Andhra HC (Pre-Telangana)
Allied Sales Corporation Secunderabad vs The Authority Under Andhra Pradesh ... on 27 February, 1990
Equivalent citations: (1990)IILLJ510AP
Author: M. Jagannadha Rao
Bench: M. Jagannadha Rao
JUDGMENT
1. This appeal is preferred by the Management against the judgment of the learned single Judge dismissing the writ petition. The writ petition was dismissed on the ground that the petitioner has an alternative remedy by way of Second Appeal to the Labour Court under Section 41(3) of the A.P. Shops and Establishments Act, 1966.
2. As there has been considerable litigation in this matter earlier which has gone upto Supreme Court at two stage, it is necessary to state the fact from the very beginning of the dispute.
3. The dispute between the appellant and the Workman, the 2nd respondent, is in relation to the age of retirement of the workmen in the appellant establishment.
4. There was a settlement between the Management and the workmen under Section 18(1) of the Industrial Disputes Act on 25th April 1983 under which the age of superannuation of the workmen was fixed at 55 years. The settlement was to be in force upto 30th June 1986 and the next settlement, incorporating practically the same terms, was again entered into on 4th February 1987 under Section 18(1) of the Industrial Disputes Act. There is no dispute that these settlements are under Section 18(1).
5. While so, the Management issued a notice to the workman on 20th November 1986 informing him that he is to retire, on superannuation at his 55th year, the exact date of retirement being 21st May 1987. Questioning the said notice, the workman filed a petition under Section 41(1) of the A.P. Shops and Establishments Act (hereinafter referred to as the Act) on 27th April 1987. The Authority under the Act (hereinafter called the Authority) is the Assistant Commissioner of Labour, Hyderabad-II. The Workman contended that the letter amounted to termination of his services by the Management on the ground of retirement on 21st May 1987. The Management filed a counter before the said Authority refuting the various allegations that were made in the application. The workman filed a stay application. The said stay petition was rejected by the Authority. He, however, did not file any Second Appeal under Section 41(3) before the Labour Court questioning the order of the Authority refusing to stay nor did he seek an early disposal of his first appeal pending before the Authority. Instead, he filed a writ petition in the High Court straightway questioning the proceedings of the Management dated 20th November 1986 and sought a direction that the said proceedings seeking to retire him on 21st May 1987 should be declared as bad and also for grant of a declaration that the action of the Authority in not granting stay is illegal. The said writ petition came up before P. A. Choudary, J. on 20th July 1987. While accepting that 40(3) of the Act is not a provision intended for fixing an age for superannuation for workmen, the learned Judge proceeded to hold that the Authority under the Act could, even apart from Section 40(3), go into the question whether the retirement, by proceedings of the Management dated 20th November 1986, was 'unreasonable'. As, according to the learned Judge, termination could only be for a reasonable cause, he observed that it was open to the workman to question the said order before the Authority under the Act as amounting to an unreasonable termination. The learned Judge noticed that the workman had earlier approached the Authority well before 21st May 1987, the date of superannuation, and observed that inasmuch as the date of superannuation had expired during pendency of the writ petition, the Authority should treat the earlier first appeal filed by the workman against the orders of the Management dated 20th November 1986, as an appeal against his retirement itself which took place on 22nd May 1987. He, therefore, in effect, remanded the matter and directed the authority to examine whether the retirement of the workman could be treated as an unreasonable termination of the contract of service.
6. Against the above said judgment of P. A. Choudary, J. the Management preferred Writ Appeal No. 1225/1987 but the same was dismissed by a Division Bench of this Court on 16th September, 1987 on the ground that, having regard to the terms in the operative portion of the order of the learned single Judge, there was no ground for interfering in writ appeal. The Management then filed S.L.P. No. 14630/87 against the dismissal of W.A. No. 1225/87. Notice was ordered in that S.L.P. on 3rd November, 1988.
