JUDGMENT B. Mukerji, J.
1. This second appeal was referred to a Full Bench by one of us because of a question of law of some importance arising in the case. One of the questions that arose for determination in the appeal was whether an employee of the improvement trust could claim to be a member of a civil service or holding a civil post as contemplated by Section 240 of the erstwhile Government of India Act (26 Geo. 5).
2. In order to be able to realize the true scope of the question properly it is essential to state some of the facts giving rise to this appeal. The appeal was by the plaintiff who was an employee of the improvement trust, Lucknow, He occupied the permanent post of a building supervisor in the scale of Rs. 45-3-90 plus Rs. 3 per mensem as cycle allowance. The plaintiff claimed that he had subsequently been promoted to the post of a trust inspector in the grade of Rs. 60-5-100 per mensem plus Rs. 35 a month as conveyance allowance and Rs. 22 a month as clearness allowance; further he was allowed Rs. 9 per month as Interim relief; in short, he alleged that he was in receipt of a total sum of Rs. 126 per mensem. The plaintiff was charged with having been guilty of dereliction of duty and other offences and consequently he was first suspended and subsequently on 22 January 1948, dismissed from service by an order of the chairman of the improvement trust. The plaintiff's case was that his dismissal was wrongful and consequently he claimed a declaration to that effect and also claimed Rs. 500 as damages and in the alternative a decree for Rs. 180 representing three months' salary in lieu of notice.
3. The suit was contested on behalf of the improvement trust, which was sued through its chairman. The contention of the plaintiff that his dismissal was wrongful was challenged. It was stated that the plaintiff had been appointed by the chairman and that the chairman was as such competent to dismiss the plaintiff. It was further contended on behalf of the improvement trust that the suit was not maintainable by virtue of the provisions of Sections 96 and 97(3) of the Uttar Pradesh Town Improvement Act (Act VIII of 1919). In the written statement allegations of incompetence and other serious allegations were also made against the plaintiff.
4. On the pleadings of the parties the trial court struck the following issues:
(1) Whether the plaintiff held the substantive post of trust inspector as alleged by him ? If so, its effect ?
(2) Whether the dismissal of the plaintiff from the service is invalid, illegal and inoperative as alleged in Para. 8 of the plaint ?
(3) Whether the suit is not maintainable under Section 96 of the Uttar Pradesh Town Improvement Act as alleged in Para. 14 of the written statement ?
(4) To what relief and damages, if any, is the plaintiff entitled?
(5) Whether the defendant is entitled to special costs from the plaintiff under Section 35A of the Code of Civil Procedure ?
(6) Whether the suit is barred by Section 97 of the Uttar Pradesh Town Improvement Act?
5. The trial court held on the first issue that the plaintiff's substantive post was that of a building supervisor and that he Was appointed temporarily to the post of the " trust inspector." The trial court further held under this issue that the chairman of . the improvement trust was the proper authority who could take action even to the extent of dismissal against the plaintiff. On the second issue, viz., whether the dismissal of the plaintiff was illegal, the trial court came to the conclusion that since the chairman did not serve the plaintiff with the charges in writing and further since he did not call upon the plaintiff to show cause against the proposed punishment, the action of the chairman in dismissing the plaintiff was wrongful and ineffective. The trial court came to the aforementioned conclusion mainly on the ground that the plaintiff's conditions of service were governed by the Civil Services (Classification, Control and Appeal) Rules and that his dismissal could only be made by strictly complying with the provisions of Rule 55 of the rules published in the Uttar Pradesh Gazette, Part I, dated 28 June 1930. In regard to the bar of Section 97(3), the trial court held that since the plaintiff's dismissal was invalid, the question of limitation did not arise, for the plaintiff would be deemed still to be in service. On the question of damages, however, the trial court came to the conclusion that the claim for damages was barred by limitation under Section 97(3) of the Uttar Pradesh Town Improvement Act. The reasoning on which the trial court made the distinction between the relief for damages and the relief for a declaration was not very clearly expressed in its judgment. What the learned trial court seems to have thought was that the claim for damages being dependent upon the wrongful dismissal and that wrongful dismissal having in fact been made on 22 January 1948, a claim for damages should have been made within six months, as provided for by Section 97(3) of the Uttar Pradesh Town Improvement Act.
