Rajasthan High Court - Jaipur
The New India Assurance Company Ltd. And ... vs Central Industrial Tribunal And Shri ... on 30 August, 1994
Equivalent citations: (1995)ILLJ1186RAJ, 1995(1)WLC13, 1994(2)WLN425
JUDGMENT R.S. Verma, J.
1. The facts giving rise to this D.B. Special Appeal lie in a narrow compass. Respondent No. 2, K.G. Thanvi, entered the service under the appellants as Junior Inspector on probation vide order dated January 10, 1979 which had come into effect on December 18, 1978. The initial period of probation was one year and it was liable to be extended for a further period of one year. If no confirmation order was passed on the expiry of the period of probation, the services were to stand terminated automatically.
2. The performance of the respondent-Inspector came to be reviewed during the period of probation and it was found that respondent failed to achieve requisite targets. Hence, in pursuance of the terms of employment the services of the respondent No. 2 were terminated vide order dated February 9, 1980 received by the respondent No. 2 on February 14, 1980.
3. It appears that the respondent No. 2 preferred a departmental appeal against termination of his services upon which his case was reviewed and he was taken back in service by an order dated April 23, 1980 and it was, inter-alia, ordered that he shall remain in service on a further extended period of probation with effect from the date he joined service namely, from May 5, 1980.
4. It appears that the services of respondent No. 2 were terminated again on the grounds that (i) he failed to pass the licenciate examination, which was a condition precedent for being confirmed and, (ii) his business performance was not upto mark. This was done after periodically apprising and fore-warning the respondent-inspector. This termination was effected by order dated September 30, 1981. Respondent No. 2 was duly paid notice pay of Rs. 500/- and bonus of Rs. 521/-.
5. Respondent No. 2 raised an industrial reference after a considerable delay. Due conciliation proceedings took place and duly failed and the following question was referred to the Central Industrial Disputes Tribunal, Jaipur for adjudication:
"Whether the action of the New India Assurance Company Limited, Jaipur in terminating services of Shri Krishan Gopal Thanvi, Junior Inspector w.e.f October 19, 1981 is justified? If not, to what relief the workman concerned is entitled?
6. Respondent-workman filed his statement of claim disputing the validity of the order terminating his services before the Tribunal. The employers (appellants) contested the claim by filing a proper reply. They inter alia relied upon the two grounds upon which termination was based and they urged that services of the workman-respondent were terminated since he failed to discharge his functions satisfactorily during the period of extended probation. The Tribunal did agree with the contentions of the employers that the workman had failed to achieve the prescribed targets and had also failed to pass the prescribed examination. But, it was of the view that workman had completed 240 days of service and hence Section 25F of the Industrial Disputes Act came into play and since there was non-compliance with the provisions of this section, the termination amounted to retrenchment and was bad in law for non-payment of retrenchment benefits payable under the said provision. The Tribunal, therefore, gave an award directing reinstatement of the workman in service. However, he was not awarded back wages w.e.f. October 19, 1981 to November 1988 on the ground that workman raised the industrial dispute with delay. The tribunal directed that workman shall be deemed to be in continuous service w.e.f. the date of impugned retrenchment and workman would be entitled to notional fixation and ancillary benefits, but for the salary for the aforesaid period.
7. Aggrieved, employers filed S.B. Civil Writ Petition No. 1688 of 1992 challenging the direction of reinstatement of the workman also on the ground that termination of the services of the workman did not amount to retrenchment within meaning of Section 2(oo)(bb) of the Industrial Disputes Act; any invalidity in termination order stood ceased by introduction of the said provision which came into force on August 18, 1984 i.e. much before the impugned award was passed. Reliance was placed upon a judgment of Kerala High Court in this regard rendered in Samson Jayasingh v. Malayalam Plantations Ltd. 1988 LLN 707. It was contended that in this view of the matter, the award deciding reinstatement of the respondent workman was bad.
