IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP(T) No.: 11701 of 2008. Decided on: 23.02.2011. _____________________________________________________ Vijay Kumar. … Petitioner. Versus State of Himachal Pradesh and others. … Respondents. Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting?1 Yes. For the Petitioner : Mr. T.S. Chauhan, Advocate. For the Respondents : Mr. P.M. Negi, Deputy Advocate General with Mr. R.P. Singh, Assistant Advocate General for respondents No.1 & 2. Mr. Bhuvnesh Sharma, Advocate for respondents No.3 and 4. Rajiv Sharma, Judge: Material facts necessary for adjudication of this petition are that the petitioner was engaged on daily wage basis as Sweeper in Municipal Council, Una (Respondent No.3). Thereafter, he was engaged on contract basis for a period of six months with effect from 3rd April, 2000. The petitioner was served with a notice under Section 25-F of the Industrial Disputes Act, 1947 (hereinafter 1 Whether the reporters of Local Papers may be allowed to see the judgment? Yes. - 2 - referred to as “the Act” for brevity) on 20th December, 2004. Petitioner approached the learned erstwhile Himachal Pradesh Administrative Tribunal by way of present O.A. The learned Tribunal granted interim order in favour of the petitioner on January 14, 2005. Petitioner is continuously working till date as Sweeper in Municipal Council, Una. 2. Mr. T. S. Chauhan, learned counsel for the petitioner has strenuously argued that Annexure A-2, dated 20th December, 2004 was illegal. According to him, his client has not been paid compensation for a period of 15 days for each calendar year at the time of issuance of Annexure A-2, dated 20th December, 2004. He also argued that since the petitioner has now worked for more than ten years, his services may be directed to be considered for regularization. 3. Mr. R.P. Singh, learned Assistant Advocate General on the basis of Annexure R-3/A, dated 11th November, 2004 has argued that it was not desireable to accord further approval for the continuation of contractual employees and action was required to be taken under Section 25-F of the Act. He also referred to Annexure R-3/B, dated 2nd June, 2004. Mr. Bhuvnesh Sharma, learned counsel appearing on behalf of respondents No.3 and 4 has also relied upon Annexure R-3/A and R-3/B. According to him, Annexure A-2, dated 20th December, 2004 is in accordance with law. - 3 - 4. I have heard the learned counsel for the parties and gone through the pleadings carefully. 5. Petitioner was engaged initially on daily wage with effect from 27.2.1999. He was engaged on contract basis for six months with effect from 3rd April, 2000. Thereafter on 20.12.2004, petitioner has been served with a notice under Section 25-F of the Act. A bare perusal of Annexure A-2 makes it abundantly clear that the petitioner has not been paid any compensation on the date of retrenchment as per Section 25-F, clauses (a) and (b) of the Act alongwith letter of retrenchment. The non-payment of compensation in terms of Section 25-F, clause (b) has rendered the action of Municipal Council, Una a nullity. Clause (b) of Section 25- F of the Act imposes a duty upon the employer to pay to the workman at the time of retrenchment, compensation equal to 15 days’ average pay for every completed year of continuous service or any part thereof in excess of six months. This mandatory provision has not been followed by the Municipal Council, Una, rendering the retrenchment of petitioner a nullity. 6. Their Lordships of Hon’ble Supreme Court in Rajasthan Lalit Kala Academy versus Radhey Shyam, (2008) 13 SCC, 248 have held that compliance of Section 25-F (a) and (b) is mandatory. Their Lordships have held that in order to comply with Section 25-F, following conditions have to be satisfied:- “(i) workman given one month’s notice, (a) in writing, (b) indicating the reasons for retrenchment; - 4 - (ii) retrenchment must take effect after expiry of period of one month’s notice or payment in lieu thereof; (iii) at the time of retrenchment, workman be paid compensation, equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months; and (iv) notice in prescribed manner be served on the appropriate Government or such authority as may be specified.” In this case, respondent-Council has only issued one month’s notice and has not paid the retrenchment compensation alongwith the letter of retrenchment. The Municipal Council has not followed the rest of the mandatory provisions, as indicated hereinabove. 7. Their Lordships of Hon’ble Supreme Court in Rajasthan Lalit Kala Academy versus Radhey Shyam, (2008) 13 SCC, 248 have held as under (para 15):- “It is trite that in the event of retrenchment of a workman, employed in any industry, continuously for not less than one year under an employer, compliance with the 8 provisions of Section 25-F of the Act, in particular clauses (a) and (b) thereof is mandatory. A bare reading of Section 25-F of the Act shows that retrenchment within the meaning of Section 2 (oo) of the Act, which admittedly is the case here, must satisfy the following conditions: (i) the workman is given one month's notice - (a) in writing (b) indicating the reasons for retrenchment; (ii) the retrenchment must take effect after the expiry of the period of notice. i.e., one month or else, the workman should be paid in lieu of such notice, wages for the period of the notice: - 5 - (iii) at the time of retrenchment, the workman has been paid compensation, equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months; and (iv) the notice in the prescribed manner is served on the appropriate government or such authority as may be specified.” 