6. An appeal was preferred by the improvement trust against the decision of the Munsif decreeing the plaintiff's suit in respect of relief (a) claimed by him in his plaint. The learned Judge in appeal reversed the decision of the learned Munsif on practically all the grounds. The lower appellate Court came to the conclusion that the plaintiff's appointment had been made by the chairman of the trust under the powers conferred on him under Section 19 of the Uttar Pradesh Town Improvement Act and as such the chairman was the proper authority who could legally make an order for the plaintiff's dismissal. An argument appears to have been raised on the plaintiff's behalf before the lower appellate Court that the plaintiff's appointment as " trust inspector" had been made by the board and therefore it was the board which alone could properly dismiss the plaintiff. This argument was in our opinion rightly repelled by the lower appellate Court, for what appears to have been the true position was that the board approved of the creation of a temporary post of a " trust inspector" to which post the plaintiff had been appointed under the orders of the chairman. Indeed the chairman appears to have been appointed to the post a day earlier than the creation of the post had been actually approved of by the board. The contention of the plaintiff, therefore, that his appointment was made by the board, and not by the chairman, was without any substance at all and was rightly repelled.
7. The main argument that was advanced before the lower appellate Court, and advanced before us in second appeal, was that the plaintiff's service, even though it was under the improvement trust, fell within the category of services contemplated under Section 240 of the Government of India Act as adapted by the India (Provisional Constitution) Order, 1947. The relevant portion of Section 240 is in these words :
240. (1) Except as expressly provided by this Act, every person who is a member of a civil service of the Crown in India, or holds any civil post under the Crown in India, holds office during His Majesty's pleasure.
(2) * * * (3) No such person as aforesaid shall be . dismissed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him:
Provided that this sub-section shall not apply-
(a) where a person is dismissed or reduced in rank on the ground of conduct, which has led to his conviction on a criminal charge; or
(b) where an authority empowered to dismiss a person or reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing, it is not reasonably practicable to give to that person an opportunity of showing cause.
(4) * * * The aforequoted provisions of the section could apply to the plaintiff only if he could establish that he was a "member" of a civil service of the Crown in India," or he held a " civil post under the Crown in India.
8. Before entering more closely into a scrutiny of this question it is in our view necessary to state that the lower appellate Court had found that the plaintiff had been apprised of the charges which were levelled against him and further that the plaintiff had the necessary opportunity of showing cause against the proposal that was made by the trust engineer, for his dismissal. The lower appellate Court also came to the conclusion that the plaintiff was dismissed because of proved misconduct and that the punishment which was awarded, viz., the dismissal, was not unjustified under the circumstances of the case.
9. The contention which was raised before us was that the plaintiff had no reasonable opportunity to meet the charges and further that the plaintiff had no second opportunity, at any rate, to show cause against the proposed punishment. The question whether the plaintiff was entitled to show cause against the proposed punishment could only arise if the Civil Services (Classification, Control and Appeal) Rules applied to the plaintiff. The plaintiff was not a Government servant in the sense that his appointment had not been made by Government, nor was he paid out of Government funds, nor did he discharge any of those functions for which Government was as such directly responsible in the exercise of its functions. The plaintiff was an employee, as we have already seen, of the improvement trust which was a statutory body constituted under the Uttar Pradesh Town Improvement Act, 1919. Section 3 of that Act provides as follows :
The duty of carrying out the provisions of this Act in any local area shall, subject to the conditions and limitations hereinafter contained, be vested in a board to be called ' the (name of town) Improvement Trust,' hereinafter called 'the trust'; and every such board shall be a body corporate and have perpetual succession and a common seal, and shall by the said name sue and be sued.
From the above it would be clear that the employer of the plaintiff was a body corporate which meant that it had a separate legal entity and that it had under the Act its own sphere of activity. Under Section 19, the power of appointing, promoting and granting leave to officers and servants of the trust and reducing, suspending, or dismissing them for misconduct, was vested-
(a) in the case of officers and servants whose monthly salary did not exceed Rs. 300 in the chairman, and
(b) in other cases in the trust.
