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2000 DIGILAW 1310 (ALL)

U. P. FINANCIAL CORPORATION KANPUR v. NEELAM SHARMA

2000-10-13

S.R.SINGH

body2000
S. R. SINGH, J. ( 1 ) THIS writ petition has been instituted by the employer against the award dated 19. 7. 1996 rendered by the Labour Court (IVth) U. P. , Sarvoday Nagar, Kanpur in Adjudication Case No. 296 of 1995 in favour of the respondent No. 2, Km. Neelam Sharma. The dispute referred to the labour Court for adjudication under Section 4k of the U. P. Industrial Disputes Act (hereinafter referred to as the State Act) was as to whether the employers were justified in precluding Km. Neelam Sharma from doing her duties as Steno/typist w. e. f. 23. 7. 1994 and if not what relief/compensation was she entitled to get and with effect from which date. ( 2 ) ON the facts found by the Labour Court and submissions made across the Bar, the questions that have come to the fore for consideration by this Court are threefold : firstly, whether respondent Km. Neelam Sharma came within the purview of workman as defined in Section 2 (z) of the State Act : secondly, whether termination of service by efflux of time would amount to retrenchment as defined in Section 2 (s) of the State Act ; and thirdly, whether definition of the term retrenchment as given in Section 2 (oo) of the Industrial Disputes Act. 1947 (in short the central Act), will prevail over the definition of the term as given in Section 2 (s) of the State act. In re--the first question : ( 3 ) IT has been contended by Sri V. B. Singh, Senior Advocate appearing for the petitioners that the U. P. Financial Corporation is not an industry within the meaning of Section 2 (k) of the state Act and ; that the employees of the Corporation are public servants within the meaning of section 2 (b) of the U. P. Public Services (Tribunal) Act, 1976 and, therefore, reference under section 4k of the State Act and was not maintainable and the Labour Court had no jurisdiction to entertain the dispute which fell within the exclusive jurisdiction of U. P. Public. Services tribunal under Section 4 of the U. P. Public Services Tribunal Act. 1976. Services tribunal under Section 4 of the U. P. Public Services Tribunal Act. 1976. Sri V. B. Singh placed reliance on certain judgments of the Supreme Court in which correctness of the seven-Judge bench decision of the Supreme Court in Bangalore Water Supply and Sewerage Board v. A. Rajappa, AIR 1978 SC 548 , had been doubted and matter referred to larger Bench for consideration. The submission made by Sri V. B. Singh has no merits and, it seems, was advanced but to be rejected. In Coir Board Ernakulam, Kerala State v. Indira Deval, (2000) 1 scc 224 , the view taken by the seven-Judge Bench in Bangalore Water Supply and Sewerage board (supra) has been reiterated and it has been held that there is no need for reference to a larger Bench. In Samistha Dubey v. City Board, Etawah and another, (1999) 3 SCC 14 , a typist/clerk in the administrative office of a Nagar Palika in U. P. was held to be a workman to whom the provisions of the U. P. Public (Tribunal) Act, 1976 would not apply. It is, therefore, not necessary to dilate much on this point which is concluded against the petitioners by pronouncements of the Supreme Court. I am inclined to the view that the petitioner Corporation is an industry and the petitioner comes within the purview of workman as defined in Section 2 (z) of the State Act. In re--questions 2 and 3 ( 4 ) THE next contention of Sri V. B. Singh pertains to questions two and three formulated in the beginning of this judgment. It has been contended by Sri V. B. Singh that the respondent Km. Neelam Sharma was engaged as steno/typist from time to time for specified durations and the last of such engagements came to an end by efflux of time on 6. 7. 1994, i. e. , her engagement automatically came to an end by efflux of time on 6. 7. 1994. Such determination of engagement, proceeds the submission, does not come within (he purview of retrenchment in view of clause (bb) of Section 2 (oo) of the Central Act which will prevail over Section 2 !s) of the State Act and, therefore, compliance of Section 6n of the State Act was not necessary. 7. 