Kerala High Court
Eranalloor Service Co-Operative Bank ... vs Labour Court And Ors. on 30 May, 1986
Equivalent citations: (1986)IILLJ492KER
JUDGMENT Radhakrishna Menon, J.
1. The petitioner Bank is a service Co-operative Society, established under the Kerala Co-operative Societies Act 1969 for short, the Act.
2. After the coming into force of Section 80 of the Act, the petitioner adopted the staff pattern evidenced by Exts. M10 and M10(a) produced before the 1st respondent who by Ext. P6 award has declared that the second respondent is entitled to get reinstated in service as "salesman" with continuity of service and the benefit of back wages with effect from 1st May, 1977.
3. The facts relevant for deciding the issue arising for consideration in this O.P. are these: While working as a commission agent, the second respondent was appointed as a salesman on a temporary basis, as is seen from Ext. P 1. Ext. P 1 discloses that the appointment was subject to the approval of the Registrar of the Co-operative Societies. It is relevant to note here that at the time when the second respondent was appointed as salesman, he did not have the requisite qualification prescribed under Rule 186 of the Co-operative Societies Rules, for short the Rules, and therefore he was ineligible for being appointed as salesman. The petitioner therefore had approached the Re gistrar for sanction to appoint the 2nd respondent as a salesman which however, was turned down as is seen from Ext. P2.
4. The petitioner society thereafter considered the impact of the above order refusing permission and resolved as is seen from Ext. P3 to terminate the service of the second respondent. The" second respondent filed a revision before the Registrar against the order of termination, Ext. P3. The Registrar after considering the various contentions raised by the second respondent passed Ext. P4 order upholding the order of the Deputy Registrar that the appointment of the second respondent as salesman in the petitioner bank is contray to the express provisions contained in Section 80 of the Act. Aggrieved by Ext. P4 order the second respondent filed a revision before the Government. The Government by Ext. P5 order sustained the order terminating the service of the second respondent. Thereafter the second respondent got 'the dispute' referred to the first respondent under Section 10(1) of the Industrial Disputes Act for short the ID. Act. The first respondent after considering the various contentions raised by the parties has passed Ext. P6 award which is under challenge in this O.P.
5. Learned counsel for the petitioner submits that the impugned award Ext. P6 is not sustainable in law. Expanding this contention he submits:
The relationship between the petitioner and the second respondent under no circumstance can be said to be that of master and servant because the order appointing the second respondent as salesman was one passed contrary to the express provisions of Section 80 of the Act. Dilating on this point he submits that unless the relationship of Master and Servant exists the provisions of the I.D. Act, are not applicable and if that be the position, the question whether the termination of the service of the second respondent can be said to be retrenchment within the meaning of Section 2(f) of the I.D. Act, does not arise for consideration. If it is not retrenchment, then Section 25F of the I.D. Act is not attracted, he submits.
That the petitioner society has adopted the staff pattern prescribed under Rule 188 is beyond; challeng" and therefore no appointment as salesman can be had unless the person recommended for appointment possesses S.S.L.C. or its equivalent or a successful completion of the Subordinate (Junior Personnel Co-operative Training Course (Junior Diploma in Co-operation) as provided for under Rule 186. An appointment by passing the qualification prescribed under Rule 186 can be had only if the society applies for and obtains the prior approval of the Registrar of Co-operative Societies (Vide the second proviso to Rule 188). It therefore follows that the appointments made without obtaining the prior approval of the Registrar of Cooperative Societies, will be declared as appointments made without the authority of law and hence ab initio void. The contract of service in such cases can be terminated even without an enquiry. Here it is worth remembering that it is not the case of the second respondent that in such circumstances the appointment will only be voidable. For that matter such a contention cannot be raised at all because these provisions as a matter of fact, prohibit the appointment of persons not possessing the prescribed qualification without the prior approval of the Registrar of Co-operative Societies.
6. I am fortified in this view by a Division Bench ruling of this court in K. N. Gopalan v. State Bank of Travancore I.L.R. Kerala 1980 (1) 81. The petitioner in the said ruling secured employment without disclosing" important facts which if disclosed will make him disqualified. The appointments in such cases, this court held, will be void and can be terminated without enquiry.
7. A question however, would arise whether in such circumstances the termination of service will attract the provisions of the I.D. Act. To put it differently; if the service of such an appointee is terminated without complying with the provisions of Section 25F of the I.D. Act, is he entitled to reinstatement and retrenchment compensation? He will not; because under law, the effect of the order sending him out will not be one terminating his services but will only be a declaration that he never had been appointed to that post. I would in this connection refer to a decision of this court in Kunhikrishnan Nair v. State of Kerala 1964 K.L.T. 1066 wherein it has been stated thus:
There was no dismissal or reduction in rank within the meaning of Article 311 and therefore no enquiry as contemplated by the Article was necessary. Assuming that the real reason why the service of the petitioner as Panchayat Executive Officer was purported to be terminated is that his character and antecedents were not found acceptable to the appointing authority, the real effect of the order was not to terminate the service of the petitioner as Panchayat Executive Officer, but only to declare that he has never been appointed to that post. The rule regarding the character and antecedents of a person for appointment to the service is really a rule laying down one of the qualifications of that person for appointment to the service. So as the appointing authority was not satisfied about the character and antecedents of the petitioner, he was ineligible for being appointed to the service, which means that he had no qualification for being appointed to the service. Therefore, the order of reversion can only mean that the Government have finally decided that the petitioner was ineligible for appointment. It cannot therefore be said that the petitioner's service as Panchayat Executive Officer was terminated by the impugned order as the appointment itself was void. In this view of the matter no question of the applicability of Article 311 arises in the case.