That section also provided that any officer or servant in receipt of a monthly salary exceeding one hundred rupees who was reduced, suspended or dismissed by the chairman could appeal to the trust, whose decision was to be final on the question.
10. It has been seen earlier that the plaintiff was appointed by the chairman and the plaintiff was dismissed by the chairman. The plaintiff was in receipt, on his own showing, of a salary of less than Rs. 100 and therefore, he could not even appeal to the trust against the order of the chairman dismissing him from service. Under the Uttar Pradesh Town Improvement Act there was no provision for making rules governing the appointment, promotion, reduction, suspension, dismissal, of the servants of the trust except such servants as possessed "professional skill," in which case the State Government had the power to make rules and indeed the State Government has made a rule which is rule 93 and which is in these words :
All questions connected with the appointment, punishment or dismissal of officers or servants of the trust appointed to offices requiring professional skill shall be referred for decision to the State Government:
Provided that if the trust appoint as its chief officer a person possessing status and qualifications such as the State Government considers sufficient, it will delegate the power of decision in respect of such questions in the case of all other such officers to the trust:
Provided further that in any case where the power of decision has been delegated to the trust, an appeal shall lie from such decision to the State Government.
11. The aforequoted rule cannot apply to the plaintiff, for admittedly the plaintiff was not an employee possessing any "professional skill." It was agreed between the parties before us that there were no rules framed by the trust which provided for the conditions of service or which provided for procedure in regard to appointments, promotions and punishments (including dismissals) of the servants of the trust, so that in case the plaintiff's appointments did not fall under the category of appointment visualized under Section 240 of the Government of India Act, 1935, or in that category to which the Civil Services (Classification Control and Appeal) Rules applied; the plaintiff could only succeed in his claim if he could show that the action taken against him was opposed to some principle of natural justice.
12. The finding of the Court below was, as we have already seen earlier, that the plaintiff had an opportunity of showing cause against the charges which had been levelled against him: the finding arrived at by the Court below was a finding on a question of fact and as such was binding in second appeal; even so, we looked into the facts relating to this matter and we discovered that the plaintiff was aware of the charges which had been laid against him and he submitted written explanations in regard to them and further he was given an opportunity to make any oral submissions that he wished to make before the chairman in the presence of his main accuser, the trust engineer. There is nothing to indicate that the plaintiff sought any opportunity to call any evidence in his defence and that opportunity was denied to him. We cannot therefore say that any principle of natural justice was violated by the chairman in arriving at his decision against the plaintiff.
13. No authority was shown to us on which it could be said that the rules of natural justice required that the plaintiff should have been given a second opportunity of showing cause against the proposed punishment; to that opportunity the plaintiff could be entitled only if the plaintiff's appointment could be held to fall within the category of servants referred to in Section 240 of the Government of India Act. Indeed, counsel for the plaintiff did not contend, that apart from Section 240 and the provisions of the Civil Services (Classification, Control and Appeal) Rules the plaintiff could, on any other ground, claim the right to have a second notice to show cause against " the proposed punishment."
14. The question whether the appointment of the plaintiff could fall under the provisions of Section 240 of the Government of India Act, that is to say, whether the plaintiff could be considered to be a Government servant holding a civil post under the Crown in India, is not really resintegra, for there are decided cases which have pronounced upon this question. We propose first to deal with the oases of our own Court which were cited at the bar and then refer to the cafes of other High Courts throwing light on this question.
