Allahabad High Court
U.P. Rajkiya Hathkarga Nigam Ltd. Che. ... vs Union Of India Thr The Dev. Commi. ... on 5 April, 2013
Author: Shabihul Hasnain
Bench: Shabihul Hasnain
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
Reserved
Writ Petition No.2235 of 2004 (S/S).
U.P. Rajya Hathkargha Nigam Ltd.
Kshhetriya Karmchari Sanghthan and others. .....Petitioners
Versus
Union of India and others .....Opposite Parties.
Along with connected
Writ Petition No.4075 (S/S) of 2004,
Writ Petition No.3841 (S/S) of 2004 and
Writ Petition No.3852 (S/S) of 2004.
Hon'ble Shabihul Hasnain, J.
Heard Sri R. C. Saxena,Sri S. N. Shukla, learned counsel for the petitioners and Sri J. N. Mathur, learned Additional Advocate General assisted by Sri V.S. Tripathi for the State and Sri Manish Kumar for U.P.Handloom Corporation. Useful assistance was provided by the Law Trainee of this Court Km. Twishi Srivastava also.
The facts as unfolded by the petitioners in the writ petition are as follows:-
The U.P. State Handloom Corporation Ltd. (hereinafter referred to as the Corporation) was established in the year 1973 by the State Government as a Government Company registered under Section 617 of the Company Act. Affairs of the corporation and conduct of business are managed by the State Government. The Board of Directors consists of the officers of the State of U.P. A member of Indian Administrative Service is appointed as Managing Director.
Petitioner had earlier approached this Court by means of writ petition NO.3442 of 1999 (S/S), when the salary of the members of association was not paid from the year 1998 despite taking work from them. This Court passed order dated 2.11.1999 directing that the arrears of salary shall also be paid to the petitioners and if necessary the State Government shall provide fund to the Corporation for making such payment within a period of next 6 weeks from the date the certified copy of the order is produced before the concerned authority. This fact finds mention in annexure -4 at page 48-51.
The petitioner/Association filed a contempt petition as Criminal Misc. Case No.75 of 2000 before this Court for non-implementation of the order dated 2.11.1999 in which this Court passed orders directing the personal appearance of Sri C. K. Sharma, the then Principal Secretary, Handloom Corporation, Government of U.P. Sri C. K. Sharma, the then Principal Secretary, Handloom Corporation, Government of U.P., appeared in person before this Court on 19.12.2000 and the contempt Court while exempting the personal appearance of Sri C. K. Sharma, directed him to make certain proposals and also directed that the Handloom Corporation shall arrange the payment of salary to the members of Association and other petitioners.
Instead of complying with the order dated 2.11.1999, the opposite parties preferred SLP (Civil) No.18097 of 2001) against the above order dated 2.11.1999 which was dismissed on 13.9.2002. This fact finds mention in annexure -5 at page 52-53.
Another writ petition bearing NO.1688 (S/B) of 2002 (U.P. Handloom Employees Association and others Vs. Union of India and others) was filed before this Court. This Court on 7.4.2003 directed the petitioners to give list of its members, who want benefit of voluntary retirement scheme (VRS) so that amount of voluntary retirement scheme may be paid to them. This fact finds mention in annexure -6 at page 54.
ON 25.4.2003, in compliance of the order dated 7.4.2003, a list of 412 employees who desired VRS as on 31.1.2003 was submitted before this Court and the same was handed over to the Secretary to the Government (Order dated 25.4.2003 as Annexure No.7 at page 55). More than 200 employees further opted VRS but only 20 percent were given VRS vide office memo dated 28.2.2004 (This fact finds mention in annexure -9 at page 74.) The Corporation in a most discriminatory and arbitrary manner accepted only the applications of 181 employees for voluntary retirement out of 412 employees and retained 130 employees in service whose names were included in the list of 412 employees who had opted for VRS. The Corporation arbitrarily retrenched 100 employees despite their option for voluntary retirement. In the meantime one person retired from service.
After dismissal of above SLP, this Court vide its order dated 2.11.1999 directed the arrears to be paid within fifteen days from the date of the order failing which Sri V. K. Deewan, Chief Secretary (opposite party No.10) and Sri Ravindra Singh, Secretary Handloom and Textiles, Govt. of U.P. (opposite party No.11) was to appear in person on 19.4.2004. This fact finds mention in annexure -10 at page 75.
