Madras High Court
S. Palani vs Indian Bank And Anr. on 26 December, 1979
Author: A. Varadarajan
Bench: A. Varadarajan
JUDGMENT A. Varadarajan, J.
1. This writ petition has been filed by the petitioner S. Palani under Article 226 of the Constitution of India for the issue of a writ in the nature of a mandamus directing the first respondent-Indian Bank to consider the petitioner's application for appointment as a permanent peon in the Indian Bank with effect from the date when J. Satyamoorthi and Chandran, respondents 2 and 3 respectively, were so appointed in preference to the petitioner.
2. The petitioner was employed as a peon in the sub-staff category of the first respondent-Bank, hereinafter referred to as the bank", in the branches at Vaniyambadi and Ambur in North Arcot District between 2-12-1974 and 2-3-1976 in leave vacancies. The temporary appointment of the petitioner as peon was approved by the District Manager of the Bank at Vellore. During the said period 2-12-1974 and 2-3-1976 the petitioner had worked for 133 days intermittently and was later ousted from service consequent upon the permanent incumbent coming back to work, though the petitioner was fully qualified for being appointed as a permanent peon in the Bank, he having studied up to the S.S.L.C. class. The Bank is one of the banks nationalized by the Banking Companies (Acquisition and Transfer of Undertakings) Act 5 of 1970. The employees of the Bank, both before and after the nationalization, were governed by the Sastry Award as modified by the Desai Award relating to banks and by the bipartite settlement dated 19-12-66 between the Bank and the Federation of the Indian Bank Employees' Union, hereinafter referred to as the bipartite settlement. These terms and conditions of service of workmen in the Bank are protected statutorily by Sections 12 and 19 of the said Act 5 of 1970 and the workmen of the Bank are covered by the Industrial Disputes Act, 1947.
3. While the petitioner was in the service of the Bank and also subsequently he had applied on 24-12-1975, 27-2-1976 and 24-3-1976 for appointment as a permanent peon. Those applications were forwarded by the District Manager, Vellore to the Head office of the Bank. But without considering those applications the Bank appointed respondents 2 and 3 as permanent peons, though the second respondent had put in less than 40 days of service as a temporary peon and was not in any way better qualified than the petitioner and was junior to him in service. The third respondent had never worked in the Bank earlier and he was appointed overlooking the petitioner's claim because he happened to be a son of one of the employees of the Bank who was about to retire.
4. The termination of the petitioner's employment amounts to retrenchment. Paragraph 20.12 of the bi-partite settlement which follows the Sastry Award and Desai Award, states that the employees, whose services have been terminated, are entitled to preference whenever vacancies arise and this, as already stated, has received statutory protection by the aforesaid Act 5 of 1970. Even under Section 25H of the Industrial Disputes Act, 1947, retrenched employees are entitled to preference in the matter of re-employment in subsequent vacancies on the basis of their seniority and the Bank is obliged to send notices of such vacancies to the retrenched employees in the order of their seniority. As a retrenched employee the petitioner was entitled to preference over respondents 2 and 3 when the Bank filled up the aforesaid posts of peons permanently on 29-3-1976 and subsequently. An offer should have been made to the petitioner as he was a retrenched employee and senior to respondents 2 and 3. The third respondent cannot be preferred to the petitioner merely because his father was about to retire from the service in the Bank. In these circumstances the petitioner made a representation to the Managing Director of the Bank on 14-4-1976 and sent a reminder on 26-4-1976. The Superintendent of the Bank sent a reply on 3-5-1976 without meeting any of the points raised by him in his letter dated 14-4-1976. Thereupon the petitioner raised an industrial dispute before the Regional Commissioner of Labour (Central) by presenting a petition dated 17-5-1976. The Bank refused to come to any reasonable settlement before the conciliation officer who gave time to the Bank to settle the matte; amicably. The conciliation officer, therefore, submitted a failure report to the Government and the Government for no reason whatever, declined to refer the dispute for adjudication by its order dated 8-9-1976. The Government of India declined to reconsider the matter by its order dated 4-10-1976 sent in reply to the representation made by the petitioner on 24-9-1976. The petitioner has thus exhausted all possible remedies available to him under the Industrial Disputes Act before invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution. The petitioner has, therefore, filed this writ petition for the issue of a writ of mandamus.
The grounds urged in the writ petition are:
(1) The Bank acted illegally in ignoring the petitioner's claim for appointment as a peon ignoring the provisions of paragraph 493 of the Sastry Award and paragraph 20.12 of the bipartite settlement which is statutorily protected by the provisions of the Central Act 5 of 1970 and lays down that temporary employees whose services were terminated are entitled to preference when vacancies arise in future.
(2) The Bank is not justified in appointing the second respondent who has worked only for about 43 days. Whereas the petitioner has worked for 133 days and was senior to the second respondent, ignoring the petitioner's claim, though he was entitled to preference under paragraph 20.12 of the bipartite settlement.
(3) The Bank was not justified in appointing as a permanent peon the third respondent who had not worked in the Bank at all previously merely because he is the son of an employee who was about to retire. Paragraph 20.12 of the bipartite settlement and Section 25H of the Industrial Disputes Act and Rule 78 of the Industrial Disputes Central Rules do not contemplate any such exception.
(4) The Bank has clearly discriminated against the petitioner while appointing respondents 2 and 3 even though he was senior to them and fully qualified and belongs to the Backward Class. The petitioner was registered in the Employment Exchange (No. 16428/75) and he has impleaded respondents 2 and 3 as parties not because of any personal grievance against them but his only intention is to get employment in the Bank and not to oust respondents 2 and 3.
5. The writ petition is opposed by the Bank alone. In the counter-affidavit it is contended that the writ petition is not maintainable on the ground that the petitioner has no statutory status to ask for the reliefs claimed by him and no statutory duty is cast on the Bank to select the petitioner while recruiting subordinate staff. The writ petition is, therefore, liable to be dismissed. The petitioner was assigned work only as and when leave vacancies arose in the Ambur and Vaniyambadi branches of the Bank and he cannot, therefore, claim the status of a temporary workman as contemplated in paragraph 20.12 of the bipartite settlement, The petitioner had worked only for 133 days in all in the period between 2-12-74 and 2-3-1976 and not during a particular calendar year and he could not claim to be a retrenched employee of the Bank. The award staff and officers of the Bank, which has been nationalized, are governed by Sections 12 and 10 of the Central Act 5 of 1970. But the petitioner was not in the service of the Bank and was only a casual employee on daily wages and he is, therefore, not entitled to the benefits of those two sections of the Act. There is no discrimination of the petitioner as against respondents 2 and 3, for appointments to sub-staff of a category are normally made from the residents of the locality. The second respondent is a resident of Tirupattur and was working as a casual employee in the Tirupattur branch and he was selected when a vacancy arise. The third respondent was appointed as a sub staff taking into consideration the fact that his father was due to retire shortly at that time. The petitioner is not entitled to claim that he should have been preferred in the matter of selection, especially when he was not an employee of the Bank. Under paragraph 20.12 must of the bipartite settlement a person claiming the benefit must be a temporary workman and he should be selected to fill a permanent vacancy. The petitioner was not a temporary workman at all and he cannot, therefore, claim a right of being absorbed as a sub staff and, therefore, he is not entitled to protection under the Central Act 5 of 1970 upon nationalization of the Bank. The petitioner, who had worked in leave vacancies is not entitled to claim the benefits of Section 25H of the Industrial Disputes Act falling under Chapter V(A) thereof. The petitioner is not entitled to question the basis of the appointments of respondents 2 and 3 of whom the second respondent is a resident of Tirupattur and the third respondent was the son of a retiring employee. The petitioner was not entitled to service of any notice of retrenchment or payment of retrenchment compensation under the provisions of the Industrial Disputes Act. There is no termination of his services at all, for, he was given work only on day-to-day basis, depending upon the availability of the leave vacancies in any of the branches of the Bank. The Government of India considered the matter and came to the right conclusion that the dispute raised by the petitioner under the Industrial Disputes Act was not worthy of being referred for adjudication on the ground that he was merely casual labour and not a temporary workman as claimed by him. The petitioner cannot challenge the said order dated 8-9-1976 of the Government of India which has become final and is not entitled to file this writ petition even if the petitioner was a temporary employee according to the bipartite settlement that settlement has not obtained statutory force and cannot be enforced in proceedings under Article 226 of the Constitution of India.
