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1984 DIGILAW 377 (RAJ)

Mewar Textiles Mills Ltd. v. IT. , Raj. , Jaipur

1984-08-21

DWARKA PRASAD

body1984
JUDGMENT 1. - The only question which arises for consideration in this writ petition is as to whether the petitioner company could lawfully discharge the service of three of its employees on the ground of superannuation at the time when there were no conditions relating to superannuation in the contract or service rules or regulations governing the employment of such workmen. The contention on behalf of the petitioner company is that according to the past practice, the company was entitled to discharge its employees on the ground of attaining the age of superannuation after they became 58 years of age. On the other hand, it was contended on behalf of respondent No. 2, Rajasthan Audhyogic Karmchari Sangh, Bhilwara (hereinafter referred to as `the Union") representing the concerned workmen, that in the absence of any condition in the contract of service or the rules or regulations governing the employment of such workmen or standing orders duly certified in accordance with law the service of the workmen already in employment could not be dispensed with by the company on attaining the age of 58 years, but such employees were entitled to continue in service as long as they were physically and mentally fit to serve the employer. 2. The three concerned employees are Jamnalal, Manohar Singh and Daya Ram. The respective dates of birth and the dates of attaining age of 58 years and 60 years by the aforesaid three employees are as under : S.No. Name Date of birth Date of attaining age of 58 years Date of attaining age of 60 years. 1. Jamna Lal 25-4-1914 25-4-72 25-4-74 2. Manohar Singh 24-10-1913 24-10-71 24-10-73 3. Daya Ram 15-8-1910 15-8-68 15-8-70 3. All the aforesaid three persons were employed as clerks by the petitioner M/s Mewar Textile Mills Ltd., Bhilwara (hereinafter referred to as "the Company") and they were discharged from the service of the Company by the notices dated August 31, 1973 with effect from September 1, 1973 on the ground that they have passed the age of superannuation. They were directed to collect the amount of gratuity and other dues payable to them by the Company from the Accounts Section. The Rajasthan Audhyogic Karmchari Sangh, Bhilwara espousing the cause of the aforesaid employees raised an industrial dispute. They were directed to collect the amount of gratuity and other dues payable to them by the Company from the Accounts Section. The Rajasthan Audhyogic Karmchari Sangh, Bhilwara espousing the cause of the aforesaid employees raised an industrial dispute. The State Government referred the question as to whether the termination of the employment of the aforesaid three employees was legal and valid, to the Industrial Tribunal No. 1, Jaipur. The case set up by the Union was that as there was no regulation governing the conditions of service of the employees of the petitioner Company regarding the age of superannuation and as other persons who had attained the age of 58 years were still working in the employment of the petitioner Company, the concerned employees could not have been discharged from service by the Company on the plea of their having attained the age of superannuation. The Union prayed that the three employees he taken back in the employment of the Company and they may be paid all their dues from the date of their discharge from service. The case set up by the petitioner Company before the Industrial Tribunal was that the workmen employed by the Company could be retired after attaining the age of 58 years and to retain after attaining the age of 58 years and to retain them in service thereafter was in the sole discretion of the management of the Company and that they did not thereafter possess any subsisting right to continue in service after attaining the age of 58 years. 4. The Industrial Tribunal No. 1, Jaipur by its Award dated March 2. 1976 held that it was not disputed that under the Rules and Regulations then prevelant in the Company, age of superannuation was not prescribed. The Tribunal held that the management was unable to prove the allegation that in actual practice the management of the Company has been retiring its employees on their attaining the age of 58 years, which was seriously disputed on behalf of the workmen. Thus the Tribunal held that when there was neither a rule nor practice of retiring the workmen at the age of 58 years. there was no justification for the Company to retire the concerned workmen. The order of retirement was consequently set aside. 5. Thus the Tribunal held that when there was neither a rule nor practice of retiring the workmen at the age of 58 years. there was no justification for the Company to retire the concerned workmen. The order of retirement was consequently set aside. 