Indian Oil Corporation Limited, Barauni-Kanpur Pipeline, Barauni through its Chief Operations Manager v. Presiding Officer, Central Government Industrial Tribunal. No. 1, Dhanbad
1994-11-16
B.P.SINGH
body1994
DigiLaw.ai
Judgment B.P. Singh, J. The petitioner-Corporation has impugned the award of the Central Government Industrial Tribunal No. 1 at Dhanbad, in Reference no. 127 of 1990 whereby the Tribunal answered the reference in favour of the workman, respondent no. 2 herein, and declared that the action of the Management of the petitioner-Corporation in terminating the services of the aforesaid workman with effect from 11-5-1988 was not justified. The Tribunal took the view that even if in terms of the relevant clause of the Certified Standing Orders of the Corporation, respondent No. 2 lost lien on appointment having been absent from duty for eight consecutive days without obtaining leave, the termination of his service on such ground also amounted to "retrenchment" within the meaning of section 2 (oo) of the Industrial Disputes Act. Consequently, the order of termination was set aside and the Management was directed to reinstate the workman in service with full wages from 11-5-1983 treating the period of absence from duty from 19-1-1988 to 10-5-1988 as an extra ordinary leave without pay, but with benefit of continuity of service and other benefits. 2. The facts of the case are not in dispute. The question urged before me being a pure question of law, it is not necessary to refer to all the detailed facts of the case, but the salient facts, in so far as they are material, for the purpose of the instant writ petition may be briefly noticed. Respondent no. 2 was a workman of the petitioner-Corporation. By order dated 13/14th January, 1988, communicated to him on the 15th January, 1988, respondent no. 2 was transferred from Barauni to Kanpur. He was required to join at Kanpur but despite repeated directions issued to him he did not do so. The petitioner remained absent, though he had applied for leave with effect from 16-1-1988. The petitioner-Corporation offered him pay upto 18-1-1988 and relieved him from duty to enable him to join at Kanpur in the afternoon of 18-1-1988. From 19-1-1988 till 10-5-1988 respondent no. 2 was absent from duty and his application for leave on medical ground was not entertained by the Management in this background on 11-5-1988 a letter was issued by the petitioner-Corporation to respondent no. 2 informing him that in accordance with the Certified Standing Orders, particularly Clause 13 thereof, respondent no.
From 19-1-1988 till 10-5-1988 respondent no. 2 was absent from duty and his application for leave on medical ground was not entertained by the Management in this background on 11-5-1988 a letter was issued by the petitioner-Corporation to respondent no. 2 informing him that in accordance with the Certified Standing Orders, particularly Clause 13 thereof, respondent no. 2 had lost lien on his appointment and had thus voluntarily resigned his service. His name had, accordingly, been struck off from the rolls of the Corporation with immediate effect. 3. Thereafter, on 11.7.1988 respondent no. 2 submitted his joining report, but the same was refused on the ground that in view of the order of transfer there was no question of his 'joining at Barauni. An industrial dispute was raised and upon failure of the conciliation proceeding the appropriate Government referred the industrial dispute for adjudication to the Central Government Industrial Tribunal No. 1 at Dhanbad. The reference was made in the following terms : "Whether the action of the management of Indian Oil. Corporation Ltd., Barauni-Kanpur Pipe Line Division, Barauni in terminating the services of Sri Satya Narayan Rai. Operator Gr. 'B' w.e.f. 15.1.88 is justified. If not what relief is the workman entitled to? 4. As noticed earlier, the Tribunal' took the view that under clause 13 of the Certified Standing Orders a workman lost his lien on appointment if he remained absent continuously for a 'period of eight days or• more. However, since the loss of lien on the appointment resulted in termination of his services, it amounted to "retrenchment" within the meaning of the term defined in section 2 (oo) of the Industrial Disputes Act. Since there was non-compliance with the provision of section 25-F of the Industrial Disputes Act, the termination of service of respondent no. 2 was not in accordance with law. 5. Learned counsel appearing on behalf of the petitioner-Corporation strongly urged before me that the Tribunal fell into an error of law in' holding that where a workman lost his lien on his appointment 'by operation of law, and not on account of 'any positive action taken by the Management, such a termination also amounts to "retrenchment". According to him, the Certified Standing Orders had the force of law, and the services of respondent no. 2 stood terminated by operation of the aforesaid clause of the Certified Standing Orders.
