Patna High Court
Rajendra Prasad Sah And Anil Kumar Ojha vs State Of Bihar And Ors. on 19 September, 2000
Equivalent citations: (2000)IIILLJ222PAT
Author: Aftab Alam
Bench: Aftab Alam
JUDGMENT Aftab Alam, J.
1. These two cases came to be heard before a Bench of three Judges on a reference made by me. Earlier while hearing these cases, sitting singly, I found it difficult to reconcile the views taken in two Division Bench decisions of this Court, one cited in support of the case of the petitioners and the other relied upon by the respondents. I accordingly, made an order of reference indicating the points of deviation in the two decisions.
2. The two petitioners, one in each of these two writ petitions were removed from service of the Bihar Co-operative Marketing Union, Ltd. (the Biscomaun, for short) by orders passed by its Administrator on the ground that their appointment was irregular and illegal. At the time of their removal they were given one month's wages in lieu of one month's notice (evidently to satisfy the requirements of the Bihar Shops and Establishments Act) but admittedly no show cause notice or an opportunity of hearing was given to the petitioners before passing the order of their removal from service.
3. The petitioners filed, separate writ petitions submitting that their removal from service, without giving them any notice to show cause or an opportunity of hearing was violative of the principles of natural justice. In support of the submission reliance was placed on an unreported Division Bench decision of this Court in C.W.J.C. No. 8642 of 1988, Sri Biresh Tripathi v. State of Bihar and Ors.. In that case also an order of removal from service passed by the Administrator, Biscomaun on the same ground and under similar circumstances came under challenge. A Bench of this Court by judgment and order, dated December 15, 1989, allowed the application holding that the order of removal from service having been passed in violation of principles of natural justice was unsustainable in law.
4. From the side of the Biscomaun however, the impugned orders of, removal were sought to be defended by relying upon another Division Bench decision of this Court, in Bihar State Co. operative Marketing Union Ltd., Through its Administrator v. State of Bihar and Ors. 1993-I-LLJ-1177 (Pat-Dc). This was also a case of removal of an employee of the Biscomaun from service but it seems that the earlier (unreported) decision of the Court in Biresh Tripathi was brought to the notice of the Bench hearing this case. In the latter reported case, a similar order of removal from service was first challenged by the employee before the Authority under the Shops and Establishments, Act. The authority held that the order passed by the administrator was arbitrary because the concerned employee was not given any opportunity of hearing in the matter before the order of his removal was passed. It also found and held that the concerned employee was not given one month's pay in lieu of notice and, therefore, the order of removal was also bad for non-compliance with the mandatory requirement of Section 26 of the Shops Act.
5. The order of the authority was challenged before this Court in a writ petition filed on behalf of the Biscomaun. In the reported decision it was held by a Bench of this Court that removal from service on the appointment was irregular and illegal was covered by the expression "for a reasonable cause" within the meaning of Section 26(1) of the Act and it, therefore, did not attract the principles of natural justice and the action of the Administrator in passing the order of removal from service without giving the concerned employee an opportunity of being heard in the matter could not; therefore be said to be unreasonable or arbitrary. In that case, however, the authority under the Shops Act had also field that the order of removal from service was made without making payment of one month's wages in lieu of one month's notice and, therefore, the termination of employment was further bad for non-compliance with the requirement of Section 26(1) of the Act. The Division Bench of this Court did not disturb that finding but remitted the matter to the authority to reconsider whether the relief of monetary compensation in lieu of reinstatement in service, as earlier directed by it might not be a more appropriate relief having regard to the fact that the termination of employment was for a reasonable cause being on the ground that the initial appointment was irregular and illegal.
6. Thus, the crucial difference between the two Division Bench decisions, one unreported, in Biresh Tripathi and the other in Biscomaun reported in Bihar State Co-operative Marketing Union (supra) is that in Biresh Tripathi it was held that failure to observe the principles of natural justice while removing an employee on the ground that his appointment was irregular and illegal would be a fatal lacuna rendering the action invalid and unsustainable in the eyes of law whereas in Biscomaun (supra), it was held that removal from service on the ground of the appointment being irregular and illegal was covered by the expression "for a reasonable cause" within the meaning of Section 6 of the Shops Act and in such a case, therefore, the principles of natural justice had no application, And in case the concerned employee was given a month's notice or a month's wages in lieu of the notice, he could no longer question his removal from service on the ground of not being given a notice to show cause or an opportunity of hearing the matter.
