Case: State Bank of India Vs. N. Sundaramoney

Krishna Iyer, J.1. The appellant employer, undaunted by a double defeat at both tiers in the High Court, has appealed against the adverse judgments, by certificate, on the only ground that there was no retrenchment of the respondent-employee (within the meaning of S.2(00) of the Industrial Disputes Act, 1947 (Act XIV of 1947) hereinafter called the Act) and, consequently the latter was ineligible to the statutory compensation the non-payment of which, along with the termination of service, nullified the termination itself. The end result was that the Division Bench of the Court ruled that the respondent "was entitled to retrenchment compensation" which, not having been paid, "the termination would be invalid." The subtle legal issue, substantial in its financial impact, is whether S. 25F read with S. 2(00), vis-a-vis a short employment, casts a lethal spell on the cessation of service for non-compliance with the condition precedent set out in the provision.The Certificate2. The certificate issued by the High Court under Art. 133(1) is bad on its face, according to counsel for the respondent and the appeal consequently incompetent. We are inclined to agree that the grant of a constitutional passport to the Supreme Court by the High Court is not a matter of easy insouciance but anxious advertence to the dual vital requirements built into Art. 133(1) by specific amendment. Failure here stultifies the scheme of the Article and floods this Court with cases of lesser magnitude with illegitimate entry. A substantial question of law of general importance is a sine qua non to certify fitness for hearing by the apex Court. Nay, more, the question, however important and sub-stantial, must be of such pervasive import and deep significance that in the High Courts judgment it is imperatively needs to be settled at the national level by the highest bench. The crux of the matter has been correctly set out in a decision Union of India v. Hafiz Mohd, Said, I.L.R. (1973) 2 Del. 673, 676, of the Delhi High Court in words, which find our approval."A certificate can be granted only if the case involves a question of law :"(i) which is not only substantial but is also of general importance; and(ii) the said question, in our opinion, needs, to be decide by the Supreme Court."3. It has to be noted that all the above requirements should be satisfied before a certificate can be granted. It means that it is not sufficient if the case involves a substantial question of law of general importance but in addition to it the High Court should be of the opinion that such question needs to be decided by the Supreme Court.Further, the word needs suggests that there has to be a necessity for a decision by the Supreme Court on the question, and such a necessity can be said to exist when, for instance, two views are possible regarding the question and the High Court takes one of the said views. Such a necessity can also be said to exist when a different view has been expressed by another High Court.4. It is but fair to add an implied but important footnote that while exercising the wider power under Art. 136 this Court must have due regard to the constitutional limitations on Art. 133(1) and owe allegiance to those restraints save in exceptional cases.5. This view of the certificate would have put the lid on this appeal but on hearing counsel we feel that the omission of the Court to assess the case explicity from this angle does not disable us from granting special leave, if applied for. So much so counsel have proceeded to argue on the merits, the penumbral area of industrial law covered by the subject-matter being one which cannot be left in legal twilight.The Facts6. One of the two employees involved in these appeals has been re-absorbed in service and his case is, therefore, of lesser import, but the other is still out in the cold and his legal fate falls for examination in the matrix of facts which we proceed to state. This respondent was appointed as cashier, off and on, by the State Bank of India between July 4, 1970 and November 18, 1972. The intermittent breaks notwithstanding, his total number of days of employment answered the test of "deemed" continuous service within S. 25B (2) and both sides accept that fact situation. But the order of appointment, which bears in its bosom the "good bye" to the employee after a few days, calls for construction in the light of S. 2(oo) and S. 25F and we may as well read it here :"(1) The appointment is purely a temporary one for a period of 9 days but may be terminated earlier, without assigning any reason therefore at the Banks discretion;(2) The employment, unless terminated earlier, will automatically cease at the expiry of the period, i.e. 18-11-1972."The nine days employment tacked on to what has gone before, has ripened to a continuous service for a year on the antecedent arithmetic of 240 days of broken bite of service.The Legal Issue7. The skiagram of the employment order must now be studied to ascertain which of the rival meanings counsel have pressed deserves preference. Statutory construction, when court consider welfare legislation with an economic justice bias, cannot turn on cold print glorified as grammatical construction but on teleological purpose and protective internment. Here Ss. 25F, 25B and 2(oo) have a workers mission and the input of Part IV of the Constitution also underscores this benignant approach. While canons of traditional sanctity cannot wholly govern, Courts cannot go haywire interpreting provisions, ignoring the text and context. With these guidelines before us, we seek to decode the implications of the order of appointment. But before doing so, an analysis of the legal components of S. 25F will facilitate the diagnostic task.8. The leading case on this fact of is the Hospital Mazdoor Sabha, [1960-I L.L.J. 