C.W.P. No.2422 of 1983 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** C.W.P. No.2422 of 1983 Date of Decision:23.09.2008 The Management of M/s Escorts Limited, Plant No.I, Mathura Road, Faridabad .....Appellant Vs. Kesar Chand and another .....Respondents CORAM:- HON'BLE MR. JUSTICE HARBANS LAL Present:- Mr. D.S. Patwalia, Advocate for the petitioner. Mr. Sanjay Majithia, Senior Advocate with Mr. Surinder Sharma, Advocate for the respondents. **** HARBANS LAL, J. This petition has been moved by the Management of M/s Escorts Limited, Plant No.I, Mathura Road, Faridabad under Articles 226/ 227 of the Constitution of India for quashing the award dated 14.10.1982 (Annexure P.15). The biref facts giving rise to this petition are that Kesar Chand- respondent joined the service of the petitioner on 30.10.1975 as Trainee by appointment letter dated 28.10.1975. After his training came to an end, he was appointed as an Inspector with effect from 1.5.1976 by an order dated 30.4.1976. The petitioner received an ESI (Information of Sickness) slip dated 11.3.1980 in which it was mentioned that the workman has been needing medical treatment and attendance with effect from 6.3.1980. In pursuance of this, he was treated on leave upto 17.3.1980. The conditions C.W.P. No.2422 of 1983 -2- of service of the respondent and other workmen are governed by the Standing Orders certified under the Industrial Employment (Standing Orders) Act, 1946 (for short `the Standing Orders'). Clause 37 of the Standing Orders reads in the terms that “a workman who absents himself for 10 consecutive days or overstays leave beyond the period of leave originally granted or subsequently extended for 10 consecutive days will be deemed to have left the service of the Company without notice. The Company in such case need not give any notice of termination to the workman as it will be deemed to be a case of voluntary abandonment of service.” The respondent remained absent for more than ten days with effect from 18.3.1980. He was treated as having left his employment under the aforesaid clause and consequently, his name was struck off from the rolls of the petitioner. He raised a dispute, which was referred for adjudication to the Labour Court. In his claim statement, the respondent stated that he was appointed as Trainee on 30.10.1975 and he was made regular from 1.5.1976. As far as his absence is concerned, his case was that he had duly informed the Management through the leave application dated 31.3.1980, but he was wrongly stopped from 1.4.1980 without any charge-sheet or retrenchment compensation. After hearing the representatives of the parties and examining the evidence, the Labour Court held that “further in the interest of natural justice, the respondent should have given the opportunity to explain about his absence from duty and after decision they can take some action by rejecting his reply, which shows that the striking off the name of the workman was not justified and in order and the workman is entitled for his reinstatement with full back-wages and continuity of service.” In his written statement, the workman has averred that the C.W.P. No.2422 of 1983 -3- termination of his services amount to retrenchment within the meaning of Section 2(oo) of the Industrial Disputes Act (for brevity, `the Act') and the same was illegal for non-compliance with Section 25-F of the Act. Before terminating his services, the principles of natural justice were not followed inasmuch as no notice whatsoever was given to him and the action was taken behind his back. The leave was applied on medical grounds. It is not disputed that the Standing Orders are binding but such orders cannot be in conflict with the provisions of the Act and in case of conflict, the provisions of the Act would prevail. As per clause 22(a) of the Standing Orders, full opportunity to defend himself is to be given to a workman before an order for dismissal on the ground of misconduct is to be passed. Lastly, it has been prayed that this petition may be dismissed with costs. I have heard the learned counsel for the parties besides perusing the findings returned by the learned Presiding Officer of the Labour Court as well as the documents placed on record with due care and circumspection. Mr. D.S. Patwalia, Advocate appearing on behalf of the petitioner urged with great eloquence that the only factual question to be decided was whether the claimant- workman absented from his duty for more than the stipulated period which according to Clause 37 ibid was 10 days. If he, so absented for more than 10 days, then it was a case of voluntary abandonment of service in accordance with the Standing Orders. It is not an industrial dispute within the meaning of Section 2-A of the Act as the workman was deemed to have left his employment in accordance with the provisions of the Standing Orders. Such cessation of employment is not discharge, dismissal, retrenchment or termination within the meaning of C.W.P. No.2422 of 1983 -4- Section 2-A ibid. After a loss of lien, an employee ceases to be a workman as defined in Section 2(s) of