7. At the first glance the two decisions may not appear comparable; one (in Biresh Tripathi) was given on a petition filed under Articles 226 and 227 of the Constitution directly before this Court challenging the order of removal from service while the other (in Biscomaun) came in a case arising from a proceeding under Section 26 of the Shops Act. It may further be said that the Division Bench in the case of Biscomaun examined and interpreted the import and scope of Section 26 of the Shops Act, issues that did not arise in Biresh Tripathi and that do not arise in these two cases, either. This is quite true but the irreconcilable conflict between the two lies in the completely different outcome flowing from the two decisions. A person starting from the same set of facts will get completely different results on following one or the other of the two decisions. For illustrations, if a removal order of this kind was directly challenged before this Court in a petition under Arts. 226 and 227 of the Constitution, a learned single Judge before whom such a petition would be normally placed (or even a Division Bench) would be obliged to up hold the challenge and set aside the order of removal following the Division Bench decision in Biresh Tripathi. On the other hand, the same order was taken before the authority in a complaint under Section 26(2) of the Shops Act the authority would be bound to dismiss the complaint following the decision in the earlier case of Biscomaun (supra). Needless to say that this is highly an anamolous and undesirable situation where the same case between the same parties is bound to be decided differently before two different Courts. To say the same thing differently, if an employee dismissed from the service of the Biscomaun fails to get any relief before the Authority under the Shops Act which is also a Court of fact, there is no reason why he should get any relief on the same facts before a writ Court and on the other hand when the employee removed from service is bound to get relief before a writ Court, there is no conceivable reason why he should not get the same relief before the Authority under the Shops Act. It follows, therefore, that either the case of Biresh Tripathi (supra), or the earlier case of Biscomaun was not correctly decided and there is, therefore, a need to review and re-examine the correctness of the two decisions.
8. Before proceeding any further it would be appropriate to take a brief look at the facts of the two cases.
9. According to Rajendra Prasad Sah, the petitioner in C.W.J.C. No. 2188 of 1989, he was engaged to work as a packer on daily-wages by the Chief Engineer of Biscomaun and on that basis he worked from April 7, 1984 to April 25, 1985. He was then appointed as a packer in the Biscomaun Bakery at Phulwari by letter No. AR 2190, dated June 26, 1986 (Annexure 1) issued by the advisor.
He joined the work at the bakery on the same day. Later, by the order of the Managing Director his service was regularised with effect from May 25, 1987 by the Special Officer (Administration) by his Memo No, B-3894, dated June 1, 1987 (Annexure 2). Pursuantto the aforesaid memo issued by Special Officer (Administration) his joining report on the post of packer was accepted by the order issued by the Special Officer (Administration) under his Memo No. M/1461 dated October 7, 1987 (Annexure 3). His monthly salary was fixed by memo, dated October 8, 1987 (Annexure 4), Later, on July 31, 1988, the Managing Committee of Biscomaun was superseded by State Government and an Administrator was appointed with all the powers of the Board of Directors. The Administrator by his order, dated April 3, 1989 (Annexure 5) terminated the petitioner's employment with immediate effect on the ground that his appointment was irregular and illegal. He was given one month's wages at the time of termination of his employment by a bearer's cheque, dated April 27, 1989 (Annexure 6).
10. No counter-affidavit has been filed in this case and it is not denied that the petitioner was not given any notice to show cause or an opportunity of hearing in the matter before passing the order removing him from service.
11. Anil Kumar Ojha, the petitioner in C.W.J.C. No. 7507 of 1989, was appointed as an Assistant by an order issued by the Managing Director under his Memo No. 1619-AR, dated June 11, 1987 (Annexure 2). Pursuant to his appointment he gave his joining report on July 3, 1987 (Annexures 3 and 4) after the supersession of the Managing Committee, however, he too was removed from service by an order passed by the Administrator under his Memo No. M/8066, dated April 5, 1989 (Annexure 1). The termination of employment was with immediate effect and this petitioner was also given one month's wages in lieu of one month's notice at the time of his removal from service. But no show-cause notice or an opportunity of hearing was given to this petitioner either.
12. At this stage, it is very important to bear in mind that the Biscomaun itself underwent a very basic change in its legal status. As its name suggests, it is a co-operative society registered under the Bihar Co-operative Societies Act, 1935 and its management used to be vested in a Managing Committee, as provided under Section 14 of the Co-operative Societies Act. On July 31, 1988 its Managing Committee was superseded under Section 41 of the Act and an Administrator, was appointed in its place to carry on the business of the Society. Before the supersession of the Managing Committee and appointment of an Administrator in its place, the Biscomaun was he to be neither an authority nor an instrumentality or agency of the State. It followed, therefore, that it was not amenable to the writ jurisdiction of this Court. (See Harendra Narain Banker v. State of Bihar and Ors. 1985 P.LJ.R. 1078).
