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2002 DIGILAW 804 (MAD)

N. Palaniammal v. The Pasur Puduppalayam & Another

2002-08-09

P.K.MISRA

body2002
Judgment :- The petitioner has prayed for quashing the order in T.N.S.E.No.8 of 1991 dated 3.5.1993 and for directing the first respondent to reinstate the petitioner in service with full backwages and other attendant benefits. 2. Petitioner was employed under the first respondent in a Fair Price Ration Shop in late 1970’s. While she was continuing so for more than a decade, her services were terminated by order dated 22.8.1991 on the ground of merger of fair price shop with another shop. The petitioner challenged the aforesaid order in appeal under Section 41 of the Tamil Nadu Shops and Establishments Act, 1947 on the ground that no notice had been issued nor any compensation had been paid as contemplated under Section 41(1)of the Act. The Appellate Authority by order dated 3.5.1993 found that the order of termination was justified and for a reasonable cause, but neither notice had been given nor wages in lieu of one month notice had been paid. Accordingly the appellate authority following the ratio of the decision reported in 1975(1) LLJ 159 directed that the present petitioner should be paid wages for the period upto the date of the order of the appellate authority in addition to one month wages. Thereafter the petitioner filed application under Section 33-C (2) of the Industrial Disputes Act claiming various amounts. The aforesaid application was disposed of on 23.2.1995 recording that a memo had been filed by the petitioner and in view of the memo filed, the petition was dismissed as withdrawn. Thereafter the petitioner has filed this writ application on 23.6.1995 claiming the reliefs already indicated earlier. 3. In the writ petition it has been contended that since notice had not been issued nor any retrenchment compensation had been paid, the order of termination was void under Section 25-F of the Industrial Disputes Act. 4. In the counter affidavit filed on behalf of the first respondent it has been indicated that the petitioner had already accepted the compensation which had been granted by the appellate authority under the Tamil Nadu Shops and Establishments Act and it must be taken that she had waived her right if any for claiming reinstatement in service. 5. A reply affidavit has been filed on behalf of the petitioner stating that another person has been appointed by the first respondent. 6. 5. A reply affidavit has been filed on behalf of the petitioner stating that another person has been appointed by the first respondent. 6. It is the admitted case of both sides that neither one month notice nor one month wages in lieu of notice as contemplated under Section 25-F of the Industrial Disputes Act had been given. Learned counsel for the petitioner has submitted that issuance of one month notice or payment of wages in lieu of such notice is a condition precedent for retrenchment and in the absence of compliance with the provisions contained in Section 25-F, the order of retrenchment must be taken to be void. He has placed reliance upon the decisions of the Supreme Court reported in 1981(II) L.L.J. 70 (MOHAN LAL Vs. BHARAT ELECTRONICS LIMITED) and A.I.R. 2000 SC 454 (MANAGEMENT OF M.C.D. Vs. PREM CHAND GUPTA AND ANOTHER ) in support of such contention. 7. Learned counsel appearing for the first respondent on the other hand has submitted that since the retrenchment was found for a reasonable cause, it was within the discretion of the appellate authority to direct payment of compensation in lieu of reinstatement and for the aforesaid purpose, he has placed reliance upon the decision reported in 1975(I) L.L.J. 159 (STATE BANK OF INDIA, REPRESENTED BY THE AGENT, COONOOR BRANCH Vs. THE ADDITIONAL COMMISSIONER FOR WORKMEN’S COMPENSATION AND ANOTHER) as has been done by the appellate authority under the Tamil Nadu Shops and Establishments Act. In addition, the learned counsel has also placed reliance upon the decisions reported in 1979 (I) L.L.J. 41 (MANAGEMENT OF COIMBATORE PIONEER B. MILLS Vs. PRESIDING OFFICER, LABOUR COURT, COIMBATORE AND OTHERS) which has been affirmed by the Supreme Court in the decision reported in 1981 (I) L.L.N. 561 and 1985 (I) L.L.N. 801 (MOUNT METTUR PHARMACEUTICALS LTD. Vs. SECOND ADDITIONAL LABOUR COURT, MADRAS, AND ANOTHER). In addition to the above decisions, he has also submitted that the petitioner having accepted the order of the appellate authority under the Tamil Nadu Shops and Estabishments Act by filing application under Section 33-C(2) of the Industrial Disputes Act and by receiving the amount and by filing memo to that effect, cannot claim for reinstatement and the writ petition should be dismissed by applying the doctrine of acquiescence and waiver. 8. 