Karnataka High Court
Karnataka Handloom Development ... vs D.L. Nanjundaswamy And Anr. on 24 July, 2001
Equivalent citations: [2002(95)FLR626], ILR2002KAR1886, (2002)IILLJ884KANT, 2002 AIR - KANT. H. C. R. 490, (2002) 8 SERVLR 86, (2002) 95 FACLR 626, (2002) 6 KANT LJ 396, (2002) 2 LABLJ 884
Author: A.V. Srinivasa Reddy
Bench: A.V. Srinivasa Reddy
ORDER G.C. Bharuka, J.
1. This Writ Petition is directed against the order dated August 7, 1995 passed by the Labour Court, holding that the order of discharge or termination dated November 28, 1983 passed by the petitioner-Corporation terminating the services of the first respondent Sri Nanjunda Swamy, was illegal. The Labour Court consequently directed for his reinstatement with 50% back wages and other benefits from the date of reference i.e., January 1, 1986 till the date of his reinstatement.
2. The petitioner herein is a Government Company. It has been incorporated by the State Government with an object of developing the handloom industry in the State and help the weavers.
3. The petitioner-Company has set up number of show rooms to market handloom cloths. The first respondent was appointed under an order dated September 30, 1982 (Annexure-B) to the post of 'Helper' on probation for a period of one Year at the first instance. During the period of probation despite repeated warnings the petitioner did not improve his work as desired of him. Therefore his services could not be confirmed and ultimately he was relieved after complying with the requirement of Section 25-F of Industrial Disputes Act, 1947 ("the Act" for short). A memo dated November 28, 1983 (Annexure 'J') issued to the above effect read as follows:
"By appointment order No. KHDC: ADM 15-31, 11160 dated September 30, 1982, you are appointed as Helper on probation for one year and posted to Silk Raw material-cum-Procurement Depot, Malkalmuru. You reported for duty in Silk Raw-Material-cum-Procurement Depot, Malkalmuru, on October 29, 1982. We regret we are unable to confirm you. Hence, your services are hereby terminated with immediate effect.
As required under Section 25-F of the Industrial Disputes Act, you are hereby paid one month's pay in lieu of one month's notice and also 15 days' wages as compensation. A cheque in respect of the above payments bearing No. 40594 dated November 29, 1983 for Rs. 639.00 is enclosed herewith. You are requested to acknowledge the receipt thereof.
for Karnataka Handloom Development Corporation Limited Sd/-
Managing Director."
4. The above memo clearly shows that it was a case of termination simpliciter of a probationer without casting any stigma. The above action on the part of the petitioner was quite permissible under the letter of appointment dated September 30, 1982 (Annexure-B) Clauses 2 and 3 whereof read as under:
"2. You will be on probation for a period of one year. You will be eligible for confirmation on successful completion of the period of probation. If at the end of the probationary period no order of confirmation is issued, you will continue to be on probation till you receive the order of confirmation or order of termination.
3. During or at the end of the period of probation or extended period of probation the Corporation is absolutely at liberty to terminate your services without any notice and without assigning any reasons therefor or any payment of compensation."
5. The first respondent questioned the. validity of the above order of termination by filing a Writ Petition before this Court in W.P. No. 19183/1984 but the same was dismissed by an order dated December 4, 1984 with liberty to make a representation before the State Government. The respondent thereafter instead of filing a representation raised an industrial dispute in 1985. Pursuant thereto the State Government referred the same to the Labour Court under its order of reference dated January 1, 1986. The term of reference wherein is as follows:
"1) Whether the order of dismissal dated November 28, 1982, dismissing Sri D.L. Nanjundaswamy, issued by the Managing Director, Karnataka Handloom Development Corporation, Cunningham Road, Bangalore-52, is in accordance with law?
2) If not, to what relief the workman is entitled?"
6. In the Reference before the Labour Court the first respondent presented his claim statement which was duly countered by the petitioner through their reply. The petitioner led evidence to show that there were materials on record to justify non-confirmation of the service of first respondent because during the probationary period, despite repeated warnings he had not conducted himself with appropriate discipline and the required work culture. Certainly this evidence was led to show that non-confirmation of probationary period of first respondent in service was not suffering from any arbitrariness or whimsical act of the management. Nonetheless the Labour Court took upon itself to examine the evidence and came to the conclusion that since the service of first respondent was terminated on the charge of misconduct therefore they ought to have been proceeded with an enquiry which has not been done in the present case. The Labour Court also held that the first respondent was not given three months salary before termination. Accordingly the impugned order, as noticed above, was passed.
