Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi (1975)

The decision of the Supreme Court in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi (1975) is a landmark judgement in Indian constitutional law. It clarified the meaning of the term “State” under Article 12 of the Constitution and the legal nature of regulations framed by statutory corporations. 

The Court held that statutory bodies such as the Oil and Natural Gas Commission (ONGC), Life Insurance Corporation of India (LIC), and Industrial Finance Corporation of India (IFCI) are “State” within Article 12 and are therefore bound by fundamental rights. The case also addressed important aspects of delegated legislation and the principles of natural justice in the context of employment matters.

Background of Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi Case

The dispute arose when employees of three statutory corporations (LIC, ONGC, and IFCI) were terminated from service. They contended that their dismissal violated the statutory regulations that governed their employment.

• Bhagat Ram challenged his termination before the Orissa High Court, which ruled in his favour and set aside the dismissal.
• On the other hand, similar petitions by Sunil Kumar and Sukhdev Singh were dismissed by the Patna High Court and the Punjab & Haryana High Court.
• The conflicting decisions led all parties to approach the Supreme Court through special leave petitions under Article 136 of the Constitution.

The key question before the Court was whether employees of statutory corporations could claim protection under fundamental rights and whether such corporations could be considered “State” under Article 12.

Issues Before the Court

1. Whether termination of employees in violation of the regulations framed under the ONGC Act, the IFC Act, and the LIC Act gives the right to reinstatement or merely a claim for damages.
2. Whether employees of statutory corporations can invoke protection under Article 14 and Article 16 of the Constitution.
3. Whether regulations framed by corporations under statutory powers have the force of law.
4. Whether statutory corporations such as ONGC, LIC, and IFCI fall within the definition of “State” under Article 12 of the Constitution.

Arguments of the Parties

Contentions on Behalf of the Employees

• The regulations governing employment were framed under statutory authority. They therefore carried the force of law.
• Any action violating these regulations was unlawful and void.
• Termination of employees contrary to statutory provisions amounted not merely to breach of contract but to breach of law.
• Since statutory corporations were created under Parliamentary Acts and performed public duties, they should be considered “State” under Article 12.

Contentions on Behalf of the Corporations

• The regulations were framed for internal management of employees and did not possess statutory force.
• Employment in statutory corporations was contractual in nature. Violation of service rules could give rise only to damages, not reinstatement.
• The corporations, although established by statutes, did not exercise sovereign functions and hence could not be regarded as “State” under Article 12.

Legal Aspects Considered by the Court in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi

Constitutional Validity of State Actions

The Court in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi emphasised that public corporations cannot act arbitrarily. Their decisions must conform to fairness, equality, and reasonableness as required by Articles 14 and 16.

Delegated Legislation

The Court recognised that Parliament cannot legislate on every minor matter. Therefore, power is delegated to statutory bodies to frame regulations. Such delegated legislation, when validly made under a statute, has the same effect as law. The Court noted that corporations such as ONGC, LIC, and IFCI framed regulations under express powers granted by their parent statutes.

Principles of Natural Justice

The case highlighted the importance of principles of natural justice in employment matters. Employees cannot be terminated without being given an opportunity to be heard. Any dismissal in violation of statutory regulations and natural justice was held to be invalid.

Scope of Article 12 of the Constitution

Article 12 defines the term “State” to include the Government and Parliament of India, the Government and Legislature of each State, local authorities, and “other authorities.” Judicial interpretation has broadened the meaning of “other authorities” to cover bodies created by statute that exercise public functions or are under the control of the Government.

Court’s Analysis in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi

Regulations as Law

The Court observed that rules and regulations framed under statutory authority are not mere administrative directions but have the force of law. Any violation of these rules is not a simple contractual breach but a legal wrong enforceable in courts.

Distinction from Companies Act Entities

The Court rejected the argument that statutory corporations were akin to companies under the Companies Act. Unlike companies, these corporations were created by statutes, were subject to governmental control, and performed public duties.

Nature of ONGC, LIC, and IFCI

• ONGC: Substantial governmental control over its functioning, budget, members, and dissolution. Employees are deemed public servants.
• LIC: Exclusive privilege of conducting life insurance business in India. Complete control of the Central Government over policies, profits, and dissolution.
• IFCI: Financial institution heavily controlled by the Government in terms of management, funds, and guarantees.

The Court concluded that all three bodies were under deep and pervasive control of the Government and were therefore authorities within the meaning of Article 12.

Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi Judgement

• The Supreme Court held that ONGC, LIC, and IFCI are “State” within Article 12 of the Constitution.
• Employees of these corporations are entitled to the protection of Articles 14 and 16.
• Regulations framed by these corporations under their respective Acts have the force of law.
• Termination of employees in violation of statutory regulations was declared invalid. Employees were entitled not only to compensation but also reinstatement.

Rationale Behind the Judgement

The rationale of the judgement was based on the following points:

1. Statutory corporations are created by Acts of Parliament and are instruments of the State.
2. Regulations framed under statutory authority have binding legal force.
3. Employment in such corporations is not purely contractual but subject to statutory provisions.
4. Employees must be protected against arbitrary actions in line with the constitutional guarantee of equality and fairness.

Critical Analysis

The judgement is a milestone in Indian service jurisprudence. It recognised the changing role of the State in a welfare society where governmental functions extend beyond traditional administration to commercial and industrial sectors. By bringing statutory corporations within the ambit of Article 12, the Court ensured that fundamental rights are enforceable against such bodies.

However, the ruling also raised questions about the limits of Article 12. If every organisation with some governmental control is considered “State,” the boundary between public and private sectors could blur. Later judgements such as Ajay Hasia v. Khalid Mujib Sehravardi (1981) and Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002) further refined the tests for determining when a body qualifies as “State.”

Conclusion

The judgement in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi (1975) remains a cornerstone in the interpretation of Article 12. It reinforced constitutional guarantees in the sphere of public employment and strengthened the accountability of statutory corporations. 

The case confirmed that such corporations, though distinct legal entities, are subject to constitutional discipline and judicial scrutiny. Employees of LIC, ONGC, and IFCI were assured not only of statutory protection but also of constitutional safeguards, thereby advancing the cause of fairness and equality in Indian administrative law.