5. Learned counsel for the petitioner Company did not dispute even before this Court that there was no rule or regulation or Standing Order prevailing in the Company at the relevant time fixing the age of superannuation. It appears that the Standing Orders in force in the company at the relevant time were silent about the age of retirement or superannuation. A Draft Standing order was submitted by the Factory Manager of the petitioner Company, with a view to amend the existing Standing orders. The Union raised objections in respect of age of superannuation and clause 13--A of the draft Standing order was modified by Certifying Officer under the Industrial Employment (Standing Orders) Act, Rajasthan, Jaipur, by his order dated March 18, 1975 so as to fix the age of retirement or superannuation as 58 years. Thus prior to March 18, 1975 there was no provision fixing the age of superannuation for its employees. Learned counsel for the petitioner however, relied upon the provisions of Payment of Gratuity Act, 1972 in support of his contention that the age of retirement unless otherwise specified should be taken to be 58 years, in the case of Industrial employees. Clause (r) of Section 2 of the Payment of Gratuity Act, 1972 defines 'Superannuation' as under : "(r) -Superannuation" in relation to an employee means, (i) The attainment by the employee of such age as is fixed in the contract or conditions of service as the age on the attainment of which the employee shall vacate the employment; and (ii) In any other case, attainment by the employee of the age of fifty-eight years. However, Section 4 (1) of the aforesaid Act provides that gratuity shall be payable to an employee on the termination of his employment, after he has rendered continuous service for not less than 5 years, on his superannuation or on his retirement or resignation or on his death or disablement due to accident or disease. However, Section 4 (1) of the aforesaid Act provides that gratuity shall be payable to an employee on the termination of his employment, after he has rendered continuous service for not less than 5 years, on his superannuation or on his retirement or resignation or on his death or disablement due to accident or disease. Thus, gratuity is payable on the termination of employment of the workman, on his attaining the age of superannuation which is 58 years, if it is not fixed by contract or by the conditions of service. However, it may be observed in this connection that the provisions of Payment of Gratuity Act regulate the payment of gratuity to the industrial workers. The Act came into force with effect from September 16, 1972, on publication of a notification issued by the Central Government, appointing the aforesaid date for the enforcement of the Act. 6. The question, as to whether the employer has a right to terminate the employment of his employee if no age of superannuation is specified in the Rules or regulations or in the contract of employment, or the service conditions prescribed in the Rules or Regulations governing such employment are silent about the age of retirement, is often being raised and in that context the question as to whether the employment in such a case could be for life, was considered in Mc. Clelland v. Northern Ireland General Health Services Board (1957 (2) All E. L. R. 129) . It was observed by Lord Goddard in that case that if an advertisement offered permanent employment it does not mean that employment for life was offered. The following observations of Lord Goddard may be usefully quoted : "That an advertisement offers permanent employment does not, in my opinion. mean thereby that employment for life is offered. It is an offer, I think, of general as distinct from merely temporary employment, that is that the person employed would be on the general staff with an expectation that, apart from misconduct or inability to perform the duties of his office, the employment would continue for an indefinite period. But, apart from a special condition, in my opinion a general employment is always liable to be determined by reasonable notice. But, apart from a special condition, in my opinion a general employment is always liable to be determined by reasonable notice. Nor do I think that, because a person is offered pensionable employment, the employer thereby necessarily engages to retain the employee in his service long enough to enable him to earn a pension." The same view was also expressed by Lord Evershed in that case, who observed as under: "If the terms of the appellant's service depended only on the respondents board's advertised offer and its acceptance by the appellant, I should think that the board were entitled to succeed; for I should not regard the use of the word "permanent" even when the word "pensionable" is added to it, as sufficient in that context to create a promise of a life employment or to disable the board as employers from terminating the employee's contract of service on