Mahammad Ishaq Suleman Kadiwal v. Palanpur Nagarpalika
2016-07-26
J.B.PARDIWALA
body2016
DigiLaw.ai
JUDGMENT : J.B. Pardiwala, J. 1. I am tempted to preface this judgment with the following observations made by a Division Bench of this Court. "There are many enactments in this country intended to serve the purposes of extending the welfare measures to the working class. Merely enacting the laws would not be an adequate protection or extension of a necessary benefit. Such laws have to be implemented with a sense of commitment. That largely depends on who apply the law and how they handle it. That also depends, quite often, on the degree of efficiency of the persons administering the law and the capacity to take decisions one way or the other expeditiously. Time is of the essence and delay will destroy the advantage conceived by the extension of the benefits of such welfare measures." 2. The writ-applicants before me are the retrenched employees of the Palanpur Nagarpalika. They were serving on different posts. Their services came to be terminated in the year 2007. They seek to invoke the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India with a prayer that the orders putting an end to their service be quashed and they should be reinstated in service on their respective posts with the back-wages. 3. The details as regards the post, date of appointment and date of termination of one of the set of employees is as under:- Sr. No. Petition No. Petitioner’s Name Appointment Date of Retirement Terminated 1 SCA 2189/07 Mohmmad I. Kadival Conductor 19-11-86 on probation period 22-07-87 probation extended. 1-11-87 permanent 31-05-19 11/01/07 2 SCA 2190/07 Pravin K. Parmar Conductor “do” 19-06-17 “do” 3 SCA 2191/07 Sardarsing A. Bhati Conductor “do” 28-05-20 “do” 4 SCA 2192/07 Rasidahmed Vora Conductor “do” 13-07-18 “do” 5 SCA 2193/07 Sabbirbhai Babi Conductor “do” 11/06/11 “do” 4. For the convenience of the Court, a chart has been prepared providing the details as regards the date of superannuation, payment of retiral dues and other remarks. The same is as under:- Sr.
For the convenience of the Court, a chart has been prepared providing the details as regards the date of superannuation, payment of retiral dues and other remarks. The same is as under:- Sr. No. Name Category Rojamdar SCA Date of Superannuation Payment of Retrial Dues Remarks 1 MFI Qureshi Gardner Helper 5058/07 25-12-2025 Refused to Accept 2 Rajabhai Bhikhabhai Gardner Helper 5059/07 16-04-2020 Payment accepted Ref.IT-218/86 3 Kantibhai R. Parmar Rojamdar Helper 5060/07 Payment accepted Expired petition withdrawn 4 Govindbhai Joitaram Rojamdar Helper 5061/07 01-06-16 Payment accepted Ref.IT-27/88 Expired No heirs brought 5 Safimohamad Dosmohmad Rojamdar Helper 5062/07 18-04-2024 Refused to Accept Ref.IT-218/86 6 Akbarbhai R. Salat Gardner Helper 5063/07 07-03-19 Payment accepted Ref.IT-27/886 7 Bachusha Imamsha Sai Gardner Helper 5064/07 06-03-10 Payment accepted Retired 8 Haribhai M. Parmar Rojamdar Helper 5065/07 07-04-21 Refused to accept Ref.IT-218/86 9 Naranbhai Ganeshbhai Rojamdar Helper 5066/07 01-02-21 Payment accepted Ref.IT-27/88 10 Ramjibhai Dharmabhai Gardner Helper 5067/07 31-12-2007 Refused to accept 11 Pravinbhai Devjibhai Gardner Helper 5068/07 08-04-23 Refused to accept 12 Babubhai Ramdasbhai Gardner Helper 5069/07 16-04-2020 Payment accepted Ref.IT-218/86 13 Suraji S. Thakore Gardner Helper 5070/07 EXPIRED Payment accepted Expired – Heirs brought on record. 14 Jayntibhai D. Padhiyar Gardner Helper 5071/07 EXPIRED Payment accepted Expired Heirs brought on record. 15 Devabhai Madhabhai Gardner Helper 5072/07 16-04-2025 Payment made to heirs LEFT HOME MISSING 16 Kalubhai B. Menpara Gender Helper 5073/07 EXPIRED Payment accepted. Paid to heirs. Expired 17 Ramjibhai J. Parmar Gardner Helper 5074/07 07-03-10 Payment accepted Retired Ref.IT-218/86 18 Ramjibhai S. Chhaniyyad Gardner Helper 5075/07 03-04-22 Payment accepted 19 Dhanjibhai S. Menpara Gardner Helper 5076/07 03-04-29 Payment accepted 5. At the outset, I may state that the following petitioners have passed away. Sr. No. Particular Name of the petitioner 1 SCA No. 5060/2007 Kantibhai Ranchhodbhai Parmar 2 SCA No. 5061/2007 Govindbhai Joitabhai Solanki 3 SCA No. 5070/2007 Suraji Shankarji Thakor 4 SCA No. 5071/2007 Jayantibhai Devchandbhai Padhiyar 5 SCA No. 5073/2007 Kalubhai Bhikhabhai Menpara 6. In none of the writ-applications referred to above, the legal heirs have been brought on record. 7. The following writ-applicants have retired from the service. Sr. No. Particular Name of the petitioner 1 SCA No. 5064/2007 Bachusha Imamsha Shai 2 SCA No. 5074/2007 Ramjibhai Jethabhai Parmar 3 SCA No. 2193/2007 Babi Sabbirbhai Mohmmadbhai 8. There are three sets of the writ-applicants before me (1) Bus Conductors; (2) Gardeners, and (3) Cleaners (Dairy). 9.
7. The following writ-applicants have retired from the service. Sr. No. Particular Name of the petitioner 1 SCA No. 5064/2007 Bachusha Imamsha Shai 2 SCA No. 5074/2007 Ramjibhai Jethabhai Parmar 3 SCA No. 2193/2007 Babi Sabbirbhai Mohmmadbhai 8. There are three sets of the writ-applicants before me (1) Bus Conductors; (2) Gardeners, and (3) Cleaners (Dairy). 9. So far as the Bus-conductors are concerned, they are five in numbers, out of which, as stated above, one has already attained the age of superannuation. They all were appointed in the year 1987 by a regular recruitment process and that too on the vacant sanctioned posts. They all were being paid the regular salary prescribed for the post of conductors on the establishment of the Palanpur Nagarpalika. It appears that at the relevant point of time, the Palanpur Nagarpalika was rendering bus service to its citizens within the municipal area. 10. It appears that the General Body of the Nagarpalika vide its Resolution No. 105, dated 31/10/2005, resolved to discontinue the Public Transport Service and decided to render such service on contract basis. Accordingly, the transport service was discontinued. It appears that a public advertisement was issued inviting tenders for running the Public Transport Service for a period of 10 years. Such contract was awarded to a private party. On account of such decision of the Nagarpalika to privatize the transport service, the Conductors were left with no work. In such circumstances, they were discontinued vide order dated 11/01/2007. Later on, all the posts of the City Bus-Conductors were abolished. Thus, since 2007, the bus service is now being provided on contract basis and not directly by the Nagarpalika. 11. So far as the Gardeners are concerned, the Nagarpalika, in its affidavit-in-reply, has explained the position as under:- "5.3 With reference to contents of paragraph 3 of the petition, it is denied that the petitioners were appointed on regular basis on the sanctioned post of establishment set-up approved by the Government by order of Municipality as mentioned in respective petitions.
So far as the Gardeners are concerned, the Nagarpalika, in its affidavit-in-reply, has explained the position as under:- "5.3 With reference to contents of paragraph 3 of the petition, it is denied that the petitioners were appointed on regular basis on the sanctioned post of establishment set-up approved by the Government by order of Municipality as mentioned in respective petitions. I say and submit that by virtue of several awards of the learned Industrial Tribunal in past, certain daily wagers casual labourers were ordered to grant benefit of salary and other benefits at par with the regular employees (i.e. at part with the employees working on sanctioned establishment.) I say and submit that, three employees in sanitation department were also granted such benefits by Ld. Tribunal. I say and submit that those three employees were neither regular employees nor the employees appointed on a sanctioned posts. I say that, only wages and other benefits were granted at par with the regular employees. I say and submit that upon retirement of such daily wagers could not have been treated as vacancies fallen for 3 posts and no other daily wagers could have been accommodated in place of such retiring casual labourers and given benefits as granted to such retiring daily wagers. 5.4 With reference to the contents of paragraph 4 of the petition, it is denied that the Municipality was taking work of sanitation clerk from the petitioners and not of Gardner. It is also denied that the Municipality arbitrary and discriminatory dismissed the petitioners from the services vide order dated 15.01.2007. I say and submit that the petitioners were a daily wager and granted benefits and other benefits at part with the regular employees without following due procedure of law, and therefore, before discontinuing such employee, issuances of show cause notice is not required. I further say that, petitioners services are not discontinued on account of any penal actions or the service of the petitioners were also not contemplating opportunity of hearing before discontinuation of their services on account of non-availability of work. It is also denied that other similarly situated employees of the same category are not terminated. I say and submit that as there are no work with the Municipality for maintenance of gardens.
It is also denied that other similarly situated employees of the same category are not terminated. I say and submit that as there are no work with the Municipality for maintenance of gardens. I further say and submit that, at present Municipality has no work to offer the petitioners and therefore also, the petitioners were discontinued from services. I say and submit that continuation of other employees in other branches (where there is a requirement of manpower) cannot be treated as discrimination meted out to the petitioners. I say and submit that the petitioners being daily wagers were assigned different work vide different orders for temporary period but such allotment of work does not create any rights in favour of the petitioners nor it can be treated that there are availability of the work and vacancies on sanctioned establishment. However, I say and submit that the Collector, Banaskantha time and again directed the Municipality to reduce its establishment expenses (by reducing staff and more particularly daily wagers or those who are working on sanctioned establishment). I say and submit that as on today, the Government has imposed ban of 20% even on sanctioned establishment as measures of reducing establishment expenses. I say and submit that the Municipality has terminated/discontinued/relieved total 115 daily wagers during June, 2006 to January, 2007 under such directions for reducing the establishment expenses and will continue to reduce such expenses stage wise. I say and submit that, the Government and Collector also directed the Municipality to discontinue/close certain discriminatory functions which are operated by the Municipality and causing huge financial loses to the Municipality. I say and submit that as measures of reducing expenditure, the Municipality has also discontinued certain discretionary functions and some discretionary functions were given for operation and maintenance to the private parties on contract basis. I say and submit that the main 2 gardens of towns were also given for operation and maintenance to private trusts. Hence, the Municipality has no work to offer the petitioners. 5.5 With reference to the contents of paragraph 5 of the petition, it is denied that the impugned order is malafide and the reasons mentioned for discontinuing service is not plausible. It is also denied that the petitioners were appointed on regular basis.
