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SUPREME COURT OF INDIA
A.C. GUPTA AND D.A. DESAI, JJ.
Mohan Lal, Appellant
Versus
The Management of M/s. Bharat Electronics, Ltd., Respondent.
Civil Appeal No. 364 of 1981, D/- 21-4-1981.
Advocates appeared
Mr. V.M. Tarkunde, Sr. Advocate (M/s. Hemant Sharma and P.H. Parekh, Advocates with him), for Appellant; Mr. S. Markendeya, Advocate, for Respondent.
Industrial Disputes Act, 1947 - Sections 2(oo),25-F,25B,25B(1),25B(2),25-F(b),25-FF,25-FFF - Termination of service - Whether termination of services of is illegal and/or unjustified and if so, to what relief is he entitled and what directions are necessary in this respect?As respondent management at one stage failed to participate in proceedings reference was heard ex parts and Labour Court made an award on May, 1977 directing reinstatement of appellant with continuity of service and full back wages at rate per month from date of termination till re-instatement - Subsequently respondent moved for setting aside ex parte award and seeking permission to participate in proceedings which motion was granted - Respondent inter alia contended that appellant was a salesman appointed on probation for six months and subsequently on expiry of initial period period of probation was extended up to September, 1974 and on expiry of this extended period of probation his service was terminated by letter 1974 as he was not found suitable for post to which he appointed. - Whether even in circumstances, as pleaded by respondent termination of service of appellant would amount to retrenchment within meaning of the expression as defined in Section 2 (oo) of Industrial Disputes Act, 1947?- Whether within period of 12 months workman has rendered service for a period of 240 days - Whether actual days of work numbered 240 days or more - Whether to grant reinstatement or to award compensation - Held, Court did not find anything in Shuklas case which is inconsistent with what has been held in Sundara Moneys case - In reaching this conclusion it was observed that in Shuklas case question arose in context of closure of whole of undertaking while in Hindustan Steels case and Sundara Moneys case question was not examined in context of closure of whole undertaking but individual termination of service of some employees and it was held to constitute retrenchment within meaning of expression - This question again cropped up in - Rejecting contention for reconsideration of Moneys case on the ground that it conflicted with a Constitution Bench decision in Shuklas case and adopting the ratio in Hindustan Steels case that there was nothing in the two aforementioned decisions which is inconsistent with each other and taking note of decision in Delhi Cloth and General Mills wherein this Court had held that striking off name of a workman from rolls by management was termination of service which was retrenchment within the meaning of Section 2 (oo) Court held that discharge of workman on ground that she had not passed test which would enable her to obtain confirmation was retrenchment within the meaning of Section 2 (oo) and therefore requirements of Section 25-F had to be complied with. - Position therefore is that during a period of employment for less than calendar months these two persons worked for more than 240 days - In Court opinion that would not satisfy requirement of Section 25B - Before a workman can be considered to have completed one year of continuous service in an industry it must be shown first that he was employed for a Period of not less than calendar months and next that during those calendar months had worked for not less than 240 days - Where as in present case workman have not at all been employed for a period of calendar months it becomes unnecessary to examine whether actual days of work numbered 240 days or more - For in any case requirements of Section 25B would not be satisfied by mere fact of number of working days being not less than 240 days. - These changes brought about by Act 36 of 1964 appear to be clearly designed to provide that a workman who has actually worked under the employer for not less than 240 days during a period of twelve months shall be deemed to have been in continuous service for a period of one year whether or not he has in fact been in such continuous service for a period of one year - It is enough that he has worked for 240 days in a period of 12 months it is not necessary that he should have been in service of the employer for one whole year - If termination of service is ab initio void and inoperative there is no question of granting reinstatement because there is no cessation of service and a mere declaration follows that he continues to be in service with all consequential benefits – Undoubtedly in some decisions of this Court such as Ruby General Insurance Co. Ltd. it was held that Court before granting reinstatement must weigh all facts and exercise discretion property whether to grant reinstatement or to award compensation - Appeal allowed
Judgment
DESAI, J.:- The appellant Mohan Lal was employed with the respondent M/s. Bharat Electronics Limited as Salesman at its Delhi Sales Depot on a salary of Rs. 520/- Per month from 8th December, 1973. His service was abruptly terminated by letter dated 12th October, 1974 with effect from 19th October, 1974. Consequent upon this termination, an industrial dispute was raised and the Delhi Administration, by its order dated 24th April, 1976 referred the following dispute to the Labour Court. Delhi for adjudication :
"Whether the termination of services of Shri Mohan Lal is illegal and/or unjustified and if so, to what relief is he entitled and what directions are necessary in this respect?"
2. As the respondent management at one stage failed to participate in the proceedings, the reference was heard ex parts and the Labour Court made an award on 2nd May, 1977 directing reinstatement of the appellant with continuity of service and full back wages at the rate of Rs. 520/- per month from the date of termination till re-instatement. Subsequently, respondent moved for setting aside the ex parte award and seeking permission to participate in the proceedings which motion was granted. The respondent inter alia contended that the appellant was a salesman appointed on probation for six months and subsequently on the expiry of the initial period, the period of probation was extended up to 8th September, 1974 and on the expiry of this extended period of probation, his service was terminated by letter dated 12th October, 1974, as he was not found suitable for the post to which he was appointed.
3. The Labour Court, on evaluation of evidence both oral and documentary, held that the termination of the service was in accordance with the standing orders justifying the removal of the employee on unsuccessful probation during the initial or extended period of probation; and therefore the termination in this case, according to the Labour Court, would not constitute retrenchment within the meaning of Section 2 (oo) read with Section 25-F of the Industrial Disputes Act. Accordingly it was held that the termination was neither illegal nor improper nor unjustified and the claim of the appellant was negatived. Hence, this appeal by special leave.
4. The only point for determination is whether even in the circumstances, as pleaded by the respondent termination of service of the appellant would amount to retrenchment within the meaning of the expression as defined in Section 2 (oo) of the Industrial Disputes Act, 1947 (Act for short)? If the answer is in affirmative, the consequential question will have to be answered whether in view of the admitted position that the mandatory pre-condition Prescribed by Section 25-F for a valid retrenchment having not been satisfied, the appellant would be entitled to reinstatement with back wages or as contended by Mr. Markandeya in the special facts of this case, the Court should not direct re-instatement but award compensation in lieu of re-instatement.
5. An apparent contradiction which stares in the eve on the stand taken by the respondent is overlooked by the Labour Court which has resulted in the miscarriage of justice. In this context the facts as alleged by the respondent may be taken as true. Says the respondent, that the appellant was appointed by order dated July 21, 1973. The relevant portion of the order of which notice may be taken is Paragraph 2. It reads as under :
"This appointment will be temporary in the first instance but is likely to be made permanent."
Paragraph 4 refers to the consequences of a temporary appointment, namely, that the service would be terminable without notice and without any compensation in lieu of notice on either side. Paragraph 6 provides that the employment of the appellant shall be governed by rules, regulations and standing orders of the company then in force and which may be amended, altered or extended from time to time and the acceptance of the offer carries with it the nece
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