CIVIL WRIT JURISDICTION CASES No.1754,3838 & 3839, ALL OF 1996 In the matter of applications under [SECTION] and [SECTION] of the [ACT]. CWJC NO. 1754 OF 1996 1. KAMESHWAR RAI SON OF SRI SHEONARAYAN RAI, R/O MOHALLA HARNANGI TOLA, P.O. RAJAPUR, ENGLISH,P.S. KOELWAR, DISTRICT-BHOJPUR. 2. VINAY SHANKAR PRASAD S/O SRI AYODHYAYA PRASAD, 3. RAJESH KUMAR S/O SRI RADHA SAO, R/O CHIRAIYATANR, P.S. KANKARBAGH, DISTT-PATNA 4. BRAJ NANDAN PRASAD S/O LATE LAXMI NARAYAN SHRIVASTAVA, R/O MOHALLA MITHAPUR, P.S. JAKKANPUR, IN THE TOWN OF PATNA. -PETITIONERS VERSUS. 1. THE STATE OF BIHAR THROUGH ADDITIONAL SECRETARY TO THE STATE GOVERNMENT, WELFARE DEPARTMENT, GOVT. OF BIHAR, PATNA. 2. BIHAR STATE SCHEDULED CASTE CO-OPERATIVE DEVELOPMENT THROUGH ITS SECRETARY, BUDHA COLONY, P.S. BUDHA COLONY, DISTT.-PATNA. 3. ADMINISTRATOR, BIHAR STATE SCHEDULED CASTE CO-OPERATIVE DEVELOPMENT CORPORATION LTD. HAVING ITS OFFICE AT BUDHA COLONY, P.S. BUDHA COLONY, DISTT.PATNA. 4. PRESIDING OFFICER, LABOUR COURT, PATNA. -RESPONDENTS CWJC No.3838 oF 1996 1. BIHAR STATE SCHEDULE CASTE CO-OPERATIVE DEVELOPMENT CORPORATION LTD., HAVING ITS HEAD OFFICE AT 4TH FLOOR, BISCOMAUN TOWER, WEST GANDHI MAIDAN, PATNA. 2. SRI A.C. BISWAS, ADMINISTRATOR, BIHAR STATE SCHEDULE CASTE CO-OPERATIVE DEVELOPMENT CORPORATION LTD; 4TH FLOOR, BISCOMAUN TOWER, WEST GANDHI MAIDAN, PATNA. -PETITIONERS 2 VERSUS 1. THE STATE OF BIHAR, 2. PRESIDING OFFICER, LABOUR COURT, PATNA. -RESPONDENTS- 1ST SET 3. KAMESHWAR RAI (CLERK), S/O SRI SHIV NARAYAN RAI, R/O MOHALLA HARNANGI TOLA, P.S. KOILWAR, DISTRICT-BHOJPUR. 4.BINAY SHANKAR PRASAD (FIELD ORGANISER), S/O SHRI AYODHYA PRASAD, C/O RAVI KIRANA GANDHI ROAD, P.O. + P.S. JAKKANPUR, DISTT-PATNA. 5.BINAY KUMAR (CLERK), S/O SRI RADHA SAO, R/O CIRAIYATAR, P.S. KANKARBAGH, DISTRICT- PATNA. 6.RAKESH KUMAR, S/O NOT KNOWN, AT CHIRAYATAR, P.S. KANKARBAGH, DISTRICT-PATNA. 7. RAJESH KUMAR, S/O NOT KNOWN, AT CHIRAYATAR, P.S. KANKARBAGH, DISTRICT-PATNA. -RESPONDENTS- 2ND SET CWJC No.3839 oF 1996 1. BIHAR STATE SCHEDULE CASTE CO-OPERATIVE DEVELOPMENT CORPORATION LTD., HAVING ITS HEAD OFFICE AT 4TH FLOOR, BISCOMAUN TOWER, WEST GANDHI MAIDAN, PATNA. 2. SRI A.C. BISWAS, ADMINISTRATOR, BIHAR STATE SCHEDULE CASTE CO-OPERATIVE DEVELOPMENT CORPORATION LTD; 4TH FLOOR, BISCOMAUN TOWER, WEST GANDHI MAIDAN, PATNA. -PETITIONERS VERSUS 1. THE STATE OF BIHAR. 2. PRESIDING OFFICER, LABOUR COURT, PATNA. -RESPONDENT-1ST SET 3. SRI BRAJ NANDAN PRASAD, S/O LATE LAXMI NARAYAN SHRIVASTAVA, R/O MOHALLA MITHAPUR, P.S. JAKKANPUR, DISTRICT- PATNA. -RESPONDENTS-2ND SET FOR THE PETITIONERS : M/S DURGESH PRASAD & RAJENDRA KR. JAIN (IN CWJC NO.1754/1996) FOR THE PETITIONERS : M/S P.K. SHAHI, (IN CWJC NOS.3838 & R.S. PRADHAN, 3 3839, BOTH OF 1996 RAKESH KUMAR & AND RAJEEV LOCHAN. FOR RESPONDENTS (IN CWJC NO.1754) P R E S E N T THE HON'BLE THE CHIEF JUSTICE THE HON'BLE MR. JUSTICE KISHORE KUMAR MANDAL THE HON'BLE DR. JUSTICE RAVI RANJAN Koshy, CJ. In all these writ petitions, the challenge is directed against the award in [CASE NUMBER] on the file of the Labour Court, Patna. The issues referred for adjudication in both the cases are whether the termination of the workers named therein by the Bihar State Scheduled Caste Corporation Ltd (the Corporation, for brevity), a Corporation registered under the [ACT] (the Act, in short) is valid or not and whether they should be reinstated in service and given compensation. The references were made under [SECTION] of the [ACT] (for short, the [ACT]). 2. The workers were appointed by the Executive Officer/Administrator on a temporary basis. Their services were terminated after the continuous service of one year and 4 in that year, they had worked for more than 240 days. All the workers involved in the dispute were appointed in 1990-91 purely on temporary basis. Their services were not confirmed despite their request since, according to the respondent, they were employed in violation of the circular (No. 526 dated 9th February 1989) issued by the Department of Co-operative, Government of Bihar. As per the above notification, a selection committee, headed by the members of the Board of Revenue, was constituted for selection and appointment to be made in any of the co-operative societies. The appointments, though made purely on temporary basis, were violative of the provisions of the Act and the Circular. Therefore, the appointments were invalid. Some of the workers challenged their termination of services by filing [CASE NUMBER], which was dismissed as withdrawn. Some other workers filed another writ petition, which was dismissed on merit by a Division Bench of this Court (see [PRECEDENT]) holding