Amar Jain Medical Relief Society v. Presiding Officer, Labour Court
1995-09-20
N.L.TIBREWAL
body1995
DigiLaw.ai
Judgment N.L. Tibrewal, J.-The petitioner Society in this petition under Articles 226 and 227 of the Constitution of India, challenges the award dated August 17, 1994 passed by the Labour Court, Jaipur in a reference made by the State Government under Section-lO (1) of the Industrial Disputes Act, 1947, (hereinafter to be referred to as the Act). .2. The claim of the non-petitioner-workman was that he was appointed as Typist-cum-Clerk on October 16, 1990 against a vacant post after due selection and calling application by advertisement. Initially, he was given appointment for two months and thereafter, vide order dated December 17, 1990, the period was extended upto March 31, 1991, but by another letter dated March 14, 1991, his services were terminated w.e.f March 31, 1991. He then made a representation, on which the Honorary Secretary of the petitioner Society passed an order on March 18, 1991 that he be further appointed for one month and the performance of his work be .examined, but, inspite of that he was removed from the service on March 31, 1991. It was also pleaded inter-alia that his removal from service was not on account of the fact that the Society had no work and one Sujeet Jain was appointed in his place from the very next day on April 1, 1991. That there was no compliance of the provisions of Section-25C and 25-H of the Act. .3. On the other hand, the case of the petitioner-society was that appointment of the workman was made initially for a fixed term of two months which was extended upto March 31, 1991 vide letter dated December 17, 1990 and that the petitioner was not entitled for any relief in view of Clause (bb) of Section 2 (oo) which defines retrenchment. After recording evidence of the parties, the Tribunal recorded the following findings: .(i) That the offer of appointment to the petitioner was made by the Selection Committee after calling applications by an advertisement in the daily newspaper Rajasthan Patrika. .(ii) That the appointment was against a vacant post. The Tribunal did not accept the contention of the petitioner-Society that appointment of the petitioner was made for completion of extra work or to meet the situation of extra workload.
.(ii) That the appointment was against a vacant post. The Tribunal did not accept the contention of the petitioner-Society that appointment of the petitioner was made for completion of extra work or to meet the situation of extra workload. (iii) That after termination of the petitioner one Sujeet Jain was appointed by the petitioner-Society on April 1, 1991 i.e. the very next date and he was doing the same work by change of nomenclature of the post as Office Assistant. That he was doing the same work and he was appointed in place of the petitioner. .(iv) That appointment of the petitioner for a fixed term was against the spirit of the provisions of the Industrial Disputes Act which are meant to protect the workman from exploitation. .(v) That there was non-compliance of the mandatory provisions of Sections-25G and 25H of the Industrial Disputes Act which are independent in nature. With the above findings the Labour Court held the termination of the service of the petitioner as invalid and consequently, the same was declared as null and void with a direction to reinstate the petitioner in continuity with 30% of the back wages. 4. Learned Counsel appearing for the petitioner contended that appointment of the non-petitioner workman was for a fixed term of contract and as such, it falls outside the definition of retrenchment as it is frilly covered by Clause (bb) of Section 2 (oo) of the Act. Reliance is placed on U.P. State Co-operative Land Development Bank Ltd., vs. Tazmulk Ansari & Ors. 1994 Suppl. II S.C.C. 745 and M. Venugopal vs. Divisional Commissioner, Life Insurance Corporation of India & Anr. (1994-I-LLJ-597) (SC). 5. On the other hand, learned Counsel appearing for the workman supported the findings and the view taken by the Labour Court. 6. I have given my careful consideration to the respective submissions. The findings of the Labour Court that appointment was offered to the petitioner after due selection inviting applications by advertisement published in daily newspaper ‘Rajasthan Patrika’ and it was against the permanent vacancy and not to cope with extra load of work and that one Sujeet Jain was given appointment from April 1, 1991 in place of the workman for the same work are findings of fact and in my view, they are well founded.