According to him, the Certified Standing Orders had the force of law, and the services of respondent no. 2 stood terminated by operation of the aforesaid clause of the Certified Standing Orders. The petitioner-Corporation merely informed• respondent no. 2 of the consequence that followed in law by reason of his continued absence for more than eight days without grant of leave. He further submitted that the petitioner-Corporation had relied upon three decisions of the Supreme Court which were most relevant and which the Tribunal failed to notice and appreciate. 6. Clause 13 of the Certified Standing Orders applicable to respondent no. 2 is in the following terms: "If a workman overstays beyond the period of leave originally granted or subsequently extended or absents himself without obtaining leave for more than 8 consecutive days he shall lose his lien on his appointment. If, however, the workman returns within 8 days of the expiry of the leave originally granted or extended to him or within 8 days of his absence without leave, he will be asked to show cause against the loss of his lien to the satisfaction of' the officer authorised to sanction leave." 7. The first decision of the Supreme Court relied upon by the petitioner-Corporation is reported in A.I.R. 1964 S.C. 1458 (Workmen of Dewan Tea Estate and others v. Their Management). In that case it was held that Certified Standing Orders became part of the statutory terms and conditions of service between the industrial employer and his employees. If the Standing Orders thus became part, of the statutory terms and conditions of service, they would .govern the relations between the parties unless, of course, it can be shown that any provision of the Industrial Disputes, Act is inconsistent with the said Standing orders. In that case, it may be permissible to urge that the statutory provision contained in the Act should override the Standing Order. Counsel for respondent no. 2 submitted that so far as the principle laid down by the Supreme Court in the aforesaid decision is concerned, the same is unexceptional, but he submitted that if the term 'retrenchment' in section 2 (oo) of the industrial Disputes Act is given its true meaning and import termination of employment by operation of clause 13 of the Standing Orders would amount to retrenchment, and consequently would attract the provision of section 25-F of the Industrial Disputes Act.
Apart from general principles of law and rules of interpretation, section 25-J of the Industrial Disputes Act makes the position clear that the provisions of the Act will override the Certified Standing Orders. The relevant part of section 25-J of the Industrial Disputes Act provides as under: "25-J. Effect of laws inconsistent with this chapter. - (1) The provisions of this chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law including standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946)." 8. Counsel for the petitioner-Corporation then relied upon a decision of the Supreme Court in Buckingham and Carnatic Co. Ltd. Vs. Venkatiah and another (A.I.R. 1964 S.C. 1272). In that case the Court was considering the true scope and effect of the provision contained in section 73 of the Employees' State Insurance Act, 1948, which provided that no employer shall dismiss, discharge, or reduce or otherwise punish an employee during the period the employee is in receipt of sickness benefit or maternity benefit, nor shall he, except as provided under the regulation, dismiss, discharge or reduce or otherwise punish an employee during the period he is in receipt of disablement benefit for temporary disablement or is under medical treatment for sickness or is absent from work as a result of illness duly certified in accordance with the regulations arising out of the pregnancy or confinement rendering the employee unfit for work. The respondent in that case had gone on leave for six days, but despite expiry of the leave he did not join duty as he should have, but remained absent without leave without sending to the appellant any communication for extending his leave. Much later Oil March 11, 1957, he sent a letter to the appellant stating that after reaching his village he suffered from fever and dysentery and was treated by Civil Assistant Surgeon Kanigiri. This letter was accompanied by a certificate issued by the said Civil Assistant Surgeon certifying that the respondent had suffered from chronic malaria and dysentery from 15th January to 7th March, 1957. The respondent was directed to appear before the Senior Medical Officer of the appellant for examination, but after examination the said Officer was unable to confirm that the respondent had been ailing for a period of nearly two months.
