Punjab-Haryana High Court
Ajit Singh vs Presiding Officer, Labour Court And ... on 7 May, 2002
Equivalent citations: [2002(94)FLR446], (2002)IIILLJ554P&H
JUDGMENT
G.S. Singhvi, A.C.J.
1. These appeals are directed against an order dated August 30; 1991, passed by the learned single judge in C.W.P. No. 1994 of 1985 - Ajit Singh v. Presiding Officer, Labour Court, Rohtak and C.W.P. No. 2018 of 1985 - Sonepat Co- operative Sugar Mills Ltd., Sonepat v. Presiding Officer, Labour Court, Rohtak.
2. The appellant, Ajit Singh, was appointed as Legal Assistant in the service of Sonepat Co-operative Sugar Mills Ltd., Sonepat on September 27, 1978. His service was terminated on February 9, 1980 without complying with the provisions of Section 25F of the Industrial Disputes Act, 1947 (for short, the Act) or holding enquiry in consonance with the rules of natural justice. Immediately thereafter, Shri Vishnu Dutt was appointed on part time basis to do the work which was being done by the appellant. He challenged the action of the employer by raising an industrial dispute which was referred by the State Government to the Labour Court, Rohtak, under Section 10(1)(c) of the Act.
3. In his statement of claim, the appellant pleaded that the termination of his service was vitiated due to violation of the mandatory provisions of Sections 25F and 25G of the Act. He also accused the management of the mill of adopting unfair labour practice.
4. In the written statement filed on behalf of the management, a preliminary objection was raised to the maintainability of the reference on the ground that the applicant (appellant) was not a workman within the meaning of Section 2(s) of the Act. It was further averred that his services had been terminated in accordance with the conditions of appointment.
5. On the pleadings of the parties, the Labour Court framed the following issues:
"1. Whether the applicant does not fall under the definition of workman (OPM);
2. Whether the termination of services of the workman is proper, justified and in order ? If not, to what relief is he entitled?"
6. By an order dated September 24, 1982, the Labour Court decided issue No. 1 in favour of the appellant and, held that he is covered by the definition of workman. Thereafter, by an award dated November 13, 1984, it ordered reinstatement of the appellant with 50 per cent back wages. For the sake of reference and convenience, the relevant extracts of the award are reproduced below;
"Appointment letter issued in favour of the workman, photo copy of which exhibit M.W. 1 is dated September 27, 1978. The workman joined his services on September 28, 1978. As per stipulation in the letter of appointment his initial period of probation was one year, which could be extended further by one year by the respondent but the respondent chose to extend the period of probation for two months only, vide its letter exhibit M.W. 2/1 dated October 23, 1979, with effect from September 28, 1979. The management issued another letter to the workman on January 23/24, 1980, exhibit M.W. 2/3 intimating him that since the Board of Directors have decided to abolish the post of legal assistant in the respondent-mill at the close of the current crushing season, so the services of the workman will not be required after that. Copy of the order of termination is exhibit W. 1. The same is dated February 9, 1980. All these facts are undisputed. That would mean that the workman was in the employment of the respondent right from September 28, 1978, to February 9, 1980, and his tenure was definitely more than one year on the date of his termination. The learned authorised representative of the respondent-management tried to by-pass the provisions of Section 25F of the said Act by arguing that since there was a stipulation in the letter of appointment issued to the workman that his services could be dispensed with without prior notice during the period of probation, so the workman cannot press into service the provisions of Section 25F of the said Act. In my opinion, the contention is absolutely grotesque and fanciful. The same runs counter to the settled position of law handed out in many authorities of various High Courts and the Supreme Court of India. In that behalf, a reference can be made to the Management of Karnataka State Road Transport Corporation, Bangalore v. M. Boraiah, AIR 1983 SC 1320 : 1984 (1) SCC 244 : 1984-I-LLJ-110. The observation made in this authority can be extracted with advantage:
"Once the conclusion is reached that retrenchment as defined in Section 2(oo) of the Industrial Disputes Act covers every case of termination of service except those which have been embodied in the definition, discharge from employment or termination of services of a probationer would also amount to retrenchment. Admittedly, the requirements of Section 25F of the Industrial Disputes Act had not been complied with in these cases. Counsel for the appellant did not very appropriately dispute before us that the necessary consequence of non-compliance of Section 25F of the Industrial Disputes Act in a case where it applies made the order of termination void. The High Court, in our opinion has, therefore, rightly came to the conclusion that in these cases the order of retrenchment was bad and consequently it upheld the award of the Labour Court which set aside those orders and gave appropriate relief. These appeals are dismissed. There would be one set of costs. Consolidated hearing fee is assessed at Rs. 5,000."