Hence, the Municipality has no work to offer the petitioners. 5.5 With reference to the contents of paragraph 5 of the petition, it is denied that the impugned order is malafide and the reasons mentioned for discontinuing service is not plausible. It is also denied that the petitioners were appointed on regular basis. 5.6 With reference to the contents of paragraph 6 of the petition, I say and submit that same is pertaining to other petitions involving different issue, which has nothing to do with the termination or discontinuation of daily wagers like the petitioners. It is denied that the petitioners were not paid salary of last 17 months. I say and submit that since 1990, the regular salary of certain months in a year are not paid and i.e. how it has accumulated as 17 months. I say and submit that, as per the final accounts of salary the Municipality had to recover the amount from some of the petitioners and to give small amount to some of the petitioners by way of due salary. 5.7 With reference to the contents of paragraph 7 of the petition, it is denied that the impugned order is violative of Articles 14, 16 and 21 of the Constitution of India and also, violative of principal of natural justice and is without following legal procedure. I say and submit that the order of the Municipality is just, legal and proper. 5.8 With reference to the contents of paragraph 8 of the petition, it is denied that the petitioners were removed in arbitrary manner. I reiterate that the petitioners were daily wagers and given benefits wages and other benefits at part with regular employee without following due procedure of law and the petitioners being present not appointed on regular establishment, the Municipality has right to relieve the petitioners from the services on account of non-availability of the work. 5.9 With reference to the contents of paragraph 8.1 of the petition, it is denied that the action of the respondent is in violation of Section 25(F) of the Industrial Dispute Act, 1947. It is also denied that the nature of engagement of the (either daily wager or on regular employee) is undisputed. It is also denied that the Municipality has not complied with the order of the Collector dated 20.03.2006.
It is also denied that the nature of engagement of the (either daily wager or on regular employee) is undisputed. It is also denied that the Municipality has not complied with the order of the Collector dated 20.03.2006. I say and submit that the Collector in its order dated 20.03.2006 recorded that against sanctioned set up of 325 employees, at present 706 employees are working with the department and total establishment expenditure is Rs. 41,02,400/- per months as against that, the grant of Rs. 17.00 lakhs. Thus, each on months, the Municipality had to incur Rs. 22,02,400/- per month from its own fund and, therefore, along with the other direction also, directed the Municipality to discontinue/relieve the daily wagers/employees who are not working on set up till 30.06.2006. I say and submit that, without reducing the excess staff (who are appointed without following due procedure) there is no option available with the Municipality to come out from financial crunch and, therefore, stage wise/department wise, the excess staff is reduced." 12. So far as the Cleaners (Dairy) are concerned, the stance of the Nagarpalika remains the same as that of the Gardeners referred to above. 13. Thus, the picture that emerges from the materials on record is as under:- "(A) The Bus-Conductors were appointed on the regular basis on the vacant sanctioned posts. They worked for almost a period of 20 years. The Municipality decided to discontinue the transport service and thought fit to render such service through outsourcing. Later on, all the posts of the Bus-Conductors came to be abolished. The services of the Conductors were brought to an end. They were paid the retiral benefits like the provident fund, gratuity, leave encashment, etc. (B) So far as the Gardeners and Cleaners (Dairy) are concerned, their appointments were not regular appointments. They were not appointed on the sanctioned posts. However, the fact remains that they were paid the regular salary and they worked almost for a period of two decades. One fine day, their services also were brought to an end. (C) The decision was taken keeping in mind the financial position of the Municipality and also the decision to reduce the administrative expenses." 14. Mr.
However, the fact remains that they were paid the regular salary and they worked almost for a period of two decades. One fine day, their services also were brought to an end. (C) The decision was taken keeping in mind the financial position of the Municipality and also the decision to reduce the administrative expenses." 14. Mr. Majmudar, the learned counsel appearing for the writ-applicants vehemently submitted that the action on the part of the Municipality in terminating the services of his clients could be termed as absolutely illegal, high-handed and violative of the provisions of the Industrial Disputes Act, 1947. He submitted that there has been non-compliance with the requirement of Section-25F of the Industrial Disputes Act, 1947. He submitted that so far as the Bus-Conductors are concerned, their services could not have been retrenched on the ground that a decision was taken to abolish the posts. For any reason, if such decision was taken, then the Municipality was obliged to accommodate the Bus-Conductors in any other department. He submitted that the appointments of all the writ-applicants were not illegal appointments. Mr. Majmudar submits that so far as the Gardeners and the Cleaners (Dairy) are concerned, their appointments at best could be termed as irregular but not illegal. 15. Mr. Majmudar submitted that so far as the Gardeners and Cleaners are concerned, although the work was of regular and permanent in nature, yet, the Nagarpalika appointed them on ad hoc basis in order to deny the benefits of permanent employment. 16. According to Mr. Majmudar, since there is a violation of the provisions of Section 25F of the Industrial Disputes Act, 1947, the impugned orders be quashed and the Municipality be directed to reinstate them in service with backwages. 17. On the other hand, all the writ-applications have been vehemently opposed by Mr. Mehul H. Rathod, the learned counsel appearing for the Palanpur Municipality. So far as the Special Civil Application Nos. 2189 to 2193 of 2007 are concerned, his submissions in writing are under:- "1. All the five petitioners were serving as the Bus Conductors in the City Bus Department of the Palanpur Nagarpalika. 2. Section 91 of the Gujarat Municipalities Act provides for the discretionary functions that can be performed by the Municipality within the municipal limits from the Municipal funds.
All the five petitioners were serving as the Bus Conductors in the City Bus Department of the Palanpur Nagarpalika. 2. Section 91 of the Gujarat Municipalities Act provides for the discretionary functions that can be performed by the Municipality within the municipal limits from the Municipal funds. Sub Clause (d) of Clause (A) of Section 91 provides for the transport facilities for the conveyance of the public. 3. In 1985, the Municipality decided to set up and maintain the transport facility by way of plying the city buses within the limits of the Palanpur city. 4. The Director of Municipalities, vide order dated __.04.1986 approved the establishment of the City Bus department as under: (i) City Bus Supervisor - One Post - Graduate or SSC Pass having experience of Automobiles of 5 years; (ii) Conductors - Six Posts - Std. 8 Pass holding license base; (iii) Driver - Five Posts - Std. 8 Pass holding license base holder having experience of driving heavy vehicle for 5 years; (iv) Helper cum Peon - Std. 8 Pass having experience of garage work of 5 years. 5. On 22.05.1985, the Municipality issued an advertisement and invited names from the District Employment Exchange, District and State Social Welfare Officers, etc. and after following due process, the petitioners were appointed vide order dated 19.11.1986. 6. The initial appointments were on probation for a period of six months. Later on, the probation period was extended upto 11.5.1987. 7. The petitioners were absorbed as regular employees vide order dated 24.02.1988 w.e.f. 01.11.1987. 8. On 11.08.2005, the Director of Municipalities issued a circular instructing the Municipalities to minimize the expenses by privatizing the discretionary functions which were incurring loss (like Bus Service, Garbage collections, etc.). 9. At the relevant point of time the total establishment expenditure was Rs. 41,02,400/- per month, as against the available grant of Rs. 17,00,000/-. The total sanctioned set up was of 325 employees. As against that, 706 employees were working. Thus, there was continuous financial loss to the Municipality and burden on the establishment expenses. 10. By 2005, the financial condition of the Palanpur Municipality weakened and was unable to pay the regular salary to its employees and also started facing difficulties in meeting with the expenses even for the compulsory functions. 11.
As against that, 706 employees were working. Thus, there was continuous financial loss to the Municipality and burden on the establishment expenses. 10. By 2005, the financial condition of the Palanpur Municipality weakened and was unable to pay the regular salary to its employees and also started facing difficulties in meeting with the expenses even for the compulsory functions. 11. The Banaskantha Safai Kamdar Sangh filed the SCA No. 17029 of 2005 (there are other similar petitions also) before this Court, praying for the payment of the monthly salary regularly and other benefits. This Court passed an order directing the Municipality to make the payment and also directed the Director of Municipalities to look into the matter and issued necessary directions. At one stage, the officers from the Director of Municipalities were also ordered to remain present. Accordingly, the Dy. Director personally remained present before this Court. The said petition was disposed of on 20.06.2006. 12. In pursuance of the interim order dated 29.12.05 passed in the SCA No. 17029/05, the Director of Municipalities convened a meeting on 03.02.2006 with the Resident Dy. Collector, Palanpur, Dy. Director of Gujarat Municipal Finance Board, a Representative of the Urban Development Department, Chief Officer, Palanpur Nagarpalika, and the Chairman of the Executive Committee of the Palanpur Nagarpalika to take care of the financial crisis faced by the Municipality. 13. On the basis of the meeting dated 03.02.2006, the Director of Municipalities ordered the Municipality to reduce the sanctioned establishment by 20% and to close down the discretionary functions which were incurring loss or else such functions to be privatized. The Director directed to reduce the rojamdars who were appointed de hors the rules and in excess to the sanctioned posts and whose services were not required. Several other directions were issued. 14. On 22.02.2006, the Collector, Banaskantha, passed an order and directed the Municipality to reduce 20% of the sanctioned establishment and to reduce the rojamdars and directed to improve the financial position of the municipality. 15. On 07.07.2006, the Chief Officer, submitted a report about the huge loss incurred by the City Bus Department along with the figures of the last five years. 16. On 31.10.2006, the Municipality, vide Resolution No. 105, resolved to privatize the bus service and authorized the President and the Chief Officer to take all necessary steps in that regard. 17.
15. On 07.07.2006, the Chief Officer, submitted a report about the huge loss incurred by the City Bus Department along with the figures of the last five years. 16. On 31.10.2006, the Municipality, vide Resolution No. 105, resolved to privatize the bus service and authorized the President and the Chief Officer to take all necessary steps in that regard. 17. Vide order dated 11.01.2007 and in pursuance to the Resolution No. 105 dated 31.10.2006, the President and the Chief Officer removed the present petitioners from their service as Conductors as the Municipality was unable to accommodate them in any other department. Moreover, as the expenses were required to be reduced and the city bus service was privatised the services of the Conductors were no longer required. 18. The order dated 11.11.2011 received approval from the General Body of the Municipality vide resolution Nos. 151 to 155, dated 31.01.2007. 19. On 29.01.2007, a decision was taken to reduce the sanctioned establishment by abolishing 26 posts of Class-III which included the 6 posts of City Bus Conductors and 2 posts of City Bus Drivers. It was also decided to reduce 10 posts of Class-IV. 20. The said decision was approved vide Resolution No. 136 dated 31.01.2007 passed by the General Body. 21. As on date, there is no other department in which the petitioners can be accommodated. In fact, there is no work for the writ-applicants. 22. All the petitioners were paid their retirement dues including the salary. 23. The petitioners have not raised any issue as regards the violation of the provisions of ID Act in the present petition nor have they raised any other industrial dispute in respect of their termination from service." 18. So far as the Special Civil Application Nos. 5058 to 5076 of 2007 are concerned, his submissions are as under:- "1. In the Municipality there are three categories of employees working as under: (i) Employees appointed on the sanctioned establishment after following the due procedure. ('Regular Employees' for short). (ii) Casual Labourers appointed illegally on the payment of daily wages. ('Rojamdar' for short) (iii) Casual Labourers who were initially appointed illegally on payment of daily wage, but subsequently by the awards of the Industrial Tribunal, they are given pay scale and other benefits equivalent to the Regular employees. (Popularly identified as "Employees on Award") 2.
