Appeal No 874 of 1962
Appeal from the judgment and order dated January 15 1962 of the Madras High Court in Writ Appeal No 82 of 1959
A V Viswanatha Sastri G B Pai and B N Ghosh for the appellant
267 B R Dolia M Rajagopalan and K R Chaudhuri for the respondents
August 2 1963
The Judgment of the Court was delivered by GAJENDRAGADKAR J
The principal question which arises in this appeal relates to the true scope and effect of the provisions contained in section 73 of the hereinafter called the Act
The appellant the Buckingham  Carnatic Co Ltd is a company registered under the Indian Companies Act and its registered office is at Madras
It has a Textile Mill in Madras City which employs 14000 workmen
On January 10 1957 the respondent Venkatiah whose case is sponsored by the respondent Union the Madras Labour Union had gone on leave for six days
Taking into account the intervening holidays the said leave expired on January18 1957
He however did not join duty on the 19th January as he should have but remained absent without leave without sending to the appellant any communication for extending his leave
On the 11th March 1957 he sent a letter to the appellant stating that sometime after reaching his village near Kanigiri he suffered from fever and dysentery and was treated by the Civil Assistant Surgeon Kanigiri
This letter was accompanied by a certificate issued by the said Civil Assistant Surgeon
In this certificate it was stated that Venkatiah suffered from chronic malaria and dysentery from January 15 to March 7 1957
When he appeared before the Manager of the Company he was asked to go to the Senior Medical Officer of the appellant for examination
The said Officer examined him and was unable to confirm that he had been ailing for a period of nearly two months
Acting on that opinion  the appellant refused to take back Venkatiah and when Venkatiah pressed to be taken back the appellant informed him on March 23 1957 that he could not be reinstated as his explanation for his absence was un satisfactory
The case of Venkatiah was treated by the appellant under Standing Order No 8ii of the Standing Orders of the appellant
Meanwhile Venkatiah had applied to the Employees State Insurance Corporation and on or about the 15th June 1957 he obtained cash sickness benefit for the period covered by the medical certificate issued
by the Civil Assis 268 tant Surgeon Kanigiri
The Regional Director to whom Venkatiah had applied for the said assistance accepted the said certificate as alternative evidence and directed that payment may be made to him to the extent permissible under the Act
Accordingly Rs 82 14 00 were paid to him
When the appellant refused to take back Venkatiah in its employment the respondent Union took up his case and it was referred for adjudication to the Labour Court at Madras as an industrial dispute SPO No A 5411 of 1958
Before the Labour Court the appellant urged that the reference made was invalid and it also contended that the termination of Venkatiah s services was Justified
The Labour Court rejected the appellants preliminary object ion about the invalidity of the reference
It held that if the matter had to be considered solely by reference to the Standing Orders the appellant was entitled to succeed because it was justified in acting upon the opinion given by its Medical Officer in regard to the alleged illness of Venkatiah
When the said opinion was attacked before the Labour Court it observed that it was easy to make such an attack and it held that he was not inclined to accept the correctness of the criticism in the a absence of any strong evidence to show that the Medical Officer was prejudiced against the worker and was motivated with the idea of victimisation
The respondent however succeeded before the Labour Court primarily on the ground that the decision of the appellant not to take back Venkatiah was inconsistent with the provisions of section 73 of the Act
That is why the Labour Court directed the management of the appellant to reinstate Venkatiah within two weeks after its award came into force without liability to pay back wages but with continuity of service
After this award was pronounced by the Labour Court the appellant moved the Madras High Court by 2 writ petition and prayed that the said award be quashed WP No 716 of 1958
This writ petition was allowed by Mr Justice Balkrishna Ayyar
The learned Judge held that section 73 of the Act was inapplicable to the present case and found that in substance the labour court had made its award on grounds of sympathy for Venkatiah rather than on the merits of the case
In the result the said 269 award was set aside by the learned judge
The respondent challenged the correctness of this decision by a Letters Patent Appeal before a Division Bench of the Madras High Court No LPA 82 of 1959
The respondent s appeal was allowed by the Division Bench and in consequence the award passed by the Labour Court has been restored
The Division Bench has held that section 73 applied to the present case and that made the refusal of the appellant to take back Venkatiah in its employment illegal
It has also observed that in refusing to take back Venkatiah the appellant had not properly discharged its obligation of examining Venkatiah s explanation reasonably and that introduced an infirmity in its decision not to take him back