15. Chronologically, the first case of this Court was that of Roshan Lal Goswala v. District Board, Aligarh A.I.R. 1935 All. 802 wherein Bennet and Allsop, JJ., held that "all offices" are held either "at pleasure" or "during good behaviour " and that where an office is held at pleasure, the holder thereof is subject to dismissal at any time without any cause being assigned. No notice or framing of any charge is necessary; and the holder of the office is removable at the sole discretion of the appointing authority. Where an office is held during good behaviour, the holder thereof is appointed to all intents and purposes for life and has what is called a " freehold office " for his life and he can be removed from office only for want of good behaviour. They further held that except where it is otherwise provided by statute, all public officers and servants of the Crown bold their appointments at the pleasure of the Crown; and speaking generally, they are subject to dismissal at any time without cause being assigned, and an action for wrongful dismissal cannot be entertained by a Court of law. The Bench further held that a district board employee was under the general disability of other public servants in so far as he held his office during pleasure and that he could not sue the district board or the Secretary of State, in a Court of law for wrongful dismissal, nor could he sue for a declaration that a resolution removing him was null and void, inasmuch as such a declaration would be hit by the provisions of Section 42 of the Specific Relief Act. Reliance was placed in Roshan Lal case on a passage from Ayyangar's Law of Municipal Corporations in British India appearing at p. 124 of that book. Ayyangar relied on some decided cases for the statement of law in his book which was, apparently, approved by the Bench. The position in regard to public servants was summarized by Sir William Anson in his book on Law and Custom of the Constitution, Vol. 2, Part I, p. 221, 3rd Edn,, that " all offices are held either ' at pleasure or during good behaviour,' and, unless it is otherwise stated, their occupants hold 'at pleasure'." This principle was repeatedly recognized by Courts in this country, as would be apparent from several decisions of the Calcutta High Court and other Courts. In Roshan Lal case A.I.R. 1935 All. 802 it was further held at p. 810, column 1, that the fact that Government controlled district boards in certain matters did not place the servants of the district board on any other footing than that of other public servants who held their position at pleasure. On the basis of the aforequoted observations by the learned Judges in Roshan Lal case A.I.R. 1935 All. 802 it was contended on behalf of the plaintiff by his learned Counsel that the position of the plaintiff as an employee of the improvement trust was that of a Government servant and therefore all those rules which governed Government servants in the matter of their dismissal would apply in the case of the plaintiff. We are unable to agree with this contention of the learned Counsel, for in our view the learned Judges in Roshan Lal case A.I.R. 1935 All. 802 did not hold anything like what has been contended by the learned Counsel. The learned Judges in Roshan Lal case A.I.R. 1935 All. 802 only pointed out that there were two classes of servants, one who held their appointment during pleasure and the other who held their appointment during good behaviour and they further held that in the case of a servant of the district board he held his appointment during pleasure.
16. Reliance was next placed on the decision of Prabhu Lal Upadhya v. District Board, Agra 1938 A.L.J. 351 : A.I.R. All. 276 wherein Harries and Raehhpal Singh, JJ., held that the officials of district boards are public officials and are " in a sense Government servants." Even so, they held that Government servants held office 'at the will and pleasure of the Crown' and although there may be rules prescribing formalities before the dismissal of such servants, yet a failure to comply with such rules and formalities does not give a Government servant a cause of action. In the case of Prabhu Lal Upadhya 1938 A.L.J. 351 : A.I.R. All. 276 a complaint was made that there was a breach of rule 3 in Chap. III of the rules framed under Section 172 of the Uttar Pradesh District Board Act and on that it was contended that the dismissal was unjustified. Even so, the learned Judges held that a failure to comply strictly with the rules did not give a cause of action to the servant dismissed by the board. In the instant case there were no rules framed by the improvement trust regulating the dismissal of its servants. Therefore, the questions could not arise about any adherence to those rules but the point which is of importance for us to note is that the learned Judges did hold that an employee of the district board held his office "during pleasure." Much reliance was placed by the learned Counsel on the observation of the Bench in Prabhu Lal Upadhya case 1938 A.L.J. 351 : A.I.R. All. 276 to the effect that the officers of the district board are in a sense Government servants. We do not think that this observation can justify us in holding that the plaintiff in this case was in a sense a Government servant or that he was in any sense entitled to claim that his dismissal should have been in accordance with the rules framed by Government for the dismissal of their servants. This question did not arise for determination in Prabhu Lal Upadhya case 1938 A.L.J. 351 : A.I.R. All. 276 and therefore that case would be no authority for the proposition which falls for our determination.
17. Reliance was next placed on the decision of L. Shankar Lal Dahania v. L. Balkishan 1937 A.L.J. 1227 : 1938 A.I.R. All. 57 wherein Ganga Nath, J., had observed that the municipal servants stand on the same footing as other public and Government servants.