Since the opposite parties were not inclined to pay the salary and they also wanted to any how save themselves from the contempt proceedings as such in order to get rid of the problem, they decided to cause arbitrary retrenchment of the employees/officers of the Corporation completely ignoring the scheme provided for VRS/compulsory retirement to the inefficient and lazy employees/officers for reducing the man power in 'Yojana'. The opposite parties did not prepare the requisite list of inefficient and lazy employees instead in an arbitrary manner in utmost haste the opposite parties issued a seniority list dated 6.4.2004 prepared on the basis of pay scales. The opposite parties ought to have prepared the seniority list taking into account the nature of the work performed by the employees / officers, their designations and the posts mentioned in their appointment letter (This fact finds mention in annexure -11 at page 76-122).
The petitioner No.1 made a representation to the Labour Commissioner, Kanpur on 16.3.2004 apprising him that on account of non payment of arrears of salary and non acceptance of VRS on the ground that the employees are demanding their all dues at the time of VRS, the State Government vide order dated 8.3.2004, directed for utilization of the VRS amount towards the payment of retrenchment compensation (This fact finds mention in annexure -21 at page 162-163).
When the Government vide order dated 8.3.2004 directed for utilization of the amount towards the payment of retrenchment compensation, the association submitted a representation dated 16.3.2004 to the Labour Commissioner bringing to her notice that the Government has wrongly directed for utilization of VRS amount towards payment of retrenchment compensation. It was specifically stated in the representation that the employees are still ready to take VRS provided their entire retiral dues, VRS Compensation and outstanding arrears of salary are paid to them at a time. Smt. Anita Bhatnagar Jain, Labour Commissioner, referred the matter to the State Government vide letter dated 12.4.2004, justifying the demand of the association regarding grant of VRS and payment at a time. ( This fact finds mention in annexure -22 at page 164.
Thereafter by the notice dated 12/13.4.2004 published in Amar Ujala Daily News papers, Kanpur Edition, contained in annexure No.1 at page 45, illegally and arbitrarily retrenching 866 employees/officers of the Corporation w.e.f. 15.4.2004 in gross violations of:-
(I)Rehabilitation package /VRS scheme under Deen Dayal Hathkargha Protsahan Yojana, contained in Annexure No.19 at page 131-157.
(II)Under the Service Rules of the Corporation i.e. U.P. State Handloom Corporation Ltd. (Officers and Staff) Service Rules, 1981, there is no provision for retrenchment of the employees/officers of the Corporation.
(III)The published Seniority List dated 6.4.2004 was not a legal and valid seniority list and the principles of first come last go was not possible to be followed on the basis of above seniority.
(IV)Section 6N, 6P and 6Q of Industrial Disputes Act, 1947, were illegally made applicable whereas the employees /officers retrenched were not workmen within the meaning of aforesaid Act.
(V)Definition of 'workmen' under Section 2(7) read with Rule-2 Sub-clause (iii) of Rule 2 and sub clause (ix) of Rule-3 of Industrial Disputes Act, 1947.
(VI)Under the Service Rules of the Corporation i.e. U.P. State Handloom Corporation Ltd. (Officers and Staff) Service Rules, 1981, there is no provision for retrenchment of the employees/officers of the Corporation.
As U.P. State Handloom Corporation Ltd. was running under heavy losses and was unable to meet its basic obligations like disbursement of salaries to its employees and to meet with other day- to-day expenditures, a detailed rehabilitation package in the name of "Deen Dayal Hathkargha Protsahan Yojna', contained in Annexure No.19 was prepared and a decision was taken to reduce the man power from 1748 to 599 (29 officers + 570 employees=599) (This fact finds mention at page 149 of the writ petition).The cost of cutting down with an power to the above level was worked out to about Rs.40.18 crores. From this cost the compensation package to the employees /officers opting for VRS or compulsory retired, were to be paid and their outstanding liabilities were also to be cleared off. A very important thing for reducing the man power was provided in Deen Dayal Hathkargha Protsahan Yojna (hereinafter referred to as 'Yojna') that care should be taken that only inefficient and lazy employees be given VRS and efforts should be made to reduce inefficient employees only, otherwise the scheme of VRS will be adverse to the corporation. To sustain the scheme of reducing the man power by granting VRS/compulsory retirement, the working capital of Rs.40 crores was required. To meet out the cost of the scheme it was proposed that the government of India would contribute its share as per "Yojana" amounting to Rs.25.67 crores and the same amount of Rs.25.67 crores was to be contributed by the State Government. For meeting out the balance cost of the scheme, the Corporation was required to arrange loan of Rs.14.51 crores from the State Government and working capital loan of Rs.34.40 crores from Bank, NABARD, Financial Institution. Thus, from the above, it is absolutely clear that manpower from 1748 was to be reduced to the extent of 599 by giving VRS/compulsory retirement only to the employees /officers who are adjudged as inefficient or lazy. In terms of Yojana about 1100 employees/officers adjudged inefficient or lazy were to be given VRS/compulsory retirement.