In other words according to the Division Bench the action of the management amounted to contravention of the provisions of section 73 of the Act and was otherwise not fair
It is against this decision that the appellant has come to this Court with a certificate issued by the Madras High Court under article 1331c of the Constitution
Mr Sastri for the appellant contends that the case of Venkatiah falls squarely within the provisions of Standing Order 8ii and the High Court was in error in holding that the decision of the appellant in refusing to condone the absence of Venkatiah was either unfair or improper or that it contravened the provisions of section 73 of the Act
Let us first examine Standing Order No 8ii before proceeding any further
The said Standing Order reads thus Absent without Leave Any employee who absents himself for eight consecutive working days without Leave shall be deemed to have left the Company s service without notice thereby terminating his contract of service
If he gives an explanation to the satisfaction of the management the absence shall be converted into leave without pay or dearness allowance
Any employee leaving the Company s service in this manner shall have no claim for re employment in the Mills
But if the absence is proved to the satisfaction of the Management to be one due to sickness then such absence shall be converted into medical leave for such period as the employee is eligible with the permissible allowances
 270 This Standing Order is a part of the certified Standing Orders which had been revised by an arbitration award between the parties in 1957
The relevant clause clearly means that if an employee falls within the mischief of its first part it follows that the defaulting employee has ter minated his contract of service
The first provision in clause ii proceeds on the basis that absence for eight consecutive days without leave will lead to the inference that the absentee workman intended to terminate his contract of service
The certified Standing Orders represent the relevant terms and conditions of service in a statutory form and they are binding on the parties at least as much if not more as private contracts embodying similar terms and conditions of service
It is true that under common law an inference that an employee has abandoned or relinquished service is not easily drawn unless from the length of absence and from other surrounding circumstances an inference to that effect can be legitimately drawn and it can be assumed that the employee intended to abandon service
Abandonment or relinquishment of service is always a question of intention and normally such an intention cannot be attributed to an employee without adequate evidence in that behalf
But where parties agree upon the terms  conditions of service and they are included in certified Standing Orders the doctrines of common law or considerations of equity would not be relevant
It is then a matter of construing the relevant term itself
Therefore the first part of Standing Order 8ii inevitably leads to the conclusion that if an employee is absent for eight consecutive days without leave he is deemed to have terminated his contract of service and thus relinquished or abandoned his employment
The latter part of this clause however provides that the employee can offer an explanation as to his absence and if Ms explanation is found to be satisfactory by the management his absence will be converted into leave without pay or dearness allowance
Now this clause is in substance a proviso to its first part
Before effect is given to the inference of relinquishment of service which arises from the first part of the clause an opportunity is given to the employee to offer an explanation and if the said explanation is treated as satisfactory by the management 271 the inference of termination of contract of service is rebutted and the leave in question is treated as leave without pay or dearness allowance
This latter clause obviously postulates that if the explanation offered by the employee is not found to be satisfactory by the management the inference arising from the first part prevails and the employee shall be deemed to have terminated his contract of service with the result that the relationship of master and servant between the parties would be held to have come to an end
With the remaining part of the said Standing Order we are not concerned in this appeal
It is true that absence without leave for eight consecutive days is also treated as misconduct under cl
13f of the Standing Orders
The said clause refers to the said absence and habitual absence without leave
In other words the position under the Standing Orders appears to be that absence without leave for more than eight consecutive days can give rise to the termination of the contract of service either under Standing Order 8ii or may lead to the penalties awardable for misconduct after due enquiry is held as required by the relevant Standing Order
The fact that the same conduct is dealt with in two different Standing Orders cannot affect the applicability of SO 8ii to the present case
It is not as if the appellant is bound to treat Venkatiah s absence as constituting misconduct under SO 13f and proceed to hold an enquiry against him before terminating his services
Dismissal for misconduct as defined under SO 13 may perhaps have different and more serious consequences from the termination of service resulting from SO 8ii
