Rajasthan High Court - Jaipur
Rajasthan State Road Transport ... vs Ramavtar Sharma on 29 August, 1997
Equivalent citations: (1998)ILLJ973RAJ, 1997(3)WLC656
JUDGMENT Tibrewal, J.
1. This special appeal under Section 18 of the Rajasthan High Court Ordinance, 1949, is directed against the judgment and order dated December 7, 1992 of the learned Single Judge in S.B. Civil Writ Petition No. 1755/87, holding termination of respondent's service to be illegal and void with further direction to reinstate him with all consequential benefits from the date of judgment. For back wages for the period from the date of termination till the date of Judgment it was observed that the respondent shall be free to take steps under Section 33C(2) of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act).
2. For deciding the questions raised before us, it is desirable to note out the facts and circumstances leading to this appeal. The respondent was an employee of the appellant Rajasthan State Road Transport Corporation, Jaipur (for short the Corporation). He was appointed as a bus conductor initially on daily wage basis vide Order dated June 28,1986. Thereafter vide order dated May 5, 1987 he was appointed on probation for one year and regular pay scale of bus conductor was given to him. The appointment letter contained terms and conditions of employment. One of them is that his services shall be regulated by the Standing Orders of the Corporation which govern service conditions of its employees. During probation period, vide order dated July 15, 1987 the respondent was discharged from his service by giving him one month's salary in lieu of one month's notice. The respondent challenged the order of termination before this Court by filing writ petition under Articles 226 of the Constitution of India. The challenge was on several grounds. It was stated to be a mala fide and arbitrary action of the Corporation. It was also pleaded, inter alia, that persons junior in service were retained while respondent's service were terminated without notice or affording him an opportunity of hearing. The action was stated as punitive in nature. Another challenge was that his termination amounted to retrenchment and it was void and inoperative being in violation of mandatory provisions contained in Section 25F of the Act.
3. In return on behalf of the Corporation it was denied that termination of the respondent's service was by way of punitive action or the principles of natural justice were attracted. According to the Corporation, the respondent was discharged from service during probation period as his work was found unsatisfactory. Certain past acts of his commission and omission were detailed out in the reply to substantiate this contention. In short, the p!ea of Corporation is that the impugned order was one of discharge or termination of service simpliciter which could not be regarded as punitive in nature. Further the termination was as per service conditions of the employment as provided under the Standing Orders of the Corporation and it did not amount to retrenchment to attract Section 25F of the Act.
4. The learned Single Judge invalidated respondent's termination of service on the ground of non-compliance of requirement of Section 25F. The learned Judge was of the view that termination of service of a probationer even on account of un-suitability was 'retrenchment' under Section 2(oo) of the Act and compliance of Section 25F is essential in such case while non-compliance would render such termination as invalid and void. The learned Judge placed reliance on the decision of Supreme Court in Management of Karnataka State Road Transport Corporation v. M. Boriah (1984-I-LLJ-110) and Smt. Santosh Gupta v. Bank of Patiala (1980-II-LLJ-72). The non-compliance, according to the learned Judge was that of nonpayment or retrenchment compensation equal to 45 days salary as the respondent had completed 40 days in the calendar year preceding his termination.
5. Appearing for the appellant-Corporation Shri Kewal Ram has in the first instance, contended that the order terminating respondent's service did not amount to retrenchment as defined in the Act and provisions of Section 25F were not attracted in the case. Learned counsel contended that the respondent was discharged from service during probation period as his work was found unsatisfactory. In such cases, neither the principles of natural justice are violated nor it is by way of punishment requiring holding of an enquiry. It was further submitted that the order was one of discharge or termination of service simpliciter which was as per service conditions during probation period. That after introduction of Clause (bb) in Section 2(oo) by Amending Act No. 49 of 1984, termination of the contract of service under a stipulation in that behalf contained in contract of employment is not retrenchment and Section 25F is not attracted, while the learned Single Judge decided the writ petition without taking into consideration Clause (bb). In support of his contentions strong reliance was placed on a decision of the Supreme Court in M. Venugopal v. The Divisional Manager, L.I.C. of India and Anr. (1994-I-LLJ-597) and a decision of this Court in Bundi Kshetriya Gramin Bank, Bundi v. Central Industrial Tribunal, Jaipur and Anr. (1996-III-LLJ (Suppl)-1177). Shri Kewal Ram also challenged the order of the learned Single Judge with regard to back wages.