The respondent was directed to appear before the Senior Medical Officer of the appellant for examination, but after examination the said Officer was unable to confirm that the respondent had been ailing for a period of nearly two months. The appellant refused to take back the respondent and informed him on March 23, 1957 that he could not be reinstated as his explanation for his absence was unsatisfactory. The case of the respondent was treated by the appellant under Standing Order No. 8(ii) of the Standing Orders of the appellant. Under the said Standing Orders any employee who absented himself for eight consecutive working days without leave was deemed to have left the Company's service without notice there by terminating his contract of service. A question arose as to whether section 73 of the Employees' State Insurance Act, 1948, applied to the facts of the case, where the termination was by operation of Standing Order No. 8(ii). The Court held: "(15) There is another aspect of this question to which it is necessary to refer. Section 73(i) prohibits the employer from dismissing, discharging, reducing or otherwise punishing an employee. This seems to suggest that what is prohibited is some positive act on the part of the employer, such as an order passed by him either dismissing discharging or reducing or punishing the employee. Where termination of the employee's services follows automatically either from a contract or from a Standing Order by virtue of the employee's absence without leave for the specified period, such termination is not the result of any positive act or order on the part of the employer, and so to such a termination the prohibition contained in S.73(1) would be inapplicable 9. Relying upon the aforesaid observation counsel for the petitioner submitted that in the case in hand as well the termination was not the result of any positive act or order on the part of the employer and therefore, such a termination cannot be said to be retrenchment within the meaning of Section 2 (oo) of the Industrial Disputes Act, which, in term defined 'retrenchment' to mean "termination by the employer of the service of a workman for any reason whatsoever." On the other hand, counsel for respondent no.
2 submitted that though the observation may support the case of the petitioner, the decision did not consider the meaning of the term 'retrenchment' under the Industrial Disputes Act, but was only concerned with section 73 of the Employees' State Insurance Act, 1948 which related to dismissal or punishment of employee during the period of sickness etc: 10. Reliance was placed upon a decision of the Supreme Court in National Engineering Industries Ltd. Vs. Hanuman (A.I.R. 1968 S.C. 33). In that case a question arose as to whether automatic termination of employment under the Standing Orders would attract the provisions of sections 33 and 33-A of the Industrial Disputes Act. The Court held that in such a case the provisions of sections 33 and 33-A of the Industrial Disputes Act are not attracted, because his service stood automatically terminated upon happening of the contingency envisaged in that Standing Order. The Court observed : "The standing order is inartistically worded, but it seems to us clear that when the standing order provides that a workman will lose his lien on his appointment in case he does not join his duty within 8 days of the expiry of his leave, it obviously means that his services are automatically terminated on the happening of the contingency. We do not understand how a workman who has lost his lien on his appointment can continue in service thereafter. Where therefore a standing order provides that a workman would lose his lien on his appointment, if he does not join his duty within certain time after his leave expires, it can only mean that his service stands automatically terminated when the contingency happens........ Section 33 of the Act corresponds to Section 23 of the Industrial Disputes (Appellate Tribunal) Act, 1950. The position therefore would be the same under Section 33 of the Act. Where therefore a workman's service terminates automatically under the standing order Section 33 would not apply and so an application under Section 33-A would not be maintainable, as there is no question in such a case of the contravention of Section 33 of the Act." This decision as well did not consider the question of automatic termination of service under the Standing Orders in the context of "retrenchment" as defined under section 2 (oo) of the Industrial Disputes Act and section 25-F thereof.
