Madras High Court
The Management Of Kodumudi Growers ... vs The Presiding Officer, Labour Court And ... on 8 December, 1998
Equivalent citations: (1999)1MLJ412
Author: P. Sathasivam
Bench: P. Sathasivam
ORDER P. Sathasivam, J.
1. Aggrieved by the award of the Labour Court in I.D.No. 46 of 1986 dated 13.12.1989 the management has filed the above writ petition.
2. The case of the petitioner is briefly stated hereunder:
The petitioner Society is a Bank carrying on the business of banking apart from sale of essential commodities through its shops, which have since closed and the second respondent was employed in the petitioner society as typist from 7.5.1983. Malpractices and misappropriation indulged in by the employees in the shops, for which 2 were dismissed after enquiry and 6 others were resigned. The petitioner society after intimation to the Additional Collector, Periyar District notified the closure of its shops. This resulted in the second respondent herein and three other workmen rendered surplus to requirements, accordingly the petitioner issued orders of termination to the 4 workmen including the second respondent on 10.8.1985 and offered them their legal dues as per Section 25-F of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act), besides giving the Government notice as required, while 3 of the workmen accepted their termination of retrenchment and as the dues as offered on 10.8.1985. The second respondent refused to accept the same when offered on 10.8.1985 itself, necessitating the order having to be sent by RPAD on the very same day. Though the said order was served on the second respondent on 12.8.1985 he did not choose to come forward to settle his accounts till 15.8.1985. Therefore the petitioner society sent the second respondent his dues by cheque on 16.8.1985. The second respondent raised an industrial dispute over his termination alleging that he had been terminated for his union activities. After failure report of the conciliation Officer and after reference by the Government of Tamil Nadu, the first respondent took the issue for adjudication as I.D.No. 46 of 1986. The first respondent in the impugned award after holding that the second respondent was employed only as a typist on 7.5.1983 for work of the shops, the petitioner had close down the shops bona fidely, retrenchment of 4 workmen was justified, by relying on a decision of this Court reported in Sivasundaram v. Press Superintendent, Southern Railway, Madras and Anr. (1969)2 L.L.J. 373 has held that the retrenchment of the second respondent was not in accordance with the provisions of Section 25-F of the Act. Accordingly by the impugned award ordered, reinstatement of the second respondent with continuity of service and backwages. The said award is being questioned in the present writ petition by the management.
3. The second respondent workman has filed a counter-affidavit disputing Various averments made by the petitioner and reiterating the reason given by the first respondent.
4. In the light of the above pleadings I have heard Mr. Dwarkanathan learned Counsel appearing for the petitioner as well as Mrs. Rita Chandrasekaranm, learned Counsel appearing for the second respondent.
5. In view of the Conclusion of the Labour Court, namely, that the second respondent herein was employed only as a typist for work of the shops and the society has closed down the Shops bona fidely, retrenchment of 4 workmen was justified and the retrenchment of second respondent was not in accordance with the provisions of Section 25-F of the Act, it is unnecessary to consider other aspects except whether the petitioner management had complied with Section 25-F of the Act while retrenching the second respondent. There is no dispute that in view of closing down of shops, the petitioner management had retrenched 4 workmen on 10.8.1985. It is the case of the petitioner out of 4 workmen 3 on receipt of compensation amount left the service. It is also the case of the petitioner that while passing the order of termination on 10.8.1985 terminating the service of the second respondent they informed him that in lieu of notice one month salary is being paid and requested him to get the same from their office on 10.8.1985 itself. In the order dated 10.8.1985 it is mentioned thus.
By referring the above statement made in the order referred above the learned Counsel appearing for the petitioner has contended that they have complied with Section 25-F of the Act. He also brought to my notice acquittance for the month of August, 1985. By relying on the said document learned Counsel has stated that except the second respondent herein the other retrenched workmen on receipt of the compensation signed the relevant records. By showing both the above aspects, learned Counsel would contend that the petitioner society has fully complied with Section 25-F of the Act.
