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1979 DIGILAW 205 (MP)

UNION OF INDIA v. CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL-GUM-LABOUR COURT 724 NAPIER TOWN JABALPUR

1979-07-18

G.P.SINGH, U.N.BHACHAWAT

body1979
JUDGMENT : ( 1. ) SHIV Kant Shukla respondent No. 2 in this petition, was employed as a P. L. Fitter in South Eastern Railway. The respondent was convicted for an offence under section 323 of the Indian Penal Code. As a result of his conviction, the respondent was compulsorily retired as a matter of punishment from 24th March 1965. The respondent was re-employed on compassionate grounds as a Khalasi from 1st July 1970. The respondent challenged the order of his compulsory retirement in the High Court in miscellaneous Petition No. 378 of 1974 which was dismissed on 13th november 1975. The High Court refused to go into the merits of the respondents case and dismissed the petition on the ground of delay. The respondent retired from Railway service on superannuation from 1st July 1976. The respondent made an application on 4th September 1976 to the Labour Court, jabalpur under section 33-C (2) of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act) for award of wages as P. L. Fitter from 1st september 1964 to 1st July 1976 and for getting the retirement benefits on the footing that his compulsory retirement as P. L. Fitter was invalid and void and he all along continued to hold that post. This application was allowed by the Labour Court by order, dated 28th February 1977. By this petition under Article 226 of the Constitution, the Union of India and the Divisional engineer, South Eastern Railway challenge the said order. ( 2. ) THE argument of the learned counsel for the petitioners that under section 33-C (2) of the Act the Labour Court had no jurisdiction to go into the question of the validity of the order of compulsory retirement and award wages and benefits by holding it to be invalid. The argument of the learned counsel appearing for the respondents, on the other hand, is that the order of compulsory retirement was void a b initio, being in contravention of rule 1719 of the Railway Establishment Code, Volume I, and, therefore, it was open to the Labour Court to ignore that order and treat the respondent entitled to the wages and benefits as P. L. Fitter. ( 3. ( 3. ) THE law seems to be well settled that the proceeding under section 33-C (2) of the Act is a proceeding in the nature of an execution proceed-ing wherein the Labour Court calculates the amount of money due to a workman from his employer, or, if the workman is entitled to any benefit which is capable of being computed in terms of money, it proceeds to compute the benefit in terms of money. This calculation or computation follows upon an existing right to the money or benefit, in view of its being previously adjudged, or, otherwise, duly provided for. A workman will normally not be entitled to ignore the order dismissing or terminating his employment and to seek relief under section 33-C (2) on the footing that the dismissal or termination was wrongful and that the wages or benefits should be calculated on the basis that he continued in service. In The Central Bank of India Ltd. v. P. S. Rajagopaian, (AIR 1964 S C 743.) the Supreme Court observed: "if an employee is dismissed or demoted and it is his case that the dismissal or demotion is wrongful, it would not be open to him to make a claim for the recovery of his salary or wages under section 33-C (2 ). His demotion or dismissal may give rise to an industrial dispute which may be appropriately tried, but once it is shown that the employer has dismissed or demoted him, a claim that the dismissal or demotion is unlawful and, therefore, the employee continues to be the workman of the employer and is entitled to the benefits due to him under a pre-existing contract cannot be made under section 33-C (2 ). " The same point was considered by the Supreme Court in central Inland Water Transport Corporation Ltd. v. The Workmen, (AIR 1974 S C1604, at p. 1610. ). The following observations of the Court are pertinent on this point: "by merely making a claim in a loaded form the workmen cannot give the Labour Court jurisdiction under section 33-C (2 ). The workman who has been dismissed would no longer be in the employment of the employer. It may be that an industrial tribunal may find on an investigation into the circumstances of the dismissal that the dismissal was unjustified. The workman who has been dismissed would no longer be in the employment of the employer. It may be that an industrial tribunal may find on an investigation into the circumstances of the dismissal that the dismissal was unjustified. But when he comes before the Labour Court with his claim for computation of his wages under section 33-C (2) he cannot ask the labour Court to disregard his dismissal as wrongful and on that basis compute his wages. In such cases, a determination as to whether the dismissal was unjustified would be the principal matter for adjudication, and computation of wages just consequential upon such adjudication. It would be wrong to consider the principal adjudication as incidental to the computation. Moreover, if we assume that the Labour Court had jurisdiction to make the investigation into the circumstances of the dismissal, a very anomalous situation would arise. The Labour Court after holding that the dismissal was wrongful would have no jurisdiction to direct reinstatement