('Regular Employees' for short). (ii) Casual Labourers appointed illegally on the payment of daily wages. ('Rojamdar' for short) (iii) Casual Labourers who were initially appointed illegally on payment of daily wage, but subsequently by the awards of the Industrial Tribunal, they are given pay scale and other benefits equivalent to the Regular employees. (Popularly identified as "Employees on Award") 2. All the nineteen petitioners were casual labourers engaged by the Palanpur Nagarpalika without following the due procedure. None of the petitioners was appointed against the vacant sanctioned posts. The appointments are not irregular but illegal. However, some of the petitioners were given the benefit of the pay scale and other benefits equivalent to the regular employees according to the awards of the Industrial Tribunal passed in different references. 3. Out of nineteen petitioners, nine have expired, two petitioners have crossed the age of superannuation and one petitioner is missing from home since last couple of years. The writ-application i.e. SCA No. 5060/2007 was withdrawn. The Special Civil Application Nos. 5069/07, 5061/07, 5065/07, 5066/07 & 5073/07 have abetted as the heirs and legal representatives have not been brought on record. 4. All the petitioners were paid the retirement dues and their due salary. However, five petitioners refused to accept their retirement dues. 5. By 2005, the financial condition of the Municipality worsened. It was unable to pay the regular salary to its employees and also faced difficulties in meeting with the expenses of compulsory functions. 6. The Banaskantha Safai Kamdar Sangh filed the S.C.A. No. 17029 of 2005 before this Court praying for payment of regular monthly salary and other benefits. This Court passed an order directing the Municipality to make payment and also directed the Director of Municipalities to look into the matter and issue necessary directions. At one stage, the officers from the office of the Director of Municipalities were also ordered to remain present. Accordingly, the Dy. Director personally remained present and the necessary instructions were issued to him. The said petition was disposed of on 20.06.2006. 7. In pursuance to the interim order/direction issued in the SCA No. 17029 of 2005 dated 29.12.2005, the Director of Municipalities convened a meeting on 03.02.2006 with the Resident Dy. Collector, Palanpur, Dy.
Accordingly, the Dy. Director personally remained present and the necessary instructions were issued to him. The said petition was disposed of on 20.06.2006. 7. In pursuance to the interim order/direction issued in the SCA No. 17029 of 2005 dated 29.12.2005, the Director of Municipalities convened a meeting on 03.02.2006 with the Resident Dy. Collector, Palanpur, Dy. Director of Gujarat Municipal Finance Board, Representative of Urban Development Department, Chief Officer, Palanpur Nagarpalika and the Chairman of the Executive Committee of Palanpur Nagarpalika, wherein a decision was taken to reduce the excess staff i.e. the Rojamdars working on the award post. It also decided to reduce the employees from the discretionary functions of the Municipality and accordingly, necessary orders were issued by the Director of Municipalities and the Collector in that regard. 8. The other identical petitions i.e. the SCA Nos. 21560/2005 and 21563/2005 to 21648/2005) were disposed of vide order dated 02.02.2006. 9. On the basis of the order passed by this Court in the aforesaid petitions, the Collector, Banaskantha, vide order dated 20.03.2006, directed the Municipality to reduce the expenses and also the workforce of the Rojamdars. 10. In view of the directions issued by the Director of Municipality, Collector and this Court, the Municipality, vide its Resolution No. 111 dated 31.10.2006, decided to reduce the workforce of Rojamdars. Accordingly, in the year 2006-2007 stage wise from different departments total 115 rojamdars were reduced, which included the Rojamdars receiving the benefits under the awards. 11. The present petitioners were also discontinued vide order dated 15.01.2007. Similar orders were passed in respect of all the other petitioners. 12. Out of the total, 15 petitioners-Rojamdars were assigned the work of Gardeners, 3 were assigned the work of Helpers in the milk distribution and one Clerk. 13. The Municipality was maintaining three gardens and one open ground. All the gardens and the open ground were given to the private institutions/trust for maintenance and operation. At present those trusts and institutions are maintaining the same and, therefore, there is no requirement of Gardeners. 14. So far as the work of milk distribution is concerned, the same has been taken over by the Banas Dairy from the Municipality and, therefore, there is no work of milk distribution also with the Municipality. 15.
At present those trusts and institutions are maintaining the same and, therefore, there is no requirement of Gardeners. 14. So far as the work of milk distribution is concerned, the same has been taken over by the Banas Dairy from the Municipality and, therefore, there is no work of milk distribution also with the Municipality. 15. In this bunch of writ-applications, by way of amendment, the writ-applicants have complained of violation of the provisions of the Industrial Disputes Act, but did not raise any industrial dispute. It is settled legal position that if a statutory efficacious alternative remedy is available to the petitioners, then in such circumstances, the writ petitions should not be entertained. The nature of service, number of working days, entitlement of compensation, availability of work, etc. are disputed questions of fact and, therefore, the same can only be adjudicated by leading oral as well as documentary evidence before the Labour Court. 16. Even if the violation of Section 25F of ID Act is established, the recent trend of the Apex Court is to grant compensation in lieu of reinstatement and, therefore, this Court may mould the relief accordingly." 19. Thus, according to Mr. Rathod, the services of all the writ- applicants had to be terminated because the posts were abolished and there was a direction from the State Government to reduce the expenses and to relieve the employees from service. The principal argument of Mr. Rathod is that the "termination of the services of the writ-applicants as a result of the abolition of the posts and other directions of the State Government does not amount to retrenchment as contemplated under Section-2(oo) of the Industrial Disputes Act, 1947". He would submit that even an opportunity of being heard to the writ-applicants was not necessary before the posts were abolished by the Nagarpalika in accordance with the directions of the State Government. According to him, it was a policy decision and should not be interfered or disturbed. He would submit that the writ-applicants were not entitled to be accommodated in any other department of the Nagarpalika as an alternative employment notwithstanding the abolition of the posts. 20. Mr. Rathod submitted that the expression "termination by the employer of the service of a workman for any reason whatsoever" appearing in Section 2(oo) of the Act has its own limitations.
20. Mr. Rathod submitted that the expression "termination by the employer of the service of a workman for any reason whatsoever" appearing in Section 2(oo) of the Act has its own limitations. The limitations are that such termination shall be a termination for a reason. In other words, according to Mr. Rathod, the words "termination" and "reason" imply a certain amount of volition and choice and free action on the part of the employer. According to him, if the objective situation is such that both "termination" and "reason" are beyond the control of the employer, then termination in that context would not be "retrenchment." While all retrenchment is termination of service, all termination of service is not retrenchment under Section 2(oo) of the Act. Some limitation must be imposed as being inherent in the definition of "retrenchment" in Section 2(oo) as meaning the termination by the employer of the service of workman for any reason whatsoever, save and except the exceptions expressly mentioned. In short, the submission of the learned counsel appearing for the Nagarpalika is that if there is no termination of services by the employer out of his own volition but that the discharge of the employee was brought about on account of the supervening act or event over which the employer has no control, then it cannot, by any stretch of imagination, be said that there was termination of the service of a workman by the employer. 21. Mr. Rathod has placed reliance on two decisions of the Supreme Court – (i) Barst Light Railway Company, Ltd. and Anr. v. Joglekar and Ors. (1957 I L.L.J. 243); and (ii) Pipraich Sugar Mills, Ltd. v. Pipraich Sugar Mills Mazdoor Union (1957 I L.L.J. 235). "(i) In the case of Barst Light Railway Company, Ltd. and Anr. v. Joglekar and Ors., 1957 I L.L.J. 243, the Supreme Court observed at Page-252 as under:- ...that " retrenchment " as defined in Section 2(oo) and as used in Section 25P has no wider meaning than the ordinary accepted connotation of the word:... and that there is no retrenchment unless there is discharge of surplus labour or staff in a continuing or running industry.
and that there is no retrenchment unless there is discharge of surplus labour or staff in a continuing or running industry. (ii) In the case of Pipraich Sugar Mills, Ltd. v. Pipraich Sugar Mills Mazdoor Union, 1957 I L.L.J. 235, the Supreme Court observed at Page-241 as under:- ...But retrenchment connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff or the labour force is discharged as surplusage and the termination of services of all the workmen as a result of the closure of the business cannot, therefore, be properly described as retrenchment." 22. Having heard the learned counsel appearing for the parties and having considered the materials on record, the following questions fall for my consideration:- "(1) Whether the impugned orders passed by the Nagarpalika terminating the services of the writ-applicants are liable to be set at naught on any permissible legal ground? (2) Whether giving an opportunity of being heard to the writ-applicants was necessary before the posts were abolished? (3) Whether the writ-applicants are entitled to be accommodated in any other department as of alternative employment notwithstanding the abolition of the posts held by them? (4) Whether the retrenchment of the writ-applicants fall under the ambit of unfair labour practice? And Whether the Nagarpalika has followed the conditions prescribed in Section-25-F of the Industrial Disputes Act, 1947?" 23. The judgment of the Supreme Court in the case of M. Ramanatha Pillai v. State of Kerala and Anr. (1973 AIR 2641 : 1974 SCR (1) 515), is an authority to state that the power to create or abolish a post is a matter of policy. The power to create and abolish a post is invested in every employer, whether the employer is a State employer or a private employer, and such power should be conceded to an employer in the interest and necessity of internal administration. The creation or abolition of a post is dictated by the policy decision, exigencies of circumstances and administrative necessity. The creation, continuance and abolition of posts are all decided by the employer in the interest of administration and general public if such employer happens to be a State employer and in the interest of exigencies of administration if such employer happens to be a private employer. Whether a post should be retained or abolished is essentially a matter for the authority to decide.
Whether a post should be retained or abolished is essentially a matter for the authority to decide. The abolition of a post is an executive policy decision. It is not open to the Court to go behind the wisdom of the decision and substitute its own opinion for that of the authority on the point as to whether a post should or should not be abolished. The only requirement is that the decision to abolish the post should be taken in good faith and be not used as a cloak or pretence to terminate the services of a person holding that post. 24. Although the power of an employer to abolish a post which might result in the holder thereof ceasing to be in service has got to be recognised, yet any such action, legislative or executive, taken pursuant to that power is always subject to judicial review. But the grounds of judicial review appear to have been somewhat limited and circumscribed to cases where the exercise of the power is not bona fide but is used only as a cloak or pretence to terminate the post. In N. Ramanatha Pillai's case (supra), the Hon'ble Chief Justice speaking for the Constitution Bench of the Supreme Court, observed thus: "A post may be abolished in good faith. The order abolishing the post may lose its effective character if it is established to have been made arbitrarily, mala fide or as a mask of some penal action within the meaning of Article 311(2)". The Supreme Court in State of Haryana v. Des Raj Sangar, (1976 AIR 1199 : 1976 SCR (2) 1034) has, however, held that as long as the decision of abolishing a post is taken in good faith the same cannot be set aside by the Court and it is not open to the Court to go behind the wisdom of the decision and substitute its own opinion for that of the Government on the point as to whether a post should or should not be abolished. Furthermore, it needs to be emphasised that if an authority takes into account relevancy and usefulness of different posts in deciding which one is to be abolished and which one is to be retained, the Court will not interfere with the decision of such authority.
Furthermore, it needs to be emphasised that if an authority takes into account relevancy and usefulness of different posts in deciding which one is to be abolished and which one is to be retained, the Court will not interfere with the decision of such authority. In taking this opinion, I am fortified by the judgment of the Supreme Court in S.S. Dhanoa v. Union of India, (1991 AIR 1745 : 1991 SCR (3) 159). Therefore, the impugned action of the petitioners in abolishing the post held by the respondent cannot be condemned as arbitrary or mala fide by applying any permissible rational test or principle. The abolition of the post was not only due to non-availability of required number of students but also due to the policy decision taken by NCHM. Therefore, we answer first point in the negative." 25. Therefore, I am of the view that the impugned action of the Nagarpalika in abolishing the post of Conductors held by some of the writ-applicants cannot be condemned as arbitrary or malafide by applying any permissible rational test or principle. The abolition of the posts of Conductor was on account of the policy decision to discontinue the Public Transport Service as such service was incurring huge loss. The Nagarpalika decided to render such service to the people of the town by entering into a contract with a private person. Thus, I answer the first question in the negative. 26. A public servant enters upon his appointment to a post on the understanding that he is entitled to hold it so long as the post is in existence and not abolished. His right, at the highest, is to continue in the post so long as the post continues but he cannot prevent a post being abolished so that he might continue in it. The severance from the post follows automatically upon the abolition of the post. Abolition of the post cannot be equated to termination of service.
