Madras High Court
Rallis India Ltd., Madras vs M. Narasimha Rao And Another on 21 August, 1990
Equivalent citations: [1989(58)FLR777], (1991)IILLJ505MAD
Author: A.S. Anand
Bench: A.S. Anand
JUDGMENT Raju, J.
1. This appeal is filed against the order dated November 13, 1987 in W.P. No. 932 of 1984 dismissing the said petition seeking to quash the orders of the second respondent herein dated December 15, 1983 made in T.S.E. Case No. 15 of 1973.
2. The relevant facts relating to the case on hand are not in much controversy. The first respondent was appointed and serving under the appellant as a Medical Representative with Headquarters in Nellore in the State of Andhra Pradesh and he had to work in the areas comprising of Nellore, Chittoor and Cuddapah Districts of Andhra Pradesh State. After October, 1967, according to the appellant, the first respondent was indifferent in the performance of his duties which necessitated the issue of several directions and warnings both orally and in writing also requesting him to improve his efficiency and achieve the sales targets. According to the appellant, there was no improvement and consequently by an order dated January 10, 1973 the appellant terminated the services of the first respondent with effect from January 31, 1973. That portion of the order of termination, which is relevant for the purposes of consideration in this case, is as hereunder :-
"We regret to inform you that we have no further need of your services and your services shall be deemed to be terminated with effect from January 31, 1973.
You will be paid, your salary upto and inclusive of January 31, 1973, one month's notice pay and commission will be paid after deduction of any advance given by the company."
As against this, the first respondent preferred an appeal under Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947. The appellant took two preliminary objections on the ground (a) that the first respondent was not employed in any shop or commercial establishment within the jurisdiction of the said appellate authority; and (b) that as principal Medical Representative, the first respondent was required to do canvassing and in substance his job was that of a canvasser and, therefore, the Tamil Nadu Shops and Establishments Act will not apply to him. The appellate authority rejected the preliminary objection by its order dated September 10, 1976 and thereupon the matter was taken up before this Court which ultimately ended in W.A. No. 377 of 1977. A Division Bench of this Court repelled the contentions of the appellant herein and directed the disposal of the matter on merits.
3. Thereafter, the case was taken up for trial on merits and an additional counter affidavit was filed by the appellant herein wherein it was contended that the service of the first respondent, who was employed as a Medical Representative, was terminated for a "reasonable cause" on January 10, 1973, that after October, 1967, the first respondent was found to be inefficient in the performance of his duties which necessitated the issue of several oral and written directions to improve his efficiency and achieve the sales targets, that inspite of this, there was no improvement in the efficiency of the performance of his duties and consequently it was decided that the service of the first respondent should be terminated on grounds of inefficiency and performance of work. It was also submitted that the non-employment of the first respondent was for a reasonable cause and inasmuch as he had been issued one month's salary in lieu of notice, the appeal deserves to be dismissed. The appellant also denied the claim of the first respondent that he was subjected to any pin pricks, humiliations and biased attitude by the Regional Manager at Madras or that the first respondent was charged with irregularities and there was no victimisation as alleged. The appellant also pleaded that attribution of inefficiency does not amount to an allegation of misconduct and, therefore, the question of holding any enquiry did not arise.
4. The appellate authority, after a consideration of the materials on record, came to the conclusion that inefficiency cannot be considered to be a misconduct in respect of a probationer but in respect of a person in permanent service allegations of inefficiency do constitute a misconduct for which proper enquiry would be necessary. But at the same time, the appellate authority concluded that though the appellant contended that the service of the first respondent was terminated for "inefficiency", even that cause was not disclosed or mentioned in the order of termination and the appellant could not either plead or justify the termination order at the stage on ground of inefficiency. The appellate authority also relied upon the decision reported in Tata Iron Steel Co., Ltd., v. G. Ramakrishna Iyer and P. Narayanaswamy (1950-II-LLJ-1043) wherein a Division Bench of this Court laid down the necessity to disclose the reason for termination in the order itself and held that it was not open to the employer to assign a reason different from what was stated in the order of termination of maintain or to establish the reasonableness of the order. The appellate authority also referred to an relied upon a judgment of this Court in State Bank of Travancore v. Deputy Commissioner of Labour (1981-I-LLJ-393) wherein a learned single Judge of this Court held as follows (p. 395) :
"If the termination is to be on the ground of reasonable cause, it is incumbent on the part of the employer to disclose the cause in the order of termination and in the absence of such a disclosure it is not possible for any Authority, and in particular the Appellate Authority, under S. 41(2) of the Act, to determine as to whether the grounds put forth by the employer can be stated to constitute a reasonable cause and as to whether the order of termination has been passed bona fide."
