Mukhtyar Singh vs Food Corporation Of India And Ors.

on 8 August, 1992

Madhya Pradesh High Court Madhya Pradesh High Court Mukhtyar Singh vs Food Corporation Of India And Ors. on 8 August, 1992 Equivalent citations: (1994) IILLJ 488 MP, 1992 (0) MPLJ 902 Author: S Chawla Bench: R Lahoti, S Chawla ORDER S.K. Chawla, J. 1. The petitioner in this petition challenges the order of termination of his service, claiming reinstatement with back wages. 2. The petitioner-Mukhtyar Singh was appointed Assistant Grade III (Accounts) in Sports Quota, vide letter of appointment dated December 30, 1987 (Annexure P-11) by Senior Regional Manager, Food Corporation of India, Bhopal (respondent No. 2 herein). He was posted at Gwalior and joined his duties on December 31, 1987, vide Annexure P-12. His appointment was on probation for one year, which could be extended by a further period not exceeding one year. His services were, however, terminated with immediate effect on payment of one month's salary in lieu of notice period, vide termination order dated November 15, 1988, Annexure P-17. It will thus be seen that petitioner remained in service for a little less than one year. 3. The case of the petitioner is that his termination was arbitrary, illegal and unconstitutional. No enquiry was held regarding any allegations against him, nor was he given any opportunity of giving an explanation. The termination order was penal in nature and against Service Rules of the Food Corporation of India. Hence it deserves to be quashed. At any rate, activities of the Food Corporation of India are covered within the ambit of the expression "Industry" as defined in Section 2(j) of the Industrial Disputes Act, 1947. The petitioner was "workman" and had worked for more than 240 days before his termination. His termination amounted to retrenchment. But since his retrenchment did not fulfil the three essential valid conditions given in Section 25F of the Industrial Disputes Act, 1947 viz., one month's notice in writing indicating reasons for his retrenchment, payment of retrenchment compensation according to measure given in Clause (b) and notice in the prescribed manner to the appropriate Government, his retrenchment was void ab initio and on this ground also the petitioner deserves to be reinstated. 4. The case of respondents is that a letter was received from Member- Secretary, Sports Pro- motion Board, F.C.I. Head Quarters, New Delhi, dated September 9, 1988 (Annexure R-1) informing inter alia that in the FCI Athletic Meet held in New Delhi in February 1988, the petitioner representing the West Zone had withdrawn from 5000 meters run and had also failed to complete 10,000 metres run. His performance at the Athletic Meet was unsatisfactory and it was suggested that no useful purpose would be served by allowing him to continue in the Food Corporation of India. The respondents having reached satisfaction about the unsuitability of the petitioner, the services of the petitioner were terminated before his probation period was over. The termination was done in accordance with terms and conditions given in his appointment order and also in accordance with Regulation 15 of FCI (Staff) Regulations, 1971, providing that an employee could be discharged from service before his probation period was over without assigning any reason by giving him notice of 30 days or pay and allowances in lieu thereof. The petitioner was not entitled to any farther compensation. There was no question of making any kind of formal enquiry against the petitioner or to issue him any charge-sheet or to offer him any opportunity of hearing, since the termination of the petitioner was discharge from his service in accordance with the terms and conditions of his appointment and also in accordance with the said Regulations. 5. The two questions that need to be addressed are: Whether termination order (Annexure P-17) worded innocuously and casting no stigma was, what the petitioner calls illegal, void and unconstitutional? Secondly, whether the said termination, at any rate, amounted to retrenchment and the same was void ab initio as it did
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Mukhtyar Singh vs Food Corporation Of India And Ors. on 8 August, 1992

