SCA/14161/2007 1/42 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 14161 of 2007 With SPECIAL CIVIL APPLICATION No. 14163 of 2007 To SPECIAL CIVIL APPLICATION No. 14168 of 2007 With SPECIAL CIVIL APPLICATION No. 17181 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE S.R.BRAHMBHATT ================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================= SANJAY C. PATEL & 6 - Petitioners Versus GUJARAT URJA VIKAS NIGAM LTD. & 1 - Respondents ================================================= Appearance : MR TR MISHRA for Petitioners : 1 - 7. RULE SERVED BY DS for Respondents : 1 - 2. MS LILU K BHAYA for Respondent : 2, ================================================= CORAM : HONOURABLE MR.JUSTICE S.R.BRAHMBHATT Date : 29/12/2008 CAV COMMON JUDGMENT : 1. This group of petitions involve almost identical facts and common question of law, hence they were heard SCA/14161/2007 2/42 JUDGMENT together and are being disposed of by this common judgment & order. 2. The petitioners in petition No. 14161 of 2007 and Special Civil Application No. 14163 to 14168 of 2007 were working as helpers in Thermal Power Station at Gandhinagar of erstwhile Gujarat Electricity Board, now known as Gujarat Urja Vikas Nigam Limited. The petitioner in Special Civil Application No. 17181 of 2007 is Gujarat State Electricity Corporation Ltd, formerly known as Gujarat Electricity Board. In the petitions filed by the workmen, office order dated 12/6/2007 is impugned on the ground that the said order is passed contrary to the principle of law and ignoring the decision in the award dated 20/1/2007 passed in Reference (I.T.) No. 25/2004 where under the respondent Gujarat Electricity Board and its successor was directed to hold proper inquiry following the procedure prescribed in Gujarat Electricity Board Establishment Manual, Chapter-8 and as per the prevalent Service Regulations. The Gujarat Urja Vikas Nigam Limited has challenged Award and order dated 20.01.2007 passed in Reference (IT) No. 25/2004 only so far as it contains direction for holding inquiry following the provisions of prevalent service regulations and in accordance with the provisions of Chapter-8 of Gujarat Electricity Board Establishment Manual in respect of Notice dated 26/11/2002, on the ground that said direction is not in consonance with the provision of law and hence the same deserve to be quashed and set aside. SCA/14161/2007 3/42 JUDGMENT 3. For the sake of convenience the workmen are going to be referred to as the “Petitioners” and the Gujarat Electricity Board or employer is going to be referred to as “Respondent” herein after. 4. Facts in brief deserve to be set out as under in order to appreciate the controversy involved in these petitions. It was the case of the petitioners that they were working as contract labourers prior to 1996 at Thermal Power Station, Gandhinagar of Gujarat Electricity Board (hereinafter referred to as “GEB TPS” for the sake of brevity). The State of Gujarat in exercise of the power conferred by sub section (1) of Section 10 of the 'The Contract Labour (Regulation and Abolition) Act, 1970 [herein after referred to as the “Abolition of Contract Labour Act”] issued notification dated 9/6/1997 prohibiting employment of contract labour in the establishments specified thereunder which included GEB-TPS, Gandhinagar. On abolition of the contract labour at GEB-TPS, Gandhinagar, the contract labours were required to be absorbed as permanent employees of the then Gujarat Electricity Board and accordingly the present petitioners also came to be absorbed as employees of Gujarat Electricity Board. The petitioners were discharging their duties to the satisfaction of their superiors, however their services came to be terminated on 11/9/1998 or there about without affording them any SCA/14161/2007 4/42 JUDGMENT opportunity of being heard or informing them about the reason for such abrupt termination. The petitioners therefore were constrained to file Special Civil Application No. 7928 of 1998 challenging the said termination orders. During pendency of the said petition the respondent decided to withdraw the order of termination of service of the petitioners and prayed for liberty for passing appropriate orders of the termination of service of the petitioners in accordance with law. In view of this decision a statement came to be made before the Court in the aforesaid petition being Special Civil Application No. 7928 of 1998 wherein this Court (Coram: S.K. Keshote,J, as he then was) passed the following order on 24/6/1999. “ The petitioners in this Special Civil Application are challenging the order of the respondent No.1 terminating their services. The Counsel for the respondent No.1 makes a statement before this Court that the respondent No.1 shall withdraw the order of termination of services of the petitioners. However, the counsel for the petitioners state