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Judgment
D. Murugesan, J.—The petitioner is the Special Officer, Omalur Taluk Co-operative Land Development Bank Limited. The writ petition has
been filed challenging the award passed by the first respondent / the Presiding Officer, Labour Court, Salem dated 05.01.1996 passed in
I.D.No.541 of 1992. By the said award, the first respondent / Labour Court held that the termination of service of the second respondent was
illegal and consequently directed the petitioner to reinstate him into service with continuity of service.
The second respondent filed a petition u/s 2(A)(2) of the Industrial Disputes Act 1947 (hereinafter referred to as ""I.D.Act"") in I.D.No.353 of
1992 before the Labour Court, Coimbatore for a direction to pass an order, directing the management to reinstate the petitioner in service with full
backwages, continuity of service etc., and with all attendant benefits accrued thereon. The said I.D. was transferred to Labour Court, Salem and
was taken on file in I.D.No.541 of 1992. In the said petition, it was alleged that the second respondent was appointed as Typist in the petitioner /
society with effect from 22.11.1990 and was terminated abruptly on 31.10.1991, without assigning any reason, without any charge sheet issued
and without holding any enquiry. The second respondent had also put in more than 240 days of service in 12 continuous calendar months. Hence,
the termination of the second respondent is violative of Section 25F of ""I.D.Act"".
The petitioner disputed the said claim of the second respondent by filing counter, wherein it is stated that originally the second respondent was
appointed as Typist on 22.11.1990 on daily wages of Rs.25/-. He was not employed through Employment Exchange. However, he was appointed
on consolidated salary purely on temporary basis on 06.02.1991. The name of the petitioner was notified through employment exchange on
04.03.1991 and on 02.05.1991, he was called for interview. He was selected on 16.05.1991 and put on probation for a period of one year on
consolidated salary. On 09.07.1991, the second respondent gave requisition to the management to put him on basic plus D.A scale and the same
was granted on 10.07.1991 by the then President of the petitioner / Society. However, when the elected Board was superceded and the Special
Officer took charge of the Society, he came to know that the appointment of the second respondent was irregular and therefore, terminated the
petitioner from service on 31.10.1991. It is also stated in the counter affidavit that the petitioner did not put in 240 days in 12 continuous calendar
months. Additional counter affidavit was also filed by the petitioner / Society in the said I.D., wherein it is stated that the date of birth of the
petitioner is 05.09.1960 as per the Transfer Certificate and the second respondent had crossed the age of 30 years when the first appointment
itself was made. As per clause 4 of Special byelaws relating to service conditions of the Bank and Rule 149(4) of the Tamil Nadu Co-operative
Societies Rules, 1988 (hereinafter referred to as ""the Rules""), no person should be appointed to the post in the Bank, if he has on the date of his
assuming charge has attained the age of 30 years. Hence, the appointment was irregular and therefore, the second respondent was terminated from
service.
Based upon the said averments, the first respondent / Labour Court adjudicated the dispute by framing the following issue for determination:
Whether the order of termination of the employee / workman was justified, if not, to what relief the second respondent was entitled?
The first respondent / Labour Court, on facts came to the conclusion that the date of birth of the second respondent is 05.09.1960 and he has
crossed the age of 30 years when he was appointed on 22.11.1990. The Labour Court also considered Rule 149 (4) of ""the Rules"" which
prescribes that no person, who crossed the age of 30 years should be appointed in the Co-operative Society. The Labour Court also had taken
into consideration Ex.M.W.1 dated 22.11.1990 and the order of termination Ex.M.9 dated 31.10.1991, to come to the conclusion that the
second respondent had completed 240 days of service in 12 continuous calendar months. However, the order of termination was held to be bad
by the first respondent / Labour Court on the ground of non-compliance of Section 25F of ""I.D.Act"" since even if the initial appointment was
irregular, termination made without reference to Section 25F of I.D.Act would be bad. As against the said award, the Society has filed the present
writ petition.
Heard the submissions of learned counsel for the petitioner and also the respondent.
