Rajasthan High Court - Jaipur
Radha Kishan Sharma And Ors. vs Rajasthan Financial Corporation And ... on 8 July, 1986
Equivalent citations: 1986(2)WLN561
JUDGMENT Mahendra Bhushan Sharma, J.
1. As common question of fact and law is involved in these three writ petitions it will be proper to deal with them together. The writ petitions are therefore being disposed of by a common order. The terms and conditions of the employees of the Rajasthan Financial Corporation (for short, the Corporation) are governed by the Rajasthan Financial Corporation (Staff) Regulations, 1958 (for short, the Regulations) framed by the Board of Directors of the Corporation after consultation with the Reserve Bank of India and with the previous sanction of the Government of Rajasthan. The respondents published an advertisement in the Rajasthan Patrika dated July 10, 1978 for the posts of Junior Assistant/Typists and apprentices. Ail the three petitioners applied for the said posts. They appeared for interview/test on Sunday, 10th September, 1978 at 11 a.m. in the Head Office of the Corporation at Surya Niwas C/18 Bhagwandas Road, Jaipur. As a result of the type test and the interview the petitioners were selected and appointed as apprentice/Junior Assistant on the fixed stipend of Rs. 300/- p.m. initially for a period of three months and finally to be absorbed in regular scale of Rs. 270-10-350-15-425 with usual allowances on satisfactory completion of a suitable period of apprenticeship and on occurrence of clear vacancies, under the order Annexure 1 dated September 11,1978, issued by the Secretary of the Corporation. The names of the three petitioners Gyanchand, Gauri Shankar and Radha Krishan in the aforesaid order appear at Nos. 6. 20 and 27 respectively. Their terms were extended from time to time. The Assistant Secretary of the Corporation vide circular dated January 16, 1979 informed that a type test in English/ Hindi and a written test to adjudge proficiency in Accounts and drafting official correspondence will be held at the Head Office on Saturday, 10th February, 1979 at 10.00 a.m. All the apprentice/Junior Assistant/Typists selected in the first group in September, 1978 will be required to appear. The apprentices coming to attend the test from different branch offices (except Jaipur Branch) will be paid the travelling expenses at the minimum rate payable to a regular Junior Assistant/Typsits of the Corporation. On the basis of the above test, regularisation of apprentices will be considered. According to the petitioner Gyan Chand in Writ Petition No 725/1980, he appeared in the test on March 4, 1979 and as far as he is aware he did fairly well in these tests and his impression is that he must have qualified in these tests though the result thereof was never declared by the respondent Corporation. It may be stated that under the order Annexure-1 dated September 11, 1978, 33 candidates were appointed as Apprentices, Junior Assistant/Typists on the fixed stipend of Rs.300/- p.m. Out of them, 21 had joined and under the order dated September 10, 1979, it was ordered that all the 21 apprentices whose names were specified there in were discontinued with immediate effect because their term had expired. There were agitations by the petitioners and others and under order dated September 11, 1979, i.e, next day of the discontinuance of the services, four persons, Sarva Shri Satya Narain Sharma, M.C.Jain, C.P. Pareek and Rakesh Kumar were again appointed on temporary basis w.e.f. September 21, 1979 for three months on the post of Junior Assistant/Typists on basic pay of Rs. 200-440 with usual allowances and posted at the places mentioned in the order. The agitation continued and it was withdrawn on October 19, 1979 on the assurance of the management that cases of petitioners and others will be considered and necessary relief will be granted to them. The petitioner Gyan Chand was appointed as apprentice under order dated October 24, 1979 and was posted at Branch Office Bharatpur. The petitioner Gauri Shanker was appointed as Apprentice on the monthly stipend of Rs. 400/- p.m. and was posted at the Head Office (F&R). The petitioner Radha Krishna Sharma was appointed as apprentice for three months on the monthly stipend of Rs. 350/- and attached with A.S. at Head Quarter.
