Research › Search › Judgment

Karnataka High Court · body

2012 DIGILAW 356 (KAR)

N. Rangaswamy v. State of Karnataka

2012-04-13

ARAVIND KUMAR

body2012
Judgment :- 1. Workman is calling in question notice dated 09.03.2012 Annexure –H issued by the fourth respondent intimating the petitioner that his services would be retrenched with effect from 08.04.2012. 2. Heard Sri S B Mukkannappa, learned counsel appearing for petitioner and Sri Ramachandran, learned counsel appearing on behalf of Sri M R C Ravi for respondents No 2 to 4 and Sri Jagadeesh Mundaragi, learned Additional Government Advocate appearing for respondents No 1 to 3. Perused the impugned notice. 3. Facts in brief leading to filing of this writ petition are as under: Petitioner was engaged as stenographer on daily wage basis by fourth respondent in the year 1992 and on account his alleged termination in July 1993 a dispute came to be raised by the petitioner and on a reference being made by the appropriate Government. Reference came to be answered in favour of the petitioner by the Labour Court, Mangalore, in reference No. 52/1998 with a direction to fourth respondent herein to reinstate petitioner into service with continuity of service but without backwages. Fourth respondent-establishment after dragging its feet for a period of 7 years is said to have reinstated petitioner-workman on 03.08.2009 as per Annexure-D. Thereafter petitioner has continued to discharge his services in the fourth respondent establishment. However on 09.03.2012 a notice came to be issued which is at Annexure-A intimating the petitioner that his services would be retrenched with effect from 08.04.2012 as per Section 25-F of Industrial Disputes Act, 1947 to be effective from said date i.e. 08.04.2012. Aggrieved by the said notice petitioner approached this Court in the above writ petition filed on 19.03.2012 and matter came to be listed before this Court on 27.03.2012, 03.04.2012, 09.04.2012, 10.04.2012, 12.04.2012 and today. During the pendency of the writ petition petitioner’s counsel expressed apprehension of petitioner being retrenched as per the notice dated 09.03.2012 Annexure-H and to allay such fears learned counsel for respondents No. 2 to 4 submitted that no precipitative action will be taken till an order is passed by this Court in the pending writ petition. Though it was not specifically recorded in the order sheet as such this fact is not in dispute as agreed to by the learned Advocates appearing for the parties. Though it was not specifically recorded in the order sheet as such this fact is not in dispute as agreed to by the learned Advocates appearing for the parties. In this factual background petitioner is said to have been continued without giving effect to the impugned notice dated 08.04.2012 and these facts are not in dispute. 4. It is the contention of Sri S B Mukkannapa, learned counsel appearing for petitioner that impugned notice is a notice of retrenchment and there has been violation of Clause (b) of Section 25-F namely retrenchment compensation is not paid along with notice and on this ground alone notice is liable to be quashed as it is violative of Section 25-F. He would further elaborate his submission by contending that even in the event of such notice does not accompany the actual amount of retrenchment compensation payable to the petitioner and if paid thereafter even in such circumstances notice of retrenchment would be violative of Section 25F and contends in the instant case that no such amount has been despatched/forwarded/paid to the petitioner and as such impugned notice is liable to be quashed. In support of his submission he relies upon the following judgments 1. AIR 1960 SC 610 : The State of Bombay and others vs. The Hospital Madoor Sabha and others. 2. AIR 1973 Lab I.C. 172: Kalicharan vs. The Workshop Eleectrical Engineer and others. 3. 1997 (2) LLJ 519: Mani Ram vs. The presiding Officer. 5. Per contra Sri Ramachandran learned counsel appearing for respondents No. 2 to 4 would contend thaT impugned notice in question is not a notice terminating the petitioner by retrenchment but it is only a notice of intimation to the petitioner that he would be retrenched from the effective date as mentioned therein i.e, 08.04.2012 and as such respondents No. 2 to 4 would be entitled to pay the retrenchment compensation to the petitioner even on the date of retrenching him and contends that writ petition is premature. He would elaborate his submission by contending that under Clause (a) of Section 25F minimum one month’s notice is required to be given indicating the reasons for retrenchment and admittedly such notice has been issued and in so far as retrenchment compensation is concerned as per Clause (b) it is to be paid either at the time of retrenchment or before retrenchment and it is not necessary that retrenchment compensation should accompany a notice whereunder date of retrenchment would become effective. On these grounds he seeks for dismissal of the writ petition. 