the Act because it cannot be said that he was dismissed, discharged or retrenched. The alleged application dated 31.3.1980 was not received by the Management. The workman was sanctioned leave from 11.3.1980 to 17.3.1980 whereafter he did not report for duty nor did he apply for any extension of leave, he, thus, overstayed his sanctioned leave in contravention of Clause 37 ibid. As such, he was deemed to have left the Company with effect from 1.4.1980 and a letter to that effect was sent to him as per Registered A.D. post. He did not come to the factory on 1.4.1980. He further puts that as the services of the workman were never terminated by the Management, so there was no need to hold an inquiry which was required if he had been charged with misconduct. As would be apparent from Annexure P.9, the copy of statement of S.K. Sehgal, MW-1, except Ex.M.1, no other application/ medical certificate etc., or information had been received from the workman. It is further in the evidence of N.S. Ratra, MW-2, Annexure P.10, the petitioner had sent the letter intimating the workman that his name had been struck off from the rolls vide letter Ex.M/6 sent through registered post with A.D. and before writing letter Ex. M/6, inquiry was got made through Head Time Keeper as to whether any information or application had been received on behalf of the workman. It is in the cross-examination of Kesar Chand, workman, statement as WW2, Annexure P.12 that he had sent a medical certificate from 6.3.1980 to 9.3.1980 by hand through his tenant and he had not sent anything else. This entire evidence leaves no scope for doubt that indeed the workman did not seek extension of leave nor he got the leave sanctioned and that being so, the Labour Court was not justified in passing the C.W.P. No.2422 of 1983 -5- impugned award. To fortify these contentions, he has sought to place reliance upon the observations made in re: Punjab and Sind Bank and others v. Sakattar Singh, (2001) 1 Supreme Court Cases 214; and National Engineering Industries Limited, Jaipur v. Hanuman, AIR 1968 Supreme Court 33. To controvert these submissions, Mr. Sanjay Majithia, learned Senior Advocate representing the respondent argued that a careful delving into the statements referred to by Mr. Patwalia would reveal that as a matter of fact, the respondent had sought extension by sending application on the ground of his illness. For a little while, if it is assumed that he had overstayed leave, nonetheless, his name could not be struck off from the rolls of the petitioner- Company whimsically and without affording an opportunity of being heard to him in adherence to the principles of natural justice. He further argued that striking off his name in such a manner virtually tantamounts to retrenchment qua which no compensation has been given to the workman. If it is assumed that he was guilty of misconduct despite that in view of Clause 22 of the Standing Orders, his services could not be terminated without giving him full opportunity to defend himself in a domestic inquiry in accordance with the Standing Orders particularly when admittedly he was a confirmed employee. Thus by no process of reasoning, the impugned award can be faulted with. To buttress these stances, he has relied upon Uptron India Limited v. Shammi Bhan and another, (1998) 6 Supreme Court Cases 538; Shri D.K. Yadav v. M/s JMA Industries Limited, 1993 (4) Services Law Reporter 126; Mohan Lal v. The Management of M/s Bharat Electronics Limited, AIR 1981 Supreme Court 1253; L Robert D'Souza v. The Executive Engineer, Southern C.W.P. No.2422 of 1983 -6- Railway and another, AIR 1982 Supreme Court 854; Naresh Chandra Das v. Seventh Industrial Tribunal and others, 1982 Lab I.C. 579; Nicks (India) Tools v. Ram Surat and another, (2004) 8 Supreme Court Cases 222. I have given a deep and thoughtful consideration to the rival contentions. As surfaces in the cross-examination of N.S. Ratra, MW.2 Annexure P.10 “we did not write a letter to the workman as to why he had not joined the duty. To do so was not necessary according to our S.O.” This spells out that no letter was written to the respondent for not joining the duty. The respondent as WW.2 in his statement Annexure P.12 has stated that he was confirmed on 1.8.1976. He fell sick on 6.3.1980. He sent a medical certificate for leave from 6.3.1980 to 9.3.1980. Then, he sent medical certificate from 6.3.1980 to 11.3.1980 and that was accompanied by a leave application which was for grant of leave upto 30.3.1980. I sent this application through Shri Dalip Rana WW.1. I went to the gate of the factory on 1.4.1980. I was told then that my name had been struck off the rolls. It is in his further evidence that “I had sent fitness certificate to the respondent on 12.4.1980. I did not wish to leave the job. While terminating my services, the respondents had not paid me any compensation. I am not employed now anywhere but I am unemployed. I used to draw Rs.737/- as pay. My job in the factory was to check the material manufactured there”. It is in his cross-examination that “I had sent medical