N. S. GULERIA v. NATIONAL HORTICULTURAL RESEARCH AND DEVELOPMENT FOUNDATION
2006-06-02
SHIV NARAYAN DHINGRA, T.S.THAKUR
body2006
DigiLaw.ai
T. S. THAKUR, J. ( 1 ) THE short question that falls for consideration in this appeal is whether the termination of services of the appellant amounted to retrenchment so as to attract the provisions of Sections 25-F and 25-G of the Industrial Disputes Act, 1947. The Labour Court before whom the said issue was first raised, in a reference made to it by the Appropriate Government, answered the same in favour of the respondent Management. It held that the termination of the appellant s services were covered by clause 2 (bb) of Section 2 (oo) of the Industrial disputes Act and did not, therefore, amount to retrenchment so as to invalidate the same on account of non-payment of retrenchment compensation. Aggrieved by the said order, the appellant filed WP (C) No. 16661/2004 to argue that the order of termination was in essence a device to avoid regularization of services by management. That contention was examined and repelled by the learned single judge holding that since the appointment of the petitioner was only for a limited period and since the termination was necessitated by the appointment of regular incumbents to the post, the same was neither a device nor an attempt to circumvent the provisions of Section 25f. The present appeal assails the correctness of that view. ( 2 ) THE appellant was appointed as a General Clerk by the respondent on 25th February, 1995 for a limited period of six months on a consolidated salary of Rs. 2300/- per month. He was subsequently placed in the regular pay scale of rs. 950-1500 and his appointment extended from time to time till 31st July, 1998. All these appointments/extensions were admittedly limited in terms of period for which the same were made. On 27th July, 1998, i. e. , before the expiry of the last extension granted to the appellant, he was informed that the tenure of his appointment was expiring on 31st July, 1998 and that his services were no more required and would stand terminated w. e. f. 31st July, 1998. Aggrieved by the said order of termination, the appellant raised an industrial dispute which was referred to the Labour Court for adjudication of the legality of the action taken by the Management.
Aggrieved by the said order of termination, the appellant raised an industrial dispute which was referred to the Labour Court for adjudication of the legality of the action taken by the Management. The Management s case before the Labour Court, inter alia, was that the appellant having been appointed only for limited periods which were extended from time to time, the termination of his contractual appointment was permissible without payment of any retrenchment compensation. It was also urged that the termination had become necessary as the appellant had, despite two opportunities granted to him, failed to qualify the examination necessary for getting a regular appointment. The charge of unfair labour practices levelled against the Management was also refuted. The Labour Court on the basis of the material placed before it and relying upon the decisions of the supreme Court in Himanshu Kumar Vidyarthi and Others Versus State of Bihar and others, 1997 Labour Industrial Cases 2075; Birla VXL Ltd. Versus State of Punjab and Others, 1998 LLR 167; Escorts Ltd. Versus Presiding Officer and Another, 1997 LLR 699; and State of Rajasthan and Others Versus Rameshwar Lal Gahlat, 1996 LLR 482, held that the appointment of the appellant being contractual, the same would not amount to retrenchment if the appointment was terminated either by efflux of time or by reason of a stipulation contained in the contract itself. The Labour Court accordingly answered the reference in the negative. The said order when assailed before a single bench of this Court was upheld on the authority of the decisions of the Supreme Court in S. M. Nilajkar and Others versus Telecom District Manager, Karnataka, 2003 (4) SCC 27 and Escorts Ltd. Versus Presiding Officer and Another, 1997 LLR 699. The learned single Judge held that the appointment was contractual in nature and having come to an end by efflux of time, the same did not amount to retrenchment to warrant interference on account of non-payment of retrenchment compensation. ( 3 ) WE have heard learned counsel for the parties and perused the record. The legal position regarding the true scope and meaning of the expression "retrenchment" as defined in Section 2 (o) of the Industrial Disputes Act has been the subject matter of a long line of decisions rendered by the Apex Court.
( 3 ) WE have heard learned counsel for the parties and perused the record. The legal position regarding the true scope and meaning of the expression "retrenchment" as defined in Section 2 (o) of the Industrial Disputes Act has been the subject matter of a long line of decisions rendered by the Apex Court. Before we refer to some of those decisions, we need to notice that the decision of the Supreme Court in Santosh Gupta Versus State Bank of Patiala, AIR 1980 SC 1219 , reliance whereupon was placed by counsel for the appellant, was interpreting the provisions of Section 2 (oo) of the Act before the introduction of the clauses (bb) to the same. The said decision would not, therefore, be of much assistance particularly when the amended provision after the introduction of clause (bb) has itself fallen for interpretation of their Lordships in a number of cases over the past ten years or so. ( 4 ) IN M. Venugopal Versus Divisional Manager, LIC, Machilipatnam, 1994 (2) scc 323 , the apex Court held that before the introduction of clause (bb) in section 2 (oo), there were only three recognised exceptions to what would constitute retrenchment. The result was that even discharge simpliciter was taken as retrenchment from service. Their lordships further held that with the introduction of clause (bb), one more exception had been introduced by which cases of termination of services of workmen as a result of non-renewal of the contract of employment were also excluded from purview of retrenchment. ( 5 ) IN State of Rajasthan and Others Versus Rameshwar Lal Gahlot, 1996 (1) scc 595 , the Court held that termination of an appointment made for a fixed or a specified period did not tantamount to retrenchment unless it was found to be mala fide or a colourable exercise of power. The Court observed :"when the appointment is for a fixed period, unless there is a finding that the 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 services in terms of the letter of appointment unless it is a colourable exercise of power.