that the appointments were made without authority and thus there is violation of [SECTION] and [SECTION] of the [ACT] and [SECTION] of the [ACT]. [SECTION] of the [ACT], as inserted by the 5 amendment Act 5 of 1989, reads as follows: "66B. (1) Notwithstanding anything contained in this Act or the rules and bye-laws made thereunder, the State Government may, from time to time, by special or general order, determine the nature and number of posts to be created and the mode of recruitment of personnel by Co-operative Societies and prescribe among other things (1) the qualifications, age and experience, (2) the pay scale and other emoluments, (3) the method of recruitment, (4) the conditions of service, and (5) the disciplinary procedure to be followed. (2) Any appointment made in contravention of the order of the State Government under sub-section (1) shall be void as if no such appointment ever existed and salary and other allowances paid if any, shall be recoverable under [SECTION]". In [ENTITY] v. State of Bihar ([PRECEDENT]), while considering identically placed workers case, it was held as follows: "[SECTION]. It is not the case of the petitioners that they were appointed from and on the basis of any panel prepared by the Selection Authority constituted under the aforesaid order of the State Government or by any other authority after 6 observing the well-established norms of selection. If that be so, the one and the only conclusion that will irresistibly follow is that the appointments were void, being in contravention of the order of the State Government aforesaid. Nothing more was to be seen by the Department." The Court further held thus: "32. Employment opportunity in public posts is a sacred right guaranteed to every citizen. Every eligible person is entitled to exploit those opportunities and have his share in the wealth of public employment. Any attempt to make appointments in public posts by surreptitious methods would amount to stealing this wealth by denying to the eligible and suitable persons a chance of consideration. That would not be in the interest of the services either. Such a state of affairs cannot be judicially countenanced. " 3. One of the contentions raised by the workmen is that the termination of their service is in violation of the provisions of [SECTION] of the [ACT] and, therefore, they are entitled to full backwages since their services were not terminated. In the written statement (see Annexure 6 attached to the supplementary affidavit filed by the workman in CWJC 7 1754 of 1996 and Annexures 10 and 11), it is stated that though the workmen were appointed only temporarily, they had filed representations to the authorities concerned for making their service permanent. The Deputy Labour Commissioner issued several notices regarding the dispute for confirmation of services. It was contended that the questions regarding the termination of their services and the confirmation of their services are pending conciliation. Even though this point was raised in the written statement, from a perusal of the award, it could be seen that the above questions were not seriously argued or considered by the Labour Court in the award. Since that question is raised before us also, we shall consider the same. 4. [SECTION] of the [ACT] deals with the conditions of service, etc, to remain unchanged under certain circumstances during pendency of proceedings. [SECTION] deals with change of conditions in any manner connected with the dispute and [SECTION] deals with misconduct connected with the dispute, discharge or punishment, for which permission is required. The services of the workmen were terminated only on the ground that their 8 initial appointments were illegal and, therefore, [SECTION] is not applicable as it is not a change in conditions connected with the dispute. Admittedly, the services of the workmen were not terminated for any misconduct. Therefore, [SECTION] also does not apply in their case. [SECTION] is also regarding the change of conditions of service and [SECTION] deals with dismissal or discharge for any misconduct, for which approval is necessary. The rest of the provisions under [SECTION] deal with protected workers and the workmen are not claiming the said benefit. We have seen that the termination of services on ground that initial appointment itself was illegal will not come under [SECTION] or [SECTION] of the [ACT]. Assuming that it will come under [SECTION] or [SECTION], and permission or approval, as the case may be, of the concerned authority is necessary for discharge or termination of service, the effect of violation of