However, it cannot be denied that the observations made in the decisions of the Supreme Court do support the submission urged on behalf of the petitioner-Corporation that with a view to attract the provision of section 25-F of the Industrial Disputes Act, it must be shown that the termination amounted to retrenchment, which in turn involved some positive act on the part of the employer, and consequently ruled out termination of employment by operation of law. 11. The submission urged on behalf of the petitioner-Corporation ignores the development of the law after the year 1968. The submission proceeds on the basis that the termination of employment will not amount to retrenchment, if it is by operation of the Certified Standing Orders, and not on account of any positive act on the part of the Management. The development of the law in this regard cannot be ignored, and counsel for respondent no. 2 has rightly contended before me that the term 'retrenchment' has a different content and import than what was understood when the judgments relied upon by the petitioner-Corporation were rendered. The law has developed over the years by judicial interpretation and the recent decisions of the Supreme Court have left no room for doubt that even termination of services by operation of the Certified Standing Orders would amount to "retrenchment'", obliging the Management to comply with the provision of section 25F of the Industrial Disputes Act. It is not as if the Certified Standing Orders will not operate to bring about a cessation of employer-employee relationship but what has been emphasised is the tact that 'upon such cessation of relationship, the Management is obliged to compensate the concerned workman in the manner provided by section 25-F of the 'Industrial Disputes Act. The submission urged on behalf of respondent no. 2 has force and must be upheld. The submission is not only supported by two decisions of Division Benches of this Court but also by the authoritative pronouncement of the Supreme Court rendered by a Constitution Bench. 12. The first departure from the accepted connotation of the term 'retrenchment' appears to have been made in State Bank of India v. N. Sundara Money, (1976) 3 SCR 169. That was a case in which the appointment was purely temporary one for a period of 9 days, but could be terminated earlier without assigning any reason therefore at the employer's discretion.
That was a case in which the appointment was purely temporary one for a period of 9 days, but could be terminated earlier without assigning any reason therefore at the employer's discretion. Unless terminated earlier the employment was to cease automatically at the expiry of the period. Considering the meaning of 'retrenchment' it was held that the expression for any reason whatsoever in section 2 (oo) of the Industrial Disputes Act was very wide and almost admitting of no exception. The Court rejected the contention of the employer that the order of appointment carried an automatic; cessation of service and the period of employment worked itself out by efflux of time not by act of employer and, therefore. Such cases were outside the concept of retrenchment. The Court observed:- "A breakdown of Section 2 (oo) unmistakably expands the semantics of retrenchment. Termination for any reason whatsoever are the key words. Whatever the reason, every termination spells retrenchment. So the sale question is has the employee's 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 howsoever produced. Maybe, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the armour of Section 25-F and Section 2 (oo). Without speculating on possibilities, we may agree that 'retrenchment' is no longer terra incognita but area covered by the expansive definition. It means 'to end, conclude, cease'. In the present case the employment ceased, concluded ended on the expiration of nine days automatically may be, but cessation all the same. That to write into the order of appointment the date of termination confers no moksha from Section 25-F (b) is inferable from the proviso to Section 25-F(1) [sic 25F (a)].
It means 'to end, conclude, cease'. In the present case the employment ceased, concluded ended on the expiration of nine days automatically may be, but cessation all the same. That to write into the order of appointment the date of termination confers no moksha from Section 25-F (b) is inferable from the proviso to Section 25-F(1) [sic 25F (a)]. True, the section speaks of retrenchment by the employer and it is urged that some act of volition by the employer to bring about the termination is essential to attract Section 25-F and automatic - extinguishment of service by effluxion of time cannot be sufficient" In several subsequent decisions of the Supreme Court the law relating to retrenchment has followed the line of reasoning in Sundara Money's case (supra). It is not necessary for me to refer all those decisions because they have been exhaustively dealt with by a Constitution Bench of the Supreme Court to which I shall advert later. At this stage I may notice the decision of the Supreme Court in L. Robert D'Souza vs. The Executive Engineer, Southern Railway (A.I.R. 1982 S.C. 854). The Court noticed the submission urged on behalf of the employer that the Court should proceed on the construction of the expression 'retrenchment' as set out in Hari Prasad Shukla's case ( AIR 1957 S.C. 121 ) and ignore the construction of the expression 'retrenchment' put in the, decisions of the Supreme Court in Sundara Money's case ( AIR 1976 SC 1111 ), Hindustan Steel Ltd. case ( AIR 1977 SC 31 ). Santosh Gupta's case ( AIR 1980 SC 1219 ), Delhi Cloth & General Mills Ltd. case ( AIR 1978 SC 8 ) as being per incuriam. The submission was negatived, The Court held:- “The definition of expression 'retrenchment' in S. 2 (oo) is so clear and unambiguous that no external aids are necessary for its proper construction.
