
Constitution of India would depend upon peculiar facts and circumstances of each case, that no hard and fast rules of universal application can be
laid down as to when writ can be issued and that the Writ Court can intervene to remedy for the violation of fundamental rights irrespective of the
status of the violator, especially when the principles of natural justice have not been followed.
It is also clear from the observation made by the Apex Court in Hirday Narain v. Income Tax Officer, Bareilly (supra) that the writ petition
having been admitted by one of the learned Judges of this Court, the Respondents are precluded at the time of final hearing taking the plea that the
Petitioner had alternative remedy and on such plea, the writ petition should be dismissed.
In the instant case, as mentioned in the earlier paragraphs, similar impugned orders, earlier passed by the Respondents were challenged in the
writ petition in W.P. No. 1175/91 before this Court. The Respondents did not object to the entertainment of the said writ petition on the ground
that the writ petition would not be maintainable, since the issue arising out of contractual terms was to be decided by the Civil Court. On the other
hand, the Respondents filed a memo intimating to the Court that the earlier orders impugned had been withdrawn.
Moreover, the present writ petition was admitted by this Court on 1.4.1991 and stay was granted. On 14.1.92, the Respondents filed a petition
in W.M.P. No. 2348/92-requesting this Court to dismiss this main writ petition, namely, W.P. No. 4754/91, as there was no merit, since the
Petitioner ceased to be in the employment from 30.11.91 and seeking for permission to file a suit to recover the excess amount of salary paid to
the Petitioner before the Civil Court. In the said petition, the objection with regard to the maintainability of the writ petition was not raised. On the
other hand, this Court by the order dated 3.3.92 refused to dismiss the writ petition and rejected the prayer of the Respondents for filing a suit for
recovery of the excess amount paid to the Petitioner.
In the meantime, it is to be noticed that the Respondents by order dated 2.5.91 transferred the Petitioner from the Internal Audit Section to an
unspecified post in the Hostel Sector. Against this order also, the Petitioner filed a writ petition on 11.6.91 in W.P. No. 8133/91 and obtained a
stay of the transfer order. For vacating the stay granted in W.P. No. 8133/91, the Respondents filed a petition in W.M.P. No. 16148/91. Even in
the affidavit filed by the Respondents for vacating the said stay, the maintainability of the writ petition was not questioned. It is seen from the
records that the Petitioner filed an application to vacate the stay granted in this writ petition in W.M.P. No. 10067/91. In this petition there is an
incidental reference to the effect that the effective remedy for the Petitioner is the institution of civil suit on the basis of the contract. But, this petition
was not pursued before this Court and no order has been passed in the said petition. Admittedly, the main writ petition is pending for about 7
years. Merely because an alternative remedy is available by filing a civil suit, in my view, this Court cannot be prevented from hearing the writ
petition, in order to see whether the relief sought for in this writ petition could be granted.
There is no dispute about the fact that the scale of pay was reduced from Rs. 3,700-5,700 to Rs. 3,000-5,000. The Respondents, would
contend that because of some error, the Petitioner was put in the grade of Rs. 3,700-5,700 and that this error was subsequently rectified.
When a similar situation was dealt with by the Apex Court, their Lordships in Divisional Superintendent, Eastern Railway, Dinapur v. L.N.
Kashri (supra) would specifically hold that even if it is an error in fixing of the scale, the party should be heard by giving proper opportunity before
reducing to the said scale or otherwise, the order reducing the scale without giving any opportunity to the person concerned would become invalid.
In yet another case, in similar situation, in Alrulmighu Devanatha Swami Devasthanam v. State of Tamil Nadu (supra), a Division Bench of this
Court would observe as follows:
Now the principle is well-settled that even administrative orders which involve civil consequences could arrive only after the principles of natural
justice have been followed.
It is appropriate to refer another decision of the Apex Court in Bhagwan Shukla v. Union of India (supra). The relevant observation is this:
We have heard learned Counsel for the parties. That the Petitioner''s basic pay had been fixed since 1970 at Rs. 190/- p.m. is not disputed. There
is also no dispute that the basic pay of the Appellant was reduced to Rs. l81/- p.m. from Rs. 190/- p.m. in 1991 retrospectively w.e.f. 18.12.70.
The Appellant has obviously been visited with civil consequences but he had been granted no opportunity to show cause against the reduction of
his basic pay. He was not even put on notice before his pay was reduced by the department and the order came to be made behind his back
without following any procedure known to law. There, has thus, been a flagrant violation of the principles of natural justice and the Appellant has
been made to suffer huge financial loss without being heard. Fair play in action warrants that no such order which has the effect of an employee
suffering civil consequences should be passed without putting the concerned to notice and giving him a hearing in the matter. Since, that was not
done, the order (memorandum) dated 25.7.1991, which was impugned before the Tribunal could not certainly be sustained.
On consideration of the materials placed before this Court and the submissions made on either side, I am of the opinion that the reduction to a
lower time scale is some sort of penalty under the statutes of the Respondent-Institute and as such, it cannot be imposed except after an enquiry
and giving a reasonable opportunity by showing cause as to why the reduction to a lower time scale has become an essential one.
The contention of the Respondents that there was an error of calculation cannot be countenanced. In view of the situation that reduction to a
lower time scale without giving reasonable opportunity to the Petitioner by pointing out about the said error is itself, in my view, a grave error.
Therefore, it can be very well concluded that the impugned orders are violative of the principles of natural justice.
It is to be noticed, at this juncture, that when a similar reduction to the lower time scale which was sought to be enforced through O.O.331
dated 30.11.1990 and F/Admn.I/A3/91/121 dated 23.1.1991 was challenged in W.P. No. 1175/91, the Respondents did not file any counter or
oral statement that it was mere an error. On the other hand, memo has been filed before this Court in the said writ petition intimating to this Court
that those impugned orders were withdrawn.
Thus, the impression was created by the Respondents by filing a memo, making it appear as if the Status Quo ante would be maintained. The
Respondents having obtained the option of the Petitioner for fixing his pay in the scale of Rs. 3,700-5,700 from 30.4.1987 cannot re-fix his pay,
that too, in a lower time scale without giving opportunity to the Petitioner and without showing to the Petitioner that under what circumstances, the
Respondents proposed to make a reduction of scale of pay.
In the light of the above well established principles laid down by this Court as well as the Apex Court, I am of the view that the impugned
orders dated 25.3.91 revising the earlier order of pay by reducing the scale of pay without hearing the Petitioner are not valid in law, since, in my
view, those orders have been passed violating the principles of natural justice.
In the result, the Writ Petition is allowed and the impugned orders are quashed. There is no order as to costs. Consequently, no orders are
necessary in W.M.P. Nos. 7302 of 1991 and 10067 of 1991.
9.12.1998
In view of the above order, the Petitioner is entitled to get the Contributory Provident Fund retained by the Respondents, in pursuance of the order
earlier passed by this Court.