7. As things stood thus, the Authority took up the mater on remand by P. A. Choudary, J. to consider whether the retirement at the end of 55th year was unreasonable and it passed a fresh order on 28th November, 1987. It held that the settlement under the Industrial Disputes Act was one singed by the representatives of the workmen under pressure of the Management and that therefore the same was not enforceable. If the settlement could thus be ignored as not being binding on the workman, there was no age of superannuation at which the workman would retire. Therefore the retirement on 21st May, 1987 by the Management should be treated as unreasonable termination, liable to be set aside. The Authority accordingly passed an order holding that the retirement of the workman on the completion of 55 years was bad and directed them to continue the workman in service 'till a reasonable age of retirement is got fixed by approaching the proper forum'. The Management then straightway filed an S.L.P. in the Supreme Court against the said order of the Authority dated 28th November, 1987. The same was registered as S.L.P. No. 2891/1988.
8. We have already stated that in S.L.P. No. 14630/87 filed against the dismissal of W.A. No. 1225/87 the Supreme Court ordered notice on 3rd November, 1988. On the same day, the Supreme Court also took up S.L.P. No. 2891/88 which was filed by the Management against the order dt. 28th November, 1987 of the Authority under the Act on remand and passed the following order :
"This special leave petition is allowed to be withdrawn with liberty to the petitioner to approach the High Court."
On the basis of the above said observations and also on the basis that the order passed by the authority was beyond the scope of s. 41(1) read with Section 40 of the A.P. Shops and Establishments Act, the Management filed the present Writ Petition No. 19142/88. The relief claimed is for quashing of the order of the Authority dt. November 28, 1987. When the writ petition came up for admission before the learned single Judge, he dismissed the same observing that the Management has an alternative remedy of Second Appeal under Section 41(3) against the order passed by the Authority to the Labour Court. It is against this order of the learned single Judge that the present writ appeal has been filed.
9. Before we proceed further, it is necessary to note another important fact. The Supreme Court took up S.L.P. No. 14630/87 filed by the Management against the dismissal of W.A. No. 1225/87 and passed an order on November 27, 1989 declaring that the observations of P. A. Choudary, J. in his judgment dated July 20, 1987 in W.P. No. 5766/87 were 'uncalled for and unwarranted in the circumstances of the case'. Having so observed, the Supreme Court further stated as follows :
"We are now told that the Authority has disposed of the matter in the light of the observations made by the learned single Judge and that order is under challenge before the High Court. Counsel for the petitioner may produce this order before the High Court The Special Leave Petition is disposed of accordingly"
10. The point that arises for consideration in this appeals is :
Whether the Order of the Authority dated November 28, 1987 holding that the settlement under Section 18(1) of the Industrial Disputes Act is vitiated by undue influence or coercion is ultra vires of the powers of the Authority, as a first appellate authority under S. 4(1) read with S. 40 of the A.P. Shops and Establishments Act, 1966 and whether the appellant could be permitted to approach this Court without exhausting the alternative remedy under S. 40(3) of that Act ?
11. The scheme of the Act, no doubt, is that against orders of termination of service of employees under S. 40, there is a first appeal before the Authority notified by the Government under S. 41(1)(a) and then a second appeal by the aggrieved party to the Labour Court under S. 41(3). 41 reads as follows :
S. 41. Appointment of authority to hear and decide appeals arising out of termination of service :-
(1)(a) The Government may, by notification, appoint for any area as may be specified therein, an authority to hear and decide appeals arising out of the termination of service of employee under Section 40.
(b) Any employee whose service has been terminated may appeal to the authority concerned within such time land in such manner as may be prescribed.
(2) The authority may, after inquiry in the prescribed manner, dismiss the appeal or direct the reinstatement of the employee with or without wages for the period he was kept out of employment or direct payment of compensation without reinstatement or grant such other relief as it deems fit in the circumstances of the case.
(3) Against any decision of the authority under sub- (2), a second appeal shall lie to the Labour Court constituted under Section 7 of the Industrial Disputes Act, 1974, within thirty days from the date of communication of the decision and the decision of the Labour Court on such appeal shall be final and binding on both the employer and the employee and shall be given effect to within such time as may be specified in the order of that Court.