On the above premise, the appellate authority set aside the order of termination. As against this, the appellant filed W.P. No. 932 of 1984 to quash the said order of the appellate authority dated December 15, 1983. The learned single Judge, after considering the relevant case laws referred to before him and the respective submission of the counsel appearing for both sides, held that the expression "no longer required" which was the subject matter of consideration in the decision reported in Tata Iron and Steel Company Limited v. G. Ramakrishna Iyer and P. Narayanasamy (supra) as well as the expression "we have no further need of your services" contained in the impugned order, carry the same purport or meaning, that when an employer uses the above phraseology, there could be innumerable causes or factors which the necessitated the termination of services as above and unless the very reason for which the employer considered the services of the employee to be not needed any further, is stated in this order, such an order of termination is not termination in the eye of law and thereafter the employer could not be allowed to spell out the reason which it could and ought to have stated in the very termination order itself. With the above conclusion, the learned single Judge dismissed the writ petition holding that there is no need to remit the matter as requested by the appellant, since there was no valid order of termination. Aggrieved against the same, the above writ appeal has been filed.
5. Mr. Sanjay Mohan, learned counsel for the appellant, contended as follows :- (a) The termination was on account of the inefficiency in the performance of the services and the failure to improve efficiency in spite of demands made on the first respondent. The learned Counsel referred to the various voluminous correspondences in this regard enclosed in the typed set of papers and submitted that the said reason does not constitute termination for misconduct and consequently the absence of any domestic enquiry preceding the order of termination does not invalidate the said order; (b) The appellant filed an application praying for permission to examine witnesses on its side in support of the merits of the case and justify the order of termination and substantiate the plea of inefficiency. Failure to pass orders and give an opportunity prayed for vitiated the order of the appellate authority; and (c) The fact that details were not given in the order of termination when both parties knew the reasons for such termination does not disable the employer from substantiating the reasons for the order on the basis of evidence before the appellate authority.
6. Mr. A. L. Somayajee, learned counsel appearing for the first respondent, contended as follows :- (a) When the termination order stated that the appellant had no further need of the services of the first respondent, it is merely indicative of the factum of termination and not really the reasons for termination. It has been contended that unless the cause or reason which made the employer to come to the conclusion that there is no further need of the services of the first respondent is actually specified in the order of termination, it is to be taken as no indication of reason in the order and consequently it is not open to the employer at the appellate stage to give reason as well as try to defend the order of termination to be for a reasonable cause; (b) Learned Counsel, while referring to the communications at pages 11, 16, 21, 42, 57 and 60 of the typed set of papers, contended that the employer was making serious allegations of irregularity and insubordination against the first respondent and particularly threatened to take disciplinary action in their latter dated December 27, 1972. Consequently, the submission of the learned counsel for the first respondent was that in effect there was an alleged misconduct and in the absence of a domestic enquiry before such termination, the order is vitiated; and (c) Disclosure of the reason for termination will only help the appellate authority or the Court to find out whether the dispensing with services was for a reasonable cause or on the ground of misconduct, and failure to disclose the reason in the order renders the very order void and there was nothing further to be considered by the appellate authority by giving an opportunity to the employer to lead evidence.
7. Learned counsel for the appellant produced case laws to substantiate his submission that allegations and attribution of inefficiency in an employee do not constitute an allegation of misconduct. We are afraid that the decision in Union of India v. J. Ahmed (1979-II-LLJ-14) (S.C.) really does not support such a wide proposition. We find that the learned Judges of the Supreme Court in the said decision, as a matter of principle, sustained the principle that there could be cases of inefficiency or lapse or negligence in the performance of duties which having regard to the nature of the charges and the resultant consequences or damage could be held to be misconduct. At the same time, the learned Judges, having regard to the nature of the charges in that particular case, came to the conclusion that no misconduct was involved. Likewise, in the decision in Shyam Sunder Pal v. Union of India (1983 Lab. I.C. 48), a learned single Judge of the Calcutta High Court held that the order of termination on account of unsatisfactory work with reference to the particular nature of the charges therein did not constitute any blemish or stigma. Learned counsel for the first respondent referred to the decisions reported in Tata Iron Steel Co. Ltd. v. G. Ramakrishna Iyer and P. Narayanasamy (supra); The State of Bihar v. Shiva Bhikshuk Mishra (1970-II-LLJ-440); State Bank of Travancore v. Deputy Commissioner of Labour (supra); and Spencer & Co. Ltd., Madras v. B. Vajravelu and another (1990-I-LLJ-569) and reiterated the submission made on the basis of the ratio laid down in those decisions.