Santosh Gupta's case ( AIR 1980 SC 1219 ), Delhi Cloth & General Mills Ltd. case ( AIR 1978 SC 8 ) as being per incuriam. The submission was negatived, The Court held:- “The definition of expression 'retrenchment' in S. 2 (oo) is so clear and unambiguous that no external aids are necessary for its proper construction. Therefore we adopt as binding the well settled position in law that if termination of service of a workman is brought about for any reason whatsoever, it would be retrenchment except if the case falls within any of the excepted categories, i.e. (i) termination by way of punishment inflicted pursuant to disciplinary action; (ii) voluntary retirement of the workman; (iii) 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; (iv) or termination of the service on the ground of continued ill-health. Once the case does not fall in any of the excepted categories the termination of 'service even if it be according to automatic discharge from service under agreement would nonetheless be retrenchment within the• meaning of expression in Section 2 (oo). It must as a corollary follow that if the name of the workman is struck off the roll that itself would constitute retrenchment, as held by this Court in Delhi Cloth & General Mills Ltd. Case ( AIR 1978 SC 8 ).” 13. I may also notice two Division Bench judgments of this Court in Desh Raj Sood vs. Presiding Officer, Industrial Tribunal and another ( 1984 PLJR 612 ) and Mahabir vs. D.K. Mittal (1980 PLJR 162). In the first case it was held that the striking off the name of the workman from the rolls amounted to retrenchment within the meaning of section 2 (oo) of the Act requiring mandatory compliance of section 25 (a) and (b) of the Act. These were peremptory conditions precedent. Even in a case of loss of lien bringing in automatic termination of an employment, the name of the workman has to be struck off from the rolls. There was no force in the argument that for application of the provisions of section 2 (oo) of the Act, the order of termination must be by an overt act by the employer.
There was no force in the argument that for application of the provisions of section 2 (oo) of the Act, the order of termination must be by an overt act by the employer. Assuming it to be so, overt act could also be striking off the name of the concerned person from the register of employment. The expression 'retrenchment' is of widest amplitude and even if the termination is effected not by any voluntary action on tile part of the employer, such termination also becomes retrenchment within the meaning of section 2 (oo) of the Act. In the second decision the same view was taken dealing with a case of compulsory retirement. The argument that the termination of service resulted from the exercise of statutory power and was, therefore not "retrenchment" was negatived, giving to the term 'retrenchment' its widest amplitude and including therein all terminations of service except those expressly excluded by the definition. The decisions of Division Benches of this Court are binding upon me, and the Division Benches having considered exhaustively the decided cases on the subject, it is not open to me to take a different view. 14. What, however, puts the controversy at rest is the decision of the Constitution Bench of the Supreme Court in Punjab Land Development & Reclamation Corporation Ltd. vs. Presiding Officer, Labour Court, Chandigarh (1990) 3 Supreme Court Cases 682. The Supreme Court considered a large number of decisions on this point rendered by the Supreme Court as well as the High Courts. It negatived the contention that the judgment of the Supreme Court in Sundara Money's case was rendered per incuriam on the ground of failure to apply the law earlier laid down by the Constitution Bench of the Court in Hari Prasad Sukla's case. It was noticed that in Hindustan Steel Ltd. and Santosh Gupta's case the Division Benches of the Supreme Court referred to Hari Prasad case and 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.
