Madhya Pradesh High Court
Union Of India (Uoi) vs Presiding Officer, Central Govt. ... on 2 August, 1994
Equivalent citations: [1995(71)FLR20], (1995)ILLJ994MP, 1994(0)MPLJ970
Author: D.M. Dharmadhikari
Bench: D.M. Dharmadhikari
ORDER D.M. Dharmadhikari, J.
1. A common order is being passed in this petition and the connected petition being M.P.No. 1711/91 as the two cases involve a common question of law.
2. The two workmen-deceased Ramsumiran and Chandrabhar who are respondents in the two petitions, were the employees in the Central Ordnance Depot of the Union of India. The workmen were the employees under the Union of India in its Defence establishment. Their services were terminated by the two separate orders by giving the one month's notice or pay in lieu thereof in accordance with the provisions contained in Rule 5(1) of the Central Civil Services (Temporary Service) Rules, 1955 (shortly referred to as 'the Rules of 1966'). The workmen approached the Central Govt. Industrial Tribu-nal-Cum-Labour Court, Jabalpur by way of reference for adjudication of the dispute about their termination of services under Section 10 of the Industrial Disputes Act. The Industrial Tribunal-cum-Labour court by the two awards impugned in these two petitions set aside the termination of services of the workmen holding that they have been illegally retrenched without payment of compensation in contravention of the provisions contained in Section 25J of the Industrial Disputes Act, 1947 (shortly referred to as 'the Act'). The Labour; Court directed their reinstatement in service with full backwages.
3. The learned counsel appearing for the Union of India in these two petitions have raised two common grounds to assail the awards passed by the Industrial Tribunal-cum-Labour Court. The first ground raised is that the Central Ordnance Depot, where the workmen were employed, is not an industry, as defined in Section -2(j) of the Industrial Disputes Act and the industrial Tribunal- cum-Labour Court has no jurisdiction to set aside the termination of the services of the workmen and to direct their reinstatement. Reference is made to the decision of the Supreme Court in the case of Bangalore Water Supply and Sewerage Board v. A. Rajappa and Ors. (1978-I-LLJ-349). The second ground urged by the petitioner is that the services of the workmen as Central Govt. servants were governed by the provisions of the Central Civil Services (Temporary Service) Rules, 1965 which are framed under Article 309 of the Constitution of India and the Rules exclude completely application of the provisions of the Industrial Disputes Act to the Central Govt. employees. Reliance is placed on behalf of the petitioner on a decision of Kerala High Court reported in Director of Postal Services (South) Kerala Circle, Trivandram and Anr. v. K.R.S. Kaimal and Anr. (1984-I-LLJ-484).
4, The learned counsel appearing for the respondent-workman in his reply to the first ground urged that the Central Ordnance Depot is covered by the definition of 'industry' under Section 2(j) of the Industrial disputes Act. He relies on the decision of this Court in M.p.nO. 1069/93, decided on March 21, 1984 (Rajendra Naidu v. Union of India and Ors.). In the aforesaid case, relying on the decision of the Supreme court in Bangalore Water Supply and Sewerage Board (supra), the Ordnance Factory of the Union of India at Khamaria in Jabalpur is held to be covered by the definition of 'industry'. The learned counsel for the workmen also relies on the decision of the Madras High Court reported in Soundararajan and Ors. v. The Secretary to Govt. of India, Ministry of Labour, New Delhi (1994-II-LLJ-665). The Madras High Court has held that the Central Ordnance Depot is covered by the definition of 'industry'. The contention advanced on behalf of the workman is that the Central Ordnance Depot is established for the defence and security of the nation; but carries on industrial activities of the Government in discharge of its sovereign function. It 1 satisfies the triple test applied by the Supreme Court in Bangalore Water Supply and Sewerage Board (supra), it has to be held as 'industry' being a separate unit or wing of the Defence Department or organisation of the Central Govt.