His right, at the highest, is to continue in the post so long as the post continues but he cannot prevent a post being abolished so that he might continue in it. The severance from the post follows automatically upon the abolition of the post. Abolition of the post cannot be equated to termination of service. The Supreme Court, in Parshotam Lal Dhingra v. Union of India, (1958 AIR 36 : 1958 SCR 828 ) speaking through S.R. Das, Chief Justice of India, indicated the proposition that the abolition of post did not amount to dismissal or removal and observed thus: "In the absence of any special contract the substantive appointment to a permanent post gives the servant so appointed a right to hold the post until, under the rules, he attains the age of superannuation or is compulsorily retired after having put in the prescribed number of years' service or the post is abolished and his service cannot be terminated except by way of punishment for misconduct, negligence, inefficiency or any other disqualification found against him on proper enquiry after due notice to him..... ". (emphasis supplied). The position stated above was reiterated by the Supreme Court in Moti Ram Deka v. General Manager, North East Frontier Railway, and in Champaklal Chimanlal Shah v. Union of India, (1964 AIR 1854 : 1964 SCR (6) 190). The principle that abolition of a post does not amount to dismissal or removal has been reaffirmed by the Supreme Court and the High Courts in large number of cases including in K. Rajendran v. State of Tamil Nadu,; Des Raj Sangar's case; Rabindra Nath Mukherjee v. S.R. Das and Anr., 1980-I-LLJ-315 (Cal.) : 1979 (2) CLJ 333 (Cal.) and the Allahabad High Court in J.P. Pandey v. Kanpur University, 1996(3) SLR 680 (All.) (DB), to cite a few." 27. The abolition of post may have the consequence of termination of service of a public servant. Such termination is not dismissal or removal. Therefore, the opportunity of showing cause against the proposed penalty of dismissal or removal does not arise in the case of abolition of post. The abolition of post is not a personal penalty against the public servant. The right to hold a post automatically comes to an end on the abolition of the said post which a public servant holds.
Therefore, the opportunity of showing cause against the proposed penalty of dismissal or removal does not arise in the case of abolition of post. The abolition of post is not a personal penalty against the public servant. The right to hold a post automatically comes to an end on the abolition of the said post which a public servant holds. In that view of the matter, the respondent cannot complain of violation of principles of natural justice on the part of the appellants in abolishing the post of Conductors. It is well-settled that Article 311(2) of the Constitution has no application where the post is abolished. No opportunity of hearing need be given to the holder of a post which is abolished. Therefore, it logically follows that even in non-Governmental public service, there is no obligation to follow the principles of natural justice before abolishing a post. This position is also well-settled by the judgment of the Madras High Court in B. Krishnamurthy v. Chairman, Madras Port Trust, 1996 II LLJ 1254 (Mad.) and the judgment of the Bombay High Court in P.V. Naik v. State of Maharashtra, 1967 II LLJ 486 (Bom.), and the judgment of the Supreme Court in Sri Maheshwari Senior Higher Secondary School v. Bhika Ram Sharma, 1996 (2) SCR 466. Thus, I answer the second question in the negative. 28. At the threshold it needs to be noticed that the question whether a person who ceases to be a servant consequent upon abolition of a post should be rehabilitated by giving an alternative employment, it is trite, is a matter of policy on which the Court has no say. The Supreme Court in K. Rajendran's case (supra) in para 34 held: "It is no doubt true that Article 38 and Article 43 of the Constitution insist that the State should endeavour to find sufficient work for the people so that they may put their capacity to work into economic use and earn a fairly good living. But these articles do not mean that everybody should be provided with a job in the civil service of the State and if a person is provided with one he should not be asked to leave it even for a just cause.
But these articles do not mean that everybody should be provided with a job in the civil service of the State and if a person is provided with one he should not be asked to leave it even for a just cause. If it were not so, there would be no justification for a small percentage of the population being in Government service and in receipt of regular income and a large majority of them remaining outside with no guaranteed means of living. It would certainly be an ideal state of affairs if work could be found to all the able bodied men and women and everybody is guaranteed the right to participate in the production of national wealth and to enjoy the fruits thereof. But we are today far away from that goal. The question whether a person who ceases to be a Government servant according to law should be rehabilitated by giving an alternative employment is, as the law stands today, a matter of policy on which the Court has no voice". Thus, I answer the third question in the negative. 29. It would be apposite at this stage to refer to and to rely upon two more decisions of the Supreme Court - (i) in the case of Workmen of Subong Tea Estate v. Outgoing Management of Subong Tea Estate (1964 I LLJ 333); and (ii) in the case of Parry and Co. Ltd. v. P.C. Lal, Judge of the Second Industrial Tribunal, Calcutta (1970 II LLJ 429). 30. In the earlier decision, it was held that:- "The management can retrench its employees only for proper reasons. It is for the management to decide the strength of its labour force, for, the number of workmen required to carry out efficiently the work involved in the industrial undertaking of any employer must always be left to be determined by the management in its discretion, and so, occasions may arise when the number of employees may exceed the reasonable and legitimate needs of the undertaking. In such a case, if any workmen become surplus, it would be open to the management to retrench them. Workmen may become surplus on the ground of rationalisation or on the ground of economy reasonably and bona fide adopted by the management, or of other industrial or trade reasons.
In such a case, if any workmen become surplus, it would be open to the management to retrench them. Workmen may become surplus on the ground of rationalisation or on the ground of economy reasonably and bona fide adopted by the management, or of other industrial or trade reasons. In all these cases, the management would be justified in effecting retrenchment in its labour force. Thus, though the right of the management to effect retrenchment cannot normally be questioned, when a dispute arises before an Industrial Court in regard to the validity of any retrenchment, it would be necessary for industrial adjudication to consider whether the impugned retrenchment was justified for proper reasons. It would not be open to the management either capriciously or without any reason at all to say that it proposes to reduce its labour force for no rhyme or reason. This position cannot be seriously disputed." 31. In the later decision, the principle laid down in a few earlier decisions including the one referred to above was approved and it was held (Para 12) (pp. 436-437): "In D. Macropollo & Co. v. Their Employees' Union (1958 II LLJ 492), this Court held that if a scheme of reorganization has been adopted by an employer for reasons of economy or convenience and it has been introduced in all the areas of its business, the fact that its implementation would lead to the discharge of some of the employees would have no material bearing on the question as to whether the scheme was adopted by the employer bona fide or not. In the circumstances, an industrial tribunal considering the issue relating to retrenchment, should not attach any importance to the consequences of reorganisation. The resulting discharge and retrenchment would have to be considered as an inevitable, though unfortunate, consequence of such a scheme. It also held that where the finding of a tribunal is based on wrong and erroneous assumption of certain material facts, such a finding would be perverse. A recent decision in Ghatge & Patel Concern's Employees' Union v. Ghatge & Patel (Transport) (P) Ltd. (1968 I LLJ 566) was a case of an employer reorganising his business from conducting a transport business himself through employees engaged by him to conducting it through a contract system whereunder he let out his motor trucks to persons, who, before this change, were his employees.
Admittedly, this was done because he could not implement some of the provisions of the Motor Transport Workers Act, 1961. The change over to the contract system was held by the Tribunal not to have been effected for victimising the employees. The employees had voluntarily resigned and hired the employer's trucks on contract basis. It was held that a person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has, without the arrangement, no proper means of obeying. In Workmen of Subong Tea Estate v. The Outgoing Management of Subong Tea Estate, (supra) this Court laid down the following propositions: (1) that the management can retrench its employees only for proper reasons, which means that it must not be actuated by any motive of victimisation or any unfair labour practice, (2) that it is for the management to decide the strength of its labour force, for the number of workmen required to carry out efficiently the work in his industrial undertaking must always be left to be determined by the management in its discretion, (3) if the number of employees exceeded the reasonable and legitimate needs of the undertaking it is open to the management to retrench them, (4) workmen may become surplus on the ground of rationalisation or economy reasonably or bonafide adopted by the management or on the ground of other industrial or trade reasons, and (5) the right to effect retrenchment cannot normally be challenged, but when there is a dispute about the validity of retrenchment the impugned retrenchment must be shown as justified on proper reasons, i.e., that it was not capricious or without rhyme or reason. In view of the above legal principle, opposite party Nos. 1 and 2 had discretion in making retrenchment of its idle and surplus staff while they made an effort for reorganisation and so long their action was bona fide and they followed the relevant provisions of the Act, the retrenchment cannot be questioned. There is nothing in the record to show that the retrenchments were done with malice in order to intentionally harass the petitioners. Further there is nothing to show that opposite party Nos. 1 and 2 were actuated by mala fide motive for retrenchment of each of the individual petitioners for some reason or other.
There is nothing in the record to show that the retrenchments were done with malice in order to intentionally harass the petitioners. Further there is nothing to show that opposite party Nos. 1 and 2 were actuated by mala fide motive for retrenchment of each of the individual petitioners for some reason or other. No such allegations of mala fide, improper motive or unfair labour practice have been made in the writ petitions. Even if there be any, the proper form is the Industrial Tribunal and not the High Court which is not a fact finding authority." 32. In my view, having regard to the law discussed above, the Nagarpalika is competent to say that a particular department of its is running at a loss. It is permissible to retrench the idle, surplus and unnecessary staff of its establishment in their discretion which must be bonafide and supported by proper reasons subject to the observance of the retrenchment benefits as contained in Section 25F of the Industrial Disputes Act. 33. In my view, everything now turns around on the compliance of Section-25-F of the Act. 34. Section-2(oo) of the Industrial Disputes Act defines the term "retrenchment" which reads as under:- "2(oo) "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include - (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or [(bb) 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 or of such contract being terminated under a stipulation in that behalf contained therein; or;] (c) termination of the service of a workman on the ground of continued ill-health;]" 35. Section-25F of the Industrial Disputes Act reads as under:- "25F.
Section-25F of the Industrial Disputes Act reads as under:- "25F. Conditions precedent to retrenchment of workmen:- 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 - (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 b [for every completed year of continuous service] or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government c [or such authority as may be specified by appropriate Government by notification in the Official Gazette.] [a] (1) Sub-section (2) of section 3 of the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955 (45 of 1955), is as follows:- "Section 25F of the aforesaid Act (that is, the Industrial Disputes Act, 1947), in its application to working journalists, shall be construed as if in clause (a) thereof, for the period of notice referred to therein in relation to the retrenchment of a workman, the following periods of notice in relation to the retrenchment of a working journalist had been substituted, namely:- (a) six months, in the case of an editor, and (b) three months, in the case of any other working journalist". (2) Contracts of Employment Act, 1963 (1963, c. 49), lays down a minimum period of notice to terminate the employment of those who have been employed continuously for twenty-six weeks. Part-time employment is excluded. The Act further lays down that the obligation of the employer cannot be reduced by contract but either party may waive his right to notice' or may accept payment in lieu of notice. The Act, however, does not affect the common law right of the employer of dismissal without notice for misconduct of the employee. [b] Substituted for the words "for every completed year of service" by the Industrial Disputes (Amendment) Act, 1964 (36 of 1964), Sec. 14 (19-12-64). [c] Inserted, ibid. [d] Proviso omitted by the Industrial Disputes (Amendment) Act (49 of 1984), Sec. 3 (18-8-1984). 36.