8. Similarly, their Lordships of Hon’ble Supreme Court in Anoop Sharma versus Executive Engineer, Public Health Division No.1, Panipat (Haryana), (2010) 5 SCC 497 have held that compliance with clause (b) of Section 25-F is mandatory. Their Lordships have held that the workman cannot be retrenched without payment, at the time of retrenchment, compensation computed in terms of Section 25-F (b). Their Lordships of Hon’ble Supreme Court have held as under (paras 16-22):- “An analysis of the above reproduced provisions shows that no workman employed in any industry who has been in continuous service for not less than one year under an employer can b retrenched by the employer until the conditions enumerated in clauses (a) and (b) of Section 25-F of the Act are satisfied. In terms of clause (a), the employer is required to give to the workman one month’s notice in writing indicating the reasons for retrenchment or pay him wages in lieu of the notice. Clause (b) casts a duty upon the employer to pay to the workman at the time of retrenchment, compensation equivalent to fifteen days’ average pay for every competed year of continuous service or any part thereof in excess of six months. This Court has repeatedly held that Sections 25-F(a) and (b) of the Act are mandatory and non-compliance therewith renders the retrenchment of an employee nullity – State of Bombay v. Hospital Mazdoor Sabha, Bombay Union of - 6 - Journalists v. State of Bombay, SBI v. N. Sundara Money, Santosh Gupta v. State Babnk of Patiala, Mohan Lal v. Bharat Electronics Ltd., L. Robert D’Souza v. Southern Railway, Surendra Kumar Verma v. Central Govt. Industrial Tribunal-cum- Labour Court, Gammon India Ltd. v. Niranjan Dass, Gurmail Singh v. Statet of Punjab and Pramod Jha v. State of Bihar. This Court has used different expressions for describing the consequence of terminating a workman’s service/employment/engagement by way of retrenchment without complying with the mandate of Section 25-F of the Act. Sometimes it has been termed as ab initio void, sometimes as illegal per se, sometimes as nullity and sometimes as non est. Leaving aside the legal semantics, we have no hesitation to hold that termination of service of an employee by way of retrenchment without complying with the requirement of giving one month’s notice or pay in lieu thereof and compensation in terms of Sections 25-F(a) and (b) has the effect of rendering the action of the employer as nullity and the employee is entitled to continue in employment as if his service was not terminated. The question whether the offer to pay wages in lieu of one month’s notice and retrenchment compensation in terms of clauses (a) and (b) of Section 25-F must accompany the letter of termination of service by way of retrenchment or is it sufficient that the employer should make a tangible offer to pay the amount of wages and compensation to the workman before he is asked to go was considered in National Iron and Steel Co. Ltd. v. State of W.B. The facts of that case were that the workman was given notice dated 15-11-1958 for termination of his service with effect from 17-11-1958. In the notice, it was mentioned that the workman would get one month’s wages in lieu of notice and he was asked to collect his dues from the cash office on 20-11-1958 or thereafter during the working hours. The argument of the Additional Solicitor General that there was sufficient compliance with Section 25-F was rejected by this Court by making the following observation: (AIR p 1210, para 9) - 7 - “9. The third point raised by the Additional Solicitor General is also not one of substance. According to him, retrenchment could only be struck down if it was mala fide or if it was shown that there was victimisation of the workman etc. Learned counsel further argued that the Tribunal had gone wrong in holding that the retrenchment was illegal as Section 25-F of the Industrial Disputes Act had not been complied with. Under that section, a workman employed in any industry should not be retrenched until he had been given one month's notice in writing indicating the reasons for retrenchment and the period of notice had expired, or the workman had been paid in lien of such notice, wages for the period of the notice. The notice in this case bears the date 15-11-l958. It is to the effect that the addressee's services were terminated with effect from the 17th November and that he would get one month's wages in lieu of notice of termination of his service. The workman was further asked to collect his dues from the cash office on 20-11-1958 or thereafter during the working hours. Manifestly, Section 25-F, had not been complied with under which it was incumbent on the employer to pay the workman, the wages for the period of the notice in lien of the notice. That is to say, if he was asked to go forthwith he had to be paid at the time when he was asked to go and could not be asked to collect his dues afterwards. As there was no compliance with S. 25-F, we need not consider the other points raised by the learned counsel.” In SBI v. N. Sundara Money the Court emphasised that the workman cannot be retrenched without payment, at the time of retrenchment, compensation computed in terms of Section 25-F(b). The legal position has been beautifully summed up in Pramod Jha v. State of Bihar in the following words: (SCC pp. 624-25, para 10) - 8 - “10. … The