5. In regard to the second ground urged, the reply of the learned counsel on behalf of the respondent-workmen is that the Central Ordnance depot, being an 'industry' of the Central Govt., the service conditions of the employees would be governed both by the service rules framed under Article 309 of the Constitution of India and the provisions of the Industrial Disputes Act, which are not inconsistent with each other. The service rules cannot be held to exclude the provisions of the Act since both can co-exist without any conflict. The learned counsel for the workman contends that the decision of the Kerala High Court (supra) does not lay down the correct law on the point. In that case, the court totally overlooked the provisions contained in sections 9A and 25J of the Industrial Disputes Act. The contents of those provisions give a clear indication that the Central Govt. servants working in a department or wing of the Govt., which is also an 'industry', can be governed both by the provisions of the Act and the service rules framed under Article 309 of the Constitution of India. On the second question, the learned counsel for the workman refers to a Full Bench decision of the Patna High Court in Bijay Kumar Bharti and Ors. v. state of Bihar and Ors. 1983 Lab IC 1984.
6. The first question raised on behalf of the petitioner as an employer is that the Central Ordnance Depot is not an industry. Nothing much is required to be said by this Court in view of the pronouncement of the Supreme Court in the case of Bangalore Water supply and Sewerage Board (supra) wherein the following observations are relevant for the purpose of the issue raised in this case:--
"...... Sovereign functions, strictly understood (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies ................."
Even in a department discharging sovereign function, if there are units, which are industries and they are substantially severable, then they should be considered to come within the fold of Section 2(j) of the Industrial Disputes Act. I find myself in complete agreement with the opinion expressed by the Madras High Court in the case of Soundararajan & ors. (supra) that the central ordnance Depot, being a severable unit of the Defence Department and is carrying on a systematic activity with the cooperation of employees and employer, it satisfies the triple test laid down by the Supreme Court in the case of Bangalore Water Supply and Sewerage Board (supra). The contention advanced on behalf of the employer that the Central Ordnance Depot is not an industry is therefore rejected.
7. The second ground urged that the rules framed under Article 309 of the Constitution for the Central Govt. employees exclude the application of the provisions of the Industrial Disputes Act has little merit, if the provisions of the rules and the Act are examined critically. The learned counsel for the workman is right in submitting that the Full Bench decision of the Kerala High Court (supra), which has applied the theory of implied exclusion of the Act by the rules does not lay down the correct law and ignores the provisions of sections 9A and 25J of the Industrial Disputes Act which clearly indicate application of the provisions of the Act to Central Govt. employees whose service conditions are also regulated by the rules framed under Article 309 of the constitution. Before deciding the question raised of the applicability of the Industrial Disputes Act to the Central Govt. employees governed by the service rules framed under Article 309 of the Constitution, it would be necessary to examine the relevant provisions of the Act and the Rules. Rule 5 framed under Article 309 of the Constitution of India, on which action of termination of service of the workman was based, reads as under:--
"5. Termination of temporary service--(1) (a) The services of a temporary Government servant who is not in quasi-permanent service shall be liable to termination at any time by a notice in writing given either by the Government servant to the Appointing Authority or by the Appointing Authority to the Government servant:
(b) the period of such notice shall be one month:
Provided that the service of any such Government servant may be terminated forthwith and no such termination the Government servant shall be entitled to claim a sum equivalent to the amount of his pay plus allowances for the period of the notice at the same rates at which he was drawing them immediately before the termination of his services, or as the case may be, for the period by which such notice falls short of one month.
Note.-....."
8. Section 9A of the Act requires that an employer of an industry who proposes to effect any change in the conditions of service applicable to the workman in respect of any matter specified in the Fourth Schedule, shall effect such change only after giving a notice of such change to the workman. Proviso(b) to section 9A of the Act, however, exempts service of such notice on the workman, if his services are governed by the statutory rules or rule framed under Article 309 of the constitution of India. Section 9A of the Act reads:--
"9. A Notice of change.-- No employer, who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule, shall effect such change,--
(a) without giving to the workman likely to be affected by such change a notice in the prescribed manner or the nature of the change proposed to be effected, or
(b) within twenty-one days of giving such notice;
Provided that no notice shall be required for effecting any such change
(a) where the change is effected in pursuance of any settlement or award; or
(b) where the workman likely to be affected by the change are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Services (Classification, Control and Appeal) Rules, or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the Official Gazette, apply"
9. Section 25J of the Act as contained in Chapter V-A on the subject 'Effect of laws inconsistent with this Chapter' was inserted by the Amendment Act in the year 1963 with effect from August 24, 1963. Section 25F lays down a condition precedent to the retrenchment of workman and requires service of minimum one month's notice containing reasons for retrenchment or payment of wages in lieu of the said notice. It also requires payment of retrenchment compensation at the rate prescribed and also the service of notice on the appropriate Government in the prescribed manner. Section 25F of the Act is also quoted hereunder:
"25F. Conditions precedent to retrenchment of workman.- No workman employed in any industry who has been in continuous service for less than one year under an employer shall be retrenched 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;
(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."
