civil appeal
Saptarshi Paul
(Querist) 03 October 2010
This query is : Open
Mr x had installed one 5 Kva Generator Set in a Nationalised bank on monthly rent basis. :- 1/1/2006
@Rs. 3500/- Pm, on request the bank had enhanced MONTHLY RENT ON :- 4/7/2007 FROM :- Rs 3500/- to Rs 4500
There after an AGREEMENT MADE FOR 5 Yrs Term starting from 1/6/2007
Certainly the bank called for another quation to install 10kva genset , Mr X thought it as additional genset or standby genset and accordingly participated in the tender but the bank has disqualified his tender as the rate is higher.
Therafter bank as informed Mr X to TERMINATE SERVICE ON 28/6/2010
Therafter Mr x send LEGAL NOTICE SEND ON 30/6/2010 throgh his advocate as the agreemnent was for 5 years term then how can they terminate the service.
There after Bank Notice to Terminate Service on:- 9/7/2010 and Order to close services of gen set on 31/7/2010
Mr X filed title suit and also SUIT FILE ON 30/7/2010 UNDER ORDER 39 Rule 1 & 2
Temporary injuection was granted by Musnsiff-2
But later on the bank contested as in the agreement in last para it is mentioned as – “ bank has right to terminate service of generator at any time without giving any reason”
Court has given order in favour of Bank on the basis of following points :-
1. It’s a nationalized bank and if proper power is not supplied then transaction and customer of the bank will suffer.
2. Mr x had participated in the tender and as he lost the tender that is why he filed suit otherwise he should have objected before participating in tender
We had already argued on behalf of Mr x as follows :-
1. Government Companies or Public Corporations which carry on trade and business activity of State being State instrumentalities, are State within the meaning of Article 12 of the Constitution and as such they are subject to the observance of fundamental rights embodied in Part III as well as to conform to the directive principles in Part IV of the Constitution. In other words, the Agreement terms & conditions framed by them are to be tested by the touchstone of Article-14 of the Constitution. Furthermore, the procedure prescribed by their Rules or Regulations must be reasonable, fair and just and not arbitrary, fanciful and unjust.
2. The 'audi alteram partem' rule which, in essence, enforces the equality clause in Article 14 of the Constitution is applicable not only to quasi-judicial orders but to administrative orders affecting prejudicially the party-in-question Rules of natural justice do no supplant but supplement the Rules and Regulations. Moreover, the Rule of Law, which is founded in the Constitution of India, demands that it has to be observed both substantially and procedurally. Rule of law says that the power to be exercised in a manner which is just, fair and reasonable and not in an unreasonable, capricious or arbitrary manner leaving room for discrimination
3. Terms condition mentioned in the Agreement in Para-17 :- “…Bank reserved the right to terminate the agreement at any time without assigning any reason thereof…”
does not expressly exclude the application of the 'audi alteram parterm' rule and as such the order of termination of service of a which already agreed in Para – 1 of the agreement for 5years from 01.06.2007 and ending on 31/12/2011 cannot be passed by simply issuing a notice just before the 21days (9th july 2010) prior to the close of business on 31st July 2010 and without giving any hearing to the employee to controvert the allegation on the basis of which the purported order is made.
4. the Supreme Court in its landmark judgment relating to service condition, reported in AIR 1986 SC 1571 (Central Inland Water Transport Corporation v. Brojo Nath Ganguly) spoke of unconscionable contract. That was a case relating to the particular clause in the service rule entitling the employer to terminate the services even of the permanent employees without giving any reason and by giving notice. It was held that such a clause is void under Section 23 of the Contract Act being opposed to the public policy. It was further held to be ultravires of Article 14 of the Constitution of India and also violation of the Directive Principles contained in Article 39 (a) and 41 of the Constitution of India. Such a clause in the rules was described by the Apex Court as a naked "hire and fire" rule and its only parallel is to be found in the Henry VIII clause so familiar to administrative lawyers.
But the learned court disagree our argument and gave judgement in favour of Bank
Now we like to make Appeal to the District Judge
Kindly Help me out by providing valuable suggestion in this regard