6. The following facts are not in dispute: The petitioner had studied up to the S.S.L.C. class and he had worked as a peon in the Vaniyambadi and Ambur branches of the Bank in all for 133 days in broken periods during the period from 2-12-1974 to 2-3-1976 in leave vacancies and he was ousted from 3-3-1976 when he permanent incumbent returned from leave. While the petitioner was working in the Bank he had put in application for appointment in a regular vacancy on 24-12-1975, 27-2-1976 and 24-3-1976 and his applications were rejected on the ground that he had no claim for permanent appointment. Two vacancies of permanent peons arose in the Bank on 29-3-1976 and the second respondent a resident of Tirupattur who had put in about 40 days of temporary service and the third respondent who had not put in any temporary service at all but happened to be the son of one of the employees of the Bank who was about to retire at that time, had been appointed in the regular vacancies. The petitioner raised an industrial dispute before the Regional Commissioner of Labour (Central) by presenting a petition dated 17-5-1976. The conciliation officer submitted a failure report to the Government of India because the Bank refused to come to a settlement of India because the Bank refused to come to a settlement before him and the Government of India declined to refer to, dispute for adjudication by its order dated 8-9-1976 and refused to reconsider the matter by order dated 4-10-76 sent in reply to the representation made by the petitioner on 24-9-1976.
7. The writ petition has been filed under Article 226 of the Constitution for the issue of a writ of mandamus directing the Bank to consider the petitioner's application for appointment as a permanent peon with effect from the dates on which the respondents 2 and 3 were so appointed in preference to the petitioner. The petitioner relies upon paragraph 493 of the Sastry Award, paragraph 20.12 of the bipartite settlement arrived at under the industrial dispute between the Management's of Banks as represented by the Indian Banks' Association, Bombay and the Bombay Exchange Banks' Association, Bombay and their workmen as represented by All India Bank Employees' Association and All India Bank Employees' Federation, and Section 25H of the Industrial Disputes Act read with Rule 78 of the Industrial Disputes (Central) Rules, 1957. The contention of the petitioner is that by reason of Sections 12 and 19(3) of the Banking Companies (Acquisition and Transfer of Undertakings) Act 5 of 1970 the Sastry Award and the bipartite settlement have acquired statutory force and the Bank should have sent notice to the petitioner before filling up the permanent vacancies of peons to enable him to exercise his option to be appointed in any of the permanent posts. The relevant portion of paragraph 493 of the Sastry Award reads:
...We also recommend that Banks should give first preference to those members of their retrenched staff who are otherwise qualified to fill up vacancies We are unable to support the demand that sons and daughters of employees should be given preference as the employment of more than one member of a family in one and the same office is not free from certain risks. We however, recommend that where a bank has a large number of offices it may give preference to the sons and daughters of employees and keep them in different offices.
Paragraph 20.12 of the bipartite settlement reads:
Other things being equal, temporary workman (other than godown keeper) will be given preference for filling permanent vacancies and if selected they may have to under go probation.
Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act 5 of 1970 relates to the power of the Central Government to make regulations. Clause (3) of that Section lays down:
Until any regulation is made under Sub-section (1) the articles of association of the existing Bank and every regulation, rule, bye-law or order made by the existing Bank shall, if in force at the commencement of this Act, be deemed to be the regulations made under Sub-section (1) and shall have effect accordingly and any reference therein to any authority of the existing Bank shall be deemed to be a reference to the corresponding authority of the corresponding new Bank and until any such corresponding authority is constituted under this Act, shall be deemed to refer to the custodian.
Sub-clause (d) of Clause (2) of Section 19 of that Act lays down:
(2) In particular, and without prejudice to the generality of the foregoing power, the regulations may provide for all or any of the following matters namely:
(d) the conditions or limitations subject to which the corresponding or new Bank may appoint advisors, officers or other employees and fix their remuneration and other terms and conditions of service.
The First schedule to the said Act shows that the Bank in this case, namely, the first respondent Indian Bank is a new Bank after nationalization corresponding to the old Indian Bank Limited.
Section 2(oo) of the Industrial Disputes Act, 1947 defines "retrenchment" as meaning;
the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include--
(a) voluntary retirement of the workman or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
(c) termination of the service of a workman on the ground of continued ill-health.
Section 25F of the Industrial Disputes Act deals with the conditions precedent to retrenchment and lays down:
No workman employed in any industry, who has been in continuous service for not less than one year under an employer shall be restrenched by that employer until--
(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired or the workman has been paid in lieu of such notice, wages for the period of the notice;
Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service.
(b) The workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette.
Section 25H of that Act lays down:
Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re-employment and such retrenched workmen who offer themselves for re-employment shall have preference over other persons.
Clause (1) of Rule 78 of the Industrial Disputes (Central) Rules, 1957 relates to re-employment of retrenched workman and lays down:
At least ten days before the date on which vacancies are to be filled the employer shall arrange for the display on a notice board in a conspicuous place in the premises of the industrial establishment details of those vacancies and shall also give intimation of those vacancies by registered post to everyone of all the retrenched workmen eligible to be considered there for, to the address given by him at the time of retrenchment or at any time thereafter.
8. The contention urged on behalf of the Bank in this case is that the Sastry Award and the bipartite settlement were not in the nature of a regulation, rule, byelaw or order made by the existing Bank, the Indian Bank, Ltd. in force at the commencement of the Banking Companies (Acquisition and Transfer of Undertakings) Act 5 of 1970 but were only awards and they have not acquired statutory force under Section 19(3) of the Act and could not be enforced in proceedings under Article 226 of the Constitution of India. The learned Counsel for the Bank invited my attention to the decision of Basu, J., of the Calcutta High Court in Mukherjee v. State Bank of India and Ors. 1969-I L.L.J. 50, in support of his contention that the Sastry Award, as modified by the Desai Award, has no statutory force. In that case, the Sastry Award as modified by the Desai Award, both of which were given by Industrial Tribunal has been held to have no statutory force. The learned Judge has observed in that decision:
It is needless to say that the award of an Industrial Tribunal is the decision of an industrial adjudication by a statutory Tribunal and can have no more statutory force than the decree of a civil Court. Either may be executed or otherwise implemented in the manner laid down in the relevant law, but it cannot be enforced by the prerogative writ of mandamus as an instrument having the force of law....
The learned Counsel for the petitioner merely reiterated the allegation made in the affidavit filed in support of the writ petition that the Sastry Award is in the nature of a contract or regulation binding on the parties thereto and has acquired statutory force under Section 19(3) of the Banking Companies (Acquisition and Transfer of Undertakings) Act 5 of 1970. He did not cite any authority in support of that contention. The employees of the Indian Bank Ltd., of which the corresponding new Bank is the Indian Bank according to the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act 5 of 1970 as mentioned above did not file any statements of claims before the Tribunal which gave the Sastry Award on 20-3-1953. Therefore, following the aforesaid decision of Basu, J., I hold that the Sastry Award, as modified by the Desai Award, has no statutory force and its provisions could not be enforced by the petitioner in proceedings taken under Article 226 of the Constitution of India. But it is seen from the bipartite settlement that the Indian Bank, Ltd. was a party to the dispute in which the bipartite settlement was arrived at on 19-10-1966, as seen from Appendix "A" to that settlement. However, in view of the fact that the settlement is only in the nature of a decree of a civil Court, it could not be enforced by a prerogative writ of mandamus as an instrument having the force of law. Thus, the contention urged on behalf of the Bank that the Sastry Award and the bipartite settlement have not acquired statutory force under Section 19(3) of the Banking Companies (Acquisition and Transfer of Undertakings) Act 5 of 1970 has to be accepted. Even if the bipartite settlement is considered as having acquired statutory force by reason of the fact that the Indian Bank, Ltd. of which the corresponding new Bank is the Bank in the present case, was a party to the dispute in which the settlement was arrived at, the petitioner cannot succeed as paragraph 20.12 of that settlement relied upon, lays down "other things being equal, temporary workman (other than godown-keeper) will be given "preference for filling permanent vacancies and if selected they may have to undergo probation" and as the petitioner was not in the employ of the Bank as a temporary workman and the permanent vacancies arose on and after 29-3-1976 and he had been, admittedly, ousted from service with effect from 3-3-1976 itself.
