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Right To Hearing And Contracts of Service
by DR. M.L. Upadhyaya *

Cite as : (1972) 2 SCC (Jour) 9

It is one of the established principles of Common Law that officials taking action of a judicial nature must give an adequate opportunity of being heard to a person against whom the action is proposed to be taken.1 This principle, which is known to be one of the principles of natural justice, is based on the Latin maxim, audi alteram partem, which when rendered in English means: here the other side. English Law, however, seems to take it to mean: hear both sides.2

The principle seeks to ensure fairness of procedure in the dealings between public authorities and the citizens. In order to ensure the maximum amount of fair play in such dealings the courts often find this procedural requirement implied in a statute even though there was no express provision to that effect. Those who were not too happy with such an extension of the principle argued that the concept was so vague as to be meaningless. Lord Reid saw this view as tainted by the perennial fallacy that because something cannot be cut and dried or nicely weighed or measured therefore it does not exist.3

The protection that the principle of audi alteram partem is designed to afford to an individual is in the nature of a right to a fair hearing. The principal characteristics of this right to a hearing are three, namely, (i) the right to be informed of the case one is to meet at the hearing, (ii) the right to have notice of the time and place of hearing, and (iii) a reasonable amount of time between the date of notice and the actual date of hearing so as to enable one to prepare his defence.

Bearing in mind these basic requirements of the principle, Lord Hodson observed as follows in the leading case of Ridge v. Baldwin:

"No one, I think, disputes that three features of natural justice stand out, (i) the right to be heard by an unbiased tribunal, (ii) the right to have notice of charges of misconduct, and (iii) the right to be heard in answer to these charges."4

The ambit of applicability of the principle has never been static. It has always been changing as and when the needs of society dictated such a change. While this flexibility has helped healthier development of the law and resulted in ever-widening horizons of the scope of the principle, the resultant uncertainty has given rise to a serious cause of concern as one is not sure as to the applicability of the principle in a given case till the issue is finally decided by the courts. The need for some measure of certainty as to its ambit in a country like India is all the greater as here we have no statute like the Administrative Procedure Act, 1946, of the United States of America.

The cases involving consideration as to the applicability or otherwise of the principle, audi alteram partem, whether they relate to termination of contract of employment or other matters, raise one common question as to whether the authority acting to the prejudice of the complainant of injustice was bound to observe that principle. In other words, whether the authority was bound to inform the complainant of the grounds on which it proposed to act and give him a fair opportunity of being heard in his own defence.

The ambit of this common law principle of natural justice has also, as in other spheres, been subject to restrictions by statutory provisions. The result is that the principle does not apply where there is a statute providing for a fair opportunity of being heard to be given to the person proceeded against. But if the statute or regulations gave the authority a general power to act without providing for the fair procedure, then the courts held that sometimes in view of the special circumstances of the case the requirements of this principle should be taken to be implied. Another restriction on the ambit of this principle has come to be imposed for some historical and technical reasons, mainly in the sphere of dismissal and removal from certain offices. The cases concerning termination of employment by the employer thus fall into three classes, namely, (i) dismissal of a servant by his master, (ii) dismissal from an office held during the pleasure of the head of State and, (iii) dismissal on account of some misconduct or other offence on the part of the employee. The way the common law has developed over the centuries, the principle audi alteram partem does not apply to cases falling into classes (i) and (ii). Even as regards cases falling in class (iii), if there is a statute providing for a fair procedure, the principle has no application.

The Indian Law in this regard is not very different from the English Law. In cases after cases, the Supreme Court of India and several other High Courts have held that the principle does not apply in cases involving termination of employment of a servant by his master as contracts of employment are not specifically enforceable and the only remedy that the servant has in such cases is that of claiming damages. Similarly, under the Indian Law a civil servant working for the Union of India or any of the State Governments holds the office during the pleasure of the President and the Governor respectively. Nevertheless, he is entitled to protection guaranteed under Article 311 of the Indian Constitution, namely, (i) not to be removed or dismissed from service by an authority lower in rank than the appointing authority, and (ii) to be entitled to a right to fair hearing. Thus it is only the third category of cases where the principle audi alteram partem is applicable. However, recent English cases are indicative of the trend that somehow the principle is making its way also into the area of master and servant cases. It seems that a similar development in the Indian Law is bound to come and would indeed prove to be a welcome change.

In this paper, an attempt will be made to analyse cases involving consideration of the questions other than those relating to the doctrine of pleasure and that of statutory protection so as to ascertain the emerging trend in this otherwise very sensitive area of the administrative law.