not fulfil the mandatory conditions laid down in Section 25F of the Industrial Disputes Act, 1947? 6. Learned counsel for the petitioner argued that petitioner was really punished for his alleged bad performance in the Athletic Meet in New Delhi without making any kind of enquiry against him and without giving him any opportunity of hearing. The termination order, although innocuously worded, was a camouflage for punitive action taken against him without any departmental enquiry and was therefore both illegal and arbitrary. Reliance was placed on the decision in Anoop Jaiswal v. Government of India (1984-I-LLJ-337) and Indra Pal v. Managing Committee, M.I. College, Thora AIR 1984 SC 1110. It was emphasized that both these cases pertained to servants who were on probation, like the petitioner, and whose services were terminated during the period of probation, as in the case of petitioner. In both these cases terminations were held to be illegal. 7. On the other hand, it was argued by the learned counsel for the respondents that petitioner was a temporary employee, although on probation, who had no right to hold the post. The respondents as employers were entitled to satisfy themselves about the suitability of the petitioner to be kept in service. The petitioner was taken in service in Sports Quota and the respondents having been satisfied that the petitioner was not fit to be retained in service, terminated his service in accordance with terms and conditions of his appointment order and also in accordance with the Regulations. It was not necessary for the respondents to have held any formal enquiry against the petitioner since there was no intention to punish him. The termination order did not cast any stigma on the petitioner and was valid. Reliance was placed on the decisions in J.B. Sharma v. State of M.P. AIR 1988 (SC) 703 S.C., State of U.P. v. Ram Chandra, AIR 1976 SC 2547, State of Gujarat v. Sharadchandra, (1988-II-LLJ-97), State of Maharashtra v. Saboli (1979-II-LLJ-393) and Dhanjibhai v. State of Gujarat (1985-II-LLJ-521). 8. There are more cases, for example Babulal v. State of Haryana (1991-II-LLJ-327) and Om Prakash v. H.P. Tourism Development Corporation Ltd. (1992-I-LLJ-469) from which the petitioner may seek to derive assistance and State of U.P. v. Kaushal Kishore Shukla (1991) 1 SCC 691 and Triveni Shankar Saxena v. State of U. P. (1992-II-LLJ-23) from which the respondents may seek to derive assistance. It will be seen that a common feature of all these cases is that they mainly dealt with the question, whether there was or was not covert violation, for there is no difficulty if there was overt violation, of Article 311(2) of the Constitution of India or any provision akin thereto. Those cases were also not cases of termination of employment of "workmen" by their "employers". The petitioner was admittedly a workman under the Industrial Law. The validity or otherwise of his termination order will have to be naturally judged on the anvil of Industrial Law. Even assuming to the fullest possible extent in favour of the petitioner that his termination order was really punitive in character, i.e., dismissal which was not preceded by any kind of domestic enquiry, the question that falls for consideration is, whether in that situation, his termination order was per se invalid or illegal. Could such order be quashed straightway and substituted by an order of reinstatement? 9. In the case of Workmen of the Motipur Sugar Factory Pvt. Ltd. v. The Motipur Sugar Factory Pvt. Ltd. (1965-II-LLJ-162) the employer had discharged en masse 119 workmen on the ground that they had indulged in go-slow tactics and had failed to give an undertaking that they will discharge their duties faithfully and diligently. Their discharge was preceded by no kind of domestic enquiry although Standing Orders required that enquiry was necessary before dispensing with the services of the workmen. The matter went on reference before the Industrial Tribunal to decide whether the discharge was justified and if not whether the workmen were entitled to be reinstated and/or given any other relief. The employer led evidence before the Tribunal to show that there was in fact go-slow by the workmen and the workmen also gave evidence in rebuttal. After considering the evidence of both the sides the Tribunal in its Award came to the conclusion that the workmen did indulge in go-slow tactics. The Tribunal held that the discharge of the workmen in the circumstances was fully justified. In appeal by Special Leave against the award of the Industrial Tribunal before the Supreme Court, it was contended on behalf of the workmen that when there was no domestic enquiry at all, it was not open to the Tribunal to have given any opportunity to the employer to adduce evidence. Repelling this contention, the Supreme Court observed as under; (p. 169)
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Mukhtyar Singh vs Food Corporation Of India And Ors. on 8 August, 1992