under section 33-C (2 ). And yet if its jurisdiction to compute the benefit is conceded it will be like conceding its authority to pass orders awarding wages as many times as the workman comes before it without being reinstated. Therefore, the Labour Court exercising jurisdiction under section 33-C (2) has got to be circumspect before it undertakes an investigation, reminding itself that any investigation it undertakes is, in a real sense, incidental to its computation of a benefit under an existing right, which is its principal concern. " But in Punjab Beverages v. Suresh Chand, (AIR 1978 s c 995.) which related to an application made under section 33-C (2) by a workman whose services were terminated in violation of section 33 of the Act, there are observations to the effect that if an order of termination of employment is null and void" "ab initio" or ""wholly without force or effect", the workman can make an application under section 33-C (2) without raising an industrial dispute or taking other steps for setting aside the termination order. The Supreme Court, however, held that the order of termination of employment in breach of section 33 was not void ab initio and, therefore, the application was not maintainable under section 33-C (2 ). The Supreme Court, however, held that the order of termination of employment in breach of section 33 was not void ab initio and, therefore, the application was not maintainable under section 33-C (2 ). In that context it was pointed out that the remedy of challenging such an order is provided under section 33-A; and even if there be a breach of the provisions of section 33, the Tribunal cannot simply on that ground declare the order void and reinstate the workman. The Tribunal can permit the employer to lead evidence of misconduct on which the employment was terminated; and if it holds that the employee was guilty of misconduct and the employer was not guilty of any unfair labour practice and vindictiveness, the order of termination would be upheld even if there was contravention of section 33. ( 4. ) IN the light of the aforesaid decisions of the Supreme Court, it has to be seen whether the order of compulsory retirement passed against the respondent was void ab initio which could be ignored by the Labour Court while dealing with the application under section 33-C (2 ). The only infirmity which has been found by the Labour Court in the order of compulsory retirement is that the respondent was not given a hearing before passing the order and there was no summary enquiry held by the disciplinary authority in the manner required by the decision of the Supreme Court in Divisional Personnel officer v. T. R. Challappan,a I R 1975 S C 2216, p. 2225. ). Rule 1719 of the Railway Establishment Code corresponds to Rule 14 of the Railway Servants (Discipline and Appeal)Rules, 1968, which was considered in Challappans case. It will be recalled that the respondent was compulsorily retired on the ground of conduct which had led to his conviction on a criminal charge. The Supreme Court while interpreting Rule 14 of the Railway Servants (Discipline and Appeal) Rules said that even in such cases the disciplinary authority has to embark upon a summary enquiry as to the nature and extent of the penalty to be imposed on the delinquent employee, and before taking final action the delinquent employee has to be heard and the circumstances of the case objectively considered. As Rule 1719 of the Railway Establishment Code has the same wording as Rule 14 (1) of the Railway Servants (Discipline and Appeal) Rules, the same construction must be adopted of the former. Before imposing a penalty under Rule 1719 of the Railway Establishment Code on the ground of conduct which had led to the conviction of the delinquent employee on a criminal charge, he ought to be noticed and heard and the disciplinary authority must make a summary enquiry relating to the nature and extent of the penalty to be imposed. Admittedly, this was not done by the disciplinary authority in the instant case. The order of compulsory retirement of the respondent suffers from the infirmity that it did not follow the procedure required under rule 1719. The question then is whether the non-compliance with Rule 1719 made the order of compulsory retirement void ab initio justifying its overlooking by the Labour Court while dealing with the application under section 33-C (2 ). Challappans case points out that the statutory requirement of" the rule that there should be a summary enquiry as to the nature and extent of the punishment t0 be imposed and the delinquent employee should be heard is importation of the rule of natural justice. It also holds that if the statutory requirement is not followed, the order of termination or dismissal becomes invalid and has to be quashed. ( 5. ) THERE is some controversy on tbe question whether an order passed in disregard of a rule of natural justice is void or voidable. The Privy council in Durayappah v. Fernando, (1967-2 A C 337=1967-2 All E R 152) held that an order of a Minister dissolving a Municipal Council without following the requirements of natural justice was not a nullity but merely voidable at the instance of the Council and was not liable to be set aside at the instance of the Mayor, although if challenged and avoided at the instance of the Council, the order would be void ab initio this concept of voidable administrative order has invited criticism : [see Wade unlawful Administrative