6. Section 25-F of the Industrial Disputes Act is a follows:
25-F. Conditions precedent to retrenchment of workmen: No workman employed in any industry who as been in continuous service for not than one year under an employer shall be retrenched by that employer until-
(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
(b)....
(c)....
There is no dispute that the second respondent was in continuous of more than a year, accordingly before passing an order of retrenchment the employer has to fulfil, the condition prescribed in Sub-clause (a). In other words, it is open to the employer to retrench the workman by giving one month's notice in writing indicating the reasons for the retrenchment or in lieu of such notice wages for the said period of notice have to be paid to the said workman. In our case the petitioner employer did not give one month's notice in writing. However, in lieu of the said notice, the second respondent herein was offered wages for one month. The reading of the Sub-clause (a) in Section 25-F of the Act clearly shows that, without payment of wages for the period of notice no employee shall be retrenched by the employer. In this regard, learned Counsel appearing for the second respondent/workman as well as the Labour Court has relied on a decision of this Court reported in Sivanandam v. Press Superintendent, Southern Railway (1960)2 L.L.J. 373, After referring the scope of Section 25-F this Court has held that, Retrenchment of workmen without compensation is bad.
In other words, according to the learned Judge, the payment of compensation is condition precedent as per Section 25-F (a) and (b) of the Act. In that case, petitioner therein was not paid retrenchment compensation at the time of retrenchment (that is, on 22.12.1966), but was paid only on 7.2.1967. In the light of Section 25-F(a) and (b), this Court has held that, ...the petitioner's services were not validly retrenched in accordance with law as interpreted by the Supreme Court and therefore the petitioner must be deemed to be in service.
A plain reading of Section 25-F (a) and (b) coupled with the decision of this Court referred to above, undoubtedly show that order of retrenchment and payment of compensation have to be made simultaneously. Even though the learned Counsel for the petitioner has Stated that the petitioner was asked to collect one month' s wages in lieu of notice from their office, after going through the said order, I am of the view that the same is not in terms of Section 25-F (a) and (b) of the Act.
7. Learned Counsel for the petitioner in support of his contention has relied on the following decisions reported in,
(i) Harisingh v. Industrial Tribunal-cum-Labour Court, Rohtak (1993) II L.L.N. 245; (ii) Suresh Kumar v. Band Box (P) Ltd. (1982)1 L.L.J., 362; (iii) Management of Ramesh Hyderomachs v. Labour Court, Hubli and Anr. (1986)1 L.LJ. 334 and (iv) E.I.D. Parry (India) Ltd. v. Labour Court, Guntur 1992 Lab I.C. 278.
In all these decision ho doubt their Lordships have held that, keeping the money available would be sufficient compliance of Section 25-F of the Act. It is true that, in the above referred cases in the order of termination the workman was asked to collect the money from their office. The said recourse was accepted as sufficient. Compliance in all the above mentioned decisions. Apart from the said decision, learned Counsel appearing for the petitioner has very much relied on the decision of the apex Court reported in Gurmail Singh and Ors. v. State of Punjab arid others (1991)2 L.L.J. 76. In the said decision, the following conclusion have been pressed into service.
