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1977 DIGILAW 63 (CAL)

UNION OF INDIA v. Piru Kisku

1977-02-22

M.M.Dutt, SABYASACHI MUKHARJEE

body1977
JUDGMENT 1. IN this appeal, the respondents who are 77 is number, joined the services under the South Eastern Railway, as casual labourers (Gangman) and they have put in 6 to 12, years of continuous services in the said Railway under the permanent pay Inspector, Satragachi (East), in the district of Howrah. In view of clause (b) of the rule 2501 of Chapter xxv of the Railway Establishment Manual, the respondents having worked for more than six months without a break, have acquired the status of casual labour to be treated as temrary. There was a general strike in all the Railways which commenced in West Bengal from May 8, 1974 and continued till May 27, 1974 when it was called off, It is the case of the respondents that they could not attend their duties for reasons beyond their control. After the withdrawal of the general strike they reported for duties on May 28 1974, but they were not given any work by the authorities concerned without assigning any [reason. Subsequently, they received cyclostyled notices dated May 21, 1974 whereby their services were terminated under Rule 149 (1) of the Railway Establishment Code, Volume I. It was directed in the notices that they would be paid the sum equivalent to the amount of pay and allowances for one month in lieu of the period of notices. . They challenged the ' legality of the notices terminating their services by a Writ petition under Article 226 of the Constitution and obtained a Rule being C. R. No. 4798 (w) of 1974. The said Rule along with two other Rules were heard together by A. K. Mookerji, J. and his Lordship by his judgment dated October 7, 1974 made the said Rules absolute on the ground that as payment of one month salary in lieu of notice had not been made simultaneously with the issuance of the notices under Rule 149, the impugned orders of termination were illegal" and must be set aside. Thereafter, fresh notices under Rule 149i (l) were issued by the Railway on June 23, 1975 terminating the services of the respondents with effect from July 1, 1975. It was further directed that the sum equivalent to the amount of pay and allowances for the notice period of one month had been kept ready for payment. Thereafter, fresh notices under Rule 149i (l) were issued by the Railway on June 23, 1975 terminating the services of the respondents with effect from July 1, 1975. It was further directed that the sum equivalent to the amount of pay and allowances for the notice period of one month had been kept ready for payment. The respondents again challenged the termination of their services by the fresh notices, all dated June 24, 1975 and issued under Rule 149 (1), and obtained a Rule Nisi out of which this appeal arises. 2. THE principal contentions of the respondents in the Rule were that they are workmen within the meaning of the industrial Disputes Act, 1947, that the termination of their services amounted to retrenchment an defined in section 2 (00) of the said Act and that the appellant, South Eastern Railway not having paid them compensation as required to be paid under section 25f, the orders of termination were illegal and inoperative. T. K. Basu J. who heard the Rule accepted the contentions of the respondents, set aside the orders of termination and made the Rule absolute. Hence, this appeal. It is not disputed before us that the respondents are workmen within the meaning of the Industrial Disputes act. Rule 149 consists of six clauses. The first part of clause (1) of Rule 149. inter alia provides that a railway servant will not be entitled to any notice of termination if his service is terminated on certain grounds as mentioned therein. Those grounds do not apply to the respondents. 'the latter part of clause (1) provides that if the termination of his service is due to some other cause, he shall be entitled to one month's notice provided he was engaged on a contract for a definite period and the contract does not provide for any other period of notice, and to a notice of fourteen days if he was not engaged on a contract. Clauses (2) and (3) provide for the termination of service of apprentices and certain other railway servants. Clause (4) lays down that in lieu of the notice prescribed in Rule 149, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice. Clauses (2) and (3) provide for the termination of service of apprentices and certain other railway servants. Clause (4) lays down that in lieu of the notice prescribed in Rule 149, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice. Under clause (5), the notice of termination of service Should be given by an authority not lower than the appointing authority. Clause (6) provides that notwithstanding anything contained in clauses (1), (2) and (4), if the railway servant or