6. Shri Rajendra Soni on the other hand, on behalf of the respondent workman argued that his termination was void and in-operative being in violation of Section 25F and 25G of the Act. It was contended that the order terminating services of the respondent amounted to 'retrenchment' within Section 2(oo) of the Act and it was also punitive in nature. According to Shri Soni, as per the reply of the Corporation, order of termination was based on past incidents, as such it was not simpliciter one, but was punitive in nature. Since termination has been made without holding an inquiry or affording any opportunity of hearing to the respondent, it was void being violative of the principles of natural justice.
7. The submissions made before us by the learned counsel on both sides would raise the following points for decision in the appeal: -
(i) Whether termination of respondent's service during probation period for his unsatisfactory work did amount to 'retrenchment' under the Act attracting the requirement of Section 25F of the Act;
(ii) Whether the said termination was punitive in nature and in absence of a departmental inquiry it was void and inoperative;
(iii) If the order of termination is held to be illegal and void, what should be the order with regard to back wages?
8. At the out-set it may be stated that the respondent was a probationer at the time when his services were terminated. A bare perusal of the order of termination would show that it was not passed by way of punishing the respondent for any misconduct. The view that the services of the respondent were not satisfactory, was undoubtedly based on the past incidents which are set out in reply of the Corporation. It was not disputed before us even by the learned counsel for the respondent that service of a probationer could be discharged on account of unsuitability or unsatisfactory work. For judging suitability of the services or unsatisfactory work of an employee during the period of probation the employer can take into consideration his past incidents and merely on this ground the termination cannot be said to be punitive in nature or otherwise a mala fide action. On going through the entire materials produced before the learned Single Judge and taking into consideration the facts and circumstances of the case, we are satisfied that termination of respondent's service during his probation period was termination simpliciter and it could not be regarded as punitive requiring an inquiry into the conduct or attracting the principles of natural justice. We, therefore, have no hesitation in rejecting the contention made on behalf of the respondent that termination of his service was punitive in nature and in absence of an inquiry or affording him a reasonable opportunity of being heard it was void and inoperative. The learned Single Judge also has not set aside respondent's termination on this ground.
9. Having held so, we advert to the principal question which was seriously contested and stressed before us. The question is as to whether Section 25F of the Act is attracted to invalidate the order. The stand of the employer-Corporation is that the respondent-employee was a probationer and his order of discharge was on accent of his unsatisfactory work. Since the order of discharge has been grounded upon the unsatisfactory work during the period of probation and was under stipulation in that behalf contained in the contract of employment, it has been argued that it did not amount to 'retrenchment' and provisions contained in Section 25F were not attracted; while according to the respondent, it would amount to 'retrenchment' and compliance with the requirements of Section 25F was essential. As stated earlier, the learned Single Judge has held the order of termination as void and inoperative for non-compliance with the requirement of Section 25F.
10. Section 2(oo) of the Act defines retrenchment. Before introduction of Clause (bb) by Amending Act No. 49 of 1984, Section 2(oo) defined retrenchment as under:-
"Retrenchment means the termination by the employer of the service of a workman for any reason whatsoever otherwise than as a punishment 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
(c) termination of the service of a workman on the ground of continued ill health."
11. The wide language employed and particularly by the use of the words 'termination' for any reason whatsoever' the expression 'termination' included and covered in its fold all cases of termination and cessation of service except those embodied in the definition. The excepted or excluded cases are where termination is by way of punishment inflicted by way of disciplinary action, voluntary retirement of the workman, retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains the stipulation in that behalf and termination of service of a workman on the ground of continued ill-health.
