IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 12829 of 2000 For Approval and Signature: HON'BLE MR.JUSTICE AKSHAY H.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- GUJARAT STATE CO-OP AGRI & RURAL DEVELOP BANK LTD Versus YOGINIBEN ANILKUMAR JOSHI -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 12829 of 2000 MR MITUL K SHELAT for Petitioner No. 1-2 MR PH PATHAK for Respondent No. 1 -------------------------------------------------------------- CORAM : HON'BLE MR.JUSTICE AKSHAY H.MEHTA Date of decision: 14/05/2004 CAV JUDGEMENT 1. In this petition, which is filed under Article 227 of the Constitution of India, the petitioners have challenged the award made by the Labour Court, Kalol dated 1st July, 2000 in Reference (LCK) No. 348 of 1995. By the said award the petitioners have been directed to reinstate the respondent on the original post with continuity of service and to pay to her the back wages with effect from 24th December, 1997. 2.0. Relevant facts in nutshell, can be stated as under :- 2.1. Petitioner no. 1 is a cooperative bank registered under the provisions of the Gujarat Cooperative Societies Act, 1961. Respondent was appointed in the employment of petitioner no. 1 on daily wage basis by order dated 28th January, 1991. She was appointed for a period of two months. She worked till 30th January, 1991 i.e. for a period of three days. According to the respondent, her service was terminated orally without assigning any reason by the petitioners. 2.2. The respondent, in the year 1995, raised a dispute regarding termination of her service on the ground that it was illegal and she was entitled to be reinstated with full back wages. It appears that the conciliation proceedings failed and, therefore, the Assistant Labour Commissioner, Mehsana vide order dated 22nd December, 1995 referred the industrial dispute for adjudication to Labour Court. 2.3. Before the Labour Court she filed statement of claim at Exh. 5 wherein she averred that she was appointed by the petitioners in its district office as Clerk by letter of appointment dated 21st January, 1991. In response to the said letter, she reported for work on 28th January, 1991 at the said office and a report accordingly was despatched to the head office by petitioner no. 2. However, on 30th January, 1991 in the evening she was relieved from the service by oral order without any prior intimation. She was thereafter never re-employed though persons junior to her had been re-employed. According to her, her service was terminated despite order of this Court to maintain status-quo in the proceedings of Special Civil Application No. 526 of 1991. She has also averred that before relieving her from the service, no prior notice or pay in lieu of the notice or compensation had been paid to her. According to her, the termination of her service was, therefore, illegal and she was required to be reinstated on her original post. 2.4. As against that, the petitioners, while resisting the claim by filing written statement at Exh. 14 have contended that the respondent was given appointment on daily wage basis on 28th January, 1991. Thereafter the recognized workers' union of the petitioners challenged the appointment of the respondent and several other employees of petitioner no. 1 before this Court by filing petition on the ground that the said appointments were not made by the petitioners in accordance with the recruitment regulations and the requisite procedure and hence those appointments were required to be quashed. In view of the same, the respondent was relieved from service in the evening of 30th January, 1991. It was contended that as a daily wager the respondent worked only for three days i.e. 28th January, 29th January and 30th January, 1991. She therefore, did not have any right to claim reinstatement on the original post together with back wages and continuity of service. Finally it was contended that the reference was required to be dismissed. 2.5. Before the Labour Court, both the parties led oral evidence as well as produced documentary evidence in support of their respective cases. The respondent examined herself at Exh. 8 and the petitioners examined one Vasantbhai Ramshankar at Exh. 18. Apart from the documentary evidence that was produced by the parties which included the letter of appointment, the report of respondent, copy of the petition filed before this Court, the correspondence exchanged between the petitioners and the respondent, a list of employees junior to the respondent, etc., the learned advocates for the parties submitted written arguments also before the Labour Court. 3. On the strength of the material produced by the parties, Labour Court came to the conclusion that the termination of service of the respondent was illegal as no prior notice was given and also that no written order was passed assigning the reasons for termination of the service before the contract period. In the opinion of the Court the respondent was required to be reinstated on her original post with continuity of service. So far the payment of back wages is concerned, the Labour Court thought it fit to award the same with effect from 21st December, 1997 i.e. the date on which the reference appears to have been filed before the Labour Court. The petitioners have challenged this award. 