13. However, in Nand Kishore Raut v. State of Bihar 1992-I-LLJ-610 (Pat-FB), a Bench of this Court considered the legal position after the Managing Committee of a Co-operative Society was superseded and a Special Officer was appointed in its place. It took the view that the Special Officer, appointed to manage the affairs of the society, must be held to be an authority within the meaning of Article 12 of the Constitution who would be amenable to the writ jurisdiction of this Court.
14. This position has been consistently followed by this Court in the case of Biscomaun as well, that is to say, before the supersession of its managing committee on July 30, 1988, it was a co-operative society not being an authority or an instrumentality or agency of the State and was, therefore, not amenable to the writ jurisdiction of this Court but after July 31, 1988, the Administrator appointed in place of the Managing Committee has been held to be an authority within the meaning of Article 12 of the Constitution and his actions are therefore, subject to judicial review by this Court.
15. Another important fact to recall here is that the appointments of two petitioners were made prior to July 31, 1988 when he biscomaun was not an authority or an instrumentality or agency of the State. But the orders of their removal from service were passed by the Administrator who has been consistently held to be an authority within the meaning of Article 12 of the Constitution and whose actions are, therefore, amenable to the writ jurisdiction of this Court.
16. This distinction was sharply brought into focus in the decision in Biresh Tripathi when considering the alleged invalidity of the appointment it was observed as follows:
"A Bench of this Court has taken notice of the law on the subject and accordingly decided vide its judgment, dated April 18, 1989, in C.W.J.C. No. 2076 of 1989 that from the date the management of the Bihar State Co-operative Marketing Union Ltd., was taken over by the State Government and was put in charge of the Administrator appointed by it, it acquired the character of a statutory authority or an authority amenable to the writ jurisdiction of this Court under Article 226 of the Constitution of India and that so long its management had not been taken over by the State and put under the Administrator, it was a society constituted in accordance with the Bihar and Orissa Co-operative Societies Act and the rules framed there under and governed by its own bye-laws which had no force of statute. In other words in accordance with the judgment of this Court in the aforementioned case, of the petitioner had been appointed before the management of the society had been taken over by the State Government conditions of service were contractual in nature and merely because some bye-laws or rules which had no statutory force were violated, it cannot be said that there was any breach of a statute or a law which rendered appointment of the petitioner illegal or invalid. If however the petitioner was appointed after the management had been taken over by the State and put in charge of the administrator even if there were no Statutory Rules in existence and only contractual obligation existed between the administrator on the one hand and the petitioner on the other hand, yet the rules enshrined in common law, principles of natural justice read with Articles 14 and 16 of the Constitution of India applied. Validity or otherwise of the appointment of the petitioner, thus, could be tested with reference to violations, if any of the guarantees of Articles 14 and 16 of the Constitution of India or such common law principles which are read to be present in these Articles of the Constitution of India."
17. Then the decision proceeded to consider the submissions made on behalf of the Biscomaun that there were serious irregularities in picking up the removed employee from nowhere and appointing him as a Marketing Officer whereas other qualified persons were ignored and that no norms were followed in appointing the removed employee which ordinarily ought to have been followed; and that even if there was any violation of the principles of natural justice in passing the order of removal from service this Court should decline to exercise its extraordinary jurisdiction because the appointment of the removed employee was bad in law. The Division Bench repelled the submissions relying upon the Supreme Court decisions in:
(i) Dr. Bool Chand v. Chancellor, Kurukshetra University AIR 1968 SC 292 : 1968-II-LLJ-135,
(ii) State of Orissa v. Dr. (Miss) Binapani Dei AIR 1967 SC 1269 : 1967-II-LLJ-266,
(iii) Chairman, Board of Mining Examination and Chief Inspector of Mines and Anr. v. Ramjee AIR 1977 SC 965 : 1977 (2) SCC 256;
(iv) Shamisher Singh v. State of Punjab and Anr. AIR 1974 SC 2192 : 1974 (2) SCC 831 : 1974-II-LLJ-465, and a few decisions of this Court. At the end it was observed as follows:
"True, respondents have brought on the record facts showing certain irregularities by the erstwhile (sic) management of the Society. Whether these were enough to defeat or nullify the contract of service or not is a matter of dispute. Whether the petitioner was appointed as claimed by him in January 1987 or in April 1987, as shown, in the order of removal from service, are facts which cannot be conclusively determined in any summary manner. While it may be true, that there has been something wrong in the background of the petitioner's appointment, unless opportunity is given to the petitioner to show cause he may continue complaining that the respondents manipulated facts in a manner that was devoid of truth which according to him is that he had been regularly and validly appointed. It is also not possible to accept that by calling the appointment irregular and illegal, the respondents have not attached any stigma to the petitioner. Termination of service without any notice has undoubtedly visited the petitioner with civil: consequence. It is not a termination simplicitor. Stigma is well pronounced in the words - 'The appointment of Sri Biresh Tripathi as Development Officer (Marketing) vide memo No. MD-G/235, dated April 25, 1987, is illegal and irregular."'