Other authorities cited on behalf of the workman on this point were State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610 : 1960-I-LLJ-251 ; Hindustan Steel Ltd. v. State of Orissa, AIR 1977 SC 31 ; 1976 (4) SCC 222 : 1977-I-LLJ-1; Udaipur Mineral Development Syndicate (P.) Ltd. v. M.P. Dave, 1975-II-LLJ-499 (Raj-DB); Santosh Gupta v. State Bank of Patiala, AIR 1980 SC 1219 : 1980 (3) SCC 340 : 1980- II-LLJ-72. So, there is no escape from the conclusion that in the process of terminating the services of the workman, the respondent did not comply with the provisions of Section 25F of the said Act and as such, his termination/ retrenchment was void ab initio and cannot be sustained."
7. The learned authorised representative of the respondent tried to wriggle out of this unhappy position by arguing that the respondent was constrained to dispense with the services of the workman because no post of legal assistant was provided in the respondent-mill by the Haryana State Federation of Co-operative Sugar Mills Ltd., Chandigarh as Apex authority which controls the function of the respondent-mill and its staffing pattern. Be that as it may the respondent could not dispense with the services of the workman in the summary manner it did, without complying with the provisions of Section 25F of the said Act and so the order of termination is held to be illegal and void ab initio. The mala fide nature of the order of termination is also apparent from the fact that immediately after dispensing with the services of the workman, the respondent-mill chose to employ the services of Shri Vishnu Dutt, though on part time basis and this was done, as alleged by the workman just to benefit a favourite of the respondent. I shall refrain from passing any observations about the circumstances under which the services of Shri Vishnu Dutt were employed by the respondent. Suffice it to say that the conduct of the respondent was most unbecoming in that behalf. So, this issue in its entirety is answered in favour of the workman, (italicised by us)
8. The objection raised by the representative of the employer to its jurisdiction to entertain and decide the reference in view of the provisions contained in the Haryana Co-operative Societies Act, 1984, was overruled by the Labour Court with the observation that the said Act had not been given retrospective operation. On the issue of back wages, the Labour Court held that the ends of justice would be met by directing payment of 50 per cent back wages. Accordingly, it passed the award dated November 13, 1984, for reinstatement of the workman with continuity of service and 50 per cent back wages.
9. The appellant filed C.W.P. No. 1994 of 1985 for quashing the award to the extent of denial of back wages and respondent No. 2 filed C.W.P. No. 2018 of 1985 for quashing the award in its entirety. The learned single judge upheld the findings of the Labour Court that the appellant falls within the definition of workman under Section 2(s) of the Act. He also approved the view taken by the Labour Court that termination of the service of the appellant was violative of Section 25F of the Act. However, by taking into consideration the averments contained in paragraph 7(v) of C.W.P. No. 2018 of 1985 that the appellant had been appointed as Additional District Attorney in the State Government, the learned single judge set aside the direction for reinstatement by making the following observations:
"The workman had joined the post of legal assistant on September 28, 1978. His services were terminated on February 9, 1980. He had thus worked for a total period of about 17 months. Thereafter, he has been practising as an advocate and had even been appointed as an Additional District Attorney in the year 1985. Taking the totality of circumstances under consideration, I am of the view that the award of 50 per cent. back wages from the date of termination to the date of the award, viz., November 13, 1984, would be a just and fair compensation to the petitioner. He having been appointed as an Additional District Attorney in the year 1985, it would not be in the fitness of things to order his reinstatement in service, especially when from the evidence on record, it is apparent that one Vishnu Dutt had been appointed in his place."
10. Shri R.K. Malik argued that the learned single judge committed a serious error by interfering with the award of the Labour Court because the same did not suffer from any jurisdictional infirmity or error of law apparent on the face of the record. He further argued that reinstatement with full back wages is the normal rule in the cases of unlawful termination of service and any deviation from that rule can be made only in exceptional circumstances, but the learned single judge interfered with the award of reinstatement without any rhyme or reason. Shri Malik also assailed the award of the Labour Court to the extent of denial of full back wages to the appellant by arguing that in the absence of any evidence of his gainful employment, the appellant could not have been deprived of his right to get full wages for the intervening period.
11. Shri R.S. Chahar, counsel for the respondents supported the impugned order and argued that the relief of reinstatement was rightly declined to the appellant because he had served under the bank for a period of a few months only and after termination of service, he had joined service as legal assistant.