[b] Substituted for the words "for every completed year of service" by the Industrial Disputes (Amendment) Act, 1964 (36 of 1964), Sec. 14 (19-12-64). [c] Inserted, ibid. [d] Proviso omitted by the Industrial Disputes (Amendment) Act (49 of 1984), Sec. 3 (18-8-1984). 36. The plain reading of Section-25-F of the Act indicates that Section 25-F of the Act contemplates two essential conditions namely, (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; and (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months. The third condition deals with the intimation to government. The purpose of such intimation to the appropriate government, in my opinion, is to notify the retrenchment in the official gazette, to make known to the general public that the relationship of employer and employee is terminated. If a workman is retrenched, he should be given advance notice of one month or in lieu of such notice, payment of one month wages with appropriate compensation as provided in the statute. Compliance of Section 25-F(a) and (b) are mandatory, as failure to do so, would result in serious prejudice and hardship to the employee. 37. It is well-settled that Clauses (a) and (b) of the Section 25-F are mandatory and must be strictly complied with whereas Clause (c) is directory. In case of failure to comply with the mandatory provisions, the retrenchment order would be rendered illegal and void and the necessary consequences would flow. 38. The underlying object of Section 25-F is twofold. First, 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.
38. The underlying object of Section 25-F is twofold. First, 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 for 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 spent in searching for another employment. Section 25-F nowhere speaks of the 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 or 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 it would result in nullifying the retrenchment.[See: Pramod Jha and Ors. v. State of Bihar and Ors., 2003 (2) LLJ 159.] 39. The meaning to be given to the term 'retrenchment' has been considered in several decisions of the Supreme Court, one of those is the Constitutional Bench decision in the case of The Punjab Land Development and Reclamation Corporation Ltd. Chandigarh v. The Presiding Officer, Labour Court, Chandigarh and Ors. [1990 SCR (3) 111 : 1990 SCC (3) 682], where it was observed as follows:- "When we analyse the mental process in drafting the definition of 'retrenchment' in Section 2(oo) of the Act we find that firstly it is to mean the termination by the employer of the service of a workman for any reason whatsoever. Having said so the Parliament proceeded to limit it by excluding certain types of termination namely, termination as a punishment inflicted by way of disciplinary action.
Having said so the Parliament proceeded to limit it by excluding certain types of termination namely, termination as a punishment inflicted by way of disciplinary action. The other types of termination excluded were (a) voluntary retirement of a workman, or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf or (c) termination of service of a workman on the ground of continued ill health. Had the Parliament envisaged only the 2/3 question of termination of surplus labour alone in mind, there would arise no question of excluding (a), (b), (c) above. The same mental process was evident when Section 2(oo) was amended inserting another exclusion of clause (bb) by the Amending Act 49 of 1984, with effect from August 18, 1984, 'termination of the service of workman as a result of non-renewal of the contract of employment between the employer and the workman concerned on its expiry of such contract being terminated under a stipulation in that behalf contained therein." At page 336 of the report, the Supreme Court has observed : "The definition has used the word 'means'. When a statute says that a word or phrase shall 'mean' not merely that it shall 'include' certain things or acts, 'the definition is a hard-and-fast definition and no other meaning can be assigned to the expression than is put down in definition per Esher, M.R. Gough v. Gough, (1981) 2 QB 665. A definition is an explicit statement of the full connotation of a term." At page 342, the Court lays down after considering the reasonings, principles and precedents to the definition in Section 2(oo) of the Act that 'retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in the section." 40. In the case of S.M. Nilajkar And Ors. v. Telecom, District Manager reported in (2003) 4 SCC 27 , the Supreme Court observed as under:- "12. 'Retrenchment' in its ordinary connotation is discharge of labour as surplus though the business or work itself is continued. It is well-settled by a catena of decisions that labour laws being beneficial pieces of legislation are to be interpreted in favour of the beneficiaries in case of doubt or where it is possible to take two views of a provision.
'Retrenchment' in its ordinary connotation is discharge of labour as surplus though the business or work itself is continued. It is well-settled by a catena of decisions that labour laws being beneficial pieces of legislation are to be interpreted in favour of the beneficiaries in case of doubt or where it is possible to take two views of a provision. It is also well-settled that the Parliament has employed the expression "the termination by the employer of the service of a workman for any reason whatsoever" while defining the term "retrenchment", which is suggestive of the legislative intent to assign the term 'retrenchment' a meaning wider than what it is understood to have in common parlance. There are four exceptions carved out of the artificially extended meaning of the term 'retrenchment', and therefore, termination of service of a workman so long as it is attributable to the act of the employer would fall within the meaning of 'retrenchment' de hors the reason for termination. To be excepted from within the meaning of 'retrenchment' the termination of service must fall within one of the four excepted categories. A termination of service which does not fall within the categories (a), (b), (bb) and (c) would fall within the meaning of 'retrenchment'. 13. The termination of service of a workman engaged in a scheme or project may not amount to retrenchment within the meaning of Sub-clause (bb) subject to the following conditions being satisfied:- (i) that the workman was employed in a project or scheme of temporary duration; (ii) the employment was on a contract, and not as a daily-wager simplicitor, which provided inter alia that the employment shall come to an end on the expiry of the scheme or project; and (iii) the employment came to an end simultaneously with the termination of the scheme or project and consistently with the terms of the contract. (iv) the workman ought to have been apprised or made aware of the abovesaid terms by the employer at the commencement of employment. 14. The engagement of a workman as a daily-wager does not by itself amount to putting the workman on notice that he was being engaged in a scheme or project which was to last only for a particular length of time or upto to occurrence of some event, and therefore, the workman ought to know that his employment was short-lived.
14. The engagement of a workman as a daily-wager does not by itself amount to putting the workman on notice that he was being engaged in a scheme or project which was to last only for a particular length of time or upto to occurrence of some event, and therefore, the workman ought to know that his employment was short-lived. The contract of employment consciously entered into by the workman with the employer would result in a notice to the workman on the date of the commencement of the employment itself that his employment was short-lived and as per the terms of the contract the same was liable to termination on the expiry of the contract and the scheme or project coming to an end. The workman may not therefore complaint that by the act of employer his employment was coming to an abrupt termination. To exclude the termination of a scheme or project employee from the definition of retrenchment it is for the employer to prove the above-said ingredients so as to attract the applicability of Sub-clause (bb) above-said. In the case at hand, the respondent-employer has failed in alleging and proving the ingredients of Sub-clause (bb), as stated herein above. All that has been proved is that the appellants were engaged as casual workers or daily-wagers in a project. For want of proof attracting applicability of Sub-clause (bb), it has to be held that the termination of the services of the appellants amounted to retrenchment. 15. The appropriate provision which should govern the cases of the appellants is Section 25FFF, the relevant part whereof is extracted and reproduced hereunder:- "25FFF. Compensation to workmen in case of closing down of undertakings.- (1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of Sub-section (2), be entitled to notice and compensation in accordance with the provisions of Section 25F, as if the workman had been retrenched: Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under Clause (b) of Section 25F shall not exceed his average pay for three months.
[Explanation : An undertaking which is closed down by reason merely of- (i) financial difficulties (including financial losses); or (ii) accumulation of undisposed of stocks; or (iii) the expiry of the period of the lease or licence granted to it; or (iv) in a case where the undertaking is engaged in mining operations, exhaustion of the minerals in the area in which such operations area carried on, shall not be deemed to be closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub-section.] 1A. [Not reproduced] 1B. [Not reproduced] (2) Where any undertaking set-up for the construction of buildings, bridges, roads, canals, dams or other construction work is closed down on account of the completion of the work within two years from the date on which the undertaking had been set up, no workman employed therein shall be entitled to any compensation under Clause (b) of Section 25F, but if the construction work is not so competed within two years, he shall be entitled to notice and compensation under that section for every [completed year of continuous service] or any part thereof in excess of six months." 16. It is pertinent to note that in Hariprasad Shivshanker Shukla and Anr. v. A.D. Divikar and Ors., (1957) SCR 121 the Supreme Court held that 'retrenchment' as defined in Section 2(oo) and as used in Section 25F has no wider meaning than the ordinary accepted connotation of the worked, that is, discharge of surplus labour or staff by the employer for any reason whatsoever otherwise than by way of punishment inflicted in disciplinary action. Retrenchment was held to have no application where the service of all workmen were terminated by the employer on a real and bona fide closure of business or on the business or undertaking being taken over by another employer. The above-said view of the law taken by the Supreme Court resulted in promulgation of the Industrial Disputes (Amendment) Ordinance, 1957 with effect from 27.4.1957, later on replaced by an Act of Parliament (Act 18 of 1957) with effect from 6.6.1957 whereby Section 25FF and Section 25FFF were introduced in the body of the Industrial Disputes Act, 1957. Section 25FF deals with the case of transfer of undertakings with which we are not concerned. Section 25FFF deals with closing down of undertakings.
Section 25FF deals with the case of transfer of undertakings with which we are not concerned. Section 25FFF deals with closing down of undertakings. The term 'undertaking' is not defined in the Act. The relevant provision use the term 'industry'. Undertaking is a concept narrower than industry. An undertaking may be a part of the whole, that is, the industry. It carries a restrict meaning. (see Bangalore Water Supply & Sewerage Board etc. v. A. Rajappa and Ors. etc., (1978) 2 SCC 213 and the Management of Hindustan Steel Ltd. v. The Workmen and Ors., (1973) 3 SCC 564 ). With this amendment it is clear that closure of a project or scheme by the State Government would be covered by the closing down of undertaking within the meaning of Section 25FFF. The workman would therefore be entitled to notice and compensation in accordance with the provisions of Section 25F though the right of employer to close the undertaking for any reason whatsoever cannot be questioned. Compliance of Section 25F shall be subject to such relaxations as are provided by Section 25FFF. The undertaking having been closed on account of unavoidable circumstances beyond the control of the employer, i.e. by its own force as it was designed and destined to have a limited life only, the compensation payable to the workman under Clause (b) of Section 25F shall not exceed his average pay for three months. This is so because of failure on the part of respondent employer to allege and prove that the termination of employment fell within Sub-clause (bb) of Clause (oo) of Section 2 of the Act." 41. In the case of M/s. Maruti Udyog Ltd. v. Ram Lal and others, reported in AIR 2005 SC 851 , the Supreme Court has explained the provisions of Section 25-F of the 1947 Act, more particularly, it is extend in case of transfer of an undertaking or closure thereof. "21. How far and to what extent the provisions of Section 25-F of the 1947 Act would apply in case of transfer of undertaking or closure thereof is the question involved in this appeal. A plain reading of the provisions contained in Section 25-FF and Section 25-FFF of the 1947 Act leaves no manner of doubt that Section 25-F thereof is to apply only for the purpose of computation of compensation and for no other.