18. The Bench hearing the case in The Biscomaun (supra), was also not unconscious of the change in the legal status of Biscomaun pursuant to the appointment of the administrator on July 31, 1988. It accordingly rejected the submission that the appointment of the removed employee was made in contravention of Articles 14 and 16 of the constitution. It, however, held that the appointment was illegal, being in breach of the provisions of the Staff Regulations of Biscomaun laying down the procedure for appointment.
19. From a perusal of the judgment in Biscomaun it appears that the core of the decision is contained in Paras. 7 and 8 and the decision is founded on three premises which can be stated as follows:
(i) The appointment of the removed employee was illegal because it was made in breach of the provisions of Staff Regulations of the Biscomaun, laying down the procedure for appointment.
(ii) The removal from service on the ground that the appointment was illegal and invalid was "for a reasonable, cause" within the meaning of Section 26(1) of the Shops Act.
(iii) The termination of appointment being for a reasonable cause would not attract the principles of natural justice and it would be, therefore, open to the employer to terminate the employment without giving the employee a notice to show cause or an opportunity of hearing in the matter.
20. So far as premise No. (ii) is concerned, I find myself in agreement with the view taken by the decision in Biscomaun. However, I would only wish to add that this question would arise only in case of establishments in which appointments are governed by Statutory Rules but in case of the very large number of private shops and establishments which are also covered by the Shops Act this question may never arise.
21. In respect of premises (i) and (iii) I respectfully feel that they would bear further scrutiny.
22. Premise (i) relates to the question of invalidity of the appointment and on this issue the decisions in Sri Biresh Tripathi and in Biscomaun have taken opposite views. In Biresh Tripathi it was observed as follows:
"...If the petitioner had been appointed before the management of the society had been taken over by the State Government conditions of service were contractual in nature and merely because some bye-laws or rules which had no statutory force were violated, it cannot be said that there was any breach of a statute or a law which rendered appointment of the petitioner illegal or invalid."
23. In The Biscomaun, on the other hand, the appointment was held to be invalid being in breach of the relevant provisions of the Staff Regulations. I feel that much can be said in favour of the view taken in Biresh Tripathi. It may be noted that in The Biscomaun, though it was held that the appointment was illegal for being in breach of the provisions of the Staff Regulations, there is no consideration whether the Staff Regulations were statutory in nature. The question of illegality or invalidity of the appointment would arise only in case the appointment was made in breach of some rules or regulations having statutory force. Nothing-was shown to us to indicate that the appointments were made in breach of any Statutory Rules or regulations.
24. The question of illegality of the appointment can also be examined in a different way. If the appointments were illegal, then there must be some remedy in law for correcting the illegality. A question would, therefore, arise that remedy would be available for nullifying the appointment of the petitioners. Any aggrieved person, for instance some other aspirant for appointment in Biscomaun whose case was overlooked could not have approached this Court in a writ petition as the Biscomaun was then not amenable to the writ jurisdiction of this Court.
Sub-section (2) of Section 66-B of the Co-operative Societies Act also came much later in the year, 1989. No other legal proceeding or forum was pointed out to us before which an action could be instituted at the instance of a third party for having the appointment of the petitioners declared as illegal and invalid and for a direction for his removal from service.
25. For the foregoing reasons I feel that the finding recorded in the earlier case of Biscomaun that the appointments were illegal being in breach of the regulations is not free from doubt.
26. The real problem, however, arises in connection with premise No. 3 according to which termination of employment for a reasonable cause would not attract the principles of natural justice. The decision in Biscomaun takes this position solely with reference to the proviso to Section 26(1) of the Shops Act. According to the Proviso one month's notice or one month's wages in lieu of notice would not be necessary where the services of an employee are dispensed with on a charge of misconduct, supported by satisfactory evidence recorded at an enquiry held for the purpose. The decision in the Biscomaun, therefore, observed as follows:
"The action of the Administrator, therefore must be tested for its fairness and reasonableness by reference to the provisions of Section 26(1) of the Act which are applicable to the facts of the case. There is no requirement that the concerned employee must be afforded an opportunity of being heard before an order of termination is passed, except in a case were his services are dispensed with on a charge of misconduct. It would, therefore, not be fair to import an additional condition not envisaged by the Act, and insist that the rule of audi alteram partem will also apply to a case where the employer is not 'State' and the termination of employment is sought to be justified for a reasonable cause, on the ground of the appointment being contrary to law and the rules, and not on the ground of misconduct. 1990 (4) S.C.C. 35. Reliance placed by the authority upon the judgment reported in AIR 1991 S.C. 309 is misplaced, because that was a case where the employer was the State of Bihar and their Lordships were not considering a case of termination of employment by a society which was not 'State' and whose actions had to be justified in the light of the provisions of a statute, such as the Bihar Shops and Establishments Act, which permits termination of employment for a reasonable cause in cases where the termination is not on the ground of misconduct. The statute requires that the reasonable cause must be established before the prescribed authority, and additionally provides for grant of monetary compensation in appropriate cases. It cannot be lost sight of that though the actions of the Administrator are amenable to writ jurisdiction, he all the same exercises powers on behalf of Biscomaun, which is not 'State' as held by the Court. I have, therefore, no doubt that the services of respondent 3 were terminated for a reasonable cause, and the action of the Administrator in doing so was neither unreasonable nor unfair."