6. Having heard the learned Advocates appearing for the parties, I am of the considered view that following points arise for my consideration: 1. Whether retrenchment compensation should accompany the notice issued by an employer? And if so; 2. Whether impugned notice in question Annexure-H is violative of Section 25-F of Industrial Disputes Act, 1947; 3. What order? 7. The facts having ready been narrated hereinabove and for determining the points formulated hereinabove it would be necessary to look into the provision of law namely Section 25-F and the judgments relied upon by the learned counsel appearing for petitioner which are as under: Section 25F: “25F. Conditions precedent to retrenchment of workmen.—No workmen employ in any industry who has been in continuous service for not less than one year under an employer shall be retrenchment by that employer shall be retrenchment by that employer until--- [a] the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; [b] the workman has been paid, at the time of retrenchment compensation which shall be equivalent to fifteen days average pay in excess of six months; and [c] notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette]. By a reading of the above provision of Industrial Disputes Act, 1947 it would emerge that in a situation where the employer decides to retrench a workman, he has to be given minimum one month’s notice in writing by indicating the reasons for retrenchment and the period of notice has expired or the workman has been paid in lieu of such notice wage for the period of notice i.e., one month’s pay. Clause (b) of Section 25-F mandates that workman has to be paid at the time of retrenchment compensation which shall be equivalent to 15 days average pay for any part thereof in excess of these months. 8. Thus issuance of one month’s notice and payment of compensation as required under Clause (b) are mandatory there cannot be any dispute on this proposition of law. In the following Judgments the effect of non compliance of Section 25-F, the manner in which it requires to be complied and the effect of its compliance at any other stage came up for consideration and it has been held as under: AIR 1960 SC 610 : “(6) Now, turning to the first point, it may be stated that the facts on which the respondents plea is based are not in dispute. It is conceded that the services of respondents 2 and 3 have been retrenched though it may be for the purpose of making room for other Government servants with a longer record of service who had to be retrenched owing to the closure of the appellant’s Civil Supplies Department. It is also not disputed that the said respondents had not been paid at the time of retrenchment compensation as prescribed by S.25F (b). The respondents contention is that the failure to comply with the said requirement makes the order of retrenchment invalid. This pleas has been upheld by the Court of Appeal. Section 25F (b) provides that no workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until he has been paid at the time of retrenchment compensation which shall be equivalent to fifteen days average pay for every completed year of service or any part thereof in excess of six months. Clauses (a) and (c) of the said section prescribe similar conditions but we are not concerned with them. Clauses (a) and (c) of the said section prescribe similar conditions but we are not concerned with them. On a plain requirement prescribed by it is a condition precedent for the retrenchment of the workman. The section provides that no workman shall be retrenched until the condition in question has been satisfied. It is difficult to accede to the argument that when the section imposes in mandatory terms a condition precedent, non-compliance with the said condition would not render the impugned retrenchment invlid. The argument which appealed to Tendolkar, J., however, was that the consequence of non-compliance with the requirement of S-25F (b) was not to render the impugned retrenchment invalid, because he thought that by S.25-I a specific provision has been made for the recovery of the amount prescribed by S.25F (b). Section 25-I provides for the recovery of monies due from employers under Ch.V, and according to Tendolkar J, this provision covers the amount due to the workman by way of compensation under S.25F(b). In our opinion, this view is untenable. Having regard to the fact that the words used in S.25F(b) are mandatory and their effect is plain and unambiguous it seems to us that the Court of Appeal was right in holding that S.25-I covered cases of recovery of moneis other than those specified in S.25F(b), and it is obvious that there are several other cases in which monies become due from the employers to the employees under Ch.V; it is for the recovery of these monies that S.25-I had been enacted. Therefore, we see no substance in the argument that the Court of Appeal has misconstrued S.25-F(b). That being so, failure to comply with the said provision renders the impugned orders invalid and inoperative.” AIR 1973 LAB I.C. 173: “In view of the above Supreme Court decision, the condition precedent contained in Clause (b) of the Section 25-F to the retrenchment of