the same is provided in [SECTION] The effect of filing of the complaint is that such complaint would be deemed as an industrial dispute and the same would be adjudicated by the authority. The Supreme Court, in Automobile Products of India Ltd v. Rukmaji Bala 1955) 1 LLJ 346), observed as 9 follows: " clearly indicates that the authority to whom the complaint is made is to decide both issues, namely, (1) the fact of contravention; and (2) the merits of the act or order of the employer " The question was considered in Equitable Coal Co. Ltd v. Algu Singh 1958) 1LLJ 795 (SC . It was held that when a complaint is filed under [SECTION], the authorities shall consider first whether any of the provisions of [SECTION] is contravened and if the answer is in the affirmative, it shall also further consider whether the termination or discharge of the workmen is justified on merits. The Supreme Court observed as follows: If both these questions are answered in favour of the employee, the appellate tribunal would no doubt be entitled to pass an appropriate order in favour of the employee. If the first point is answered in favour of the employee, but on the second point the finding is that, on the merits, the order passed by the employer against the employee is justified, then the breach of [SECTION] proved against the employer may ordinarily be regarded as a technical breach and it may not, unless there are compelling facts in favour of the 10 employee, justify any substantial order of compensation in favour of the employee. It is unnecessary to add that, if the first issue is answered against the employee, nothing further can be done under [SECTION]. What orders would meet the ends of justice in case of a technical breach of [SECTION] would necessarily be a question of fact, to be determined in the light of the circumstances of each case." The same view was repeated in Punjab National Bank Ltd. v. Their Workmen 1959) 2 LLJ 666 at p. 681). In Punjab Beverages Pvt. Ltd v. Suresh Chand 1978) 2 LLJ 1), the apex Court held that contravention of [SECTION] will not make the dismissal void. The Supreme Court further held thus: "It will, therefore, be seen that the first issue which is required to be decided in a complaint filed by an aggrieved workman under [SECTION] is whether the order of discharge or dismissal made by the employer, is in contravention of [SECTION]. The foundation of the complaint under [SECTION] is a contravention of [SECTION] and if the workman is unable to show that the employer has contravened [SECTION] in making the order of discharge or dismissal, the complaint would be liable to be rejected. But, 11 if the contravention of [SECTION] is established, the next question would be whether the order of discharge or dismissal passed by the employer is justified on merits. The Tribunal would have to go into this question and decide whether, on the merits, the order of discharge or dismissal, passed by the employer, is justified and if it is, the tribunal would sustain the order, treating the breach of [SECTION] as a mere technical breach. Since, in such a case, the original order of discharge or dismissal would stand justified, it would not be open to the tribunal, unless there are compelling circumstances, to make any substantial order of compensation in favour of the workman. In fact, in Equitable Coal Co's case, and order of compensation made by the tribunal in favour of the workman, was reversed by this court. The tribunal would have to consider all the aspects of the case and ultimately, what order would meet the ends of justice would necessarily have to be determined in the light of the circumstances of the case. But this much is clear that a mere contravention of [SECTION] by the employer will not entitle the workman to an order of reinstatement, because an inquiry under [SECTION] is not confined only to the determination of the question as to whether the employer 12 has contravened [SECTION], but even if such contravention is proved, the tribunal has to go further and deal also with the merits of the order of discharge or dismissal." In this case, not only that complaint under [SECTION] was not filed, but it could be seen that the dispute was referred and after considering it on merits, it was found that the termination of service of the workmen was legally justified. The Labour Court only found that there was technical violation of non-compliance of the procedure prescribed under [SECTION] and it awarded compensation considering the above aspect. In the above set of facts, we do not find any reason to hold that there is violation of [SECTION] of the [ACT] while terminating the workmen, whose initial appointment was found invalid and void. Even if there is violation, since the Labour Court considered the matter on merit, the workmen are not entitled to any other relief on this ground. 