However that may be if SO 8ii is applicable it would be no answer to the appellant s case under SO 8ii to say that SO 13f is attracted
This position is not seriously in dispute
The High Court appears to have taken the view that the appellant did not act fairly in rejecting Venkatiah s case that he was ill and in refusing to act upon the certificate produced by him in support of his case
It is necessary in the first instance to examine the correctness of this con clusion
As we have already indicated the Civil Assistant Surgeon no doubt certified on March 7 1957 that Venkatiah had suffered from chronic dysentery from janu 272 ary 15 to March 7 1957 and he added that he was then completely free from the ailments and was in a fit state of health to join duty on the 9th March 1957
Incidentally the certificate has been granted at the end of the treatment and specifically avers that he was fit enough to join on March 9 1957
When Venkatiah was examined by the Medical Officer of the appellant on the 22nd March 1957 thr Medical Officer was unable to confirm that he was ill for a period of nearly two months
The High Court has criticised this certificate as being vague
In our opinion by this certificate the Medical Officer politely suggests that having regard to the opinion which he formed on examining Venkatiah on March 22 he was unable to confirm the certificate issued by the Civil Assistant Surgeon
What struck the High Court as vague in the certificate is obviously the result of the desire of the appellant s Medi cal Officer to observe professional courtesy in dealing with the certificate on which Venkatiah relied
Apart from I this aspect however we do not see how it was open to the High Court to consider the propriety of the conclusion reached by the Labour Court on this point
We have already noticed that the Labour Court has specifically repelled the criticism made by the respondent against the conduct of the appellant s Medical Officer and has held that if the matter had fallen to be considered only in the light of Standing Order 8ii the appellant would have succeeded
That being so it is not easy to see how the respondent s grievance against the said finding of the Labour Court could have been properly upheld by the High Court in exercising its writ jurisdiction under article 226 of the Constitution
Whether or not the appellant should have accepted the certificate of the Civil Assistant Surgeon was primarily for the appellant to consider
It is significant that there is no allegation about mala fides in this case and so we do not think that the High Court was justified in making a finding against the appellant on the ground that the appellant had not discharged its obligation under the Standing Orders of properly considering the explanation of Venkatiah in regard to his absence
The High Court was apparently aware of this position and so it has stated in the course of its judgment that it would rest its decision on what it regarded to be the effect of 273 section 73 even assuming that the discharge of the worker in the instant case was automatic by virtue of the operation of Standing Order 8ii and so it is to this part of the case that we must now turn
Before doing so however we may refer to the argument urged before us by Mr Dolia for the respondent that it would be anomalous if it is open to the appellant to reject Venkatiah s case that he was ill during the relevant period when the said case had been accepted by the Corporation when it gave him relief under section 73 and the regulations framed under the Act
Mr Dolia relies on the fact that Venkatiah satisfied the relevant authorities administering the provisions of the Act that he was ill during the relevant period and had in fact been given assistance on that basis so that for the purposes of the Act he is held to be ill during that period and yet the appellant for the purpose of Standing Order 8ii holds that Venkatiah was not ill
during the same period
It could not be the intention of the legislature to allow such a glaring anomaly to prevail says Mr Dolia and so he suggested that the appellant was bound to hold that Venkatiah was ill during the relevant period having regard to the fact that his illness had been accepted by the relevant authorities under the Act
This argument is no doubt prima facie attractive but before accepting it it would be necessary to find out whether there is any specific provision in the Act which compels the appellant to accept the view taken by the relevant authority under the Act when it decided to give assistance to Venkatiah
Section 73 of the Act reads asunder  Employer not to dismiss or punish employee during period of sickness etc 1No employer shall dismiss discharge or reduce or otherwise punish an employee during the period the employee is in receipt of sickness benefit or maternity benefit nor shall he except as provided under the regulations dismiss discharge or reduce or otherwise punish an employee during the period he is in receipt of disablement benefit for temporary disablement or is under medical treatment for sickness or is absent from work as a result of illness duly certified in accordance with the regulations to arise out 274 of the pregnancy or confinement rendering the employee unfit for work