underlying object of Section 25-F is twofold. Firstly, a retrenched employee must have one month's time available at his disposal to search for alternate employment, and so, either he should be given one month's notice of the proposed termination or he should be paid wages for the notice period. Secondly, the workman must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to his employer demanding retrenchment compensation and the compensation so paid is not only a reward earned for his previous services rendered to the employer but is also a sustenance to the worker for the period which may be spent in searching for another employment. Section 25-F nowhere speaks of the retrenchment compensation being paid or tendered to the worker along with one month's notice; on the contrary clause (b) expressly provides for the payment of compensation being made at the time of retrenchment and by implication it would be permissible to pay the same before retrenchment. Payment of tender of compensation after the time when the retrenchment has taken effect would vitiate the retrenchment and non- compliance with the mandatory provision which has a beneficial purpose and a public policy behind would result in nullifying the retrenchment.” (emphasis in original) If the workman is retrenched by an oral order or communication or he is simply asked not to come for duty, the employer will be required to lead tangible and substantive evidence to prove compliance with clauses (a) and (b) of Section 25-F of the Act.” 9. Mr. R.P. Singh, learned Assistant Advocate General and Mr. Bhuvnesh Sharma, Advocate have also argued that the petitioner being workman should have approached the machinery - 9 - employed under the Industrial Disputes Act, 1947. It is true that the petitioner should have approached the Labour Court for the redressal of his grievance. However, in the instant case, the petition is pending since January, 2005 and the petitioner had been working continuously on the basis of interim order dated 14th January, 2005 till date. In view of this, instead of relegating the petitioner to avail the alternative remedy, this Court has decided the matter on its own merits. 10. Mr. Bhuvnesh Sharma, learned counsel appearing on behalf of respondents No.3 and 4 has also argued that the retrenchment of the petitioner necessitated in view of Annexure R-3/A. However, the fact of the matter is that the respondents while issuing notice to the petitioner have not followed the mandatory provisions of Section 25-F of the Act. The effect of non- compliance with Section 25-F of the Act is that the retrenchment of the petitioner was a nullity-void ab initio and the petitioner would be deemed to be in continuous service. It is reiterated that the petitioner was entitled to get compensation amount on the date when he was issued notice dated 20th December, 2004. The direction to him to collect the compensation on 27th January, 2005, was not sufficient compliance with Section 25-F(b) of the Act. This question is also no more resintegra in view of law laid down by their Lordships of Hon’ble Supreme Court in M/s. National Iron and Steel Co. Ltd., and others v. The State of West Bengal and - 10 - other, AIR 1967 SC 1206. Their Lordships of Hon’ble Supreme Court have held as under (para 9):- “The third point raised by the Additional Solicitor General is also not one of substance. According to him, retrenchment could only be struck down if it was mala fide or if it was shown that there was victimisation of the workman etc. Learned counsel further argued that the Tribunal had gone wrong in holding that the retrenchment was illegal as S. 25F of the Industrial Disputes Act had not been complied with. Under that section, a workman employed in any industry should not be retrenched until he had been given one month's notice in writing indicating the reasons for retrenchment and the period of notice had expired, or the workman had been paid in lien of such notice, wages for the period of the notice. The notice in this case bears the date November 15, l958. It is to the effect that the addressee's services were terminated with effect from the 17th November and that he would get one month's wages in lieu of notice of termination of his service. The workman was further asked to collect his dues from the cash office on. November 20, 1958 or thereafter during the working hours. Manifestly, S. 25F, had not been complied with under which it was incumbent on the employer to pay the workman, the wages for the period of the notice in lien of the notice. That is to say, if he was asked to go forthwith he had to be paid at the time when he was asked to go and could not be asked to collect his dues afterwards. As there was no compliance with S. 25F, we need not consider the other points raised by the learned counsel. This conclusion receives support from the observations of this Court in Bombay Union of Journalists v. State of Bombay, (1964) 6 SCR 22 at pp. 31-32: (AIR l964 SC 1617 at p. 1623). Incidentally it may also be pointed out that the retrenchment of Sushil does not seem to be otherwise justified in that following the principle of 'last come first to go', Sushil could not be called upon to leave the company's service. Another employee by name Joy Kishen, junior to Sushil, was retained in service. No doubt, the Labour Officer, Jha, tried to make out a case in his oral evidence that Joy Kishen was - 11 - retained in service because he was doing a special job at the time while Sushil was not. The Tribunal