There was a preliminary objection regarding alternative remedy. Sri J. N. Mathur, learned Senior Advocate appearing for the opposite party as well as Sri Manish Kumar have argued that the matter should not be heard by this Court directly as there is alternative remedy available to the petitioners. They have also informed the Court that a number of petitions have earlier been dismissed on the grounds of alternative remedy. Sri R. C. Saxena, on the other hand, has strongly argued that alternative remedy is not an absolute bar and moreover, under the circumstances, it is the only remedy available to the petitioner. He argued to the extent that earlier petitions were dismissed because of misconceived arguments of the opposite parties and the misleading facts placed by them before the Court. He has relied upon a number of case laws and has demonstrated before the Court that in all these matters supremacy has been granted to the principle of natural justice and fair play right from the very beginning of the Constitution of India. Hon'ble Supreme Court has been explaining this principle. Some of such judgments in which this principle has been enunciated are as under:-
1.State of U.P. Vs. Mohammad Nooh, AIR 1958 SC 86. In para 13 of this judgment it has been held as under:-
"13. Likewise in Khurshed Modi v. Rent Controller, Bombay (6), it was held that the High Court would not refuse to issue a writ of certiorari merely because there was a right of appeal. It was recognized that ordinarily the High Court would require the petitioner to have recourse to his ordinary remedies, but if it found that there had been a breach of fundamental principles of justice, the High Court would certainly not hesitate to issue the writ of certiorari. To the same effect are the following observations of Harries C.J. in Assistant Collector of Customs v. Soorajmull Nagarmull (7) at page 470:
"There can, I think, be no doubt that Court can refuse to issue a certiorari if the petitioner has other remedies equally convenient and effective. But it appears to me that there can be cases where the court can and should issue a certiorari even where such alternative remedies are available. Where a Court or Tribunal, which is called upon to exercise judicial or quasi - judicial functions discards all rules of natural justice and arrives at a decision contrary to all accepted principles of justice then it appears to me that the court can and must interfere.
In para 21 their Lordships have laid down the basic principle in a most easy manner which is as follows:-
"21. The very wide powers conferred on the High Courts by Art. 226, and on this Court by Art. 136, were given in order to ensure that justice is done in this land and that the Rule of Law prevails. I see no reason why any narrow or ultra technical restrictions should be placed on them. Justice should, in my opinion, be administered in our Courts in a common-sense liberal way and be broad-based on human values rather than on narrow and restricted considerations hedged round with hairsplitting technicalities."
2.A.V.Venkateswaran, Collector of Customs, Bombay Vs. Ramchand S. W. and Another, AIR 1981 S.C. 1506 in which the law laid down in the case of State of U.P. Vs. Mohammad Nooh, AIR 1958 SC 86 have been reiterated.
In para 15 of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai, 1999 (17) LCD 219 it has been held as under:-
"15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a Writ Petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order of proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic Whirlpool, we would rely on some old decisions of the evolutionary ear of the Constitutional law as they still hold the field."
The echo of these land mark judgments have been palpable in all the subsequent judgments like R.P. Pandey Vs. U.P. Power Corporation and others, 2004 (22) LCD 20, U.P. State Spining Co. Ltd. Vs. R.S.Pandey and another, ATJ 2006 (2) 161 and U.P. Vidyut Mazdoor Sangh Vs. U.P. State Electricity Board (1997) 2 UPLBEC 1295.