certificate from 6.3.1980 to 9.3.1980 by hand through my tenant”. It is in the statement of Dalip Raina, MW-1, Annexure P.14 that “the workman gave me the application and medical certificate for the submission in the factory. That was from 6.3.1980 to 9.3.1980 and 10 to 11. I handed over the same to Mr. C.W.P. No.2422 of 1983 -7- Sabharwal, Inspector under the instruction of Mr. Sehgal and also he asked me about the welfare of the workman and I used to inform him about the condition of Kesar Chand”. It is in his further statement that “the workman also gave me an application for extension of leave which was submitted to Mr. Sabharwal”. The learned Presiding Officer of the Labour Court has observed that the dates on the certificates are very clearly given but the respondent has taken the certificate from 11.3.1980 to 17.3.1980 and after that they took no step for the information of the workman when the workman was absent from duty. It was duty of the Management to send him letters about his absence or ask him to join his duty. Needless to say, the above discussed evidence is supportive of this observation. The sending of the applications for extension of leave with medical certificate is also fortified by the above referred statement of Dalip Raina. In re: Shri D.K. Yadav (supra), the name of the workman was struck off from the rolls for absence from duty. The Apex Court held that “it amounts to retrenchment. A fair play required that a reasonable opportunity should be given to the employee to put forth his case and proper inquiry was required to be held.” If the matter is viewed in the light of these observations, striking off name of the workman from the rolls of the petitioner- Company amounts to retrenchment. It is pertinent to point here that admittedly, no domestic inquiry was held nor opportunity of hearing was given to the respondent nor any effective order of retrenchment was passed. As held by the Apex Court in re: Mohan Lal (supra), “where the termination is illegal especially where there is ineffective order of retrenchment, there is neither termination nor cessation of service and a declaration follows that the workman concerned continues to be in service with all consequential benefits, C.W.P. No.2422 of 1983 -8- namely, back wages in full and other benefits.” In re: Naresh Chandra Das (supra), the services of the workman were terminated in accordance with the Standing Orders for continued absence without leave of Company. It was held that “the termination amounted to retrenchment within the meaning of Section 2(oo) of the Act and the same was illegal for non- compliance with Section 25-F of the Act”. Thus, on looking the matter, in the background of these authorities, termination of the services of the respondent amounted to retrenchment and the same was illegal without the compliance of the provisions of Section 25-F ibid. In re: Shammi Bhan and another (supra), the Apex Court held as under: “Conferment of “permanent” status on an employee guarantees security of tenure. Services of a permanent employee, whether employed by the Government, or government company or government instrumentality or statutory corporations or any other “authority” within the meaning of Article 12, cannot be terminated abruptly and arbitrarily, either by giving him a month's or three months' notice or pay in lieu thereof or even without notice, notwithstanding that there may be a stipulation to that effect either in the contract of service or in the Certified Standing Orders. In view of the above legal position, action taken against respondent who was a permanent employee was wholly illegal. xx xx xx xx xx xx Any clause in Certified Standing Orders providing for automatic termination of service of a permanent employee, not C.W.P. No.2422 of 1983 -9- directly related to “production” in a factory or industrial establishment, would be bad if it does not purport to provide an opportunity of hearing to the employee whose services are treated to have come to an end automatically”. In this case of Shammi Bhan and another (supra), respondent No.1 had proceeded on maternity leave from 7.11.1984 till 29.1.1985. Thereafter, she allegedly remained absent with effect from 30.1.1985 to 12.4.1985 without any application for leave and consequently by order dated 12.4.1985, the petitioner informed her that her services stood automatically terminated in terms of Clause 17(g) of the Certified Standing Orders. The Tribuanl by its award dated 21.7.1992, held that the termination of services of respondent No.1 amounted to “retrenchment” within the meaning of Section 2(oo) of the Industrial Disputes Act, 1947 and since all other legal requirements had not been followed, the termination was bad and consequently, she was entitled to reinstatement as also 50% of back-wages from the date of termination till reinstatement. The Apex Court held that this case does not fall in either of the two situations contemplated by Clause (bb) “Rule of Exception”, therefore, is not applicable in the instant case and consequently, the finding recorded by the Tribunal on “retrenchment” cannot