2. After re-appointment, the representations were made by the petitioners to the Secretary of the Corporation. They were re-appointed and joined their duties. The services of the petitioners were again terminated. The services of the petitioner Gyan Chand were terminated vide order dated March 5, 1980 on the ground that the relationship of Gyan Chand with the Corporation in terms of the order dated October 19, 1979 came to an end on January 18, 1980. He was no more required and he was, therefore, discontinued with immediate effect. Similarly, under order dated February 7, 1980, Shri Radha Krishan petitioner was informed that his relationship with the Corporation came to an end on January 18, 1980 and his stipend has been credited in his Bank account maintained in the Bank of Baroda, Udyog Bhawan Branch, Jaipur. In case of Gauri Shanker under order dated January 29, 1980, he was informed by the Dy. Manager of the Corporation that his term has already expired on December 16, 1979 and his services are no more required and he was informed that his relationship with the Corporation came to an end on December 16, 1979.
3. The petitioners have challenged the aforesaid orders informing them that there relationship with the Corporation has come to an end in this court on the ground that the Corporation is an industry and the petitioners are workmen within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 (for short, the ID Act). Their services were terminated in contravention of Section 25F and 25G of the ID Act. No notice or pay in lieu of notice or retrenchment compensation was given to them and each of the petitioners had worked with the Corporation for more than 240 days in the year immediately preceding the date of their termination; that the petitioners have been treated discriminately, firstly on September 10, 1979 and again in March 1980 when their services were terminated arbitrarily while other employees were regularised on the post of Junior Assistant/Typists that the termination of the petitioners is in contravention of Regulation 15 of the Regulations; the petitioners were in the employment of the Corporation as staff grade 'B' that the petitioners became permanent employees of the Corporation after the expiry of period of probation of six months as prescribed for class B staff. The petitioners are entitled for the regular pay scale as well as substantive status and appointment after successful completion of the period of probation. In the writ petitions Nos. 331/1980 and 332/1980 of Radha Krishan and Gauri Shanker respectively the order of termination has been challenged on the ground that the action of the Corporation is arbitrary and discriminatory and it offends provisions of Article 14 and 16 of the Constitution of India as the Corporation has treated the petitioners and others similarly situated differently and discriminately. It is also the case of the petitioners in these writ petitions that though described as apprentices/Typists on a stipend of Rs. 300/- p.m. but the appointment of the petitioners was a regular appointment under the Regulations on probation.
4. The Corporation in its reply has come out with the case that it is not 'State' within the meaning of Article 12 of the Constitution of India and as such it is not amenable to the writ jurisdiction. It does not dispute the initial appointment of the petitioners as apprentices/Typists and subsequent extensions, but its case is that their services were not terminated as in fact the term of their apprenticeship had already expired and therefore their services were discontinued with immediate effect. According to the case of the Corporation it had no authority to appoint persons as apprentices, as the Apprentices Act, 1961 is not applicable to the appointment of the petitioners. it is also the case of the Corporation that it is not an industry and the petitioners are not workmen within the meaning of the ID Act. Any discrimination as alleged by the petitioners in the matter of appointment is denied and the case of the non-petitioners in that fresh appointments were only made as apprentices on fixed stipend judging the worth of each candidate and such appointment does not and cannot be termed as arbitrary or discriminatory. The Corporation has not come out with the case that in case it is held to be an industry under the provisions of ID Act, it had complied with the provisions of Section 25F and 25G of the ID Act.