We do not also see any force in contentions regarding non-compliance with the provisions of Section 25-F of the Industrial Disputes Act. It is urged on behalf of the appellants that the State has not furnished the details of amounts of compensation determinated in the case of each employee and that the State had also taken no steps to deliver the payment in respect of each employee at his door by the relevant date. It is submitted that the tender of compensation under Section 25-F, in order to be valid, should be on the precise amount and should be made simultaneously with termination of the service. This, of course, is correct, but the High Court has satisfied itself by looking into the original records, that drafts in respect of individual employees were despatched in time so as to reach Division/Sub-Divisional Offices by 31st of August, 1983. An attempt was made before us to suggest that there was some discrepancy between two affidavits filed by the State Government in this behalf. We have, perused the said averments and we find no inconsistency as alleged. It is true that the amounts were not actually paid or tendered to the workers by the corporation directly but the corporation had evolved a method of disbursement of compensation in the interest of the workers convenience. Instead of making the appellants, spread out all over the State, to come to the head office to collect the compensation and to avoid the inconvenience and difficulty of the corporation making available the compensation at the doorstep of each employee, the corporation made arrangement whereby the tubewell operators could go to the nearest Divisional/Sub-Divisional Office and collect the amount of compensation due to them. It appears that the appellants were not interested in taking the compensation amount. None of them appears to have ascertained whether these amounts had reached the Sub-Divisional Office and whether they were for the correct amounts. No instance has been pointed out to us as to why that they were not for the correct amounts. We do not think we need elaborate further on this aspect since the relevant records were brought before the High Court and the High Court was satisfied that the individual compensation drafts were sent to the various subordinate offices ready for distribution to the concerned workers on or before the relevant date. In the circumstances of this case, we agree with the High Court that when individual drafts for the amounts of compensation due to the various tubewell operators were forwarded to the Divisional/Sub-Divisional Office, sufficiently in time to the available to be taken by them by 31st August, 1983, there was sufficient compliance with the provisions of Clause (b) of Section 25-F. The perusal of the decision of the Apex Court shows that, along with the order of termination, wage for one month period has been sent by way of draft. In other words, it is clear that the compensation amount was enclosed along with the order of retrenchment and despatched to the employees on the very same day. In such circumstances, the procedure followed therein has been accepted by the Hon'ble, Supreme Court. Even though the learned Counsel for the petitioner has very much contended that the said decision supports the petitioner's case, I am of the view that the petitioner herein failed to fulfill or satisfy Section 25-F of the Act. Even the plain reading of Section 25-F, I am of the view that the tender of compensation under Section 25-F in order to be valid should be of the precise amount and should be made simultaneously with the termination of the service. I. have already extracted the actual statement in the order of termination dated 10.8.1985. It is only stated that, It is clear that the management did not tender the amount along with the order of termination. As a matter of fact, the previous line states that, his services had been terminated eyen in the forenoon. Actually, it is stated that, It is clear that, even in the forenoon itself the services of the second respondent herein had been terminated. If that is so, undoubtedly I am of the view that the petitioner management failed to satisfy Section 25-F of the Act. Even though it is stated that it was only the second respondent workman failed to receive the compensation amount, the fact remains the said amount had been sent only on 16.8.1985, In such circumstances, the Labour Court has rightly concluded, viz.,
8. In the light of the factual position available in our case with reference to the Order of termination dated 10.8.1985, I am of the view that in view of enclosing the compensation amount in lieu of one month salary along with retrenchment order, in the case before the Supreme Court reported in Gurmail Singh and Ors. v. State of Punjab and Ors. (1991)2 L.L.J. 76, the same is not helpful to the petitioner's case. In view of the language used in Section 25-F (a) and (b) of the Act and in the light of the interpretation given by this Court in earlier decision reported in Sivanandam v. Press Superintendent, Southern Railway (1969)2 L.L.J. 873, with respect I dm not in a position to fellow the decisions rendered; by Punjab and Haryana, Delhi, Karnataka and Andhra Pradesh High Courts taking contrary view. The language used in Section 25-F of the Act clearly shows that, payment of retrenchment compensation is a condition precedent to the valid retrenchment/accordingly the amount has to be tendered along with the order of termination. As rightly pointed out by the learned Counsel for the second respondent the statement made in the order of termination at the most would be construed only as offer and the same cannot be construed as sufficient compliance, accordingly, I am in agreement with the conclusion arrived by the Labbur Court.
9. Net result, the writ petition fails and the same is dismissed, No costs.