LLM Notes: Are You Protected? How Public Utility Employees Gained Constitutional Rights Under Article 12 of Constitution of India?

 When we talk about fundamental rights in India, we often think about government employees and civil servants. But what about the thousands of people working in electricity boards, water corporations, and other public utility services? Do they enjoy the same constitutional protections? The answer lies in a fascinating legal evolution around Article 12 of the Indian Constitution.

What is Article 12 and Why Does It Matter?

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LLM Notes: Are Public Utilities Part of the "State"? Understanding Constitutional Protection for Employees

Public Utilities as "State" Under Article 12: Constitutional Protection for Employee Interests

Article 12 of the Constitution of India serves as the foundational provision defining the scope of "state" for the enforcement of fundamental rights, and its interpretation has profound implications for employees working in public utility services . The question of whether public utilities constitute "state" under Article 12 has evolved significantly through judicial interpretation, with courts progressively expanding the definition to include various instrumentalities and agencies of government that perform public functions . This expansion has created substantial constitutional protections for employees in public utility services, transforming their legal standing and employment security.

Constitutional Framework: Article 12 and the Definition of "State"

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Whether employees of private schools are entitled to get salary as per 5th and 6th pay commission reports?

 No doubt, the conditions of service and the pay scales applicable to the teachers of secondary schools are prescribed by Schedule 'C' of the Rules of 1981. The State of Maharashtra by issuance of G.R. directed that all schools should implement the 6th Pay Commission Report and pay salary to the staff accordingly. The payment of salary and the arrears in accordance with the recommendations of 5th and 6th Pay Commission Reports are made applicable to the employees of the private schools irrespective of whether they are receiving grant-in-aid or not. In our opinion, merely because necessary amendments are not made in Schedule 'C' of the Rules of 1981 incorporating pay scales in terms prescribed by the Pay Commission reports would not be a ground to deny the benefit of the pay scales to the petitioners as per the 5th and 6th Pay Commission reports.

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 242 of 2013

Decided On: 27.06.2019

Manojkumar S. Amare  Vs.  The State of Maharashtra

Hon'ble Judges/Coram:

S.C. Dharmadhikari and M.S. Karnik, JJ.

Citation: 2020(1) MHLJ 742

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What are foundational pillars of law of arbitration?

 Speedy conclusion of arbitration proceedings hardly needs to be emphasised. It would be of some interest to note that in England also, Modern Arbitration Law on the lines of UNCITRAL Model Law, came to be enacted in the same year as the Indian law which is known as the English Arbitration Act, 1996 and it became effective from 31-1-1997. It is treated as the most extensive statutory reform of the English arbitration law. Commenting upon the structure of this Act, Mustill and Boyd in their Commercial Arbitration, 2001 companion volume to the 2nd Edn., have commented that this Act is founded on four pillars. These pillars are described as:

(a) The first pillar: Three general principles.

(b) The second pillar: The general duty of the Tribunal.

(c) The third pillar: The general duty of the parties.

(d) The fourth pillar: Mandatory and semi-mandatory provisions.

Insofar as the first pillar is concerned, it contains three general principles on which the entire edifice of the said Act is structured. These principles are mentioned by an English Court in its judgment in Deptt. of Economics, Policy and Development of the City of Moscow v. Bankers Trust Co. [2005 QB 207 : (2004) 3 WLR 533 : (2004) 4 All ER 746 : 2004 EWCA Civ 314] In that case, Mance, L.J. succinctly summed up the objective of this Act in the following words: (QB p. 228, para 31)

“31. … Parliament has set out, in the Arbitration Act, 1996, to encourage and facilitate a reformed and more independent, as well as private and confidential, system of consensual dispute resolution, with only limited possibilities of court involvement where necessary in the interests of the public and of basic fairness.”

Section 1 of the Act sets forth the three main principles of arbitration law viz. (i) speedy, inexpensive and fair trial by an impartial tribunal; (ii) party autonomy; and (iii) minimum court intervention. This provision has to be applied purposively. In case of doubt as to the meaning of any provision of this Act, regard should be had to these principles.

15. In the book O.P. Malhotra on the Law and Practice of Arbitration and Conciliation (3rd Edn. revised by Ms. Indu Malhotra), it is rightly observed that the Indian Arbitration Act is also based on the aforesaid four foundational pillars.