the petitioner not having been followed inasmuch as compensation in accordance with the said clause had not been paid to the petitioner by or under the impugned notice the same is illegal and unenforceable at law.” 1997 II LLJ 519: “A perusal of the provisions of Section 25-F would reveal that these provisions are mandatory in nature and clause (b) of Section 25-F postulates that no workman shall be retrenched until he has been paid compensation at the time of retrenchment. This Section contains mandate that the employer shall not retrench a workman unless retrenchment compensation has been paid prior or at the time of the retrenchment. In the present case the condition postulated in Section 25-F(b) has not been complied with. It is no doubt correct that the workmen were directed to collect the retrenchment compensation on February 17 and 18, 1983 but by this letter the management is not exonerated of its statutory liability. Also the management is not exonerated nor it can be said that it has complied with the provisions of Section 25-F by sending the money order, which was sent after the relevant date, i.e. February 20, 1983. Even the letter dated February 25, 1983 is not a compliance of the provisions of Section 25-F of the Act. The learned Labour Court while passing the award has not correctly appreciated or interpreted the legal effect of the statutory provisions of Section 25-F of the Act. The erroneous approach of the Labour Court while applying the provisions of Section 25-F to the facts has caused miscarriage of justice to each of the workmen and which finding of the learned Labour Court cannot be upheld. It has been held in Shri Mohan Lal v. The Management of M/s Bharat Electronics Ltd. (1981-II-LLJ-70) (SC), that it is well settled that where prerequisite for valid retrenchment as laid down in Section 25F has not been complied with, retrenchment bringing about termination of service is ab initio void. Similar view was also taken in State of Bombay and others v. The Hospital Mazdoor Sabha and others (1960-I-LLJ-251) (SC), that failure to comply with the requirement of Section 25-F 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 cessation of service of the workman. The workman continues to be in service.” 9. In Hospital Mazdoor Sabha’s case referred to supra it has been held that requirement prescribed under Clause (b) of Section 25-F is mandatory and non compliance with the said provision renders the impugned retrenchment invalid and inoperative. In other words it does not bring about cessation of service of the workman. The workman continues to be in service.” 9. In Hospital Mazdoor Sabha’s case referred to supra it has been held that requirement prescribed under Clause (b) of Section 25-F is mandatory and non compliance with the said provision renders the impugned retrenchment invalid and inoperative. In the said case a plea came to be put forward by the management that even in case of retrenchment compensation is not paid under Section 25-F the workman has right under Section 25-I to recover the compensation amount and on the ground of non payment of retrenchment compensation the order of retrenchment cannot be set aside. Repelling such a contention their Lordships have held that combined reading of Clause (a) & (b) of Section 25-F the payment of retrenchment compensation along with retrenchment notice is mandatory and it is in this background law came to be laid down in the said case. 10. In the case of Maniram decided by Punjab and Haryana High Court it was noticed by the court that management had informed workman vide communication dated 16.02.1983 intimating workmen to collect their retrenchment compensation in February 17th and February 18th, 1983 from its office and petitioners. It was followed up by another letter dated 25.02.1983 intimating the workmen that retrenchment compensation, pay and allowances for the month of February, 1983 have been drawn and they are lying in the office [Executive Engineer/HC 11] and requested the workmen to collect the same at once. Services of all the workmen were terminated on 20.02.1983. In this background High Court of Punjab and Haryana examined as to whether there was due compliance of section 25F of the Industrial Disputes Act and it came to be held that neither compensation accompanied the notice of retrenchment or immediately thereafter the retrenchment compensation was paid to the workmen before they were actually retrenched on 20.02.1983. Thus, it can be seen from the said judgment issue was as to whether mere sending of notice without payment of retrenchment compensation, management is absolved of its statutory liability or otherwise. It is in this background the Punjab and Haryana High Court held that there was no due compliance of section 25F. 11. Thus, it can be seen from the said judgment issue was as to whether mere sending of notice without payment of retrenchment compensation, management is absolved of its statutory liability or otherwise. It is in this background the Punjab and Haryana High Court held that there was no due compliance of section 25F. 11. In Kalicharan’s case decided by High Court of Allahabad the issue was simple and straight namely the notice of retrenchment issued to the workman was not accompanied by retrenchment compensation and as such it was held that there was non compliance of clause (b) of section 25F and it was an admitted position. 