In this case an employee of the Municipal Board of Secunderabad attained 60 years of age in April 1933 but in March 1933 the municipal board by a resolution gave one year's extension to the employee from 1 April 1933 to 31 March 1934. The chairman of the board did not approve of the view which had been taken by the board, nor did he approve of the resolution, so he wrote to the commissioner, to whom resolutions of the board had been sent apparently for approval, to the effect that the employee was not fit to deserve an extension. After enquiry into the matter the commissioner agreed with the view of the chairman and therefore he wrote to the municipal board on 23 May 1933, to dispense with the services of that employee. On receipt of the commissioner's letter the employee was asked to hand over charge. He handed over charge on 14 June 1933, but was reinstated by the board on 28 October 1933. Thereafter the employee brought a suit for the salary to which he would have been entitled during the period 14 June to the date of his reinstatement. The question in the case arose whether the employee had been rightly dismissed by the chairman after receipt of the commissioner's letter or not. While disposing of this case in appeal, the observations on which reliance was placed by the learned Counsel were made. Ganga Nath, J., while making the aforementioned observation, also said that though the tenure of office of such employees was at pleasure, yet there had been rules to regulate procedure of appointment and dismissal and they could not be treated arbitrarily or capriciously in the matter of their dismissal. He, however, pointed out that the remedy of the person aggrieved in the case of non-compliance with the rules did not lie by way of a suit in a Court hut lay by way of an appeal of an " official kind " prescribed in the rules. The learned Judge held that the suit which had been filed by the plaintiff in that case could not be maintained, even though the dismissal had been in contravention of the rules framed. This case was, therefore, no authority of the proposition for which it was pressed into service by learned Counsel.
18. The next case cited was that of Banarasi Das v. Municipal Board, Moradabad 1939 A.L.J.R. 9 wherein Bonnet and Verma, JJ., held that the power of the executive officer of the municipal board to dismiss a municipal servant was conferred by Section 76 of the Uttar Pradesh Municipalities Act and since the statute did not prescribe a particular method for the exercise of the power of dismissal, the executive officer had full authority to dismiss a municipal servant whose monthly salary did not exceed Rs. 30. This case again is no direct authority for the question which we have to determine because in this case too the question did not specifically arise as to whether or not a municipal employee could claim to be a civil servant within the meaning of Section 240 of the Government of India Act. Nevertheless, this decision does lay down that if there is authority vested in an officer to dismiss' an employee, then unless there were restrictions placed on the exercise Of that authority, the authority could be exercised by the person in whom it was vested without any restrictions. In view of this decision it would be apposite to refer again to Section 19 of the Uttar Pradesh Town Improvement Act, for this section specifically vests in the chairman authority to dismiss a certain class of servants of the trust. The power is not hedged in by any restrictions. As we have already noticed, no rules have been framed by the Improvement trust or by Government under its rule-making power which restrict the use of the power conferred by Section 19 of the Act,
19. Before referring to the other Allahabad cases in which the question whether a certain class of employees of local authorities could claim the protection provided to public servants under Article 311 of the Constitution arose for determination, we should like to notice two cases of the Calcutta High Court. In Bibhuti Bhusan Ghosh v. Damodar Valley Corporation , Bose, J., held an employee of the Damodar Valley Corporation could not be treated as an officer holding "a civil post" under the Union or the State Government and as such there was no duty cast upon the Corporation to act in the manner prescribed by Article 311(2) of the Constitution. Bose, J., opined that the Damodar Valley Corporation having been created by an Act called the Damodar Valley Corporation Act, 1948, had a distinct legal entity of its own which was separate from the entity of the Union of India or any State of India. The position of the improvement trust is in our view analogous to what the position of the Damodar Valley Corporation was. Therefore, the dictum of Bose, J., would be applicable to the servants of the improvement trust also. In Nagendra Kumar Roy v. Commissioners for the Port of Calcutta , Sinha J., held that the employees of the commissioners of the Port Calcutta could not be held to be civil servants of Government, even though the commissioners for the port of Calcutta had adopted the fundamental rules applicable to Government civil servants. It appears that the commissioners had not framed any separate rules for the appointment and dismissal of their servants but they had adopted the Fundamental Rules for their guidance in such matters. It was pointed out by Sinha, J., that merely because the commissioner had adopted the Fundamental Rules for their guidance without there being power in the Act to do so, the employees could not claim the status of Government servants, nor could they insist upon the strict observance of those rules. Sinha, J., however, pointed out that even though there was no statutory rules to guide the action of the commissioners they were, nevertheless, bound to give reasonable opportunity to a person to show cause against his dismissal because that was founded on the rules of natural justice,
20. In Mangal Sain v. State of Punjab the question arose whether the expression "civil post under a State" in Article 311(1) included persons in the service of a local authority within the territory of a State. It was held by Harnam Singh and Soni, JJ., that an executive officer under the Punjab Municipal (Executive Officer) Act, 1931, did not hold a civil post under a State within the meaning of Article 311, even though the Government had a hand in his appointment or dismissal under the provisions of that Act. It was pointed out that the mere fact that Government may have a hand in the appointment or dismissal of a person from the service of a local authority could not place that servant in the category of Government servants. Reliance was placed by the learned Judges on the following statement of the law in Halsbury's Laws of England, Vol. XXII, at p. 112 :
A person may be the servant of another although a third party has the power of appointing or dismissing him or of requiring his dismissal, or has powers of direction and control in regard to his work, or pays him his wages.