The plea that the alternative remedy is available to the retrenched employees/officers as raised by the opposite parties is totally unsustainable in view of various decisions of this Hon'ble Court and of Hon'ble Supreme Court. This court in the case of Pradeep Kumar Tripathi Versus State of U.P. and Managing Director U.P. Handloom Corporation Ltd. (Writ Petition No.1973 of 1994 decided on 31.3.1994), has dealt with all the relevant issues regarding retrenchment and alternative remedy and quashed the retrenchment on various grounds. The case of the petitioners is fully covered by the aforesaid decision of this Hon'ble Court.
Even otherwise also in Ambika Singh Versus U.P. State Sugar Corporation Ltd. 1991(61) FLR 416 Division Bench of Allahabad High Court has ruled that after entertaining writ petition and exchange of counter and rejoinder affidavits, the petition should not be dismissed on the ground of alternative remedy at the time of hearing. The other plea raised by the opposite parties that some of the staff have accepted retirement compensation, is also devoid of any merit and is unsustainable in view of decision of Hon'ble Apex Court in the case of Narsingh Pal Versus Union of India and others, reported in 2000, SCC (L & S), 362, wherein the aforesaid plea was rejected as wholly erroneous. The Hon'ble court held that acceptance of retrenchment compensation to sustain himself and his family members specifically when there was no question of payment of any salary does not mean that the retrenched employee had surrendered all the constitutional rights in favour of the respondents because fundamental rights under the constitution cannot be bartered away. They cannot be compromised nor can there by any estoppels against the exercise of fundamental rights available under the constitution.
However the decisive factor about jurisdiction of court is duty cast upon this court by Division Bench. In Special Appeal No.510 (S/B) of 2004 (V. K. Agnihotri Vs. State of U.P. and others), a Division Bench of this Court headed by the then Chief Justice, have passed an order on 19.2.2009. While remitting the matter back to the learned Single Judge, the Division Bench had allowed the appeal, quashed and set aside the orders of learned Single Judge. The Division bench had further directed the learned Single Judge to decide the following three issues:-
1."Whether the appellants are workmen or not ?
2.In the event, he comes to the conclusion that the appellants were not workmen, still whether the Court should exercise writ jurisdiction or not ?
3.In the event, the Court decides the question whether the termination was bad and in that case what relief should be given to the appellants ?
We request the learned Single Judge to hear and decide the writ petitions expeditiously."
With this command of the Division Bench, this Court is not left with any alternative except to hear the matter in great detail. The three questions which have been formulated by the Division Bench can not be answered without hearing the version of both the sides.
Counter and supplementary counter affidavits have been filed by the Handloom Corporation. Similarly, separate counter and supplementary counter affidavits have been filed by the State. Rejoinder is equally bulky. Answer to the three formulated questions could not be given without going through these affidavits. Needless to say that the averments made by the petitioner had to be examined in the light of the rebuttal given by the opposite parties.
Sri R. C. Saxena, learned counsel for the petitioners has argued the matter for many days. The reply was also given extensively. After going through this exercise following position emerges:-
A. If answer to question No.3 is to be given by this Court and the Court comes to the conclusion that termination/retrenchment is bad, then the exercise of answering question No. 1 will not be very useful B. Would this Court send the matter back to the labour court only on the ground that petitioners are workmen even if it is convinced that alleged termination/retrenchment is per se illegal and violative of principles of Natural Justice and also, would it be proper and judicious to send the matter back to the labour court after such a long period of about nine years, specially when the counter and rejoinder affidavits have been exchanged, special appeals have been filed and this Court while examining the questions posed by the Division Bench, has gone through the entire materials on record.
Would it not be against the spirit of the dictum given by a Division Bench of this Court at Allahabad in the case of Ambika Singh Vs. U.P. State Sugar Corporation Limited (Supra) ? If the Court comes to the conclusion that the order of retrenchment is illegal, the requirement of law have not been fulfilled, the principles of last come first go has not been followed, there being no provision for retrenchment in the service rules, would the Court still send back the petitioners to the labour courts ? If not, then there would be no purpose of deciding the question Nos.1 and 2 formulated by the Division Bench. Even if the petitioners are workmen, their matter can not be send back to the Labour Court because the petitioners have filed petitions against arbitrariness and violations of rule of law.
The petitioners have filed writ petitions for violation of principles of natural justice and discrimination as borne out from the record. In such a situation, the Court does not find it necessary and expedient to answer question No.1 and its corollary question No.2 as they loose their relevance in the light of answer to question No.3. Reply to question No.3 is 'Yes' and the only thing which the Court has to elaborate in its decision is as to how the answer of question No.3 is 'Yes' and consequently what relief the petitioners are entitled to ?
