IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 18.08.2011 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.No.5063 of 2009 and M.P.No.2 of 2009 The Management of Binny Ltd., B & C Mills, Perambur Barracks, Post Box No.951, Chennai - 600 012. ...Petitioner Vs. 1.The Presiding Officer, II Additional Labour Court, Chennai. 2.G.Thandavarayan ...Respondents Writ Petition is preferred under Article 226 of the Constitution of India praying for the issue of a writ of Certiorari, calling for the records of the first respondent in I.D.No.621 of 1999 and quash its Award dated 24.04.2008. For Petitioner : Mr.S.Ravindran for M/s.T.S.Gopalan and Co., For Respondents : Mr.P.Ravi Shankar Rao for M/s.K.V.Ananthakrishnan for R2 O R D E R The petitioner is the Management of Binny Limited. In this writ petition, they have come forward to challenge an Award passed by the first respondent Labour Court made in I.D.No.621 of 1999 and seeks to set aside the Award dated 24.04.2008. By the impugned Award, the Labour Court directed the payment of Rs.75,000/- as compensation together with interest at the rate of 6% from the date of raising the dispute till the date of payment. 2. The writ petition was admitted on 31.03.2009. Pending the writ petition, an interim stay was granted for a period of three weeks. Subsequently, the second respondent filed a vacate station application in M.P.No.2 of 2009. By an order dated 25.02.2010, interim stay granted was made absolute on condition that the Petitioner Management pays 50% of the Award amount ordered by the Labour Court to the workman. https://hcservices.ecourts.gov.in/hcservices/ 3. It is the case of the second respondent that he joined as Badli worker with the petitioner Management on 29.09.1976. He was given training under Weaving Department and Power Looms. Because of his work in the Weaving section, his health was completely affected due to developed respiratory problem. His services came to be terminated on 05.09.1989. Thereafter, on the representation made by the Union, he was restored to service on 22.06.1990. His Token Number was 1609 and he was covered by ESI and PF. He was taking treatment in the ESI Hospital from 28.12.1987. Again, he was admitted in the hospital on 29.01.1991 and discharged on 09.02.1991. Once again his services were terminated on 10.03.1991 without any charge memo or enquiry. It was claimed that a settlement was entered into between the Management and Union and it was agreed to reinstate persons who were continuously absent for 8 days. But since the second respondent was absent for more than 21 days from 29.01.1991 to 09.02.1991, his services were terminated in terms of Clause 12(1) of the Certified Standing Orders applicable to the petitioner Management. 4. As against his termination, the second respondent raised an industrial dispute before the Labour Officer, (Conciliation). As the Conciliation Officer could not bring about mediation, he gave a failure report dated 18.03.1999. On the strength of the failure report, he filed claim statement dated 19.07.1999 before the first respondent Labour Court. 5. The Labour Court took up the dispute as I.D.No.621 of 1999 and ordered notice to the Management. On receipt of the notice, the petitioner Management filed a counter statement dated Nil (April 2000). 6. The stand of the petitioner Management was that under Clause 8(ii) of the Certified Standing Orders, if an employee absents himself for more than 8 consecutive days without leave, he is deemed to have left the service of the company. It is only if the employee concerned comes back and gives satisfactory explanation, he will be taken back to service but without pay or dearness allowance. It was stated that during August and September 1989, the second respondent was absent for 8 consecutive days and therefore, as per the Certified Standing Order, he was deemed to have left the service on 05.09.1989. Apart from the second respondent, several other workmen were also got their services terminated by invoking the said provision. The Trade Union representing the workmen made a demand for the re-employment by assuring that in future, they will not give room for any unauthorised absence. Based upon the discussion between the Management and the Union, the Management took those workmen back into service but imposed the following two conditions: i) The workmen shall not absent from work without leave for more than 10 days in a year for a period of two years; and ii) The workman shall not absent from work for more than 20 days in a year on the strength of E.S.I, Medical Certificates for a period of two years. https://hcservices.ecourts.gov.in/hcservices/ 6. The workmen must also agree to give an undertaking to abide by those terms. On such assurance, the second respondent was reinstated into service with effect from 22.06.1990. But however contrary to the said undertaking, in the first year of his reinstatement, the second respondent absented himself without leave for 21 days and hence, by an order dated 08.02.1991, his services were terminated with effect from 10.03.1991 on the ground of contravention of the terms of reinstatement. 