In its absence, the employer could terminate the services 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. " ( 6 ) TO the same effect is the decision of the Supreme Court in Birla VXL ltd. Versus State of Punjab and Others, AIR 1999 SC 561 where their Lordships held that the employer was entitled to bring the temporary employment of an employee to an end at the conclusion of the period of temporary employment. Termination simpliciter in such cases without casting any stigma did not amount to retrenchment, observed the Court. The following passage is in this regard relevant :"the real question is whether the third respondent had a claim to employment beyond 31st December, 1984. Having regard to the clear terms of his appointment order, which he accepted by signing at the foot thereof the appellant was entitled to bring his employment to an end at the conclusion of the period of temporary employment. The letter stating that the third respondent s services would come to an end on 31st December, 1984 did not say that the services were being terminated because of any misconduct. There was no stigma whatever cast by that letter. The High Court was not, in the circumstances, warranted in concluding that the services had been terminated because of the third respondent s misconduct and upholding his reinstatement with full backwages. "the decision of the Supreme Court in Kishore Chandra Samal Versus Orissa State cashew Development Corporation Ltd. , Dhenkanal, 2006 (1) SCC 253 also dealt with a case where the workman had been engaged for different spells of fixed periods from July 1982 to August 1985. The Court held that since specific periods had been mentioned in each order of engagement in the case, termination of such an employment fell squarely within the provisions of Section 2 (oo) (bb) and that section 25-F would be wholly inapplicable. The Court also observed that the decision in S. M. Nilajkar s case upon which the employee had placed reliance had no application as no specific period of engagement had been mentioned in that case.
The Court also observed that the decision in S. M. Nilajkar s case upon which the employee had placed reliance had no application as no specific period of engagement had been mentioned in that case. ( 7 ) IN the light of the legal position settled by the above decisions, we have no manner of doubt that the termination of the appellant s services in the instant case which were for specific period would not tantamount to retrenchment under Section 2 (oo) of the industrial disputes act so as to attract the provisions of Section 25 F of the said Act. ( 8 ) LEARNED counsel for the appellant next argued that the termination was in the instant case a device to somehow deprive the appellant of his right to regularisation. He urged that just because the appellant had failed to pass the examination conducted for making regular selections against the available posts, was no reason for the management to throw him out on the pretext that the period of his employment had come to an end. So long as the post and the need for a workman existed, argued the learned counsel, the right of the employee working on the same could not be terminated on the pretext of making regular appointments. We see no merit in the contention urged by the learned counsel. Neither the Labour Court nor the learned single Judge before whom the question of bona fides of the action taken by the management was raised, has recorded any finding that the action of termination was mala fide. Even before us, it was not in dispute that the period of employment of the appellant was coming to an end on 31st July, 1998. Non-extension of the said period could not, therefore, in itself tantamount to retrenchment unless it was shown that any such non- extension was mala fide or a camouflage to get rid of the employee. The management s explanation is fairly logical and has been accepted by the courts below. The Management argues that there was no need for any further extension having regard to the fact that person who had been regularly selected had to be appointed against the post held by the appellant.
The management s explanation is fairly logical and has been accepted by the courts below. The Management argues that there was no need for any further extension having regard to the fact that person who had been regularly selected had to be appointed against the post held by the appellant. That the appellant had also been given a fair opportunity not once but on two occasions to compete for the post so that he could be regularly appointed is not in dispute. On both these occasions, the appellant had failed to pass the test. Appointments on a regular basis against the available post in the respondent Management have to be made on the basis of a selection process in which all eligibles are allowed to compete. ( 9 ) THE Management had in keeping with the said requirement given two chances to the appellant. Since the appellant had admittedly failed to qualify and earn a rightful appointment, there was nothing unfair, irrational or mala fide about the termination of his employment by efflux of time. Selection of candidates on the basis of their merit in a process which is fair, objective and transparent cannot be dubbed as a device. ( 10 ) WE therefore have no hesitation in holding that the non-extension of the petitioners employment is neither mala fide nor unfair. ( 11 ) IN the result, this appeal fails and is hereby dismissed but in the circumstances without any orders as to costs.