IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.10468 of 2000 (O&M) Date of decision: 06 .11.2009 Alpha Drugs Mazdoor Union and another ....Petitioners versus State of Punjab and others ...Respondents. CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Mr. Rajesh Punj, Advocate, for the petitioners. Mr. Pawan Kumar Mutneja, Advocate, with Mr. S.S.Sudan, Advocate, and Ms. Monika Sharma, Advocate, for the respondent. ----- 1. Whether reporters of local papers may be allowed to see the judgment ? 2. To be referred to the reporters or not ? 3. Whether the judgment should be reported in the digest ? ---- K.Kannan, J. I. The nature of order impugned 1. On a permission sought by the management under Section 25-N of the Industrial Disputes Act to retrench 7 workmen, the Additional Labour Commissioner, Punjab as the Authorities specified under the Act passed the on 27.7.2000 on a changed circumstance only to one workman, 5 other workmen having had voluntarily resigned and one workman had been redeployed in some other unit of the same management, since the time of seeking for permission. The Union along with the workman, who was allowed by the management to be Civil Writ Petition No.10468 of 2000 (O&M) - 2 - retrenched, have joined together to file the writ petition, challenging the order. II. The grounds of challenge 2. The grounds of challenge by the workman are that there had been junior members to him working in the same establishment and while they were being retained, the workman alone has been terminated in violation of the provisions of Section 25-G of the Industrial Disputes Act. Conceding that the factory is attracted to the provisions of Chapter V-B, the further challenge mounted by the workman against the management is that the impugned order has been passed in violation of principles of natural justice in relying on documents which had been shared by the management with the Authority merely at the time of arguments and without putting them on prior notice to the workman. According to him, the enquiry had not been in conformity with the procedure, as contemplated by Section 25-N(3) & (4). The order, according to him, is, therefore, vitiated. III. The contentions in defence by the Management 3. The principal contentions in defence by the management are that the writ petition itself is not maintainable, the petitioners not having exhausted statutory remedy provided under Section 25-N(6) that permits the workman to apply for a review of the order and if aggrieved to seek for reference to the Labour Court for an adjudication. Joining issues on the merits of the contentions raised by the petitioner, the management would contend that Section 25-G itself is not attracted since the appropriate application which had to be resorted was only 25-N and the Civil Writ Petition No.10468 of 2000 (O&M) - 3 - Government had passed a considered order after admittedly giving an opportunity to make his representations before making the order. In any event, according to the management, Section 25-G did not contain an absolute interdict against the breach of the rule, but only contains a reference to record a reason for breaching the seniority principle and such a reason had been recorded that defuses to nought the challenge of violation of Section 25-G. Adverting to the challenge against the impugned order as having been passed in violation of the principles of natural justice, the contention is that the management had outlined 12 reasons as justifying its stand seeking for termination of service of the workman. The reasons ranged between his poor contribution to productivity to persistent absence and insubordinate attitude, among others. Poised between two rival contentions, the authority had accepted the contentions of the Management according the permission to terminate the services of the workman in the manner set forth under the relevant provisions of the Industrial Disputes Act. IV. Nature of enquiry contemplated under Section 25-N of ID Act 4. On the preliminary contention that the workman had not availed of the statutory remedies and the writ petition itself was not maintainable, the reference to Section 25-N(6) would become necessary. The proviso of Section 25-N(6) is as under :- “(6) The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication; Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award Civil Writ Petition No.10468 of 2000 (O&M) - 4 - within a period of thirty days from the date of such reference.” The power to apply for a review may be normally understood as available at a superficial level and it is just as well possible for a workman to perceive that to be inadequate in a given circumstance. If a factual consideration of the reasons found in the impugned order would require a further probe and if there are disputed questions of fact, it shall be impermissible for a workman, who is aggrieved by the order to challenge the same directly before this Court for an adjudication. I, therefore, put the counsel for the workman to notice of the position that his challenge shall be only to the adequacy of the grounds themselves taking the grounds to be true and that he shall not be permitted to contend any disputed questions of fact. The learned counsel for the petitioner responded with gusto that the challenge is at a more fundamental level that the so-called charges attributed to the workman had not been put to the authority with any relevant details with any kind of