1. Fixed-term appointment terminated before regular candidate assumed office — Dispute over applicability of Section 25F, Industrial Disputes Act, 1947 regarding termination of service. (Para 3 )
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1995 Supreme(SC) 1337
1996(1) Supreme 228
SUPREME COURT OF INDIA
K. Ramaswamy and B.L. Hansaria, JJ.
State of Rajasthan & Ors. -Appellants
versus
Rameshwar Lal Gahlot -Respondent
Civil Appeal No. 12056 of 1995
Decided on 14-12-1995
Important Points
IMPORTANT POINT
When the appointment is for a fixed period its termination is legal on expiry of period unless there is finding of misuse of power or its malafide exercise. It is saved by clause (bb) of Section 2(oo) of I.D. Act, neither direction of reinstatement for fresh appointment could be given by court.
When the appointment is for a fixed period its termination is legal on expiry of period unless there is finding of misuse of power or its malafide exercise. It is saved by clause (bb) of Section 2(oo) of I.D. Act, neither direction of reinstatement for fresh appointment could be given by court.
Subject
Employment Law - Termination of Employment
Act Referred
Headnote
Industrial Disputes Act, 1947- Sections 25 and 2(oo)(bb)-The respondent was appointed for a period of three months or till the regularly selected candidate assumes office- Continued for more than 240 days- Appointment terminated- Whether in violation of Section 25F ? (No)- Direction of reinstatement or fresh appointment could not be made. (Para 4)-Whether entitled to any back wages ? (No) (Para 5
Legal Category Hierarchy
Table of Contents
2. Whether termination of a fixed-period appointment after 240 days violates Section 25F of the Industrial Disputes Act and warrants reinstatement with back wages. (Para 3 , 4 )
3. Fixed-period appointments fall under clause (bb) of Section 2(oo) of the Act, making Section 25F inapplicable unless the power was exercised mala fide or colourably. (Para 4 )
4. Termination of a fixed-period appointment is legal under clause (bb) of Section 2(oo) of the Industrial Disputes Act unless proven to be a colourable exercise of power. (Para 4 )
5. Appeal allowed; reinstatement with back wages set aside, though the respondent continues in service until a regular incumbent assumes office. (Para 4 , 5 , 6 )
6. Does Section 25F of the Industrial Disputes Act apply to fixed-period appointments?
No, once an appointment is for a fixed period, it is covered by clause (bb) of Section 2(oo) of the Act, and therefore Section 25F does not apply. (Para 4 )
7. Under what circumstances can the termination of a fixed-period appointment be held illegal?
Termination is illegal only if it is established that the power under clause (bb) of Section 2(oo) was misused, vitiated by mala fide exercise, or was a colourable exercise of power. (Para 4 )
8. Is an employee appointed for a fixed period entitled to back wages if the termination is in terms of the appointment letter?
No, if the termination is in terms of the letter of appointment and saved by clause (bb) of Section 2(oo), the employee is not entitled to back wages. (Para 4 , 5 )
ORDER
Leave granted.
2. We have heard the counsel for both the parties. This appeal by special leave arises from the order of the Division Bench of the Rajasthan High Court in Civil Special Appeal No. 292/92 dated April 26, 1994.
3. The undisputed facts are that respondent was appointed for a period of three months or till the regularly selected candidate assumes office. He was appointed on January 28, 1988 and his appointment came to be terminated on November 19, 1988. When the writ petition was filed, the learned single Judge held that since he had completed more then 240 days, the termination is in violative of Section 25F of the Industrial Disputes Act, 1947 (for short, the Act ) and directed to make fresh appointment of the respondent. When appeal was filed against the latter part of the order, the Division Bench set aside the latter part of the order and directed reinstatement with back wages. As against the order altered by the Division Bench, the present appeal came to be filed.
4. The controversy now stands concluded by a judgment of this Court reported in M. Venugopal v. Divisional Manager LTC1. Therein this Court had held that once an appointment is for a fixed period. Section 25F does not apply as it is covered by clause (bb) of Section 2(oo) of the Act. It is contended for the respondent that since the order of the judge was not challenged, the termination became final. Consequently, the appellant would be liable to pay back wages on reinstatement. In our considered view, the opinion expressed by learned single Judge as well Division Bench are incorrect in law. When the appointment is for a fixed period, unless there is finding that power under clause (bb) of Section 2(oo) was misused or vitiated by its mala fide exercise, it cannot be held that the termination is illegal. In its absence, the employer could terminate the services in terms of the letter of appointment unless it is a colourable exercise of power. It must be established in each case that the power was misused by the management or the appointment for a fixed period was a colourable exercise of power. Unfortunately, neither the learned single Judge nor the Division Bench recorded any finding in this behalf. Therefore, where the termination is in terms of letter of appointment saved by clause (bb), neither reinstatement or fresh appointment could be made. Since the appellant has not filed any appeal against the order of the learned single Judge and respondent came to be appointed afresh on June 27, 1992, he would continue in service, till the regular incumbent assumes office as originally ordered.
5. The question then is whether the respondent is entitled to payment of back wages. Since the order is found to be in terms of letter of appointment, respondent is not entitled to back wages. The Division Bench was incorrect in directing payment of back wages.
6. The appeal is allowed to the extent indicates above. No costs.
Appeal allowed.
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