4. Mr. Mitul K. Shelat, learned advocate appearing for the petitioners has submitted that the judgment and award made by the Labour Court are erroneous, because the respondent's appointment was not only on daily wage basis, but it was for a limited period of two months. The petitioners were, therefore, entitled to terminate the same without assigning any reason. According to him action of petitioners was covered under Section 2 (oo) (bb) of the Act. He has further submitted that the petitioners were required to relieve the respondent from the service only because her appointment as well as appointments of several others were challenged by the recognized union of petitioner no. 1 before this Court on the ground that the appointments were made without following the requisite procedure. There was no extraneous consideration nor any malafide intention on the part of the petitioners in doing so. He has also submitted that since the appointment was not in accordance with the rules and regulations, the respondent had no substantive right on the post. Lastly he has submitted that the respondent has approached the Labour Court very late and on the ground to delay alone the Labour Court ought to have dismissed the reference. 4.1. As against that, Mr. P.H. Pathak, learned advocate appearing for the respondent has strongly supported the judgment and award of the Labour Court. According to him no written order of termination of service was passed nor any procedure required to be followed before terminating the service was complied with, hence the order of termination of respondent's service was illegal. He has submitted that the petitioners did not comply with provisions of section 25-G while terminating the service of respondent and Section 25-H of the Act while re-employing the retrenched workmen, read with rules 77 and 78 of the Industrial Disputes (Central) Rules, 1957 (hereinafter referred to as 'the Rules') and the respondent was entitled to be reinstated. He has further submitted that provisions of section 2(oo) (bb) will not be attracted in the present case because the appointment was for two months, whereas the service of the respondent has been terminated on the 3rd day itself and that too without following requisite legal procedure and without complying with the principles of natural justice. He has also submitted that the Labour Court has rightly not gone into the question regarding delay as the provisions of the Limitation Act do not apply to a reference u/S. 10 of the Act. He has, therefore, prayed that the petition does not have any merit and it deserves to be dismissed. 4.2. No other submissions have been made by the learned counsels. They have placed reliance on the decisions of the Apex Court as well as this Court. I will refer to them in due course. 5. Having carefully gone through the record of this petition as well as having carefully considered the rival submissions, it appears that the respondent was appointed on daily wage basis in the service of petitioner no. 1 and after she had worked for three days she was orally asked not to attend the duty. In other words on the 3rd day itself, in the evening, her service was terminated though the employment was for a period of 2 months. Ofcourse, the say of the petitioners is that there was nothing personal against her but it was only because the recognized union of petitioner no. 1 had objected to several appointments including that of the respondent on the ground that these appointments were made without following the selection procedure, her service was terminated and so also the services of about 35 other employees. 5.1. So far the reason advanced by the petitioners to terminate the service of the respondent is concerned, reliance has been placed on the copy of the Special Civil Application No. 526 of 1991 filed before this Court by the Gujarat State Cooperative Land Development Bank Ltd. Employees' Union, which is the recognized union of petitioner no. 1. Perusal of the said petition reveals that the union had strongly objected to the appointments being made on the post of Clerk, etc. by petitioners without publishing advertisement, inviting applications, holding interviews and also without calling names from the Employment Exchange. Judgment of Labour Court shows that this copy is also produced before it. There is no dispute with regard to the fact that the respondent's appointment was made without following the appropriate procedure. Atleast that is the averment made by the petitioners and it is not controverted by the respondent. Therefore, the say of the petitioners that the service of the respondent together with several others was terminated because of the writ petition before this Court appears to be true. So far the order of status-quo issued by this Court is concerned, the respondent has tried to aver that despite the order of status-quo she had been relieved from the service. The Labour Court has also proceeded on the said footing that the status-quo required the petitioners to stay their hands even from discontinuing the services of the respondent and the like employees. However, if the relief clause (A) of the said petition is perused, the prohibitory orders have been sought from this Court by the said petitioning union to the effect that the present petitioner no. 1, which was respondent in that proceeding, be restrained from confirming the service of irregularly and illegally appointed candidates and also for directing it not to appoint any person without issuing proper public advertisement and without following the proper selection procedure. The petitioners' interpretation, therefore, appears to be that such order did not prohibit them from terminating the service of the employees whose appointment was challenged by the said union. Respondent was one of such employees. The petitioners cannot be accused of deliberately flouting the order of this Court for having discontinued the service of the respondent nor it can be a ground for the Labour Court to quash the action of the petitioners. 