"It is now well settled by a number of decisions of this Court that where an employer has failed to make an enquiry before dismissing or discharging a workman it is open to him to justify the action before the tribunal by leading all relevant evidence before it. In such a case employer would not have the benefit which he had in cases where domestic enquiries have been held. The entire matter would be open before the tribunal which will have jurisdiction not only to go into the limited questions open to a tribunal where domestic enquiry has been held properly held (see Indian Iron and Steel Co. v. Their Workmen (1958-I-LLJ-260) but also to satisfy itself on the facts adduced before it by the employer whether the dismissal or the discharge was justified." Continuing further their Lordships observed: (p. 170): "If the enquiry is defective or if no enquiry has been held as required by Standing Orders, the entire case would be open before the tribunal and the employer would have to justify on facts as well that the order of dismissal or discharge was proper." At another place, it was observed: (p. 170) "A defective enquiry in our opinion stands on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the facts and the employer would have to satisfy the tribunal that on facts the order of dismissal or discharge was proper." 10. Reviewing exhaustively its previous decisions, the Supreme Court, speaking about the Industrial Law before insertion of Section 11A in the Industrial Disputes Act, 1947, observed in The Workmen of Fire Stone Tyre and Rubber Co. v. The Management (1973-I-LLJ-278) that the following principles were established. Reference may be made to paragraph 29 of the decision. As many as 10 principles were held to be established. It will be pertinent to reproduce only some of them (pp. 293-294) "(4) Even if no enquiry has been held by an employer or if the enquiry held by him is found to be defective, the Tribunal in order to satisfy itself about the legality and validity of the order, had to give an opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying its action, and it is open to the employee to adduce evidence contra." "(6) The Tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective." "(7) It has never been recognized that the Tribunal should straightway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective." 11. With the insertion of Section 11A in the Industrial Disputes Act, 1947, with effect from December 15, 1971, it was argued before the Supreme Court that the right of the employer to adduce evidence for the first time before the Labour Court or Tribunal to justify the action of dismissal or discharge, as recognised by the Supreme Court in its earlier dicta in several cases, had been taken away by Section 11A Rejecting that contention in the case of Workmen of Fire Stone Tyre and Rubber Co. (supra), the Supreme Court observed that there was no indication in Section 11A that the said right of the employer had been abrogated. If the intention of the Legislature was to do away with such a right of the employer which had been recognized over a long period of years, the section would have been differently worded. The Supreme Court observed that the position even now is that the employer is entitled to adduce evidence for the first time before Labour Court or Tribunal in 'no enquiry' as also in 'invalid enquiry' cases. Likewise the workman is entitled to lead evidence contra before the Labour Court or Tribunal. The Labour Court or the Tribunal cannot simply set aside the order of dismissal or discharge on the ground that there was no enquiry or that the enquiry was invalid. It has to record evidence in support of or opposition to the order of dismissal or discharge and has to give its opinion
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Mukhtyar Singh vs Food Corporation Of India And Ors. on 8 August, 1992