A plain reading of the provisions contained in Section 25-FF and Section 25-FFF of the 1947 Act leaves no manner of doubt that Section 25-F thereof is to apply only for the purpose of computation of compensation and for no other. The expression 'as if' used in Section 25-FF and Section 25-FFF of the 1947 Act is of great significance. The said term merely envisages computation of compensation in terms of Section 25-F of the 1947 Act and not the other consequences flowing therefrom. Both Section 25-FF and Section 25-FFF provide for payment of compensation only, in case of transfer or closure of the undertaking. Once a valid transfer or a valid closure comes into effect, the relationship of employer and employee takes effect. Compensation is required to be paid to the workman as a consequence thereof and for no other purpose. 22. A Constitution Bench of this Court in Hariprasad Shivshankar Shukla v. A.D. Divikar, (1957) SCR 121 interpreted the word 'retrenchment' as contained in Section 2(oo) of the ID Act, holding : "For the reasons given before, we hold, contrary to the view expressed by the Bombay High Court, that retrenchment as defined in S.2(oo) and as used in S.25-F has no wider meaning than the ordinary, accepted connotation of the word: it means the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as punishment inflicted by way of disciplinary action, and it has no application where the services of all workmen have been terminated by the employer on a real and bona fide closure of business as in the case of Shri Dinesh Mills Ltd. or where the services of all workmen have been terminated by the employer on the business or undertaking being taken over by another employer in circumstances like those of the Railway Company..." 23. The history of the legislation has been noticed by a Constitution Bench of this Court in Anakapalla Co-operative Agricultural and Industrial Society Ltd. (supra) and, it while holding that a company taking over the management of a closed undertaking may in a given situation become successor-in-interest but as regard the interpretation of the relevant provisions of the 1947 Act following Hariprasad Shivshankar Shukla (supra), opined : "...
The Legislature, however, wanted to provide that though such termination may not be retrenchment technically so-called, as decided by this Court, nevertheless the employees in question whose services are terminated by the transfer of the undertaking should be entitled to compensation, and so, S. 25-FFprovides that on such termination compensation would be paid to them as if the said termination was retrenchment. The words "as if" bring out the legal distinction between retrenchment defined by S.2(oo) as it was interpreted by this Court and termination of services consequent upon transfer with which it deals. In other words, the section provides that though termination of services on transfer may not be retrenchment, the workmen concerned are entitled to compensation as if the said termination was retrenchment. This provision has been made for the purpose of calculating the amount of compensation payable to such workmen; rather than provide for the measure of compensation over again, S.25-FF makes a reference to S.25-F for that limited purpose, and, therefore, in all cases to which S.25-FF applies, the only claim which the employees of the transferred concern can legitimately make is a claim for compensation against their employers. No claim can be made against the transferee of the said concern." 24. The said decision, therefore, is an authority for the proposition that the expression 'as if' has limited application and has been employed only for the purpose of computation of quantum of compensation and takes within its purview a case where retrenchment as contained in Section 2(oo) of the 1947 Act has taken place within the meaning of Section 25-F and not in a case falling under Sections 25-FF or 25-FFF thereof. 25. Once it is held that Section 25-F have no application in a case of transfer of an undertaking or closure thereof as contemplated in Section 25-F and 25-FFF of the 1947 Act, the logical corollary would be that in such an event Section 25-H will have no application. 26. The aforementioned provisions clearly carve out a distinction that although identical amount of compensation would be required to be paid in all situations but the consequence following retrenchment under Section 25-F of the 1947 Act would not extend further so as to envisage the benefit conferred upon a workman in a case falling under Sections 25-FF or 25-FFF thereof.
26. The aforementioned provisions clearly carve out a distinction that although identical amount of compensation would be required to be paid in all situations but the consequence following retrenchment under Section 25-F of the 1947 Act would not extend further so as to envisage the benefit conferred upon a workman in a case falling under Sections 25-FF or 25-FFF thereof. The distinction is obvious inasmuch as whereas in the case of retrenchment simpliciter a person loses his job as he became surplus and, thus, in the case of revival of chance of employment, is given the preference in case new persons are proposed to be employed by the said undertaking; but in a case of transfer or closure of the undertaking the workman concerned is entitled to receive compensation only. It does not postulate a situation where a workman despite having received the amount of compensation would again have to be offered a job by a person reviving the industry." 42. In my view, the Municipality was obliged in law to comply with the Section 25F of the Industrial Disputes Act in view of the undisputed facts emerging from the record. Practically, each of the applicants had put in uninterrupted service of almost 20 years preceding the date of termination. It has been fairly conceded before me that the Nagarpalika has not complied with the mandatory provision of the Section 25F of the Industrial Disputes Act, 1947. According to Mr. Rathod, it was not necessary for his client to comply with Section 25F of the Industrial Disputes Act. 43. In my view, the noncompliance would render such termination void ab-initio. The Supreme Court in the case of Mohan Lal v. The Management of M/s. Bharat Electronics Ltd., AIR 1981 SC 1253 has explained the law as under:- "7. Niceties and semantics apart, termination by the employer of the service of a workman for any reason whatsoever would constitute retrenchment except in cases excepted in the section itself. The excepted or excluded cases are where termination is by way of punishment inflicted by way of disciplinary action, voluntary retirement of the workman, retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf, and termination of the service of a workman on the ground of continued ill-health.
It is not the case of the respondent that termination in the instant case was a Punishment inflicted by way of disciplinary action. If such a position were adopted, the termination would be ab initio void for violation of principle of natural justice or for not following the procedure prescribed for imposing punishment. It is not even suggested that this was a case of voluntary retirement or retirement on reaching the age of superannuation or absence on account of continued ill-health. The case does not fall under any of the excepted categories. There is thus termination of service for a reason other than the excepted category. It would indisputably be retrenchment within the meaning of the word as defined in the Act. It is not necessary to dilate on the point nor to refer to the earlier decisions of this Court in view of the later two pronouncements of this Court to both of which one of us was a party. A passing reference to the earliest judgment which was the sheet anchor till the later pronouncements may not be out of place. In Hariprasad Shivshankar Shukla v. A.D. Divikar, 1957 SCR 121 : ( AIR 1957 SC 121 ) after referring to Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union, 1956 SCR 872 : ( AIR 1957 SC 95 ) a Constitution Bench of this Court quoted with approval the following Passage from the aforementioned case (at page 126 of AIR) : "'But retrenchment connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff or the labour force is discharged as surplus age and the termination of services of all the workmen as a result of the closure of the business cannot therefore be properly described as retrenchment." This observation was made in the context of the closure of an undertaking and being conscious of this position, the question of the correct interpretation of the definition of the expression 'retrenchment' in Section 2(oo) of the Act was left open. Reverting to that question, the view was reaffirmed but let it be remembered that the two appeals which were heard together in Shukla's case were cases of closure, one Barsi Light Railway Company Ltd., and another Shri Dinesh Mills Ltd., Baroda.
Reverting to that question, the view was reaffirmed but let it be remembered that the two appeals which were heard together in Shukla's case were cases of closure, one Barsi Light Railway Company Ltd., and another Shri Dinesh Mills Ltd., Baroda. With specific reference to these cases in State Bank of India v. N. Sundara Money, (1976) 3 SCR 160 : ( AIR 1976 SC 1111 ) Krishna Iyer, J. speaking for a three Judges bench, interpreted the expression 'termination............ for any reason whatsoever' as under (at page 1114 of AIR) : "A break-down of Section 2(oo) unmistakably expands the semantics of retrenchment. 'Termination................... for any reason whatsoever' are the key words. Whatever the reason, every termination spells retrenchment. So, the sole question is-has the employee's service been terminated? Verbal apparel apart the substance is decisive. A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term. To protect the weak against the strong this policy of comprehensive definition has been effectuated. Termination embraces not merely the act of termination by the employer, but the fact of termination howsoever produced. May be, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the armour of section 25-F and Section 2(oo). Without speculating on possibilities, we may agree that 'retrenchment' is no longer terra incognita but area covered by an expansive definition. It means 'to end, conclude, cease'. In the present case the employment ceased, concluded, ended on the expiration of nine days automatically may be, but cessation all the same. That to write into the order of appointment the date of termination confers no moksha from Section 25-F(b) is inferable from the Proviso to Section 25-F(1). True, the section speaks of retrenchment by the employer and it is urged that some act of volition by the employer to bring about the termination is essential to attract Section 25-F and automatic extinguishment (of service by effluxion of time cannot be sufficient." It would be advantageous to refer to the facts of that case to appreciate the interpretation placed by this Court on the relevant section. State Bank of India appointed the respondent by an order of appointment which incorporated the two relevant terms relied upon by the Bank at the hearing of the case.
State Bank of India appointed the respondent by an order of appointment which incorporated the two relevant terms relied upon by the Bank at the hearing of the case. They were : (i) the appointment is purely a temporary one for a period of 9 days but may be terminated earlier, without assigning any reason therefor at the Bank's discretion; (ii) the employment, unless terminated earlier, will automatically cease at the expiry of the period i.e. 18-11-1972. It is in the context of these facts that the Court held that where the termination was to be automatically effective by a certain date as set out in the order of appointment it would nonetheless be a retrenchment within the meaning of Section 2(oo) and in the absence of strict compliance with the requirements of Section 25-F, termination was held to be invalid. 8. Continuing this line of approach, in Hindustan Steel Ltd. v. The Presiding Officer, Labour Court, Orissa, (1977) 1 SCR 586 : ( AIR 1977 SC 31 ), a Bench of three Judges examined the specific contention that the decision in Sundara Money's case ( AIR 1976 SC 1111 ) runs counter to the construction placed on that section by a Constitution Bench and, therefore, the decision is per incuriam. This Court analysed in detail Shukla's case ( AIR 1957 SC 121 ) and Sundara Money's case ( AIR 1976 SC 1111 ) and ultimately held that the Court did not find anything in Shukla's case which is inconsistent with what has been held in Sundara Money's case. In reaching this conclusion it was observed that in Shukla's case the question arose in the context of closure of the whole of the undertaking while in Hindustan Steel's case and Sundara Money's case the question was not examined in the context of closure of whole undertaking but individual termination of service of some employees and it was held to constitute retrenchment within the meaning of the expression. This question again cropped up in Santosh Gupta v. State Bank of Patiala, (1980) 3 SCR 340 : ( AIR 1980 SC 1219 ).
This question again cropped up in Santosh Gupta v. State Bank of Patiala, (1980) 3 SCR 340 : ( AIR 1980 SC 1219 ). Rejecting the contention for reconsideration of Sundara Money's case on the ground that it conflicted with a Constitution Bench decision in Shukla's case and adopting the ratio in Hindustan Steel's case that there was nothing in the two aforementioned decisions which is inconsistent with each other and taking note of the decision in Delhi Cloth and General Mills Ltd. v. Shambu Nath Mukherjee, (1978) 1 SCR 591 : ( AIR 1978 SC 8 ) wherein this Court had held that striking off the name of a workman from the rolls by the management was termination of service which was retrenchment within the meaning of Section 2(oo), the Court held that discharge of the workman on the ground that she had not passed the test which would enable her to obtain confirmation was retrenchment within the meaning of Section 2(oo) and, therefore, the requirements of Section 25-F had to be complied with. It was pointed out that since the decision in Shukla's case, the Parliament stepped in and introduced Section 25-FF and Section 25-FFF by providing that compensation shall be payable to workman in case of transfer or closure of the undertaking, as if the workmen had been retrenched. The effect of the amendment was noticed as that every case of termination of service by act of employer even if such termination was as a consequence of transfer or closure of the undertaking was to be treated as 'retrenchment' for the purposes of notice, compensation, etc. The Court concluded as under : "Whatever doubts might have existed before Parliament enacted Ss. 25-FF and 25-FFF about the width of S. 25-F there cannot be any doubt that the expression 'termination of service for any reason whatsoever now covers every kind of termination of service except those not expressly provided for by other provisions of the Act such as Sections 25-FF and 25-FFF". 9. 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.
9. 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 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. In State of Bombay v. The Hospital Mazdoor Sabha, (1960) 2 SCR 866 at p. 872 : ( AIR 1960 SC 610 at p. 613) this court held 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 a cessation of service of the workman and the workman continues to be in service. This was not even seriously controverted before us. 10. It was, however, urged that Section 25F is not attracted in this case for an entirely different reason. Mr. Markenday contended that before Section 25F is invoked, the condition of eligibility for a workman to complain of invalid retrenchment must be satisfied. According to him unless the workman has put in continuous service for not less than one year his case would not be governed by Section 25F. That is substantially correct because the relevant provision of Section 25F provides as under : "25F.