The provisions of Section 25J starts with non-obstante clause and gives an over-riding effect to the provisions contained in Chapter V-A of the Act which includes Section 25F over all laws including the standing orders made under the Industrial Employment (Standing Orders) Act, 1946. Under the proviso to Section 25J, provisions of any other Act or Rules which provide for better benefit to the workman than those contained in Chapter V-A of the Act are saved. Section 25J is reproduced below for its proper understanding and interpretation:
"25j Effect of laws inconsistent with this Chapter.--(1) The provisions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law including standing orders made under the Industrial employment (Standing Orders) Act, 1946 (28 of 1946):
Provided that where under the provisions of any other Act or rules, orders or notifications issued thereunder or under any standing orders, or under any award, contract of service or otherwise, a workman is entitled to benefits in respect of any matter which are more favourable to him than those to which he would be entitled under this Act, the workman shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that he receives benefits in respect of other matters under this Act.
(2) For the removal of doubts, it is hereby declared that nothing contained in this Chapter shall be deemed to effect the provisions of any other law for the time being in force in any State in so far as that law provides for the settlement of Industrial Disputes, but the rights and liabilities of employers and workman in so far as they relate to lay-off and retrenchment shall be determined in accordance with the provisions of this Chapter."
Having thus examined the relevant provisions quoted above, contained in the rules framed under Article 309 of the constitution and contained in the Act, it is not possible for this Court to accept the contention advanced on behalf of the employer that the rules framed under Article 309 of the constitution exclude the application of the provisions of the Act. As has been seen above, the opening part of Sub-section (1) of Section 25J containing non-obstante clause uses the expression "notwithstanding anything inconsistent therewith contained in any other law."
10. In the opinion of this Court, the above expression and the use of the words 'any other law' would include the statutory rules framed under Article 309 of the Constitution of India to regulate the terms and conditions of the Govt. Servants. The word 'law' has to be given general and wide meaning to include the rules framed under the constitutional provisions. The rules framed under Article 309 of the Constitution are legislative in character and they are laws for all purposes. This Court also does not find any inconsistency in the provisions of rule 5 and the provisions contained in Section 25F of the Act. Rule 5 requires service of notice or payment in lieu thereof for terminating the services of a temporary Govt. servant. Section 25F of the Acts also provides for service of notice or payment in lieu thereof but in addition, it also provides for payment of retrenchment compensation. The two provisions in the rules and the Act are not inconsistent; but both can be made applicable and are supplementary to each other. The theory of implied exclusion applied by the Full Bench of Kerala High Court cannot be accepted, in view of the express provisions of Section 9A and Section 25J of the I.D. Act. The provisions contained in Section 9A and particularly the proviso(b) thereunder show a clear legislative intent that a Govt. Servant, if he falls within the definition of a 'workman' defined under the Act would be governed both by the provisions of the rules framed under Article 309 of the Constitution of India or under any other enactment as also by the provisions of the I.D. Act. Dissenting from the view expressed by the Full Bench of Kerala High Court in the case of Director of Postal Services (supra), in the opinion of this Court, the service conditions of the workmen in this case are governed both by the rules framed under Article 309 of the Constitution and the provisions of Section 25F of the I.D. Act.
11. The Central Govt. Industrial Tribunal-cum-Labour Court, therefore, committed no error in holding that the termination of service of the workmen amounted to an illegal retrenchment which is contrary to the provisions of Section 25F of the Act and the workmen were entitled to ihe relief prayed for by them.
12. Consequently, this petition fails and is hereby dismissed; but without any order as to costs. The amount of security deposited, if any, be refunded to the petitioner.