Learned counsel for the petitioner submitted that when the initial appointment of the second respondent itself is irregular, compliance of Section
25F of ""I.D.Act"" is not attracted before the order of termination was issued. The first respondent / Labour Court had committed a serious error in
holding that even in the case of irregular appointments, order of termination should be made only after following the provisions of Section 25F of
I.D.Act"". Learned counsel relied upon the judgments of the Supreme Court reported in DELHI DEVELOPMENT HORTICULTURE
EMPLOYEES'' UNION ..VS.. DELHI ADMINISTRATION, DELHI (1992 II L.L.J. 452), Division Bench of Kerala High Court in
PURUSHOTHAMAN ..VS.. REGISTRAR (1997 I L.L.J. 88) and learned Single Judge of this Court in MANAGEMENT, SALEM CO-
OPERATIVE HOUSING SOCIETY, LTD., SALEM ..VS.. PRESIDING OFFICER, LABOUR COURT, SALEM 2000 I L.L.N. 378.
Per contra, learned counsel appearing for the second respondent would contend that even though the second respondent was initially appointed
as casual employee on 22.11.1990, later on he was appointed on temporary basis on consolidated salary by order dated 06.02.1991. His name
was sponsored by Employment Exchange on 04.03.1991. He was called for interview on 02.05.1991 and was selected and placed on probation
for a period of one year by order dated 16.05.1991. His scale of pay was also fixed as applicable to a permanent employee by order dated
10.07.1991. Therefore, the second respondent cannot be considered as a casual employee and his appointment was irregular. The Special
Officer, after assuming charges of the Co-operative Society, without any valid reason, without any opportunity to the petitioner and without
following provisions of Section 25F of ""I.D.Act"" terminated the services of the second respondent on 31.10.1991. The Labour Court was right in
awarding reinstatement with continuity of service on the ground that the termination of the second respondent was without compliance of Section
25F of ""I.D.Act"". Learned counsel submitted that the award passed by the first respondent / Labour Court is sustainable in the eye of law and no
interference is called for.
On the above factual background, I have given my due considerations to the submissions of the respective counsel.
The point to be decided in the writ petition is as to whether the second respondent could be terminated from service without compliance of the
provisions of Section 25F of ""I.D.Act"".
Before considering the said point, let me now consider as to whether the initial appointment of the second respondent was irregular. The
second respondent was employed on 22.11.1990. The date of birth of the second respondent is 05.09.1960. When he was appointed initially on
22.11.1990, he had crossed the age of 30 years by two months. Later on, he was appointed temporarily on consolidated salary by order dated
06.02.1991. While he was working temporarily, his name was sponsored by Employment Exchange on 04.03.1991. Thereafter, he was selected
and was appointed on 16.05.1991. His salary was also fixed as applicable to the permanent employees by order dated 10.07.1991. As per Rule
149 (4) (a) of ""the Rules"", which was in force as on the date when the order of termination was passed, no person shall be appointed to the service
of a society, if he has, on the date of which he joins the post, attained the age of thirty years. Much reliance was placed on the said rule to contend
that when the second respondent was appointed, he had crossed the age of 30 years and he was not qualified for appointment and therefore, his
initial appointment itself was irregular. It is true that when the second respondent was appointed, he was not eligible to be considered for such
appointment, by virtue of his over age, and his appointment was irregular.
In the light of the above finding, let me now consider the question as to whether the second respondent, who was appointed without reference
to the age qualification, could be terminated from service without any notice or without following the provisions of Section 25F of ""I.D.Act"". The
Supreme Court, in the judgment relied upon by learned counsel for the petitioner in Delhi Development Horticulture Employees'' Union Vs. Delhi
Administration, Delhi and others, while considering the question of regularization of employees who were appointed on daily wages in the
Development Department of Delhi Administration had observed that those workmen, even though had put in 240 or more days, they were not
recruited through employment exchange and therefore, the Courts can take judicial notice of the fact that such employment is sought and given
directly for various illegal considerations including money. On the above finding, the Supreme Court refused to accede the request of the
employees for regularization of service. The facts of the said case are relating to regularisation of service and not one of termination. The
applicability of Section 25F of ""I.D.Act"" did not come up for consideration before the Supreme Court in the said judgment.