According to him unless the workman has put in continuous service for not less than one year his case would not be governed by Section 25F. That is substantially correct because the relevant provision of Section 25F provides as under : "25F. 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 - (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; Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service; (b) the workman has been paid, at the time of retrenchment, compensation which, shall be equivalent of fifteen days' average pay (for every completed year of continuous service) or any part thereof 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)." Before a workman can complain of retrenchment being not in consonance with Section 25F, he has to show that he has been in continuous service for not less than one year under that employer who has retrenched him from service. Section 25B is the dictionary clause for the expression 'continuous service'. It reads as under : "25B.
Section 25B is the dictionary clause for the expression 'continuous service'. It reads as under : "25B. (1) a workman shall be said to be in continuous service for a period if he is for that period in uninterrupted service including service which may be interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal, or a lockout or a cessation of work which is not due to any fault on the part of the workman; (2) where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer- (a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than - (i) one hundred and ninety days in the case of a workman employed below ground in a mine; and (ii) two hundred and forty days, in any other case; (b) for a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made has actually worked under the employer for not less than - (i) ninety-five days, in the case of a workman employed below ground in a mine; and (ii) one hundred and twenty days, in any other case. Explanation - For the purposes of clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which- (i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946, or under this Act or under any other law applicable to the industrial establishment : (ii) he has been on leave with full wages, earned in the previous years; (iii) he has been, absent due to temporary disablement caused by accident arising out of and in the course of his employment; and (iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks." 44.
In the case of Gammon India Limited v. Niranjan Dass reported in AIR 1984 SC 500 , the Supreme Court observed as under:- "2......... The question, however, is whether the learned single Judge, who interfered with the award of the Tribunal was justified in coming to the conclusion that the case was one of closure covered by Sec. 25-FFF or the Industrial Tribunal was right in holding that it is a case of retrenchment covered by Section 25-F of Industrial Disputes Act. This point can be answered by mere reference to the, notice served by the appellant-company on the respondent intimating to him that his services will no more be required effective from October 14, 1967. The notice as a whole has been extracted hereinbefore. The notice recites that as a result of recession in the volume of work of the company, services of the respondent would no more be required by the company after October 14, 1967 and this notice may be treated as a statutory notice as contemplated by Section 25-F (a). There is not even a whisper in the notice that as the Delhi office is being closed down, the services of the respondent would not be required. An attempt was made while leading evidence before the Industrial Tribunal to show that the Zonal office at Delhi was closed on January 31, 1968 while the Central Zone office was closed somewhere in Oct., 1967 if by September, 1967, the appellant-company had resolved to close the office at Delhi to which the respondent was attached it is unthinkable that that aspect would not be recited in the notice. The necessity for termination of service of the respondent recited in the notice was recession in the work, handled by the company. Not even one word is stated in the notice that the office to which the respondent was attached was in the process of being closed down, so his services would no more be required. On a true construction of 'the notice, it would appear that the respondent had become surplus on account of reduction' in volume of work and that constitutes retrenchment even in the traditional sense of the term as interpreted.
On a true construction of 'the notice, it would appear that the respondent had become surplus on account of reduction' in volume of work and that constitutes retrenchment even in the traditional sense of the term as interpreted. in Pipraich Sugar Mills; Ltd. v. Pipraich Sugar Mills Mazdoor Union 1956 SCR 872 : ( AIR 1957 SC 95 ), though that view does not hold the, field in view of the recent decisions of this Court in State Bank of India, v. N. Sundara Money, (1976) 3 SCR 160 : ( AIR 1976 SC 1111 ), Hindustan Steel Ltd. v. The Presiding Officer, Labour Court Orissa, (1977) 1 SCR 586 : ( AIR 1977 SC 31 ), Santosh Gupta v. State Bank of Patiala, (1980) 3 SCR 884 : ( AIR 1980 SC 1219 ), Delhi Cloth and General Mills Ltd. v. Shambu Nath Mukherjee, (1978) 1 SCR 591 : ( AIR 1978 SC 8 ), Mohan Lal v. Management of M/s. Bharat Electronics Ltd., (1981) 3 SCR 518 : ( AIR 1981 SC 1253 ) and L. Robert D'souza v. Executive Engineer, Southern Railway, (1982) 3 SCR 251 : ( AIR 1982 SC 854 ). The recitals and averments in the notice leave no room for doubt that the service of the respondent as terminated for the reason that on account of recession and reduction in the volume of work of the company, respondent has become surplus. Even apart from this, the termination of service for the reasons mentioned in the notice is not covered by any of the Clauses (a), (b) and (c) of Section 2(oo) which defines retrenchment and it is by now well settled that where the termination of service does not fall within any of the excluded categories, the termination would be ipso facto retrenchment. It was not even attempted to be urged that the case of the respondent would fall in any of the excluded categories. It is then indisputably a case of retrenchment. 3. It is not disputed that the pre-requisite for a valid retrenchment as laid down in Section 25-F has not been complied with and therefore the retrenchment bringing about termination of service is ab initio void." 45. It is very difficult for me to accept the contention of Mr.
It is then indisputably a case of retrenchment. 3. It is not disputed that the pre-requisite for a valid retrenchment as laid down in Section 25-F has not been complied with and therefore the retrenchment bringing about termination of service is ab initio void." 45. It is very difficult for me to accept the contention of Mr. Rathod that in the facts and circumstances of the present case, there was no termination of service, and even if it amounts to termination of service, it is not "retrenchment" under the Industrial Disputes Act. The consensus of judicial opinion is that the question, whether the termination of service of a particular workman amounts to retrenchment must be determined in each case on the facts and circumstances of that case. The language of the definition in Section 2(oo) of the Act has to be read along with the provisions of Section 25-F of that Act to either accept or reject the contentions raised by the learned counsel for the respondent. Chapter V-A of the Act deals with "Lay-off and Retrenchment". Section 25-F provides for the conditions which are precedent to retrenchment of workmen. Section 25-F, so far as relevant, may be usefully extracted here : "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 the 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 : Provided that no such notice shall be necessary if the retrenchment is under an agreement which specified a date for the termination of service. 46. The proviso extracted above substantially throws sufficient light for a proper interpretation of the meaning of retrenchment. It uses both the terms "retrenchment" and "termination". It is one of the well accepted principles of interpretation that if in, the same provision of a Statute two words are used, they necessarily connote two different meanings. The proviso makes it clear that if there be termination of service in terms of an agreement on a specified date, it would still be retrenchment.
It is one of the well accepted principles of interpretation that if in, the same provision of a Statute two words are used, they necessarily connote two different meanings. The proviso makes it clear that if there be termination of service in terms of an agreement on a specified date, it would still be retrenchment. It is one matter that different consequences would follow in such an event, but it is all the same made clear that it would continue to be a case of retrenchment. If the definition given in Section 2 (oo) of the Act is read with the proviso referred to above, no room for doubt is left that the termination of service in terms of a contract of employment is also retrenchment. The scope of retrenchment came to be examined by the Supreme Court in AIR, Hariprasad v. A.D. Divelkar., 1957 AIR(SC) 121 S.K. Das, J. spoke for the Court thus : "What after all is the meaning of expression for any reason whatsoever? When a portion of the staff or labour force is discharged as surplusage in a running or continuing business, the termination of service which follows may be due to a variety of reasons; e. g., for economy, rationalisation in industry, installation of a new labour saving machinery, etc. The legislature in using the expression 'for any reason whatsoever says in effect: 'It does not matter why you are discharging the surplus; if the other requirements of the definition are fulfilled, then it is retrenchment'." 47. An Attempt was also made to argue that even if everything as submitted by the writ-applicants is accepted to be true, the case would fall within the ambit of Section 25-FFF and not Section-25F. The argument proceeds on the footing that since the Public Transport Service had to be closed as the Nagarpalika was sustaining huge financial loss, the case was one of closure of an undertaking governed by Section 25-FFF Clause (1) and the proviso appended to it. It may be recalled that the Public Transport Service was previously run by the Nagarpalika. The Nagarpalika took a decision to render such service to the people through a contractor. A private contractor with whom the Nagarpalika entered into an agreement started managing the Public Transport Service.
It may be recalled that the Public Transport Service was previously run by the Nagarpalika. The Nagarpalika took a decision to render such service to the people through a contractor. A private contractor with whom the Nagarpalika entered into an agreement started managing the Public Transport Service. Section 25-FFF Clause (1) and the proviso applies where an undertaking "is closed down", and as in the instant case, the undertaking merely changed the hands but was kept running. In such circumstances, it cannot be said that the case falls under Section 25-FFF Clause (1) or the proviso. In the same manner, the ownership of the three gardens and the common ground also remained with the Nagarpalika, but for the purpose of management, the same was handed over to a private trust. Even if, it is believed that the Public Transport Service was closed down by reason of financial difficulties, the case would not fall within Section 25-FFF. 48. A reading of Section 25-FFF would itself show that by virtue of the explanation to that section, "an undertaking which is closed down by reason merely of financial difficulties (including financial losses) or accumulation of undisposed stocks, shall not be deemed to have been closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to Sub-section (1) of Section 25-FFF which contingency alone will attract the proviso to Sub-section (1) of Section 25-FFF which limits the payments of compensation provided in Section 25-F(b) to 8 months. Once the proviso is not attracted, and if cannot be denied that it is not attracted because the company has been liquidated due to financial difficulties, then Section 25-F will apply. 49. This question is covered by the decision of the Supreme Court in the case of Workmen of Uttar Pradesh State Electricity Board and Another v. Upper Ganges Valley Electricity Supply Company and Others [1966 (1) LLJ 730 (SC)], wherein, in almost identical circumstances, it was held that there was no closing down of undertaking to attract the operation of Section 25-FFF(1) and the proviso. 50. I may quote the observations of the Supreme Court as under:- "Next is the question of the compensation which ought to have been awarded to him. The tribunal treats the matter as falling within the proviso to S. 25FFF (1).
50. I may quote the observations of the Supreme Court as under:- "Next is the question of the compensation which ought to have been awarded to him. The tribunal treats the matter as falling within the proviso to S. 25FFF (1). Sharma, on the other hand, claims under S.25F (1) that he is entitled to compensation equal to fifteen days' average pay for every completed year of service or any part thereof in excess of six months as if he was retrenched. We shall now consider which of these two provisions is applicable in the present case. Section 25F(b) reads: "25F. Conditions precedent to retrenchment of workmen.- 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 - (a) * * * (b) the workman 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; and ***" 25FFF(1) reads as follows: "25FFF. (1) Compensation to workmen in case of closing down of undertakings.- When an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of Section 25F, as if the workman had been retrenched : Provided that where the undertaking is closed down on account of unfavourable circumstances beyond the control of the employer, the compensation to be paid to the workman under clause (b) of Section 25F shall not exceed his average pay for three months." Both the sub-section and the proviso apply to the undertakings which close down. If Sharma had continued in service with the company and the undertaking had closed down, the proviso last quoted would undoubtedly have applied to his case. But the undertaking never closed down. It continued in the hands of the board. All that happened was that the company having unlawfully terminated the service of Sharma did not transfer him to the board as one of the employees in the undertaking and the board also did not accept him on its service rolls.