reasonable notice." In K. G. Mathew v. Chairaman-Cum-Managing Director, National Insurance Co. Ltd. & ors., 1976 (1) L. L. J. 27 , a learned Judge of the Madras High Court observed as under in this context : "though a contract of employment does not provide age limit for retirement, the usage prevailing in similar establishments can be taken to be a part of the contract of service, that it is impossible, even in the absence of a rule fixing the age of retirement, to construe the contract of service as one for life and that the normal practice, in such services should be taken to be part of the service contract. On the question of practice and usage, it is significant to note in this connection that in respect of supervisory, clerical and sub ordinate staff working in all the four acquiring companies, retirement age had been fixed statutorily at 60 years, vide paragraph 12 of the General Insurance (Nationalisation and revision of pay scales and other conditions of service of supervisory clerical and sub-ordinate staff) Scheme, 1974. In this view of the matter, the petitioner's contention that he is entitled to continue in service life cannot be accepted." 7. In Fibre Foam Private Ltd. v. Kannan Nair and others (1979 Lab. I. C. 252) , some employees were retired from service on the ground that they exceeded the age of 58 years. They received gratuity and other retirement benefits. In Fibre Foam Private Ltd. v. Kannan Nair and others (1979 Lab. I. C. 252) , some employees were retired from service on the ground that they exceeded the age of 58 years. They received gratuity and other retirement benefits. Later on they raised an industrial dispute claiming retrenchment compensation on the ground that the alleged termination amounted to retrenchment. A learned Judge of the Kerala High Court held that as the employees had received gratuity and other retirement benefits, on the basis of the provisions of the Payment of Gratuity Act, the age of superannuation provided in that Act would govern the retirement of the concerned employees, although the contract of employment did not contain any such term. The following observations of the learned Judge in this respect may be usefully quoted : "It is not disputed before me that the contract of employment did not specify that the concerned workmen have to retire on attaining 58 years. The contention of the petitioner is, therefore, founded on the Payment of Gratuity Act, 1972, briefly Act 39 of 1972. It is undisputed that respondents 1 and 2 received gratuity from the petitioner-employer ............In cases where the contract of employment does not specify the age of superannuation, the attainment of the age of 58 years by the employee would amount to 'superannuation". Gratuity was received by respondents I and 2 from the petitioner-employer under the relevant provisions of Act 39 of 1972. The 3rd respondent proceeded on the basis that the age of superannuation mentioned in Act 39 of 1972 cannot apply when rights under the Act are ad-Judged. Technically that proposition is correct. Here the question of superannuation arises because of the acceptance of gratuity under Act 39 of 1972. Having obtained the benefits under Act 39 of 1972 it is not open to respondents 1 and 2 to contend later that for the purpose of retirement on superannuation they are not bound by Act 39 of 1972. There is thus force in the contention of the petitioner that by acceptance of gratuity in accordance with the provisions of Act 39 of 1972 respondents 1 and 2 are estopped from contending that the termination of their services was not retirement on superannuation but retrenchment." 8. There is thus force in the contention of the petitioner that by acceptance of gratuity in accordance with the provisions of Act 39 of 1972 respondents 1 and 2 are estopped from contending that the termination of their services was not retirement on superannuation but retrenchment." 8. On the other hand, learned counsel for the respondents placed reliance on the decision of a learned Judge of this Court in the case of M.P. Dave v. Udaipur Mineral Syndicate, Bhilwara (S. B.) Civil Writ Petition No. 1758/70 decided on 9-7-71 , wherein it was observed that if the management has not fixed the age of superannuation for its employees by framing valid Standing Order, then the employee can claim a right to serve the employer as long as he is physically and mentally fit to serve the master. This case was, however, decided prior to the coming into force of the Payment of Gratuity Act, 1972, which came into force with effect from September 16, 1972. 9. The Rajasthan Textile Employees Gratuity Scheme, framed by the Judge, Special Industrial Tribunal, Rajasthan, Jaipur and published in the Rajasthan Gazette dated January 27, 1972, provides that the age of superannuation, in cases where the age is not fixed in the contract or conditions of service should be 58 years. The aforesaid scheme came into force with effect from January 1, 1972. 