8. This Court, after consideration of the authorities placed before it and the submission of the learned counsel on either side, is of the view that it is not necessary for the purposes of this case to go into the question as to whether attributing inefficiency or making allegations expressing want of sufficient efficiency of performance by itself constitute any stigma or amounts to a charge of misconduct. There could be no exception to the principle that it is open to the Courts to examine and consider the entirety of the circumstances preceding or attendant discover whether the order had been made way of punishment by applying the test whether the misconduct is a mere motive or is the very foundation of the order. This Court is inclined to agree with the submissions of the learned counsel for the first respondent made in support of the conclusion expressed by the learned single Judge as well as the findings of the second respondent that the order of termination in question does not contain any reason whatsoever for the decision of the appellant that they have no further need of the services of the first respondent. The disclosure of the cause or reason in the order itself is a must in cases of the nature in question, since it is only then the appellate authority could be in a position to see whether it is a case of simple discharge for a reasonable cause or for an alleged misconduct, in which the appellate authority is obliged to further see whether a proper domestic enquiry was conducted before the passing of the order of termination on grounds of misconduct. The statement contained in the order of termination that the appellant has no further need of the service of the first respondent does not in law by itself constitute a reason. Unless the appellant has also disclosed in the very order of termination the cause or factor which made them to come to such a conclusion, the appellant could not be said to have disclosed the cause or reason for termination in the order in question. This Court further considers that in the absence of disclosure of any cause or factor in the order of termination itself, which alone could be said to be the reason for the decision to terminate the services of the first respondent, there is absolutely no scope for the appellant to contend that the dispensing with the services of the first respondent was for a reasonable cause. Equally, there was no need or obligation cast upon the appellate authority to conduct a detailed enquiry into the undisclosed cause or the reasonableness of such a non-disclosed cause or permit or allow the production of any evidence at the appellate stage to disclose the reason as well as substantiate the reasonableness of the reason for the termination in question. If, as in this case, no reason or cause has been given in the order itself, the order goes down as one without legs to stand. The appellate authority, therefore, could not be said to have committed any error in the exercise of its jurisdiction in not allowing the appellant to produce evidence on its side. It is not also in dispute before us that all the relevant documents were permitted to be made available before the appellate authority and the only grievance is that no oral evidence was allowed to be let in. In the view that this Court has taken that no reason, which has not been stated in the order of termination itself, could be allowed to be either assigned or substantiated at the appellate stage, the appellate authority could not be said to have committed any error of law in not said to have opportunity prayed for by the appellant. We also find that reliance has been rightly placed upon the decisions of this Court reported in Tata Iron Steel Co. Ltd. v. G. Ramakrishna Iyer and P. Narayanaswami (supra) as well as State Bank of Travancore v. Deputy Commissioner of Labour (supra) for rejecting the plea of the appellant in this case by the appellate authority and the learned Judge and the conclusions arrived at by them are quite in accordance with law.
9. That apart, even without going into the question as to whether a charge of inefficiency and lack of expected efficiency in performance constitute misconduct involving a stigma, if the nature and character of the order of termination before us is considered, in our opinion, it appears to be more an order of termination brought about for reasons of misconduct. The fact that the termination order as such does not contain any express words of stigma is not conclusive of the issue. It may be evident from the entirety of circumstances preceding or attendant on the particular order in question and for that purpose materials could be examined to see whether the misconduct is a mere motive or is the very foundation of the order. So far as the present case is concerned, both the counsel for the appellant as well as the counsel for the respondents themselves took us through the relevant materials made available in the form of typed sets. In the light of our consideration of all these materials and particularly the communications made available at pages 11, 16, 21, 42, 57 and 60 of the typed set of papers, we are constrained to come to the conclusion that there were serious allegations of certain irregularities in the performance of duties as well as insubordination resulting even in a threatened dismissal and those really constituted the basis of the impugned order of termination. Consequently, the plea that the order of termination in question is one dispensing with the services of the first respondent for a reasonable cause not amounting to misconduct has to be rejected. If that be the position, having regard to the admitted fact that no domestic enquiry was conducted before passing the impugned order of termination, no question of permitting the appellant to lead for the first time evidence before the appellate authority functioning under the Tamil Nadu Shop and Establishments Act exercising powers under Section 41 arises. Even the learned counsel for the appellant conceded this position on the scope of appellant powers under Section 41 of the Act. Consequently, we do not find any error of law, either in the order of the appellate authority or that of the learned single Judge warranting interference by us in this appeal. The appeal, therefore, fails and is dismissed. But there will be no order as to costs.