7. The learned single Judge, before whom the Writ Petition was placed, after hearing the learned counsel for the parties, has passed the order dated February 2, 1999 referring it to Division Bench under Section 9 of the Karnataka High Court Act, 1961 since according to him, the plea regarding applicability of Section 25-N of the Act in a case of termination of a probationer on the ground of unsuitability having wider implications should be considered by the Division Bench. A doubt has been raised at the Bar that when a case is referred by a learned single Judge to a Division Bench by formulating a question of law, then whether the Division Bench is required to return the Writ Petition back to the learned single Judge after answering the question of law or it has jurisdiction to decide the entire case.
8. Before proceeding to examine the issues on merits of the case, we would like to delve upon the jurisdictional issue first. Section 9 of the Karnataka High Court Act, 1961 (in short "the High Court Act") reads thus:
"9. Other powers of a single Judge: The powers of the High Court in relation to the following matters shall be exercised by asingle Judge, provided that the Judge before whom the matter is posted for hearing may adjourn it for being heard and determined by a Bench of two Judges:
(i)......... to..........(xi)
(xii) exercise of powers under -
(a) Clause (i) of Article 226 of the Constitution of India except where such power relates to the issues of a Writ in the nature of habeas corpus; and
(b) Articles 227 and 228 of the Constitution of India.
(xiii).........."
If the above provision is read in juxtaposition to Section 6 of the High Court Act which empowers the Division Bench to refer certain questions of law under circumstances mentioned therein to a Full Bench, then it becomes imminently clear that the learned single Judge, if for one or the other good reason, finds it advisable that the matter should be considered and disposed of by a Division Bench then, the entire case gets transferred to the Division Bench and it is the Division Bench which has to decide the case on the issues falling for consideration in such case. No provision of the Act including Section 9 of the High Court Act empowers the Division Bench to decide only issues of law and remit the case back to the learned single Judge for final disposal thereof. Adoption of such course will not only be against the express provision contained in the High Court Act, but even otherwise it may not be found to be advisable because against the order of the learned single Judge again an appeal would lay before the Division Bench. Such a course would merely lead to multiplicity of litigation, avoidable consumption of judicial hours and unwarranted cost escalation for the litigation. Having so held, we proceed to examine on merits.
9. In the case of Governing Council Of Kidwai Memorial Institute Of Oncology, Bangalore v. Dr. Pandurang Godwalkar and Anr., it has been held that an order of termination simpliciter based on certain preliminary enquiry or examination of some allegation, cannot be termed as amounting to punishment. Paragraph 6 of the Judgment reads as under at p. 311 of LLJ:
"Even if such employee while questioning the validity of an order of termination simpliciter brings on the record that some . preliminary enquiry of examination of some allegations had been made, that will not vitiate the order of termination. Reference in this connection may be made to the case of Oil and Natural Gas Commission v. Dr. Mohd. S. Iskender Ali, , where it was pointed out that a temporary employee is appointed on probation for a particular period 'only in order to test whether his conduct is good and satisfactory so that he may be retained.' It was also said that even if misconduct, negligence, inefficiency may be the motive or the influencing factor which induced the employer to terminate the service of the employee, which such employer admittedly had under the terms of the appointment, such termination cannot be held to be penalty or punishment. Same view has been reiterated in connection with appointment of temporary or ad hoc basis in the cases of Ravindra Kumar Misra v. U.P. State Handloom Corporation Limited, ; State of Uttar Pradesh v. Kaushal Kishore Shukla, and Triveni Shankar Saxena v. State of U.P., 1992 (1) JT (SC) 37."
Similarly in a recent judgment in the case of Dipti Prakash Banerjee v. Satyendra Nath Bose National Centre For Basic Sciences, Calcutta and Ors., , it has been held that at pp. 1065 & 1066 of LLJ :
".......... It is true that where the employee had been given suitable warnings, requested to improve, or where he was given a long rope by way of extension of probation, this Court has said that the termination orders cannot be held to be punitive. Hindustan Paper Corporation v. Purnendu Chakraborty, . See in this connection, Oil and Natural Gas Commission v. Md. S. Iskendar Ali, ; Unit Trust of India v. T. Bijaya Kumar, 1992 (5) Serv LR 855 (SC); Principal, Institute of P.G. Medical Education and Research, Pondicherry v. S. Andel, 1995 Suppl (4) SCC 609 and a labour case Oswal Pressure Die Casting Industry v. Presiding Officer, . But in all these cases, the orders were simple orders of termination which did not contain any words amounting to stigma. In case we come to the conclusion that there is stigma in the impugned order, we cannot ignore the effect it will have on the probationer's future whatever be earlier opportunities granted by the respondent organisation to the appellant to improve."