1994. Such determination of engagement, proceeds the submission, does not come within (he purview of retrenchment in view of clause (bb) of Section 2 (oo) of the Central Act which will prevail over Section 2 !s) of the State Act and, therefore, compliance of Section 6n of the State Act was not necessary. Sri K. P. Agarwal learned counsel appearing for the respondent, on the other hand, submits that Section 2 (oo) (bb)of the Central Act has no application to the State of U. P. In view of Section 6r of the State Act. The term retrenchment as defined in Section 2 (s) of the State Act is, according to Sri Agarwal, of wide amplitude encompassing within its sweep all types of termination of services of a workman for any reason whatsoever otherwise than as punishment barring terminations due to reasons mentioned in the exclusionary clauses (i) and (ii), ( 5 ) SECTION 2 (s) of the State Act reads as under : " (s) Retrenchment means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as punishment inflicted by way of disciplinary action but does not include : (i) voluntary retirement of the workmen ; or (ii) retirement of the workmen on reaching the age of superannuation if the contract of employment between the employer and workman concerned contains a stipulation in that behalf. " ( 6 ) BUT for the exclusionary clauses (i) and (ii), termination of the service of a workman even on the basis of voluntary retirement or retirement on reaching the age of superannuation would have come within the purview of retrenchment. So far as the Central Act is concerned, the definition of the word retrenchment in Section 2 (oo) is identically worded except that it contains two more exceptions those contained in the State Act. In fact it contained three exclusionary clauses prior to its amendment by Act No. 49 of 1948. These exclusionary clauses were (a) voluntary retirement : (b) retirement on reaching the age of superannuation ; and (c) termination of service on the ground of continued ill-health. By Act No. 49 of 1984. clause (bb) was added to the exclusionary clauses aforesaid. In fact it contained three exclusionary clauses prior to its amendment by Act No. 49 of 1948. These exclusionary clauses were (a) voluntary retirement : (b) retirement on reaching the age of superannuation ; and (c) termination of service on the ground of continued ill-health. By Act No. 49 of 1984. clause (bb) was added to the exclusionary clauses aforesaid. Clause (bb) of Section 2 (oo) of the Central Act reads as under : " (i) 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. (ii) such contract being terminated under a stipulation in that behalf contained in contract of employment. " ( 7 ) IT cannot be gainsaid that but for clause (bb), termination of service of a workman as a result of non-renewal of the contract of employment between the employer and the workman concerned on its expiry would have come within the purview of retrenchment notwithstanding the contract of employment being terminated under a stipulation in that behalf contained in the contract of employment itself. The question is whether the restricted meaning given to the word retrenchment by Section 2 (oo) of the Central Act, as it stands amended by Act No. 49 of 1984 is applicable to the Slate of U. P. This Court has expressed divergent opinions on this issue. A division Bench of this Court in Jai Kishun and others v. U. P. Cooperative Bank Limited, lucknow and others, 11989) 2 UPLBEC 144, has held as under : "the subject matter of legislation is undisputedly in the concurrent list. Therefore, we hold that in view of Article 254 (2) of the Constitution, provisions of Section 6r of the U. P. Act will prevail over the provisions of Section 25-O of the Central Act, i. e. , to say, in the State of U. P. , in the matters relating to rights and liabilities of employees and workmen. In a case of retrenchment. Section 6n of the U. P. Act will be applicable. In a case of retrenchment. Section 6n of the U. P. Act will be applicable. And further : "once we have come to the conclusion that the provisions of the U. P. Act will be applicable in the State of Uttar Pradesh in the matters relating to retrenchment, there remains no difficulty in holding that the definition of the word retrenchment as given in the U. P. Act will be applicable. . . . . " ( 8 ) RELYING upon the said decision, a learned single Judge, in U. P. State Sugar Corporation limited v. Presiding Officer, Labour Court, Gorakhpur and another, 2000 (85) FLR 879 , has held that Section 2 (oo) of the Central Act does not apply in respect of the proceeding under the state Act. ( 9 ) IN Laxmi Raj Singh and another u. State of U. P. and others, 1995 (1) LLJ 262 , I had an occasion to examine the question. It has been held therein that although the term retrenchment as defined in Section 2 (s) of State Act is of wide amplitude and comprehends even an automatic termination of service in terms of contract of service but retrenchment as defined in clause section 2 (bb) of Section 2 (oo) of the Central Act, as it stands amended by Industrial Disputes (Amendment) Act. 1984 excludes termination of service of a workman as a result of non-renewal of contract of employment. The definition of the retrenchment as given in the Central Act as it stands amended by the Act No. 49 of 1984, it was held therein, would prevail over the definition of the term retrenchment as given in Section 2 (s) of the U. P. Industrial Disputes Act, 1947 by virtue of Article 254 of the Constitution of India inasmuch as the definition of retrenchment as given in Section 2 (s) of the U. P. Industrial Disputes Act, 1947 has now become repugnant to the definition of the term as given in Central Act in view of its amendment by virtue of Act No. 49 of 1984 and, therefore, to the extent of repugnancy, the Central legislation would prevail over the State legislation by virtue of Article 254 (1) of the Constitution. Similar was the view taken by me in Akhilesh Kumar v. Director of Training and Employment, Lucknow and others, 1994 (69) FLR 297. Similar was the view taken by me in Akhilesh Kumar v. Director of Training and Employment, Lucknow and others, 1994 (69) FLR 297. In Arvind Kumar v. Deputy Director (Admn. ). Rajkiya Krishi Utpadan Mandi samiti. 