10. Learned counsel for the respondents also submitted that the order passed by the Certifying Officer dated March 18, 1975 certifying the modification of the Standing Orders of the petitioner Company was later modified on appeal by the Appellate Authority by its order dated September 26, 1975 and that the age of superannuation of the clerical and supervisory staff of the Company was fixed as 60 years. There is no doubt that the Standing Orders of the Company, as initially in force did not contain any provision regarding the age of superannuation of the employees of the Company. The Company applied for modification of the Standing Orders before the Certifying Officer, proposing that the age of superannuation may be fixed at 55 years. However, the workers' Union desired that the age of superannuation should be fixed at 58 years instead of 55 years, as in most of other Cotton Textile Mills. The Company applied for modification of the Standing Orders before the Certifying Officer, proposing that the age of superannuation may be fixed at 55 years. However, the workers' Union desired that the age of superannuation should be fixed at 58 years instead of 55 years, as in most of other Cotton Textile Mills. The Certifying Officer accepted the objection of the workmen and fixed the retirement age as 58 years by his order dated March 18, 1975. But on appeal, in cases of clerks and supervisory staff, the age of retirement was fixed as 60 years instead of 58 years. 11. There was some controversy earlier as to whether service conditions re acing to age of superannuation fixed by the management would be applicable to workmen who had joined the service at a time when there was no age limit. It was held by their Lordship of the Supreme Court in (4) Workmen of Kettlewell Bullen & Co. Ltd. v. Kettlewell Bullen & Co. Ltd. 1964 (2) LLJ 146 , that the new rule fixing the age of superannuation would not be applicable in the case of old employees, unless such employees accept the new rules. However, in (5) Salem Erode Electricity Distribution Co. (P) Ltd. v. Their Employees' Union ( AIR 1966 SC 808 ) , it was held that two sets of Standing Orders could not govern the terms and conditions of the employees of the same industrial establishment, at the same time. In that case the earlier decision in (6) Guest Keen Williams Private Ltd. v. P. J. Sterling ( AIR 1959 SC 1279 ) . was explained and it was observed that in the earlier case the Certified Standing Orders were not applied to the employees who were already in the employment in the special circumstances of the case and the age of superannuation for prior employees was reasonably and fairly fixed as 60 years. The matter was further explained in a subsequent decision of the Supreme Court In (7) Agra Electric Supply Co. Ltd. v. Sri Alladin and others ( AIR 1970 SC 512 ) , and it was observed that Kettlewell Bullen Co.'s case (4) did not have any concern with Standing Orders but with rules made by the Company and that the decision was not applicable to cases where Certified Standing Orders have come into force. 12. Ltd. v. Sri Alladin and others ( AIR 1970 SC 512 ) , and it was observed that Kettlewell Bullen Co.'s case (4) did not have any concern with Standing Orders but with rules made by the Company and that the decision was not applicable to cases where Certified Standing Orders have come into force. 12. The view taken in India, in respect of the age of superannuation applicable to employees, where the contractor the rules or regulations framed by the employers or Standing Orders do not prescribe any age of retirement, is the same as in England and it has been held that workmen cannot b. allowed to remain in employment during their life time. In Guest Keen Williams Private Ltd.'s case (6) the same question.arose as to at what age industrial employees should be retired if no age of superannuation is fixed by the terms of the contract or rules or regulations governing their employment. In that case it was held, with regard to the workmen already in employment, that the age of superannuation should be fixed at 60 years. It was also held in that case that even if the age of superannuation fixed under the rules may not be applicable to prior employees, yet the court can fix the age of superannuation which may be reasonable and fair. In the special circumstances of that case, in respect of prior employees the age of retirement was fixed as 60 years and it was held that the same would not be unfair or unreasonable, considering some other awards where the age of superannuation had been fixed. In a recent case in (8) the Workmen of the Bharat Petroleum Corporation Ltd. Bombay v. M/s Bharat Petroleum Corporation Ltd. and another ( AIR 1984 SC 356 ) , a similar question arose before their Lordships of the Supreme court, as to what age should be fixed for retirement of clerical staff of the Refinery Division of the Bharat Petroleum Corporation Ltd. Bombay. The Company wanted the age to be fixed at 55 years while the workmen demanded that the age of retirement should be fixed at 60 years. The Company wanted the age to be fixed at 55 years while the workmen demanded that the age of retirement should be fixed at 60 years. Their Lordships of the Supreme Court observed that in fixing the age of retirement, other factors have to be taken into consideration, In that case their Lordships while considering all the relevant circumstances fixed the age of retirement of the clerical staff of the Refinery Division of the Company as 60 years. 