5. Though an objection has been taken in the reply that the Corporation is not a 'State' within the meaning of Article 12 of the Constitution, and as such is not amenable to the writ jurisdiction, but Mr. Agrawal, learned counsel for the Corporation during the course of arguments, in all fairness to him, did net lay any stress on this controversy and rightly so in view of the provisions of the State Financial Corporation Act 1951 (for short 1951 Act and in view of the decision of their Lordships in Banglore Water Supply v. A. Rajappa . The Corporation is a creature of Statute (the Act) and it has been created by the State Government under the powers vested in it under Section 3(1) of the 1951 Act shall be such sum as may be fixed by the State Government in this behalf but it shall in no case be less than fifty lakhs of rupees or exceed ten crores of rupees. The authorised capital shall be divided into such number of fully paid up shares the State Government may determine shall be issued to the parties mentioned in sub Section (3) of Section 4 at such times and in such manner as the Government may determine and each such share shall have the same face value. It is the State Government which has power under sub-Section (3) of Section 4 of the 1951 Act with the approval of the Central Government to determine the number of shares which may respectively be distributed among the State Government the Reserve Bank, the Development Bank, the Scheduled Banks, the Insurance Companies and parties other than those referred to above. But under the proviso to Sub-section (3) of Section 4 number of share which may be allotted to the parties referred to in clause (d) of that Section shall in no case exceed twenty five percent of the total number of charges. The shares of the Corporation shall be guaranteed by the State Government as to the repayment of principal and actual advancements. The management vests in the Board of Directors and four Directors are to be nominated by the State Government. It will therefore, be clear that the Corporation is the instrumentality of the State and as such amenable to writ jurisdiction under Article 226 of the Constitution of India. In Bangalore Water Supply case (supra) it has been held that 'Industry' as defined in Section 2(j) of the ID Act has a wide import. Even an organisation which is a trade or business it does not cease to be one because of philanthropy animating the undertaking. In the aforesaid case of Bangalore Water Supply (supra) triple test has been laid down and if that satisfies them, an establishment is an industry. They are (i) systematic activity (ii) organised by co-operation between employer and employee (the direct and substantial element is chimerical) and (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to calestial bliss i.e. making on a large scale prasad or food, prima facie there is an industry in that enterprise. It has also been held that the absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector. A look at Chapter III of the 1951 Act will show that among the business which financial Corporation may transact, (he following kinds of businesses namely, granting on such terms and conditions as may be agreed upon loans raised by industrial concerns which are repayable within a period not exceeding twenty years and are floated in the public market etc. are included. Therefore, to my mind there can be no doubt that the Corporation is an industry within the meaning of Section 2(j) of the ID Act.
6. The three petitioners were appointed under order dated September II, 1978 and each of them continued for more than 240 days in a year preceding the date of their retrenchment. Gyanchand in writ petition No. 725/1980 was appointed under order dated September 11,1978 and he was intimated on March 15, 1980 that his relationship with the Financial Corporation in terms of the order came to an end on January 10, 1980 and as such he was no more required. Similarly, other two petitioners were also appointed under the same order and it is not disputed that each of them continued in the capacity of Junior Assistants/Typists on a fixed stipend for more than 240 days. There can be no dispute that termination arising by efflux of time of each of the petitioners as Junior Assistants/Typists amounts to retrenchment within the meaning of Section 2(oo) of the ID Act. It is not the case of the Corporation that the provisions of Section 25F of the ID Act were complied with. Section 25F of the ID Act contains conditions precedent to the retrench nent of the workman and the conditions (a) and (b) contained therein are mandatory. No workman employed in an industry who has been in continuous service for not less than one year under an employer shall be retrenched until 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 wages for the period of notice, and 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 (hereof in excess of six months. There has been non-compliance with the provisions of Section 25F of the ID Act. The contention of Mr. Agrawal that the petitioners should have raised industrial dispute cannot be accepted, firstly because these writ petitions are pending since 1980 and secondly it is not disputed that Section 25F of the ID Act has not been complied with. The law is settled that if the retrenchment of a workman is in contravention of the provisions of Section 25F of the ID Act, it is nonest. On this ground alone the writ petition is to be accepted.