that the Board may be directed to reinstate the petitioners back in service within time bound programme. The Board has prayed for giving it liberty for passing appropriate orders of the termination of services of the petitioners in accordance with law. No such liberty has to be granted because it is always open to the Board to act in accordance with law where it considers necessary of termination of the services of the petitioners. SCA/14161/2007 5/42 JUDGMENT In view of the statement of the Counsel of the respondent No.1, this petition has become infructuous and the same is dismissed. Rule discharged. The Board is directed to complete all the formalities of withdrawing the order of terminating the services of the petitioners and to reinstate the petitioners back in service within a period of seven days from today. No order as to costs. “ 5. Thus the petitioners came to be reinstated as per the say of the petitioners on 12/7/1999. It is to be noted that after reinstatement of the petitioners on 12/7/1999 they came to be confirmed also vide order dated 25/10/1999 and the said order is placed on record of these proceedings. It is required to be noted that thereafter a show cause notice came to be issued to the petitioners on 26/11/2002 calling upon the petitioners to show cause as to why their services shall not be terminated forthwith as they had never worked as contract labours prior to the appointed day, i.e. the day on which the contract labour came to be abolished in GEB-TPS, Gandhinagar on 9/6/1996 or before that and as such they had obtained the employment fraudulently and fraudulent employment being void ab initio they were liable to be terminated forthwith. The petitioners gave detailed reply to the show cause notice and thereafter on 16/1/2003 second show cause notice came to be issued to them informing them that as the Board was to follow principle of natural justice, pursuant to the show cause notice dated 26/11/2002, petitioners were afforded an opportunity for putting up their say and making oral as well as written representation on 27/1/2003 at 2.30 p.m. In the office of Chief Engineer (Generation), Gandhinagar. SCA/14161/2007 6/42 JUDGMENT 6. The Petitioners being aggrieved and dissatisfied with this attitude and approach of the respondent moved Special Civil Application No. 693/2003 and also issued through union a notice demanding settlement of dispute for dropping the said notice as the mandatory provision of holding inquiry had not been followed. Pursuant to the raising of industrial dispute with regard to not following the procedure and proceeding with the show cause notice for termination the competent authority referred the matter for adjudication to the Industrial Court wherein it was registered as Reference (I.T.) No. 25/2004. As the matter was referred for adjudication to the competent industrial forum the petition being Special Civil Application No. 693 of 2003 came to be withdrawn on 10/2/2004. 7. The petitioners filed application for interim relief in I.T. Reference No. 25/2004 vide exhibit-7 for maintaining status quo with regard to their service condition during pendency of the reference as there was genuine apprehension on their part that during pendency of the petition, as there was no stay order granted, their services would be terminated abruptly without following the due process of law. The Industrial Court after hearing rival contentions of the parties rejected the same vide order dated 6/10/2004 and fixed the matter for further hearing on 2/11/2004. SCA/14161/2007 7/42 JUDGMENT 8. Being aggrieved and dissatisfied with the said order dated 6/10/2004 rejecting exhibit-7 application for interim relief for maintaining status-quo with regard to service conditions during pendency of the reference, petitioners preferred writ petition being Special Civil Application No. 14106 of 2007 wherein they obtained ad- interim relief. Ultimately the said petition came to be disposed of by this Court (Coram: H.K. Rathod, J) vide order dated 30/6/2006 issuing direction to the Industrial Tribunal (Gujarat) Ahmedabad to adjudicate and decide finally the Reference (I.T.) No. 25/2004 within a period of four months from the date of receiving copy of the said order without any further delay, and ordered continuation of interim relief granted by this Court on 25/10/2004 to continue till the date the award that may be rendered by the Industrial Tribunal in Reference (I.T.) No. 25/2004 becomes enforcible in law. The Tribunal rendered its award on 20/1/2007 which was communicated to the parties on 7/4/2007. In the said order the Tribunal though did not quash the notice dated 26/11/2002 but declared that petitioners were entitled to receive full opportunity in the full-fledged inquiry as per the procedure prescribed in Chapter-8 of Establishment Manual and other service regulations prevalent in GEB. Pursuant to this award it was expected as per the say of the petitioners that, the respondent would hold disciplinary proceedings in accordance with provision of Chapter-8 and afford opportunity of defending their respective cases in accordance with service regulations prevalent in GEB. But the respondent instead of following the procedure of inquiry as SCA/14161/2007 8/42 JUDGMENT prescribed under Chapter-8 of the Establishment Manual and Service Regulations issued impugned order dated 12-06-2007 terminating the petitioners' service. 