Action: Void or Voidable, 83 Law Quarterly review 499 and 84 Law Quarterly Review 95; De Smith Judicial Review of administrative Action, 2nd Edition, p. 227; 30 Modern Law Review 701 ). Professor Wade on a thorough analysis of the earlier cases and principles of administrative law has shown that the view taken in Durayappahs case proceeds on wrong principles and on a wrong reading of the speech of Lord morris in Ridge v. Baldwin, (1964 AC 40) Professor Wades conclusion, so far as relevant for our purpose, are : (a) Acts of public authorities "are either lawful and valid or unlawful and void. That is why voidable has never played a part in administrative law and should play no part now. ; (b) The question whether a third party can challenge a void Governmental act not aimed primarily at himself is governed by settled rules which vary according to remedy sought. These rules have long been in operation without any such question as void or voidable being thought relevant"; (c) "it is erroneous to suppose that an unlawful administrative act can have legal effect only if it is called voidable as opposed to void. If not challenged in law, or if the Court will not grant a remedy under the usual rules, a void act may have the effect of a valid act, since it cannot be opposed". (83 Law Quarterly Review p. 529); and (d) "the Courts have always held that failure to give a fair hearing makes the decision void, not voidable. " (84 Law Quarterly Review p. 115 ). 1 he above analysis of Professor Wade was accepted by a Division Bench of this Court in Suresh Seth v. State, (1969 M P L J 327= A I R 1970 M P 154. ). The debate of "void or voidable" continues and is further seen in the decision of the Court of Appeal in F. Hoffmann La Boche A. G. and others v. Secretary of State for Trade and Industry, ( (1973) 3 W L R 805. ). In that case the plaintiff Company had challenged the validity of an order made by the Secretary of State, following an enquiry and report by the Monopolies Commission requiring the Company to make large cuts in the prices of its products. It was contended that the Commission had violated the principles of natural justice and its report was void and the statutory order based on it was a nullity. It was contended that the Commission had violated the principles of natural justice and its report was void and the statutory order based on it was a nullity. In holding that the report of the Commission, even if it violated the principles of natural justice, was capable of legal consequences and the Secretary of State was entitled to act on it, Lord Denning M. R. observed: "i will assume for present purposes that the Monopolies Commission did act contrary to the rules of natural justice-though I would not wish to imply that it was in fact the case. Mr. Yorke says that their report would be void. He referred us to passages from Ridge v. Beldwin, ( (1964) a c 40, 80.), durayappah v. Fernando, ( (1967) 2 a c 337, 355.) and Anisminic Ltd. v. Foreign Compensation commission, ( (1969) 2 a c 147, 171. ). I have always understood the word void to mean that the transaction in question is absolutely void-a nullity incapable of any legal consequences-not only bad but incurably bad - so much so that all the world can ignore it and that nothing can be founded on it: see Mac Foy v. United Africa Co. Ltd. , ( (1962) a c 152, 160. ). If the word void is used in that sense, the report of the Monopolies commission was certainly not void. A failure to observe the rules of natural justice does not render a decision or order or report absolutely void in the sense that it is a nullity. The legal consequences are best told by recounting the remedies available in respect of it. A person who has been unfairly treated (by reason of the breach of natural justice) can go to the Courts and ask for the decision or order or report, or whatever it is, to be quashed, or for a declaration that it is invalid, that it has not and never has had any effect as against him. But it is a personal remedy, personal to him. If he does not choose himself to query it and seek a remedy, no one else can do so: see Durayappah v. Fernando. But it is within the discretion of the Court whether to grant him such a remedy or not. He may be debarred from relief if he has acquiesced in the invalidity or has waived it. If he does not choose himself to query it and seek a remedy, no one else can do so: see Durayappah v. Fernando. But it is within the discretion of the Court whether to grant him such a remedy or not. He may be debarred from relief if he has acquiesced in the invalidity or has waived it. If he does not come with due diligence and ask for it to be set aside, he may be sent away with nothing: see Reg. v. Aston university Senate, Ex parte Roffey, ( (1969) 2 q b 538.) If his conduct has been disgraceful and he has in fact suffered no injustice, he may be refused relief; see glynn v. Keele University, ( (1971) 1 w l r 487.) and Ward v. Bradford Corpn. , ( (1971) 70 l gr27. ). If it is a decision or order or report which affects many other persons besides him, the Court may not think it right to declare it invalid at his instance alone: see Maxwell v. Department of Trade and Industry (unreported), 20th December 1972, a decision of Wren J. of which we were supplied with a transcript. Moreover, pending a decision by the Courts as to its validity, other persons may be justified in acting on the footing that it is valid. If the decision or order or report is good on