8. In the decisions of Madras High Court relied upon by the learned counsel for the first respondent it has been observed that even where one month notice is not given nor payment in lieu thereof is made, the appropriate forum has discretion to direct reinstatement or direct payment of compensation in addition to payment of one month wages, if it is found that the order of retrenchment is otherwise for a justified cause and is bonafide. He has placed particular emphasis on the fact that the Division Bench decision of this Court which had been disposed of by eminent Judges had been confirmed by the Supreme Court in the decision reported in 1981(I)L.L.N. 561. 9. A perusal of paragraph 3 of the aforesaid Supreme Court decision makes it clear that at the time of considering the question of grant of special leave to appeal under Article 136, the Supreme Court had expressly confined the matter to “ the question of back-wages payable and compensation in lieu of reinstatement and other directions absorption of the workmen when there is scope for reabsorption.” Keeping in view the aforesaid aspect, ultimately, the Supreme Court directed for payment of more compensation to the concerned workman. By no stretch of imagination it can be said that the aforesaid decision of the Supreme Court is a direct decision on the question relating to effect of retrenchment order passed contrary to Section 25F of the Industrial Disputes Act. 10. Even though the aforesaid Supreme Court decision cannot be considered to be a direct authority, the fact remains that there are three or four Bench decisions of this High Court wherein it has been laid down that the appropriate forum in its discretion can grant compensatio without reinstating the retrenched workman, where it is found that retrenchment was for a reasonable cause. 11. It has to be seen whether those decisions can be followed in preference to the decisions of the Supreme Court on the point. It is true that in most of the decisions of this Court, the earlier Supreme Court decision reported in 1960 (I) L.L.J. 251 (STATE OF BOMBAY Vs. HOSPITAL MAZDOOR SABHA) has been noticed and distinguished. In fact in 1979 (I) L.L.J 41 it was observed as follows :- “ . . . It is true that in most of the decisions of this Court, the earlier Supreme Court decision reported in 1960 (I) L.L.J. 251 (STATE OF BOMBAY Vs. HOSPITAL MAZDOOR SABHA) has been noticed and distinguished. In fact in 1979 (I) L.L.J 41 it was observed as follows :- “ . . . We are aware that the Supreme Court in clear and unmistakable terms has held in the decision in State of Bombay v. Hospital Mazdoor Sabha (1960-I L.L.J. 251), that the non-compliance with the conditions of S.25F (b) relating to payment of compensation would render the impugned retrenchment invalid and inoperative. The decisions relied on by the learned counsel for the workers in Sridharan Motor Service v. Industrial Tribunal, Madras and others, (1959-I L.L.J. 380) and Indian General Navigation and Railway Company Ltd. and another v. Their Workmen, (1960-I L.L.J. 13), do not in any way advance further than holding that an illegal action can never be justified. In fact, the decision of the Supreme Court in State of Bombay v. Hospital Mazdoor Sabha, (supra) was interpreted and understood in Udaipur Mineral Development Syndicate Pvt. Ltd. v. M.P. Dave and another, (1975-II L.L.J.499), as holding that in such case there is no termination of the relationship of employer and employee. But in none of these decisions cited it has been held that even if the Labour Court were to find that there was need for retrenchment and the retrenchment was bona fide there was no option for the Labour Court but to order reinstatement in all cases of non-compliance of the provisions of S. 25F of the Act. . . ” 12. If the matter is to be decided on the basis of the decision reported in 1960(I) L.L.J. 251 alone which had been distinguished in many of the decisions of Madras High Court cited by the first respondent, I would have felt bound to follow the late decisions of Madras High Court. However, I find that subsequently there has been subsequently several decisions of the Supreme Court wherein it has been categorically laid down in no uncertain terms that the order of retrenchment in violation of Section 25-F of the Industrial Disputes Act is void and such illegally retrenched workman has to be reinstated in service. 13. However, I find that subsequently there has been subsequently several decisions of the Supreme Court wherein it has been categorically laid down in no uncertain terms that the order of retrenchment in violation of Section 25-F of the Industrial Disputes Act is void and such illegally retrenched workman has to be reinstated in service. 