In the case before us the plaintiff was appointed by the chairman of the improvement trust which had a separate legal existence, which had its sown funds and its own sphere of action. The plaintiff was paid out of the funds of this body and therefore, the plaintiff's position wag infinitely inferior to the position of a person visualized in the passage quoted above from Halsbury's Laws of England.
21. In Kumaran v. State of Travancore-Cochin A.I.R. 1952 Travancore-Cochin 264, Sankaran, J., held that the post of the secretary of a co-operative society did not in any sense come under the category of a civil post under the State as contemplated by Articles 309 to 313 of the Constitution. He further held that the removal from office of such an employee of the society was not controlled by the procedure contemplated by Article 311. The reason why Sankaran, J., held the view stated above was that the secretary of the society had nothing to do with "the affairs of the State" and was not appointed by the State or by any authority prescribed in that behalf. Further the remuneration for his services was also not paid from the State funds. A similar view was taken by Teja Singh, C.J., In Tejbhan Chowdhry v. Rajpura Development Board A.I.R. 1953 Pepsu 99.
22. In Chaturbhuj Sahai v. Chairman, Board of Directors, Bihar State Co-operative Bank, Ltd., Patna , Das, C.J., and Chowdhry, J., held that a person giving up Government service and joining a post under the State Co-operative Bank, Patna, could not be said to hold a civil post under the State of Bihar within the meaning of Article 311 of the Constitution. They further held that even though the State Government did exercise control over the co-operative bank by virtue of the authority conferred on them by some provisions of the Bihar and Orissa Co-operative Societies Act, 1935, it did not mean that persons who served under that local authority held a civil post under the State.
23. In another case, namely, Lachmi v. Military Secretary to the Governor of Bihar A.I.R. 1953 Patna 398, Das. C. J., and Imam, J., held that the true test for determining whether the person came within Article 311 of the Constitution or not is not whether his salary or wages were paid from the State funds but the true test was whether he was a member of a civil service of a State or held a civil post under the State. They expressed the view that the expression "civil post under a State" meant that the post was under the control of the State, i.e., the State could abolish the post if it so desired or the State could regulate conditions subject to which the post was in future to be held. They expressed the view that the real test, therefore, was as to who had the immediate or ultimate control in regard to the post in question. The aforementioned case arose out of a dismissal of certain mails who had been employed in the Raj Bhawan and whose salaries were paid from the State funds placed at the disposal of the Governor. If the case of malis employed in the Government House and paid, in a sense, out of the State funds, could not come within the purview of Article 311 of the Constitution, then a post like the one held by the plaintiff could neither in our view fall within the posts contemplated by Article 311 of the Constitution,
24. In Subodh Ranjan Ghosh v. Sindri Fertilizers and Chemicals, Ltd. 1967-II L.L.J. 686, Ramaswami, C.J., and Prasad, J., held that Article 311 had no application to the case of servants of Sindri Fertilizers and Chemicals, Ltd., as they were not servants of the Union Government, even though the company was Completely owned by the Union Government and the directors of the company were appointed by the President of India. The view taken by the learned Judges was that in the eye of law the company had a separate legal entity and legal existence. They further held that the company could not even be held to be the agent of the Union Government or the trustee for them. Since the company had a separate and independent legal existence, it could not be held to be a department of the State Government or a delegate or agent of it. Again, in the matter of Rangnath Misra v. Chairman, District Board, Saharsa , Ramaswami, C.J., and Prasad, J., held that a clerk in the service of a district board was not a Government servant and as such Article 311 did not apply to him. Another important matter which was decided in this case was as to the scope of natural justice in regard to taking action against an employee by a local authority. It was held in this case that the requirements of natural justice were fully complied with when a person had been apprised of the charge against him and opportunity to meet that charge was afforded to him. According to the learned Judges, the principles of natural justice did not require the person being asked to show cause against the proposed punishment.
