Gopala Pillai v. Kerala State Road Transport Corporation
1967-10-07
V.P.GOPALAN NAMBIYAR
body1967
DigiLaw.ai
JUDGMENT : V. P. Gopalan Nambiyar, J. 1. These writ petitions are by employees of the Kerala State Road Transport Corporation against the orders of termination of their services. The facts giving rise to these writ petitions may conveniently be stated with reference to O. P. No. 2241 of 1967 in which arguments were addressed and on which the fate of the other writ petitions were left to depend. 2. By Ext. P-1 order, dated 18th August 1966 the respondent-Corporation raised the age of superannuation of its employees from 55 to 58 years subject to certain specified conditions. Condition No. 1 in substance stated that the suitability of employees to be continued in service beyond 55 years of age will be decided by the General Manager in the light of the report of the Head of Office/the Official Superior, and of a Medical Board regarding the fitness of the employee; Condition No. (iv) was to the effect that where an employee is continued in service beyond 55 years, the General Manager may, after giving him atleast three months' previous notice in writing, retire him on a date to be specified in the notice. 3. In accordance with these provisions the petitioners (in these writ petitions), were all continued beyond the age of 55 years by appropriate orders. Ext. P-2 is a copy of the order so passed. Thereafter came Ext. P-3 order dated 28th June 1967 by which the Corporation in partial modification of Ext. P-1 ordered that the age of superannuation of its employees except those in whose case it is 60 years, shall be 55 years with effect from 25th June 1967. Persons who had passed the age of superannuation and were continued beyond the said limit by orders passed in pursuance of Ext. P-1 proceedings, and those to attain the age of 55 years of age within three months from 25th June 1967, were to be given notice for retirement from the service of the Corporation with effect from three months of the date of service of notice. Accordingly the petitioners in these writ petitions were served with notices for retirement. Exts. P-4 to P-9 are copies of such notices served on the petitioners in O.P. No. 2241 of 1967. 4.
Accordingly the petitioners in these writ petitions were served with notices for retirement. Exts. P-4 to P-9 are copies of such notices served on the petitioners in O.P. No. 2241 of 1967. 4. The notices and the termination of service effected by them have been attacked on several grounds: (1) that the petitioners are "workmen" and the respondent-Corporation an "industry" under the Industrial Disputes Act, and the termination of service amounts to "retrenchment" and is violative of the provisions of section 25F of the Industrial Disputes Act; (2) that the vesting of a discretion under condition (iv) of Ext. P-1 in the General Manager to retire an employee by giving three months' notice in writing, is arbitrary and invalid; and (3) that the respondent-Corporation is barred by principles of legal and equitable estoppel from terminating the services of the petitioners. 5. For the respondent it was denied that the termination of service amounts to retrenchment. It was further defended that Ext. P-3 order was in pursuance of a settlement effected in the course of conciliation proceedings between the employees and the Unions of workmen, and as such, the same is binding on all the employees of the Corporation. Whereupon, for the petitioners the plea was raised that the conciliation proceedings are not valid and binding, and Ext. P-3 would not therefore preclude the petitioners. These contentions now require to be examined. 6. There is no denial of the express averments made in paragraph 4 of the petitioners' affidavit that the respondent-Corporation is an "industry" and that the petitioners are "workmen" under the Industrial Disputes Act. I would accordingly proceed on the assumption that these premises of the petitioners are well-founded.