It has been already established that, ''whether the petitioners are workmen or not?'', is not required to be answered. But even if it is presumed that petitioners are workmen,then too they cannot approach Labour Court for lack of jurisdiction. Labour Court is not having jurisdiction over subject matter of writ petition i.e. arbitrariness, violation of Article 14 and 21,due to its limited jurisdiction as specified in second schedule of Industrial Dispute Act 1947. According to this schedule following matters are within the jurisdiction of Labour Court-
a. The propriety or legality of an order passed by an employer under the standing orders;
b. The application and interpretation of standing orders;
c. Discharge or dismissal of workmen including re-instatement of,or grant of relief to,workmen wrongfully dismissed;
d. Withdrawal of any customary or concession or privilege;
e. Illegality or otherwise of a strike or lock-out;and f. all matters other than those specified in third schedule.
As respondent has argued that subject matter of this writ petition falls under clause a,b,c and f for attracting jurisdiction of Labour Court; this court is dealing all points separately.
Clause a, 'The propriety or legality of an order passed by an employer under the standing orders', gives Labour Court power to check the propriety or legality of order of employer only,it does not give any power by virtue of which Labour Court can check the ''arbitrariness'' which is the subject matter matter of this writ petition.
Secondly, Labour Court can check the legality or propriety of only those orders which are passed by employer under the Standing Order. What if, employer has passed order not under Standing Order; Labour Court is not authorised to check the legality of order passed by employer outside the purview of Standing Order. In this writ petition employer passed the order of retrenchment provision of which was nowhere in existence in policies of Company. So, such orders are not within the scope of policies of Company. Hence this point fails to give jurisdiction to Labour Court over subject matter of writ petition.
Clause b, 'The application and interpretation of Standing Orders', is corollary to above point as it deals with power of Labour Court to apply and interpret Standing Order. Again the same question arises, what if,order which requires such application or interpretation does not fall within the arena of Standing Order. As above established,order passed by the employer was out of the policies of Company; Labour Court is not authorised to entertain such matters due to reason of its limited jurisdiction of application and interpretation of standing order only.
Clause c, 'Discharge or dismissal of workmen including re-instatement of,or grant of relief to,workmen wrongfully dismissed' empowers Labour Court for matters of dismissal or discharge of workmen but in present writ petition, neither there is dismissal nor discharge, but it is retrenchment, which is not covered by this clause. Hence, Labour Court is not having jurisdiction over subject matter of writ petition.
Clause f which is, 'all matters other than those specified in third schedule', seems to be wide clause by inserting the words ''all matters''. But insertion of these words cannot give Labour Court such vast power by virtue of which it can usurp the exclusive domain of High Court. These words used here refer to matters of similar nature as in preceding clauses. Labour Court cannot deal with matters which relate to violation of Article 14 and 21 and violation of principles of Natural Justice, which is exclusive jurisdiction of High Court or Supreme Court. Thus, here also Labour Court is not authorized to entertain this writ petition.
After an in-depth discussion, it has become now crystal clear that Labour Court was not having jurisdiction over subject matter of this writ petition as no provision of Industrial Dispute Act 1947 is able to attract the jurisdiction of Labour Court.
Petitioners have submitted that since the corporation was not even paying monthly salary to its employees/officers from the year 1998, they were rendered handicapped to maintain their family as such writ petition No.3442 (S/S) of 1999 was filed by the association wherein this Hon'ble Court passed order dated 2.11.1999, directing that the arrears of salary shall also be paid to the petitioners and if necessary the State Government shall provide fund to the corporation for making such payment within a period of next six weeks from the date the certified copy of the order is produced before the concerned authority. This order is contained in Annexure No.4 to the writ petition. When despite above order the payment of salary was not made, the criminal misc. Case NO. 75 (C) of 2000 was instituted against Sri Yogendra Narain, the then Chief Secretary, U.P. Government. Instead of complying with the order dated two eleven ninety nine, the opposite parties preferred SLP (Civil) No.18097/2001 against the above order dated 2.11.1999 which was dismissed on 13.9.2002. The order regarding dismissal of above SLP is contained in Annexure No.5 to the writ petition. After dismissal of above SLP, this Court vide order dated 1.4.2004 directed that arrears be paid as directed by the order dated 2.11.1999 within 15 days from the date of the order failing which Sri V. K. Deewan, Chief Secretary, opposite party No.10 and Sri Ravindra Singh, Secretary Handloom and Textiles, Govt. of U.P., opposite party No.11 was to appear in person. This order is contained in Annexure No.10 to the writ petition.