9. The petitioner cannot succeed unless he proves that he is entitled to the benefit of Section 25H of the Industrial Disputes Act and should have given notice by registered post, as required by Rule 78(1) of the Industrial Disputes (Central) Rules, to exercise his option for being considered for appointment as a permanent peon in the Bank as the Bank filled up the permanent posts on and after 29-3-1976. As already stated, Section 25H lays down.
Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re-employment and such retrenched workmen who themselves for re-employment shall have preference over other persons.
The petitioner has, therefore, to establish that he is a retrenched workman within the meaning of Section 2(oo) of the Industrial Disputes Act. A major portion of the argument of the learned Counsel for the petitioner and the Bank related to the question whether the petitioner was or was not a retrenched workman within the meaning of Section 2(oo) of the Industrial Disputes Act, and several decisions were relied upon by the learned Counsel in support of their respective contentions. I shall briefly consider those authorities.
10. In Hariprasad Shivshankar Shukla and another v. A.D. Divelkar and Ors. A.I.R. 1957 S.C. 121, under an agreement dated, 1-8-1895 between the Secretary of State for India in Council and the Railways Company, the Company constructed, maintained and worked a light railway between Barsi Town and Barsi Road Junction. The agreement provided, inter alia, for the Secretary of State purchasing and taking over the undertaking after giving not less than 12 calendar months' notice in writing. On 19-12-1952 such a notice was given to the company by the Director of the Railway Board on behalf of the President of India to the effect that the undertaking would be purchased and taken over from 1-1-1954. Consequently the Railway Company served a notice on its workmen on 11-11-1953 saying that in view of the Government's action their services would be terminated with effect from the afternoon of 31-12-1953. The notice stated that the Government intended to employ such of the staff of the company as will be willing to serve the Railways on terms and conditions to be notified later by the Railway Board on 15-12-1953. When the undertaking was actually taken over on 1-1-1954 about 77 per cent of the staff of the Railway Company were re-employed by the Government and about 24 of the former employees of the company declined to serve under the Government. Subsequently some 61 applications were filed for payment of retrenchment compensation. Their Lordships of the Supreme Court have observed:
It has been argued that by excluding bona fide closure of business as one of the reasons for termination of the service of workmen by the employer, we are cutting down the amplitude of the expression for 'any reason whatsoever' and reading into the definition words which do not occur there. We agree that the adoption of the ordinary meaning gives to the expression 'for any reason whatsoever' a somewhat narrower scope; one may say that it gets a colour from the context in which the expression occurs; but we do not agree that it amounts to importing new words in the definition. What after all. Is the meaning of the expression 'for any reason whatsoever? when a portion of the staff or labour force is discharged as surpluse in a running or continuing business, the termination of service which follows may be due to a variety of reasons; e.g. for economy, rationalization in industry, installation of a new labour saving machinery, etc. The Legislature in using the expression 'for any reason whatsoever' says in effect.
It does not matter why you are discharging the surplus; if the other requirements of the definition are fulfilled, then it is retrenchment.
In the absence of any compelling words to indicate that the intention was even to include a bona fide closure of the whole business, it would, we think, be divorcing the expression altogether from its context to give it such a wide meaning as is contended for by learned Counsel for the respondents.
Retrenchment means discharge of surplus workmen in an existing or continuing business; it had acquired no special meaning so as to include discharge of workmen on bona fide closure of business, though a number of Labour Appellate Tribunals awarded compensation to workmen on closure of business as an equitable relief for a variety of reasons.
This decision holds the field even now and states categorically that "retrenchment means discharge of surplus workmen in an existing or continuing business.
10A. The case in N. Sundaramony v. The State Bank of India, Kuzhithurai Branch 1973-II L.L.J. 551, was decided by K.N. Mudaliyar, J. of this Court. The learned Judge has observed:
The respondent admits in the counter that the petitioner was employed temporarily either to meet the additional work or to do the work of a permanent incumbent who was on leave, or on deputation to some other branch. In the face of this averment I find no difficulty in holding that the termination of the petitioner amounts to discharge of surplus labour or staff in a continuing or running industry. When the permanent cashier, either on transfer or on deputation, returned to the Kuzhithurai branch, the petitioner as found to be surplus and, therefore, he was discharged. That would amount to retrenchment within the meaning of Section 25F read with Section 2(oo) of the Industrial Disputes Act.
That decision of the learned Judge was confirmed on appeal by a Division Bench of this Court in State Bank of India v. N. Sundaramony 1975-I L.L.J. 453, where the learned Judges have observed.
In Murugesan Naickcr Co. v. Labour Court 1963-I L.L.J. 495, one of us "dealt with the definition in the light of earlier decided cases particularly Hariprasad v. A.D. Divelkar 1957-I L.L.J. 243 and held that the word 'retrenchment' should be understood in the ordinary sense and that it is not every termination that can be retrenchment, but termination, in order to be retrenchment, should be of surplus labour or staff and in an industry which is continuing and not closed or transferred. That view was accepted in Writ Appeal No. 5 of 1972. Mr. Ramachandran, defending, as he was, the appeal, drew our attention to Central Bank of India v. Rajagopalan 1963-II L.L.J. 89, which really related to the scope of Section 33C(2) of the Industrial Disputes Act, and L. Krishnan v. Southern Railway 1972-II L.L.J. 568, which lay emphasis on the fact that in order a termination to be retrenchment, it must be of surplus labour.
That decision of the Division Bench of this Court came up for consideration before two learned Judges of the Supreme Court in State Bank of India, v. N. Sundaramony 1976-I L.L.J. 478. Sundaramony, the respondent in that appeal filed by the employer, had been appointed as a cashier off and on from 4-7-1970 to 18-11-1972. Notwithstanding the intermittent breaks, he had put in 240 days of service answering the test of "deemed" continuous service within the meaning of Section 25B(2) of the Industrial Disputes Act. But the order of appointmented that the appointment was purely temporary for a period of 9 days but it may be terminated earlier without assigning any reason at the Bank's discretion and the employment, if not terminated earlier, will automatically cease at the expiry of the period, i.e., 18-11-1972. It was argued before the Supreme Court that the obligation to pay retrenchment compensation under Section 25F of the Industrial Disputes Act flows only out of retrenchment and not termination which is outside retrenchment, Their Lordships have observed.
The key to this vexed question is to be found in Section 2(oo) which reads thus: "2(00) 'retrenchment' means the termination by the employer of the service of a workmen for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include--
(a) Voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf: or
(c) termination of the service of a workman on the ground of continued ill-health.
For any reason whatsoever--very wide and almost admitting of no exception. Still, the employer urges that when the order of appointment carries an auto matic cessation of service, the period of employment works itself out by efflux of time, not by act of employer. Such cases are outside the concept of 're-trenchment' and cannot entail the burdernsome conditions of Section 25F. Of course, that a nine days employment, hedged in with an express condition of temporariness and automatic cessation, may look like being in a different street (if we may use a colloquialism) force telling a man off by retrenching him. To retrench is to cut down. You cannot retrench without trenching or cutting. But dictionaries are not dictators of statutory construction where the benignant mood of a law and more emphatically, the definition clause furnish a different denotation. Section 2(oo) is the master of the situation and the Court cannot truncate its amplitude.