12. During the course of hearing, we enquired from Shri Malik as to what the appellant had been doing after termination of his service from the post of legal assistant. In reply, learned counsel stated that after five years of the termination of his service, the appellant was appointed as Additional District Attorney under the State Government, but his services were terminated on September 1, 1987, and since then he is enrolled as an advocate.
13. We have given serious thought to the arguments of the learned counsel. A look at the order under challenge shows that the learned single judge has upset the award of reinstatement only on the ground that after the termination of his service, the appellant had been appointed as Additional District Attorney in the year 1985 and he worked in that post till January, 1987. In our opinion, the, learned single judge has committed a serious illegality by upsetting the award of reinstatement ignoring the fact that after January 1987, the appellant was not holding the post of Additional District Attorney or any other post under the Government or a private employer. We can take judicial notice of the fact that adjudication of the disputes raised under the Act takes years together and during the long interregnum, the workman cannot be expected to sit idle. Rather, he is bound to do something for earning his livelihood. If his act of obtaining employment during the pendency of reference proceedings etc., could be made a ground for interfering with the award of reinstatement, then in all the cases the employer would succeed in persuading the superior Court to pass the order like the one impugned before us. However, that would clearly be against the settled principles of industrial jurisprudence and law laid down by the Supreme Court.
14. The provisions of Section 25F(a) and (b) of the Act have been held to be mandatory - State of Bombay v. Hospital Mazdoor Sabha (supra), State Bank of India v. N. Sundramoni, AIR 1976 SC 1111 : 1976 (1) SCC 822 : 1976-I-LLJ-478; Delhi Cloth and General Mills Ltd. v. Shambhu Nath, AIR 1978 SC 8 : 1977 (4) SCC 415 : 1978-I-LLJ-1; Santosh Gupta v. State Bank of Patiala (supra); S.K. Verma v. Industrial Tribunal-cum- Labour Court, New Delhi, AIR 1981 SC 422 and Mohan Lal v. Management of Bharat Electronics Ltd., AIR 1981 SC 1253 : 1981 (3) SCC 225 : 1981-II-LLJ-70. The Courts have also held that non-compliance with the mandatory provisions of Section 25F has the effect of rendering the action of the employer as void ab initio, invalid and inoperative. It is also the consistent view of the Courts that the relief of reinstatement with continuity of service and back wages must follow as a necessary corollary to the declaration of invalidity of the action taken by the employer in violation of the provisions of Section 25F. In State of Bombay v. Hospital Mazdoor Sabha (supra), a three judge Bench of the Supreme Court considered the nature of Section 25F(b) and held as under 1960-I-LLJ-251 at p. 255:
"Having regard to the fact that the words used in Section 25F(b) are mandatory and their effect is plain and unambiguous it seems to us that the Court of Appeal was right in holding that Section 25I covered cases of recovery of monies other than those specified in Section 25F(b), and it is obvious that there are several other cases in which monies become due from the employers to the employees under Chapter v. ; it is for the recovery of these monies that Section 25I had been enacted. Therefore, we see no substance in the argument that the Court of Appeal has misconstrued Section 25F(b). That being so, failure to comply with the said provision renders the impugned orders invalid and inoperative. "
15. In Delhi Cloth and General Mills v. Shambhu Nath (supra), a three-judge Bench of the Supreme Court held that the provisions of Section 25F(a) and (b) are mandatory and an order of retrenchment made in violation of these peremptory conditions precedent is liable to be treated as invalid and the workman is entitled to reinstatement with back wages.
16. In Santosh Gupta v. State Bank of Patiala (supra), a two- judge Bench of the Supreme Court held that termination of the services of a person employed on probation without complying with the mandatory provisions of Section 25F was invalid and she was entitled to reinstatement with full back wages.
17. In S.K. Verma v. Industrial Tribunal-cum-Labour Court, New Delhi (supra), a three-judge Bench considered the effect of violation of Section 25F and gave some illustrations in which a departure can possibly be made from the normal rule of reinstatement with back wages.
