Union of India v. Shri Mahaveer Prasad — 1981 DIGILAW 8 (RAJ)

DWARKA PRASAD, J.— This second appeal by the Union of India arises in the following circumstances :— 2. Mahaveer Prasad, plaintiff was a temporary employee of the Central Arid Zone Research Institute, Jodhpur (hereinafter referred to as the Institute). His services were terminated by the Director of the aforesaid institute after giving him one months notice on April 30, 1964. Mahaveer Prasad filed a suit in the court of Additional Munsiff No. 1, Jodhpur challenging the termination of his services on the ground that the same was brought about by way of punishment without complying with the requirements of Art. 311 of the Constitution. Another ground advanced by the plaintiff was that the termination of his services was in contravention of the provisions of Arts. 14 and 16 of the Constitution. The third ground advanced in the alternative was that the Central Arid Zone Research Institute, Jodhpur was an industry within the meaning of the clause(j) of section 2 of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act) and the services of the plaintiff were terminated without complying with the requirements of section 25F of the Act, which constituted a condition precedent for retrenchment. 3. The defence of the respondents was that the plaintiff Mahaveer Prasad was a temporary employee appointed under a particular scheme and on account of the partial reduction in the scheme, some of the posts were abolished and the services of the plaintiff were terminated by way of retrenchment. According to the defendants, the Departmental Promotion Committee reviewed the work of the plaintiff and placed him along with the other temporary employees in category C, which were not considered fit for permanent retention. Thus, according to the defendants, the termination of the services of the plaintiff was not brought about by way of punishment nor there was any contravention of the provisions of Articles 14 and 16 of the Constitution, but the termination of the plaintiff was on account of retrenchment. However, it was submitted that the provisions of section 25F of the Act were not applicable as the Institute was not an industry within the meaning of clause (j) of section 2 of the Act. 4. However, it was submitted that the provisions of section 25F of the Act were not applicable as the Institute was not an industry within the meaning of clause (j) of section 2 of the Act. 4. The trial court did not give any finding on the question as to whether the Institute was an Industry, as defined in the Act, nor it gave any finding on the question as to whether the provisions of Arts. 14 and 16 were contravened. However, it proceeded to hold that the services of the plaintiff were terminated by way of punishment and as the provisions of Art. 3 i 1 (2) of the Constitution were not complied with, it was held that the termination of the services of the plaintiff was illegal. Thus, the plaintiffs suit was decreed in respect of reinstatement. 5. An appeal was preferred by the Union of India and by the Director of the Institute. The learned Civil Judge, Jodhpur, in a well considered order, held that Art. 311 was not attracted as the services of the plaintiff were not terminated by way of punishment. It was held that there was no violation of the provisions of Articles 14 and 16 of the Constitution. However, the first appellate court held that the retrenchment of the plaintiff was illegal, on account of the non-compliance of the provisions of section 25F of the Act. It was also held, relying upon the decision of their Lordships of the Supreme Court in The State of Bombay vs. The Hospital Mazdoor Sabha (1), that the Institute was an industry, within the meaning of clause (j) of section (2) of the Act Thus, on the ground of non-compliance of the provisions of section 25F of the Act, the decree passed by the trial court was maintained. 6. In this appeal the argument of the learned counsel for the appellants is that the Institute is not an industry, and that the first appellate court erred in holding that the termination of the services of the plaintiff was in violation of the provisions of section 25F of the Act. 7. The expression industry has been defined in section 2(j) of the Act as under : — "industry" means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or a vocation of workmen." 8. 7. The expression industry has been defined in section 2(j) of the Act as under : — "industry" means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or a vocation of workmen." 8. There was divergence of opinion about the ambit and scope of the word industry, as employed in the Act, but the legal position in this respect has now been set at rest by the decision of their Lordships of the Supreme Court in Bangalore Water Supply vs. A. Rajappa (2). Krishna Iyer J., who delivered the leading judgment on behalf of their Lordships of the Supreme Court in Bangalore Water Supply case(2) observed that the expression industry, as defined in section 2(j) of the Act, is of widest amplitude and approved the earlier decision of the Supreme Court in Hospital Mazdoor Sabha case (1). The dominant test laid down in Bangalore Water Supply case (2) is as under : - "IV. The dominant nature test : (a) Where a complex of activities, some of which qualify for exemption others, not, involves employees on the total undertaking, some of whom are not workmen as in the University of Delhi case ( AIR 1963 SC 1873 ) or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur ( AIR 1960 SC 675 ), will be the true test. The whole undertaking will be industry although those who are not workmen by definition may not benefit by the status. (b) Notwithstanding the previous clauses, sovereign functions, strictly understood (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies. (c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantively severable, then they can be considered to come within S. 2(j). (d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby". 