Going by the facts of the case and the materials placed on record despite repeated warnings given to the first respondent, his behaviour with his senior had not improved and therefore the management finding that he can not be confirmed in service, issued the memo at Annexure-'J'. The order at its face does not contain any allegation or any word suggesting any stigma against the first respondent. Therefore, the Labour Court had committed a clear error in holding that the termination of the first respondent amounted to punishment and it ought to have been preceded by a regular enquiry.
10. Now we come to the second question regarding non-compliance of Section 25-F of the Act. In the present case, as is evident from the order of termination at Annexure-J itself, at the time of termination the respondent was duly paid one month's pay in lieu of notice and fifteen days' wages as compensation as required under Section 25-F of the Act.
11. The question is whether in the facts and circumstances of the case, Section 25-F had any application and if so whether non-compliance therewith can be said to vitiate the impugned order and entitle the first respondent to the benefit of reinstatement with 50% back wages as directed by the Labour Court.
12. The question regarding application of Section 25-F of the Act in relation to a probationer had fallen for consideration in the case of Deputy General Manager, KSRTC v. Sheik Abdul Khader and Ors., 1983 (1) K.L.C. 259. The Bench was comprised of M.N. VENKATACHALAIAH and M. RAMA Jois, JJ. It was a case of a probationer whose services were terminated by the Corporation without compliance with the provisions contained under the Act. The Bench held that within the meaning of Section 2(s) of the Act even a probationer was a workman. But as found from para 22 of the Judgment the Bench, despite having found that there were more than three hundred workmen in the Corporation, held that:
"The management of an industry which effects retrenchment of any of its workmen without complying with the provisions of Section 25-F of the Act cannot be heard to contend that the setting aside of the order of discharge would compel the management to pay arrears of salary. The only way to avoid such a consequence, would be to comply with Section 25-F of the Act before effecting retrenchment. In the case of the employees, if the Corporation had proceeded to terminate their services after complying with Section 25-F of the Act, they would not have been faced with the present situation. It is because the Corporation failed to obey the mandate of Section 25-F of the Act, they may now be required to pay arrears of salary to the employees. It is a consequence of its own unlawful action and for that they cannot blame the provisions of the Act."
13. The above judgment was rendered on August 5, 1982. On being challenged, the same was confirmed by the Supreme Court in the case reported in the case of Karnataka State Road Transport Corporation, Bangalore v. Sheikh Abdul Khader and Ors., where again it was held that the termination of a probationer on the ground of unsuitability amounts to retrenchment and therefore requires compliance with Section 25-F of the Act. Para 13 of the judgment reads as under at p. 115 of LLJ:
"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 service of a probationer would also amount to retrenchment. Admittedly the requirements of Section 25-F 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 25-F of the Disputes Act in case where it applied made the order of termination void."
From the above decisions of the Division Bench of this Court and that of the Supreme Court even law abiding citizen can carry an impression that irrespective of number of employees in the industrial establishments, for termination of service of a probationer on the ground of unsuitability is required to comply with the provisions contained in Section 25-F of the Act. This view can reasonably get fortified with the stringent provisions contained in Section 25-N which not only require three months' notice or payment of wages in lieu thereof, but also speaks of a prior permission of the appropriate Government to take action against the probationer. Further, the Government could have given such a permission for termination of the probationer only after holding an elaborate enquiry. If this provision was to apply even to a probationer, the very purpose of keeping a person on probation to test his suitability for confirmation of his service, would have clearly got frustrated.
14. Any how in the present case we do not propose to express our conclusive view with regard to application of Section 25-N of the Act, because in the present case the petitioner-Company has complied with the legal requirements in accordance with the law laid down by the Division Bench and the Supreme Court. Even otherwise after 18 years of termination of service of the first respondent was found to be suitable for confirmation of his probation it will be highly improper to thrust such a person on the petitioner which is a Government undertaking. Possibly for the above reasons an amendment was made in Section 2(oo) of the Act by incorporating Clause (bb) providing that the termination of the services of a workman as a result of non-renewal of contract of employment will not amount to "retrenchment". In the case of M. Venugopal v. LIC of India, A.P. and Anr., it has been held that at p. 603 of LLJ:
".........Once Section 2(oo) is not attracted, there is no question of application of Section 25-F on basis of which the termination of the service of the appellant can be held to be invalid. The termination of the service of the appellant during the period of probation is in terms of the order of appointment read with Regulation 14 of the Regulations".
15. So far as back wages is concerned pursuant to an interim order passed by this Court in the present Writ Petition first respondent has already availed more than Rs. 50,000/- by way of interim relief. In our opinion it will be unjust to penalise the petitioner-Company to pay anything more as damages and that too when the first respondent has been paid the interim amounts without rendering any service or doing work for the petitioner.
16. For the aforesaid reasons the impugned order and award of the Labour Court are quashed. Any how there will be no order as to costs.