(4) Any amount directed to be paid under this may be recovered -
(a) if the authority is a Magistrate, by the authority, as if it were a fine imposed by him as Magistrate; and
(b) if the authority is not a Magistrate, by a Magistrate to whom the authority makes application in this behalf, as if it were a fine imposed by such Magistrate."
12. It will be noticed that, in effect, the first appeal before the Authority is only one against orders of 'termination' by the employer and the second appeal also is in connection with the same question. The Act does not define termination but we have an indication, in S. 40 of the act, of the 'conditions for termination of the services of an employee and payment of gratuity'. That Section 40 reads thus (in so far as it is material) :
S. 40. Conditions for terminating the services of an employee and payment of gratuity :- (1) No employer shall without a reasonable cause and except for misconduct terminate the service of an employee who has been in his employment continuously for a period of not less than six months without giving such employee, at least one month's notice in writing or wages in lieu thereof (and in respect of an employee who has been in his employment continuously for a period of not less than five years, a gratuity amounting to fifteen days' average wages) for each year of continuous employment. Explanation (omitted).
(2) omitted.
(3) An employee, who has completed the age of sixty years or who is physically or mentally unfit having been so declared by a medical certificate, or who wants to retire on medical grounds or to resign his service, may give up his employment after giving to his employer notice of atleast one month in the case of an employee of sixty years of age, and fifteen days in any other cases; and every such employee and the dependent of an employee who dies while in service, shall be entitled to receive (a gratuity as provided in sub- (1). He shall be entitled to receive the wages from the date of giving up the employment until the date on which the gratuity so payable is actually paid, subject to a maximum of wages for two months.
(4) The services of an employee shall not be terminated for misconduct except for such acts or omissions and in such manner, as may be prescribed.
Explanation : For the purpose of this , the term 'employee' shall include part-time employee also."
13. On the question whether S. 40(3) prescribes an age for superannuation, even P. A. Choudary, J. has held against the workman, that it does not. In fact, this question is not in dispute before us even now. But, P. A. Choudary, J. went further and observed that the Authority should go into the question whether superannuation at the age of 55 years under the settlement entered under Section 18(1) of the Industrial Disputes Act, could be treated as 'unreasonable termination' falling under Section 40(1). The Supreme Court, in its orders in S.L.P. No. 14630/87, dated November 27, 1989 directed against W.A. No. 1225/87 arising out of judgment of P. A. Choudary, J. observed.
"We are of the opinion that most of the observation made by the learned single Judge are uncalled or and unwarranted in the circumstances of the case".
The above passage in the order of their Lordships of the Supreme Court is obviously applicable to the further observations made by P. A. Choudary, J. that the Authority under the A.P. Shops and Establishment Act could go into the question whether the superannuation at the end of the 55th year amounted to unreasonable termination under Section 40(1). Therefore, the finality that could otherwise be attached to the observations of P. A. Choudary, J. no longer hinders us and this court can go into the question whether the Authority could decide that the settlement entered into under Section 18(1) of the Industrial Disputes Act, fixing the age of superannuation at 55 years, could be held to have been executed for the workman under pressure, misrepresentation or coercion of the management. In fact, without ignoring the said settlement, the Authority could not have held that the settlement was not binding and that therefore there was no age of superannuation fixed, land that retirement on the completion of 55 years amounted to unreasonable termination.
14. Now the Authority constituted under Section 41(1) of the Act is an authority with very limited jurisdiction. It can only decide in the first appeal whether a termination by the management is valid or not and is within the parameters of Section 40 of the Act. The said Authority, in our view, has absolutely no jurisdiction to decide whether a settlement entered into under Section 18(1) of the Industrial Disputes Act between the representatives of the Workmen and of the Management, is vitiated by undue influence or misrepresentation or coercion on the part of the Management. The Authority, namely, the Assistant Commissioner of Labour, was never intended by the A.P. Legislature to have jurisdiction to go into the question of the validity of a settlement arrived at under Section 18 of the Industrial Disputes Act by an Industrial Court. That Parliament has, in fact, constituted Industrial Courts under the Industrial Disputes Act, with extensive powers cannot be disputed. What we mean to say is that the Authority under Section 41(1) of the A.P. Act has no jurisdiction what-so-ever either to question or to decide about the validity of any such settlements. If parties to a settlement have a grievance about the validity of a settlement, it is for them to agitate the matter before the appropriate forum and they cannot ask an Authority constituted under Section 41(1) of the A.P. Shops and Establishments Act, 1966 with limited jurisdiction, to go into any such question and, that too, incidentally while deciding whether retirement as per the contract of employment, is legal or not.