5.2. The question that would now arise for consideration is whether the termination of service of the respondent was against the provisions of the Act and in particular the provisions of section 25 G and H of the Act read with rules 77 and 78 of the Rules and whether the respondent was entitled to be reinstated on her original post with all incidental benefits. The submission of Mr. Shelat is that since the appointments were challenged before this Court, they were constrained to cancel them and discontinue such persons from service. There was no other reason for the same. In other words, in the submission of Mr. Shelat the action of the petitioners was bonafide one. He has also submitted that such termination would not amount to "retrenchment" u/S. 2 (oo) but would stand covered under exception (bb). So far Mr. Shelat's submission with regard to section 2 (oo) (bb) of the Act is concerned, it cannot be accepted. Clause (bb) is as under :- "(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;" Admittedly, contract of service was for months and respondent was appointed on daily wage basis. From the judgment of Labour Court it is not at all clear what were the terms and conditions of service. Petitioner has also not produced letter of appointment of respondent on record of this petition. Only communication dated 28th January, 1991 by petitioner no. 1 to its Dist. Officer, Mehsana granting consent for appointment of respondent and one another is produced. It is for two months and on daily wage basis. It is, therefore, presumed that except this, there are no other terms or conditions on the record of the petition. There is therefore, no stipulation to terminate the contract before expiry of its term. In the present case termination is much before expiry of term of the contract. The action of petitioners does not fall under either of the categories and hence, it is not covered under Clause (bb) of section 2 (oo) of the Act. The Labour Court's conclusion that such action of petitioners amounts to retrenchment within the meaning of section 2 (oo) is proper. If that be so, whether the petitioners were under any legal obligation to comply with the provisions of section 25-G and H of the Act read with rules 77 and 78 of the Rules or provisions of section 25-F of the Act. 5.3. For ready reference said legal provisions are required to be stated here. "25-F Conditions precedent to retrenchment of workmen.- No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until- (a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette. 25G Procedure for retrenchment.- Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category or workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman. 25H. Re-employment of retrenched workmen.Where any workmen are retrenched, and the employer proposes to take into his employment any persons, he shall, in such manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re-employment, and such retrenched workmen who offer themselves for re-employment shall have preference over other persons." "Rule 77. Maintenance of seniority list of workmen.- The employer shall prepare a list of all workmen in the particular category from which retrenchment is contemplated arranged according to the seniority of their service in that category and cause a copy thereof to be pasted on a notice board in a conspicuous place in the premises of the industrial establishment at least even days before the actual date of retrenchment. Rule 78. Re-employment of retrenched workmen.(1) At least ten days before the date on which vacancies are to be filled, the employer shall arrange for the display on a notice board in a conspicuous place in the premises of the industrial establishment details of those vacancies and shall also give intimation of those vacancies by registered post to every one of all the retrenched workmen eligible to be considered thereof, to the address given by him at the time of retrenchment or at any time thereafter; Provided that where the number of such vacancies is less than the number of retrenched workmen, it shall be sufficient if intimation is given by the employer individually to the senior most retrenched workmen in the list referred to in Rule 77 the number of such senior most workmen being double the number of such vacancies; Provided further that where the vacancy is of a duration of less than one month there shall be no obligation on the employer to send intimation of such vacancy to individual retrenched workmen; [Provided also that if a retrenched workman, without sufficient cause being shown in writing to the employer, does not offer himself for the re-employment on the date or dates specified in the intimation sent to him by the employer under this sub-rule, the employer may not intimate to him the vacancies that may be filled on any subsequent occasion] (2) Immediately after complying with the provisions of sub-rule (1), the employer shall also inform the trade unions connected with the industrial establishment, of the number of vacancies to be filled and names of the retrenched workmen to whom intimation has been sent under that sub-rule; Provided that the provisions of this sub-rule need not be complied with by the employer in any case where intimation is sent to every one of the workmen mentioned in the list prepared under rule 77." So far the provisions of section 25-F of the