These contentions now require to be examined. 6. There is no denial of the express averments made in paragraph 4 of the petitioners' affidavit that the respondent-Corporation is an "industry" and that the petitioners are "workmen" under the Industrial Disputes Act. I would accordingly proceed on the assumption that these premises of the petitioners are well-founded. Section 2 (oo) of the Industrial Disputes Act defines retrenchment as follows: "2 (oo) "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include- (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workmen concerned contains a stipulation in that behalf; or (c) termination of the service of a workman on the ground of continued ill-health;" Construing the above definition, the Supreme Court in Hari Prasad Shiv Shanker Shukla and another v. A. D. Divelkar and others A.I.R. 1957 S.C 121 noticed the meaning given by it earlier in the Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union A.I.R 1957 S.C. 95 that retrenchment in its ordinary acceptation, is a discharge of surplus labour. It was pointed out that the said ordinary meaning of the term fulfilled the requirements of the statutory definition under the Act. It was then pressed on the Supreme Court that the acceptance of the ordinary meaning would give to the expression "for any reason whatsoever" in section 2(oo) of the Act, a somewhat restricted scope. Adverting to this argument it was observed: "We agree that the adoption of the ordinary meaning gives to the expression "for any reason whatsoever" a somewhat narrower scope; one may say that it gets a colour from the context in which the expression occurs; but we do not agree that it amounts to importing new words in the definition. What after all is the meaning of the expression "for any reason whatsoever"? When a portion of the staff or labour force is discharged as surplusage in a running or continuing business, the termination of service which follows may be due to a rationalisation in industry, installation of a new labour-saving machinery etc.
What after all is the meaning of the expression "for any reason whatsoever"? When a portion of the staff or labour force is discharged as surplusage in a running or continuing business, the termination of service which follows may be due to a rationalisation in industry, installation of a new labour-saving machinery etc. The legislature in using the expression "for any reason whatsoever" says in effect: "It does not matter why you are discharging the surplus; if the other requirements of the definition are fulfilled, then it is retrenchment". In the absence of any compelling words to indicate that the intention was even to include a bona fide closure of the whole business, it would, we think, be divorcing the expression altogether from its context to give it such a wide meaning as is contended for by learned counsel for the respondents. What is being defined is retrenchment, and that is the context of the definition. It is true that an artificial definition may include a meaning different from or in excess of the ordinary acceptation of the word which is the subject of definition; but there must then be compelling words to show that such a meaning different from or in excess of the ordinary meaning is intended. Where, within the framework of the ordinary acceptation of the word, every single requirement of the definition clause is fulfilled, it would be wrong to take the definition as destroying the essential meaning of the word defined." Again in paragraph 19 it was observed: "For the reasons given above, we hold, contrary to the view expressed by the Bombay High Court, that retrenchment as defined in section 2 (oo) and as used in section 25-F has no wider meaning than the ordinary, accepted connotation of the word: it means the discharge of surplus labour or staff by the employer for any reasons whatsoever otherwise than as a punishment inflicted by way of disciplinary action, and it has no application where the services of all workmen have been terminated by the employer on a real and bona fide closure of business as in the case of Shri Dinesh Mills Ltd. or where the services of all workmen have been terminated by the employer on the business or undertaking being taken over by another employer in circumstances like those of the Railway Company.
* * * * On our interpretation, in no case is there any retrenchment, unless there is discharge of surplus labour or staff in a continuing or running industry." (Underlining mine) 7. The pronouncement in the Pipraich Sugar Mills, Ltd. v. Pipraich Sugar Mills Mazdoor Union A.I.R 1957 S.C. 95 was with respect to a retrenchment effected in 1951 and before the statutory definition of retrenchment was incorporated in section 2 (oo) by the Amending Act 43 of 1953. Still, the court sustained its earlier exposition. In Anakapalle Co-operative Agrl. and Industrial Society Ltd. v. Workmen A.I.R 1963 S.C. 1489 the "Supreme Court again noticed the decision in the Hari Prasad Shiv Shankar Shukla and another v. A. D. Divelkar and others A.I.R 1957 S.C. 121 as having clearly shown that termination of service resulting from transfer or closure is not retrenchment, and further pointed out that in enacting section 25-F of the Industrial Disputes Act as amended, the legislature had accepted the correctness of the decision, (vide paragraphs 14 and 19). 8. There was no case before me that the termination of service in question would be excluded from the scope of retrenchment by reason of any one of the three exceptions (a) to (c) in section 2 (oo). The controversy turned on whether it would fall at all within the main part of definition of the term. According to the petitioners' counsel, as there was termination of service in a continuing industry, it must amount to, retrenchment and the reasons therefor are immaterial. On the other hand, according to the counsel for the respondent, as termination of service was not on considerations of surplus labour, there can be no question of retrenchment. Looking to the definition of retrenchment in section 2 (oo) and the narrower scope with in which the words "for any reason whatsoever'' was confined by the Supreme Court in the Hari Prasad Shiv Shanker Shukla and another v. A. D. Divelkar and others A.I.R. 1957 S.C. 121 it seems to me that the termination otherwise than,, by way of discharge of surplus labour cannot be comprehended within the term "retrenchment". The observations in the concluding sentence of paragraph 19 of the judgment in the Hari Prasad Shiv Shanker Shukla and another v. A. D. Divelkar and others A.I.R. 1957 S.C. 121 appear to be conclusive of the matter. 9.