opportunity given to the workman to respond to the same and the impugned order of the Authority itself had been passed in flagrant violation of the procedure described under Section 25-N(2) & (3). The relevant clauses are as follows:- “(2) An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner. (3) Where an application for permission under sub- section (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the Civil Writ Petition No.10468 of 2000 (O&M) - 5 - person interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen. ” The above clause 25-N (2) refers to the fact that an application for permission sought by the Government shall clearly state the reasons for the intended retrenchment and that copy of the application shall also be served simultaneously on the workman. The learned counsel appearing for the workman does not seriously dispute the reasons of financial stringency and other causes outlined in the application before me. The only objection is with reference to targeting him as one amongst the 7 persons for retrenchment. The application for seeking for permission sets out the reasons for particularizing the workman, viz., “Service record of this employee is quite adverse. He is very indisciplined worker. Hardly gives any output. Disobedient, absenteeism is high, problem creator.” Section 25-N(3) contemplates that the appropriate Government or the specified authority shall first make an enquiry as it thinks fit on the application made by the management. It shall give a reasonable opportunity of being heard to the employer and the workman concerned. It shall specify the genuineness and adequacy of the reasons stated by the employer, the interest of the workman and other relevant factors. As stated above, the other factors relating to the decision to close down a particular unit of the factory were themselves not challenged before me. The impugned order states that during arguments, the management had produced some documents showing instances and Civil Writ Petition No.10468 of 2000 (O&M) - 6 - proof for insubordination, disobedience, unreliability, being habitually irregular in the discharge of duties etc. which it felt constrained to examine and be persuaded by the factors that contributed to the satisfaction of the authority. The Authority in its impugned order states as follows:- “I am of the considered opinion that if the management wants to retrench such a indisciplined workman by departing the principle of last come, first go, it will not be violative of the provisions of Section 25-G of the Act in any way.” The objection of the learned counsel for the petitioner was that the documents which had been produced complaining of insubordination, disobedience etc. had not been filed along with the application to elicit a response on the basis of such reasons, but they were produced only at the time of the arguments. The instances of insubordination, disobedience, unreliability etc. come through documents which have been exhibited before this Court. A letter of communication dated 21.03.1997 (Annexure B-16) refers to unauthorized absence of the workman for 23 ½ days in the year 1996. 28 days of unauthorized absence refer to in the letter dated 20th March, 1998, for the year 1997 (Annexure B-17). 22days of unauthorized absence refer to in the letter dated 17.03.1999 (Annexure B-18) for the year 1998. The receipt of the letters are themselves not denied by the workman. In the letter of the management to the Labour Commissioner, Punjab, dated 21st July, 2000 (Annexure R- 3/2), it has been complained that the workman had been demanding for an additional increase and promotion and if they are not conceded, he would go on indefinite strike and that the management had to ultimately Civil Writ Petition No.10468 of 2000 (O&M) - 7 - to succumb to his pressure tactics. It had brought out 12 reasons as to why it was not possible to retain the workman, which referred to specific instances of the acts of insubordination, the insulting languages that he used on various occasions and his supercilious ways in the manner that he conducted himself at the security gate and other places. 5. I have no difficulty in accepting the contention of the workman that the power of the Authority under Section 25-N(3) is quasi- judicial in nature and a full opportunity must be given to the workman to review the contentions. Detailing on the nature of power exercised by the authority, the Hon’ble Supreme Court Meenakshi Mills Limited Versus the Workmen-(1992) 3 SCC 336, had stated even when Section 25-N was in its unamended form that the powers of the authority shall be exercised only after due consideration of all the relevant factors and taking into account the representations given by the respective parties by a proper enquiry. The decision of the Hon’ble Supreme Court in Meenakshi Mills Limited case was further reinforced by decisions and by statutory enactment stipulating specifically on the nature of enquiry. In Uttranchal Forest Department Corporation Versus Jabar Singh- (2007) 2 SCC 112, the Hon’ble Supreme Court had held that the object of Section 25-N was to afford protection to workmen against the retrenchment by making prior scrutiny by Government as a condition precedent. That there was an enquiry is not a disputed fact. The degree of formality of the enquiry is what is now disputed. Meenakshi Mills Limited case referred to above itself gives a clue to an understanding of this provision when