27. From the passage quoted above, it is evident that here the decision lost sight of the fact that after the supersession of the Managing Committee on July 31, 1988 in a series of decision of this Court, the Administrator was consistently held to be an authority within the meaning of Article 12 of the Constitution and his action was, therefore, to be tested as the actions of such an authority. The reference to the proviso to Section 26(1) of the Act, for excluding the application of the principles of natural justice to a case of termination of employment for a reasonable cause also does not appear to me to be wholly convincing.
28. At this stage, it will be necessary to take a look at Section 26 of the Shops Act. The provisions of the section in so far as relevant for the present are reproduced below:
"Notice of the dismissal or discharge.- (1) No employer shall dismiss or discharge or otherwise terminate the employment of any employee who has been in his employment continuously for a period of not less than six months; except for a reasonable cause and after giving such employee atleast one month's notice or one month's wages in lieu of such notice.
Provided that such notice shall not be necessary where the services of such employee are dispensed with on a charge of such misconduct as may be prescribed by the State Government, supported by satisfactory evidence recorded at an enquiry held for the purpose."
29. On a plain reading of Section 26(1) it appears that the employment of any employee may be terminated for a reasonable cause after giving him atleast one month's notice or one month's wages in lieu of such notice. The proviso stipulates that no notice or notice pay is required to be given if the employee is removed from service on a charge of misconduct but in that event the charge must be established by leading satisfactory evidence in an enquiry held for the purpose. The express requirement of holding an enquiry for proving the charge, being the basis of the dismissal of the employee has been taken to imply that there is no need for the observance of even the basics of natural justice in case the removal from service was for a reasonable cause as provided under Section 26(1). With respect I am unable to agree. It is true that the exclusion of natural justice may be by necessary implication but the simple fact that the statute classifies different situations and while, in some cases, it makes it obligatory to give a hearing to the party to be affected by the proposed order, but in some other specified circumstances no such provision is expressly made, may not always lead to the conclusion that the legislature intended to exclude the application of natural justice.
30. In Union of India v. J.N. Sinha AIR 1971 SC 40 : 1970 (2) SCC 458 : 1970-II-LLJ-284, it was observed as follows:
"It is true that if a statutory provision can be read consistently with the principles of natural justice, the Courts should do so because it must be presumed that the legislatures and the statutory authorities intend to act in accordance with the principles of natural justice."
31. In another Supreme Court decision in S.L. Kapoor v. Jagmohan AIR 1981 SC 136 : 1980 (4) SCC 379, this question was considered in a more focussed manner and in Para. 10 of the judgment it was observed as follows:
"One of the submissions of the learned Attorney-General was that when the question was one of disqualification of an individual member, Section 16 of the Punjab Municipal Act expressly provided for an opportunity being given to the member concerned whereas Section 238(1) did not provide for such an opportunity, so, by necessary implication, it must be considered that the principles of audi alteram partem was excluded. We are unable to agree with the submission of the learned Attorney-General. It is not always a necessary inference that if opportunity is expressly provided in one provision and not so provided in another opportunity is to be considered as excluded from that other" provision. It may be a weighty consideration to be taken into account but the weightier consideration is whether the administrative action entails civil consequences. This was also the view taken in Mohinder Singh Gill v. Chief Election Commissioner New Delhi AIR 1978 S.C. 851, where it was observed:
'We have been told that wherever the Parliament had intended a hearing it has said so in the Act and the rules and inferentially where it is not specified, it is otiose. There is no such sequitur. The silence of a statute has no exclusionary effect except where it flows from necessary implication. Article 324 vests a wide power and where some direct consequence on candidates emanates from its exercise we must read this functional obligation.'"
32. The legal position is, thus, clear that the mere omission to mention natural justice in Section 26(1) would not necessarily have the implication of exclusion of those principles.