5. The industrial dispute was raised mainly contending that the services of the workmen were terminated violating [SECTION] of the [ACT] and that since they had worked for about 240 days in a year, their retrenchment is illegal and, 13 therefore, they are entitled to reinstatement with full back wages. [SECTION] of the [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." Sub-clause (bb) was added to [SECTION] by [ACT] before the termination of services of the workers. 6. [SECTION] of the [ACT] reads as follows: "25F. 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 14 employer until (a) the workman has been given one months 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)." [SECTION] defines continuous service. [SECTION] reads as follows: "(2) where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer (a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than (i) one hundred and ninety days in the case of a workman employed below ground in a mine; and (ii) two hundred and forty days, in any other case;". 15 7. After considering the contentions raised and the evidence adduced, the Labour Court came to the conclusion that since the workers had the continuous service of one year, their services ought to have been terminated only after complying with the procedures laid down in [SECTION] of the [ACT] and, therefore, their retrenchment, which is violative of [SECTION] of the [ACT], was illegal and liable to be set aside. But the Labour Court further found that even though termination of service of the workers was illegal since it violated the procedure prescribed in [SECTION] of the [ACT], their reinstatement virtually amounts to perpetuating illegality. Therefore, the Labour Court did not award reinstatement with backwages, but it limited the relief to compensation equivalent to 3.33 years salary, including admissible allowance, on the basis of last pay and allowances drawn by the employees concerned. The award was challenged by both the workers and the management. In [CASE NUMBER], the workmen challenged the award contending that after holding that their termination was illegal, the Labour Court ought to have granted their reinstatement with full back wages and that after reinstating [SECTION] them. The management filed two writ petitions challenging the common award. 8. The learned single Judge, having found that the question involved requires consideration by a larger Bench, the matter was referred to a Division Bench. The Division Bench too having felt the need to refer the matter to a larger Bench, it referred the matter to the Full Bench. Hence the matter is before us. 9. It is not in dispute that the petitioners in these cases were employed by the Corporation. Their employment lasted for more than 12 months and they completed 240 days in an year. It is also not in dispute that their initial employment was not made by a selection committee as per the statutory provisions and the relevant notification and, therefore, their employment was declared void under [SECTION] of the Act. The decision of the Division Bench to the above effect was approved by the Supreme Court. Therefore, the questions to be considered are whether the termination of the service of a workman, whose initial appointment was held to be void and non est, can be stated to be retrenchment as defined under [SECTION] of the [ACT], so as to compel the 17 employer to comply with the provisions under [SECTION] of the [ACT] merely because the workman had the continuous service for one year. In such circumstances, if the procedure contemplated under [SECTION] is not complied with, whether termination will become illegal. If so, what is the relief that can be granted by the Labour Court? 10. The meaning of retrenchment, as defined in [SECTION] of the [ACT], was considered by the Supreme Court in various decisions. In Pipraich Sugar Mills Ltd v. Pipraich Sugar Mills Mazdoor Union 1957)1 LLJ 235), the Supreme Court held that retrenchment means, in ordinary parlance, discharge of the surplus, it cannot include discharge on closure of business. After considering the definition of the word retrenchment, before the insertion of [SECTION] of the [ACT], a [ACT] Bench of the Supreme Court in Barsi Light Rly Co. Ltd v. K.N Joglekar 1957(1) LLJ 243) held that the meaning of retrenchment is to be accepted in its ordinary acceptation. Speaking for the Bench, [ENTITY], J.