8. Learned Single Judge, who heard the petitioner, was of the view that introduction of Clause 2(oo)(bb) in the Industrial Disputes Act was not retrospective and was prospective and hence this provision could not be pressed into service by the employers for upholding the validity of the impugned retrenchment order. Learned Single Judge, considered the ruling rendered by the Kerala High Court and did not feel persuaded to accept the ratio of the said decision. Learned Single Judge observed:-
"No doubt, the Kerala High Court's decision as has been cited by Shri Dalip Singh fully supports the arguments raised in this regard by him that the termination of the respondent workman should be treated to be effective from August 18, 1984 instead of September 30, 1981 but with all respects, I do not find myself to be in agreement with the view taken by the Kerala High Court in the aforesaid decision. The Kerala High Court, itself in the aforesaid case of Samson Jayasingh v. Malayalam Plantations Ltd. (supra) has noted in para 10 that had this sub-clause i.e. (bb) been there on the statute book at the relevant time, the employee's services would be liable to be terminated otherwise than by retrenchment, for admittedly he was appointed only on probation, subject to his appointment being terminated on his failure to satisfactorily complete the probation. But the insertion of the sub-clause by the amendment of August 18, 1984 was not with retrospective effect and was inserted to over-come the principle laid down by the Supreme Court in State Bank of India v. Sunderamony (1976-I-LLJ-478) and other cases to the effect that, even when a person was appointed only for a specific period or where the order of appointment specifically stated that at the end of a specific period his appointment was liable to be terminated, he was entitled to be retained in service until duly retrenched in terms of Section 25F and further that this principle was negatived, though prospectively, by the statutory amendment which came into force from August 18, 1994. Having noted as above, the Kerala High Court has taken the view that, although, the services of employee had been terminated for bonafide reasons by the management by an order which, as the law was then understood, was an invalid order, and, therefore, the employee was entitled to be treated as if he was notionally in service, that position could validly continue only until the Legislature finally clarified the law so as to negative the principle laid down by the Supreme Court. Accordingly, the order of termination, which until the elate of insertion of Sub-clause (bb) to Section 2(oo) remained ineffective, revived itself in full force, although prospectively, as from August 18, 1989. In my opinion, this reason given by the Kerala High Court runs counter to the basic tenets of the interpretation of statute and amounts to read the amendment dated August 18, 1984 as a post validating provision or an amendment having the effect of validating the orders which were otherwise invalid till the amendment came into force. Such could never be and was not the intention of the Legislature. Had it been so, nothing prevented the Legislature from giving retrospective effect to this amendment. If an order is invalid at the time when it is passed, it cannot attain the validity on account of subsequent amendment unless that amendment is given retrospective effect or unless a piece of legislation is enacted in the nature of validating Act and to have the effect of validation. Besides this, the view taken by the Kerala High Court also runs counter to the basic principle that the validity of an order is to be examined with reference to the law which was existing on the statute book at the time when the order was passed and the validity of such order cannot be examined with reference to a subsequent amendment. If the view taken by the Kerala High Court is taken to be the correct view, it would result in all the invalid orders of retrenchment of this nature passed prior to August 18, 1984 to attain validity from August 18, 1984. It would have been a different matter altogether, had the petitioner company passed another order of termination against the respondent workman on or after August 18, 1984 but on the basis of the prospective amendment dated August 18, 1984 the validity cannot be injected into the invalid orders passed prior to August 18, 1984. Strictly speaking, in the face of the provisions of Section 25F if an order is passed without following the conditions precedent and prerequisite under Section 25F of the Industrial Disputes Act, it is an order which is ab initio null and void and for all intent and purposes, such orders are to be taken as non-est orders and, no order which is null and void, or non-est order can be made to attain validity on the strength of a prospective amendment, For all these reasons, I respectfully disagree with the view taken by the Kerala High Court and the argument raised by Shri Dalip Singh on that basis is hereby rejected."
9. Now, in this special appeal, the employers assail the correctness of the view proposed by the learned Single Judge of this Court and it is contended that once Clause (bb) of Section 2(oo) had been inserted in the Industrial Disputes Act, the alleged invalidity in the retrenchment order stood cured and on the date the tribunal gave the impugned award, reinstatement could not have been ordered in view of the amended provisions. Reliance is placed upon the Kerala decision (supra).
10. On behalf of the workman, the appeal is stoutly opposed and it is contended that an order which was void ab initio and non-est cannot be rejuvenated by a subsequent amendment in law, which was never intended to be retrospective.
11. We have carefully considered the rival contentions and have given our earnest consideration to them. Admittedly, impugned termination order was passed much before the amendment took place in law by virtue of insertion of Clauses (oo) & (bb) in Section 2 of the Industrial Disputes Act. This provision reads as follows:
"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 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."
This amendment admittedly came into force on August 18, 1984 i.e. long after the impugned order of termination of service of workman was passed, but before the impugned award was passed by the Tribunal.
12. The contention of the learned counsel for the appellant is that the order of termination of the workman was passed bona fide because the workman did not satisfactorily work during the period of probation. This is true that benefits admissible under Section 25F of the Industrial Disputes Act were not paid but on that ground, reinstatement should not have been ordered. The Tribunal as also the learned Single Judge failed to appreciate this aspect that the termination was done in pursuance of the terms of employment in a most bona fide manner. On the date the impugned award was passed, the law stood clarified that such a termination did not amount to retrenchment. The amended provisions were only clarificatory in nature and hence there was no question of applying these provisions retrospectively. He places reliance in this regard upon the Kerala decision (supra).