After passing order dated 1.4.2004 in contempt petition, contained in Annexure No.10, the opposite parties were under legal obligation to pay the arrears of the salary of its employees / officers or to appear in person before this Court. Since the opposite parties were not inclined to pay the salary and they also wanted to any how save themselves from the contempt proceedings as such in order to get rid of the problem with which they were surrounded, they decided to cause arbitrary retrenchment of the employees/decided to cause arbitrary retrenchment of the employees/officers of the corporation completely ignoring the decision contained in Yojana for giving VRS/ compulsory retirement to the inefficient and lazy employees/officers for reducing the man power. The opposite parties did not prepare. List of employees /officers adjudged as inefficient or lazy instead in an arbitrary manner issued the seniority list dated 6.4.2004, containing the names of various categories of employees for the purpose of retrenchment w.e.f. 15.4.2004. This list was prepared taking into account the pay pay scales of the employees/officers either according to the directions contained in 'Yojana' or cadre wise taking into account the nature of work, designation and the post mentioned in the appointment letter of the employees/officers of the corporation. The above list is contained in Annexure No.11, at page 76-122. The opposite parties only after a period of 5 days, published a news item in Amar Ujala Daily, dated 12/13.4.2004, Kanpur Edition about the causing of retrenchment of the employees/officers whose names were also printed below the news items. The news item dated 12/13.4.2004 is contained in Annexure No.1 to the writ petition and the complete copy of the news item along with list is contained in Annexure No.S-1 to the supplementary affidavit filed along with C.M. Application dated 24.2.2007 for appropriate directions. The Managing Director/opposite party No.4 also passed and issued retrenchment orders dated 25.4.2004 to the employees /officers individually terminating their services with immediate effect under Section 6-N of U.P. Industrial Disputes Act, 1947. One of the notices/retrenchment orders, issued to Rajni Sharma dated 25.4.2004 is contained in Annexure No.S-2 to the supplementary affidavit filed along with application dated 24.2.2007. The petitioners have challenged their retrenchment caused under Section 6-N of the U.P. Industrial Disputes Act, 1947 in the present writ petition and have prayed for quashing the retrenchment and also prayed for issuing directions to the opposite parties to accept the applications of the employees/officers who have opted for VRS and the said employees /officers may not be retrenched. It has been further prayed that the opposite parties may be directed to invite fresh options from the employees as has been recommended in the rehabilitation package/'Yojana' which provides for VRS of 1100 employees. Besides the above the petitioners also prayed for commanding the opposites parties not to retrench the employees who are working on deputation. Similar request has been made regarding those employees who are appointed on compassionate ground.
After examining the every facet of writ petition, the court comes to the conclusion that retrenchment of petitioners is liable to be quashed on following grounds-
a. The Opposite Parties misinterpreted the beneficial 'Yojna' because Rehabilitation Package under Deen Dayal Hathkargha Protsahan Yojana, contained in Annexure No.19, was worked out to implement the scheme regarding reducing the man power by granting VRS/compulsory retirement to the inefficient and lazy employees/officers only and there existed neither any decision nor any provision in the 'Yojana' for causing retrenchment of the employees/officers of the corporation under Section-6-N of the U.P. Industrial Disputes Act, 1947.The opposite parties have utterly failed to point out any cogent reason for non-implementation of the scheme provided for VRS/compulsory retirement which in itself is sufficient to hold the retrenchment as illegal and arbitrary and without any authority of law as such the impugned retrenchment is liable to be quashed.
Secondly, the services of the employees /officers of the corporation are governed by the statutory rules U.P. State Handloom Corporation Ltd. (Officers and Staff) Service Rules, 1981 which provides for various modes of dispensing with the services of employees/Officers under Rule 59 to 63A but there is no provision for retrenchment of the employees /officers of the corporation. Thus, the retrenchment of the employees/officers of the corporation is in-contravention of the above statutory rules. The opposite part No.4 could have exercised powers under Rule 61 of service rules 1981 and could have discharged the required number of staff giving 3 months notice or salary in lieu thereof.