Learned Counsel for the petitioner could not point out any legality in the impugned award vitiating any of the aforesaid findings. .7. In State of U.P. vs. M.O. Siddiqui & Ors. AIR 1990 S.C. 1098 , the Supreme Court has observed. “In our opinion, reading the advertisement and the manner and mode of the appointment of the appellant, it must be held that they were appointed in a substantive capacity to temporary posts which according to the advertisement were likely to continue. There does not appear to be any magical formula or special charm in the word ‘substantive’. The mere use of the term ‘appointment’ in a temporary vacancy by itself would not conclude the matters or lead to the irresistible inference that the appointment was not made in a substantive capacity because even a substantive appointment could be made to a purely temporary vacancy. In order, therefore, to determine nature of the appointment, we have to look to the heart and substance of the matter, the surrounding circumstances, the mode, the manner and the terms of appointment and other relevant factors. In the instant case, we cannot ignore the advertisement which forms the pivotal basis of the direct recruitment in pursuance of which the appellants were appointed. Another circumstance that supports our view is that the appellants were not appointed merely on an adhoc basis but through the Public Service Commission and is a regular way.” .A similar view has been expressed by the Supreme Court in P.O. Agrawal vs. State of U.P. AIR 1987 SC 1676 , as well as in Ashok Gulati vs. B.S. Jain AIR 1987 SC 424 . .8. The aforesaid decision shows that for the purpose of determining as to whether a particular appointment was on a substantive capacity the Court has to look into the substance of the matter i.e. the mode of the selection, manner of selection and the nature of vacancy. In R.S. Rawat vs. State of Rajasthan & Ors. 1993 (1) WLC (Raj.) 79 a learned Single Judge of this Court has also held that the mere use of the word “ad hoc” or the mere fact that the term of appointment was specified in the appointment letter will make no difference and the appointment can be treated in the nature of regular and substantive if it was made after regular selection and .issuance of advertisement inviting applications. 9.
9. In our country, the doctrine of laissez-faire has not been accepted and the employer does not have an absolute freedom in the matter of laying down the terms and conditions of the employment. If the terms and conditions of the employment are unfair, arbitrary or opposed to public policy, the same may not be binding on the employee. In Central Inland Water Transport Corporation vs. Brojo Nath Ganguli (1986-II-LLJ-171), their Lordships of the Supreme Court struck down the terms and conditions of the employment on the ground that the same were unconscionable or unfair. After making a lucid analysis of Articles 14, 19 (a) and 41 of the Constitution of India and Section-21 of the Contract Act, 1872, the Court held at P 204: “An unconscionable bargain or contract is one which is irreconcilable with what is right or reasonable or the terms of which are so unfair and unreasonable that they shock the conscience of the Court.” “The doctrine of distributive justice is another jurisprudential concept which has affected the law of contracts. According to this doctrine, distributive fairness and justice in the possession of wealth and property can be achieved not only by taxation but also by regulatory control of private and contractual transactions even though this might involve some sacrifice of individual liberty. This doctrine has found constitutional recognition through the Preamble and Articles 38 and 39”. At P 207: “The test of reasonableness or fairness- a clause in a contract where there is inequality of bargaining power is another theory recognised in the sphere of law of contracts. The Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or a clause in a contract entered into between parties who are not equal in bargaining power. Lord Diplock in A. Schroeder Music Publishing Co. case has given the test of fairness thus : “Whether the restrictions are both reasonably necessary for the protection of the legitimate interests of the promisee and commensurate with the benefits secured to the promiser under the Contract. For the purpose of this test all the provisions of the contract must be taken into consideration. At P 208 This is in consonance with right and, reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Article 14.
For the purpose of this test all the provisions of the contract must be taken into consideration. At P 208 This is in consonance with right and, reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Article 14. There can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The Court must judge each case on its own facts and circumstances. The above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties or where the inequality is the result of circumstances, whether of the creation of the parties or not or where the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the term imposed by the stronger party or go without term or where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both the parties are businessmen and the contract is a commercial transaction. However, these are only illustrations as it is difficult to give an exhaustive list of all bargains of this type.” At P 209: “The contracts of the types to which the principle formulated above applies are not contracts which are tainted with illegality but are contracts which contain terms which are so unfair and unreasonable that they shook the conscience of the Court. In the vast majority of cases such contracts are entered into by the weaker party under pressure of circumstances, generally economic, which results in inequality of bargaining power. Such contracts will not fall within the four corners of the definition of “undue influence” given in Section 16(1) of the Contract Act, even though at times they are between parties one of whom holds a real or apparent authority over the other.