A break-down of Section 2(oo) unmistakably expands the cematics of retrenchment. 'termination, for any reason whatsoever' are the key words. Whatever the reason, every termination spells retrenchment. So the sole question has the employee's service been terminated? Verbal apparel apart, the substance is decisive. A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term. To protect the weak against the strong this policy of comprehensive definition has been effectuated. 'Termination embrace not merely the act of termination' by the employer, but the fact of termination howsoever, produced. May be the present may be a hard case, but we can vissualise abuses by employers, by suitable verbal devises, circumventing the armour of Section 25F and Section 2(oo).
In the particular facts and circumstances of this case, the respondent shall be put back where he left off, but his new salary will be what he would draw where he to be appointed in the same post today de novo. As for benefits, if any, flowing from service he will be ranked below all permanent employees in that cadre and will be deemed to be a temporary hand up to now. He will not be allowed to claim any advantages in the matter of seniority or other priority inter se among temporary employees on the ground that his retrenchment is being declared invalid by this Court. Not that we are laying down any general proposition of law, but make this direction in the special circumstances of the case.
11. The learned Counsel for the petitioner relied very strongly upon this decision and submitted that the ouster of the petitioner being otherwise than as a punishment inflicted by way of disciplinary action, not a voluntary retirement or retirement on reaching the age of superannuation or termination of his service on account of continued ill-health, amounts to retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act. I shall consider that submission after referring to the other decisions relied upon by the learned Counsel for the petitioner and also by the learned Counsel for the Bank.
12. The learned Counsel for the petitioner invited my attention to the decision of the Supreme Court in Delhi Cloth & General Mills Ltd. v. Shambhu Nath Mukherjee and Ors. 1978-I L.L.J 1. I do not think it necessary to refer to this decision as the question whether there was a retrenchment did not arise and was not raised before the Supreme Court in that case.
13. The writ petitioner, viz., Assistant Personnel Officer, Southern Railway, Olavakkot v. K.T. Antony 1978-II L.L.J. 254, was a casual labourer in the Southern Railways. His services were terminated. In the order of termination it was stated that his services were being dispensed with and no formal order of appointment was being issued to him because the verification of the character and antecedents of the petitioner showed that he would not be a desirable person to be appointed to the Railway Service. The termination was sought to be justified under Rule 149 of the Indian Railway Establishment Code Vol. 1 Sub-clause (c) of Clause (3) of that Rule relating to certain other railway servants, lays down.
The services of certain other railway servants specified below shall be liable to termination on notice on either side for the periods shown against each. Such notice is not, however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of Clause (2) of Article 311 of the Constitution and compulsory retirement due to mental or physical incapacity.
(c) Non-gazetted railway servants on porbation (One month's notice) Sub-clause (4) of that Rule provided that--
In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Administration to terminate the service of a railway servant by paying him the pay for the period of notice.
The learned Judges of the Division Bench of the Kerala High Court, who decided the case, have expressed the view that Rule 149(3)(c) clearly applies to the case of the writ petitioner and, therefore, in this case termination could be effected with one month's notice. It was contended before the learned Judges on behalf of the respondent-writ petitioner that the termination was contrary to the provisions of Section 25F of the Industrial Disputes Act. The learned Judges have observed:
In the light of the above provisions (Section 2(oo) and Section 25-F of the Industrial Disputes Act) it was argued that, having regard to the statutory definition of 'retrenchment' as a termination of service (for any reason whatsoever) it had to satisfy the requirements of Section 25F in order to be regarded as valid and proper. As compensation had not been paid, it was contended that the termination was illegal and ineffective, and therefore, the learned Judge was justified in quashing the same. Counsel for the respondent placed reliance on the Division Bench Ruling of this Court in Krishnan v. Southern Railway 1972-II L.L.J. 568 and on two recent decisions of the Supreme Court, viz, State Bank v. N.S. Money 1976-I L.L.J. 478, and Hindustan Steel v. Labour Court, Orissa 1977-I L.L.J. 1, The earlier Supreme Court decision states in categorial terms that once there has been a termination of service, the reasons therein would be immaterial and that it must be tested on the touchstone of the provisions of Section 25F, The latter decision in 1977-I L.L.J. 1, has considered the position in the light of the two previous pronouncements of the Supreme Court in Pipraich Sugar Mills case 1957-I L.L.J. 235 and Hariprasad Shiva-shankar Shukla's case A.I.R. 1957 S.C. 121 and has pointed out that, on the actual facts of the case before the Supreme Court, the conclusion that, there was retrenchment of the workman, was quite consistent with the two previous decisions of the Supreme Court. In 1977-I L.L.J. 1, the termination of service of the workman was to streamline the organisation and to effect economies where ever possible.
"In the light to these pronouncements of the Supreme Court, we are of the opinion that the termination in this case satisfies the definition of 'Retrenchment' under Section 2(oo) of the Industrial Disputes Act, and, therefore, violates the provision of Section 25F of the Act. In that view, the conclusion of the learned Judge that the termination was illegal, is correct.
With respect, it is not possible to follow this view of the learned Judges of the Division Bench of the Kerala High Court in view of the subsequent Full Bench decision of that High Court in L. Robert D'Souza v. Executive Engineer, Southern Railway and Anr. 1979-I L.L.J. 211, to which reference will be made later.
14. Reference was made to the earlier decision of a Bench of five Judges of the Supreme Court in Hariprasad Shivashanker Shukla and Anr. v. A.D. Divelkar and Ors. A.I.R. 1957 S.C. 121 in the decision in Excel Wear and Ors. v. Union of India and Ors. 1978-II L.L.J, 527, rendered by an equally strong Bench of the Supreme Court, where it has been observed.
In Hariprasad Shivashanker Shukla v. A.D. Divelkar (1957) S.C.R. 1219. this Court had occasion to consider the meaning of the term retrenchment'. It was opined that the word 'retrenchment' means the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action and does not include termination of services of all workmen on a bona fide closure of an industry. The question posed at page 132 by S.K. Das J., who delivered the judgment on behalf of the Constitution Bench of this Court was 'retrenchment' covers cases of closure of business when the closure is real and bona fide? The answer given at page 133 was in the negative. Discharge of workmen on bona fide closure of business was held to be not retrenchment.
15. What the term "retrenchment" means came up for consideration before a Division Bench of the Patna High Court in Mahabir v. D.K. Mittal, Deputy Chief Mechanical Engineer, North Eastern Railway and Ors. Volume 55 (1979) F.J.R. 216, where the learned Judges have observed:
In General parlance, retrenchment means the discharge of surplus labour or staff by the employer, otherwise than as a punishment. But, while defining the word 'retrenchment' the Act says that it will include 'termination by the employer' for any reason whatsoever. This has been interpreted to mean that the word retrenchment used in the Act includes within its compass all types of termination by the employer and the reasons leading to such terminations are irrelevant for all practical purposes. This aspect of the matter has been considered by the Supreme Court in the case of State Bank of India v. N. Sundara Money (1976) 49 F.J.R. 78.
The word 'termination' in context with the word 'retrenchment' was interpreted to mean that the service of the employee concerned should have come to end by any means whatsoever. This must be in contradiction to coming to an end in the natural course of events like superannuation. Again, the same question arose for consideration in the case of Hindustan Steel Ltd. v. Labour Court, Orissa (1976) 49 F.J.R. 397. In this case, an attempt was made to question the correctness of the ratio of the aforesaid judgment of the Supreme Court in the case of State Bank of India (1976) 49 F.J.R. 78, by counsel concerned saying that the interpretation given to the word 'retrenchment' was in conflict to the interpretation given by the Supreme Court in its earlier judgments, Specially in the case of Hariprasad Shivashanker Shukla v. A.D. Divelkar (1956)-II F.J.R. 317. Their Lordships, after referring to the earlier judgment, expressed the view that there was no conflict and it was observed that in the case of the State Bank of India (1976) 49 F.J.R. 78, the scope of the word 'retrenchment' has been rightly interpreted. It may be mentioned that in the case of Hariprasad, Shivashanker Shukla (1956) II F.J.R. 317), it had been pointed out that the words 'for any reason whatsoever' used while defining 'retrenchment' would not include a bona fide closure of the whole business because it would be against the entire scheme of the Act. We are not concerned with any other case of termination due to closure of the whole business, Again, in the case of Delhi Cloth and General Mills, v. Shambhu Nath Mukherji (1979) 55 F.J.R. 210, it was held that striking off the names of the workman from the rolls, will amount to retrenchment within the meaning of Section 2(oo) of the Act.