2No notice of dismissal or discharge or reduction given to an employee during the period specified in sub section 1 shall be valid or operative Mr Dolia contends that since this Act has been passed for conferring certain benefits on employees in case of sickness maternity and employment injury it is necessary that the operative provisions of the Act should receive a liberal and beneficent construction from the court
It is a piece of social legislation intended to confer specified benefits on workmen to whom it applies and so it would be inappropriate to attempt to construe the relevant provisions in a technical or a narrow sense
This position cannot be disputed
But in dealing with the plea raised by Mr Dolia that the section should be liberally construed we cannot overlook the fact that the liberal construction must ultimately flow from the words used in the section
If the words used in the section are capable of two constructions one of which is shown patently to assist the achievement of the object of the Act courts would be justified in preferring that construction to the other which may not be able to further the object of the Act
But on the other hand if the words used in the section are reasonably capable of only one construction and are clearly intractable in regard to the construction for which Mr Dolia contends the doctrine of liberal construction can be of no assistance
Mr Dolia s suggestion is that the general policy of section 73 is to prevent dismissal discharge reduction or other punishment being imposed or
an employee who is ill if it is shown that he has received sickness benefit
There are other cases mentioned in this section to which it is not necessary to refer for the purpose of dealing with Mr Dolia s argument
According to Mr Dolia the operation of section 73 is confined to cases of illness for instance and it prohibits the imposition of any penalty wherever it is shown that in respect of the illness in question the employee has received sickness benefit
In the present case the employee has received sickness benefit and so for the said sickness no penalty can be imposed on him
That in brief is the contention which Mr Dolia has pressed 275 before us
On the other hand Mr Sastri argues that the words used in the section are capable of only one construction
The section merely prohibits any punitive action being taken against the employee during the period of his illness and he urges that the prohibition is not confined to punitive action in respect of illness alone but extends to punitive action in respect of all kinds of misconduct whatever
What the section says is during the period that the employee is ill no action can be taken against him whatever may be the cause for the said action
Mr Sastri also contended that the clause during the period the employee is in receipt of sickness benefit can cover the period during which the sickness benefit is actually received by him and so he suggests that since during the period of Venkatiah s illness itself no sickness benefit had been received by him section 73i is wholly inapplicable
We are not impressed by this argument
In our opinion the clause during the period the employee is in receipt of sickness benefit refers to the period of his actual illness and requires that for the said period of illness sickness benefit should have been received by him
It is quite clear that in a large majority of cases sickness benefit would be applied for and received by the employee after his sickness is over and so to hold that the period there referred to is the period during which the employee must be ill and must also receive sickness benefit would make the section wholly unworkable
That is why we do not think that the limitation which Mr Sastri seeks to introduce by suggesting that sickness benefit must be paid during the course of illness itself can be read into the section
Even so what is the effect of section 731  In considering this question it would be useful to take into account the provisions of sub section
This sub section provides that no notice given to an employee during the period specified in sub section
i shall be valid or operative
Thus it is clear that the giving of the notice during the specified period makes it invalid and it is remarkable that the notice is not in regard to dismissal discharge or reduction in respect of sickness alone but it includes all such notices issued whatever may be the misconduct justifying them
Thus 276 there can be no doubt that the punitive action which is prohibited by section 731 is not confirmed to punitive action proceeding on the basis of absence owing to sickness it is punitive action proceeding on the basis of all kinds of misconduct which justifies the imposition of the penalty in question
What section 731 prohibits is such punitive action and it limits the extent of the said prohibition to the period during which the employee is ill
We are free to confess that the clause is not very happily worded but it seems to us that the plain object of the clause is to put a sort of a moratorium against 211 punitive actions during the pendency of the employee s illness
If the employee is ill and if it appears that he has received sickness benefit for such illness during that period of illness no punitive action can be taken against him
That appears to us to be the effect of that part of section 731 with which we arc concerned in the present appeal