apprentice is one to whom the provisions of the Industrial Disputes Act, 1947, apply, he shall be entitled to notice or wage in lieu thereof in accordance with the provisions of that Act. 3. IT has been urged by Mr. Smriti kumar Roy Chowdhury, learned Advocate appearing on behalf of the appellant South Eastern Railway, that the termination of the services of the respondents under Rule 149 (1) is not retrenchment within the meaning of the definition of the term under section 2 (00) of the Industrial Disputes Act. Retrenchment has been defined in section 2 (00) as follows: "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. " 4. THE definition seems to be very wide and except in the four cases mentioned in the definition, termination of the service of a workman for any reason whatsoever, would tantamount to retrenchment. The interpretation of the expression "for any reason whatsoever" in the definition of the word 'retrenchment' came up for consideration before the Supreme Court in hariprasad Shivshankar Shukla v. A. D, Divelkar, A. I. R. 1957 S. C. 121. It has been held by a Bench of 5 Judges of the Supreme Court that 'retrenchment' as denned in section 2 (00) and as used in section 25f has no wider meaning than the ordinary accepted connotation of the word. It has been held by a Bench of 5 Judges of the Supreme Court that 'retrenchment' as denned in section 2 (00) and as used in section 25f 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 reason 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 his business. It follows from the above decision of the Supreme Court that the expression "for any reason whatsoever" does not mean that all cases of termination of service for any reason whatsoever will be retrenchment within the meaning of the term as defined in section 2 (00), but in order that a case may be said to be one of retrenchment two conditions must be fulfilled, namely, (1) the industry must be a going concern and (2) the termination must be on the ground of surplusage. This decision has been strongly relied on by the appellant, and there can be no doubt that the decision supports the contention of the appellant. On the other hand, Mr. Nani Coomar Chakrabarti, learned Advocate appearing on behalf of the respondents has placed reliance on a later decision of the Supreme Court by a Bench, consisting of 3 Judges in State Bank of India vs. Shri N. Sundara Money, A. I. R. 1976 S. C. 1111; 1976 Lab. I. C. 769. Krishna Iyer J. who delivered the judgment of the Court observed as follows: "a break-down of Sec. 2 (00) unmistakably expands the condition of retrenchment. "termination, for any reason whatsoever" are the key words. Whatever the reason, every termination spells retrenchment. So the sole questions is has the employees' service been terminated Verbal apparel apart, the substance is decisive. A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term To protect the weak against the strong this policy of comprehensive definition has been effectuated. Termination embraces not merely the act of termination by the employer, but the fact of termination however produced. A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term To protect the weak against the strong this policy of comprehensive definition has been effectuated. Termination embraces not merely the act of termination by the employer, but the fact of termination however produced. May be, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the armour of section 25f and Section 2 (00. Without speculating on possibilities, we may agree that 'retrenchment' is no longer terms incognito but area covered by an expansive definition. It means 'to end, conclude, cease' ". In that case, the respondent was appointed purely on a temporary basis for a period of nine days and it was stipulated that his service might be terminated without assigning any reason at the discretion of the appellant Bank. It was further provided that the employment, unless terminated earlier, would automatically cease on the expiry of the period, i. e., on November 18,1972. The question before the Supreme Court was whether the termination of the service of the respondent amounted to retrenchment within the meaning of section 2 (00. While holding that it was so Krishna Iyer J. further observed: " moreover, as employer terminates employment not merely by passing an order as the service runs. He can do so by writing a composite order, one giving employment and the other ending or limiting it. A separate, subsequent determination is not the sole magnetic pull of the provision. A pre-emptive provision to terminate is struck by the same vice as the post appointment termination. . . . " 5. IT is contended on behalf of the appellant that the decision in State Bank of India's case is in conflict with that in Hariprasad Shivsankar Shukla's case, and as the decision in the latter case was rendered by 5 Judges, it will