, as he then was, it was observed as follows:
"What, after all, is the meaning of the expression for any reason whatsoever? When a portion of the staff or labour force is discharged as surplusage, in a running or continuing business, the termination of service which follows, may be due to a variety of reasons, e.g. for economy, rationalization in industry, installation of a new labour-saving machinery, etc. The legislature, in using the expression any reason whatsoever, says, in effect: It does not matter why you are discharging the surplus; if the other requirements of the definition are fulfilled, then it is retrenchment What is being defined is retrenchment, and that is the context of the definition. It is true that an artificial definition may include a meaning different from or in excess of the ordinary acceptation of the word which is the subject of the definition; but there must then be compelling words to show that such a meaning, different from or in excess of the ordinary meaning, is intended. Where, within the framework of the ordinary acceptation of the word, every single requirement of the definition clause is fulfilled, it would be wrong to take the definition as destroying the essential meaning of the word defined For the reasons given above, we hold That retrenchment, as defined in [SECTION] and as used in [SECTION] has no wider meaning than the ordinary, accepted connotation of the word: it means the discharge of the surplus labour or staff by the employer, for any reason whatsoever, otherwise than as a punishment inflicted by way of a disciplinary action, and it has no application where the services of all workmen have been terminated by the employer, on a real and bona fide closure of his business or where the services of all the workmen have been terminated by the employer, on the business or undertaking being taken over by another employer On our interpretation, in no case is there any retrenchment, unless there is a discharge of surplus labour or staff in a continuing or running industry".
In State Bank of India v. N. Sundramoney 1976) 1 LLJ
478), the Supreme Court took a different view holding that the word, for any reason whatsoever, has to be interpreted in its wider angle. In other words, the termination of service of a workman, whether surplusage or otherwise, would be retrenchment in view of the plain words used in [SECTION] of the [ACT]. This view was followed by many decisions of the Supreme Court like Surendra Kumar Verma v. Central Government Industrial Tribunal-cum-Labour Court, New Delhi 1981) 1 LLJ 386 and Mohanlal v. Management of Bharat Electronics Ltd (1981 LLJ 806 (SC . Since the ratio decided in all these cases were against the ratio given in the Five Member Bench decision in Pipraich Sugar Mills Ltd (supra), the matter was referred to a larger Bench. In Punjab L.D & R.C Ltd and others v. Presiding Officer and others 1990) 2 LLJ 70), a Five Member Bench of the Supreme Court accepted view adopted in [ENTITY] case (supra) and held as follows:
"Applying the above reasoning, principles and precedents, to the definition in [SECTION] of the Act, we hold that retrenchment means the termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in the Section".
Hence, now it is finally settled that all termination of service not protected by the section itself will come within the term retrenchment and termination need not be limited to cases regarding termination of service of surplus labour, as contemplated in its natural way.
11. These workmen were appointed purely on temporary basis subject to termination of their services without notice. It is true that their claim for making them permanent by regularising their services was pending at the time when their services were terminated. In any event, we are of the view that the services of the workmen were terminated in accordance with the conditions in the appointment order and [SECTION] of the [ACT] is applicable in this case. If that be so, even on the plain terms of the definition of retrenchment under [SECTION], termination of their services will not be retrenchment. However, this point was not seen pleaded or considered by the Labour Court. Hence we are not giving much importance to this point.