the face of it, and there is no good reason for supposing it to be invalid, other persons can treat it as valid. To it I would apply the words of Lord Redeliffe in smith v. East Elloe Rural District Council, ( (1956) A C 736, 769-770.) : an order. . . . . . . . . . . . is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders. so here, the report of the Monopolies Commission, even if it was made in breach of the rules of natural justice, is still capable of legal consequences. The question, therefore, is of what legal consequences is it capable ? so here, the report of the Monopolies Commission, even if it was made in breach of the rules of natural justice, is still capable of legal consequences. The question, therefore, is of what legal consequences is it capable ? In my opinion, when the secretary of State received the report of the Monopolies Commission, he was entitled to treat it as valid and to act as he died on the faith of it. " [ pp. 822, 823. ] there appears an interesting note on the above-quoted observations of Lord denning in 90 Law Quarterly Review 155 which runs as follows: "as has been argued in this Review (83 L Q R 499; 84 L Q R 95), it has never been necessary to treat void as meaning absolutely void in Lord Dennings sense of a transaction which is a nullity incapable of any legal consequences. Voidness is relative, not absolute, and all depends upon the right remedy being sought by the right person in the right proceedings. The same probably applies even to an order void on its face. If in Ridge v. Baldwin the order for the chief constables dismissal had stated it was because he had red hair, he would still have had to go to the Court to recover his office, effectively. And if he had not contested his dismissal, it is most unlikely that third parties would have been allowed to dispute the validity of his successors acts on the ground that the office was still held by the predecessor. Every case must depend upon the willingness of the Court to grant a remedy rather than upon any logic to be extracted from absolutely void or voidable. The key is not absolutism but relativity. Confusion must continue to reign so long as Courts attempt to take at face value the contradictions propounded by the Judicial Committee of the Privy Council in Durayappah v. Farnando. That decision endeavoured to reinstate the minority opinion in Ridge v. Baldwin in opposition to the majority of the House of Lords, who clearly held that a breach of natural justice rendered a decision void and not voidable. That decision endeavoured to reinstate the minority opinion in Ridge v. Baldwin in opposition to the majority of the House of Lords, who clearly held that a breach of natural justice rendered a decision void and not voidable. Durayappah is flawed not only by this inconsistency but also by a serious misrepresentation of the opinion of Lord Morris of Borthy-y-Gest in Ridge-as has been observed not only in this review (83 L Q R 513) but by two learned judges Speight J. in Dentom v. Aucland City, ( (1969) N Z L R 256 at 258.) and Megarry J. in Hounslow L. B. C v. Twickenham Garden Developments Ltd. , ( (1971) Ch. 233, 258. ). It is no wonder that judges bound by Durayappah have despaired at the flux and confusion which is brought upon them. Others may take heart from megarry J. s criticism of the misleading use of voidable in Durayappah and from his admirably clear statement that an irregular decision in breach of natural justice is about as void as anything can be; but if nobody who is entitled to challenge or question it chooses to do so, it remains in being. flux and confusion were the words of the learned Chief Justice of south Australia in Hinton Demolitions Pvt. Ltd. v. Lower, ( (1971) 1 S A S R 512.) where his court had to wrestle with Durayappahs insoluble problems. Here also it was sought to go behind an apparently valid order on grounds of breach of natural justice. The breach was alleged against the registrar of motor vehicles, who had rated a lorrys load capacity as over 8 tons, which made certain regulations applicable. The lorry owner, when prosecuted for breach of the regulations, contended that the registrars determination was a nullity. The Supreme Court held that this defence was not open to him in collateral criminal proceedings. One obvious consideration is that in such proceedings the proper parties may not be before the Court. Sometimes the Court may allow collateral challenge, as the House of Lords did in D. P. P. v. Head, already mentioned. But no logical criterion distinguishes other cases where the Court will not allow it. The prospects will naturally be brightest where the order is bad on its face. " ( 6. Sometimes the Court may allow collateral challenge, as the House of Lords did in D. P. P. v. Head, already mentioned. But no logical criterion distinguishes other cases where the Court will not allow it. The prospects will naturally be brightest where the order is bad on its face. " ( 6. ) WE will assume for purposes of this case that the order of compulsory retirement being in violation of the statutory requirement of natural justice contained in Rule 1719 of the Railway Establishment Code was void. Yet we are unable to hold that at the stage the Labour Court entertained the application under section 33-C (2) the order could be disregarded as void. In this respect proposition No. (c), quoted above from Professor Wades analysis, becomes relevant. As mentioned therein: "if not challenged in