15. We may also point out that after the matter went back to the Authority pursuant to the judgment of P. A. Choudary, J. the workman did not file any separate pleading alleging undue influence, pressure or misrepresentation on the part of the Management or giving any particulars thereof. Unfortunately, the Authority entertained evidence on the above aspects and came to the conclusion that the settlement was vitiated by undue influence, pressure or misrepresentation. In any event, we are clear that the Authority constituted under Section 41(1) of the A.P. Act had no jurisdiction what so-ever to decide about the validity of an industrial settlement arrived at under Section 18(1) of the Industrial Disputes Act.
16. After the judgment was reserved in this matter, the learned counsel for the respondent workman got circulated a letter through the registry seeking permission to raise another question. The matter was posted for hearing and the learned counsel was heard. The contention was that "As per the Full Bench judgment of the Court in M/s. Sri Brindavan Hotel v. Conciliation officer (1978-II-LLJ-287), if an individual workman covered by both acts viz, the Industrial Disputes Act and the Shops & Establishments Act, wants to raise an individual dispute, he can do so only under the Shops & Establishments Act. This Full Bench judgment was upheld by the judgment of five Judges' Bench reported in A. P. S. W. I. Co-op. Society v. Labour Court (1987-II-LLJ-66)."
17. We shall first explain these two decisions and show that they deal with a different controversy and not with the jurisdiction of the Authority under the Shops Act to deal with validity of a settlement arrived at under Section 18(1) of the Industrial Disputes Act.
18. In Sri Brindavan Hotel (supra), the services of certain employees were terminated as not required and the Workers' Union raised a dispute in regard to the termination of these employees and at their instance, the Conciliation Officer issued notice under the Industrial Disputes Act, 1947 to the Hotel Management for bringing about conciliation. Thereupon, the Management filed a writ petition challenging the jurisdiction of the Conciliation Officer in invoking the provisions of the Industrial Disputes Act. It was contended for the Management that the employees were governed by the A.P. Shops & Establishments Act, 1966 and that the latter Act was a special law land also prevailed over the Central law. This contention was rejected holding that (1) if an individual workman governed by both these Acts wants to raise an individual dispute he can do so only under the Shops Act, (2) If a workmen's union wants to espouse the individual dispute of an individual employee, it can do so only under the Industrial Disputes Act, and (3) in the absence of workman union, if a number of workmen want to espouse an individual dispute of an individual workman, they can so only under the Industrial Disputes Act.