12. A conjoint reading of provisions of section 25F as well as the dicta laid down, analyzed by Apex Court and High Courts referred to supra it would clearly emerge that when notice of retrenchment is issued to a workman or a employee if it is not accompanied with retrenchment compensation it would be invalid and illegal and consequently retrenchment of a workman would also become illegal. However it is required to be examined when a notice is issued proposing to retrench the workman and not accompanied by retrenchment compensation what would be the situation, is the moot question which requires to be adjudicated and answered in this writ petition in as much as notice issued to petitioner herein dated 09.03.2012 at Annexure-H is admittedly not a notice of retrenchment per se. It is a notice intimating the petitioner that he would be retrenched on the expiry of the date mentioned therein i.e. 08.04.2012. Infact clause (b) of Section 25F mandates that a workman has to be paid the retrenchment compensation “at the time of retrenchment”. Mere issuance of notice by employer to a workman notifying that on a particular date he would be retrenched itself would not become a retrenchment notice until and unless such notice gets crystalised itself to the act of retrenchment. In the instant case retrenchment by itself was not yet completed. In other words till the employee or workman as the case may be is retrenched by issuance of retrenchment order/notice retrenchment would not take place. Only in the event of such retrenchment notice being issued without payment of compensation as required under clause (b) of section 25F then only retrenchment would become illegal and void and not otherwise. In other words till the employee or workman as the case may be is retrenched by issuance of retrenchment order/notice retrenchment would not take place. Only in the event of such retrenchment notice being issued without payment of compensation as required under clause (b) of section 25F then only retrenchment would become illegal and void and not otherwise. Issuance of notice by a employer intimating the employee or workman of his proposed retrenchment to be effective from a particular date if not accompanied by retrenchment compensation, said notice cannot be termed as illegal or violative of section 25F and any examination of such issue would be premature. It is in this background the Honourable Supreme Court in the case of Pramod Jha and others Vs State of Bihar and others reported in AIR 2003 SCW 1340 has held that order of retrenchment cannot be set aside on the ground that compensation was not paid or tendered along with one month’s notice. It has been held by Honourable Apex Court as under: 10. We have given our anxious consideration to submission ands counter submission made before us in the light of the pleadings and undisputed documents available on record. We are of the opinion that the appeals are devoid of any merit and liable to be dismissed. The underlying object of Section 25F is two fold. Firstly, a retrenched employee must have one month’s time available at his disposal to search for alternate employment, and so, either he should be given one month’s notice of the proposed termination or he should be paid wages for the notice period. Secondly, the workman must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need of him to go to his employer demanding retrenchment compensation and the compensation so paid is not only a reward earned for his previous services rendered to the employer but is also a sustenance to the worker for the period which may be spend in searching for another employment. Section 25F nowhere speaks of retrenchment compensation being paid or tendered to the worker along with one month’s notice; on the contrary clause (b) expressly provides for the payment of compensation being made at the time of retrenchment and by implication it would be permissible to pay the same before retrenchment. Section 25F nowhere speaks of retrenchment compensation being paid or tendered to the worker along with one month’s notice; on the contrary clause (b) expressly provides for the payment of compensation being made at the time of retrenchment and by implication it would be permissible to pay the same before retrenchment. Payment of tender of compensation after the time when the retrenchment has taken effect would vitiate the retrenchment and non-compliance with the mandatory provision which has a beneficial purpose and a public policy behind would result in nullifying the retrenchment. 11. Compliance with clauses (a) and (b) of Section 25F strictly as per the requirement of the provision is mandatory. However, compliance with clause (c) is directory, as held Gurnail Singh and Ors. Vs. State of Punjab and Ors. (1991) 1 SCC 189 and a substantial compliance would be enough. 