1995-1 LLJ 750 Ail, a Division Bench of this Court expressed the same view. Reliance in that case was placed by the Division Bench on a decision of the Supreme Court in Director, institution of Management Development, U. P. v. Smt. Pushpa Srivastava, AIR 1992 SC 2070 , wherein it has been held that where appointment is purely on ad hoc basis and comes to an end by efflux of time on the basis of contract of employment, the person holding such post can have 110 right to continue on such post even if such person has continued from time to time on ad hoc basis for more than a year. In Smt. Pushpa Agarwal v. Regional Snspectress of Girls School, meerut and another. 1995 (70) FLR 20 . another Division Bench of this Court has laid down that : "a Full Bench decision of this Court in the case of M/s. Hindustan Sugar Mills Limited v. State of U. P. , W. P. No. 1910 of 1981 Lko, has laid down that both the State and Central Act deal with the matter enumerated in the concurrent list of the 7th Schedule of the Constitution and, as such, in view of the provisions of Article 254 of the Constitution of India, if amendment in Central Act has been made after the law was enacted by the State, it will prevail over the State Act, with the result that the Slate law to the extent of inconsistency has to give way to permit the newly added provision in the Central Act to govern the situation. Therefore, clause (bb) of Section 2 (oo) of central Act will be applicable to every case whenever the question of validity of termination of service is raised on the ground of non-compliance of Section 6n of the U. P. Act. This being the position, termination of service of the appellant cannot be said to be a case of retrenchment as it falls in one of the exceptions, laid down in clause (bb) of Section 2 (oo) of the Central Act. This being the position, termination of service of the appellant cannot be said to be a case of retrenchment as it falls in one of the exceptions, laid down in clause (bb) of Section 2 (oo) of the Central Act. " ( 10 ) ANOTHER Division Bench in Life Insurance Corporation and another v. Rajeeu Kumar srivastava, 1994 168) FLR 610, has also held that, termination of service as a result of non-renewal of contract would not come under the definition of retrenchment in view of Section 2 (oo) (bb) of the Central Act. Jal Kishun, does not hold the field in view of the Full Bench decision. However, it brooks no dispute that exceptions contained in clauses (t) and (ii) of section 2 (s) of the State Act and those contemplated by clauses (a), (b), (bb) and (c) of Section 2 (oo) of the Central Act being exceptions to the general rule, must be construed most strongly against the party for whose benefit they are introduced E. I. Rly, v. Jot Ram Chandra Bhan, AIR 1928 Lah 162. In other words, these exceptions must be construed strictly against the employer. The principle in this regard has been stated by Craw Ford in his Statutory Constructions as under : "unlike that of the proviso, however, it is apparent that the position of the exception in the statute is unimportant. But the exception is also subject to the rule of strict construction ; that is any doubt will be resolved in favour of the general provision and against the exception, and anyone claiming to be relieved from the statutes operation must establish that he comes within the exception. Indeed, the liberal construction of a statute would, in many instances, seem to require that the exception, by which operation of the statue is limited or abridged, should receive a restricted construction. Where, however, criminal or penal statute is involved, the exception must receive a liberal construction in favour of the defendant. Similarly, an exception appearing in a statute which imposes a burden on the public must also be given a liberation construction in favour of the public. " ( 11 ) GENERAL rule is that termination of service of workman for any reason whatsoever otherwise than by way of punishment is retrenchment unless it is covered by any of the exceptions. Similarly, an exception appearing in a statute which imposes a burden on the public must also be given a liberation construction in favour of the public. " ( 11 ) GENERAL rule is that termination of service of workman for any reason whatsoever otherwise than by way of punishment is