it states that the period delimited under the Act for Civil Writ Petition No.10468 of 2000 (O&M) - 8 - taking a decision by the Government itself gives an idea that the enquiry contemplated under clause (3) cannot be elaborate. Section 25-N(4) reads as follows:- “Where an application for permission has been made under sub-section (1) and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.” The Act contemplates the communication of the decision by the appropriate Government within a period of 60 days from the date on which such application is made and deems the permission as having been granted on the expiration of said period of 60 days. It is perhaps also an indication of the fact of the primacy of the decision of the employer and that the satisfaction of the Government shall be to examine that the motive of the management is not oblique or mala fide. While I see the strength in the contention of the workman that the management had not supplied all the information for requiring the workman to be terminated in its letter of application for permission, it cannot be denied that at least at the time of argument, the documents were produced. If the workman were ever to contend that the reference to documents in the order relating to his habitual absence or misconduct were not true, then one could understand that the workman was really prejudiced in making the reference to documents. None of the incidents or the circumstances set out are seriously challenged. Indeed I have also to point out if those factors had been specially denied and if the workman was challenging Civil Writ Petition No.10468 of 2000 (O&M) - 9 - the facts, his approach to the Court directly under the writ petition itself would not be appropriate. V. Factors that went into decision making by government justifies decision 6. The appropriate issue is whether the enquiry was proper and whether the management had placed sufficient grounds to enable the Government to examine the sufficiency of reasons for termination. That a notice had been given and an opportunity had also been provided to the workman to state the objections and participate in the enquiry satisfies one part of the propriety of the procedure involved in the enquiry. The reference to materials such as habitual absence at various times, particular instances of insubordination, his poor contribution to the cause of productivity take care of the remaining aspects that go to the consideration of the sufficiency of the reasons for termination of service. They had been admittedly produced before the Government and the Government had, therefore, a basis to come to a conclusion and be satisfied that the management was justified in seeking for his termination. 7. As already stated, several reasons given by the management for closing a unit and retrenching some workmen were themselves not put in challenge before me. It was not as if the workman was being singled out for termination for some oblique motive along with others. Six other persons were also sought to be terminated but it was a quite a different story that 5 of them had tendered voluntary resignation and one person had been redeployed elsewhere in some other unit. If the decision had any bearing ultimately it was only for termination of services of the Civil Writ Petition No.10468 of 2000 (O&M) - 10 - workmen now before this court. The reasons given in the letter and sought to be substantiated through documents produced before the management were sufficient for the Government to take a decision in its proper perspective. If the factual consideration of the reasons which are borne out through the order were to be challenged for any mistake in the statement of fact, it ought to have been availed by an application for review under Section 25-N(6). The workman did not avail of such an opportunity which could have if situation so warranted resulted in a reference to a Labour Court. A direct challenge of the order before this Court can avail to the workman only the right to show any inherent defect or a complete lack of reasons or error in approach of the Labour Court or a brazen violation of the principles of natural justice. I find no such grounds available for the workman and an intervention through a writ petition would not, under such circumstances, be justified. 8. If the retrenchment has been properly made and the order of the Government cannot be set aside, it shall be impermissible to examine any other issue of whether the workman would be entitled to any more compensation than what the statute already provides. The issue was dealt with by the Hon’ble Supreme Court in Gordon Woodroffe Agencies Private Limited Versus the Presiding Officer, Labour Court- (2004) 8 SCC 90, that there is no principle which can justify the payment of any more compensation than what the statute admits of. The workman had been offered such a compensation as the law provides for under Section 25-N and therefore, the impugned order cannot be assailed for the reasons set forth in the petition. Civil Writ Petition No.10468 of 2000 (O&M) - 11 - VI. The period of operation of the order issued by government 9. The learned counsel for the workman also made a faint attempt to discount the effect of the order passed by the government by stating that the order of the government itself was operative only for one year and the same having elapsed, the order of retrenchment is deemed to have worked itself out and hence he is entitled to be