16. The last decision relied upon by the learned Counsel for the petitioner in this connection is of the Supreme Court in State of Punjab v. The Labour Court, Jullundur and Ors. (1979) A.I.R. S.C, 1981, which arose under the Payment of Gratuity Act. Pathak, J., who spoke for the Bench, has observed in that decisions.
The expression 'retrenchment' has been defined by Section 2(q) to mean 'termination of service of an employee otherwise than on superannuation'. The definition is framed in the widest terms. Except for superannuation any termination of service would amount 'retrenchment' for the purposes of the Act. Retrenchment is a termination of service. It is immaterial that the termination is occasioned by the need to discharge surplus labour, The retrenchment implies the discharge of surplus labour was explained in Barsi Light Railway Co. Ltd. v. K.N. Joglekar (1957) S.C.R. 121. Nonetheless, it amounts to termination of service.
The learned Judges have not differed from the view expressed by a larger Bench of their Lordships of the Supreme Court in Barsi Light Railway Co. Ltd. v. K.N. Joglekar (supra) in that decision which, as already slated arose under the Payment of Gratuity Act.
17. On the other hand, besides relying upon the decision of the Supreme Court in Hari-prasad Shivashanker Shukla and Anr. v. A.D. Divelkar and Ors. A.I.R. 1957 S.C. 121, the learned Counsel for the Bank invited my attention to some decisions which will be referred to presently. In Anakapalle Co-operative Agricultural and Industrial Society v. Its Workmen and Ors. 1962-II L.L.J. 621, what "retrenchment" means came up for consideration. Gajendragadkar, J., as he then was, and four other learned Judges of the Supreme Court have observed in that decision:
The validity of this assumption was, however successfully challenged before this Court in the case of Hari-prasad Shivashanker Shukla v. A.V. Divelkar 1957-I L.L.J. 243. In that case, this Court was called upon to consider the true scope and effect of the concept of retrenchment as defined in Section 2(oo) and it held that the said definition had to be read in the light of the accepted denotation of the word, and as such ,it would have no wider meaning than the ordinary connotation of the word, and according to this connotation, retrenchment means the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, and does not include termination of services of all workmen on a bona fide closure of industry or on change of management thereof.
This Court having held that the word 'retrenchment' necessarily postulated the termination of the employees' services on the ground that the employees had become surplus, allowed the appeal preferred by the employers and held that the employees' claim against the purchaser in one case and against the employer who had closed his business in the other, could not be sustained.
18. The learned Counsel for the Bank invited my attention to the decision of this Court in N. Sundaramoney v. The State Bank of India, Kuzhithurai Branch 1973-II L.L.J. 551 and State Bank of India v. N. Sundaramoney 1975-I L.L.J. 453, referred to above, and submitted that in those two decisions the word "retrenchment" has been understood in the ordinary sense to mean "discharge of surplus labour or staff in a continuing industry" and that the ouster of the petitioner in this case, on the return of the permanent incumbent who had gone on leave, on the ground that the leave vacancy has come to an end would not amount to retrenchment of the petitioner.
19. The learned Counsel for the Bank invited my attention to the decision of Chandrachud. J. as he then was, and two other learned Judges of the Supreme Court in Hindustan Steel Limited v. State of Orissa and Ors. 1977-I L.L.J. 1 and submitted that there is no conflict between the decisions in Hariprasad Shivashanker Shukla v. A.D. Divelkar A.I.R. 1957 S.C. 121, and State Bank of India v. N. Sundaramoney 1976-I L.L.J. 478 and contended that the view expressed in the earlier decision that retrenchment means discharge of surplus workmen in an existing and continuing business or industry still holds the field. In Hindustan Steel Limited v. State of Orissa and Ors. 1977-I L.L.J. 1, it was contended that there was a conflict between the decisions rendered in State Bank of India v. N. Sundaramoney (supra) and Hariprasad Shivashanker Shukla v. A.D. Develkar (supra) and that a reconsideration of Sundaramoney's case was necessary since the other decision was rendered by a larger Bench. Their Lordships of the Supreme Court have held that there was no conflict between the two decisions and that Sundaramoney's case did not require re-consideration. In the case before their Lordships of the Supreme Court three persons had been appointed by the management, two as head timekeepers from September, 1959, and one as a time keeper from July, 1959, each for a term of three years. In the case of the person appointed as time-keeper the period was extended from time to time until 15-10-1962 and he had been promoted as head time keeper on 3-11-1960. Pursuant to an alleged policy to streamline the organization and to effect economies wherever possible, the management chose not to renew the contracts of services of the three head time keepers and some others. There was no order of termination of the services of the head time keepers, for, according to the management, termination was automatic on the expiry of the contractual period of service. The head time-keepers raised an industrial dispute. The Labour Court ordered reinstatement with backwages and continuity of service on the ground that the head time-keepers had been retrenched from service and it was contrary to law as the requirement of Section 25F of the Industrial Disputes Act had not been satisfied, and that the action of the management was not bona fide and amounted to unfair labour practice. Before the High Court it was contended on behalf of the management that the services of the employees had come to an end by efflux of time and that the management had not terminated the services of the employees and, therefore, there is no case of retrenchment. The High Court overruled these contentions and dismissed the writ petition. Their Lordships of the Supreme Court have observed.
It may also be noted that Section 25F(a) which lays down that no workman who has been in continuous service for not less than one year under an employer shall be retrenched by that employer unless he has been given one month's notice or wages in lieu of such notice, has a proviso which says that 'no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service. Clearly, the proviso would have been quite unnecessary if the retrenchment as defined in Section 2(oo) was intended not to include termination of service by efflux of time in terms of an agreement between the parties. This is one more reason why it must be held that the Labour Court was right in taking the view that the respondents were retrenched contrary to the provisions of Section 25F.
It has been made clear in this decision that there is no conflict between the decisions in State Bank of India v. N. Sundaramoney 1976-I L.L.J. 478 and Hariprasad Shivashanker Shula's case A.I.R. 1957 S.C. 121, for it has been observed:
In Hariprasad Shivashanker Shukla v. A.S. Divelkar, to which the Solicitor-General referred, one of the questions that arose for decision was whether the definition of retrenchment in Section 2(oo) goes 'so far beyond the accepted notion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases to exist on a bona fide closure or discontinuance of his business by the employer"? The question was answered in the negative on the authority of an even earlier case. Pipraich Sugar Mills Ltd., v. Pipraich Sugar Mills Mazdoor Union 1957-I L.L.J. 235, which held that 'Retrenchment' connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff or the labour force is discharged as surplus age and the terminations of services of all the workmen as a result of the closure of the business cannot, therefore, be properly described as retrenchment.
On the facts of the case before us, giving full effects to the words, 'for any reason whatsoever' would be consistent with the scope and purpose of Section 25F of the Industrial Disputes Act, and not contrary to the scheme of the Act.
This means that the view taken in Hariprasad's case that retrenchment means "discharge of surplus workmen in existing or continuing business" still holds the field.