25. In the State of Punjab v. Prem Prakash Bhandari, C.J., and Khosla, J., laid down a test for determining whether a particular person was or was not a Government servant. The test which they laid down was that if the person performed the functions relating to the State, then only could he be deemed to be a servant of the State. The learned Judges held that an officer appointed by the municipal board performed duties and functions which related exclusively to the affairs of the municipality as distinct from those that related to the State at large. In the case before them the State Government had found that the municipal committee of Muktsar was not discharging its duty satisfactorily and so they directed that the duties of the water works department were to be discharged by a person to be designated as superintendent of water works. The State Government, however, did not supersede the municipal committee or a department thereof, but merely entrusted the duties of the municipal committee in the water works department to another person. The learned Judges held that the post under such conditions was, for all intents and purposes, a municipal post, as the salary of the incumbent thereof was paid out of the municipal funds. They pointed out that the question whether a person is an employee of the municipal committee or not was not affected by the manner of his appointment, and that the mere circumstance that the municipal employee had been appointed by the State Government did not make him a State employee.
26. We shall now turn to the recent Allahabad cases which were cited before us. In Shy am Lal Gupta v. State 1956 A.L.J. 483 V.D. Bhargava, J., held that it was not necessary to follow the procedure prescribed under Article 311 in the case of an employee of the municipal board. In this case, however, the learned Judge gave no reasons for his view. In Badri Prasad Dubey v. State of Uttar Pradesh 1957-1 L.L.J. 209, Mehrotra, J., also held that an employee of a municipal board could not rely upon the Fundamental Rules framed regarding the recruitment to service to a department of the State Government but that the municipal employees were governed by the rules and regulations framed under Section 297 of the Uttar Pradesh Municipalities Act. Mehrotra. J., expressed the view that even though the municipal employees have been guaranteed the same protection as any other employee of the State, yet that protection was to be found in the rules and regulations governing the conditions of service of the municipal employee and not under the Fundamental Rules.
27. On an examination of all the authorities cited before us, we have come to the conclusion that the true test to determine whether a person held a civil post under the Crown as contemplated by Section 240 of the Government of India Act or was a member of a civil service of the Union or the State or held a civil post under the Union or the State, had primarily to be determined in relation to the functions which he performed. If his duties relate to activities which fell directly within the sphere of the Union or the State and his services were under the direction and control, as also Ms appointment was by either the Union or the State, then he could fall under those services which were contemplated by either Section 240 of the Government of India Act or by Article 311 of the Constitution of India, but if the sphere of activity of the employee fell within the sphere of activity of a local authority constituted under some statute having a separate legal existence, then the position of that employee, even though the State or the Union controlled some of his activity and gave him direction in the discharge of his functions, fell outside the scope of either Section 240 of the Government of India Act or Article 311 of the Constitution of India. Applying this test to the present case, we have no hesitation in holding that the plaintiff did not hold a civil post under the State, nor did he belong to the civil service of the Crown but was an employee of a local authority constituted under the Uttar Pradesh Town Improvement Act, 1919. We have also come to the conclusion that the plaintiff in this case had that opportunity to which he was entitled, to show cause against the charges made against him under the rules of natural justice and that the power which was exercised in this case by the chairman in dismissing him from service was in no way open to challenge.
28. For the reasons given above we have seen no force in this appeal which we dismiss with costs.