reinstated, in any event. The relevant subsection (5) of section 25-N reads as follows: “An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.” The interpretation given to the above provision by the learned counsel is clearly wrong. The first part of the section makes the order final and binding on all the parties. The second part relating to the period of operation to give effect to the first part. If it should mean the order shall be valid only for 1 year, the it would mean that the order of retrenchment will cease after 1 year and enable a workman retrenched to claim reinstatement. By such an interpretation, it makes absurd the finality of the order envisaged in the first part. It does not cast the liability on the management to keep applying for extension of the order every year. On the other hand, it is to cover a situation of when the government had declined permission, it would enable the management to apply for such permission again after 1 year. The occasion for reappraisal for the decision could be invoked by any party affected by the decision after a period of 1 year. This shall be without prejudice to the situation covered by sub clause (6) that provides for a review and/or reference outlined Civil Writ Petition No.10468 of 2000 (O&M) - 12 - above. The order of retrenchment is therefore valid and binding at all times, so long as there was no occasion for the management to apply for reappraisal of its decision, since permission had been granted. VII. Seniority principle in retrenchment is not inviolable- recorded reasons may justify it 10. Even without reference to Section 25-N, the learned counsel appearing for the workman argued that there had been a violation of Section 25-G. Admittedly, the workman was not the junior most and there had been a breach of the principle ‘last come, first go’, but this principle is not always inviolable as the language of Section 25-G itself reveals. The said Section states as follows:- “Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of 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.” All that the law requires is that the reasons shall be recorded and it shall be open to a Court to examine the adequacy of such reasons. The reasons that justify the particular reference to the workman under Section 25-N are also the reasons that would justify the breach of the principle outlined above. In Samishta Dube Versus City Board, Etawah and another-(1999) 3 SCC 14, the Hon’ble Supreme Court had held:- “9. It is true that the rule of ‘first come, last go’ in Section 6-P could be deviated from by an employer because the section uses the word ‘ordinarily’. It is, therefore, permissible for the employer to deviate from the rule in cases of lack of efficiency or loss of confidence, etc., as held in Swadesamitran Ltd. V. Workmen - AIR 1960 SC 762. But the burden will then be on the employer to justify the deviation. No such attempt has been made in the present Civil Writ Petition No.10468 of 2000 (O&M) - 13 - case. Hence, it is clear that there is clear violation of Section 6-P of the U.P. Act.” The burden of proof definitely was there on the management, which burden, in my view, was satisfactorily discharged. In Swadesamitran Limited, Madras Versus Workmen-AIR 1960 SC 762, the Hon’ble Supreme Court had held:- “9. ………….It may be conceded that if a case for retrenchment is made out it would normally be for the employer to decide which of the employees should be retrenched; but there can be no doubt that the ordinary industrial Rule of retrenchment is ‘last come first go’, and where other things are equal this Rule has to be followed by the employer in effecting retrenchment. We must, however, add that when it is stated that other things being equal the Rule ‘last come first go’ must be applied, it is not intended to deny freedom to the employer to depart from the said Rule for sufficient and valid reasons. The employer may take into account considerations of efficiency and trustworthy character of the employees, and if he is satisfied that a person with a long service is inefficient, amenable or habitually irregular in the discharge of his duties, it would be open to him to retrench his services while retaining in his employment employees who are more efficient, reliable and regular though they may be junior in service to the retrenched workmen. Normally, where the Rule is thus departed from there should be reliable evidence preferably in the recorded history of the workmen concerned showing their inefficiency, unreliability or habitual irregularity. It is not as if Industrial Tribunals insist inexorably upon compliance with the industrial Rule of retrenchment; what they insist on is on their being satisfied that wherever the Rule is departed from the departure is justified by sound and valid reasons. ……..” The adequacy of reasons cannot be doubted. The consideration of the reasons find expressed in the order. The non-challengeability of the reasons arise by the choice of the forum by the workman in resorting to a writ petition directly and not entering on a challenge to the reasons either by means of a review or by a reference to the Labour Court. The extent of interference by the Court under Article 226 of the Constitution to an Civil Writ Petition No.10468 of 2000 (O&M) - 14 - order passed by the Government shall not be understood as an interference that is available on every disputed questions of fact. There is nothing amiss in the decision