"We do not propose to refer to the cases arising under Sections 33 and 33A of the Industrial Disputes Act or to cases arising out of references under Sections 10 and 10A of the Industrial Disputes Act. Nor do we propose to engage ourselves in the unfruitful task of answering the question whether the termination of the services of a workman in violation of the provisions of Section 25F is void ab initio or merely invalid and inoperative, even, if it is possible to discover some razor's edge distinction between the Latin void ab initio and the Anglo-Saxon 'invalid and inoperative'. Semantic luxuries are misplaced in the interpretation of bread and butter statutes. Welfare statutes must, of necessity, receive a broad interpretation. Where legislation is designed to give relief against certain kinds of mischief, the Court is not to make inroads by making etymological excursions, void ab initio, 'invalid and inoperative' or call it what you will, the workmen and the employer are primarily concerned with the consequence of striking down the order of termination of services of the workmen. Plain commonsense dictates that the removal of an order terminating the services of workmen must ordinarily lead to the reinstatement of the services of the workmen. It is as if the order has never been passed and so it must ordinarily lead to back wages too. But there may be exceptional circumstances which make it impossible or wholly inequitable vis-a-vis the employer and workmen to direct reinstatement with full back wages. For instance, the industry might have closed down or might be in severe financial doldrums; the workmen concerned might have secured better or other employment elsewhere and so on. In such situations, there is a vestige of discretion left in the Court to make appropriate consequential orders. The Court may deny the relief of reinstatement where reinstatement is impossible because the industry has closed down. The Court may deny the relief of award of full back wages where that would place an impossible burden on the employer. In such and other exceptional cases the Court may mould the relief but, ordinarily the relief to be awarded must be reinstatement with full back wages. That relief must be awarded where no special impediment in the way of awarding the relief is clearly shown. True, occasional hardship may be caused to an employer but we must remember that, more often than not, comparatively far greater hardship is certain to be caused to the workmen if the relief is denied than to the employer if the relief is granted.
In the cases before us we are unable to see any special impediment in the way of awarding the relief. The Labour Court appears to have thought that the award of the relief of reinstatement with full back wages would put these workmen on a par with those who had qualified for permanent absorption by passing the prescribed test and that would create dissatisfaction amongst the latter. First, they can never be on par since reinstatement would not qualify them for permanent absorption. They would continue to be temporary, liable to be retrenched. Second there is not a shred of evidence to suggest that their reinstatement would be a cause for dissatisfaction to anyone. There is no hint in the record that any undue burden would be placed on the employer if the same relief is granted as was done in Santosh Gupta v. State Bank of Patiala (supra)",
18. In Mohan Lal v. Management of Bharat Electronics (supra), a two-judge Bench referred to various judicial precedents and held as under:
"Where the termination is illegal especially where there is an ineffective order of retrenchment, there is neither termination nor cessation of service and a declaration follows that the workman concerned continues to be in service with all consequential benefits, namely, back wages in full and other benefits."
19. In Gammon India Ltd. v. Niranjan Dass, AIR 1984 SC 500 : 1984 (1) SCC 509 : 1984-I-LLJ-233, a three-judge Bench of the Supreme Court described the effect of non-compliance of Section 25F in the following words:
"Where the service of the employee of the company was terminated on account of recession and reduction in the volume of work of the company, and the termination of service of the employee did not fall in any of the excluded categories, the termination of his service would amount to retrenchment. That being so, when the pre-requisite for a valid retrenchment as laid down in Section 25F was not complied with, the retrenchment bringing about termination of service of the employee would be ab initio void."
20. In Hart Palace, Ambala City v. Presiding Officer, Labour Court, Rohtak, 1980 (40) FLR 383, a Full Bench of this Court held that the workman is entitled to reinstatement with full back wages.
21. By applying the ratio of the above noted decisions to the facts of this case, we hold that the learned single judge committed a serious illegality by interfering with the award of the Labour Court without even holding that it was vitiated due to an error of law apparent on the face of the record. In our opinion, the appointment of the appellant as Assistant District Attorney for a period of less than two years did not warrant interference with the award of the Labour Court and the learned single judge erred in doing so.
22. In so far as the appellant's claim for back wages is concerned, we do not consider it proper to interfere with the award of the Labour Court because as per his own showing, the appellant had remained employed as Assistant District Attorney albeit for a short period of about two years and thereafter, he remained enrolled as an advocate,
23. In the result, L.P.A. No. 1356 of 1991 is allowed. The order of the learned single judge is set aside and the award of reinstatement passed by the Labour Court is restored. L.P.A. No. 1311 of 1991 is dismissed. However, it is made clear that the appellant shall be free to avail of the remedy under Section 33C(2) of the Act for payment of wages for the period between the date of award and the date of physical reinstatement. If any such application is filed by the appellant, the employer shall be free to contest the same by showing that the workman was gainfully employed during the intervening period and, therefore, he is not entitled to the whole or part of the back wages.