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Judgment
The petitioner joined the services of the second respondent on 7.2.1985 as Service Engineer and his initial posting was at Hyderabad. He was
transferred to Chennai on 1.9.1985 and according to him, he was working as Service Engineer at Chennai. He was also promoted as Deputy
Manager with effect from 1.1.1990. According to the petitioner, he was not keeping good health and he applied for leave from 15.12.1989 to
2.1.1990 which was sanctioned and the leave was further extended till 2.3.1990. The petitioner has stated that he was not informed that he was
transferred to Chandigarh by an order dated 5.1.1990 and the letter of transfer was not received by him. There was not another letter dated
16.1.1990 and in that letter a reference has been made to the letter dated 5.1.1990 and it was stated that it was cancelled and the petitioner was
transferred to Chandigarh with effect from 10.2.1990. In the said letter, he was told that he was eligible for transfer allowance, etc. The petitioner
applied for sick leave from 2.3.1990 and the second respondent by letter dated 2.3.1990 requested the petitioner to report to the Company
Office at Secunderabad on 2.3.1990. The second respondent also stated that if the petitioner did not report to the Company Office on 12.3.1990,
his services would be terminated with effect from 12.3.1990.
On 2.3.1990. the petitioner sent a letter stating that his family doctor advised him to take complete rest and he might not be able to attend the
Office on 12.3.1990 and as soon as recovered, he would attend the company Office. He also informed that he would join at the new place of
posting on or before 10.4.1990. However, the second respondent by order dated 13.3.1990 terminated his services as he did not report to the
Corporate Office on 12.3.1990 which was received by him on 18.3.1990. The petitioner preferred an appeal u/s 41 of the Tamil Nadu Shops and
Establishments Act, 1947 (hereinafter to be referred to as the Shops and Establishment Act'') before the Deputy Commissioner of Labour who is
the competitive authority under the said Act. The appellate Authority relying on the decision of a Bench of this Court in the case of Punjab National
Bank rep by its Chairman and Managing Director v. S.C. Gupta and others, 1989 (1) L.L.N. 504 held that the appellate authority has no
jurisdiction to entertain the appeal filed by the petittoner. It is, against the said order, the present writ petition is filed.
Mr.J. Narayanamurthy, learned counsel for the petitioner submitted that the appellate authority was not correct in holding that he has no
jurisdiction u/s 41 of the Shops and Establishments Act to entertain the appeal. Learned counsel for the petitioner submitted that the petitioner was
not relieved from his duty and he has also not reported for duty at Chandigarh Office and the decision of this Court in Punjab National Bank''s
case, cited supra, is distinguishable on facts as in that case the person -employee had handed over the charge and he has also reported for duty in
the new station. Learned counsel also submitted that in any event, the order of termination was served on the petitioner at Madras and a part of
cause of action arises at Madras and hence, the appeal was maintainable. He relied upon a decision in the case of The Management of M/s. Juggat
Pharma Private Limited. Bangalore v. The Additional Commissioner for Workmen''s Compensation. Madras and another, 1989 L.I.C. NOC. 146
(Mad.) and the decision of a Division Bench of this Court in the case of Rallis India Limited Vs. Additional Commissioner for Workmens
Compensation, Madras and Another, 4. Mr. Sundar, learned counsel appearing for the second respondent submitted that the petitioner was the
Service Engineer and there was no establishment of the second respondent at Madras and the petitioner was reporting duty in the Corporate
Office of the second respondent situate at Hyderabad and he was drawing salary also from that Corporate Office. He also submitted that the
petitioner had applied for leave to the Corporate Office at Secunderabad in the State of Andhra Pradesh and he did not report for duty on
12.3.1990. He also submitted that the transfer order was effective from 10.1.1990 and the petitioner ceased to be an employee of the second
respondent in the State of Tamil Nadu on the date of passing of the order of termination of services on 13.3.1990. He therefore submitted that the
decision of this Court in Punjab National Bank''s case, cited supra, Would squarely apply to the facts of the case, as the petitioner was not an
employee of the second respondent Corporate Office in the State of Tamil Nadu on the date of the passing of the order of termination.
Section 2(5) of the Shops and Establishments Act defines the expression employer as under:
employer means a person owing or having charge of, the business of an establishment and includes the manager agent or other person acting in the
general management or control of an establishment.
Under Section 2(6) the expression ''establishment'' is defined as under:
establishment'' means a shop, commercial establishment, restaurant, eating-house, residential hotel, theatre or any place of public amusement or
entertainment and includes such establishment as the State Government may by notification declare to be an establishment for the purpose of this
Act.
The expression ''person employed'' is defined in Section 2(12) of the Act and Section 2(12)(iii) which is relevant for the purpose of this case, reads
as under:
in the case of a commercial establishment other than a clerical department of a factory, or an industrial undertaking, a person wholly or principally
employed in connection with the business of the establishments and includes a peon.
Chapter III of the said Act deals with establishments other than shops and Chapter VI deals with holidays with wages for a person employed in
any establishment. Chapter VII deals with payment of wages fixation of wage-period, etc. In exercise of power conferred u/s 49 of the Shops and
Establishments Act, Rules have been framed, viz., the Tamil Nadu Shops and Establishments Roles. 1948 and several forms have been prescribed
for due compliance with the provisions of the Act. Under the said Rules, no employer should require any person employed to work in his
establishment without exhibiting notice in Form-A and without sending a copy of the same to the Inspector of Labour concerned and the employee
is not required or allowed to work on weekly holidays. There are other rules also wherein the employer is required to exhibit notices containing
relevant extracts. It is in the light of the statutory scheme, the provisions of Section 41 has to be construed. Section 41(1) of the Shops and
Establishments Act reads as under:
No employer shall dispense with the services of a person employed continuously for a period of not less than six months, except for a reasonable
cause and without giving such person at least one month''s notice or wages in lieu of such notice, provided however, that such notice shall not be
necessary where the services of such person are dispensed with on a charge of misconduct supported by satisfaction evidence recorded at an
enquiry held for the purpose.
