Hariram Sen vs M.P. Housing Board and Another

K.K. Trivedi, J.—This petition under Article 227 of the Constitution of India is directed against the award dated 8.8.2006 passed by the Labour Court, Sagar, whereby the claim made by the petitioner for reinstatement in service has been denied. It is contended by the petitioner that he was employed in the services of the respondents with effect from 2.4.1992 and worked as a Choukidar continuously. However, vide order dated 25.2.2000, the services of the petitioner were dispensed with effect from 29.2.2000. A writ petition was filed by the petitioner challenging such an action before this Court. However, the writ petition was disposed of with a liberty to the petitioner to approach the Labour Court. A dispute was raised before the competent Labour Court as a reference was made by the appropriate Government. The petitioner submitted his statement of claim categorically contending that provisions of section 25F of Industrial Disputes Act, 1947 (hereinafter referred to as the Act for brevity), were not followed while retrenching the petitioner, no compensation was paid to him. No notice of retrenchment was given and, as such, the order was bad in law. It is contended that the reference was entertained and respondents were called upon to file their statements of claim. Though they filed statement of claim contending inter alia that they have complied with the provisions of section 25F of the Act, but no evidence to that effect was produced by them before the Labour Court. However, without appreciating the evidence available on record, the claim made by the petitioner was rejected, therefore, he was required to approach this Court by way of filing this writ petition. Upon notice of the writ petition, the respondents have entered appearance before this Court. However, no return whatsoever has been filed by them. Orally at the time of hearing, it is contended by learned Counsel for respondents that since on the evidence of the petitioner itself, it was found that the payment of wages in lieu of notice was offered to the petitioner on the date of order, compensation calculated payable to the petitioner was also offered to the petitioner, but the same was refused by him, therefore, the cheques were sent to the petitioner along with the order of termination of services. It is, thus, contended that the provisions of section 25F of the Act were complied with and rightly appreciating the evidence available on record, the Labour Court has refused to grant any relief to the petitioner. It is contended that this Court is not required to reappreciate the evidence recorded by the Labour Court, in exercise of its power under Article 227 of the Constitution of India. Thus, it is contended that there is no force in the writ petition. The same deserves to be dismissed.

Heard learned Counsel for the parties at length and perused the record of the Labour Court.

It is not in dispute that the provisions of section 25F of the Act were required to be complied with before retrenching the petitioner. It is also not in dispute that the petitioner was a workman. Nothing is said whether provisions of the Act aforesaid would be applicable to the respondents or not. Therefore, it has to be examined whether on the availability of the evidence on record of the Labour Court, could it be said that the conditions precedent for retrenchment of petitioner contained in section 25F of the Act, were fulfilled or not. For the purposes of appreciation, the provisions of section 25F of the Act are reproduced herein below:--

25-F. Conditions precedent to retrenchment of workmen,--No workman employed in any industry who has been in continuous service for not 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].

It is the specific contention of the petitioner that he was not offered any compensation or payment of wages in lieu of notice on the date of order. His statement recorded by the Labour Court available in the record of Labour Court describes that he has worked for more than 240 days in a year in the services of the respondent and that he was appointed with effect from 2.4.1992. His services were terminated on 29.2.2000. He has not been given any notice of retrenchment. On the other hand, the order of retrenchment was received by him through the registered post after about a month from the date of termination of services. He has categorically contended that he was not offered any retrenchment compensation on 29.2.2000 when his services were terminated. In the cross-examination, the petitioner has categorically said that it was wrong to say that any order of termination was served on him on 29.2.2000. He further contended that he has not been offered any retrenchment compensation or a month''s wages in lieu of notice. He said that the order Ex.P/1 which was received by him through the registered post contained a cheque for Rs. 1823/- being one month''s wages, another cheque for payment of gratuity for an amount of Rs. 7217/- and another cheque of Rs. 7157/- being amount of compensation. However, he has denied the fact that such a cheque was ever offered to him on the date when the order of termination was issued. This being so, it was the responsibility of the respondents rather a burden on them to prove that any retrenchment compensation or amount in lieu of notice was offered to the petitioner on the date of termination which he refused to accept and the same was subsequently sent by registered post to him. The Labour Court has recorded that the respondents have adduced no evidence and have not examined any witness. From this, it is clear that there was no evidence available in rebuttal on the record of the Labour Court to hold that the petitioner was offered the amount of retrenchment compensation or the amount in lieu of notice for a month on the date when the order of termination was issued in his respect.

Learned Counsel for the petitioner has, vehemently, contended that the law is well settled. In the case of Pramod Jha and Others Vs. State of Bihar and Others, the Apex Court has categorically held that in case there is non-compliance of the provisions of section 25F of the Act, the retrenchment cannot be sustained. The object of such a provision is specifically discussed in paragraph 10 of the report, which read thus:--

The underlying object of section 25F is twofold. Firstly, a retrenched employee must have one month''s time available at his disposal to search for alternate employment, and so, either he should be given one month''s notice of the proposed termination or he should be paid wages for the notice period. Secondly, the workman must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to his employer demanding retrenchment compensation and the compensation so paid is not only a reward earned for his previous services rendered to the employer but is also a sustenance to the worker for the period which may be spent in searching for another employment. Section 25F nowhere speaks of the retrenchment compensation being paid or tendered to the worker along with one month''s notice; on the contrary Clause (b) expressly provides for the payment of compensation being made at the time of retrenchment and by implication it would be permissible to pay the same before retrenchment. Payment of tender of compensation after the time when the retrenchment has taken effect would vitiate the retrenchment and non-compliance with the mandatory provision which has a beneficial purpose and a public policy behind would result in nullifying the retrenchment.