20. Reliance was placed next by the learned Counsel for the Bank on the decision of Full Bench of the Kerala High Court in L. Robert D' Souza v. Executive Engineer, Southern Railway and Anr. 1979-I L.L.J. 211, referred to above, where reference has been made to Hariprasad's case A.I.R. 1957 S.C. 121 and Sundaramoney's case (supra) and other decisions. The learned Judges have observed:
We have very carefully studied the aforesaid judgments of the Supreme Court. Though some of the observations contained in Sundara Money's case may at first sight appear to be wide enough to lend support to the contention advanced by the present writ petitioner, a careful examination of the contextual background against which those observations were made will show that they were only intended to mean that even an automatic termination of service brought about by reason of the expiry of the period fixed in the order of appointment, i.e., by efflux of time and not by any overt act of the employer, will constitute retrenchment in case which otherwise satisfy all the requirements of the definition. On the facts of the case before the Supreme Court it was expressed in the order of appointment itself that the services of the employee were not required by the employer beyond the period specified therein; in other words he would become surplus to the requirements of the employer after the said date. Hence, the requirement that the termination should be on the ground of surplus age was satisfied in that case and the principal question that arose was whether an automatic cessation of service brought about by efflux of time and not by any act of the employer was outside the concept or retrenchment. The contention advanced before the Supreme Court was that when the order of appointment itself contained a stipulation that the service of the employee would come to an automatic termination at the end of the period specified therein, it was not a case of termination of service of the employee by the employer so as to constitute "retrenchment" as defined in Section 2(oo) of the Act, It is while dealing with this contention that the following observations strongly relied on by the present writ petitioner were made by the Supreme Court:
For any reason whatsoever--very wide and almost admitting of no exception. Still, the employer urges that when the order of appointment carries an automatic cessation of service, the period of employment works itself out by efflux of time, not by act of employer. Such cases are outside the concept of 'retrenchment' and cannot entail the burdensome conditions of Section 25F. A break-down of Section 2(oo) unmistakably expands the semantics of retrenchment, 'Terminationfor any reason whatsoever' are the key words. Whatsoever the reason, every termination spells retrenchment. So the sole question is how the employees' service been terminated? Verbal apparel apart, the substance is decisive. A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term. To protect the weak against the strong this policy of comprehensive definition has been effectuated. Termination embraces not merely the act of termination by the employer, but the fact of termination, however, produced. May be, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devises, circumventing the armour of Section 25F and Section 2(oo). Without speculating on possibilities, we may agree that 'retrenchment' is no longer terra incognita but area covered by an expansive definition. It means 'to end, conclude, cease'. In the present case the employment ceased, concluded, ended on the expiration of nine days--automatically may be, but cessation all the same, that to write into the order of appointment the date of termination confers no moksha from Section 25F(b) is inferable from the proviso to Section 25F(1)(c) (Section 25F(a?) True the section speaks of retrenchment by the employer and it is urged that some act of volition by the employer to bring about the termination is essential to attract Section 25F and automatic extinguishment of service by effluxion of time cannot be sufficient words of multiple import have to be winnowed judicially to suit the social philosophy of the statute. So screened, we hold that the transitive and intransitive senses are covered in the current context. Moreover, an employer terminates employment not merely by passing an order as to service runs. He can do so by writing a composite order, one giving employment and the other ending or limiting it. A separate subsequent determination is not sole magnetic pull of the provision. A pre-emptive provision to terminate is struck by the same vice as the post-appointment termination. Dexterity of diction cannot defeat the articulated conscience of the provision.
In our opinion, the true scope of these observations made by the Supreme Court can be correctly understood only by viewing them against the--
Factual background and context in which they were made, namely, (1) that it was a case where the appointment order given to the employee it-self specified that his services were not required by the Bank after the expiry of the period mentioned therein whereupon the employee would become a surplus hand and (2) that the only contention put forward before the Supreme Court on behalf of the employer was that when the order of appointment carried a stipulation for an automatic cessation of service the period of employment works itself out by efflux of time and it was not a case of termination of service of the workmen by the employer so as to constitute retrenchment. On such a study it becomes, in our opinion, quite manifest that what has been laid down in the case is only that even an automatic cessation of service brought about by the expiry of the period specified in the order of appointment will constitute retrenchment and that it is not necessary that an order of termination, as such, should be passed by the employer on the expiry of the said period. It is only in this context that the observation that 'termination embraces not merely the act of termination by the employer, but the fact of the termination howsoever produced' has been made by the Supreme Court. We consider that the further observation that 'whatever the reason, every termination spells retrenchment' must also be understood to have been made only in the said context. The case before the Supreme Court being one where the element of surplus age was duly present. We do not think it correct to assume as we are invited to do by the counsel for the petitioner, that the Supreme Court has intended by this decision to abrogate the principle categorically laid down in the earlier rulings of the Court in Hariprasad Shivashanker Shukla and Anr. v. A.D. Divelkar and Ors. A.I.R. 1957 S.C. 121 and Anakapalle Co-operative Agricultural and Industrial Society Ltd. v. Workmen and Ors. , etc., that in order to constitute retrenchment under Section 2(oo) the workman concerned should have been discharged from service on the ground of his having become surplus to the requirements of the employer. As already pointed out, the element of discharge on the ground of surplus age was present in The State Bank of India v. Shri N. Sundaramoney (supra), and hence, naturally, no question was even raised before the Supreme Court as to whether a termination of service without there being any element of surplus age would constitute retrenchment. It must have been on account of this that the decisions in Hariprasad's case (supra) and Anakapalle Co-operative Agricultural and Industrial Society's case (supra) were not even referred to in the judgment. In the light of what we have said we consider that it will be wholly wrong to understand the observations in The State Bank of India v. Shri. N. Sundara Money (supra) as laying down any principle inconsistent with what has been laid down by larger Benches of the same Court in Hariprasad's case (supra) and Anakapalle Co-operative Agricultural and Industrial Society's case (supra). That this is the position has been made clear by the subsequent pronouncement of the Supreme Court in Hindustan Steel Ltd. v. The Presiding Officer, Labour Court, Orissa and others (supra). That was also a case of discharge of certain workmen (Head Time Keepers) on the ground they they had become surplus. On the expiry of the periods specified in the orders of appointment issued to the workmen the appellant-company chose not to renew their contract of service pursuant to a policy to 'streamline the organisation and to effect economics wherever possible'. There was no order terminating their services. The contention of the appellant was that the termination was automatic on the expiry of contractual period of service and since no order of termination had been passed by the employer it did not amount to 'retrenchment' and hence Section 25F was not attracted. Following the decision in The State Bank of India v. Shri N. Sundara-Money (supra) the Supreme Court rejected the said contention and upheld the plea of the workmen that the termination of service was illegal since the provisions of Section 25F had not been complied with by the employer. Apparently on finding that the contention raised in the appeal was directly covered against him by the decision in Sundara Money's case (supra). Counsel for the appellant before the Supreme Court had submitted that the said decision was 'in apparant conflict with the earlier decision of the Court in Hariprasad's case (supra) which was by a larger Bench, and Sundara Money's case (supra), therefore, required reconsideration.'
21. Dealing with the said contention, Gupta, J. Observed:
In Hariprasad Shivashankar Shukla v. A.D. Divelkar A.I.R. 1957 S.C. 121, to which the Solicitor- General referred, one of the questions that arose for decision was whether the definition of retrenchment in Section 2(oo) goes so far beyond the accepted notion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases to exist on a bona fide closure or discontinuance of his business by the employer? The question was answered in the negative on the authority of even earlier case. Pipraich Sugar Mills Ltd. v. Pipraich Sugar Milts Mazdoor Union , which held that 'retrenchment' connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff of the labour force is discharged as surplus age and the termination of services of all the workmen as a result of the closure of the business cannot, therefore, be properly described as retrenchment.