If that be so it is difficult to invoke section 73 against the appellant because the termination of Venkatiah s services has not taken place during the period of his illness for which he received sickness benefit
There is another aspect of this question to which it is necessary to refer
Section 731 prohibits the employer from dismissing discharging reducing or otherwise puni shing an employee
This seems to suggest that what is prohibited is some positive act on the part of the employer such as an order passed by him either dismissing discharg ing or reducing or punishing the employee
Where ter mination of the employee s services follows automatically either from a contract or from a Standing Order by virtue of the employee s absence without leave for the specified period such termination is not the result of any positive act or order on the part of the employer and so to such a termination the prohibition contained in section 731 would be inapplicable
Mr Dolia no doubt contended that the word discharge  occurring in section 731 should be liberally construed and he argued that termination of service even under Standing Order 8ii should be held to be a discharge under section 731
We are not prepared to accept this argument
In considering the question about the true denotation of the word discharge in section 731 it is relevant to bear in mind the provisions of section 85d of the Act
277 Section 85d provides that if any person in contravention of section 73 or any regulation dismisses discharges reduces or otherwise punishes an employee he shall be punishable with imprisonment which may extend to three months or with fine which may extend to five hundred rupees or with both
In other words the contravention of section 731 is made penal bys
85d and so it Would not be reasonable to put the widest possible denotation on the word discharge ins
731
The word discharge in section 731 musttherefore in the context be taken to be a discharge which is the result of a decision of the employer embodied in an order passed by him
It may conceivably also include the case of a discharge where discharge is provided for by a Standing
Order
In such a case it may be said that the discharge flowing from the Standing Order is in substance discharge brought about by the employer with the assistance of the Standing Order
Even so it cannot cover the case of abandonment of service by the employee which is inferred under Standing Order 8ii
Therefore we do not think the High Court was justified in taking the view that the termination of Venkatiah s services under SO 8ii to which the appellant has given effect by refusing to take him back contravenes the provisions of section 731
Mr Dolia argued that on the appellant s construction 731 would afford very unsatisfactory and poor protection to the employees
If all that section 731 does is to prevent any punitive action being taken against the employee during the period that he is ill there is not much of protection given to him at all says Mr Dolia
There is no doubt some force in this argument but as we have already observed the words used in section 731 read with subs
2 cannot reasonably lead to the construction for which Mr Dolia contends
It would we think be unreasonable if not illegitimate to construe the relevant section merely on the hypothesis that the legislature intended to provide a larger protection to the employees when the said hypothesis cannot be worked out in the light of the words used by the statute
By virtue of the power conferred on the State Government by section 96 to make rules certain regulations had been framed under the Act in 1950
Chapter III of these 278 Regulations deals with the benefit claims
Regulations 53 to 86 in this Chapter are concerned with the certification and claims for sickness and temporary disablement
Regu lation 54 provides for the persons competent to issue medi cal certificate and Regulation 55 required that the Medical Certificate should be filled in the prescribed form
Regu lation 57 deals with the Medical Certificate on first exa mination and Regulation 58 refers to the final Medical Certificate
Regulation 63 prescribes the form of claim for sickness or temporary disablement
An insured person intending to claim sickness benefit has to submit the said form to the appropriate Local Office by post or otherwise
Regulation 64 lays down that if such a claimant fails to submit to the appropriate Local Office by post or otherwise the first medical certificate or any subsequent medical certificate within the period therein prescribed he shall not be eligible for that benefit in respect of the period indicated thereunder
It is in the light of these regulations that Regulation 53 has to be considered
This regulation provides that every insured person claiming sickness benefit shall furnish evidence of sickness in respect of the days of his sickness by means of a medical certificate given by an Insurance Medical Officer in accordance with the Regulations in the appropriate form
There is however a proviso to Regulation 53 which says that the Corporation may accept any other evidence of sickness or temporary disablement if in its opinion the circumstances of any particular case so justify