13. In 1981 (II) L.L.J. 70 (supra), the Labour Court on evaluation of evidence held that termination was in accordance with standing orders justifying the removal of the employee. Thereafter the Supreme Court posed the following question for determination :- “The only point for determination is whether even in the circumstances, as pleaded by the respondent termination of service of the appellant would amount to retrenchment within the meaning of the expression as defined in S.2(oo) of the Industrial Disputes Act, 1947 (“Act” for short)? If the answer is in affirmative, the consequential question will have to be answered whether in view of the admitted position that the mandatory precondition prescribed by S.25F for a valid retrenchment having not been satisfied, the appellant would be entitled to reinstatement with back wages or as contended by Mr. Markandey in the special facts of this case, the Court should not direct re-instatement but award compensation in lieu of reinstatement.” In paragraph 9 it was observed : “Reverting to the facts of this case, termination of service of the appellant does not fall within any of the excepted, or to be precise, excluded categories. Undoubtedly, therefore, the termination would constitute retrenchment and by a catena of decisions it is well settled that where pre-requisite for valid retrenchment as laid down in S.25F has not been complied with, retrenchment bring about termination of service is ab initio void. In State of Bombay v. The Hospital Mazdoor Sabha, (1960-I L.L.J. 251), this Court held that failure to comply with the requirement of S.25F which prescribes a condition precedent for a valid retrenchment renders the order of retrenchment invalid and inoperative. In other words, it does not bring about a cessation of service of the workman and the workman continues to be in service. This was not even seriously controverted before us.” In paragraph 16 it was observed as follows :- “ . . . Therefore, termination of his service would constitute retrenchment. In other words, it does not bring about a cessation of service of the workman and the workman continues to be in service. This was not even seriously controverted before us.” In paragraph 16 it was observed as follows :- “ . . . Therefore, termination of his service would constitute retrenchment. As precondition for a valid retrenchment has not been satisfied the termination of service is ab initio void, invalid and inoperative. He must, therefore, be deemed to be in continuous service.” (Emphasis added). The Supreme Court thereafter proceeded to observe in paragraph 17 as follows :- “ . . The last submission was that looking to the record of the appellant this Court should not grant reinstatement but award compensation. If the termination of service is ab initio void and inoperative, there is no question of granting reinstatement because there is no cessation of service and a mere declaration follows that he continuous to be in service with all consequential benefits. Undoubtedly, in some decisions of this Court such as Ruby General Insurance Co. Ltd. v. P.P. Chopra (1970 I L.L.J. 63) and Hindustan Steel Ltd., Rourkela v. A.K. Roy, (1970 I L.L.J. 228), it was held that the Court before granting reinstatement must weight all the facts and exercise discretion properly whether to grant reinstatement or to award compensation. But there is a catena of decisions which rule that where the termination is illegal especially where there is an ineffective order of retrenchment, there is neither termination nor cessation of service and a declaration follows that the workman concerned continues to be in service with all consequential benefits. No case is made out for departure from this normally accepted approach of the Courts in the field of social justice and we do not propose to depart in this case.” 14. In the decision reported in A.I.R. 2000 SC 454 (supra), the employee had been terminated in exercise of powers under Rule 5 of the Central Civil Services (Temporary Service) Rules, 1965. The Labour Court found that workman had been terminated without payment of retrenchment compensation, but yet declined to grant the relief of reinstatement. The workman approached the High Court. Learned single Judge held that termination was as per Rule 5 of the Rules and did not amount to any retrenchment as per Section 25-F of the Industrial Disputes Act. The Labour Court found that workman had been terminated without payment of retrenchment compensation, but yet declined to grant the relief of reinstatement. The workman approached the High Court. Learned single Judge held that termination was as per Rule 5 of the Rules and did not amount to any retrenchment as per Section 25-F of the Industrial Disputes Act. In the appeal, the Division Bench reversed the decision of the single Judge by taking a view that termination was contrary to Rule 5 of the Rules. However, the question regarding alleged violation of Section 25-F of Industrial Disputes Act was not considered by the Division Bench. Ultimately when the matter reached the Supreme Court, it was held differing from the observation of the Division Bench of the High Court that termination was not in violation of Rule 5 of the Rules. However, the Supreme Court proceeded to consider as to whether the order of termination could be sustained in the light of the