rejected this contention on the ground that this plea had not been put forward in the written statements of the company and we do not see any reason why we should take a different view.” 10. Their Lordships of Apex Court in The State Bank of India versus Shri N. Sundara Money, (1976) 1 SCC 822 have held that the workman cannot be retrenched without payment, at the time of retrenchment, compensation computed in terms of Section 25-F(b) of the Act. Their Lordships of Apex Court have held as under (pera 8):- “Without further ado, we reach the conclusion that if the workman swims into the harbour of Sec. 25F, he cannot be retrenched without payment, at the time of retrenchment, compensation computed as prescribed therein read with Section 25B(2). But argues the appellant, all these obligations flow only out of retrenchment, not termination outside that species of snapping employment. What, then, is retrenchment ? The key to this vexed question is to be found in S.2 (oo) which reads thus: "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 (c) termination of the service of a workman on the ground of continued ill-health;" - 12 - For any reason whatsoever – very wide and almost admitting of no exception. Still, the employer urges that when the order of appointment carries an automatic cessation of service, the period of employment works itself out by efflux of time, not by act of employer. Such cases are outside the concept of 'retrenchment' and cannot entail the burdensome conditions of Section 25F. Of course, that a nine-days' employment, hedged in with an express condition of temporariness and automatic cessation, may look like being in a different street (if we may use a colloquialism) from telling a man off by retrenching him. To retrench is to cut down. You cannot retrench without trenching or cutting. But dictionaries are not dictators of statutory construction where the benignant mood of a law and, more emphatically, the definition clause furnish a different denotation. Section 2 (oo) is the master of the situation and the Court cannot truncate its amplitude.” 11. Similarly, their Lordships of Hon’ble Supreme Court in Pramod Jha and others versus State of Bihar and others, (2003) 4 SCC 619 have held that the payment or tender of compensation after the time when the retrenchment has taken effect would vitiate the retrenchment and non-compliance with the mandatory provision which has a beneficial purpose and a public policy behind it would result in nullifying the retrenchment. Their Lordships have held as under (para 10):- ”We have given our anxious consideration to submission and counter-submission made before us in the light of the pleadings and undisputed documents available on record. We are of the opinion that the appeals are devoid of any merit and liable to be dismissed. The underlying object of Section 25-F is twofold. Firstly, a retrenched employee must have one month's time available at his disposal to search for alternate employment, and so, either he should be given one mouth's notice of the proposed termination or he should be paid wages for the notice period. Secondly, the workman must be paid retrenchment - 13 - compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to his employer demanding retrenchment compensation and the compensation so paid is not only a reward earned for his previous services rendered to the employer but is also a sustenance to the worker for the period which may be spent in searching for another employment. Section 25-F nowhere speaks of the retrenchment compensation being paid or tendered to the worker along with one month's notice; on the contrary clause (b) expressly provides for the payment of compensation being made at the time of retrenchment and by implication it would be permissible to pay the same before retrenchment. Payment of tender of compensation after the time when the retrenchment has taken effect would vitiate the retrenchment and non- compliance with the mandatory provision which has a beneficial purpose and a public policy behind would result in nullifying the retrenchment.” 12. What emerges from the above observations and discussion is that the petitioner has been continuously working as Sweeper since 27th February, 1999. The retrenchment of the petitioner for non-compliance with the mandatory provisions of Section 25-F of the Act by the Municipal Council, Una is a nullity. His case was also required to be considered for regularization. The action of the respondents to extract the work from petitioner as Sweeper and not to regularise him amounts to unfair labour practice. Respondent-Council is a State within the meaning of Article 12 of the Constitution of India. It should act like a model employer. 13. Accordingly, in view of the observations and discussion made hereinabove, the petition is allowed. Annexure - 14 - A-2, dated 20.12.2004 is quashed and set aside. Retrenchment of the petitioner is declared void ab initio. The petitioner shall be deemed to be in continuous service for all intents and purposes. Respondent No.3 is directed to forward the case of the petitioner for regularization to respondent No.2 within a period of one month after the receipt of certified copy of this judgment. Thereafter, respondent No.2 shall accord necessary permission to respondent No.3 for regularization of the services of petitioner. The pending application(s), if any, also stands disposed of. The petitioner is entitled to costs quantified at ` 5,000/-. (Rajiv Sharma), Judge. February 23, 2011. (sck).