prevail over the former. We are, however, relieved of the task of deciding whether or not the above two decisions of the Supreme Court are conflicting and which of the two decisions should prevail, for a more recent decision of the Supreme Court which will be referred to presently, has considered the matter. In Hindustan Steel Ltd. vs. Labour Court, Orissa, A. I. R. 1977 S. C. 31; 1976 Lab. In Hindustan Steel Ltd. vs. Labour Court, Orissa, A. I. R. 1977 S. C. 31; 1976 Lab. I. C. 1767, it was also contended before the Supreme Court by the learned Solicitor General that the above two decisions of the Supreme Court were in apparent conflict and as the decision in Hariprasad Shivshankar Shukla's case was by a larger Bench, the case of State Bank of India vs. Shri N. Sundarai Money required further consideration. Gupta J. who delivered the judgment of the Court observed as follows : "in Hariprasad Shivshankar Shukla vs. A. D. Divelkar (A. I. R. 1957 S. C. 121) to which the Solicitor General referred, one of the questions that arose for decision was whether the definition of retrenchment in Section 2 (00) goes "so far beyond the accepted notion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases to exist on a bona fide closure or discontinuance of his business by the employer ?" The question was answered in the negative on the authority of an even earlier case, Pipraich Sugar Mills Ltd. vs. Pipraich Sugar Mills Mazdoor Union, 1956 S. C. R. 872 which held that "retrenchment connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff or the labour force is discharged as surplusage and the termination of services of all the workmen as a result of the closure of the business cannot therefore be properly described as retrenchment. " Following Pipraich Sugar Mill's case it was held in Hariprasad Shivshankar Shukla vs. A. D. Divelkar, (A. I. R, 1957 S. C. 121) that the words "for any reason whatsoever" used in the definition would not include a bona fide closure of the whole business because "it would be against the entire scheme of the Act to give the definition clause relating) to retrenchment such a meaning as would include within the definition termination of service of all workmen by the employer when the business itself ceases to exist". On the facts of the case before us, giving full effect to the words "for any reason whatsoever" would be consistent with the scope and purpose of section 25f of the Industrial Disputes Act, and not contrary to the scheme of the Act. On the facts of the case before us, giving full effect to the words "for any reason whatsoever" would be consistent with the scope and purpose of section 25f of the Industrial Disputes Act, and not contrary to the scheme of the Act. We do not find anything in Hariprasad's case which is inconsistent with what has been held in State Bank of India v. N. Sundara Money (A. I. R. 1976 S. C. 1111. " 6. FROM the above observation of Gupta J. it appears that his Lordship after referring to the question that came up for consideration in Hariprasad Shukla's case and the decision on that question, came to the conclusion that there was no conflict between Hariprasad Shukla's case and the case of State Bank of India vs. N. Sundara Money. It, therefore, follows that so far as Hariprasad Shukla's case is concerned the principles of law laid down therein will apply to the facts and circumstances of that case, namely that termination of services of all workmen of an industry which itself ceases to exist on a bona fide closure or discontinuance of his business by the employer will not amount to retrenchment within the meaning of the definition of the term as given in section 2 (00. The interpretation as given by the Supreme Court in the case of Hindustan Steel Ltd. vs. Labour Court, Orissa, on the earlier two decisions, namely, that one is not inconsistent with the other, is binding on us. In these circumstances, we are unable to accept the contention of the appellant that the two decisions are conflicting and that the decision of the larger Bench in Hariprasad Shukla's case still covers the field. When there is no conflict between Hariprasad Shukla's case and the case of State Bank of India vs. N. Sundara Money as held in the case of Hindustan Steel Ltd., it follows that the termination of services of all workmen of an industry which is not a going concern will not be retrenchment within the meaning of section 2 (00), but in other cases, except those mentioned in section 2 (00), it will amount to retrenchment There can be no doubt that termination of services on the ground of surplusage in a going concern will be retrenchment. That the definition of the term 'retrenchment' as given in section 2 (00) is not limited only to the ease of surplusage but applies to other grounds of termination of services as well, is amply indicated in the judgement of Krishna Iyer J. in State Bank of India vs. N. Sundara