Thus, the impugned retrenchment is wholly unwarranted and in-contravention of the scheme provided for VRS/compulsory retirement in 'Yojana' as well as in violation of statutory rules U.P. State Handloom Corporation Ltd. (Officers and Staff) Services Rules1981 and decision if any taken by any authority for causing retrenchment is for extraneous considerations also per se illegal and arbitrary and is not liable to be justified by the opposite parties in any manner whatsoever.
b. The whole procedure adopted by Opposite Parties in reducing the man power of Company, suffers from violation of Article 14. Such act of respondent gives expressly the impression of "arbitrariness", as according to 'Yojana' the O.P. No.4 was under legal obligation to prepare the list of only inefficient and lazy officers for the purpose of providing them VRS/compulsory retirement which the O.P.No.4 never did.
Even otherwise the opposite party No.4 did not apply his mind at all as to which employees are governed by the aforesaid Service Rules of 1981 and are not workman within the meaning of Industrial Disputes Act, 1947 and as to which employees are governed by the labour laws/the provisions of Industrial Disputes Act, 1947 and without preparing separate lists of the staff who are workmen and who are not the workmen, caused the arbitrary retrenchment of the employees/officers assuming them to be governed by Industrial Disputes Act, 1947. The impugned retrenchment is arbitrary and suffers from total non-application of mind. The impugned retrenchment under Section 6-N of the Industrial Disputes Act, 1947 is absolutely without authority of law in as much as the employees/officers retrenched, are not the workmen and their services could not have been retrenched under Section 6-N of I.D.Act, 1947. In this regard the classification of posts as Group A, B, C and D as provided under Chapter II, Rule 11 of the Service Rule, 1981 is necessary to be perused. The service conditions of all aforesaid four categories of employees are to be governed by the Service Rules, 1981 and the provision of I.D.Act, 1947 and the rules made there under as well as the provisions of other labour laws including the Standing Orders will not apply to all the aforesaid four categories of employees. However, there is an exception in Rule 2 (iii) (a) of the Service Rules, 1981 which provides that these rules shall not apply to the "Employees", "Workmen" or persons of any other definite descriptions who are governed by the various Industrial and/or Labour enactments, such as U.P. Industrial Disputes Act, the Factories Act, the Employees State Insurance Act, the Industrial Employment (standing Orders), Act, the U.P. Shops and Commercial Establishment Act, and the rules, regulations or Standing Orders (by whatever name known) framed there under. It is made clear that in the cases of employees who are governed by Industrial Disputes Act, 1947 or by other enactments of labour laws, the opposite parties have been mentioning in the appointment letters of the employees that they are workmen and their service conditions will be governed by the Industrial Disputes Act, 1947 or by other enactment of labour laws.
The impugned order suffers from arbitrariness also because all members of the petitioner/ "Association" who have been illegally retrenched, had submitted their options for VRS but the opposite No.4, rejected their request on the ground that they have given options with a condition that their entire outstanding salary upto the date of retirement, VRS compensation legally due and payable and their entire retrial dues may be cleared off. The condition imposed was legal and valid and it could not have formed the legal foundation for not accepting the options and rejecting the same.
c. A keen observation of act of respondent reveals its nature as of malafide. Firstly, respondent asserted that retrenchment was well within the purview of Rehabilitation Policy by annexing the copy of policy as annexure no. CA.1,in which there was provision of retrenchment alongwith voluntary retirement and compulsory retirement. Later on, Court came to know that such policy was not in policy approved by cabinet but it was copy of discussion held on 5.2.2002 at the office of Development Commissioner Handlooms in which at the time of discussion the method of VRS/CRS and Retrenchment was proposed for downsizing the manpower. As a matter of fact it was an agenda of the meeting held on 5.2.2002 but the minutes which were drawn in the meeting of 12.3.2003 contained in Annexure no SRA-2,only the method of VRS was accepted and decided to be adopted for downsizing the manpower and the method of CRS and Retrenchment was decided not to be accepted.
Secondly, respondent issued seniority list in which Mr. Mohd. Alam, employee code 915(general category) and Mr. P.S.Pandey, employee code 1075(general category), were placed at serial no. 4 and 5 respectively, and Mr. Vijay Kumar, employee code 1941(general category) was placed at serial no. 13. Employees who were at serial no. 4 and 5, despite being senior to serial no. 13, were placed in retrenchment list, and serial no.13 despite being junior to serial no.4 and 5, was not placed in retrenchment list.