13. On behalf of the respondent-workman, it is urged that the contention of the appellants is fallacious and wrong. They indirectly want the amended provisions to be construed retrospectively, when they are not so. Our own High Court in Principal, Mayo College, Ajmer v. Labour Court and another (1988-II-LLJ-351), has categorically held that the said amended provision is only prospective and not retrospective. This court is bound by the said decision. Moreover, Bombay High Court has also taken a similar view in S.S. Sambra v. Chief Regional Manager, State Bank of India, Nagpur and Anr. (1992-I-LLJ 684). Gujarat High Court has also taken a similar view in ). The Kerala decision does not lay down a good precedent. Hence we should dismiss the appeal.
14. We have carefully gone through the relevant provisions quoted above and the rulings cited at the Bar and have also taken into consideration the reasoning adduced by the learned Single Judge in not following the Kerala decision. In our opinion, the Kerala decision has not correctly appreciated the situation that an order passed in violation of Section 25F of the Industrial Disputes Act, even if passed bona fide, is yet wholly illegal and non-est, A prospective change in law would not go to rejuvenate an order which is non-est and void ab initio. Situation would be different if the original order was only irregular or improper and not non- est. An order, which is void or non-est really does not subsist in the eyes of law and has no existence, as such. The Tribunal truly speaking, does not set aside such an order and the order of the Tribunal can at best be considered to be declaratory in nature.
15. An order, which has no existence in the eyes of law cannot be revived unless the amending statute so ordained, either expressly or by necessary implication. We do not find anything in the amended provision which may go to show that it meant to revive void and non-est orders of termination. Neither the language of the law nor its spirit implies such a situation.
16. Even the learned Single Judge of the Kerala High Court in Samson Jayasingh v. Malayalam Plantations (supra) recognized this position when he stated-
".... the insertion of the sub-clause by the amendment of August 18, 1984 was not with retrospective effect and it was inserted to over-come the principle laid down by the Supreme Court in State Bank of India v. Sunderamony (vide supra), and other cases to the effect that, even when a person was appointed only for a specific period or where the order of appointment specifically stated that at the end of a specific period his appointment was liable to be terminated, he was entitled to be retained in service until duly retrenched in terms of Section 25F. That principle was negatived, though prospectively, by the statutory amendment which came into force from August 18, 1984."
(emphasis ours)
17. However, by a strange quirk of the logic, the learned Judge said, -
".. as the law was then understood, was an invalid order, and, therefore, the employee was, entitled to be treated as if he was notion-ally in service, that position could validly continue only until the Legislative finally clarified the law so as to negative the principle laid down by the Supreme Court."
We are surprised to find as to what was the basis on which this observation could have been made. We, therefore, in entire agreement with the learned Single Judge, are of the view that the Kerala decision (supra) does not lay down correct law.
18. This very matter came up before a Division Bench of this Court in Principal, Mayo College v. Labour Court & Bkanwar Singh (supra), wherein this Court took a definite view that Clause (bb) added to Section 2(oo) by the Act 49 of 1984 was not retrospective and was prospective. In this case, relevant law dealing with principle of interpretation qua 'retrospectivity' of a statute was surveyed and thereafter the aforesaid conclusion was categorically expressed. It is a decision of co-ordinate Bench and is binding on us and we see no good reason to differ from the view taken in the aforesaid decision of this Court.
19. A Division Bench of Bombay High Court in S.S. Sambre v. Chief Regional Manager, SBI, Nagpur and Anr. (supra), took the same view after surveying the case law on the question.
20. A Division Bench of Gujarat High Court in Bharat Heavy Electricals Ltd. Baroda v. R.V. Krishna Rao (supra) also took a similar view and held that the provisions of Clause (bb) of Section 2(oo) are not retrospective in nature and it is prospective in nature and will apply to those terminations which take place after the provision was brought on the statute book.
21. Thus, there is consistent authority for the proposition that the provisions of Section 2(oo)(bb) of the Industrial Disputes Act are prospective and are not retrospective
22. Learned counsel for the appellant made strenuous effort to persuade us to unsettle the settled proposition of law but, in our opinion, this cannot be done.
23. On a consideration of the entire facts and circumstances of the case, we find that the judgment of the learned Single Judge does not suffer from any illegality or infirmity whatsoever and has taken a very correct view of the matter. We, therefore, do not find any merit in this special appeal. Consequently, we dismiss the special appeal. In the facts and circumstances of the case, the parties are left to bear their own costs.