Following Pipraich Sugar Mills' case it was held in Hariprasad Shivashankar Shukla v. A.D. Divelkar (supra) that the words 'for any reason whatsoever' used in the definition would not include a bona fide closure of the whole business because 'it would be against the entire scheme of the Act to give the definition clause relating to retrenchment such a meaning as would include within the definition termination of service of all workmen by the employer when the business itself ceased to exist'. On the facts of the case before us, giving full effect to the words 'for any reason whatsoever' would be consistent with the scope and purpose of Section 25F of the Industrial Disputes Act, and not contrary to the scheme of the Act, We do not find anything in Hariprasad's case which is inconsistent with what has been held in State Bank of India v. N. Sundara Money (supra).
In the light of these observations it is clear that the proposition laid down in Hariprasad's case (supra) that the expression "retrenchment" as defined in Section 2(oo) has no wider meaning than the ordinary accepted connotation of the words, namely, "discharge of surplus labour or staff by the employer or any reason whatsoever" has not been in any way departed from the ruling in Sundara Money's case (supra). If Sundara Money's case were to be understood as lying down that every termination of service of an employee "irrespective of the existence of the element of surplus age, (otherwise than as a punishment inflicted by way of disciplinary action) would constitute "retrenchment" then there is obviously a conflict between the said pronouncement and the earlier rulings in Hariprasad's case. In the light of the clear and direct pronouncement of the Supreme Court in Hindustan Steel Ltd. v. The Presiding Officer, Labour Court, Orissa and Ors. (supra) that there is no inconsistency between the dicta laid down in Hariprasad's case and Sundara Money's case, we find no scope at all for any further doubt or speculation on the matter. The principle laid down in Hariprasad's case and the subsequent rulings that followed it remains unshaken.
22. Reference may usefully be made also to a recent unreported judgment of the Supreme Court in Civil Appeal No. 634 of 1975, since reported in 1979-I L.L.J. 1, a copy of which was made available for us by the learned Additional Advocate-General appearing on behalf of the respondents. The appellant in that case M/s. Avon Services (Production Agencies) Pvt. Ltd., had set up two factories at Bombay and Ballabhgarh for the manufacture of Fire Fighters Foam Compound. The subject-matter of the appeal related to the Ballabhgarh factory. According to the appellant, this factory when commissioned in 1962, was divided into two sections, namely, (1) manufacturing section and (2) packing material making section. The packing material section was composed of two sub-sections, one manufacturing containers and the other attending to the painting of the containers. The workmen who figured as respondents Nos. 3 and 4 in the appeal, were, according to the appellants, employed in the painting section. On 13th July, 1971, the appellant purported to serve notice on respondents Nos. 3 and 4 and one Mr. Ramani intimating to them that the management had decided to close the painting section effective 13th July, 1971, due to unavoidable circumstances and hence the services of the three workmen would no longer be requited and, therefore, they were retrenched. By the said notice the workmen concerned were also informed that they should collect their dues under Section 25FFF of the Industrial Disputes Act from the office of the company. Since 13th July, 1971, respondents 3 and 4 were denied employment by the appellant. A trade union of the employee of the appellant raised a dispute challenging the validity of the said action taken by the management and demanding the reinstatement of the workmen. The Government of Harayana referred the said dispute to the Industrial Tribunal for adjudication. The Tribunal held that respondents 3 and 4 were retrenched and their case squarely fell under Section 25F of the Act and as the employer had not complied with the prerequisite condition in the said section the retrenchment was invalid. The appellant moved the High Court of Punjab and Haryana for a writ of certiorari but the writ petition was dismissed in limine. The appeal was thereafter taken to the Supreme Court on the basis of Special leave granted to the appellant. In the appeal the appellant had taken certain contentions relating to the validity of the reference made to the Tribunal and also the competence of the Tribunal and a good part of the judgment of the Supreme Court is devoted to the consideration of those contentions. It will suffice for our present purpose to note that those contentions were all overruled by the Supreme Court and that what remained was only the last contention urged on behalf of the appellant that the Tribunal had erred in holding that respondents Nos. 3 and 4 were retrenched from service and that then case was governed by Section 25F of the Act. Dealing with the said contention the Supreme Court observed as follows:
In the present case the appellant attempted to serve notice dated 13th July, 1971, on respondents 3 and 4 and one Mr. Ramani. In this notice it was stated that the management has decided to close the painting section with effect from Tuesday 13th July, 1971, due to unavoidable circumstances and the services of the workmen mentioned in the notice would no longer be required and hence they are retrenched. The workmen were informed that they should collect their dues under Section 25FFF from the office of the company.
The tenor of the notice clearly indicates that workmen were rendered surplus and they were retrenched. It is thus on the admission of appellant a case of retrenchment.
Repelling the contention that the painting section was a separate undertaking and that hence it was a case of "closure" falling within Section 25FFF, the Supreme Court held that on the facts available on record it was not shown that the painting section was a separate establishment with separate supervisory arrangement. The following observations made by the Court while dealing with that aspect of the case may usefully be extracted:
These workmen appear not to have been employed initially as painters. They were doing some other work from which they were brought to painting section. They could have as well been absorbed in the same other work which they were capable of doing as observed by the Tribunal. If painting was no more undertaken as one of the separate jobs, the workmen would become surplus and they could be retrenched after paying compensation as required by Section 25F to style a job of a particular worker doing a specific work in the process of manufacture as in itself an undertaking is to give meaning to the expression 'under taking' which it hardly connotes.
In fact, once the container making section was closed down, the three painters, became part and parcel of the manufacturing process and if the painting work was not available for them they could have been assigned some other work and even if they had to be retrenched as surplus, the case would squarely fall in Section 25F and not be covered by Section 25FFF. (underlining supplied). "Thus in this decisions also stress has been laid by the Supreme Court on the requirement that the workmen concerned must have been discharged on the ground of their having become surplus in order to constitute 'retrenchment' under Section 2(oo) of the Act. it is important to notice that the Division Bench of the Supreme Court which rendered the above pronouncement was presided over by Krishna Iyer, J. who had spoken on behalf of the Court in Sundara Money's case (supra).
"Our attention has been drawn to an unreported judgment of a Division Bench of the Delhi High Court in Civil Writ No. 851 of 1977, where the learned Judges have after adverting in detail to the observations of the Supreme Court in Sundara Money's case (supra) and Hindustan Steel Ltd. v. The Presiding Officer, Labour Court, Orissa and Ors. (supra) held that the principle laid down in Hariprasad's case (supra) that in order to constitute retrenchment there should be termination of service of workmen on the ground of their having become surplus to the requirements of the employer, remains unshaken. We are in complete agreement with the said statement of the legal position.
The learned Judges have ultimately held that in as much as the termination of the petitioner in that case was not on the ground that he has become surplus to the requirements of the railway establishment but on a totally different ground, namely, that he had unauthorisedly. absented himself and thereby invited the applicability of the provision for automatic termination contained in Rule 2505 of the Railway Establishment Manual, he could not be stated to have been "retrenched" from service and hence Section 25F of the Industrial Disputes Act was not attracted.
23. The learned Counsel for the Bank relied very strongly upon this decision and submitted that the question of surplus age was not in dispute in Sundara Money's case, as seen from the observations made by K.N. Mudaliyar, J. In 1973-II L.L.J. 551 and by the Division Bench in 1975-I L.L.J. 453 and, therefore, that aspect of the matter did not come up for consideration at all before the Supreme Court in 1976-I L.L.J. 478, and that since the petitioner was ousted from service because the permanent incumbent returned from leave and not because he had become surplus, there is no question of retrenchement and Section 25H of the Industrial Disputes Act is not attracted.
24. The learned Counsel for the Bank lastly relied on the decision of a Bench of this Court in Writ Petition No. 202 of 1977, where the learned Judges have observed.