33. Now it may be considered that the expression "for a reasonable cause" is a very wide expression which would take into its sweep a large number of eventualities. The termination of employment may take place in a situation, and for a reasonable cause, in which the concerned employee does not come into picture e.g., where the employer is closing down the business, or reducing it in extent for bona fide reasons. On the other hand, there may be situations where termination of employment though for a reasonable cause and not due to any misconduct committed by the employee may still be on a ground having a direct connection with the concerned employee, e.g. a case where termination of employment is for the reason that the concerned employee, on account of ill heath, or old age, is no longer fit to perform his duties or that, as in the present case, the appointment itself was illegal and invalid. The last ground in fact would not only visit the concerned employee with civil consequences but depending upon the nature of irregularity alleged might also cast a stigma on him.
34. I see no reason for the exclusion of the principles of natural justice in cases where the termination of employment though for a reasonable cause is on a ground directly concerning the employee and in my considered view in such cases it would be necessary to observe the principles of natural justice even for termination of employment under Section 26(1) of the Act. It is true in such cases a full dressed departmental enquiry as envisaged for proving a charge of misconduct may not be required but the basics of natural justice, that is, giving a show-cause notice and, in appropriate cases, an opportunity of hearing must be held to be necessary and the failure to comply with the same would render the action invalid.
35. With utmost respect, therefore, I venture to hold that the decision in The Biscomaun is not correct to the extent it holds that the principles of natural justice are completely divorced from the provisions of Section 26(1) of the Shops Act and no show-cause notice or opportunity of hearing was required to be given as long as termination of employment was for a reasonable cause.
36. The view taken by me would also reconcile with the earlier decision in Biresh Tripathi.
37. On the basis of the discussions made above, it must be held that the orders of removal of the two petitioners were bad and in law as the orders were passed in violation of the principles of natural justice. The orders of their removal from service (at Annexure 5 in CWJC No. 2188 of 1990 and at Annexure 1 in CWJC No. 7507 of 1989) are accordingly set aside and the two petitioners are directed to be reinstated in service.
38. As regards payment of back wages, I feel that it would be unjust to saddle the employer with full back wages as the employer was not responsible in any manner for the long delay in the disposal of these two cases before this Court. It is accordingly directed that the two petitioners will be entitled to 25 per cent of their back wages at the rate of the last pay drawn by each of them. Their current salary must be paid along with the other employees and the back wages may be paid to them within six months from the date of receipt/production of a copy of this order.
39. In the result, these two writ petitions are allowed but with no order as to costs.
S.N. Jha, J.
40. I agree with the judgment pronounced by Brother AFTAB ALAM.
Radha Mohan Prasad, J.
I had the privilege of going through the judgment of Brother ALAM, J. and I agree that the writ applications are maintainable against the respondent - Biscomaun and also with the operative part of the judgment, whereby it has been held that the orders of removal of the two petitioners were bad and unsustainable in law as those orders were passed in violation of the principles of natural justice and, accordingly, they have been set aside and the two petitioners have been directed to be reinstated in service with 25 per cent of their back wages at the rate of the last pay drawn by each of them to be paid within six months. However, I wish to give my own reasons.
41. These writ petitions have been referred to the Full Bench on account of crucial difference between two Division Bench decisions as noticed by Brother ALAM, J., in Para. 6 of this judgment, and depend upon the scope and interpretation of Section 26 of the Bihar Shops and Establishments Act, 1953 (hereinafter referred to as the Act). The preamble of our Constitution shows that our country is a sovereign socialist secular democratic Republic to secure to all its citizens justice, social, economic and political; liberty of thought, expression, belief, faith and worship; equality of status and of opportunity ; and to promote among them all fraternity assuring the dignity of the individual and the [unity and integrity of the Nation]. Directive Principles enshrined in Part IV the Constitution made it obligatory on the part of the State to secure a social order for the promotion of welfare of the people and to secure that the citizen, men and women equally, have the right to an adequate means of livelihood and by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions to work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities which, in my opinion, obviously includes security in the matter of employment and in that background, the Bihar Legislature enacted the Act to provide for regulation of condition and work and employment in jobs, another establishment and for certain other purposes.
42. Chapter II of the Act deals with various aspects in the establishments such as registration of establishments and renewal thereof, opening and closing hours of establishments prohibitions of sales before opening and after closing hours, hours of work in establishments, interval for rest, spreading periods of work, weekly holidays in establishments, other holidays and every employee to be furnished with service card. Chapter III deals with bar in employment of children and conditions. for employment of young persons and Chapter IV deals with leave with wages. Chapter V deals with responsibility, fixation and manner of payment of wages. Section 25 in the said Chapter provides that no deductions other than those which may be prescribed shall be made by the employer from the wages of his employee and Section 26(1), with which we are concerned in the instant case, deals with the notice of dismissal or discharge and Sub-section (2) provides for remedy against the order of dismissal, discharge or otherwise termination of the employment The relevant extract of the provisions contained in Section 26, as substituted by Section 15 of the Bihar Act No. 2 of 1975, is quoted hereunder for ready reference:
"26. Notice of dismissal or discharge. - (1) No employer shall dismiss or discharge or otherwise terminate the employment of any employee who has been in his employment continuously for a period of not less than six months, except for a reasonable cause and after giving such employee at least one month's notice or one month's wages in lieu of such notice.