13. The Certified Standing Orders, as they ultimately emerged after appeal may be considered to be representing the trend and if the decision of their Lordships of the Supreme Court in Guest William Pvt. Ltd. and Bharat Petroleum Corporation cases may be considered as representing a reasonable and fair view in fixing the age of retirement of clerical staff in cases where no age of retirement is fixed either in the contract of employment or the rules or regulations governing such employment, then in the present case also 60 years should be reasonably and fairly considered as the age of retirement. If no age of retirement is fixed by the contract of service or the rules or regulations governing the same, the Tribunal or the court can fix a reasonable and fair age of superannuation for such employees. The view that the employees could continue in service indefinitely until they were unable to work is contrary to the aforesaid decisions of the Supreme Court. In this view of the matter, the date on which the order of superannuation passed by the petitioner company becomes effective. Daye Ram had already attained the age of 60 years. Monohar Singh attained the age of superannuation on October 24. 1973 while Jamna Lal attained the age of 60 years on April 25, 1974. Both these employees had already attained the age of 60 years before the date when the Award was passed by the Industrial Tribunal dated March 2, 1976. The question of setting aside the order of retirement and reinstating the workmen would not, therefore, be justified and cannot be upheld. Both these employees had already attained the age of 60 years before the date when the Award was passed by the Industrial Tribunal dated March 2, 1976. The question of setting aside the order of retirement and reinstating the workmen would not, therefore, be justified and cannot be upheld. On the other hand, the proper order which should have been passed by the Industrial Tribunal was that Daya Ram having already attained the age of 60 years, he was not entitled to any benefit as he was rightly retired with effect from September 1, 1973, while Manohar Singh should have been retired from employment with effect from October 24, 1973 and Jamna Lal should have been retired with effect from April 24, 1974. Thus, Manohar Singh and Jamna Lal were entitled to receive their emoluments and other monetary benefits upto October 24, 1973 and April 25, 1974 respectively, when they attained the age of superannuation, namely, 60 years. It may also be pointed out that the workmen never claimed that the age of retirement should be fixed more than 60 years. 14. In the stay application this Court passed an order on May 6, 1977 directing the employer to make payment of Rs. 2,000/- each by way of part payment of back wages to the concerned workmen subject to the final decision of the case. The amount so paid to Jamna Lal and Manohar Singh shall be adjusted against the amount which the employer has to pay to these two employees by way of emoluments and other benefits until they attained the age of superannuation referral to above. 15. In the result, the writ petition is partly allowed and the order passed by the Industrial Tribunal No. 1, Jaipur dated March 2, 1976 is set aside. The three workmen having attained the age of superannuation, namely. 60 years need not be reinstated. However. Manohar Singh and Janina Lal shall be entitled to receive wages and other monetary benefits upto October 24, 1973 and April 25, 1974 respectively. The claim of Dayaram is not maintainable as he had already attained the age of 60 years on the date when he was superannuated. The amounts already paid to Manohar Singh and Jamna Lil by the order of this Court shall be adjusted against the amount which may be found payable to them. The claim of Dayaram is not maintainable as he had already attained the age of 60 years on the date when he was superannuated. The amounts already paid to Manohar Singh and Jamna Lil by the order of this Court shall be adjusted against the amount which may be found payable to them. The excess amount which might have been paid to Dayaram and Manohar Singh by the petitioner shall, however, be not refunded by them to the employer. 16. The parties are left to bear their own costs.Petition partly allowed. *******