9. The petitioners in Special Civil Application No. 14161 of 2007 and Special Civil Application No. 14163 of 2007 to 14168 of 2007 have preferred present petitions challenging this order dated 12/6/2007 in this set of petitions for the reasons and the grounds set out in the petitions. While the respondent GEB or its successor firstly passed the order dated 12.06.2007 without following the provisions of Chapter 8 of the Establishment Manual and Service Regulations, ignoring the mandatory direction of the Industrial Tribunal in its Award dated 20.01.07 but later on decided to challenge the same by filing Spl.C.A. 17181 of 2007. 10.It is required to be noted that the termination order dated 12/6/2007 was assailed in this group of petitions by the petitioners and on 14/6/2007 this Court (Coram: H.K. Rathod, J) passed order issuing notice to the respondent which was made returnable on 22/6/2007. On 22/6/2007 this Court (Coram: H.K. Rathod, J) recorded that though served no one has appeared on behalf of the respondent and the advocate for the petitioners were requesting for grant of interim relief. When the petitioners services were terminated on 12/6/2007 and the petitions were filed on 13/6/2007 the Court had issued only notice on 14/6/2007 and not granted initial ad-interim relief against the termination SCA/14161/2007 9/42 JUDGMENT order of 12/6/2007 with a view to give opportunity before passing ex parte ad-interim relief against the respondent and hence only notice was issued so that the respondent can appear and defend. The Court further recorded that as this opportunity was not availed the Court granted ad- interim relief against implementation of the order of termination order dated 12/6/2007 with a direction to the respondent to reinstate the petitioners in service and the matter was fixed for confirmation of ad-interim relief on 17/7/2007. On 19/7/2007 this Court (Coram: H.K.Rathod, J) issued 'Rule Expedited” and stayed the order of termination dated 12/6/2007. It appears that in the meantime the respondent also filed writ petition being Special Civil Application No. 17181/2007 challenging the award of the Tribunal passed on 20/1/2007 in Reference (IT) No. 25/2004 and therefore this Court (H.K. Rathod, J) on 5/9/2007 clubbed all the matters together and ordered it to be notified on 12/9/2007. On 12/9/2007 this Court (H.K. Rathod, J) passed order indicating that the order dated 19/7/2007 needed to be clarified and therefore it was stated that the workmen concerned shall not take any steps against the employer for non implementation of the order of this Court dated 19/7/2007. 11. The respondent filed petition as it is stated herein above being Special Civil Application No. 17181/2007 challenging the award dated 20/1/2007 passed in SCA/14161/2007 10/42 JUDGMENT Reference (IT) No. 25/2004 only to the extent that it held that it was mandatory for the petitioners that is the present respondent to follow the procedure as prescribed in Chapter-8 of Establishment Manual & Service Regulations. Thus these matters were clubbed together, heard & are being disposed of by this common judgment. 12. Learned counsel Mr. Mishra for the petitioners in Special Civil Application No. 14161/2007 and Special Civil Application No. 14163 to 14168 of 2007 has contended that in the present case looking to the nature of allegation and other facts the respondent was under duty to conduct the departmental inquiry and take appropriate action as per the service regulations. Shri Mishra contended that the Tribunal has not entered in to merits of the case and has merely directed to afford reasonable opportunity and conduct the departmental inquiry as per provision prescribed in Chapter-8 of the Establishment Manual & Service Regulations and therefore, the order impugned which is passed without following the procedure is per se illegal and requires to be quashed and set aside. 