7. In the instant case from the facts which cannot be said to be disputed any longer there appears to be a contravention of Section 25G of the ID Act. Section 25G of the ID Act provides that where any workman in an industrial establishment is to be retrenched and he belongs to a particular category of workman in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench (he workman who was the last person to be employed in the category, unless for reasons to be recorded if the employer retrenches any other workman. The petitioners have come out with the case that the petitioners were retrenched whereas the others who were appointed later on as Junior Assistant/Typists on fixed stipend were retained. It may be stated that under the order dated September 11.1978, the appointment of as many as 33 persons as Junior Assistant/Typists on the fixed stipend of Rs 300/- p.m. for three months was made Out of them only 21 joined. Their services were terminated under order dated 10, 1979 but under order dated September 11, 1978 (Annexure 9 to the writ petition No. 725/1980) four persons were re-appointed. Not only that, it appears that under order Annexure 8, again in the same writ petition the Corporation appointed as many as 24 persons as Apprentices/Assistants (Junior) on February 8, 1979 on monthly stipend of Rs. 300/- and further appointed 14 persons as Apprentice/typists on stipend. If'has been stated in the additional affidavit of Gyan Chand was filed in this court on February 4, 1985, in para No. 3 that subsequent to his initial appointment by order dated September 11, 1978, the respondents made some further appointments as apprentices of about 38 persons by an order dated February 8, 1979. Most of those 38 persons have been promoted to the posts of Assistants. The termination of his services while retaining persons junior to him is violative of Article 14 and 16 of the Constitution of India. One of the examples is of Shri Ajit Kumar Jain who was appointed by an order dated February 8, 1979 who has been regularised by the respondents. He further deposed that the persons who were appointed along with him namely Miss Jyoti Bala, Rajendra Prasad Gehlot, Miss Anita Joshi, Uma Varishnava, K.M. Matbur, Vijay Prakash Sharma, Laxmi Narain Agrawai and Pradeep Kumar, were later on apppointed as apprentice on a fixed stipend of Rs. 400/- p.m. on the post of Junior Assistants-Typists, have since been regularly appointed and have been further promoted to higher place in the order of initial appointment dated September 11, 1978 and there is no reason that the persons who were at lower number have been retained and have further been regularly appointed and given promotions. These facts have not been controverted. It can therefore be said even some persons who were appointed as Junior Assistants/Typists after the petitioners were continued whereas the services of the petitioners were terminated. At the cost of the repetition a reference may be made to the order appointing 33 candidates under which it was clearly provided that they will be finally absorbed in regular scale of of Rs. 270-10-350-15-425 with usual allowances on satisfactory completion of a suitable period of apprenticeship and on occurrence of clear vacancies. It is not the case of the Corporation that any of the three petitioners did not satisfactorily complete the period of apprenticeship of the three months. An argument has been raised on behalf of the petitioners that their appointment was of permanent nature and in this connection a reference has been made to the Regulations framed in exercise of the power conferred by Section 48 of 1951 Act, Chapter II, the classification of permanent staff has been given Regulation 6 provides that the permanent staff of the Corporation shall be grouped as follows: (i) Class A-Officers, (ii) Class B-Assistants, (iii) Class C-Subordinate staff.
8. It provides that the Board shall fix from time to time number of posts in all categories and the pay scales of the officers, the Assistants and Subordinate staff shall be as laid down in Appendix I of the Regulations. Regulation 7 provides that notwithstanding anything contained in these Regulations, the Managing Director may employ staff in classes B and C on a temporary basis for a period not exeeding three months on the pay scales laid down in Appendix I to the Regulations. In classification B Junior Assistant Typists are also included. The contention of the learned counsel for the petitioners is that after the period of satisfactory completion of apprenticeship they were bound to be absorbed in the regular pay scale of Rs. 270-425 as junior Assistants/Typists as an assurance has been given to them under order September 11, 1978 under which they were appointed as Junior Assistants/Typists after interview. In support of their contention they placed reliance on Swya Narain Yadav and Ors. v. Bihar State Electricity Board and Ors. and Narendra Kumar and Ors. v. The State of Punjab and Ors. UJ (SC) 1985 page 297. In case of Surya Narain (supra) the appointments of trainee engineers by the Bihar State Electricity Board represented by the trainee engineers from time to time that after their training was completed, they would be absorbed in regular employment of the Board. When some of the engineers were getting age-barred from government service, and had left the Board, they were told to come back under the temptation of getting permanently employed under the Board and when the Board was reeling under a strike of its employees, these trainee engineers had stood by the Board to keep up the generation and distribution of electricity and had been assured of absorption and the Board had decided to absorb them on permanent basis but initially on a probation of two years without conducting any further examination. The trainee engineers continued as such since long