Case Note & Summary
The petitioner, Dev Raj Mehta, was appointed as Chairman-cum-Managing Director of National Textile Corporation (Maharashtra North) Limited from 29.3.1996 to 28.3.2001. During his tenure, a preliminary inquiry was held regarding alleged illegal/irregular promotions and transfers of employees. An inquiry was conducted under the National Textile Corporation (MN) Limited, Employees Conduct, Discipline and Appeal Rules, 1975. The petitioner retired on 28.3.2001. On 24.12.2004, the respondents issued an order deducting Rs.3,01,361/- from his legal dues without any prior notice or opportunity of hearing. The petitioner challenged this deduction by way of a writ petition under Article 226 of the Constitution, seeking a declaration that the deduction was illegal and violative of Articles 14, 19, 21, 39(2) and 300A, and prayed for refund with interest. The respondents contended that the deduction was made based on an inquiry report and that the petitioner had been given an opportunity during the inquiry. However, the court found that no show-cause notice was issued before the deduction and no opportunity of hearing was afforded. The court held that the deduction without following principles of natural justice was arbitrary and violative of Article 300A. The impugned order was quashed, and the respondents were directed to refund the amount with interest at 9% per annum from the date of deduction till payment.
Headnote
A) Constitutional Law - Right to Property - Article 300A - Deduction from Dues - The respondent corporation deducted Rs.3,01,361/- from the petitioner's legal dues without any prior notice or opportunity of hearing. The court held that such deduction without following principles of natural justice is arbitrary and violative of Article 300A, which protects the right to property. The impugned order dated 24.12.2004 was quashed and set aside. (Paras 1-10)
B) Administrative Law - Natural Justice - Opportunity of Hearing - The court held that before making any deduction from the retiral benefits of an employee, the employer must provide a reasonable opportunity of hearing. Failure to do so renders the action illegal and unsustainable. The court directed the respondents to refund the deducted amount with interest at 9% per annum from the date of deduction till payment. (Paras 5-10)
Issue of Consideration
Whether the deduction of Rs.3,01,361/- from the petitioner's legal dues without affording him an opportunity of hearing is violative of principles of natural justice and Articles 14, 19, 21, 39(2) and 300A of the Constitution of India.
Final Decision
The court allowed the petition, quashed the order dated 24.12.2004, and directed the respondents to refund the deducted amount of Rs.3,01,361/- with interest at 9% per annum from the date of deduction till payment.
Law Points
- Natural justice
- Right to property
- Deduction without hearing
- Article 300A
- Article 14
- Article 226
- National Textile Corporation (MN) Limited
- Employees Conduct
- Discipline and Appeal Rules
- 1975
Case Details
2014 LawText (BOM) (02) 79
WRIT PETITION NO.1200 OF 2007
V. M. Kanade, G. S. Kulkarni
Ms. Nayana Buch i/b Ms. B. B. Dholakia for Petitioner, Ms. Vanita Kakkar i/b Ms. Nandini Menon for Respondent Nos.2 and 3
Union of India, The Managing Director, The National Textile Corporation Limited, The Managing Director, The National Textile Corporation (Maharashtra North) Limited
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Nature of Litigation
Writ petition under Article 226 of the Constitution challenging illegal deduction from legal dues.
Remedy Sought
Declaration that deduction is illegal, quashing of order dated 24.12.2004, refund of Rs.3,01,361/- with interest at 18% per annum, and production of certain reports.
Filing Reason
Respondents deducted Rs.3,01,361/- from petitioner's legal dues without prior notice or opportunity of hearing.
Issues
Whether the deduction of Rs.3,01,361/- from the petitioner's legal dues without affording him an opportunity of hearing is violative of principles of natural justice and Articles 14, 19, 21, 39(2) and 300A of the Constitution of India.
Submissions/Arguments
Petitioner argued that the deduction was made without any show-cause notice or opportunity of hearing, violating natural justice and constitutional rights.
Respondents contended that the deduction was based on an inquiry report and that the petitioner had been given an opportunity during the inquiry.
Ratio Decidendi
Any deduction from the legal dues of an employee without affording an opportunity of hearing is arbitrary and violative of Article 300A of the Constitution. Principles of natural justice require that before any adverse action affecting property rights, the affected person must be given a reasonable opportunity to be heard.
Judgment Excerpts
By this petition under Article 226 of the Constitution, the Petitioner who was an employee of the National Textile Corporation Limited has prayed for the following reliefs :-
The facts in brief underlying the dispute in the present proceedings are as under :
The Petitioner was appointed as Chairman-cum-Managing Director (Maharashtra North) of the National Textile Corporation with effect from 29.3.1996 for a period of five years ending on 28.3.2001.
During the tenure of the petitioner, a preliminary inquiry was held against the petitioner in regard to his actions concerning promotions and transfers of some of the employees of the Corporation.
It is stated that in November/December,1998 an inquiry was held by
Procedural History
The petitioner filed Writ Petition No.1200 of 2007 before the Bombay High Court under Article 226 of the Constitution challenging the deduction order dated 24.12.2004. The petition was heard by a Division Bench comprising V. M. Kanade and G. S. Kulkarni, JJ., and judgment was delivered on 13.2.2014.
Acts & Sections
- Constitution of India: Article 14, Article 19, Article 21, Article 39(2), Article 226, Article 300A
- National Textile Corporation (MN) Limited, Employees Conduct, Discipline and Appeal Rules, 1975:
