Nathu Ram Saini v. Hindustan Copper Ltd. — 1993 DIGILAW 259 (RAJ)

Honble G.S. SINGHVI, J.—This petition involves a challenge to the termination of the service of the petitioner w.e.f. 29.8.84 by way of striking off his name from the rolls. The petitioner has prayed for quashing of termination of his service and for reinstatement with all consequential benefits. 2. Briefly stated, the case of the petitioner is that he joined service of the Hindustan Copper Ltd. Khetri Nagar, district Jhunjhunu w.e.f. 1-9-1967. At the relevant time, he was working as Machinist Gr. B. On 14.7.84 he had gone to Chirawa for meeting his ailing aunt. There he himself fell sick. 15.7.74 was a Sunday, and that was his off day. He got himself medically examined at Chirawa. Doctor at Chirawa declared him unfit for duty. He submitted an application on 16.7.84 alongwith a medical certificate for grant of leave. He remained under treatment upto 1.10.84 and after having been declared fit to resume duty he reported for duty on 3.10.84. On that day, he submitted his fitness certificate also. He was however, not allowed to join duty and told that his name has been struck off from the rolls of the Company. The petitioner submitted an application dated 3.10.84 to the Dy. Personnel Manager/Dy. General Manager (Personnel), Hindustan Copper Ltd. for being allowed to join duty and finally served a notice for demand of justice. This notice for demand of justice was answered by the respondents on 23.1.85. In their reply, the respondents claimed that the termination of service of the petitioner was brought about in accordance with Para 15.5 of Hindustan Copper Limited Workmens Leave Rules and therefore, he was not entitled to be taken back in service. 3. The petitioner has assailed the action of the employer On the ground that striking off his name from the rolls amounts to retrenchment under section 2 (oo) of the Industrial Disputes Act, 1947 (for short the Act) and since there has been a non-compliance of Section - 25F of the Act it is liable to be declared as void. Further case of the petitioner is that he could not have been treated as having remained absent unauthorisedly because he was ailing and he had submitted sickness certificate. 4. In their reply, the respondents have pleaded that the workman had remained absent from duty since 14.7.84. He did not sent any intimation or information in relation to his absence. Further case of the petitioner is that he could not have been treated as having remained absent unauthorisedly because he was ailing and he had submitted sickness certificate. 4. In their reply, the respondents have pleaded that the workman had remained absent from duty since 14.7.84. He did not sent any intimation or information in relation to his absence. A letter dated, 7.8.84 (Annex. R/l) was sent to him and he was called upon to report for duty within ten days and to submit satisfactory explanation regarding unauthorised absence from duty. He was also informed that if he fails to comply with these requirements his name will be struck off from the roll of the Company on account of loss of lien. According to the respondents the petitioner did not respond to this letter and therefore, the Company ordered striking off his name from the rolls by letter dated, 29.8.84 (Annex. R/2). The respondents have denied the statement of the petitioner that he had sent application alongwith medical certificate. In substance, case of the respondents is that termination of the service of the petitioner on account of striking off his name from the rolls of the Company does not amount to retrenchment. According to the respondents this action has been taken in accordance with para 15.5 of the Leave Rules, which are in turn based on settlement dated, 27.3.80 arrived at between the employer and the representatives of the workmen. 5. From the rival pleadings of the parties it is clear that the petitioner joined service of the respondent Company on 1.9.67 and served it for almost 17 years before his name was struck off from the rolls of the Company. It is also borne out that the respondent Company had given a notice to the petitioner on 7.8.84 alleging therein that the petitioner was absenting from duty in an unauthorised manner since 14.7.84. He wa3 called upon to explain his absence with a warning that his name will be struck off from the rolls of the Company on account of absence from duty and ultimately the Company struck out the name of the petitioner from its roll with immediate effect by letter dated, 29.8.84. 6. He wa3 called upon to explain his absence with a warning that his name will be struck off from the rolls of the Company on account of absence from duty and ultimately the Company struck out the name of the petitioner from its roll with immediate effect by letter dated, 29.8.84. 6. While Shri Prem Krishna Sharma, learned counsel for the petitioner, argued that action of the respondent company in striking off the name of the petitioner from the rolls of the Company amounts to retrenchment and this action of the Company is liable to be declared as void on account of violation of the mandatory conditions contained in Section-25F of the Act and in any case, action of the Company is in violation of the principles of natural justice. Shri G.N. Sharma, Senior Advocate, argued that termination of service of the petitioner is covered by Section 2 (oo) (bb) of the Act. 7. Section 2 (oo) of the Act as it stood prior to its amendment by Industrial Disputes (Amendment) Act, 49 of 1984 and as it stands after coming into force of Amendment Act of 1984 w.e.f. 18.8.84 is quoted below : Sec. 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- Sec. 2(oo) prior to amendment. (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 workman concerned contains a stipulation in that behalf ; or (c) termination of the service of a workman on the ground of continued ill-health. (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 workman concerned contains a stipulation in that behalf ; or (c) termination of the service of a workman on the ground of continued ill-health. Sec. 2 (oo) after amendment - "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 work man concerned contains a stipulation in that behalf; or (bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or (c) termination of the service of a workman on the ground of continued ill-health. 8. The definition of the term "retrenchment" as contained in unamended Section 2 (oo) became subject matter of decisions by the Supreme Court in large number of cases. In Hari Prasad Shiv Shankar Shukla vs. A.D. Diwakar (1), a Constitution Bench of the Supreme Court was considering a case relating to closure. While deciding that case their Lordships made observations that only a case of termination of service as a result of surplusage can be treated as retrenchment under the Act. However, in State Bank of India vs. N. Sundra Money (2) the Apex Court gave a wider meaning to the term retrenchment. Their Lordships declared that termination of service of an employee for any reason whatsoever, will amount to retrenchment unless termination of service can be held to be covered by any of the exceptions contained in the substantive part of Section 2 (oo) or any of its clauses. Their Lordships declared that termination of service of an employee for any reason whatsoever, will amount to retrenchment unless termination of service can be held to be covered by any of the exceptions contained in the substantive part of Section 2 (oo) or any of its clauses. This wider meaning given to the term retrenchment was accepted as correct in Santosh Gupta vs. State Bank of Patiala (3), Hindustan Steel Limited vs. Presiding Officer, Labour Court (4), Delhi Cloth and General Mills Ltd. vs. Shambhu Nath Mukherji (5), Mohan Lal vs. Bharat Electronics Ltd. (6), Surendra Kumar Verma vs. Central Government Industrial Tribunal-cum-Labour Court (7) and L. Robert DSouza vs. Executive Engineer, Southern Railway (8). 9. Despite these decisions doubts were again expressed about the meaning and scope of the term retrenchment and therefore the matter was referred to a Constitution Bench once again. In Punjab Land Development and Reclamation Corporation. Ltd. vs. Presiding Officer (9), their Lordships accepted the wider literal meaning adopted in Sundra Moneys case (supra) and held that Hari Prasads case (supra) is not an authority for the proposition that Sec. 2 (oo) only covers cases of discharge of surplus labour and staff. After examining various cases previously decided their Lordships of the Supreme Court observed:- "As a result of construing retrenchment in its wider sense the rights of the employer under the Standing Orders and under the contracts of employment in respect of the workman whose service has been terminated may have been affected by introduction of Ss. 2 (oo), 25F and the other relevant sections. Secondly, it may be said, the rights as such are not affected or taken away, but only an additional social obligation has been imposed on the employer so as to give the retrenchment benefit to the affected workman, perhaps for immediate tiding over of the financial difficulty. Looked at from this angle, there is implicit a social policy. As the maxim goes-Stat pro ratione voluntas populi; the will of the people stands in place of a reason. "The wider literal meaning has since been adopted by the Supreme Court in Sundra Money and subsequent cases rejecting the narrow, natural and contextual meaning. Looked at from this angle, there is implicit a social policy. As the maxim goes-Stat pro ratione voluntas populi; the will of the people stands in place of a reason. "The wider literal meaning has since been adopted by the Supreme Court in Sundra Money and subsequent cases rejecting the narrow, natural and contextual meaning. The question of the subsequent decisions of the Supreme Court being per incuriam on ground of failure to apply the law earlier laid down by the Constitution Bench of the Court in Hariprasad Shuklas case could arise only if the ratio in Sundra Money and subsequent decisions in the line was in conflict with the ratio in Hariprasad and Anakapalle. Analysing the complex syllogism of Hariprasad case it appears that its major premise was that retrenchment meant termination of surplus labour of an existing industry and the minor premise was, that the termination in that case was of all the workmen on closure of business on change of ownership. The decision was that there was no retrenchment. However, Hariprasads case is not an authority for the proposition that S. 2 (oo) only covers cases of discharge of surplus labour and staff. The judgments in Sundra Money and the subsequent decisions in the line could not be held to be per incuriam inasmuch as in Hindustan Steel and Santosh Gupta cases, the Division Bench of the Supreme Court had referred to Hariprasad case, and rightly held that its ratio did not extend beyond a case of termination on the ground of closure and as such it would not be correct to say that the subsequent decisions ignored a binding precedent. In a last developing branch of Industrial and Labour Law it may not always be of particular importance to rigidly adhere to a precedent, and a precedent may need be departed from if the basis of legislation changes." 10. This decision of the Constitution Bench sets at rest all doubts regarding the ambit and scope of the term retrenchment as it stood prior to the coming into force the Amendment Act No. 49 of 1984. What has been done by the Amendment is to exclude from the ambit of the term retrenchment, those cases where termination of the service of the workman is on account of non-renewal of contract of employment or on termination of such contract under a stipulation contained in the contract itself. 11. What has been done by the Amendment is to exclude from the ambit of the term retrenchment, those cases where termination of the service of the workman is on account of non-renewal of contract of employment or on termination of such contract under a stipulation contained in the contract itself. 11. Action of the employer in striking of the name of the employee from its rolls has been treated as retrenchment in Delhi Cloth and General Mills Ltd. vs. Shambhu Nath Mukherji (supra). In that case, service of the workman had been terminated by way off striking of his name from the rolls in accordance with the clause contained in the Standing Order which provided for automatic cessation of service. In para-13 and 14 of that judgment their Lordships observed:— "On the face of it, the order striking off the name of the workman from the rolls on August 24, 1965, is clearly erroneous. No order even under Section 27(c) of the Standing Orders, could have been passed on that date. The clause in the Standing Orders reads as follows:— If any workman absents for more than eight consecutive days his services shall be terminated and shall be treated having left the service without notice. The workman last attended work on August 14, 1965. August 15 was a public holiday. He was, therefore, absent from work only from 16th of August. So even under the Standing Orders the Workman was not absent for "more than eight consecutive days" on August 24, 1965. The order is, therefore, clearly untenable even on the basis of the Standing Orders. It is not necessary to express any opinion in this appeal whether "eight consecutive days" in the Standing Orders mean eight consecutive working days." "Striking off the name of the workman from the rolls by the management is termination of his service. Such termination of service is retrenchment within the meaning of Section 2(oo) of the Act. There is nothing to show that the provisions of Section-25F (a) and (b) were complied with by the management in this case. The provisions of Section 25F (a), the proviso apart, and (b) are mandatory and any order of retrenchment in violation of these two pre-emptory conditions precedent, is invalid." 12. There is nothing to show that the provisions of Section-25F (a) and (b) were complied with by the management in this case. The provisions of Section 25F (a), the proviso apart, and (b) are mandatory and any order of retrenchment in violation of these two pre-emptory conditions precedent, is invalid." 12. In Syed Bin Ali vs. Superintending Engineer (10), a learned Single Judge (Shri B.P. Jeevan Reddy, as he then was) of Andhra Pradesh High Court examined a similar provision contained in Regulation 28 (3) of the Andhra Pradesh Electricity Board Service Regulations which contemplated automatic termination of service on account of absence from duty and held as under : — "An order under Regn. 28 (3) declaring that the employee of the Board had ceased to be in service for absenting himself from duty without leave for over a year amounts to retrenchment as the employee is a workman within the meaning of S. 2(s) and the order would be invalid for having been passed without complying with the provisions of S. 25F." 13. In M.S. Abbobacker vs. H.M.T. Ltd. (11), a Division Bench of the Kerala High Court examined a similar provision and observed: "Where a Standing Order provides that a workman would lose his, lien on his appointment if he does not join his duty within a certain time after his leave expires, it can only mean that his service stands automatically terminated when that contingency happens." 14. In Bharat Heavy Electricals Ltd. vs. R.V. Krishnarao (12), a Division Bench of the Gujarat High Court held that action of the employer in striking of the name of the employer from the Muster Roll on account of absence from duty amounts to retrenchment pure and simple and if there is a violation of Section-25F action of the employer is liable to be declared as void. 15. Section 2 (oo) (bb) deals with cases of termination of service brought about as a result of non-renewal of the contract of employment. This clause has been added by Amendment Act No. 49 of 1984 in order to make an inroad in the proposition of law laid down in Sundra Moneys case and similar cases that termination of service even by efflux of time or in accordance with the conditions stipulated in the terms of employment will be covered by the definition of retrenchment. The effect of insertion of Section 2(oo) (bb) is that now the termination of service which takes place on account of conditions contained in the contract of employment or expiry of the contract of employment are not covered by the definition of retrenchment as given in the substantive part of section 2(oo). An employee appointed on fixed term cannot now claim that his service has been terminated by way of retrenchment merely because, the employer has not extended the term of the contract of employment. This clause, however, cannot be stretched to cover cases where termination of service is brought about on account of the happening of an event which falls within the ambit of mis-conduct or where an action is taken by the employer for termination of service by way of striking of the name on account of alleged unauthorised absence of the employee from service. 16. In the case in hand termination of service of the workman has been brought about by a specific order of the employer issued on 29th August 1984. This termination has been made effective from 29-8-84, itself. As is evident from the language of para-3 of Annexure-R/2 the workman had allegedly remained absent from duty form 14-7-84 for a period of three weeks. The employer did not take any action invoking para 15.5 of Hindustan Copper Workmens Leave Rules. It gave a specific notice to the petitioner on 7-8-84 and after another three weeks it terminated the service of the petitioner by striking off his name from the roles of the Company. Although, the respondents have taken this action in accordance with para-15.5 of the Leave Rules termination of service w.e.f. 29-8-84 cannot be treated as a case of automatic cessation of service. It is also not possible to accept the submission that it is a case of termination of service by way of termination of contract of employment in accordance with the conditions contained in the contract itself. Even though, the Leave Rules may govern the service conditions of the petitioner, the positive action taken by the respondents for termination of service of the petitioner by striking off his name cannot be equated with termination of contract of employment itself. This position holds good notwithstanding that para-15.5 has been incorporated in the rules as a result of settlement dated, 15-4-1980. 17. This position holds good notwithstanding that para-15.5 has been incorporated in the rules as a result of settlement dated, 15-4-1980. 17. On the basis of above discussion, I have no hesitation in holding that termination of service of the petitioner brought about w.e.f 29-8-84 by way of striking off his name from the rolls of the Company amounts to retrenchment under sec. 2(oo) of the Act and it is not a case covered by sec. 2(oo) (bb) of 1947 Act. 18. The decision of the Gujarat High Court in J.J. Shrimali vs. District Development Officer, Zila Panchayat (13) as well as the decision of the Supreme Court in Surendra Kumar Gyani vs. State of Rajasthan (14) on which reliance has been placed by Shri C.N. Sharma are of little assistance to his case. In Gujarat case the employees were engaged in relief work started by the State to provide relief to the draught affected people. They were engaged as Muster Karkoons on purely temporary basis for supervising scarcity relief work started by the Government. These works were administered through the district Panchayats. In the orders of appointment ft was clearly stipulated that their employment will be terminated on the winding up of scarcity Relief works. Division Bench of the Gujarat High Court declared that draught relief work undertaken by the the Government is not an industry and since the termi-nation of service took place on account of the winding up of the draught relief work, it cannot be treated as a case of retrenchment. In Surendra Kumar Gyanis case the employees were ad hoc Lower Division Clerks employed in the State Insurance and Provident Fund Department and they were to be replaced by regularly selected candidates. What their Lordships have held in that case is that termination of service of Lower Division Clerks on availability of selected candidates cannot be treated as illegal. In fact, Surendra Kumar Gyanis case does deal with the question relating to interpretation of sec. 2(oo) or applicability of Sec. 26F. 19. So far as the present case is concerned, it is clearly established from the record that the petitioner had rendered over 17 years of service before being removed from service by way of striking off his name from the rolls. 2(oo) or applicability of Sec. 26F. 19. So far as the present case is concerned, it is clearly established from the record that the petitioner had rendered over 17 years of service before being removed from service by way of striking off his name from the rolls. Respondents have not come forward with the case that the petitioner was a casual or an ad hoc or a temporary employee appointed for fixed term. After having rendered 17 years of service the petitioner has been thrown out of employment without compliance of the requirements of sec. 25F. Provisions of sec. 25F have been field to be mandatory in Hospital Mazdoor Sabha vs. State of Bombay (15). It has also been held that conse-quence of (termination of service brought about in violation of Sec. 25F is that the employee continues to be in service as if his service had never been terminated. In large number of cases it has been held that effect of violation of Sec. 25F is that the order of termination is rendered void/non-est/inoperative. A lucid exposition of law on the subject can be found in a division bench decision of this Court in Udaipur Mineral Development Syndicate Pvt. Ltd. vs. M.P. Dave (16). 20. Even otherwise, termination of service of the petitioner is unsus-have been brought about on the allegation of unauthorised absence from duty. It was incumbent on the respondents to have made an inquiry by giving a charge-sheet to the petitioner and by holding an inquiry into the allegations of misconduct. Simple notice given to the petitioner that if he does not specifically explain his absence, he will lose his lien cannot be equa-ted with an inquiry held in accordance with the principles of natural justice. Giving of a specific charge-sheet and recording of finding of guilt ought to have preceded for valid termination of service of the petitioner for his alleged absence. In L. Robert De Souzas case (supra); their Lordships of the Supreme Court declared that termination of (service of the petitioner for absence without leave amounts misconduct and since no inquiry was held, termination of the workman was liable to be quashed on the ground of violation of principles of natural justice. 21. In L. Robert De Souzas case (supra); their Lordships of the Supreme Court declared that termination of (service of the petitioner for absence without leave amounts misconduct and since no inquiry was held, termination of the workman was liable to be quashed on the ground of violation of principles of natural justice. 21. As a result of the above discussion it is held that: (i) termination of service of the petitioner w.e.f. 29-8-84 by way of striking off his name from the rolls of the Company amounts retrenchment under sec. 2(oo); (ii) provisions of sec. 25-F have not been complied with and therefore, the termination of the service of the petitioner is void ab initio. 22. In the result, the writ petition is allowed. Termination of the service of the petitioner w.e.f. 29-8-84 is declared as void. Respondents are directed to reinstate the petitioner in service with all consequential benefits except actual wages. The petitioner shall be free to avail remedy under sec. 33C(2) for back wages. In such proceedings the respondents will be free to plead and prove that the petitioner was gainfully employed in the intervening period and is, therefore, not entitled to whole or part of the back wages. Costs made easy.