7. After a period of seven years, the second respondent sent a representation to the Minister for Labour stating that he was suffering from Tuberculosis and therefore, he could not report for work. The said letter sent was taken as an industrial dispute and the Management gave a suitable reply. Since the second respondent's termination was in terms of the settlement, it was contended that there was no need to conduct any domestic enquiry. 8. Before the Labour Court, the second respondent examined himself as W.W.1 and filed six documents which were marked as Exs.W1 to W6. On the side of the petitioner Management, one Muruganandham, was examined as M.W.1 and on their side, 12 documents were filed and marked as Exs.M1 to M12. 9. On the basis of the evidence (both oral and documentary), the Labour Court found that as per Ex.W1, the second respondent was taking treatment from 1987 to 1996 on several period and one cannot minimise the significance of that document and those documents were not created for the purpose of this case. The contention that just because, the second respondent had taken leave for 21 days, he could be terminated without enquiry also cannot be accepted. The Labour Court placed reliance on the judgment of the Allahabad High Court in Chandra Bal Shukal v. Labour Court (V) Kanpur and others reported in 2007-II-LLJ.Allahabad 644 for holding that even if the Standing Order provides for removal of the name of the wroker, the said clause is subject to observance of principles of natural justice and holding of enquiry. The Labour Court also found that subsequent to the removal of the second respondent, a closure notice was issued as per Exs.M9 and M10. Thereafter, a settlement was reached between the Union and the Management as per Ex.M11 and the Management had also introduced Voluntary Retirement Scheme as per Ex.M12 and therefore, there was no possibility of reinstating the second respondent. But considering that the second respondent had worked for more than 13 years and the removal was held to be bad in law, the Labour Court found that the only way was to provide compensation for the services rendered by him and in that view of the matter, it fixed a lump sum payment of Rs.75,000/- as compensation as noted already. 10. Challenging the said Award, it was contended by the petitioner Management that the clause in the Standing Order is a statutory contract between the workmen and the Management and therefore, the Labour Court was wrong in ordering compensation. https://hcservices.ecourts.gov.in/hcservices/ 11. The contention raised by the Management cannot be countenanced by this Court in the light of the pronouncements of the Supreme Court on the very same issue. It is necessary to refer to certain decisions, which will have a bearing on this issue. 12. The Supreme Court vide its judgment in Mafatlal Narandas Barot v. J.D.Rathod reported in AIR 1966 SC 1364, while dealing with the similar clause found in a Rule framed under the Road Transport Corporation Act, providing for punishment for absence without leave held that such a clause cannot be divorced from principles of natural justice and the person who is sought to be removed by utilizing the said clause must be given a reasonable opportunity of showing case against the said order. 13. Subsequently, the same principle was reiterated by the Supreme Court in L.Robert D’Souza v. Executive Engineer,Southern Railway and another reported in (1982) 1 SCC 645. The Supreme Court held that the absence from duty without leave is an act amounting to misconduct and the employer cannot terminate the services of an employee without conducting an enquiry and following the principles of natural justice. 14. The Supreme Court in Uptron India Limited v. Shammi Bhan and another reported in (1998) 6 SCC 538, held that the discretion conferred on the Management by Clause 17(g) to terminate or not to terminate the services of an employee who overstays the leave has to be based on objective consideration of all the circumstances and material which may be available on records. The employee against whom action on the basis of this provision is proposed to be taken must be given an opportunity of hearing. 15. In D.K.Yadav v. J.M.A.Industries Limited reported in (1993) 2 LLJ 696, the Supreme Court has held that even if the Standing Orders provides for an automatic removal of an employee on account of unauthorized absence, such Standing Orders will become illegal if principles of natural justice are not read into the same. Even in such cases, employees must be heard before an order is passed by the Employer removing the name of the workman from the list. 16. In the light of the above, the writ petition stands dismissed. The petitioner Management is directed to pay the balance amount to the second respondent within a period of eight weeks from the date of receipt of a copy of this order. However, there will be no order as to costs. Consequently, connected miscellaneous petition is closed. Sd/ Asst. Registrar /true copy/ Sub Asst.Registrar svki https://hcservices.ecourts.gov.in/hcservices/ To The Presiding Officer, II Additional Labour Court, Chennai. Copy to The Section Officer, VR Section, High Court, Madras-104 1 cc To M/s.K.V.Ananthakrishnan, Advocate, SR.51484 1 cc To M/s.T.S.Gopalan & Co., Advocate, SR.51031 ORDER IN W.P.No.5063 of 2009 VD(CO) RH (6.9.11) https://hcservices.ecourts.gov.in/hcservices/