The observations in the concluding sentence of paragraph 19 of the judgment in the Hari Prasad Shiv Shanker Shukla and another v. A. D. Divelkar and others A.I.R. 1957 S.C. 121 appear to be conclusive of the matter. 9. Apart from principle, on the state of the authorities, it seems to be clear that discharge of workmen on the ground of superannuation cannot amount to retrenchment. In Burra Kur Coal Co., Ltd. v. Azimuddin Ashraff A.I.R. 1960 Patna 554 the service of an employee was dispensed with on the ground of old age and infirmity. It was held that the same would not amount to retrenchment as it was not on the ground of surplus labour. It was also ruled that the termination would fall within exception (c) of section 2 (oo) of the Act. But this latter ground of decision does not in any way detract from the force of the former one. In The Managing Director, The National Garage, Nagpur v. Gonsalves Automobile Foreman Nagpur A.I.R. 1962 Bombay 152, a Full Bench of the Bombay High Court ruled that termination of service simpliciter under the terms of a Standing Order providing for one month's notice would not amount to retrenchment under section 2 (oo). All the authorities were reviewed. In Sh. Parsidh Singh v. State of Jammu and Kashmir and others A.I.R. 1965 J. & K. 124 the question directly arose whether the termination of service on reaching the age of superannuation would amount to retrenchment. It was ruled that it would not, as it was neither averred nor proved that there was any discharge of surplus labour. I am in respectful agreement with the principle of the above decisions. The petitioner in these cases have neither alleged nor substantiated that the termination of their service was on the ground that employees had become surplus. In the absence of this essential ingredient, I cannot hold that there was any "retrenchment" of the petitioners. No question of violation of section 25-F of the Industrial Disputes Act can therefore arise. 10. Condition No. (iv) of Ext. P-1 was sought to be condemned as arbitrary on the strength of certain observations of the Supreme Court in the Hindustan Automobiles Ltd. v. Their Workmen 1967 I.L.L.J. 114.
No question of violation of section 25-F of the Industrial Disputes Act can therefore arise. 10. Condition No. (iv) of Ext. P-1 was sought to be condemned as arbitrary on the strength of certain observations of the Supreme Court in the Hindustan Automobiles Ltd. v. Their Workmen 1967 I.L.L.J. 114. In the appeal filed by the workmen which was also dealt with by the Supreme Court in the said decision, one of the questions related to the fixation of the age of retirement for the employees. The existing age of retirement was 55, extendable to 60, at the discretion of the management if the workmen were considered suitable and if they were medically fit and mentally alert. The Tribunal had raised the age of retirement from 55 to 58 years, giving a discretion to the Company to continue an employee after that age. Following the trend of judicial opinion on the point, the Supreme Court held that the age of retirement of the employees should be raised to 60 years. Directly therefore, a pronouncement on the validity or propriety" of the discretion vested in the management to continue an employee beyond 55 years of age, did not call for notice or arise for consideration before the Supreme Court. Even so, the Supreme Court noticed an indication in the conferment of the discretion, that even in the opinion of the Tribunal the retirement age in the case of employees, might reasonably be raised, beyond 55 years. The Court then made the following observations, which are entitled to the greatest respect. "We do not think it is proper to give a discretion to the company to raise the age of retirement or not to do so, for, the vesting of such uncontrolled discretion in the employer might lead to manipulation and victimization." The above observation, as I understand it, is not to be understood as an authority that a discretionary power of the type conferred on the management in that case, should, in all cases and circumstances be regarded as per se arbitrary and struck down, on that ground. It seems to me having regard to the purpose of the power, the circumstances under which it was given, the authority in whom the power is vested, and the manner of its exercise as provided in Ext.