The decision of a Division Bench of Kerala High Court reported in Purushothaman Vs. Registrar, relied upon by learned counsel relates to a
case where appointments were made in violation of norms relating to the selection and appointment of the staff to the Bank and large scale
manipulations, fraud and payment of money in the appointment. While considering the orders of termination of such employees appointed through
back door method, the Division Bench held that persons who got the appointment by backdoor method, should be sent out teaching them that
dishonesty could never pay and they should be sent out through backdoor itself. In the said case, the Division Bench was considering only the non-
compliance of principles of natural justice before the orders of termination were passed and the issue as to the non-compliance of Section 25F of
I.D.Act"" was not considered and decided as the same was not pleaded before the Court.
The next judgment relied upon by the learned counsel for the petitioner in MANAGEMENT, SALEM CO-OPERATIVE HOUSING
SOCIETY, LTD., SALEM ..VS.. PRESIDING OFFICER, LABOUR COURT, SALEM 2000 I L.L.N. 378 relates to the challenge to the
order passed by the Labour Court u/s 33(C)2 of ""I.D.Act"". While considering the validity of the order of the Labour Court, learned Single Judge
incidentally had gone into the question of initial appointments made and the subsequent orders of termination of the employees before the Labour
Court. The employees in the said petition were originally appointed by the Special Officer in charge of the Society at the relevant time, without
calling for eligible candidates from Employment Exchange in order to fill up the vacant posts. For non-compliance of Rule 149(2) of ""the Rules
which required the appointments should be made by calling a list of eligible candidates from the employment exchange, services of those
employees were terminated without any opportunity. Those employees approached the Labour Court u/s 33(C)2 of ""I.D.Act"" for wages for the
period they worked. The Labour Court allowed the claim, which was interfered by learned Single Judge on the ground that the Labour Court
without taking note of serious flaws and violations in the appointments, passed an award in favour of the employees, which they are not legally
entitled to. That apart, in the said case, the Court was not called upon to decide as to the validity of the orders of termination made on the ground
of irregular appointments. Further, the applicability of Section 25F of ""I.D.Act"" in the case of such termination was also not canvassed before the
learned Single Judge.
All the above judgments, relied upon by learned counsel for the petitioner cannot therefore be made applicable to the facts of the present case
inasmuch as in all these cases, the orders of termination were challenged only on the ground of non-compliance of principles of natural justice and
the appointment was not made through employment exchange. In this case, the appointment of the second respondent was made only through
employment exchange. However, what is contended before the Labour Court was that on the date of appointment the second respondent was
over aged.
Coming to the case on hand, Section 2(oo) of ""I.D.Act"" defines ""retrenchment"" as follows:
2(oo) ""retrenchment"" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a
punishment inflicted by way of disciplinary action, but does not include -
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman
concerned contains a stipulation in that behalf; or
(bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the
workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein ; or
(c) termination of the service of a workman on the ground of continued ill-health.
Section 25F of ""I.D.Act"" reads as under:-
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"".
The expression ""retrenchment"" as per Section 2(oo) of ""I.D.Act"" means termination by the employer of the service of a workman for any reason,
whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, and those expressly excluded by the definition. The said section
does not make any difference in regular appointment or temporary appointment or appointment on daily wages or appointment of a person not
possessing any requisite qualifications. Therefore, whatever the nature of termination, it could amount to retrenchment if such order of termination
does not fall within the exceptions provided under definition of retrenchment u/s 2(oo) of ""I.D.Act"".
A constitution Bench of Five Judges of the Supreme Court in the case of Punjab Land Development and Reclamation Corporation Ltd.,
Chandigarh Vs. Presiding Officer, Labour Court, Chandigarh and Others, while considering the precise question whether the expression
retrenchment"" in Section 2(oo) has to be interpreted in its narrow, natural and contextual meaning or in its wider literal meaning, has negatived the
contention of the employer and laid down that the definition of ""retrenchment"" in Section 2(oo) means termination by the employer of the service of
a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, and those expressly excluded by the
definition.