8. It therefore follows that the relationship between the petitioner and the second respondent brought about by Ext. P1 is not the relationship of master and servant and hence the petitioner is not entitled to the protection provided for under the I.D. Act.
9. It is true that all retrenchment is termination of service; but the vice versa is not always true. Only terminations which are the result of the exercises of violation by the master would fall within the meaning of Section 2(oo) of the I.D. Act. If the termination is consequent upon orders passed by superior authorities constituted under the statute under which the employer is functioning, such termination will not partake of the character of retrenchment within the meaning of Section 2(oo). In such cases the employee whose services have been terminated, is not entitled to the benefit of Section 25F of the I.D. Act. (Vide C. V.A. Hydrose & Son and Ors. v. Joseph Sanjon and Ors. 1967-I L.L.J. 509.
10. Learned counsel for the second respondent, relying on the decision of the Supreme Court in Santosh Gupta v. State Bank of India 1980-II L.L.J. 72 however submits that the termination of the services of the second respondent, spells retrenchment. He submits that the expression "for any reason whatsoever," in the definition of the word retrenchment, under Section 2(oo) is very wide and therefore whatever be the reason for the termination of the services of the second respondent, the said termination, inasmuch as it is in violation of the provision contained in Section 25F of the I.D. Act, must be declared to be bad in law. That the second respondent has been working under the petitioner for more than 240 days is not in dispute. In fact the petitioner admits it. He therefore submits that the conditions precedent that are necessary to enable the 2nd respondent to claim the benefit of Section 25F, do exist in this case and therefore the impugned award may be declared void.
11. In order to appreciate this line of approach to the issue it is necessary to consider the scope of Sections 25F and 2(oo) of the I.D. Act. Section 2(oo) suggests that the person who claims the benefit of Section 25F must be one, validly appointed in the service of the employer. The service must be capable of being continued until any of the events envisaged under Clauses (a), (b) and (c) of Section 2(oo) happens. In short the person who claims the benefit of Section 25F shall establish that he is in the service of the employer having been appointed validly. It should be remembered that it is the contract of service that is terminated. A service cannot be terminated unless it is capable of being continued. The Supreme Court has held so in The Workmen of the Bangalore Woollen, Cotton and Silk Mills Co. Ltd. v. The Management of the Bangalore Woollen, Cotton and Silk Mills Co. Ltd. 1962-I L.L.J. 213,
12. Having understood the law thus, we will consider the scop of the expression capable of being continued in service, in Section 2(oo). "Capable of being continued" suggests that the employee should have entered the service under a valid contract of service which cannot be terminated without complying with the provisions of Section 25F. The workman in order to avail of the benefits of Section 25F should therefore establish that he has the right to continue in service and that the said service has been terminated without complying with the provisions of Section 25F.
13. It is in this backdrop the scope of the dictum of the Supreme Court in Santosh Gupta's case has to be considered. In the said decision the Supreme Court has referred to an earlier decision, in State Bank of India v. Shri N. Sundara Money 1976-I L.L.J. 478 where the Supreme Court while considering the scope of Section 2(oo), has indicated that the order of termination which would attract the provisions of the I.D. Act is the result of the exercise of violation by the employer. This is what the Supreme Court has said:
True, the section speaks of retrenchment by the employer and it is urged that some act of violation by the employer to bring about the termination is essential to attract Section 25F and automatic extinguishment of service by efflux of time cannot be sufficient.
When I refer to this passage I shall not be understood to have said that the Supreme Court has finally spoken on this aspect. Whatever that be, it can be seen from Santosh Gupta's case that the Supreme Court had no occasion to consider the case of a workman whose appointment indisputably was void abinitio. The content of the relevant provisions of the I.D. Act positively indicate that the workman who is entitled to the benefits of the said enactment, must be one who came into the service under a valid order of appointment. His service must be capable of being continued unless any of the events contemplated under Clauses (a) to (c) of Section 2(oo) exist.
14. The facts available on record would show that the order appointing the petitioner as salesman was ab initio void and if that be so it cannot be said that the second respondent is a workman entitled to the benefits of 25F of the I.D. Act. The award directing reinstatement of the second respondent into service with back wages therefore is not sustainable in law. Ext. P6 therefore is liable to be quashed. I accordingly quash Ext. P6.
15. In the peculiar circumstances of the case I am of the view that the payments made by the petitioner to the 2nd respondent under directions of this court shall be refunded and in case the second respondent fails to refund the same, the petitioner can recover it from the 2nd respondent.
O.P. is allowed. In the circumstances of the case no order as to costs.