In the present case the Regional Director has accepted the Civil Assistant Surge on s certificate under the proviso to regulation 53 when he directed that cash benefit may be paid to Venkatiah under section 731
Having regard to these Regulations it is difficult to see how the view taken by the Regional Directors about the effect of the certificate issued by the Civil Assistant Surgeon can be said to be binding on the appellant
There is no provision in the Act or the Regulations to which section 731 refers by which it could be contended that once the illness of an insured employee is accepted by the appropriate authority under the Act it must automatically be accepted by the employer in dealing with the said employee s case under the Standing Orders
Therefore the argument that inconsistent results may follow if two views 279 are allowed to be taken about the illness of a given em ployee does not help the appellant
Besides as we have already indicated this argument has hardly any relevance in view of the construction which we are inclined to put on section 731 of the Act
In view of our construction of the said section Mr Dolia s argument that there is inconsistency between the said section and Standing Order 8ii also has no validity
Before parting with this case we ought to add that at the very outset Mr Sastri for the appellant made it clear to us that the appellant was fighting this appeal not so much to resist the order of reinstatement passed in favour of Venkatiah as to get a decision from this Court about the true scope and effect of section 731 of the Act
In other words he argued that this case was fought as a test case on the question of the construction of the said section
Therefore when we suggested to Mr Sastri that the appel lant who is a very big prosperous employer should not resist the reinstatement of a single employee whose case has been brought to this Court he assured us that he would recommend to the employer to take Venkatiah back on the terms prescribed by the Labour Court in the first instance in this case
In the result the appeal is allowed the order passed by the Division Bench of the Madras High Court is set aside and that of the Single Judge restored
There would be no order as to costs
Appeal allowed


Summary:
The respondent Venkatiah went on leave for six days and did not join duty on the expiry of the leave period but remained absent without sending to the appellant any communication for extending his leave
Later he sent 2 letter to the appellant accompanied by a medical certificate issued by a Civil Assistant Surgeon in respect of his illness for a period of nearly two months
The Medical Officer of the appellant was unable to confirm that he was ailing for a period of two months
Finding the explanation for his absence unsatisfactory the appellant refused to take him back in its employment
Meanwhile he had applied to the Regional Director of the Employees  State Insurance Corporation and obtained cash sickness benefit for the period covered by the Medical Certificate issued by the Civil Assistant Surgeon
On the appellant s refusal to take him back in its employment the respondent union referred his case for adjudication 18 2 section C India64 266 to the Labour Court and the management of the appellant was directed to reinstate him
The appellant then moved a writ petition in the High Court and it was allowed by the learned single Judge
The respondent then preferred a Letters Patent Appeal before a Division Bench of the High  Court
The appeal was allowed by the Division Bench and the award passed by the Labour Court was restored
In his appeal against the said decision the appellant s main contention in this Court was that the case of Venkatiah fell squarely within the provisions of Standing Order 8ii and the High Court was wrong in holding that the decision of the appellant in refusing to condone the absence of Venkatiah was either unfair or improper or that it contravened the provisions of section 73 of the 
The respondent mainly contended that in the present case the employee received sickness benefit and so for the said sickness no penalty could be imposed on him
Held  i Standing Order 8ii was applicable to the present case and the fact that the same conduct was dealt with in two different standing orders could not affect the applicability of Standing Order 8ii to the present case
ii Whether or not the appellant should have accepted the certificate of the Civil Assistant Surgeon was primarily for the appellant to consider as there was no allegation about mala fides in this case it was not open to the High Court in exercise of its writ jurisdiction to consider the propriety of the conclusion reached by the Labour Court on this point
iii On a proper construction of section 731 read with sub section
2 it was impossible to invoke section 73 against the appellant because the termination of Venkatiah s services had not taken place during the period of his illness for which he received sickness benefit the High Court was not justified in taking the view that the termination of Venkatiah s services under SO 8ii contravened the pro visions of section 731
iv The view taken by the Regional Director about the effect of the Civil Assistant Surgeon s certificate under the proviso to regulation 53 could not be said to be binding on the appellant and in view of the construction put on section 731 there was no inconsistency between the said section and Standing Order 8ii