be disturbed. In re: Hanuman (supra) sought to be relied upon adequately by Mr. Patwalia, it was found that there was nothing on the record to show that illness of the workman continued. The workman had produced medical certificate recommending leave for ten days but he remained absent from duty continuously. The witnesses produced by him did not corroborate his statement. It was under these circumstances held that the application under C.W.P. No.2422 of 1983 -10- Section 33-A of the Act is not maintainable. Further in re: Sakattar Singh (supra), the respondent- workman had claimed that he had sent several communications regarding his illness or to extend his leave or to rejoin his duty but the Apex Court observed that there does not appear to be any record with the Bank nor is the respondent in a position to produce any proof of his having sent such letters. We do not also find any material on record to show that he had reported for duty within the period indicated in the notice issued in terms of Clause 16 of IV Bipartite Settlement. Adverting to the facts of the case in hand as noted supra, no notice was issued by the petitioner- Company calling upon the workman to join his duty. Thus, the facts of the authorities relied upon by Mr. Patwalia are distinguishable from the one in hand. The Presiding Officer of the Labour Court has observed as under:- “the respondent (referring to the present petitioner) has failed to prove their case of abandonment of service by the workman as the certificate Ex.M-I from 6th March 1980, to 11th March, 1980 from ESI clearly shows that the workman was ill and the statement of Shri Dalip Raina cannot be disbelieved who has stated that he gave two medical certificates and one application for extension of leave to Shri Sehgal, Incharge of the claimant. The arguments put forward by the workman's representative that no opportunity was given to the workman for explaining his position for his absence has some force. The respondent should have given the opportunity to the workman to explain his position for his absence. The respondent issued no letter to the workman to explain his position about his absence and C.W.P. No.2422 of 1983 -11- struck off his name on Ist April, 1980 without knowing the condition of the workman whom they know that he was ill. Without knowing the condition of the workman the striking off the name of the workman from the roll is not justified.” To my mind, no fault can be found with these observations being based upon the documentary evidence. The facts of the instant case bear semblance with Shammi Bhan and another's case (supra). In that case, 50% back-wages from the date of termination till reinstatement were allowed. Here, in this case, the workman has not been reinstated in compliance with the award, operation of which was stayed by this Court vide order dated 13.5.1983 passed by the Division Bench of this Court. As revealed by the order dated 20.1.1986 passed by this Court in C.M. No.3045 of 1985 in C.W.P. No.2422 of 1983 (the present petition) on behalf of the petitioner- Company, it was stated that during the pendency of the writ petition all amounts payable as salary to the workman shall be deposited in the Labour Court, Faridabad on or before 15th day of each month and the workman shall be entitled to withdraw this amount too on furnishing security to the satisfaction of the Labour Court. Admittedly, the respondent was a permanent workman of the petitioner. In view of Clause 22 of the Standing Orders, even if the respondent is assumed to be guilty of misconduct, though it is not so, yet he was to be given full opportunity to defend himself in a domestic inquiry. In awarding punishment, the Management was to take into account the gravity of the misconduct, the previous record, if any of the respondent and a copy of the order passed by the Management was to be supplied to the respondent. Herein, this clause was given to go by. The doctrine of the proportionality contemplates that C.W.P. No.2422 of 1983 -12- the punishment must commensurate with the gravity of guilt. In the instant case, if it is presumed that the respondent violated in terms of clause 37, nevertheless, the punishment was disproportionate. The doctrine of 'Audi Alteram Partem' too envisages that no one should be condemned unheard. A period of about 26 years has gone by from the date of passing of the impugned award. He being a confirmed hand, a mere compensation in lieu of reinstatement will not meet the ends of justice. On consideration of the entire matter, it is found that it will sub-serve the ends of justice if the impugned award while maintaining reinstatement of the respondent with continuity of service is modified to the extent that the respondent shall be paid 20% of the back-wages from the date of discontinuance of his services till his reinstatement except the period, if any, during which he remained gainfully employed. He will be reinstated and paid back wages within two months from today. Disposed of accordingly. September 30, 2008 ( HARBANS LAL ) renu JUDGE Whether to be referred to the Reporter? Yes.