provisions contained in Section 25-F of the Industrial Disputes Act. Ultimately it was held that termination amounted to retrenchment attracting Section 25-F of the I.D. Act and it was observed in paragraph 17 “ . . . As a result of the aforesaid discussion, it must be held that termination of the respondent-workman’s service on 29-4-1966 was violative of Section 25F of the I.D. ACT and was, therefore, null and void. . . ” (emphasis added) While considering the question of relief to be granted, it was observed in paragraph 18 as follows : - “ . . . Once it is held that termination of the respondent-workman on 29-4-1966 was null and void being violation of Section 25-F of the I.D. Act, the logical consequence would be that he would be entitled to be re-instated in service with continuity and in normal course would be entitled to full back-wages. However, in our view on the peculiar facts of this case, it will not be appropriate to grant full back-wages to the respondent-workman even though he will be entitled to be reinstated in service of the appellant-Corporation with continuity and all further consequential benefits on that score, save and except the grant of full back-wages, as indicated herein below.” Thereafter the Supreme Court proceeded to consider the question of extent of back-wages to be paid and ultimately directed payment of 50% of back-wages. 15. 15. The aforesaid two decisions of the Supreme Court make it abundantly clear that retrenchment in violation of Section 25-F makes the order null and void and in fact in the earlier decision of the Supreme Court it has observed that the person must be taken as deemed to be in service. In the face of such categorical later decisions of the Supreme Court, I am unable, with respect, to follow the decisions of this Court. 16. Learned counsel for the respondent has also submitted that the writ petition should be dismissed by applying the principle of acquiescence and waiver and since the petitioner has accepted the compensation granted by the appellate authority under the Tamil Nadu Shops and Establishments Act, he is not entitled to claim reinstatement. Even though such submission appears to be attractive on the face of it, it cannot be accepted on a deeper scrutiny. 17. To hark back to certain historical footnotes concerning the case, it is seen that the order of retrenchment dated 22.8.1991 had been immediately challenged claiming reinstatement with full back-wages. The appellate authority in its decision dated 3.5.1993 while finding that neither notice nor compensation had been given, directed for payment of monthly wages till the date of the order. The petitioner thereafter approached the Labour Court under Section 33-C(2) of the Act by filing C.P.No.85 of 1994. In paragraph 9 of such petition, the present petitioner has categorically stated “This claimant also reserves her rights to claim reinstatement with full back-wages till such re-employment in a writ-petition to be preferred against the orders of the Appellate Authority under the Tamilnadu Shops & Establishments Act in T.N.S.E.No.8 of 1991 and so this petition is filed without prejudice to the above”. It is thus evident that the petitioner had not waived her right to claim reinstatement. She had merely filed the application to get the amount already determined. 17. Learned counsel appearing for the respondent has placed strong reliance upon the memo filed by the petitioner in the computation petition dated 20.2.1995 and the receipt dated 23.2.1995. The aforesaid two documents are extracted hereunder :- “ . . . She had merely filed the application to get the amount already determined. 17. Learned counsel appearing for the respondent has placed strong reliance upon the memo filed by the petitioner in the computation petition dated 20.2.1995 and the receipt dated 23.2.1995. The aforesaid two documents are extracted hereunder :- “ . . . MEMO FILED BY THE PETITIONER This applicant is prepared to receive the admitted monthly back wages subject to the condition that she should receive the leave wages and other perquisites including bonus as claimed by her in the petition after the audit is over as averred by the respondent with liberty to file a petition for the same if the same is not given after the audit. The petitioner prays that this Honourable court may be pleased to close the petition for the present subject to the above conditions imposed by the respondent. . . . ” “RECEIPT I, Palaniammal, ex-employee of the fair price shop run by Pasur Pudupalayam Cooperative Bank Limited, Pasur Post, Annur, Avinashi Taluk, filed C.P.No,.85 of 1994 before the Labour Court, Coimbatore, pending case after direct negotiations with the management, received from the Pasur Pudupalayam Primary Co-op bank Ltd received a cheque bearing No.A 717970 dated 16.2.1995 drawn on the Coimbatore District Cooperative Bank Limited, Annur Branch for a sum of Rs.13,518/- towards wages for the period from 22.8.1991 to 3.5.1993 