But the undertaking never closed down. It continued in the hands of the board. All that happened was that the company having unlawfully terminated the service of Sharma did not transfer him to the board as one of the employees in the undertaking and the board also did not accept him on its service rolls. The result was that Sharma stood retrenched on 5 May 1959 when the undertaking changed hands. He was so retrenched by the action of the company and his case, therefore, falls squarely within the rule indicated in Section 25F(b)." 51. Although the matter was being examined from another angle before the Supreme Court in the aforesaid reported decision, yet the aforesaid paragraph clearly justifies the conclusion which I propose to adopt in respect of the contention raised before me. 52. I am also not impressed by the submission canvassed on behalf of the Nagarpalika as regards the availability of the alternative remedy. The availability of an alternative remedy does not operate as a bar to challenge such termination by way of a writ-application under Article 226 of the Constitution of India. 53. In the case of UPSSC Ltd. v. R.S. Pandey, reported in 2005 (107) FLR 729, the apex Court has observed that "the Court, in extraordinary circumstances, may exercise the power if it comes to the conclusion that there has been a breach of principles of natural justice or procedure required for decision or has not been adopted. The apex Court expressed the following views:- "There are two well recognized exceptions to the doctrine of exhaustion of statutory remedies. First is when the proceedings are taken before the forum under a provision of law which is ultra virus. It is open to a party aggrieved thereby to move the High Court for quashing a proceedings on the ground that they are incompetent without a part being obliged to be wait until those proceedings run therein full course. Secondly, the doctrine has no application when the impugned order has been made in violation of the principles of natural justice. We may add that where the proceedings itself are and abuse of process of law the High Court in an appropriate case can entertain a writ petition.
Secondly, the doctrine has no application when the impugned order has been made in violation of the principles of natural justice. We may add that where the proceedings itself are and abuse of process of law the High Court in an appropriate case can entertain a writ petition. Where under a statute there is an allegation of infringement of fundamental rights or when on the undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess can be the grounds on which the writ petitions can be entertained. But normally the High Court should not entertain writ petitions unless it is shown that there is something more in a case, something going to the root of the jurisdiction of the officer, something which would show that it would be a case of palpable injustice to the writ petitioner to force him to adopt the remedies provided by the statute. It was noted by this Court in L. Hinday Narain v. I.T.O. Bareilly, that if the High Court had entertained a petition despite availability of alternative remedy and heard the parties on merits it would be ordinarily unjustifiable for the High Court to dismiss the same on the ground of non-exhaustion of statutory remedies, unless the High Court finds that factual disputes are involved and would not be desirable to deal with them in a writ petition." 54. Thus, I have no hesitation in reaching to the conclusion that the termination of the writ-applicants was in breach of the Section-25-F of the Industrial Disputes Act. 55. The above takes me to consider the next question as regards the final relief. According to Mr. Majmudar, his clients should be reinstated in service with back-wages. On the other hand, according to Mr. Rathod, even if the termination is held to be illegal, reinstatement is not automatic. According to Mr. Rathod, instead the workman may be given monetary compensation which would meet the ends of justice. 56. As discussed above, the reinstatement in service is out of question. I have already discussed the decision of the Supreme Court in the case of M/s. Maruti Udyog Ltd. (Supra). If the case in hand is believed to be the one of transfer of an undertaking or closure thereof, Section 25-H will have no application.
56. As discussed above, the reinstatement in service is out of question. I have already discussed the decision of the Supreme Court in the case of M/s. Maruti Udyog Ltd. (Supra). If the case in hand is believed to be the one of transfer of an undertaking or closure thereof, Section 25-H will have no application. Whether Section 25-F or Section 25-FF or Section 25-FFF applies in case of 'retrenchment simplicitor', where a person loses his job having become surplus is entitled to receive compensation. 57. So far as the issue of relief is concerned, let me look into the recent pronouncement of the Supreme Court in the case of BSNL v. Bhuramal, AIR 2014 SC 1188 . I may quote the following observations contained in paras-19 to 25:- "19. The only question that survives for consideration is as to whether the relief of reinstatement with full back wages was rightly granted by the CGIT. 20. The learned counsel for the appellant referred to two judgments wherein this Court granted compensation instead of reinstatement. In the case of BSNL v. Man Singh [ (2012) 1 SCC 558 ], this Court has held that when the termination is set aside because of violation of Section 25-F of the Industrial Disputes Act, it is not necessary that relief of reinstatement be also given as a matter of right. In the case of Incharge Officer & Anr. v. Shankar Shetty [ (2010) 9 SCC 126 ], it was held that those cases where the workman had worked on daily wage basis, and worked merely for a period of 240 days or 2- 3 years and where the termination had taken place many years ago, the recent trend was to grant compensation in lieu of reinstatement. In this judgment of Shankar Shetty (supra), this trend was reiterated by referring to various judgments, as is clear from the following discussion. "Should an order of reinstatement automatically follow in a case where the engagement of a daily wager has been brought to end in violation of Section 25-F of the Industrial Disputes Act, 1947 (for short "the ID Act")? The course of the decisions of this Court in recent years has been uniform on the above question. In Jagbir Singh v. Haryana State Agriculture Mktg.
The course of the decisions of this Court in recent years has been uniform on the above question. In Jagbir Singh v. Haryana State Agriculture Mktg. Board [ (2009) 15 SCC 327 ], delivering the judgment of this Court, one of us (R.M. Lodha, J.) noticed some of the recent decisions of this Court, namely, U.P. State Brassware Corpn. Ltd. V. Uday Narain Pandey [ (2006) 1 SCC 479 ], Uttaranchal Forest Development Corpn. V. M.C. Joshi [ (2007) 9 SCC 353 ], State of M.P. v. Lalit Kumar Verma [(2007) 1 SCC 575], M.P. Admn. v. Tribhuban [ (2007) 9 SCC 748 ], Sita Ram v. Moti Lal Nehru Farmers Training Institute [ (2008) 5 SCC 75 ], Jaipur Development Authority v. Ramsahai [ (2006) 11 SCC 684 ], GDA v. Ashok Kumar [ (2008) 4 SCC 261 ] and Mahboob Deepak v. Nagar Panchayat, Gajraula [ (2008) 1 SCC 575 ] and stated as follows: (Jagbir Singh case, SCC pp.330 & 335 paras 7 & 14) "It is true that the earlier view of this Court articulated in many decision reflected the legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in a long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention of the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice. It would be, thus, seen that by a catena of decisions in recent time, this Court has clearly laid down that an order of retrenchment passed in violation of Section 25-F although may be set aside but an award of reinstatement should not, however, automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wagers has not been found to be proper by this Court and instead compensation has been awarded.
The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wagers has not been found to be proper by this Court and instead compensation has been awarded. This Court has distinguished between a daily wager who does not hold a post and a permanent employee." Jagbir Singh has been applied very recently in Telegraph Deptt. V. Santosh Kumar Seal [ (2010) 6 SCC 773 ], wherein this Court stated: (SCC p.777, para 11) "In view of the aforesaid legal position and the fact that the workmen were engaged as daily wagers about 25 years back and they worked hardly for 2 or 3 years, relief of reinstatement and back wages to them cannot be said to be justified and instead monetary compensation would sub-serve the ends of justice." 21. In the case of Telecom District Manager v. Keshab Deb [ (2008) 8 SCC 402 ] the Court emphasized that automatic direction for reinstatement of the workman with full back wages is not contemplated. He was at best entitled to one months' pay in lieu of one month's notice and wages of 15 days of each completed year of service as envisaged under Section 25-F of the Industrial Disputes Act. He could not have been directed to be regularized in service or granted/given a temporary status. Such a scheme has been held to be unconstitutional by this Court in A. Umarani v. Registrar, Coop. Societies [ (2004) 7 SCC 112 ] and Secy., State of Karnataka v. Umadevi [ (2006) 4 SCC 1 ]. 22. It was further submitted by the learned counsel for the appellant that likewise, even when reinstatement was ordered, it does not automatically follow full back wages should be directed to be paid to the workman. He drew our attention of this Court in the case of Coal India Ltd. v. Ananta Saha [ (2011) 5 SCC 142 ] and Metropolitan Transport Corporation v. V. Venkatesan [ (2009) 9 SCC 601 ]. 23. It is clear from the reading of the aforesaid judgments that the ordinary principle of grant of reinstatement with full back wages, when the termination is found to be illegal is not applied mechanically in all cases.
23. It is clear from the reading of the aforesaid judgments that the ordinary principle of grant of reinstatement with full back wages, when the termination is found to be illegal is not applied mechanically in all cases. While that may be a position where services of a regular/permanent workman are terminated illegally and/or malafide and/or by way of victimization, unfair labour practice etc. However, when it comes to the case of termination of a daily wage worker and where the termination is found illegal because of procedural defect, namely in violation of Section 25-F of the Industrial Disputes Act, this Court is consistent in taking the view in such cases reinstatement with back wages is not automatic and instead the workman should be given monetary compensation which will meet the ends of justice. Rationale for shifting in this direction is obvious. 24. Reasons for denying the relief of reinstatement in such cases are obvious. It is trite law that when the termination is found to be illegal because of non-payment of retrenchment compensation and notice pay as mandatorily required under Section 25-F of the Industrial Disputes Act, even after reinstatement, it is always open to the management to terminate the services of that employee by paying him the retrenchment compensation. Since such a workman was working on daily wage basis and even after he is reinstated, he has no right to seek regularization (See: State of Karnataka v. Uma Devi, (2006) 4 SCC 1 ). Thus when he cannot claim regularization and he has no right to continue even as a daily wage worker, no useful purpose is going to be served in reinstating such a workman and he can be given monetary compensation by the Court itself inasmuch as if he is terminated again after reinstatement, he would receive monetary compensation only in the form of retrenchment compensation and notice pay. In such a situation, giving the relief of reinstatement, that too after a long gap, would not serve any purpose. 25. We would, however, like to add a caveat here. There may be cases where termination of a daily wage worker is found to be illegal on the ground it was resorted to as unfair labour practice or in violation of the principle of last come first go viz. while retrenching such a worker daily wage juniors to him were retained.
We would, however, like to add a caveat here. There may be cases where termination of a daily wage worker is found to be illegal on the ground it was resorted to as unfair labour practice or in violation of the principle of last come first go viz. while retrenching such a worker daily wage juniors to him were retained. There may also be a situation that persons junior to him wee regularized under some policy but the concerned workman terminated. In such circumstances, the terminated worker should not be denied reinstatement unless there are some other weighty reasons for adopting the course of grant of compensation instead of reinstatement. In such cases, reinstatement should be the rule and only in exceptional cases for the reasons stated to be in writing, such a relief can be denied." 58. While awarding the compensation, the host of factors, inter alia, the manner and method of appointment, nature of employment and length of service are relevant. 59. Having regard to the fact that the Bus-Conductors were all regular employees of the Nagarpalika and had put in more than 20 years of continuous service, they are entitled to receive Rs. 1,50,000/- (Rupees One Lac & Fifty Thousand) towards the compensation. So far as the other writ-applicants are concerned, although they were all ad hoc employees, yet were receiving the regular salary and were also treated as regular employees. They had also put in continuous service of more than 20 years, however, considering the fact that they were ad hoc employees, they should be paid Rs. 1,00,000/- (Rupees One Lac) each by way of compensation. 60. In the result, all the writ-applications succeed and are allowed in part. The impugned orders of termination from service are hereby quashed and set aside. However, instead of reinstatement in service, each of the writ-applicants shall be paid the requisite amount as determined above by way of compensation within a period of three months from the date of the receipt of the order. Rule is made absolute to the aforesaid extent. Direct service is permitted.