13.Shri Mishra relied upon the decision of the Apex Court in case of AJIT SINGH AND OTHERS V. STATE OF PUNJAB AND ANOTHER, reported in (1983) 2 SCC 217 and contended that the respondent's act of confirming the present petitioners after withdrawing the original order of termination of 1998, which was also passed SCA/14161/2007 11/42 JUDGMENT after considering the fact that the petitioners were allegedly not in service with the contractor at TPS, Gandhinagar, the respondent can not brush aside the requirement of holding inquiry as per the service rules and Chapter-8 of the Establishment Manual & Service Regulations on a specious plea of so called ab initio void employment. In the case cited also the Honourable Supreme Court observed that services of the even temporary government servant cannot be terminated arbitrarily if such termination is tainted with arbitrariness than authorities' such act would not be justified on the ground of it action being in accordance with the terms of employment. In the instant case after having confirmed the employees in light of the existing circumstances it was not open to the respondent to deny them the legitimate right to be subjected to the inquiry wherein they would get the right to defend themselves properly. Therefore not holding departmental inquiry in accordance with provision of Chapter-8 of Establishment Manual becomes arbitrary, capricious and render the order made pursuant thereto illegal. 14.Shri Mishra has also relied upon the decision of the Apex Court in case of STATE OF M.P. AND OTHERS Vs. KESHAV, reported in (1996) 2 SCC 21 and contended that in a given set of circumstance it was not open to the respondents to terminate petitioners' services without holding proper inquiry as envisaged under Service Regulations. The impugned order of termination is assailed only on the ground of not holding inquiry as SCA/14161/2007 12/42 JUDGMENT directed by the Tribunal in its award dated 20/1/2007. Shri Mishra contended that the respondent was under duty to hold fulfledged inquiry before terminating the service and their right to defend themselves during the inquiry can not be curtailed. The impugned order dated 12/6/2007, which was passed without holding fulfledged inquiry as directed by the Tribunal can not be sustained and the same require to be quashed and set aside. 15. Ms. Bhaya, learned counsel for the respondent and petitioner in Special Civil Application No. 17181 of 2007 has contended that the order passed by the Tribunal has not been challenged by the present petitioners and as per the order of the Tribunal dated 20/1/2007 passed in Reference (IT) No. 25/2004, the Industrial Tribunal has observed as could be seen from page 56 that the respondent has the right to take action against the petitioners herein, therefore the demand of the petitioners to set aside notice dated 26/11/2002 has not been accepted by the Tribunal and it has given only one direction that the respondent should take action in respect of this notice as per Chapter-8 of the Establishment Manual and Service Regulations. Ms. Bhaya contended that on abolition of Contract Labour at TPS, Gandhinagar w.e.f. 9/6/1997 the contract labours were required to be absorbed in the regular employment of Gujarat Electricity Board. The petitioners claim that they were working in Skywin Erectors Contractor as could be seen from their identity card which were produced before the Tribunal in Reference (IT) No. SCA/14161/2007 13/42 JUDGMENT 25/2004. They joined in service after 9/6/1997 with the contractor and those documents are produced at page 71 to 74. Thus they were not entitled to be employed and fraudulently procured employment was void ab initio. Through mistake or oversight this facts were not noticed by the respondent and therefore the petitioners were absorbed. In such facts & circumstances the fulfledged inquiry is unwarranted as their absorption in regular employment was erroneous it was void ab initio and therefore there was no requirement of fulfledged inquiry as demanded. 16.Ms. Bhaya has further submitted that:- (1) it is the same unions who had brought to the notice of the respondent vide its letter dated 22/2/1998 that the petitioners and others were not working with the contractor before 9/6/1997 and in collusion with some of the contractors and officers of GEB they have obtained employment and they were never on the roll of the contractor. Ms. Bhaya further contended that GEB, the predecessor of the present company started inquiry in the aforesaid aspect on 22/7/1998 and the report was prepared and it was brought to the notice of GEB that the present petitioners had never been engaged by the contractor prior to the appointed day i.e. 9/6/1997 and therefore it can be said that they had procured the employment production of false certificate. On 11/9/1998 the services of the petitioners were terminated with immediate effect. The petitioners filed SCA/14161/2007 14/42 JUDGMENT petition challenging the same. And as the said order was passed without affording any opportunity of being heard the Board withdrew the same and made a statement before the Court in that petition that the respondent be granted liberty to terminate petitioners services in accordance with law and the Court observed that there was no requirement of reserving such liberty as it was always open to them to act in accordance with law. Accordingly the