after having satisfied on the evidence adduced before it for the first time, regarding the guilt or otherwise of the delinquent workman. The observations of the Supreme Court in paragraph 42 of the case of Workmen of M/s. Fire Stone. Tyre and Rubber Co. (supra) are pertinent (p.297): "But there is no provision either in this statute [meaning thereby Industrial. Employment (Standing Orders) Act, 1946] or in the Act (meaning thereby Industrial Disputes Act, 1947) which states that an order of dismissal or discharge is illegal if it is not preceded by a proper and valid domestic enquiry." 12. Listing reasons why the Labour Court or Tribunal is not permitted to set aside an order of dismissal or discharge merely on the ground that no domestic enquiry was held, the following observations of the Supreme Court in the case of The Workmen of Motipur Sugar Factory, (1965-II-LLJ-162 at 170) (supra) are pertinent: "If it is held that in cases where the employer dismisses his employee without holding an enquiry, the dismissal must be set aside in the Industrial Tribunal only on that ground, it would inevitably mean that the employer will immediately proceed to hold the enquiry and pass an order dismissing the employee once again. In that case, another Industrial dispute would arise and the employer would be entitled to rely upon the enquiry which he had held in the meantime. This course would mean delay and on the second occasion it will entitle the employer to claim the benefit of the domestic enquiry. On the other hand, if in such cases the employer is given an opportunity to justify the impugned dismissal on the merits, the employee has the advantage of having the merits of his case being considered by the Tribunal for itself and that clearly would be to the benefit of the employee. That is why this Court has consistently held that if the domestic enquiry is irregular, invalid or improper, the Tribunal may give an opportunity to the employer to prove his case and in doing so, the Tribunal tries the merits itself. This view is consistent with the approach which industrial adjudication generally adopts with a view to do justice between the parties without relying too much on technical considerations and with the object of avoiding delay in the disposal of industrial disputes". 13. Their Lordships also envisaged one situation when an employer may get disabled to hold a domestic enquiry before discharging or dismissing a workman. It was observed in paragraph 49 of the decision of the Workmen of M/s. Fire Stone Tyre and Rubber Co. (supra) that an employer with limited number of workmen may himself be a witness to the misconduct committed by a workman. He will then be disabled from conducting an enquiry against the workman because he cannot both be an enquiry officer and also a witness in the proceedings. Any enquiry held by him will not be in keeping with the principles of natural justice. But he will certainly be entitled to take disciplinary action for which purpose he can serve a charge-sheet and, after calling for explanation, impose the necessary punishment without holding any enquiry. This will be a case where no enquiry at all was held by an employer. But the employer would have sufficient material with him which could be produced before a Tribunal to satisfy it about the justification as to the action taken. That material will have to be considered by the Tribunal (1973-I-LLJ-278 at 299). 14. The learned author Shri O.P. Malhotra in his Book "The Law of Industrial Disputes" (Vol.II), 1985 Edition, at page 827 has also observed that an employer may have justifiable reasons for not holding an enquiry at all rather than having the enquiry impugned by the workman and have it scrutinized by the Tribunal. In order to cut short the time and the duplication of proceedings, an employer may bona fide discharge or dismiss a workman for an act of misconduct and then may place the whole evidence before the Tribunal in support of his case for its scrutiny. 15. With respect to an innocuous order of termination of a workman the Division Bench of our High Court had occasion to deal with in a recent case of MA. Anand Cinema, Jabalpur v. Mohan Tiwari, Gate Keeper (1993-I-LLJ-1105). It was held that it was open to an employer in such a case, when the matter went before the Labour Court, to show that the order was really a punitive order based on misconduct of the employee and to adduce evidence before the Labour Court in justification of the order. The petitioner in the present writ petition contends that the termination order should be held to be illegal precisely because it was a cloak for punitive action and not preceded by any enquiry. Even with respect to such innocuous termination orders, the
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Mukhtyar Singh vs Food Corporation Of India And Ors. on 8 August, 1992