although the Board treated them as specific class. It was held that under the facts and circumstances of the case the defence of the Board was ill-placed and could not hold as a shield against the application of the equitable doctrine and the trainee engineers formed a specific class and from time to time the the Board treated them as members of a class. In the case of Narendra Kumo (supra) 22 persons holding a three year diploma in Electrical Engineering Course from the State Board of Technical Education, Punjab were appointed as apprentices in August 1981 under the Apprenticeship Act, 1961. They completed one year of apprenticeship and the Principal Technical Training Institute Punjab State Electricity Board, Patiala issued the requisite certificates to the persons on successful completion by them of one years apprenticesship. Their names were registered with the Employment Exchange in Punjab. The Ministery of Labour and Rehabilitation Department of Labour (DGET) Government of India, New Delhi issued instructions to various offices including the Punjab State Electricity Board, Patiala asking that necessary action should be taken to ensure that the trained apprentices are absorbed in industries upto a minimum of 50 percent of direct recruitment vacancies. Writ was filed by 22 persons in the High Court of Punjab and Haryana challenging the issue of advertisement on the ground that under their respective letters of appointment, they were entitled to be appointed to 50% of the posts which were advertised by the respondents. The writ petition was dismissed by the High Court. The Supreme Court referring to Section 22(1) of the Apprentices Act, 1961 and more so to no objection, held that to doubt despite the provisions contained in Sub-section (1) it shall be obligatory for the employer to offer suitable employment to the apprentice, if the contract of apprenticeship contains a condition that the apprentice shall serve the employer after the successful completion of the training. In that case in para No. 2 of the letter of appointment it was mentioned that the apprentices shall be absorbed in the department. It was held by their lordships of the Supreme Court that 'when paragraph 2 says that the apprentice shall be absorbed in the department, the only reasonable interpretation to put upon that expression is that it creates reciprocal rights and obligations on the parties to the contract of apprenticeship, namely the employee & the employer. 'You shall be absorbed' is a double-edged term of the contract. It binds the employment to the apprentice (if there is a vacancy) and equally it binds the apprentice to accept the offer." Their Lordships in para No. 9 further observed that-
We are also of the opinion that, apart from the implication that out of Section 22(2) of the Apprentices Act, Paragraph 2 of the letters of appointment creates a binding obligation upon the employer to absorb the apprentices in the department on the successful completion of the training period, provided there is a vacancy in which the apprentices can be appointed. It would be contrary both to the letter and spirit of paragraph 2 of the letters on appointment to hold that even if there is a vacancy in which an apprentice can be appointed after the successful completion of his training, the employer is free not to appoint the apprentice and file that vacancy by appointing an outsider.
9. It is also contended by the learned counsel for the petitioners that there has been further discrimination and there has been unfair discrimination and the same is violative of Articles 14 and 16 of the Constitution of India. It has already been said earlier that alongwith the petitioners 18 more candidates were appointed as apprentices Junior Assistants/Typists and after the appointment more candidates later on were appointed as apprentice Junior Assistants/Typists. While others have been retained even though who joined later, though the petitioners under the advertisement and under their appointment letter dated September 11, 1978 were given assurance, that on occurrence of clear vacancies they will be finally absorbed in the regular scale, but they have not been retained. Therefore, the order of termination also suffers from the vice of unfair discrimination because the Corporation has not furnished any information and has not set up a case indicating that the petitioners were discharged or their periods were not extended as their services were not satisfactory or they had not maintained efficiency. Therefore, the order also suffers from the vice of unfair discrimination and is violative of Articles 14 and 16 of the Constitution of India
10. It may be stated that Gauri Shanker Gupta, petitioner in S.B. Civil Writ Petition No. 332/1980, has filed an affidavit that he has been appointed in the Reserve Bank of India on the post of Clerk cum Coin Note Examiner Grade II w.e.f August 12,1980. He does not want reinstatement because of his appointment as aforesaid.
11. Consequently, the Writ Petitions No. 331/1980 Radha Krishan Sharma v. Rajasthan Financial Corporation, Jaipur and others and S.B. Civil Writ Petition No. 725/1980 Gyan Chand Agrawal v. Rajasthan Financial Corporation and others are allowed and it is ordered that they shall be reinstated. Their termination orders are quashed. The respondents are directed to reinstate them in the regular pay scale from the date persons similarly placed were so absorbed in the regular pay scale. They will be entitled to all the consequential benefits such as back wages including that of consideration for promotion, if any, from the date persons similarly situated were considered for promotion on the higher post. No relief can be granted to Gauri Shanker Gupta, petitioner in S.B. Civil Writ Petition No. 332/1980 and his writ petition in these circumstances is dismissed. Costs made easy.