The Supreme Court had to decide a case earlier this year which is not very different from the one decided by the House of Lords only last year. The Indian case of Vidya Ram Misra v. Managing Committee, Shri Jai Narain College,5 fails to get a teacher the protection of the right to a fair hearing which a teacher in a Scottish school got in the British case of Malloch v. Aberdeen Corporation.6

In the case of Vidya Ram Misra, Mathew, J. quoted with approval from the speech of Lord Reid in the case of Ridge v. Baldwin, wherein the noble Lord had said that:

"The law regarding master and servant is not in doubt. There cannot be specific performance of a contract of service, and the master can terminate the contract with his servant at any time and for any reason or for none. But if he does so in a manner not warranted by the contract he must pay damages for breach of contract. So the question in a pure case of master and servant does not at all depend on whether the master has heard the servant in his own defence, it depends on whether the facts emerging at the trial prove breach of contract."7

It was again Lord Reid who reiterated this earlier view in the recent Scottish case and observed that:

"At common law a master is not bound to hear his servant before be dismisses him. He can act unreasonably or capriciously if he so chooses but the dismissal is valid. The servant has no remedy unless the dismissal is in breach of contract and then the servant's only remedy is damages for breach of contract." 8

In yet another recent English case,9 under the rubric master and servant, Lord Denning, M.R. introduced a new concept of invalid notice under which the termination of employment of a servant by his master could be rendered illegal. A cynic might as well say that it was an indirect attempt at enforcing the contracts of service. However, one can say with some justification that it is an attempt to bring the common law on the subject in line with the modern thinking at least in the area of industrial relations. It is besides our point whether this should be brought about by the courts or be left to the legislature.

Under the Indian law too, it is a well-settled rule that "when there is a purported termination of a contract of service, a declaration that the contract of service still subsisted would not be made in the absence of special circumstances".10

It should however be noted that this general rule admits of certain exceptions. Lord Reid referring to these exceptions observed in the case of Ridge v. Baldwin as follows:

"But this kind of case can resemble dismissal from an office where the body employing the man is under some statutory or other restriction as to the kind of contract which it can make with its servants, or the grounds on which it can dismiss them."11

Lord Reid thought that the case of the Scottish teacher was covered by this exception and so do we that the case of Vidya Ram Misra, could have been allowed the benefit flowing from the said exception. The Supreme Court did concede in the case of S.R. Tiwari v. District Board Agra that:

"This rule is subject to certain well-recognised exceptions. It is open to the courts, in an appropriate case to declare that a public servant who is dismissed from service in contravention of Article 311 continues to remain in service, even though by so doing the State is in effect forced to continue to employ the servant whom it does not desire to employ. Similarly, under the Industrial Law, jurisdiction of the labour and industrial tribunal to compel the employer to employ a worker whom he does not desire to employ, is recognised. The courts are also invested with the power to declare invalid the act of a statutory body, if by doing the act, the body has acted in breach of a mandatory obligation imposed by the statute, even if by making the declaration the body is compelled to do something which it does not desire to do."11

Thus the cases falling under the rubric master and servant class could further be classified into three different categories namely, (i) those where the service is contractual and the termination is in breach of contract, (ii) where the conditions of service are regulated by a statute, when the person dismissed from service enjoys a certain status under the statute, and the statute prescribes a procedure to be followed for the termination of services, and (iii) lastly where the master purports to terminate the services of a servant for an alleged act of misconduct.

The cases falling under the first category could be said to be, in the words of Lord Wilbeforce, 'pure master and servant cases', i.e. cases in which "there is no element of public employment or service, no support by statute, nothing in the nature of an office or a status which is capable of protection".12 The law in such cases, as Lord Reid put it, is not in doubt. But then as will be seen from the cases like the English case of Hill v. Parsons, even in cases where the services are contractual and the contract provides for a notice, the court insists that the notice should be fair, just reasonable and the one which is acceptable to both the parties, namely the employer as well as the employee.

Then there is another class of cases where there is a statute regulating the conditions of service and the statute prescribes that the servant should be given a notice of showing cause why his services should not be terminated. In such cases as the House of Lords has held in the Scottish case, the man is entitled to a right to fair hearing. Delineating the scope and content of the requirement as to notice, Lord Reid observed in his speech in the Malloch case, as follows:

"I can see no possible reason for requiring notice to the teacher other than to give him an opportunity to prepare his defence, and it appears to me to be implicit in this requirement that the teacher shall be entitled to submit his defence to be heard."13

In the Indian case of Vidya Ram Misra, it was contended on behalf of the petitioner that his services were terminated in violation of the provisions of statutes and that he was not given a reasonable opportunity of defending himself against the charges.14 The Supreme Court rejected both these pleas of the former teacher for the reason that the provision in the service agreement executed by the teacher excluded the application of statutes and as the relationship between the college and the appellant was that of master and servant he was not entitled to the right of fair hearing.15