It was noticed that in Hindustan Steel Ltd. and Santosh Gupta's case the Division Benches of the Supreme Court referred to Hari Prasad case and 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. The Constitution Bench of the Supreme Court affirmed the decision of the Supreme Court in State Bank of India vs. N. Sundara Money and approved all the decisions which followed the same line of reasoning including Delhi Cloth and General Mill's case, Santosh Gupta's case and Hindustan Steel Ltd. case. The Constitution Bench overruled the decision of Kerala High Court in L. Robert D'Souza vs. Executive Engineer, Southern Railway, (1979) 1 LLJ 211 . Perhaps, it was not brought to the notice of the Supreme Court that the said decision of Kerala High Court stood overruled by a decision of the Supreme Court, reported in A.I.R. 1982 S.C. 854, when an appeal against that judgment was brought to the Supreme Court. 15. After considering a large number of decisions the Constitution Bench of the Supreme Court held : "71. Analysing the definition of retrenchment in Section 2 (oo) we find that termination by the employer of the service of a workman would not otherwise have covered the cases excluded in (a) and (b), namely, voluntary retirement and retirement on reaching the stipulated age of retirement. There would be no volitional element of the employer. Their express exclusion implies that those would otherwise have been included. Again if those cases were to be included, termination on abandonment of service, or on efflux of time, and. on failure to qualify, although only consequential or resultant, would be included as these have not been excluded, Thus, there appears to be a gap between the first part and the exclusion part, Mr. Venugopal, on this basis, points out that cases of voluntary retirement, superannuation and tenure appointment are not cases of termination 'by the employer' and would, therefore, in any event, be outside the scope of the main provisions and are not really provisos. 72.
Venugopal, on this basis, points out that cases of voluntary retirement, superannuation and tenure appointment are not cases of termination 'by the employer' and would, therefore, in any event, be outside the scope of the main provisions and are not really provisos. 72. The definition has used the word 'means', When a statute says that a word or phrase shall 'mean" not merely that it shall "include" certain things or acts, "the definition is a hard-and-fast definition, and no other meaning can be assigned to the expression than is put down in definition" (per Esher, M.R., Gough v, Gough). A definition is an explicit statement of the full connotation of a term." A submission was advanced to the effect that if a wider meaning be given to retrenchment it would have an otherwise effect on the rights of the employer under the Standing Orders. Considering the submission urged before it the Court held : "The last submission is that if retrenchment is understood in its wider sense what would happen to 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. There may be two answers to this question. Firstly, those rights may have been affected by introduction of Section 2 (oo), 25-F 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 workmen, 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." Lastly, the Court concluded by saying: "82. Applying the above reasonings, principles and precedents, to the definition in Section 2 (oo) of the Act, we hold that "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in the section." 16.
Applying the above reasonings, principles and precedents, to the definition in Section 2 (oo) of the Act, we hold that "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in the section." 16. Counsel for the petitioner submitted that the correctness of the aforesaid Constitution Bench decisions of the Supreme Court is likely to be reconsidered by a larger Bench of the Supreme Court since similar question arising in a batch of matters before the Supreme Court has been referred to a larger Bench. Assuming it to be so, the decision of the Supreme Court is nonetheless binding upon me as the law of the land declared, which I am bound to follow having regard to the mandate of Article 141 of the Constitution. The mere fact that the matter has been referred to a larger Bench does not denude the decision of its authority as a binding precedent. 17. In this view of the matter, I must hold that the Tribunal was right in coming to the conclusion that even if respondent no. 2 in the instant case lost his lien on appointment by reason of operation of clause 13 of the Certified Standing Orders, that amounted to "retrenchment" within the meaning of section 2 (oo) of the Industrial Disputes Act This writ petition has, therefore, no merit and must be dismissed It is, accordingly, dismissed, but there will be no order as to costs.