12. In the State Bank of India v. Shri N. Sundara Money (1976-I-LLJ-478)(SC), it was held:
" A break down of Section 2(oo) unmistakably expands the semantics of retrenchment. Termination .......... for any reason whatsoever ...... are the key words. Whatever the reason, every termination spells retrenchment. ...... A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term. To protect the weak against the strong this policy of comprehensive definition has been effectuated. Termination embraces not merely the act of termination by the employer, by the fact of termination howsoever produced."
13. The Section was interpreted in similar mariner in Smt. Santosh Gupta v. State Bank of Patiala (supra) and other subsequent decisions. (See : Mohan Lal v. The Management of Bahart Electronic Ltd. (1981-II-LLJ-70) and Gammon India Ltd. v. Niranjan Das (1984-I-LLJ-233)(SC). In Management of Karnataka State Road Transport Corporation v. M. Boriah and Anr. (supra) it was held that Section 2(oo) covers every case of termination of service except those which have been embodied in the definition. A discharge from employment or termination of service of a probationer held to amount to 'retrenchment' requiring compliance of Section 25F essential, but this was before insertion of Clause (bb) in Section 2(oo) of the Act.
14. One more exception to Section 2(oo) has been incorporated by a new Clause (bb) by Act No. 49 of 1984 with effect from August 18, 1984 and it runs as under:-
"(bb) Termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein."
With introduction of this Clause, the Legisalture has excluded from the purview of retrenchment:-
"(1) Termination of the service of the workman as a result of the non renewal of the contract of employment between the employer and the workman concerned on its expiry : or
(ii) Such contract being terminated under a stipulation in that behalf contained in contract of employment."
15. In the instant case, the respondent was a probationer for a period of one year and his services were liable to termination as per service conditions according to the Standing Orders. There is no dispute before us that services of the probationer could be terminated by the employer under Standing Orders during period of probation on the ground of unsuitability or unsatisfactory work. Hence, respondent's termination stands excluded from the ambit of retrenchment by virtue of Clause (bb) as his contract of service was terminated under stipulation in the contract itself. The learned Single Judge, while deciding the petition, did not take into consideration Clause (bb) which was introduced in the year 1984.
16. In M. Venugopal v. Divisional Manager Life Insurance Corporation of India (supra), the Apex Court had an occasion to consider similar case of termination of a probationer after insertion of Clause (bb) in Section 2(oo). In that case the employee was appointed on probation by the Life Insurance Corporation of India. He failed to achieve business targets during the period of probation. The Supreme Court held mat as per Regulation 14(4) of the Life Insurance Corporation of India (Staff) Regulations, 1960, the Corporation was entitled to terminate the service of a probationer during the period of probation without any notice and Regulation 14 was to be read with a statutory term of the contract of employment between the Corporation and the employee. It was, therefore, held that termination or the probationer shall but be deemed to be 'retrenchment' within the meaning of Section 2(oo) having been covered by exception (bb). It was held thus in the case:-
"Now with introduction of one more exception to Section 2(oo), under Clause (bb) the Legislature has excluded from the purview of 'retrenchment': (i) 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; (ii) such contract being terminated under a stipulation in that behalf contained in contract of employment. It need not be impressed that if in the contract of employment on such stipulation is provided or prescribed, then such contract shall not be covered by Clause (bb) of Section 2(oo). In the present case, the termination of service of the appellant is as a result of the contract of employment having been terminated under the stipulation specifically provided under Regulation 14 and the order of the appointment of the appellant. In this background, the non-compliance of the requirement of Section 25F shall not vitiate or nullify the order of termination of the appellant."
17. A similar view has been expressed by a learned single Judge of this Court in Bundi Chittorgarh Kshetriya Gramin Bank, Bundi v. Central Industrial Tribunal, Jaipur (supra).
18. The present case is also covered by Clause (bb) as stated earlier. Respondent's termination during the period of probation was as per the Standing Orders and under a stipulation in that behalf contained in the contract of appointment. Hence, it did not amount to retrenchment and could not be invalidated for non-compliance of the requirement of Section 25F of the Act.