9. The question of research institutions was also considered by their Lordships of the Supreme Court in Bangalore Water Supply case (2) and the following observations were made by Krishna Iyer J., in this respect :— "Does, research involve collaboration between employer and employee? It does. 9. The question of research institutions was also considered by their Lordships of the Supreme Court in Bangalore Water Supply case (2) and the following observations were made by Krishna Iyer J., in this respect :— "Does, research involve collaboration between employer and employee? It does. The employer is the institution, the employees are the scientists, para-scientists and other personnel. Is scientific research service ? Undoubtedly it is. Its discoveries are valuable contributions to the wealth of the nation. Such discoveries may be sold for a heavy price in the industrial or other markets. Technology has to be paid for and technological inventions and innovations may be patented and sold. In our scientific and technological age nothing has more cash value, as intangible goods and invaluable services, than discoveries." xxx xxx xxx xxx xxx xxx "Research benefits industry. Even though a research institute may be a separate entity disconnected from the many industries which founded the institute itself, it can be regarded as an organisation, propelled by systematic activity, modelled on co-operation between employer and employee and calculated to throw up discoveries and inventions and useful solutions which benefit individual industries and the nation in terms of goods and services and wealth. It follows that research institutes, albeit run without profit-motive, are industries." 10. One of the appellants before their Lordships of the Supreme Court, whose appeal was decided along with the appeal of Bangalore Water Supply Corporation was Shriram Institute for Industrial Research and it was with reference to that appellant that the question of research institutes was considered by their Lordships and it was held that research institutes, although run without profit motive, were industries. 11. Thus it has now been authoritatively held that a research institute, though run without profit motive, is an industry within the meaning of sec 2(j> of the Act and the decision of their Lordships of the Supreme Court in Hospital Mazdoor Sabha case (1), relied upon by the first appellate court has been reaffirmed. It cannot now, therefore, be held that the Central Arid Zone Research Institute is not an industry within the meaning of the Act. Following the decision of their Lordships of the Supreme Court in Bangalore Water Supply case (2) the Institute is held to be an industry for the purposes of the Act. 12. It was admitted by the defendant-appellants that the services of the plaintiff were retrenched. Following the decision of their Lordships of the Supreme Court in Bangalore Water Supply case (2) the Institute is held to be an industry for the purposes of the Act. 12. It was admitted by the defendant-appellants that the services of the plaintiff were retrenched. Even if they would not have admitted the same, then also according to the recent decisions of their Lordships of the Supreme Court, every termination of service except those specifically referred to in section 2(oo) of the Act amount to retrenchment. 13. In Santosh Gupta V. State Bank of Patiala (3) Chinnappa Reddy J., quoted with approval the following observations of Krishna Iyer J. in State Bank of India V.N. Sundara Money (4)— "Termination......for any reason whatsoever are the key words. Whatever, the reason, every termination spells retrenchment. So the sole question 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 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 howsoever produced..... True, the section speaks of retrenchment by the employer and it is urged that some act of violation by the employer to bring about the termination is essential to attract section 25F and automatic extinguishment of service by effluxion of time cannot be sufficient......Words of multiple import have to be winnowed judicially to suit the social philosophy of the statute. So screened we hold that the transitive and intransitive senses are covered in the correct context. Moreover, an 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 preemptive provision to terminate is struck by the same vice as the post-appointment termination. Dexterity of diction cannot defeat the articulated conscience of the provision." 14. It is thus clear that the termination of the services of the plaintiff amounted to retrenchment and be was entitled to the benefits of the provisions of sec. 25F of the Act, which constituted a pre-condition for a lawful termination of his services. Dexterity of diction cannot defeat the articulated conscience of the provision." 14. It is thus clear that the termination of the services of the plaintiff amounted to retrenchment and be was entitled to the benefits of the provisions of sec. 25F of the Act, which constituted a pre-condition for a lawful termination of his services. As the condition specified in sub-sec. (1) and (2) of sec-tion 25F have not been complied with in the present case, the first appellate court was right in holding that the termination of the services of the plaintiff was in violation of the provisions of sec. 25F of the Act and was, therefore, illegal. 15. In the result, I uphold the judgment and decree passed by the learned Civil Judge, Jodhpur dated February 5, 1970 and dismiss the appeal. The parties are left to bear their own costs of this appeal.