Central
Inland Water Transport vs Brojo Nath Ganguly
Facts
1. The
incorporation of the Corporation was done by the Union Government. The
corporation was under complete dominance of the Central Government of India as
they hold all of its shares.
2. The
respondent in the case used to work for a company which later came to liquefy
as per the orders of the court and thus was given an authority in the
appellants corporation under the requisite terms and conditions.
3. Mr.
Brojo Nath Ganguly joined as the Deputy Chief Accounts Officer in the
corporation and later on became the Deputy Financial Adviser and Chief Accounts
Officer through his determination and hard work
4. A
suit was initiated by the respondent in High Court of Calcutta stating that
Rule 9(i) is arbitrary and unprincipled because of which the decision of the Hon’ble
was in respondent’s factor.
5. This
led the plaintiff to file a suit in the apex court of the country i.e. the
Supreme Court of India, for the grants of special leave, however here also the
decision of the court was against the petitioner and the grant for special
leave was cancelled by the Supreme Court. The court held Rule 9 (i) to be void
under the Indian Contract Act, 1872 section 23.
Issues
1. Whether
a Government company as defined in Section 617 of the Companies Act, 1956 comes
under the definition of ‘State’ as provided under Article 12 of the
Constitution?
2. Whether
clause (i) of Rule 9 of The Central Inland Water Transport Corporation Limited-
Service, Discipline and Appeal Rules, 1979 is arbitrary and unconscionable?
3. Whether
the power granted under clause (i) of Rule 9 of The Central Inland Water
Transport Corporation Limited- Service, Discipline and Appeal Rules, 1979 is
violate of Article 14 and unconstitutional or not?
Held
1. The
court held that Central Inland Water Transport Corporation Limited is not just
a regular company as defined under Section 617 of the Companies Act, 1956 but
fully owned by three governments at the same time namely the Central
Government, Government of Assam, and the Government of West Bengal jointly.
2. The
bargain put forward was based on unethical terms as it contradicted the
justified reasons and seems to have taken place under unfair edge over the
others. And the state under Section 39 should favor the policy of safeguarding
its citizens and providing equal pay for equal work for both sex i.e. males and
females equally decreasing the concentration of wealth and means of production
to the common detriment. Rule 9(i) of the Central Inland Water Transport Corp Ltd.
3. Service,
Discipline and Appeal Rules, 1979 granted upon the corporation the power to end
the service of a permanent employee by giving him three months’ notice in
writing or to pay him the same three months’ basic v pay and dear was
allowance.
4. A
clause such as Rule 9(1) in a contract of employment interfere with the large
sections of the public and is unfavorable to the public interest and might lead
to generating a lack of confidence in the heads of those who encounter it and
it is against the public welfare.
CONCLUSION
Since the term ‘immoral’ means ‘unconscionable’ or
‘unprincipled’, it is right to say that an immoral bargain is an unprincipled
bargain that would be antithetical to what is just.
Therefore, if an agreement or a contract is immoral
or unconscionable at the time of its formation or creation, then the court may
diminish the enforcement of such a contract or agreement.
Rule 9 (i) brought in the notice before the court in
this matter is in opposition or contrast to the government policies and claimed
to be void according to section 23 of the Indian Contract Act, 1872 as it gives
arbitrary powers upon the corporation. Besides that, it did not signify that
who is to perform and use these powers on the behalf of the corporation as well
as there are no specific rules and regulations which illustrates that in what
sort of situations or circumstances the Corporation may exercise the powers
referred to in Rule 9(i).
PRECEDENTS
Sukhdev Singh & Ors vs Bagatram Sardar Singhon
21 February, 1975
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