above decision recognises the right of the employer to show that it was really an act of disciplinary action founded on misconduct of the employee and to adduce evidence before the Labour Court in justification of the order. The following observations in the above decision are apt: (p. 1114): " An innocuous order of termination founded on misconduct does lesser harm to the employee by not creating any hindrance or disqualification for him to seek employment elsewhere. If however the employee in case of such termination seeks to impugn the action of the employer on the ground that it was unreasonable or against the principles of natural justice, since no enquiry was held against him, it is open to him to question the same in the Labour Court where the Court will have opportunity to examine the validity of the action of the employer after permitting both the parties to lead necessary evidence in the matter, a course which is permissible under the provisions of Section 11A of the Industrial Disputes Act." (Para 23) "In our view where the employer simply terminates the services of an employee by innocuous order although there was misconduct, it does no greater harm to the employee than when it attributes misconduct casting stigma on him and removes him from service. It can be contemplated that the employer may have a motive to punish the employee for a misconduct and yet decides to discharge his services by innocuous order of termination simpliciter." (Para 26) 16. From the foregoing discussion, the conclusion which inevitably follows is that an innocuously worded order of termination or order of termination simpliciter, given by an employer to his workman, is not invalid on the ground that it is really a punitive order which was not preceded by any enquiry or because it was preceded by a defective enquiry. The employer has a right to adduce evidence in justification of such an order, even for the first time, when the industrial dispute arising therefrom is referred to the Labour Court or Tribunal. It is wrong to quash such an order without letting the matter being adjudicated before the Labour Court or Tribunal. The quashing of the order may not bring an end to strife and discord or remove the root cause. On the other hand, the award of the Labour Court or Tribunal may take care of all aspects and help to bring about an early and final settlement of all kinds of disputes between the employer and workman touching the termination. 17. The only question that now remains for consideration, is, if the order of termination dated November 15, 1988 (Annexure P-17) was retrenchment. It may be mentioned here that the petitioner/workman has taken inconsistent stands. His stand has been that the termination order was a camouflage or cover for punitive action taken against him without any enquiry. If that was so, it was punishment inflicted by way of disciplinary action, expressly mentioned in the definition of retrenchment in Clause (oo) of Section 2 of the Industrial Disputes Act, as not being retrenchment. But the stand taken by the employer has also not been that the termination order was a punishment inflicted on the petitioner. Had that been the stand of the employer, then it would have been an admitted position that the termination in question was by way of punishment and therefore outside the ambit of retrenchment. Having already held that he will not quash such a termination order because the same is not invalid, that would have been the end of the matter, cedit questio. But the stand taken by the employer himself is that the termination in question was under a stipulation contained in the contract of employment and as such was not retrenchment in terms of Sub-clause (bb) of Section 2(oo) of Industrial Disputes Act, 1947. We have, therefore, decided to examine the other stand taken by the petitioner that the termination in question was retrenchment and that the same was not validly done. 18. It hardly needs to be emphasized that retrenchment not fulfilling the essential prerequisites mentioned in Section 25F of the Industrial Disputes Act is invalid and void ab initio or non est. As such, it will be proper to give relief to workman in case of invalid retrenchment, even if he has come directly to this Court invoking writ jurisdiction.

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Mukhtyar Singh vs Food Corporation Of India And Ors. on 8 August, 1992

19. We find that the definition of retrenchment is contained in Clause (oo) of Section 2 of the Industrial Disputes Act, 1947. The said clause after defining the word "retrenchment" goes on to state that "retrenchment" would not include what is provided in its Sub-clauses. Then follow Sub-clauses (a), (b), (bb) and (c). It may be stated that these sub-clauses contain excepted categories, when termination which would otherwise have been 'retrenchment', would not be retrenchment. On a first blush, these four sub-clauses may be said to be the four excepted categories, but there is also the fifth excepted category which is mentioned in the main clause itself embodying the definition, namely, punishment inflicted by way of disciplinary action. 20. The question for consideration is, if termination of an employee under a stipulation in that behalf contained in the contract of employment, is one of excepted categories to fall outside the ambit of retrenchment. The question is about proper construction to be placed on Sub-clause (bb). This sub-clause was inserted by Act 49 of 1984. The entire Clause (oo) with its sub-clauses may be reproduced here: "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 ill-health...." It will be seen that Sub-clause (bb) consists of two parts. The first part relates to termination of service of a workman as a result of the non-renewal of contract of employment between the employer and the workman concerned, on its expiry. The second part relates to "such contract" being terminated under a stipulation in that behalf contained therein. The expression "such contract" in the second part has reference to "contract of employment between the employer and the workman" mentioned in the first part. It will be wrong to say that the expression "such contract" has reference to renewable contract of employment between the employer and the workman. The first part does not speak of "renewable contract of employment", but speaks of the circumstances of non-renewal occurring to a contract. A circumstance occurring to a contract does not make it the contract itself. So the expression "such contract" in second part has reference only to the words "contract of employment between the employer and the workman" used in the first part. It follows therefore under the second part, the contract of employment may or may not be renewable. An employer intending to terminate the service of his workman under a renewable contract can afford to wait until the occasion of renewal of contract comes. It does not need to be again provided for the contingency when he may find it necessary to terminate the service of his workman even before the occasion of renewal comes, which is likely to be a slender contingency after all. It is wrong to read the word "renewable" which does not exist in the first part, while construing the expression "such contract" in the second part. The result is that under the first part termination of the service of the workman will not be retrenchment if, with respect to a contract of employment between the employer and the workman, the termination is brought about as a result of non-renewal of the contract at its expiry. Termination will not be retrenchment under the second part irrespective of whether the contract is renewable or not, if the contract of service is terminated under a stipulation contained in it in that behalf.