19. After having held termination of the respondent to be valid, question No. 3 with regard to back wages though, may not be necessary to be decided, but, since this question has been seriously agitated and argued at length we propose to consider this question and decide the legal aspect. The learned Single Judge, while quashing the order of termination, has left on discretion of the workman to take steps under Section 33C(2) of the Act for the recovery of back wages from the date of termination till the date of judgment. It is note-worthy that the learned Single Judge did not decide the question of entitlement of the respondent to get back wages for the said period.
20. It is well settled by now that jurisdiction of a Labour Court under Section 33C(2) does not extend to adjudication of entitlement of a claim. Proceedings under Section 33C(2) are in the nature of execution proceedings and does not involve a right of workman to the relief and the corresponding liability of the employer i.e. whether the employer is at all liable or not. The workman cannot put forward a claim in an application under Section 33C(2) in absence of any decision declaring his entitlement to get back wages.
21. In Municipal Corporation of Delhi v. Ganesh Razak and Anr.: (1995-I-LLJ-395), the Supreme Court after considering earlier decisions on the question, has laid down as under at p 400:
"The ratio of these decisions clearly indicates that where the very basis of the claim or the entitlement of the workmen to a certain benefit is disputed, there being no earlier adjudication or recognition thereof by the employer, the dispute relating to entitlement is not incidental to the benefit claimed and is, therefore, clearly outside the scope of a proceeding under Section 33C(2) of the Act. The Labour Court has no jurisdiction to first decide the workmen's entitlement and then proceed to compute the benefit so adjudicated on that basis in exercise of its power under Section 33C(2) of the Act. It is only when the entitlement has been earlier adjudicated or recognised by the employer and thereafter for the purpose of implementation or enforcement thereof some ambiguity requires interpretation that the interpretation is treated as incidental to the Labour Court's power under Section 33C(2) like that of the Executing Court's power to interpret the decree for the purpose of its execution."
22. By the mere fact of quashing dismissal or discharge of a workman on the ground of non-compliance of the requirement of Section 25F of the Act does not make him entitled to get back wages automatically in absence of adjudication on his entitlement to get back wages. In an application under Section 33C(2) the Labour Court has no jurisdiction to first decide the workman's entitlement and then proceed to compute in terms of money the benefit so adjudicated.
23. It is true that a workman, whose services have been illegally terminated, normally, would be entitled to full back wages except to the extent he was gainfully employed during the period. Still, it is not a straight jacket formula or an iron rule to award relief of backwages It is a question of fact depending on evidence whether after termination of his employment the workman was gainfully employed elsewhere or not and it is one of important factors to be considered for determining whether or not the reinstatement should be with full back wages and with continuity of employment. In the instant case, the respondent-workman never raised an industrial dispute nor invoked the jurisdiction of the Labour Tribunal. He directly moved this Court under Article 226 of the Constitution of India challenging his order of termination and the question of his entitlement to back wages has not been decided by the learned Single Judge. As the question of back wages depends on consideration of several factors, ordinarily the High Court could quash workman's dismissal or discharge and it cannot in its certiorari jurisdiction under Article 226 of the Constitution give further direction that the employee should be reinstated in service with full back wages.
24. In the Managing Director, U.P. Warehousing Corporation and Ors. v. Vijay Narayan Vajpayee (1980-I-LLJ-222)(SC) it has been held as under at p228:
"Thus in matter of employment, while exercising its supervisory jurisdiction under Article 226 of the Constitution over the orders and quasi Judicial proceeding of an administrative authority-not being a proceeding under the industrial/labour law before an industrial/labour Tribunal culminating in dismissal of the employee, the High Court should ordinarily, in the event of the dismissal being found illegal, simply quash the same and should not further give a positive direction for payment to the employee full back wages (although as a consequence of the annulment of the dismissal, the position as it obtained immediately before the dismissal is restored), such peculiar powers can properly be exercised in a case where the impugned adjudication or award has been given by an Industrial Tribunal or Labour Court."
25. Hence, the direction given by the learned Single Judge with regard to back wages is also not sustainable.
26. The result of the above discussions is that this appeal deserves to be allowed and is hereby allowed. The impugned order of learned Single Judge is set aside. The writ petition filed by the Respondent worker is dismissed. In the facts and circumstances there shall be no order as to costs.