Act are concerned, they will not apply in the present case because the same are in relation to the workman/employee, who has completed one year's service. Here, it was discontinuance of the service of an employee who had worked only for three days. Mr. Pathak has, however, submitted that the application of sections 25-G and 25-H cannot be restricted only to one category i.e. covered under the category of "retrenched workmen", to whom section 25-F applies. According to him, irrespective of application of section 25-F, provisions of sections 25-G and 25-H can be applied effectively to the facts of the present case. He has placed heavy reliance on the decision of the Apex Court rendered in the case of Central Bank of India v/s. S. Satyam reported in AIR 1996 S.C. p.2526, wherein it is held as under :- "9. The next provision is Section 25-H which is couched in wide language and is capable of application to all retrenched workmen, not merely those covered under Section 25-F. It does not require curtailment of the ordinary meaning of the word "retrenchment" used therein. The provision for reemployment of retrenched workmen merely gives preference to a retrenched workman in the matter of reemployment over other persons. It is enacted for the benefit of the retrenched workmen and there is no reason to restrict its ordinary meaning which promotes the object of the enactment without causing any prejudice to a better placed retrenched workman. 10. Chapter V-A providing for retrenchment is not enacted only for the benefit of the workmen to whom Section 25-F applies but for all cases of retrenchment and, therefore, there is no reason to restrict application of Section 25-H therein only to one category of retrenched workmen. We are, therefore, unable to accept the contention of Shri Pai that a restricted meaning should be given to the word "retrenchment" in Section 25-H. This contention is, therefore, rejected." It is also held as under :- "7. Rule 77 requires the employer to maintain a seniority list of workmen in that particular category from which retrenchment is contemplated arranged according to the seniority of their service. The category of workmen to whom Section 25-F applies is distinct from those to whom it is inapplicable. There is no practical difficulty in maintenance of seniority list of workmen with reference to the particular category to which they belong. Rule 77, therefore, does not present any difficulty. Rule 78, speaks of retrenched workmen eligible to be considered for filling the vacancies and here also the distinction based on the category of workmen can be maintained because those falling in the category of Section 25-F are entitled to be placed higher than those who do not fall in that category. It is no doubt true that persons who have been retrenched after a longer period of service which places them higher in the seniority list are entitled to be considered for reemployment earlier than those placed lower because of a lesser period of service. In this manner, a workman falling in the lower category because of not being covered by Section 25-F can claim consideration for reemployment only if an eligible workman above him in the seniority list is not available. Application of Section 25-H to the other retrenched workmen not covered by Section 25-F does not, in any manner, prejudice those covered by Section 25-F because the question of consideration of any retrenched workman not covered by Section 25-F would arise only, if and when, no retrenchment workman covered by Section 25-F is available for re-employment. There is, thus, no reason to curtail the ordinary meaning of "retrenched workmen" in Section 25-H because of Rules 77 and 78, even assuming the rules framed under the Act could have that effect." Normally while exercising jurisdiction under Article 227 of the Constitution of India this Court will not re-appreciate the evidence adduced before the trial Court. It is only when the submissions which are made, involve mixed questions of facts and law, some exercise in the form of verification of the material on record is required to be made to find out whether there was evidence substantiating the allegation regarding violation of aforesaid provisions. In the present case, whether compliance of section 25-G and 25-H is there, is a mixed question of fact and law and when extensive arguments have been made by the learned counsels on this aspect, it has become necessary for me to deal with the facts as they emerge from the record of this petition. 5.4. So far the provisions of section 25-G and H are concerned, though it is averred by the respondent that in the present case "last come, first go" principle has been violated and further that even while re-employing the persons those who were junior to the respondent have been taken back in the service and the respondent has been left out. The fact regarding re-employment of the juniors to the respondent is not seriously disputed by the petitioners. However, they have contended that because of the necessity and work load there was acute need to employ people in petitioner no. 1 and the Managing Director was given appropriate powers by the Board of Directors to reappoint the persons who were relieved from the service, but these persons have not been automatically re-employed, they have first applied in response to the public advertisement and then undergone the prescribed selection process. 5.5. It may be noted here that the documentary evidence that has been produced by respondent includes only the list of persons who are junior to respondent