16. First and paramount principle of the first pillar is “fair, speedy and inexpensive trial by an Arbitral Tribunal”. Unnecessary delay or expense would frustrate the very purpose of arbitration. Interestingly, the second principle which is recognised in the Act is the party autonomy in the choice of procedure. This means that if a particular procedure is prescribed in the arbitration agreement which the parties have agreed to, that has to be generally resorted to. It is because of this reason, as a normal practice, the court will insist the parties to adhere to the procedure to which they have agreed upon. This would apply even while making the appointment of substitute arbitrator and the general rule is that such an appointment of a substitute arbitrator should also be done in accordance with the provisions of the original agreement applicable to the appointment of the arbitrator at the initial stage. [See Yashwith Constructions (P) Ltd. v. Simplex Concrete Piles India Ltd. [(2006) 6 SCC 204] However, this principle of party autonomy in the choice of procedure has been deviated from in those cases where one of the parties have committed default by not acting in accordance with the procedure prescribed. Many such instances where this course of action is taken and the Court appoint the arbitrator when the persona designata has failed to act, are taken note of in paras 6 and 7 of Tripple Engg. Works [North Eastern Railway v. Tripple Engg. Works, (2014) 9 SCC 288 : (2014) 5 SCC (Civ) 30]. We are conscious of the fact that these were the cases where appointment of the independent arbitrator made by the Court in exercise of powers under Section 11 of account of “default procedure”. We are, in the present case, concerned with the constitution of substitute Arbitral Tribunal where earlier Arbitral Tribunal has failed to perform. However, the above principle of default procedure is extended by this Court in such cases as well as is clear from the judgment in Singh Builders Syndicate [Union of India v. Singh Builders Syndicate, (2009) 4 SCC 523 : (2009) 2 SCC (Civ) 246].

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

(Before A.K. Sikri and R.K. Agrawal, JJ.)

M/s. Voestalpine Schienen GMBH v. Delhi Metro Rail Corporation Ltd. .

Arbitration Petition (Civil) No. 50 of 2016

Decided on February 10, 2017

Citation: 2017 SCC OnLine SC 172,AIR 2017 SC 939,2017(6)MHLJ 1

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Whether continued medical treatment to employee while in service and after retirement is duty of employer and state?

We may also refer to the observations made by the
Supreme Court in Consumer Education and Research Centre and ors.
v/s. Union of India and ors., AIR 1995 SC 922. In the above case on
consideration of Article 21 read with Articles 39(e), 41, 43 and 48A
of the Constitution the Apex Court held that the workman has a right
to health. The Court held that continued medical treatment, while in
service and after retirement is a moral, legal and constitutional
concomitant duty of the employer and the State. The Apex Court has
accordingly held that right to health, medical aid to protect the
health and vigour of a worker while in service or post retirement is a
fundamental right under Article 21 of the Constitution. We hope and
trust that respondents will keep this constitutional mandate in mind
while considering the claims of the employees for reimbursement of
the medical expenses, particularly when employees are merely
claiming reimbursement for costs of medicines purchased by them as
per prescription of the doctor.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.11434 OF 2012
Rajendra B. Kasare 
v/s.
Union of India & Anr.

CORAM: MOHIT S. SHAH, C.J. &
M.S.SANKLECHA, J.
DATE : 25 March 2014
Citation; 2015(3) ALLMR222

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Whether burden of proof is on employee to prove existence of relationship of employer and employee?

“It is a well settled principle of law that the person who
sets up a plea of existence of relationship of employer
employee, the burden would be upon him”.1
In the same decision, however, the Supreme Court went on to
observe that the question of existence of 'employer-employee
relationship' is a pure question of fact and ordinarily the High Court
while exercising its power of judicial review, ought not to interfere,
unless the finding is 'manifestly or obviously erroneous or perverse'.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION

Tribhuvandas Dhoria

versus

Tekchand Khanchandani

WRIT PETITION NO. 930/2008

CORAM : M. S. SONAK, J.

Judgment pronounced on : 22 August 2014.
Citation;2015(2) ALLMR715

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Whether apprentice is employee for the purposes of Insurance contract?

In various enactments, the word 'employee', has no doubt, been defined to include an apprentice, but that is only a deeming provision and a legal fiction by which the meaning of the word 'employee' has been extended.

Legal fictions are well-knwon in law. For example, Section 43 (3) of the Income Tax Act defines 'plant' to include a book. Ordinarily a plant means a factory, and by no stretch of imagination can we call a factory a book. However, the Income Tax Act deems a book to be a plant for the purpose of depreciation.

Many such illustrations of deeming clauses or legal fictions can be given. The definition of employee in various enactments which include an apprentice within the ambit of the definition is such a piece of legal fiction. That, however, does not mean that in common parlance an apprentice is an employee.

In the present case, since the word 'employee' has not been defined in the contract of insurance, we have to give it the meaning which it has in common parlance. In common parlance, an apprentice is a trainee and not an employee. Even if he is given a stipend, that does not mean that there is a relationship of master and servant between the firm and the apprentice. Hence, we cannot agree with the view taken by the National Commission. In our view , the claim before the National Commission was not maintainable.

Supreme Court of India

New India Assurance Co. Ltd vs M/S. Abhilash Jewellery on 22 January, 2009

Bench: Markandey Katju, R.M. Lodha

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Whether Retiral benefits like gratuity and pension can be withheld by employer?

