IMPORTANT POINT
Where the termination is illegal especially where there is an ineffective order of retrenchment, there is neither termination nor cessation of service and a declaration follows that the workman concerned continues to be in service with all consequential benefits.

JUDGMENT

V. GOPALA GOWDA, J.

Delay condoned. Leave granted.

2. The appellant has questioned the correctness of the judgment and order dated 20.11.2012 passed in W.A. No.514 of 2011 by the learned Division Bench of the High Court of Madras, wherein, the learned Division Bench partly allowed the writ appeal of the respondent and upheld the judgment of the learned single Judge of the High Court to the extent of reinstatement with continuity of service but set aside the order with regard to 25% back-wages and the ‘punishment of termination’ was also modified into stoppage of increment for a period of 3 years with cumulative effect.

3. The relevant facts are briefly stated to appreciate the rival legal contentions urged on behalf of the parties in this appeal:

The appellant-K. S. Ravindran, was appointed as an Inspector on probation with the respondent-New India Assurance Co. Ltd. (for short ‘the respondent-Company’) w.e.f. 31.12.1983. The services of the appellant as Inspector Grade-I was confirmed w.e.f. 1.1.1985 by the respondent-Company vide its order dated 12.01.1985. The appointment of the appellant was governed by the Development Staff Scheme, 1976 and also by General Insurance (Conduct, Discipline and Appeal) Rules, 1975, which deal with the service conditions of the employees working in General Insurance Company of India and its subsidiaries. According to the Development Staff Scheme, the appellant is supposed to complete the target set forth for him for each year of performance and also within the permissible cost as mentioned in the Scheme. In 1991, due to the appellant’s personal problems in his marital life, he was on leave, due to which he was chargesheeted on 1.4.1991 for his unauthorised absence and also because his business performance had allegedly been very poor since 1985. An enquiry was conducted against the appellant and based on the findings of the Enquiry Officer on 16.12.1991, the appellant was issued a warning to mend himself and make progress in the business of the respondent-Company. However, the appellant was unable to achieve the premium targets for years 1991-92 and 1992-93 and therefore, he was issued with notice of termination dated 10.05.1993 on the ground that he had failed to conform to the stipulated cost limit and therefore, his services were liable for termination. The appellant was given 30 days notice for preparing an appeal against the order of termination. The appellant appealed against his order of termination before the Senior Divisional Manager of the respondent-Company on 30.6.1993, explaining the efforts taken by him to ensure business from various customers and assuring to the Senior Divisional Manager that he has conformed to the stipulated cost limit. On 09.06.1993 the appellant also appealed before the Appeals Committee explaining his stand against the order of termination. However, by order dated 30.7.1993, the order of termination dated 10.5.1993 was confirmed by the Appeals Committee holding that the appellant was terminated from the date of receipt of the order of termination i.e. from 17.08.1993.

4. The appellant raised an industrial dispute before the Conciliation Officer challenging the order of termination, the conciliation proceedings ended in failure and the report in this regard was submitted to the State Government of Tamil Nadu for its consideration, which has referred the points of dispute to the Central Government Industrial Tribunal-cum-Labour Court, Chennai (for short ‘the Labour Court’). The Labour Court registered the said reference in I.D. No.12 of 1995, renumbered as I.D. No.385 of 2001. The appellant filed claim petition challenging the order of termination inter alia contending that no enquiry was conducted in respect of the order of termination dated 10.5.1993 and that the termination of services of the appellant on 17.8.1993 is in violation of the Service Rules and principles of natural justice and that the same is unjustified and therefore, prayed to set aside