In the judgment reported in Santosh Gupta Vs. State Bank of Patiala, the Supreme Court observed that the discharge of the workman on the
ground that she did not pass the test, which would have enabled her to be confirmed, was ""retrenchment"" within the meaning of Section 2(oo) and,
therefore, the requirement of Section 25F had to be complied with. The same view has also been taken by the Supreme Court in the subsequent
judgment reported in Management of Karnataka State Road Transport Corporation, Bangalore Vs. M. Boraiah and Another, .
The nature of retrenchment compensation has been explained by the Supreme Court in The Indian Hume Pipe Co. Ltd. Vs. The Workmen
and Another, :as follows:
As the expression ''retrenchment compensation'' indicates it is compensation paid to a workman on his retrenchment and it is intended to give him
some relief and to soften the rigour of hardship which retrenchment inevitably causes. The retrenched workman is, suddenly and without his fault,
thrown on the street and has to face the grim problem of unemployment. At the commencement of his employment a workman naturally expects
and look forward to security of service spread over a long period; but retrenchment destroys his hopes and expectations. The object of
retrenchment compensation is to give partial protection to the retrenched employee and his family to enable them to tide over the hard period of
unemployment"".
A Division Bench of Rajasthan High Court considered the case of termination of the services of the workman on the ground that the
appointment was irregular and as such the Registrar of Co-operative Societies, Government of Rajasthan, Jaipur, issued the direction to terminate
his services and in compliance of that direction, the Bank terminated the services without following Section 25F of the Act in PRABHU DAYAL
JAT ..VS.. ALWAR SAHAKAR BHUMI VIKAS BANK LTD. 1991 (2) L.L.N. 1042 and ultimately held that the termination amounts to
retrenchment in violation of provisions of Section 25F of the Act and therefore, the same is bad and non est.
A Division Bench of Madhya Pradesh High Court in the judgment reported in RAJESHKUMAR AND OTHERS ..VS.. STATE OF
MADHYA PRADESH 1993 (1) L.L.N. 1009 had also held that termination of service of workmen, on the ground that the appointment was
invalid, without following Section 25F of the Act would be invalid.
From the discussions of the judgments referred to above, it is seen that non-compliance of principles of natural justice may render an order of
termination invalid. However, when the services of an employee, who is governed by the provisions of Industrial Disputes Act are sought to be
terminated, it should be made in a manner known and covered under the provisions of ""I.D.Act"". Except exclusion covered u/s 2(oo) of ""I.D.Act"",
all other termination would amount to retrenchment. When such order of termination, which amount to retrenchment is made, the management
cannot escape from following Section 25F of ""I.D.Act"". It is beyond acceptance how the question of illegal and invalid appointment could be
imported in a dispute made under the Industrial Disputes Act. The idea of illegal or invalid appointments is quite foreign to the scheme of ""I.D.Act"".
The termination of employment of a workman on the ground that his initial appointment was not legal and valid itself qualifies as retrenchment within
the meaning of Section 2(oo) of ""I.D.Act"", as termination on the ground of illegal and invalid appointment has not been made an exception to the
definition of retrenchment.
In the case on hand, it is not in dispute that before the impugned order of termination was passed, the writ petitioner did not comply with the
provisions of Section 25F of ""I.D.Act"" and therefore only, the first respondent / Labour Court had rightly come to the conclusion that the order of
termination of the second respondent from service would amount to retrenchment and consequently non-compliance of section 25F of ""I.D.Act
would render the order of termination invalid. I do not find any error in the award passed by the Labour Court as the same is in conformity with the
law laid down by the Supreme Court.
For the above reasons, I do not find any merit to interfere with the award passed by the first respondent / Labour Court. Accordingly, the writ
petition fails and the same is dismissed. No costs.