It seems to me having regard to the purpose of the power, the circumstances under which it was given, the authority in whom the power is vested, and the manner of its exercise as provided in Ext. P-1, it is essentially a case where an individual exercise of the power may well be relieved against in a proper case, rather than one for striking down the entire power itself as invalid. There was no case before me that the petitioners had been subjected to any victimisation or manipulation in exercise of the power. On the other hand, the facts placed show that raising of the age of retirement by Ext. P-1 was coupled with certain conditions. The petitioners took advantage of those conditions, and in accordance with the condition No. 1, were continued in service beyond 55 years, by proper orders of the type of Ext. P-2. These orders expressly recited that their continuance in service was subject to condition No. (iv) of Ext. P-1. In the circumstances, I see no case for arbitrariness, much the less for manipulation or victimisation. 11. If there was no retrenchment of the petitioners, they are not entitled to any relief in these writ petitions, as they are unable to point to any contravention of any statutory or legal provision in the matter of the termination of their services. It is therefore strictly unnecessary to deal with the defence pleaded that Ext. P-3 order was in pursuance of conciliation proceedings to which the Unions of workers were parties, and that therefore the same would be binding on all the employees of the Corporation. As the question was argued at length before me, and as the matter is not likely to rest with my decision, I may indicate my view.
P-3 order was in pursuance of conciliation proceedings to which the Unions of workers were parties, and that therefore the same would be binding on all the employees of the Corporation. As the question was argued at length before me, and as the matter is not likely to rest with my decision, I may indicate my view. Section 18 (3) (d) of the Industrial Disputes Act which was relied on by the respondent-Corporation is in these terms: "18 (3) A settlement arrived at in the course of conciliation proceedings under this Act or an award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on- (a) * * * * * (b) * * * * * (c) * * * * * (d) where a party referred to in clause (a) or clause [b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part." 12. The averments relating to the settlement are contained in paragraph 5 of the counter-affidavit to the effect that the trade unions of the employees of the respondent-Corporation made a demand for lowering the age of superannuation from 58 to 55, and that since an industrial dispute was apprehended, conciliation proceedings were started by the Labour Commissioner (Conciliation Officer), who brought about a settlement of the dispute on 25th June 1967. It is stated that an agreement was entered into that day, between the Chief Labour and Personnel Officer of the Corporation as representing the employers and 9 members of the Unions as representing the workmen of the Corporation, and that Ext. P-3 order was issued pursuant to the agreement. Ext. P-3 also recites and sets out the agreement so reached. It seems to me that on the averments thus made, the provisions of section 18 (3) (d) of the Industrial Disputes Act are attracted and that the petitioners are bound by the agreement to reduce the age of superannuation from 58 to 55 years. If so, they cannot have any complaint against the impugned notices, issued in pursuance of the said decision.
If so, they cannot have any complaint against the impugned notices, issued in pursuance of the said decision. But the petitioners' counsel contended that no one in the category of employees above 55 years of age and continued thereafter in accordance with the conditions in Ext. P-1 was a member of the Unions which participated in the conciliation proceedings, and therefore the agreement arrived at was not binding on the petitioners. It was said that only employees within this age group are directly affected by the decision. I am unable to read this limitation into the provisions of section 18 (3) (d) of the Act. As I understand from the averments made, there was a dispute between the employees of the respondent-Corporation and the Corporation itself in regard to the age of superannuation of the employees. The said dispute in which the employees and employers were vitally interested, was the subject-matter of conciliation proceedings and the agreement which resulted in Ext. P-3. Irrespective of whether employees within a certain age limit or at a certain stage of service were represented in the Unions or not, it appears to me that the conciliation proceedings must be binding, and I hold accordingly. It was frankly admitted by the petitioners that this part of the argument, if accepted at all, will be of no avail to the petitioners 9 and 10 in O.P. No. 3063/1966. 13. Arguments on the question of legal and equitable estoppel against termination of services were feeble. No materials were placed before me to substantiate the plea, and I am unable to see how any question of estoppel whether legal, equitable or otherwise can arise in the circumstances. 14. I dismiss these writ petitions but make no order as to costs.