19. In so far as the proposition (1) in Sri Brindavan Hotel's case above is concerned, the same was substantially an approval of the law laid down in an earlier Full Bench in Vishakhapatnam Marketing Co-op. Society Ltd. v. Government of A.P. . The correctness of this proposition (1) fell in issue again
20. The matter was, therefore, referred to a full Bench of five Judges which decided the point in A. P. S. W. I. Co-op. Society v. Labour Court (supra). Before the latter Full Bench of five Judges, the writ petitions were filed by the management of certain establishments/shops and the contesting respondents were employees whose services were terminated by the employers. There were individual references made to the labour Court by the Government under Section 10(1)(c) of the Industrial Disputes Act and the awards passed by the Labour Court were challenged by the management. The point raised was that the Government had no competence to refer the dispute arising out of termination of individual employees, - not backed up by a union or group of workmen - to the Labour Court under Section 10(1)(c) in view of the view taken in the earlier Full Benches. It was held that the references by the Government were valid. It was further held that the scope and ambit of the remedies available to an individual employee by virtue of S. 2-A of the Industrial Disputes Act are not identical to those available under Section 40 and 41 of the Shops Act. Virtually, Section 40 of the Shops Act deals mainly with the conditions in compliance with which alone the service of the employee could be terminated by the employer. The right conferred on the employee by sub-s (1) and (3) respectively of Section 41 of the Shops Act is to file an appeal before the appellate authority against the termination of his service and to prefer second appeal to the Labour Court. The rights and benefits flowing from these provisions could not be equated to those available by invoking S. 2-A of the Industrial Disputes Act which could give scope, inter alia for conciliation and settlement under Section 12 by a Conciliation Officer, an adjudication being done by the Labour Court under Section 15 on a reference by the Government under Section 10(1) etc. The object of Secs. 40, 41 of the Shops Act was to provide a speedy remedy against arbitrary and unjust termination of service, at the same time preserving in tact, whatever right that was already available to the employee under Section 2-A of the Industrial Disputes Act. It was held that under Secs. 40, 41 of the Shops Act, an additional forum for seeking speedy solution of the problem arising out of termination of service was given. Finally it was observed that an option is left to the shop employee who is aggrieved by termination, to either pursue the remedy involving S. 2-A of the I.D. Act or approach the appellate authority under S. 41 of the Shops Act and then go by way of second appeal to the Labour Court. The apprehension that the availability of two forums for the employee to seek redressal of his grievance would lead to conflict of decisions, they held, was unwarranted. The Full Bench of five Judges held that the view taken in Vishakhapatnam District Marketing Co-op. Society case (supra) - a view which was incorporated in principle (1) in the Full Bench in Sri Brindavan Hotel's case (supra) - namely, that disputes of an individual workman in regard to termination of services squarely fell within the field covered by Secs. 40 and 41 of the Shops Act and that S. 2-A of the Industrial Disputes Act could not be invoked by the individual workman (without his case being espoused by the Union or group of workmen) - was incorrect.
21. It must be therefore held that the contention that if the grievance is covered by both Acts an individual workman could resort only to the Shops Act was rejected by the Full Bench of five Judges. We however express no opinion as to the remedy of the workman for questioning the validity of the settlement arrived at under Section 18(1) of the Industrial Disputes Act. The new point raised before us is therefore rejected.
22. In any even those decisions do not hold that an employee could go in first appeal before the Authority under Section 41(1) of the Shops Act against an order of retirement which is in conformity with the age set out in a settlement earlier entered under S. 18(1) of the Industrial Disputes Act, and contend before that Authority that the settlement is vitiated by undue influence or coercion and seek either to set aside the settlement or obtain a declaration that the settlement is not binding on the workman. If the authority under the Shops Act decides, as in this case, that such a settlement is voidable and not binding on the workman, it must be held that such a declaration is wholly without jurisdiction.
23. On the question of alternative remedy by way of Second Appeal, it is true that normally this court does not entertain a writ petition under Art. 266 of the Constitution of India when there is a remedy for the Management by way of Second appeal before the Labour Court under Section 41(3) of the A.P. Shops and Establishments Act, 1966. But it is well settled that where an order by a statutory authority is wholly without jurisdiction and where there is no question of any inquiry into facts and the matter arises as a pure question of law, it is open to this Court to decide the question of jurisdiction straightway, without driving the parties to the alternative remedy. In this case, the observations of the Supreme Court in S.L.Ps. stating that the Management may approach the High Court, also support our view.
24. We, therefore, hold that the authority under the Shops Act acted wholly outside its jurisdiction in holding that the settlement arrived at under the industrial Disputes Act is vitiated and in holding that the age of superannuation (55 years) incorporated in the settlement is not binding and in consequently declaring that the retirement on expiry of 55 years was an unreasonable termination. It also acted wholly without jurisdiction in directing the parties to have an age of superannuation fixed before a proper forum. The impugned order is therefore liable to be quashed as wholly without jurisdiction.
25. The writ appeal is allowed and the writ petition is also allowed and the impugned order of the Authority is accordingly quashed. There will be no order of costs in the circumstances of the case.