Thus there is a set of decisions of the Supreme Court following the Principle laid down in Hariprasad's case (1957) S.C.R. 121 and another set of decisions of the Supreme Court following the view taken in Sundara Money's case 1976-I L.LJ. 478. The Kerala High Court in a recent Full Bench decision in L. Robert D' Souza v. Executive Engineer, Southern Railway 1979-I L.L.J, 211, has, after noting the apparant conflict between Hariprasad's case and Sundaramoney's case and after considering the two sets of decisions referred to above one following the Hariprasad's case and the other following Sundara Money's case expressed the view that wherever there is an element of surplus age then the termination will amount to a retrenchment so as to attract Section 25F on the Principle laid down in Sundara Money's case and wherever there has not been an element of surplus age, then the termination will not constitute retrenchmentwhatever that be, the deposition of M.W.1. was not actually complete on the date when the second respondent's services were terminated for he says that the work in Unit No. 1 was coming to a close and not that it has actually come to a close. The order terminating the second respondent's service says that his services are no longer required. While the work in Unit No. 1 was not actually complete, the termination of the second respondent's service on the ground that his services are no longer required suggests that the termination was only on the ground of surplus age. Therefore, the facts in this case will attract the principle laid down in Sundara Money's case and the impunged order of the Labour Court following the principle laid down in Sundaramoney's case cannot be said to be erroneous.
The word "retrenchment in Section 2(oo) of the Industrial Disputes Act has been understood in the ordinary accepted connotation, namely "discharge of surplus workmen in an existing or continuing business or Industry". In Hariprasad's case A.I.R. 1957 S.C. 121, Barsi Light Railway Company's case (1957) S.C.R. 121, Pipraich Sugar Mills case 1957-I L.L.J. 235, Sundaramoney's case 1975-I L.L.J. 551, State Bank of India, v. Sundaramoney's case 1975-I L.L.J. 453 and Robert D'Souza's case 1979-I L.L.J. 211 and it had been made clear in the decision in Hindustan Steel Limited, v. State of Orissa and Ors. 1977-I L.L.J. 1, that there is no conflict between Hariprasad's case (1957) S.C.R. 121, and Sundaramoney's case (supra) which means that the view expressed in Hariprasad's case that retrenchment means discharge of surplus workmen in an existing or continuing business or industry still holds the field.
25. Therefore, I hold that the ouster of the petitioner in this case who was working only in leave vacancies in broken periods in all for a period of 133 days during the period from 2-12-1974 to 2-3-1976 on the ground that the permanent incumbent had returned from leave, does not amount to retrenchment and Section 25H of the Industrial Disputes Act and Rule 78(1) of the Industrial Disputes (Central) Rules are not attracted and the petitioner is not entitled to the relief claimed.
26. The Central Bank of India has been held to fall within the term "State within the meaning of Act 12 of the Constitution of India," Miss. P.S. Geetha and Ors. v. Central Bank of India and Anr. (1979) I Andhra Pradesh Weekly Reporter 73. The Bank of Baroda has been held to fall within the enlarged definition of the term "State" under that Article in N.B. Shukla v. Bank of Baroda and Anr. 1979-I L.L.J. 291. The International Airport Authority Act, 1971 has been held to fall within the definition of "State" in Ramana Dayaram Shetty v. International Airport in Authority of India and Ors. 1979-II L.L.J. 217, on a consideration by the Supreme Court of the following and other questions, viz., "whether there is any financial assistance given by the State and if so what is the magnitude of such assistance whether there is any other form of assistance given by the State and if so whether it is of the usual kind of it is extraordinary whether any control of the management and policies of the Corporation by the State and what is the nature and extent of such control, whether the Corporation enjoys State conferred or State protected monopoly status and whether the functions carried out by the Corporation or public functions closely related to Governmental functions. In Ramaiah v. State Bank of India 1960-II L.L.J. 424, the State Bank of India has been held to be a public authority within the scope of Article 226 of the Constitution and, therefore, amenable to the writ of the High Court. Having regard to all these decisions I find that the Bank in this case is one of the nationalised banks falling within the definition of "State" under Article 12 of the Constitution of India.
27. In Miss. P.S. Geetha and Ors. v. Central Bank of India and Anr. (1979) I. Andhra Weekly Reporter, 73 referred to above it has been observed:
While justifiable classification is permitted under Articles 14, 15 and 16 a classification based solely on the ground of decent was never upheld by any court.
Whatever may have been the position with regard to the validity of the Rule before these banks were acquired under the said Act, have become 'State' within the meaning of Article 12 they would have to conform to the provisions of the Constitution of India and more especially those contained in Part III of the Constitution while formerly the Rules and Regulations framed by the Bank may have resulted only in the contractual obligations between the bank and the employees, now these rules and regulations and circulars which are continuing by virtue of Section 19(3) of the Act, would be void.The Rules reserving certain percentage of posts and granting concessions in favour of the children of the employees being violative of Articles 14 and 16 are void and cannot be given effect to Article 16(2) of the Constitution of India lays down that 'No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them be ineligible for, or discriminated against in respect of any employment or office under the State.
In the Bank's counter-affidavit it is admitted that the second respondent was appointed because he is a resident of Tirupattur and that the third respondent was appointed because he happens to be the son of an employee of the Bank who was retiring from service. The petitioner has contended in his affidavit that the Bank was not entitled to discriminate against him on these grounds and the petitioner was entitled to be considered for appointment along with respondents 2 and 3. The Bank was not entitled to discriminate against him on the ground that the second respondent was a resident of Tirupattur and that the third respondent was the son of an employee of the Bank who was retiring from service in view of Article 16(2) of the Constitution and the decision of the Division Bench of the Andhra Pradesh High Court in Miss. P.S. Geetha and Ors. v. Central Bank of India and Anr. (supra). But the petitioner has not prayed for the issue of any writ of certiorari quashing the appointments of respondents 2 and 3 . On the other hand he was stated clearly in his affidavit that he has impleaded respondents 2 and 3 as parties not because of any personal grievances against them but only to show that he has been discriminated against and his only intention is to get employment in the Bank and not to oust respondents 2 and 3. Therefore, it is not possible and there is also no need to consider whether the appointment of respondents 2 and 3 is hit by Article 16(2) of the Constitution of India.
28. The learned Counsel for the Bank invited my attention to the decision in Premier Automobiles Ltd. v. Kamalekar Shantaram Wadke of Bombay and Ors. , in support of the contention that the remedy of the petitioner who has admittedly raised an industrial dispute which the Government of India declined to refer to the Tribunal was to agitate the matter in proceedings taken under the Industrial Disputes Act and not to invoke the extraordinary jurisdiction of this Court in proceedings under Article 226 of the Constitution of India. The learned Judges have observed in that decision:
To sum up the principles applicable in the jurisdiction of the civil Court in relation to an industrial dispute may be stated thus:
(1) If the dispute is not an industrial dispute, nor does it relate to enforcement of any other right under the Act, the remedy lies only in the civil Court.
(2) If the dispute is an industrial dispute arising out of a right or liability under the general or common law and not under the Act, the jurisdiction of the civil Court is alternative, leaving it to the election of the suitor concerned to choose his remedy for the relief which is component to be granted in particular remedy.
(3) If the industrial dispute relates to the enforcement of a right or an obligation created under the Act, then the only remedy available to the suitor is to get an adjudication under the Act.
(4) If the right which is sought to been forced is a right created under the Act such as Chapter VA then the remedy for its enforcement is either Section 33C or the raising of an industrial dispute, as the case may be.
Admittedly, the dispute is in the nature of an industrial dispute and Section 25H of the Industrial Disputes Act and Rule 78 of the Industrial Disputes (Central) Rules are invoked by the petitioner. The petitioner had admittedly raised an industrial dispute which the Government of India declined to refer notwithstanding the further request of the petitioner there for. The petitioner's remedy was, therefore, to seek the aid of this Court in proceedings under Article 226 of the Constitution of India only to compel the Government of India to refer the industrial dispute if in law an industrial dispute has, in fact, arisen between the petitioner and the Bank and he is not entitled to file this writ petition under Article 226 of the Constitution of India for a direction to the Bank to consider his application for appointment as a permanent peon with effect from the date on which respondents 2 and 3 were so appointed.
29. For the reasons stated above, the writ petition fails and it is dismissed with the first respondent's costs. Advocate's fee Rs. 50.