In this case the main thing that needs to be stressed is the fact that Statute 151 framed under the provisions of the Lucknow University Act, 1920 inter alia provided that the terms of a service agreement should not be inconsistent with the Act and the statutes.16 The employee accordingly executed a service agreement in conformity with the said statutes. This meant that the employee held the appointment under the said statute and as such was entitled to the statutory protection. The statute read with the service agreement regulated the procedure for dismissal, etc. Any dismissal in violation of the statutory provisions was to be ultra vires the statute and hence void in law.17 This meant that dismissal of an employee was possible only for cause shown which meant that only after the employee was allowed to resist the case against him in a confronted enquiry. The cause for which the man was to be sacked had to be deduced after an objective enquiry and was not a matter for the subjective decision of an employer.18

In our view, Mr Setalvad, who appeared before the Supreme Court as the counsel for the appellant, was right in contending that the appellant had a statutory status and that his services were terminated in violation of the provisions of statutes passed under the Lucknow University Act, 1920. The Court referred to a very controversial case from Ceylon decided by the Privy Council in 1964.19 In that case a teacher appointed by a University constituted under a statute was held not to be holding a status but working under a contract of service between a master and the servant and as such was not entitled to the right of hearing. The decision was so much criticised in England and elsewhere that it did bring about some change in the thinking of English Judges. It was perhaps because of these criticisms that Lord Wilber force observed in the Malloch case albeit obiter that:

"Statutory provisions similar to those on which the employment (in the Ceylonese case) rested would tend to show to my mind, in England or in Scotland, that it was one of a sufficiently public character, or one partaking sufficiently of the nature of an office, to attract appropriate remedies of administrative law."20

The Supreme Court, however, did not pay much attention to these cases. Instead the court referred to a case decided by itself in 1965, wherein the appellant was held to be entitled to legal remedies under Article 226 as the College Code and the statues which regulated the contract of his service had the force of law.21 The court distinguished this case from that of Vidya Ram Misra and held that the statutes in the later case did not have the force of law and as such the teacher was not entitled to any legal right for which he could seek a remedy under Article 226. The court felt it to be "quite unnecessary to go into the question whether the appellant was given sufficient opportunity to meet the charges against him" for the technical reason that "it is necessary that the order must be the order of a statutory body acting in breach of a mandatory obligation imposed by a statute".22

In our view, the man lost the case because the court felt constrained by the peculiar technical requirements of the law owing largely to historical reasons. To have felt constrained by the law, was to take too narrow a view of the functions of law. It is here that the principles of natural justice enable a court "to step over the trip-wires of previous cases and to bring the law into accord with the needs of today".23 Since the Supreme Court is the highest court of appeal in the country, it is all the more necessary that in really deserving cases, the court appreciates the true function of the law to do justice in those particular cases without waiting for the intervention of the legislature to introduce necessary legislation to remedy the mischief of the law.

* Ph.D. (London), Reader in Law and Head of the Law Department, Meerut College, Meerut. Return to Text

1. For an analysis of recent English and Newzealand cases on the point see my article "The Ambit of Audi Alteram Partem in the Newzealand Administrative Law" (1971) NZLJ 342. Return to Text
2. See Board of Education v. Rice, (1911) AC 179, Local Government Board v. Arlidge, (1915) AC 20 and Errington v. Minister of Health, (1935) 1 KB 249. Return to Text
3. Ridge v. Baldwin, (1963) 2 All ER 66, 71: (1964) AC 40, 64. Return to Text
4. Ibid., pp. 114 and 132, respectively. Return to Text
5. (1972) 1 SCC 623. Return to Text
6. (1971) 2 All ER 1278. Return to Text
7. Supra Note 4. Return to Text
8. Supra Note 7. Return to Text
9. Hill v. Parsons & Co. Ltd., (1971) 3 WLR 995. Return to Text
10. Supra Note 6. See also Executive Committee of U.P. State Warehousing Corpn. Ltd. v. Chandra Kiran Tyagi, AIR 1970 SC 1244 and Indian Airlines Corpn. v. Sukhdeo Rai, AIR 1971 SC 1828. Return to Text
11. AIR 1964 SC 1680. Return to Text
12. AIR 1964 SC 1680. Return to Text
13. Supra Note 8. Return to Text
14. Supra Note 7. Return to Text
15. Supra Note 6. Return to Text
16. Ibid., p. 628. Return to Text
17. Ibid. Return to Text
18. See Wade, H.W.R., Administrative Law, 3rd Edn., Oxford, 1971, p. 271. Return to Text
19. Cf. a recent case of Daud Ahmad v. D.M., Allahabad, (1972) 1 SCC 655, wherein Ray, J. holds that in all such cases right to hearing should be given so as to arrive at an objective decision as to one's conduct, etc. Return to Text
20. (1964) 3 All ER 865. Return to Text
21. Supra Note 7 (parenthesis supplied). Return to Text
22. P.R. Jodh v. A.L. Pande, (1965) 2 SCR 713. Return to Text
23. Supra Note 6, p. 629. Return to Text
24. Supra Note 10, p. 1002. Return to Text