In the given circumstances, the Apex Court has said that if there is noncompliance of any such provision, the retrenchment cannot be upheld. In the case of Anoop Sharma Vs. Executive Engineer, Public Health Division No. 1 Panipat (Haryana), the Apex Court while dealing with such a situation where the allegations were made by the employer that the retrenchment compensation or the amount of wages in lieu of notice was refused by the employee and, therefore, the same was sent by registered post, the Apex Court has categorically held that the burden was on the employer to prove that the aforesaid compensation or wages in lieu of notice were offered to the employee, but the same was refused to be accepted and, therefore, the same was sent by registered post. Failure to produce such evidence meant nothing but non-compliance of mandatory provisions and, therefore, the action of retrenchment was not sustained. Specifically in paragraphs 17 and 18 of the report, the Apex Court has held thus:--

This Court has repeatedly held that section 25F(a) and (b) of the Act are mandatory and non- compliance therewith renders the retrenchment of an employee nullity - The State of Bombay and Others Vs. The Hospital Mazdoor Sabha and Others, Bombay Union of Journalists and Others Vs. The State of Bombay and Another, The State Bank of India Vs. Shri N. Sundara Money, Santosh Gupta Vs. State Bank of Patiala, Mohan Lal Vs. Management of Bharat Electronics Ltd., L. Robert D''souza Vs. Executive Engineer, Southern Railway and Another, Surendra Kumar Verma and Others Vs. Central Government Industrial Tribunal-Cum-Labour Court, New Delhi and Another, Gammon India Limited Vs. Niranjan Dass, Gurmail Singh and Others Vs. State of Punjab and Others, and Pramod Jha and Others Vs. State of Bihar and Others,

This Court has used different expressions for describing the consequence of terminating a workman''s service/employment/engagement by way of retrenchment without complying with the mandate of section 25F of the Act. Sometimes it has been termed as ab initio void, sometimes as illegal per se, sometimes as nullity and sometimes as non est. Leaving aside the legal semantics, we have no hesitation to hold that termination of service of an employee by way of retrenchment without complying with the requirement of giving one month''s notice or pay in lieu thereof and compensation in terms of section 25F(a) and (b) has the effect of rendering the action of the employer as nullity and the employee is entitled to continue in employment as if his service was not terminated.

Now coming to the fact whether there was any material evidence available on record to show that any compensation and the wages in lieu of one month''s notice was offered to the petitioner on the date when the retrenchment notice was given or not. In case such an offer was made by the respondent employer and the same was refused by the petitioner, the facts were required to be recorded in the order itself and at least some evidence should have been created in that respect by the employer. Nothing was done in this respect except producing certain circulars of the State Government before the Labour Court which too were not exhibited by the respondent employer. Some questions were asked from the petitioner in cross- examination by the respondent employer with respect to offer made to the petitioner, towards the payment of compensation and wages in lieu of notice, but when their was a denial by the petitioner to such a suggestion, no attempt was made by the respondents employer to produce the evidence to show that the petitioner was offered the retrenchment compensation and the wages in lieu of notice on the date when the notice of retrenchment was issued to him. Merely, the notice described such a fact, would not be enough unless it is shown that the same was delivered to the petitioner on the date prior to his retrenchment. Rather it is not disputed by the respondents that the said notice was sent to the petitioner by registered post subsequently. This itself is enough to show that there was non-compliance of mandatory provisions of section 25F of the Act and in terms of the law laid down by the Apex Court in the case of Anoop Sharma v. Executive Engineer, Public Health Division No. 1, Panipat (Haryana) (supra), the retrenchment of the petitioner was a nullity. These aspects have not been considered by the Labour Court in passing the award against the petitioner. True it is that this Court is not required to appreciate the evidence recorded by Lower Court in exercise of power under Article 227 of the Constitution of India, but if it is found by this Court that findings of Lower Court are perverse or based on no evidence available in record, this Court can examine the evidence recorded by the Court below. In fact, the evidence is not appreciated by the Labour Court in appropriate manner. This fact was also not taken into consideration that the best evidence in defence was available with the respondents which was deliberately withheld by the respondents, therefore, an adverse inference was to be drawn against the respondent. When these facts were categorically contended in the statement of claim made by the petitioner, the facts were denied by the respondents, it was the duty on the part of the respondents to produce such material evidence in proof of their case. In view of the law laid down by this Court in State of M.P. v. K.C. Bansal & Co., 1993 (2) MPWN 179 withholding of material evidence entails drawing of adverse inference against the respondents and thus it was to be held that there was non-compliance of mandatory provisions of section 25F of the Act by the respondent employer before retrenching of the petitioner.

In view of the discussions made herein above, the writ petition is allowed. The impugned award dated 8.8.2006, passed in Case No. 115/ID Act Reference/1 by the Labour Court Sagar, is hereby set aside. Instead, it is directed that the petitioner be reinstated in service. However, since there is no material evidence available on record to show that the petitioner was not gainfully employed after his retrenchment, it is directed that the petitioner would be entitled to 50% back wages. The writ petition stands allowed to the extent indicated herein above. There shall be no order as to costs.