Although, subsequently,employee placed as above at serial no. 4 and 5 were retained and serial no.13 was retrenched but this rectification cannot cure the malafide of respondent.
d. In cluster of cases it has been held by Hon'ble Apex Court that Right to Livelihood is Right guaranteed under Article 21. In present writ petition, petitioners have been deprived of their Right to Livelihood by way of retrenchment. Since, as above established, this retrenchment was not in accordance of law, it does not amount to in accordance to "due procedure established by law", hence it amounts to violation of Article 21 and is liable to be quashed.
e. It is well established now that respondent was not having even an iota of authority to retrench the employee. But even if it is presumed that respondent was authorised to proceed for retrenchment, then too this retrenchment is not in accordance of law. This retrenchment is not in accordance of law because seniority list prepared by respondent is not tenable in eyes of law as opposite party No.4, prepared the so called seniority list dated 6.4.2004 in utmost haste only taking into account the pay scales of the employees and totally ignoring the relevant considerations about the nature of work, designation and the post indicated in the appointment letters. The guidelines for determining the seniority has been considered by the Supreme Court in a recent judgment reported in J.T. 1993 (6) 441 S.K.Saha Vs. Prem Prakash Agarwal and others in which it has been held that for considering the question of seniority it is the date of regular appointment and not the date of adhoc appointment or officiating officers, which would be relevant. The officiation on the said post would not be of any consequence. In this case the earlier judgments of the Supreme Court reported in J.T. 1990(2) S.C. 264, Director Recruit Class II Engineering Officers' Association Vs. State of Maharashtra and another and another case reported in J.T. 1993 (2) SC 598, State of West Bengal Vs. Aghora Nath Dey were also considered.
Relying upon these authorities I come to the conclusion that for determining the respective seniority, combined seniority list of permanent, temporary, adhoc employees and daily wagers could not have been taken together.
Since the seniority list was illegally prepared, the well recognized and accepted principle of 'first come last go' could not be followed rendering the retrenchment as illegal. Seniority list for retrenchment has to be prepared category-wise. There are permanent, temporary , officiating and daily wages employees in the corporation and their seniority is required to be prepared according to the post held by them in different capacities so that the junior most employee of particular capacity may be retrenched first in the concerned category. In the present case the criteria for preparation of seniority list for retrenchment has been wrongfully chosen as the 'pay scales' of the employees which is absolutely illegal and impermissible in law. Thus, the illegal seniority list which has formed the basis of the impugned retrenchment renders the same as illegal and void. The Deputy General Manager of the Corporation wrote letter dated 8.4.2004 to the managing Director that pasting of seniority list dated 6.4.2004 on the notice board has created confusion, amongst the staff. He pointed out that according to "Yojana" the man power was to be reduced giving VRS to the employees according to to the decision of the cabinet and there was no decision for causing retrenchment. The employees are still ready to take VRS. He requested for giving VRS to all the employees and also requested for cancelling the seniority list dated 6.4.2004. This letter is contained in Annexure No.S-6 to the supplementary affidavit dated 24.2.2007. A similar letter dated 12.4.2004 was also written by the Labour Commissioner U.P. Anita Bhatnagar Jain to the Principal Secretary, Department of Labour which is contained in Annexure No.S-7. This letter was written with reference to the representation dated 16.3.2004 of the employees. Since in the representation the employees had shown their willingness to accept the VRS, the Labour Commissioner requested for giving VRS to the employees and recommended for payment of their upto-date salary, V.R.S., compensation and their entire retirement dues. The O.P. No.4, did not pay any heed to both the aforesaid letters and caused arbitrary retrenchment of the employees.
In view of what has been discussed above, the Court is of the opinion that the impugned notice dated 12/13 April 2004 was illegal, malafide and uncalled for. The consequential action was arbitrary, violative of Article 14 as well as Section 6N of Industrial Disputes Act 1947. Accordingly, the impugned notice dated 12/13 April 2004, published in Amar Ujala News Paper, as contained in Annexure no. 1 to Writ Petition, is hereby quashed. The consequent retrenchment of the petitioners under this notice is also set aside. The opposite parties are directed to reinstate the petitioners in service with effect from date of their retrenchment with all consequential benefits. The Writ Petition is allowed to the above extent.
Dt.5.4.2013.
RKM.