Retrials benefits like gratuity and pension cannot be withheld by the employer and if done so, interest is payable. Such payments are no longer bounty.
Pension and gratuity are no longer any bounty to be distributed by the employer/Government as already held by the Supreme Court of India in the case of State of Kerala & Ors. vs. M. Padmanabhan Nair, (1985) 1 SCC 429 that pension and gratuity have become valuable right of the employee and any culpable delay in the settlement of the pension and gratuity must be dealt with the penalty of interest at the current market rate from the due date of payment till the date of payment to the employee.

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7113

OF 2014

(Arising out of SLP (C) No. 25015 of 2011)

D.D. TEWARI(D) THR. LRS.

......APPELLANTS

VERSUS

UTTAR HARYANA BIJLI VITRAN NIGAM LTD. & ORS. 

Citation;2014 ALLSCR3023

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When court can lift corporate veil in case of employer and employee relationship?

It is well settled that the court can lift the veil, look to the conspectus of factors governing employment, discern the naked truth though concealed intelligently. The court has to be astute in piercing the veil to avoid the mischief and achieve the purpose of law. It cannot be swayed by legal appearance. The court’s duty is to find out whether contract between the principal employer and the contractor is sham, nominal or merely a camouflage to deny employment benefits to the workmen.

Supreme Court of India

Balwant Rai Saluja & Anr Etc.Etc vs Air India Ltd.& Ors on 13 November, 2013

Citation; 2014 ALLSCR3311

Bench: Chandramauli Kr. Prasad, V. Gopala Gowda

Read original judgment here;click here

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Whether company and its employees can made liable to pay decretal amount jointly and severally?

Plaint as filed seeks joint and several relief against defendant no.1 Company and defendant no.2 Shri Sinha. Shri Sinha is stated to be its General Manager. When purchase orders are placed by company and contract is with Company, it is clear that there cannot be any other contract or independent contract with Shri Sinha, General Manager. On the strength of the contract, the relief in summary suit could have been asked for only against defendant no.1 Company. Even if Shri Sinha is treated as General Manager, then also relief will have to be against the Company only. However, prayer clause in plaint expressly seeks a joint and several decree against both the defendants. If the decree is envisaged against only Company, it cannot be viewed as joint and several.

Bombay High Court

Mr. S.K. Agrawal vs Mrs. Varsha A. Maheshwari on 5 January, 2011

Bench: B. P. Dharmadhikari

Citation;2011 (2) MHLJ 462 Bom

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Whether employer is liable to pay interest when there is culpable delay in settlement and disbursement of retiral benefits?

The High Court has adverted to the judgments of this Court particularly, in the case of State of Kerala & Ors. Vs. M. Padmanabhan Nair[1], wherein this Court reiterated its earlier view holding that the pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement, but, have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be dealt with the penalty of payment of interest at the current market rate till actual payment to the employees. The said legal principle laid down by this Court still holds good in so far as awarding the interest on the delayed payments to the appellant is concerned.

D.D. Tewari (D) through LRS. Vs. Uttar Haryana Bijli Vitran Nigam Ltd. & Ors.

[Civil Appeal No. 7113 of 2014 arising out of SLP (C) No. 25015 of 2011]

V.GOPALA GOWDA, J.

Citation;AIR 2014 SC 2861,2014ALLSCR3023

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Whether employees have right to dissent?

Non-compliance of directions not falling within the contemplated activities not to be considered as insubordination

Kerala High Court: In a proceeding dealing with a matter relating to non-compliance of orders of the superior by an employee of an apex co-operative body, A. Muhamed Mustaque, J., explained that in a departmental enquiry, the Enquiry Officer performs a quasi judicial function and in the disciplinary proceedings relating to insubordination, such Officer is expected to enquire reasons for non-compliance of the directions of a superior by the employee. The Court, clarifying that the right to dissent is a natural right and it can only be regulated, consistent with the scheme of the contemplated activities, said that if an employee expresses his dissatisfaction on an additional work being allotted to him, especially when there are no preordained system of distribution of work, such expression need not be construed as insubordination, i.e., something part of right of free expression.

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Whether non communication of entries in annual Confidential Report will affect civil rights of employees?

Supreme Court Mandated Communication of not only all entries in annual confidential report but even whether the entry of a grade in a ACR in comparison to previous years entry resulted in lowering of the grade.
 In State of Maharashtra vs. Public Concern for Governance Trust & Ors. 2007 (3) SCC 587, it was observed (vide para 39): "In our opinion, when an authority takes a decision which may have civil consequences and affects the rights 
of a person, the principles of natural justice would at once come into play".


 In our opinion, non-communication of entries in the Annual Confidential Report of a public servant, whether he is in civil, judicial, police or any other service (other than the military), certainly has civil consequences because it may affect his chances for promotion or get other benefits (as already discussed above). Hence, such non-communication would be arbitrary, and as such violative of Article 14 of the Constitution.

Supreme Court of India

Dev Dutt vs Union Of India & Ors on 12 May, 2008

Bench: M Katju, H K Sema

Markandey Katju, J.

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