in full and final settlement of my claims. I hereby undertake to withdraw my claim petition in C.P.No.85 of 94 reserving my right to claim the leave wages for the period 22.8.1991 and 3.5.1993 and bonus at the rate of 8.33% for the period 1991-92 and 1992-93 after completion of the audit. . . ” 19. In the memo which has been extracted it has been merely stated that the petition filed by the petitioner may be closed subject to certain conditions. In such memo it has not been indicated that the petitioner had given up her right to claim reinstatement. Similarly the receipt also indicates the acknowledgment of receipt of certain amount “ . . . towards wages for the period from 22.8.1991 to 3.5.1993 in full and final settlement of my claims”. It is obvious that the receipt pertains to the claim petition filed under Section 33-c(2) which in fact the petitioner had undertaken to withdraw as apparent from the receipt itself. . . towards wages for the period from 22.8.1991 to 3.5.1993 in full and final settlement of my claims”. It is obvious that the receipt pertains to the claim petition filed under Section 33-c(2) which in fact the petitioner had undertaken to withdraw as apparent from the receipt itself. What is to be seen that neither in the memo nor in the receipt the petitioner had indicated that she would not claim reinstatement. 20. It is well settled that to attract the doctrine of acquiescence and waiver it must be shown that the petitioner had evinced clear intention to waive the right or to suffer the impugned order. After going through the memo and the receipt , I am unable to accept the contention that there has been any waiver or acquiescence. 21. Learned counsel appearing for the first respondent has also submitted that the appellate authority has passed the order in March 1993 and the writ petition has been filed in 1995, after a delay of about two years. It has been stated in the writ petition that the petitioner, who is a lady had to arrange for funds for fighting the litigation in the High Court which is far away from her native place. It is further seen that the petitioner was trying to retrieve some financial benefits by proceeding under Section 33-C(2). In the peculiar facts and circumstances of the case, I do not consider that the delay in filing the writ petition as such is to preclude the petitioner from getting the relief of reinstatement, even though this may have some bearing on the question relating to payment of back-wages. 22. The question of reinstatement can be examined from another angle. It is not disputed that soon after the disposal of the appeal by the appellate authority, the first respondent has engaged another person. Even assuming that the petitioner cannot claim reinstatement on the ground of delay or waiver and acquiescence, the question of re-employment of the petitioner by applying the provisions contained in Section 25-H cannot be over ruled. The petitioner in her application filed under Section 33-C(2) had made it amply clear that she would like to press for reinstatement in an appropriate proceeding. It is not disputed that before employing other person sometimes in 1994, the petitioner had not been given opportunity for re-employment. The petitioner in her application filed under Section 33-C(2) had made it amply clear that she would like to press for reinstatement in an appropriate proceeding. It is not disputed that before employing other person sometimes in 1994, the petitioner had not been given opportunity for re-employment. Therefore, even assuming that the petitioner is not entitled to get the relief under Section 25-F or because of the so called waiver or delay, there is enough justification for re-employment of the petitioner when another person was employed. For the aforesaid reasons, I am inclined to direct for reinstatement of the petitioner with continuity in service. 23. Next question is regarding payment of back-wages. It is not disputed that the petitioner has already received amount as directed by the appellate authority. Thereafter the writ petition which was filed in the year 1995 has remained pending in this Court for about 7 years. Even though the petitioner is not to be blamed for such pendency, the first respondent which is a Co-operative Bank should not be taken to task. Having regard to the facts and circumstances of the case, I feel that interest of justice would be served by directing payment of sum of Rs.15,000/- towards back-wages in addition to the amount already received by the petitioner in the proceeding under Section 33-C(2). 24. For the aforesaid reasons, the writ petition is allowed and the petitioner is directed to be reinstated with continuity of service and further a sum of Rs.15,000/- shall be paid towards back-wages. The direction regarding reinstatement and payment of Rs.15,000/- should be carried out within a period of two months from the date of receipt of a copy of the judgment. There would be no order as to costs.