law, or if the Court will not grant a remedy under the usual rules, a void act may have the effect of a valid act, since it cannot be opposed. " When the order of compulsory retirement was passed against the respondent, he had three remedies to challenge that order : (i) He could file a suit for setting aside the order of compulsory retirement within a period of three years; (ii) He could file a petition under Article 226 of the Constitution, which he did; and (iii) He could challenge it in a reference made by the Government under section 10 of the Act if the dispute became an industrial dispute. The respondent did not file any suit for challenging the order of compulsory retirement within the period allowed by law. He only filed a writ petition after nearly nine years which was dismissed on the ground of delay and the high Court refused to go into the question of the validity of the order of compulsory retirement. The only remedy that was left to the respondent after the dismissal of the writ petition was a reference by the Government of an industrial dispute involving the validity of the order of compulsory retirement. Now, it is well known that if an order of punishment is passed without holding an enquiry, or otherwise without following the principles of natural justice, the Tribunal in deciding an industrial dispute pertaining to the punishment does not straightway set aside the punishment. Now, it is well known that if an order of punishment is passed without holding an enquiry, or otherwise without following the principles of natural justice, the Tribunal in deciding an industrial dispute pertaining to the punishment does not straightway set aside the punishment. If the tribunal holds that there was no enquiry or that there was infirmity in the enquiry, it gives an opportunity to the employer to prove the misconduct; and if the employer succeeds in proving the misconduct before the Tribunal, the order of punishment is upheld. The adjudication of a dispute relating to an order of termination of employment or dismissal on a misconduct does not thus proceed on the basis that the order of termination of dismissal can be declared to be void and the employee reinstated the moment it is shown that there was non-compliance with the principles of natural justice or a provision of law requiring the employer to follow the principles of natural justice. See M\s Laxmirattan Cotton Mills v. Its Workmen, (air 1975 S C 1689, p. 1697. ). It was on similar reasoning that the Supreme Court in Punjab Beverages v. Suresh Chand (supra) on a consideration of section 33-A of the Act did not hold that an order of termination of employment passed in contravention of section 33 was void ab initio and the concerned employee could file an application under section 33 C (2), ignoring the order of termination. Thus the position comes to this that when the matter came up before the Labour Court on an application under section 33-C (2), the only available remedy to the respondent for challenging the order of compulsory retirement was to move the Government for reference of an industrial dispute involving the validity of the order of his compulsory retirement. The respondent, as earlier stated, had failed to take the benefit of the remedy of a civil suit and had gone to the High court under Article 226 of the Constitution at a very late stage and the High court had refused to declare the order of compulsory retirement invalid and void. The respondent, as earlier stated, had failed to take the benefit of the remedy of a civil suit and had gone to the High court under Article 226 of the Constitution at a very late stage and the High court had refused to declare the order of compulsory retirement invalid and void. Now, as seen above, even if the respondent had resorted to the remedy of industrial adjudication by getting a reference made under section 10, he could not have obtained a declaration that the order was void by merely showing that there was non-compliance with the principles of natural justice and the requirement of summary enquiry implicit in Rule 1719 as the tribunal after finding the infirmity would have itself held the necessary enquiry and heard the respondent and could have upheld the order of compulsory retirement. In these circumstances, the respondent was not entitled to raise a collateral challenge to the order of compulsory retirement and it was not open to the Labour Court at the stage when the application under section 33-C (2) was filed before it to ignore the order of compulsory retirement as a nullity or non existent or void ab initio and to proceed upon the basis that the respondent continued to be a P. L. Fitter throughout his career. By ignoring the order of compulsory retirement and by holding that the respondent all along continued in service as a P. L. Fitter simply on the ground of contravention of Rule 1719, the Labour Court has in effect granted a declaration of the invalidity of the order in a collateral challenge, a relief which the respondent at that stage could not have got even by pursuing the normal remedy open to him for directly challenging the order. In doing so, the labour Court clearly went beyond its jurisdiction under section 33-C (2)which, as already seen, is in the nature of an executing Court. ( 7. ) THE petition is allowed. The impugned order of the Labour Court is quashed. There shall, however, be no order as to costs. The security amount be refunded to the petitioners. Petition allowed.