Provided that such notice shall not be necessary where the services of such employee are dispensed with on a charge of such misconduct as may be prescribed by -the State Government supported by satisfactory evidence recorded at an enquiry held for the purpose.
Provided further that an employee who has been in continuous employment for a year or more and whose services are dispensed with otherwise than on a charge of misconduct shall also be paid compensation equivalent to fifteen days average wages for every completed years of service and any part thereof in excess of six months before his discharge in addition to the notice or pay in lieu of notice as prescribed above.
(2) Every employee, dismissed or discharged or whose employment is otherwise terminated, may make a complaint in writing, in the prescribed manner, to a prescribed authority within 90 days of the receipt of the order of dismissal or discharge or termination of employment on one or more of the following grounds, namely:
(i) there was no reasonable cause for dispensing with his services ; or
(ii) no notice was served on him as required by Sub-section (1); or
(iii) he had not been guilty of any misconduct as held by the employer; or
(iv) no compensation as prescribed in Sub-section (1) was paid to him before dispensing with his service."
43. The vires of the said provisions is not under challenge. The vires of Section 26(2) after its first amendment came up for consideration in the case of Jagdish Vastralaya v. State of Bihar reported in 1964 B.L.J.R. 672, in which it has been held that Section 26 of the Act was not unconstitutional. In the case of Indian Oil Corporation v. C.D. Singh reported in 1972 L.L.N. 306, it was in Para. 6, at pages 313 and 314, that:
".....there is no actual collision or conflict between Section 26 of the Bihar Act with any provision of the Central Acts and there is no repugnancy within the meaning of Article 254 (1) of the Constitution..."
The provisions of Section 26 of the Bihar Act as amended by Bihar Act 26 of 1959 was held to be constitutionally valid. The Court also found it difficult to hold that Section 26 of the Bihar Act is repugnant to the Industrial Disputes Act, 1947, as it stands after incorporating Section 2-A in 1965. According to the Court the object of the two proceedings under the two Acts are entirely different and there is no reason to hold that either of the proceedings must give way to the other. The Supreme Court in the case of Caltex India Ltd. v. Presiding Officer, Labour Court, and Ors., reported in AIR 1966 SCC 1729 : 1966-II-LLJ-137, held that the proviso to Sub-section (1) is not ultra vires and that Rule 20(1) defining misconduct is in conformity with the guidance given under Section 40(2)(c) of the Act.
44. The plain reading of the said provision shows that an employee, who has been in the employment continuously for a period of six months cannot be dismissed or discharged or otherwise terminated from the employment by the employer, except for a reasonable cause and after giving such employee at least one month's notice or one month's wages in lieu of such notice. However, under its proviso such notice is not necessary where the services of such employee are dispensed with on a charge of misconduct as may be prescribed by the State Government supported by satisfactory evidence recorded at an enquiry held for the purpose and under its second proviso, an employee who has completed one year of service and his service is dispensed with otherwise than on a charge of misconduct is also entitled for compensation equivalent to fifteen days' average wages for every completed year of service and any part thereof in excess of six months before his discharge in addition to the notice or pay in lieu of notice as prescribed above. Thus, it is evident that there is no restriction on the employer to dismiss or discharge or otherwise terminate the employment of an employee who has been in his employment for less than six months and after completion of his employment continuously for six months service of an employee can be dispensed with for a reasonable cause but after giving such employee at least one month's notice before such dispensation or one month's wages in lieu of such notice. Sub-section (1) of Section 2 does not deal with dispensation of the service of an employee either on the ground of misconduct entailing stigma or civil consequences. The said provision is covered by first proviso under which dispensation of an employee from service on a charge of such misconduct as may be prescribed by the State Government and in such cases, under Sub-section (1) one month's notice or one month's wages, in lieu of such notice is not necessary, but it must be supported by satisfactory evidence at an enquiry held for the purpose, which, in my opinion, obviously provides at least for compliance of rules of natural justice, failing which the proviso itself would be violative of principles of natural justice and thus ultra vires.