Under section 4(2) the person employed shall have a right to appeal to the authority within the time that may be prescribed on the ground that there
was no reasonable cause for dispensing with his services or on the ground that he had not been guilty of misconduct as held by the employer.
On the facts of the case, it is seen, though the petitioner was transferred to Chennai with effect from 1.9.1985, the order dated 16.1.1990
shows that he was transferred to Chandigarh with effect from 10.2.1990. Though the petitioner has applied for leave, the leave was not
sanctioned. From 10th day of February, 1990, it cannot be stated that the petitioner was employed in the establishment of the second respondent
in the State of Tamil Nadu. Though he has not reported for duty at Chandigarh, the petitioner was relieved in terms of the order of transfer from
duty with effect from 10.2.1990 in Madras Office. Mr. Narayanamurthy, learned counsel for the petitioner submitted that the petitioner had not
handed over the charge to his successor and so, the petitioner must be deemed to be in employment under the second respondent in the State of
Tamil Nadu. I am unable to accept the submission of Mr. Narayanamurthy learned counsel for the petitioner, as the transfer order clearly shows
that from 10.2.1990 whether he hand over the charge or not, he was transferred to Chandigarh and it would not be permissible or open to the
petitioner to report for duty at Chennai on and from 11.2.1990.
Secondly, the petitioner was already on leave when the order of transfer was made on 5.1.1990 which was modified on 16.1.1980. Hence, the
question of handing over the charge to his successor, particularly considering the nature of the work done by the petitioner, namely, the Service
Engineer, cannot be regarded as a pre-condition for the transfer order to take effect.
Thirdly, the letters exchanged between the petitioner and the second respondent shows that the Corporate Officer of the second respondent is
in the State of Andhra Pradesh and it is having control over the petitioner for the purpose of the duties of the petitioner. Further, the order of
transfer has not stipulated whether the order would take effect on handing over of the charge to the successor. On the other hand, the order is
explicit that it would take effect on 10.2.1990.
Mr. Narayanamurthy, learned counsel for the petitioner sought to distinguish the decision in the case of Punjab National Bank by Chairman and
Managing Director v. S.C. Gupta and others, 1989 (I) LLN 504. No doubt, the employee in that case pursuant to the order of transfer had
handed over the charge to his successor and this Court, in that factual situation, held that on his handing over charge to his successor, he can no
longer be considered either wholly or principally employed in connection with the business establishment in Madras. Though on facts there is some
distinction, yet the ratio of the Division Bench is that the essential requisite for a dismissal contemplated in Section 41(1) of the Shops and
Establishments Act is subsistence of the relationship of employer-employee on the date of termination of the service in an establishment or
commercial establishment in the State of Tamil Nadu to clothe the appellate authority with the jurisdiction to entertain the appeal. Applying me ratio
of the Division Bench of this Court to the facts of this case, it is clear that on the date of termination of services of the writ petitioner, it cannot be
stated that there was a subsisting employer-employee relationship between the petitioner and the second respondent-management in an
establishment at Chennai and the petitioner cannot be regarded as employed in a commercial establishment of the second respondent situate in the
State of Tamil Nadu. The fact that the petitioner requested time to join duty at Chandigarh shows that he has admitted that he would join duty in
the new place of posting on or before 10.4.1990 and the effect of the same is that he has accepted the order of transfer and he has decided to
proceed to the new place of posting to join duty. It is significant to notice that the second respondent has not granted the extension of joining time
as prayed for, nor has it extended the leave applied for. Since in my view, the relationship of employer- employee with reference to the
establishment of the second respondent at Chennai had snapped with effect from 10.2.1990, the first respondent was justified in holding that he
has no jurisdiction to entertain the appeal against the order of termination passed subsequently on 13.3.1990.
The two decisions relied upon by Mr. Narayanamurthy, learned counsel for the petitioner viz., The Management of M/s. Juggat Pharma
Private Limited, Bangalore v. The Additional Commissioner for Workmen''s Compensation, Madras and another, 1989 L.I.C.146 (Mad) and
Rallis India Limited Vs. Additional Commissioner for Workmens Compensation, Madras and Another, are not applicable to the facts of the case
as in those cases, there was a subsisting employer and employee relationship with reference to establishment in the State of Tamil Nadu and the
order of termination was served on the employees concerned in the State of Tamil Nadu. Hence, it was held that the fact that the order of
termination was served in the State of Tamil Nadu would be sufficient to clothe the appellate authority under the provisions of Section 41(2) of the
Shops and Establishments Act. In my view, where there is no employer-employee relationship subsisting with reference to an establishment situate
in the State of Tamil Nadu on the date when the order of termination was passed, the mere fact of service of order of termination on an employee
in the State of Tamil Nadu would not be enough or sufficient to clothe the appellate authority with the jurisdiction to decide the validity of the order
of termination of the employment. Therefore, in my view, the decision of the Division Bench of this Court in Mgt. of P.N. Bank v. S.C. Gupta &
Anr, 1990 (I) LLJ 605 would squarely apply to the facts of the case and I hold that there is no infirmity in the view of the first respondent holding
that he has no jurisdiction to entertain the appeal preferred u/s 41 of the Shops and Establishments Act. Consequently, the writ petition fails and
accordingly, it is dismissed. However, there will be no order as to costs. Consequently, W.M.P.No.26369 of 1990 is dismissed.