16. In the case before us the workmen have been given one month’s notice in writing. The reasons for retrenchment have been indicated. An opportunity of hearing against the proposed termination was also afforded though not required by Section 25F. Retrenchment was to take effect on expiry on one month from the date of the notice. Compensation as required by Section 25F was available in the form of banker’s cheques for payment to the workers simultaneously with the time of retrenchment and they were given an intimation in advance in that regard. The workers had already approached the High Court and secured an interim order protecting their employment and status quo being maintained. They were obviously not interested in receiving the retrenchment compensation which if done may have had the effect of frustrating the interim order. In these facts and circumstances, the retrenchment of any of the appellants cannot be found fault with an any of the grounds raised by the appellants by reference to clauses (a) and (b) of Section 25F. 13. The facts in the said case would also disclose that workmen were given one month’s notice in writing and retrenchment was to take effect on expiry of one month from the date of notice and compensation required to be paid under Section 25F was available in the form of Banker’s cheque for payment to the workers simultaneously at the time of retrenchment and admittedly they had been given notice or intimation in that regard. Though Sri Mukkannappa, learned counsel appearing for petitioner has made a valiant effort to distinguish the said judgment to the facts on hand on the ground that factum of quantum of compensation had been specified in the notice itself in Pramod Jha case, position of law with regard to compensation amount accompanying such notice still remains answered by Apex Court against the workman in the said case. The facts on hand in the instant case would disclose that impugned notice is dated 09.03.2012 and retrenchment of petitioner workman was to occur on the expiry of 30 days i.e., 08.04.2012. Thus the respondents 2 to 4 had opportunity and time to pay the retrenchment compensation to workman till he was retrenched on or before 08.04.2012 or at the time of issuing termination order and before the expiry of the date 08.04.2012. 14. Hence, I am of the view that contention of Sri Mukkannappa would have merited acceptance only in the event of workman had been retrenched on 08.04.2012 without making payment of retrenchment compensation by respondents 2 to 4 since it would have prima facie disclosed that there was non compliance of clause (b) of Section 25F. However, even before said situation were to surface petitioner has rushed to this court and as such claim of the petitioner to challenge the impugned notice on the ground on non compliance of clause (b) of Section 25F is premature. In that view of the matter also the contention of Sri Mukkannappa cannot be accepted and it is liable to be rejected. 15. In view of the discussion made hereinabove point No. 1 and 2 is answered by holding that when notice of proposed retrenchment is issued by a employer if does not accompany retrenchment compensation said notice cannot be said as violative of section 25F. However, if the notice itself is a retrenchment notice then compliance of clause (b) of section 25F is mandatory and if there were to be any infraction then it will go without saying such notice is bad in law. The impugned notice being a notice proposing to retrench the workman it cannot be termed or construed as retrenchment notice per se and as such it cannot be held that it is violative of Section 25F of Industrial Disputes Act. RE: POINT NO. 3: 16. The impugned notice being a notice proposing to retrench the workman it cannot be termed or construed as retrenchment notice per se and as such it cannot be held that it is violative of Section 25F of Industrial Disputes Act. RE: POINT NO. 3: 16. As observed herein above petitioner having approached this court by filing the present writ petition on 19.03.2012 apprehending retrenchment on the basis of notice dated 09.03.2012 Annexure-H and submission made by learned advocates having been placed on record it cannot be construed that payment if made now by respondents 2 to 4 has to be understood as having been made in violation of clause (b) of Section 25F or it would be beyond the period prescribed under clause (b) of Section 25F, in view of the fact that on account of pendency of present writ petition and submission of learned counsel appearing for respondents 2 to 4 having been placed on record namely that they would not precipitate the matter till orders are passed on this writ petition, Hence, employer would be at liberty to pay retrenchment compensation on or before 18.04.2012 without waiting for grant of copy of order of this court. In the result, following order is passed: ORDER Writ petition is dismissed. However this order not come in the way of petitioner-workman questioning his retrenchment in the manner known to law and he would be at liberty to do so. No order as to costs.