petitioners were reinstated in service on 2/7/1999. As in the inquiry conducted earlier it was noticed that one officer of the Board was involved and show cause notice dated 26/11/2002 came to be issued to the petitioners giving all the details and calling upon the petitioners to show cause as to why their services should not be terminated as there appointment itself was void ab initio as it was illegal and as it was obtained by misrepresenting. They were called upon to put up their explanation or reply on 3/12/2002 at 2.30 p.m. The petitioners did not come out with any fact with regard to they being in employment but rather they started questioning the action. The explanation is therefore not indicating anywhere that they were in service prior to 6/9/1997 i.e. appointed date with Skywin Erectors Contractors. Once again the Board called upon them to give appropriate reply vide notice dated 3/12/2002 but they did not remain present. On 16/1/2003 again a second show cause notice was issued to the petitioners and it was made very clear to the petitioners that there was no need to conduct any departmental inquiry or to act in accordance with Chapter-8 of Establishment Manual or Service Regulations because this action can SCA/14161/2007 15/42 JUDGMENT be taken against the employee who was appointed illegally. Since their appointment was illegal there was no need to follow the procedure as provided in the service regulations. It was only in the interest of justice that they were called again to make representation if any in defense of their case on 27/1/2003 as per the notice dated 16/1/2003. On 27/1/2003 representative of the petitioners remain present but they did not come with any reply or document. (2) Ms. Bhaya has further contended that in the reply filed by the GEB before the Industrial Tribunal at exhibit- 11 it has been specifically contended in para – 13 that the petitioners have joined the contractor after 1/10/1997 and as they were not in employment on 9/6/1997 they were not eligible for absorption. It was by mistake of the respondent that the petitioners were given regular employment. The petitioners have misrepresented and therefore their services were terminated on 11/9/1998 and thereafter because of the Court proceedings the petitioners have continued. (3) Ms. Bhaya has further contended that the document in respect of Reference (IT) No. 76/1996 were also produced before the Industrial Tribunal wherein it was brought to the knowledge of the Tribunal that settlement which are arrived under this Notification and number of workers working in Ash Handling and Coal Mill Plant total 52 workers for which settlement had arrived, wherein the petitioners names did not figure. That also SCA/14161/2007 16/42 JUDGMENT go to show that the petitioners were not in employment prior thereto. Mrs. Bhaya further submitted that vide exhibit-18 petitioner Sanjay C. Patel was examined. It was necessary to bring to the notice of the Court that in the affidavit filed by Mr. Sanjay Patel nowhere he mentioned that he has been appointed prior to 9/6/1997. During cross examination he has admitted that he was with Skywin Erectors Contractors and said company had given identity card to all workers have put up their signatures thereon the details given with photographs have been supplied by the workers themselves. All such pohto I-cards have been produced at exh. 19/1 to 19/8. Therefore this document which were produced along with affidavit go to show that their appointments with contractor were subsequent to the notification and they were not entitled to be absorbed in respondent. The show cause notice and charge sheet issued to the employee of the GEB, who had played role in appointing all such workers like petitioners who had joined after 9/6/197, one Shri C.H. Shah were produced before the Industrial Tribunal. The names of the petitioners to whom appointment letters were issued by him also produced before the Industrial Tribunal. One Gunwantlal Nanalal Vyas had been examined at exhibit- 20 and he admitted in his cross examination that their unions had filed Reference IT No. 76/1996 for absorbing all the workers of Skywin Erectors Contractors and he also admitted that in the said reference the names of the petitioners were not included. It was also admitted by him that their union has demanded that in view of the Notification all the workers who were working with the SCA/14161/2007 17/42 JUDGMENT contractor up to 9/6/1997 were required to be absorbed. (4) It is further submitted by Ms Bhaya that respondent's officer Shri Rana who was DGM at the relevant time had stated in his testimony that Skywin Erectors Contractor was given contract for Coal Mill Maintenance and Ash Plant operation and maintenance and some of the workers have been wrongly shown in the aforesaid contractor's register. That total 22 workers were shown which had increased to 40. He has also