Money when his Lordship observed "whatever the reason, every termination spells retrenchment. " Coming now to the merits of the instant case, it has been already stated, that by the impugned notices the services of the respondents were terminated with effect from July 1, 1975. No reason has been given in the said notices why the services of the respondents were terminated; In our opinion, Rule 149 (1) will not come in aid of the contention of the appellant that as the said Rude authorises the railway administration to terminate' the service of a temporary railway servant the question of compliance with section 25f of the Industrial Disputes Act does not arise. Clause (6) of rule 149 which has been quoted above enjoins the treatment of a railway servant to whom the provisions of the Industrial Disputes Act apply, in a way different from those to whom the said Act does not apply. As stated already, it is not disputed that the provisions of the industrial Disputes Act apply to the respondents and they are entitled to the notice or wage in lieu thereof in accordance with the provisions of the said Act as laid down in clause (6. It is, however, contended on behalf of the appellant that clause (6) does not entitle the respondents to the benefit of section 25f. It is true that clause (6) only provides for notice or wage in lieu thereof in accordance with the provisions of the Industrial Disputes Act, but that will not necessarily lead to an inference that the respondents will not get the benefit of section 25f. Apart from anything else, When there is termination of the services of railway employees in a mass scale, it will not be unreasonable to infer that such termination amounts to retrenchment within the meaning of section 2. (oo) of the Industrial Disputes Act. Apart from anything else, When there is termination of the services of railway employees in a mass scale, it will not be unreasonable to infer that such termination amounts to retrenchment within the meaning of section 2. (oo) of the Industrial Disputes Act. Before the Supreme Court in the case of State Bank of India vs. N. Sundara Money and in the case of Hindustan Steel Ltd. vs. Labour Court, the termination of the services of the employees concerned was provided in the respective contracts of service; In the instant case, the termination of the respondents was made by separate orders. We do not find any difference between these two cases of termination and relying on the above Supreme Court decisions, we hold that the termination of the services of the respondents was for all intents and purposes 'retrenchment' within the meaning of section 2 (oo) of the Industrial Disputes Act. As admittedly the provisions of section 25f was not complied with, the impugned notices of termination cannot be sustained in F. M. A. T. No. 151 of 1977. 7. IN this appeal, the points involved are the same as in the other appeal in F. M. A. T. No. 3473 of 1976and Mr. Ajoy Kumar Basu, learned Advocate appearing on behalf of the appellant, South Eastern Railway has adopted the arguments of Mr. Roy Choudhury. Mr. Basu has, however, urged an additional point, namely, that as the respondent failed to join the duty there was a break in this service and, and, accordingly, he not having been in continuous service for not less than one year, the provision of section 25p will not. apply to him. He has strongly relied on paragraph 2504 of Chapter XXV. of the Railway Manual which lays down certain circumstances in which the absence of a railway employee will not be considered as breaks in service for the purpose of determining six months continuous employment referred to in paragraph 2501 It is submitted by him that as the absence of the respondent from duty on account of the general strike is not one of continued to do the same work for which they were engaged or other work of the same type for more than six months without a break will be treated as temporary after the expiry of the six months of continuous employment. The breaks in service as provided for in paragraph 2504 relates only to the determination of six months continuous employment of casual labour as referred to in clause (b) of paragraph 2501 and not to any other purpose. The respondents in both these appeals acquired the status of casual labour to be treated as temporary after the expiry of six months of continuous employment and so it is clear that paragraph 2504 is in applicable to them. The contention of Mr. Basu, therefore, fails. No other point has been urged by him. 8. FOR the reasons aforesaid, both these appeals are dismissed, but in view of the facts and circumstances of the cases, we do. not make any order as to costs in either of them. As prayed for by the learned advocate for the appellants, there will be an interim order for a period of six weeks only to this extent that the appellants need not reinstate the respondents. Appeals dismissed.