12. Then the question is whether the termination of service of a workman on the ground that his initial appointment was void and illegal will amount to retrenchment. In [ENTITY] v. State of Bihar 1995) 1 LLJ 975), a single Bench of the Patna High Court held that termination of service of a workman on the ground that his initial appointment was not legal and valid will amount to retrenchment. In [PRECEDENT], the Kerala High Court held that appointment of an employee made without authority will be void ab initio and the termination of service will not be retrenchment. If it is retrenchment, it would mean that they have to be reinstated in service with continuity of service. If that be so, it will be perpetuating the illegality. Those who come to service by back door should go by back door itself. The learned counsel for the workman also relied on the decision in [PRECEDENT]. In that case, the appellant was selected by a selection committee constituted under the Statute. Prior to his appointment, he was appointed to a temporary vacancy and worked for over 240 days. His services were terminated subsequently on being found unsuitable for the post. At the time of termination of service, it was specifically stated that he would forfeit his chance of appointment in terms of selection and his name will stand deleted from the select list. The High Court held that there is no violation of [SECTION] of the of the [ACT], in view of [SECTION] of the [ACT] as his services were terminated in accordance with the service conditions. Therefore, no relief was granted. The Supreme Court found the termination illegal, not because there was violation of [SECTION], but no show cause notice was given to him. The Supreme Court held that there was violation of the principles of natural justice, as the workman was not given the opportunity of being heard. The Supreme Court further held as follows:
"7. Giving an opportunity of explanation would be meet the bare minimal requirement of natural justice. Before the service of an employee are terminated, resulting into forfeiture of his right to be considered for employment opportunity of explanation must be afforded to the employee concerned. The appellant was not afforded any opportunity of explanation before the issue of the impugned order consequently the order is rendered null and void being inconsistent with the principles of natural justice. "
Therefore, the above decision of the Supreme Court is not supporting the contention that if initial appointment is invalid and void, termination of service on that ground will be retrenchment.
13. In our view, the contention raised by the learned counsel for the workmen cannot be accepted as there was no valid appointment. The appointment was null and void. In such a situation, the employer cannot keep them in service. The co-operative societies can appoint employees only in accordance with the law. Since they were appointed without undergoing the selection process by a selection committee, the appointment was held to be null and void by the Division Bench and the same was affirmed by the Supreme Court also. Therefore, we are of the view that it cannot be stated that their termination of service is retrenchment and they are entitled to compensation. If their appointment itself is null and void, there is no necessity for issuing even a termination order and they cannot be reinstated in service also. [SECTION]G of the [ACT] deals with the procedure for retrenchment. Only junior-most workman can be retrenched on the principle of first come last go. If after invalid appointment juniors are appointed validly, [SECTION]G cannot be applied. That also shows that termination of service on the ground that the initial appointment itself was declared void stands on a different footing and it cannot be retrenchment. [SECTION] of the [ACT] deals with re-employment of retrenched workmen. Since the appellant was not validly appointed, the question of giving him re-employment does not arise. It shows that the termination on the ground that the appointment itself is ab initio void will not amount to retrenchment as defined in [SECTION] of the [ACT] so as to attract the procedure under [SECTION] The Division Bench in [ENTITY]'s case (supra) held that the appointment being null and void, it cannot be said to be cancellation of appointment or termination of service. It is ab initio void from the very beginning. Consequently if appointment is made, there cannot be termination of service much less retrenchment and since there is no retrenchment, the question of complying with the provisions of [SECTION] does not arise. Here, in this case, the notification was issued by the Government restraining the co-operative societies from making appointments. Therefore, appointment cannot be made and there exists no right in law. In [PRECEDENT], a [ACT] Bench of the apex Court held that when an order is void, the authority who had issued it, had no power to make it and cannot override any legal rights. In M.P Housing Board and another v. Manoj Shrivastava (2006(2) SCC
702), it was held that if an appointment is made contrary to the provisions of the statute, the effect would be that no legal right is derived by the employee. The said legal position is made clear in [PRECEDENT]. Hence, we overrule the decision in [ENTITY]'s case (supra) and hold that if the initial appointment is illegal and void, especially in view of the statutory mandate under [SECTION] of the [ACT], the termination of service of the workmen on that ground will not be retrenchment and they will not be entitled to any relief, on the principle that those who come through back door shall go through the back door.
14. Then the next question is whether the workers are entitled to reinstatement if the termination is held to be illegal for not complying with the procedure laid down in [SECTION] We have already held, the termination of service of the workmen is not retrenchment as their services were held to be illegal and void in view of the statutory mandate and the Division Bench decision. But that question also has to be answered. It is well settled that normally if retrenchment is made without complying with the conditions under [SECTION], the workman is entitled to reinstatement with full backwages and continuity of service as if there was no retrenchment, as is held in [PRECEDENT]. In Surendara Kumar Verma v. Central Government Industrial Tribunal-cum-Labour Court, New Delhi 1981) 1 LLJ 386 at p. 389, the Supreme Court held that invalid retrenchment ordinarily leads to reinstatement with backwages and moulding of relief is the duty of the Labour Court. Where the industry is closed down or is in severe financial difficulty, reinstatement cannot be possible.