45. Section 40 of the Act vests power in the State Government to make rules to carry out the purposes of the Act and Sub-section (2) provides that such rules may provide for and any of the matter referred to therein without prejudice to the generality of the foregoing power. Clause (c) of Sub-section(2) is with respect to the misconduct of an employee for which his services may be dispensed with without a notice under Sub-section (1) of Section 26 and the authority to which and the time within which appeals under Sub-section (2) of that section may be filed. In exercise of the said power the State Government has framed rule and the relevant rule containing list of acts which may be termed as misconduct is provided in Rule 20 of the Bihar Shops and Establishments Rules, 1955. The acts mentioned therein are to be treated as misconduct for the purposes of the proviso to Sub-section (1) of Section 26. Under Sub-clause (k) of the said rule breach of the provisions of the Standing Orders applicable to the establishments and certified under the Industrial Employment'(Standing Orders) Act, 1946, has also been considered as an act which can be treated as a misconduct for the aforesaid purpose. Sub-rule (2) provides that no order of discharge on ground of misconduct can be made unless the employee concerned is informed in writing of the alleged misconduct and is given an opportunity to defend himself and explain the circumstances alleged against him. The relevant extracts of Rule .20 are quoted hereunder for ready reference:
"20. List of acts which may be termed as misconducts.- (1) The following acts shall each be treated as misconduct for the purposes of the proviso to Sub-section (1) of Section 26- .............
(k) breach of the provision of the Standing Orders applicable to the establishment and certified under the Industrial Employment (Standing Orders) Act, 1946.
(2) No order of discharge on ground of misconduct shall be made unless the employee concerned is informed in writing of the alleged misconduct and is given an opportunity to defend himself and explain the circumstances alleged against him."
Rule 21 deals with the matter regarding employee making complaint to the Labour Court against an order of dismissal or discharge under Section 26.
46. Thus, from the reading of the said provision it is evident that the enquiry is contemplated only in the case of misconduct; which is defined in Rule 20 and not otherwise and one of the acts as defined being breach of the provisions of the Standing Orders applicable to the establishment and certified under the Industrial Employment (Standing Orders) Act, 1946, would cover removal from service on the ground of appointment of the employee concerned being irregular and illegal ; that is to say, in breach of the provisions of the Standing Orders applicable to the establishment and certified under the Industrial Employment (Standing Orders) Act, 1946, and not otherwise.
47. Now, the question which falls for consideration is whether the expression "reasonable cause" in Sub-section (1) of Section 26 of the Act will include removal from service on the ground that the appointment of the employee concerned itself is irregular and illegal. In my opinion, the expression "reasonable cause" will not include such removal, which on the fact of it casts stigma and the above ground will, in fact, also amount to misconduct as the employee also will equally be responsible for seeking employment through irregular, illegal and backdoor method where appointments are governed by defined rules/regulations, and not in those cases of establishment not governed by any defined rules/regulations. Thus, according to me, such a case will be covered by the first proviso and under such circumstances, one month's notice or one month's wages in lieu thereof shall not suffice the fulfilment of the requirement for dispensing with the service of an employee by the employer. In such a case, the employer will have to satisfy the requirement provided for in the first proviso that it must be supported by satisfactory evidence recorded at an enquiry held for the purpose ; meaning thereby on compliance of Rule 20(2) of the Rules or/and the relevant rules/regulations, if any, of the establishment for holding proper enquiry or minimum, well-known principles of natural justice in case of absence of any such rules or regulations.
48. The Legislature has given the said protection obviously, in my opinion, keeping in view that there may be various terms of the contract of employment in an establishment covered by the Act and they did not perhaps consider it proper to put an embargo upon the establishment which carry on any business, trade or profession or any work in connection thereto for dispensing with the service of an employee for a reasonable cause in which case the employee will be entitled for only one month's notice or one month's wages in lieu of such notice subject to other terms of employment, if any. The expression "reasonable cause" naturally will have to be tested as to whether it lacks any bona fide or is beyond the control of the employer such as lockout in the factory or reduction of work forcing the employer to take recourse to retrenchment of employees on account of loss in business or financial constraints in the interest of efficiency and economy which necessity can be termed reasonable ex facie or winding up of the company itself and cannot include termination on account of irregular or illegal appointment. The distinction between the two are that first part of Sub-section (1) gives a sense of security of the employment but it can only be till the establishment itself is in a position to survive and it has nothing to do with the case covered by the first proviso and second proviso. First proviso which deals with the case where the service of an employee is dispensed with on a charge of such misconduct as may be prescribed by the State Government and the second proviso which permits dispensation with service of an employee who has been in continuous employment for a year or more otherwise than on a charge of misconduct on payment of compensation equivalent to fifteen days average wages for every completed year of service and any part thereof in excess of six months before his discharge in addition to the notice or pay in lieu of notice as prescribed above,
49. Thus, I am of the view that the present case being covered by the first proviso of Section 26(1) of the Act, the minimum requirement of compliance of the principles of natural justice was must and that having not been complied, vitiates the orders of removal of the petitioners from services of the respondent-Biscomaun.