Such contracts will not fall within the four corners of the definition of “undue influence” given in Section 16(1) of the Contract Act, even though at times they are between parties one of whom holds a real or apparent authority over the other. Contract in prescribed or standard forms or which embody a set of rules as part of the contract or entered into by the party with superior bargaining power with a large number of persons who have far less bargaining power or no bargaining power at all. Such contracts which affect a large number of persons or a group or groups of persons, if they are unconscionable, unfair and unreasonable are injurious to the public interest. Such a contract or its clause should be adjudged void under Section-23 of the Contract Act on ground of being opposed to public policy.” 10. In The Manager, Government Branch Press & Anr. vs. D.B. Belliappa (1979-I-LLJ-156) the respondent was a Class-IV employee. One of the terms of his contract of employment was that his appointment was purely temporary and that it was liable to termination at the will and pleasure of the master without reason and without notice. The service of the employee was terminated by the employer with immediate effect as his appointment was temporary and terminable without notice and without assigning any reason. The contention of the employer that the respondent voluntarily entered into a contract of service on the terms of employment offered to him and having wilfully accepted the employment on terms offered to him, he cannot complain against the impugned action taken in accordance with those mutually agreed terms, was rejected as being misconceived. In this connection it was observed by their Lordships as under :- “Another facet of Mr. Veerappa’s contention is that the respondent had voluntarily entered into a contract of service on the terms of employment offered to him. One of the terms of that contract, embodied in the letter of his appointment is that his service was purely temporary and was liable to termination at the will and pleasure of the appointing authority without reason and without notice. Having willingly accepted the employment on terms offered to him, the respondent cannot complain against the impugned action taken in accordance with those mutually agreed terms. The argument is wholly misconceived.
Having willingly accepted the employment on terms offered to him, the respondent cannot complain against the impugned action taken in accordance with those mutually agreed terms. The argument is wholly misconceived. It is borrowed from the archaic common law concept that employment was a matter between the master and servant only. In the first place, this rule in its original absolute form is not applicable to Government servants. Secondly, even with regard to private employment, much of it has passed into the fossils of time. “This rule held the field at the time when the master and servant were taken more literally than they are now and when, as in early Roman Law, the rights of the servant, like the rights of any other member of the household, were not his own, but those of his pater familias.” The overtones of this ancient doctrine are discernible in the Anglo-American jurisprudence of the 18th century and the first half of the 20th century, which rationalised the employer’s absolute right to discharge the employee. “Such a philosophy” as pointed out by M.K. Mathew, J. (vide his treatise : “Democracy, Equality and Freedom”, page 326), “of the employer’s dominion over his employee may have been in tune with the rustic simplicity of bygone days. But that philosophy is incompatible with these days of large impersonal, corporate employers.” To bring it to tune with vastly changed and changing socio-economic conditions and mores of the day, much of this old, antiquated and unjust doctrine has been eroded by judicial decisions and legislation, particularly in its application to persons in public employment, to whom the Constitutional protection of Articles 14, 15, 16 and 311 is available. The argument is therefore, overruled.” In Oriental Bank of Commerce vs. The Presiding Officer Central Govt. Industrial Tribunal & Anr. 1992 (1) WLC (Raj.). 464, this Court has held that the provisions of Sections-25G and 25H of the Act are totally independent provisions. 11. It is true that vide appointment letter dated October 16, 1990 the workman-non-petitioner was given appointment on temporary basis for a period of two months and the same was extended upto March 31, 1991 and that the terms and conditions contained a provision that the services of the workman will stand terminated automatically with the expiry of the time. But, in my view, it does not make any substantial effect in the present case.
But, in my view, it does not make any substantial effect in the present case. The case of the petitioner cannot be said to be covered by Clause (bb) of Section 2 (oo) of the Act because of the aforesaid condition which has been held to be unfair and unreasonable by the Labour Court. I agree with the view taken by the Labour Court and hold that the workman was not bound by the said terms in the facts and circumstances of the case. Consequently, I do not find any merit in this petition and it is hereby dismissed. No order as to costs.