Statutory Authority to Exercise Impartial Discretion in Retrenchment

U.P. State Road Transport Corporation and another vs. Mohd Ismail and others

Filed under: Section 45 of the Road Transport Corporations Act Regn. 17(3) of the U.P. State Road Transport Corporation Employees Service Regulations, 1981
Appellant: U.P. State Road Transport Corporation and another
Respondent: Mohd. Ismail and others
Citation: AIR 1991 Supreme Court 1099
Court: In the Supreme Court
Judges: K Jagannatha Shetty, JS Verma and V Ramaswami

Facts

Mohd. Ismail and others involved in this case were appointed as drivers in the UP Government Roadways. Upon the formation of the UP State Road Transport Corporation, they were absorbed in the services of the Corporation. The Corporation had framed regulations prescribing medical test to drivers every year in order to assess their suitability for the job.

In accordance with these regulations, the Managing Director of the Corporation issued a circular, which stated that all drivers should be medically examined and those who would be found unsuitable on account of ill health or poor-eyesight, their services would be dispensed with. In another circular issued by the Managing Director, the Regional managers were directed to terminate the services of drivers who were found medically unfit to drive the vehicles.

It was also directed that such employees whose services are dispensed with, should be paid benefits such as retrenchment compensation.

Thereafter, these drivers were subjected to medical examination and it was found that their eyesights were defective. In view of the medical report the Corporation discharged them immediately and paid them one-month salary in lieu of the notice and retrenchment compensation.

Mohd. Ismail and other drivers challenged their retrenchment by means of Writ Petitions before the Allahabad High Court. The High Court allowed the Writ Petitions and directed the Corporation to offer alternative jobs to these drivers.

The Corporation then filed this appeal challenging the order of the High Court.

Observations of the Court

The Supreme Court referred to the relevant rules and regulations of the Corporation. According to Regulation 17(2), drivers had to undergo medical tests, particularly vision tests every year. Regulation 17(3) further stated that a driver who was found medically unfit to drive the vehicle on the public road could not be permitted to continue as a driver. His driving license was liable to be revoked.

The Corporation was therefore empowered to remove him from service. At the same time however, this rule also showed concern for the person who had been removed from service for want of medical fitness. It conferred the discretion on the Corporation to offer him an alternative job.

The Court held that the main question before it was whether the retrenched drivers had a statutory right to get an alternative job. And was it obligatory for the Corporation to offer an alternative job to a driver who was medically certified as being unfit for the driver’s job? The Court held that the view taken by the High Court was fallacious.

According to the court the discretion conferred by Regn. 17(3) did not grant a right to the retrenched drivers to get alternative jobs in the Corporation.

The Court further observed that the High Court had erred in directing the Corporation to offer alternative job to drivers who were found to be medically unfit before dispensing with their services. The Court cannot dictate decisions to the statutory authority.

According to the Court, whether an alternative job was to be offered or not was a matter left to the discretion of the competent authority. The Court cannot command the Corporation to exercise discretion in a particular manner. That would be beyond the jurisdiction of the Court.

However, the Court also held that the circulars issued by the Managing Director did not leave any scope for considering the cases of retrenched drivers for any alternative jobs. It was further pointed out that the statutory discretion could not be restricted by self-created rules or policy.

The Court held that the Corporation was required to consider the cases of retrenched drivers for alternative jobs and drew attention to the fact that the corporation was a public utility organization and had to work according to the concepts of efficiency and effectiveness, which could not be sacrificed in public administration.

However, the Court also stressed the fact that the discretion given to the Corporation should be exercised impartially and faithfully.

On these grounds, the Court allowed the appeals, reversed the judgment of the High court, and directed the Corporation to consider the cases of the Mohd. Ismail and others in light of the observations made.

Cases Referred:

• Sharp vs. Wakefield, 1891 AC 173:60 LJMO 73: 64 LT 180