15. In this connection we also refer to the decision of the Supreme Court in M.P State Agro Industries Development Corporation Ltd and another v. S.C Pandey (2006(2) SCC 7[SECTION]). The respondent in that case had worked for two years temporarily and also worked on the basis of an interim order of the Court for some time. It was not contended in that case that the termination was not retrenchment. Even in such averment, though the employer failed to comply with the mandatory procedure under [SECTION], the Supreme Court did not grant the relief of reinstatement with full backwages as the original appointment was illegal and it directed payment of Rs.10000/- by way of compensation in lieu of reinstatement. In [PRECEDENT] the apex Court held that the nature of appointment, whether there existed any sanctioned post or whether the officer had any authority to make appointment are relevant factors while awarding compensation. Therefore, in our view, when retrenchment is illegal, normally the relief that is granted is reinstatement with backwages, but in all cases, it need not be granted. By reinstating a workman, the illegality cannot be perpetuated. Closure of establishment, reduction in the business of the establishment due to financial difficulty, lack of qualification, change in technology, etc. are the various factors to be considered. Straight jacket formula cannot be given and such conditions cannot be enumerated. It would depend upon facts of each case and the Labour Court will be free to mould relief to grant compensation instead of reinstatement with full backwages depending upon the facts of each case. Under [SECTION] of the [ACT], the Labour Court has got ample power to mould relief in the case of termination of service.
[SECTION]. The next question is, if the retrenchment is illegal, whether the Labour Court is right in granting three-and-a-half years salary with allowance to the workmen. The Labour Court relied on the decision in O.P Bhandari v. Indian Tourism Development Corporation Ltd (AIR 1987 SC
111). In that case, instead of reinstatement with full backwages, the management was allowed to pay 3.3 years salary, including allowance. The facts of the said case were entirely different. In that case, the workmen were appointed as per the Rules. After working for some period, their services were terminated in exercise of the powers under [SECTION]. The Supreme Court found that the Corporation cannot terminate the services by pick and choose by giving 90 days notice or payment of salary in lieu of notice without assigning any reason as it would violate [SECTION] of the [ACT]. Consequently, the termination was found to be illegal. In such cases, the Supreme Court ordered reinstatement with backwages or in the alternative, the management was given the right to give salary to avoid reinstatement and payment of backwages, taking into account the salary they would earn in future, etc. In the said case, the employee had worked for many years and was a member under the Provident Fund scheme and was entitled to other terminal benefits also on retirement. Here the facts are entirely different. The appellants had only a service of one year and their initial appointment was found illegal and consequently, their services were terminated. We are of the opinion that giving them three and a half years salary is excessive and that the termination of service of the workmen was not at all illegal as the appointment was void as per the statutory provisions and held to be so by the Division Bench which was affirmed by the Supreme Court also. In the facts of this case, legally the workmen are not entitled to any compensation. Therefore, we answer the question in the negative, that is, the workmen are not entitled to reinstatement with full backwages as their initial appointment itself was void. Accordingly we dismiss [CASE NUMBER].
17. With regard to the contentions in [CASE NUMBER] filed by the management, even though in principle we accept the contentions raised by them, in our opinion, the compensation awarded by the Labour Court shall not be recovered from the workmen. The Labour Court granted only three-and-a-half years salary on the basis of the emoluments lastly drawn by each of the workmen in 1990. The Court also awarded Rs.10,000/-. It is submitted that after employment most of the workmen got married and they all come from poor strata of the society. Before their temporary employment, they worked on daily wages as casual employees, though details were not provided. It is true that the appointment of the workmen was illegal and void and legally they do not have any right to claim compensation. The employer is also responsible for their plight. Despite statutory bar and the directions issued, the workmen were appointed and they had an unblemished service of more than one year. The award has not been stayed. In such circumstances, we do not interfere with the award of three- and-a-half years salary by way of compensation, though not for reasons stated by the Labour Court. Therefore, [CASE NUMBER] will stand disposed of, with the above directions.
([ENTITY], CJ.) [ENTITY], J. I agree. ([ENTITY], J.) Dr. [ENTITY], J. I agree. (Dr. [ENTITY], J.) Patna High Court, The 06th May, 2009. AAhmad/AFR.