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Mukhtyar Singh vs Food Corporation Of India And Ors. on 8 August, 1992

21. It was argued on behalf of the petitioner that while interpreting the provision in question, the underlying purpose and scheme of Industrial Disputes Act should be kept in mind. If termination of contract of employment, even non-renewable, under a stipulation contained in it, is also held to be not retrenchment, as falling within second part of Sub-clause (bb), then the employer would get an outlet to shunt out his worker under the garb of that stipulation and will be free to hire and fire. This may undermine the entire object and purpose of Industrial Disputes Act. The argument overlooks the fact that provision of retrenchment is only for providing monetary assistance to a workman. It does not provide him any security of tenure. The utmost that is involved in the interpretation of the provision in question is that if certain case on construction is held not to fall within the provision in question, it will fall within the main provision of the definition of retrenchment. It will utmost be then retrenchment. The employer would then be free to again retrench his workman on payment of retrenchment compensation and complying with all the essential requirements given in Section 25F of the Industrial Disputes Act. There is no question of permitting the employer to indulge in hiring and firing or providing him with an outlet to shunt out his workman. That is not to say that the provision in question should not be properly construed. If with respect of certain categories, the Legislature provides that termination would not amount to retrenchment, that only shows that the intention of the Legislature was that it did not think that workmen falling within those categories needed to be provided even with any financial assistance for one reason or the other. Those not falling within those categories would be such for whom the Legislature intended that the financial assistance of retrenchment compensation coupled with notices etc. should be provided to them. There is also no basis for the argument that provision of (bb) assumes for its applicability that the work should be of temporary character or, speaking other way, that if the work is continuing the provision of (bb) is inapplicable. It will be seen that provision does not at all speak about the nature of work under the contract of employment. It speaks only of contract of employment between the employer and workman. The first part speaks of a contract which is of renewable character while the second part speaks of contract of any character. Our conclusion is that if the service of a workman is allowed to get terminated by non-renewal of the contract of service with him, it falls within the first part of (bb), and if the service of a workman is terminated acting under a stipulation in that behalf contained in the contract, it falls within the second part of (bb) and both cases falling within the "excepted category" are not retrenchment. The decision in C.M. Jitendra v. Management, B.E. Movies reported in 1985 LIC 1833, cited by the learned counsel for the respondent supports our view. 22. In the present case, our attention was drawn by the respondents to stipulation numbered (ii) in the petitioner's letter of appointment (Annexure P-11), which is to the effect that during the period of probation the petitioner shall be liable to be discharged from service by giving him a notice of 30 days or pay and allowances in lieu thereof. The petitioner's service was terminated under this stimulation contained in the contract. The termination, therefore, fell within second part of Sub-clause (bb) of Clause (oo) of Section 2 of Industrial Disputes Act, 1947 and being one of the excepted categories, was outside the ambit of retrenchment. If it was not retrenchment, there was no question of fulfilling of any of pre- requisites of a retrenchment. The termination was in the circumstances not invalid. 23. For the foregoing reasons, there is no force in the writ petition. The same is accordingly dismissed. No order as to costs. Outstanding amount of security, if any, shall be refunded to the petitioner.

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