retrenchment unless it is covered by any of the exceptions. Exception, it brooks no dispute, cannot be so interpreted as to nullify or destroy the main provision, Desu Rayudu v. Andhra Pradesh Public Service Commission, AIR 1967 AP 353 , or swallow the general rule. Sree R. S. Swamiji v. State of Mysore and others, (1963) 2 SCR 226 . It would thus appear that the employer in order to get benefit of clause (bb) of Section 2 (oo) of the central Act must establish that the contract of employment which visualises its termination in the event of non-renewal, is bona fide and the stipulation as to termination of service by efflux of time is not a device to circumvent the main provision and is not born of unfair labour practice. The circumstances and exigencies of administration, if any, necessitating such contractual appointment visualising termination of service in the event of non-renewal must be pleaded and proved by credible evidence. Otherwise any such stipulation in the contract of employment would be liable to be ignored in the eyes of law. In the instant case. Km. Neelam Sharma was initially appointed apprentice on 12. 9. 1988 for three months and thereafter she was appointed against a regular post of steno/typist on 12. 12. 1988 and she worked upto 22. 7. 1994 on the basis of contract appointment issued from time to time for three months. The Labour Court has recorded a categorical finding that Km. Neelam Sharma was engaged for a work of permanent nature and her appointment for stipulated period was not bona fide. The circumstances and exigencies of administration in which the respondent was given appointment for specified duration despite the fact that the work for which she was engaged was of permanent nature, were not disclosed and the employer, it has been held, has acted in arbitrary manner in giving appointment to the respondent, Km. Neelam Sharma, for a specified duration with a view to depriving her of statutory benefits. The conduct of the employer has been equated to unfair labour practice. Neelam Sharma, for a specified duration with a view to depriving her of statutory benefits. The conduct of the employer has been equated to unfair labour practice. In such view of the matter, even if Jai Kishun (supra) be taken to laying down correct law that termination of service of a workman by efflux of time docs not amount to retrenchment in the State of U. P. , the petitioners would not get the benefit of clause (bb) of section 2 (oo) of the Central Act. I am of the considered view that the Labour Courts/industrial tribunals can lift the veil and find out the real nature of appointment despite the fact that appointment of a workman purports to be of a specified duration and in case it is found that the power under clause (bb) of Section 2 (oo) of the Central Act has been misused and appointment for a job of permanent nature is given the colour of fixed term appointment with a view to circumventing the provisions contained in Section 6n of the State Act or Section 25f of the central Act or any other material provisions of the industrial law beneficial to the workman, then benefit of clause (bb) of Section 2 (oo) of the Central Act will not be given to the employer. The view I am taking finds support from a decision of the Supreme Court in State of Rajasthan and others v. Rameshwar Lal Gahlot, AIR 1996 SC 1001 . It has been held therein that, "when the appointment is for a fixed period, unless there is finding that power under clause (bb) of Section 2 (oo) was misused or vitiated by its mala fide exercise, it cannot be held that the termination is illegal. In its absence, the employer could terminate the service in terms of the letter of appointment unless it is a colourable exercise of power. It must be established in each case that the power was misused by the management or the appointment for a fixed period was a colourable exercise of power. " ( 12 ) IF the exception carved out in the above case of State of Rajasthan (supra) is applied to the facts of the present case as found by the Labour Court, termination of the service of Km. " ( 12 ) IF the exception carved out in the above case of State of Rajasthan (supra) is applied to the facts of the present case as found by the Labour Court, termination of the service of Km. Neelam sharma would come within the purview of retrenchment notwithstanding the provisions of clause (bb) of (oo) of Section 2 of the Central Act for the application of clause (bb) of Section 2 (oo) to the facts of the present case would be nothing but a fraud on the statute. A construction placed upon the exception clause (bb) of Section 2 (oo) of the Central Act that brings it into general harmony with the enacting clause, should prevail over the one which tends to nullify or destroy the main provision or swallow up the general rule. ( 13 ) IN the result, the petition fails and is dismissed. The parties are. however, directed to bear their own costs. .