251], Gajendragadkar, J. (as the then was observed :"Section 25F (b) provides that no workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until he has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days average pay for every completed year of service or any part thereof in excess of six months. Clauses (a) and (c) of the said section prescribe similar conditions but we are not concerned with them. On a plain reading of S. 25F (b) it is clear that the requirement prescribed by it is a condition precedent for the retrenchment of the workman. The section provides that no workman shall be retrenched until the condition in question has been satisfied. It is difficult to acceded to the argument that when the section imposes in mandatory terms a condition precedent, non-compliance with the said condition would not render the impugned retrenchment invalid .... failure to comply with the said provision renders the impugned orders invalid and inoperative."9. Without further ado, we reach the conclusion that if the workman swims into the harbour of S. 25F, he cannot be retrenched without payment, at the time of retrenchment, compensation computed as prescribed therein read with S. 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 super-annuation 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;"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 S. 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.10. A break-down of S. 2(oo) unmistakably expands the cemantics of retrenchment, "Termination ..... for any reason whatsoever" are the key words. Whatever the reason, every termination spells retrenchment. So the sole question has the employees service been terminated ? Verbal apparel apart, the substance is decisive. A termination takes place where a term expires either by the active step of the master or the running out of the stipulated term. To protect the weak against the strong this policy of comprehensive definition has been effectuated. Termination embraces not merely the act of termination by the employer, but the fact of termination, howsoever, produced. Maybe, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the armour of S. 25F and S. 2(oo). Without speculating on possibilities, we may agree that "retrenchment" is no longer terra incognita, but area covered by an expansive definition. It means "to end, conclude, cease, " In the present case the employment ceased, concluded, ended on the expiration of nine days-automatically maybe, but cessation all the same. That to write into the order of appointment the date of termination confers no moksha from S. 25F (b) is inferable from the proviso to S. 25F (a). True, the section speaks of retrenchment by the employer and it is urged that some act of volition by the employer to bring about the termination is essential to attract S. 25F and automatic extinguishment of service by effluxion of time cannot be sufficient An English case, Rex v. Secretary of State, [1973] 2 A.E.R. 103, was relied on, where Lord Denning, M.R. observed :"I think that the word terminate or termination is by itself ambiguous. It can refer to either of two things-either to termination by notice or to termination by effluxion of time. It is often used in that dual sense in landlord and tenant and in master and servant cases. But there are several indications in this paragraph to show that it refers here only to termination by notice."Bucklay, L.J., concurred and said :"In my judgment the words are not capable of bearing that meaning. As counsel for the Secretary of State has pointed out, the verb terminate can be used either transitively or intransitively. A contract may be said to terminate when it comes to an end by effluxion of time, or it may be said to be terminated when it is determined at notice or otherwise by some act of one of the parties. Here in my judgment the word terminated is used in this passage in para 190 in the transitive sense, and it postulates some act by somebody which is to bring the appointment to an end, and is not applicable to a case in which the appointment comes to an end merely by effluxion of time."Words of multiple import have to be winnowed judicially to suit the social philosophy of the statute. So screened, we hold that the transitive and intransitive senses are covered in the current context. Moreover, an employer terminates employment not merely by passing an order as the service runs. He can do so by writing a compositive order, one giving employment and the other ending or limiting it. A separate, subsequent determination is not the sole magnetic pull of the provision. A pre-emptive provision to terminate is struck by the same vice as the post-appointment termination. Dexterity of diction cannot defeat the articulated conscience of the provision.11. What follows ? Had the State Bank known the law and acted on it, half a months pay would have concluded the story. But that did not happen and now, some years have passed and the Bank has to pay, for no service rendered. Even so, hard cases cannot make bad law. Re-instatement is the necessary relief that follows. At what point ? In the particular facts and circumstances of this case, the respondent shall be put back where he left off, but his new salary will be what he would draw where he to be appointed in the same post today de novo. As for benefits, if any, flowing from service he will be ranked below all permanent employees in that cadre and will be deemed to be a temporary hand upto now. He will not be allowed to claim any advantages in the matter of seniority or other priority inter se among temporary employees on the ground that his retrenchment is being declared invalid by this Court. Not that we are laying down any general proposition of law, but make this direction in the special circumstances of the case. As for the respondents emoluments, he will have to pursue other remedies, if any.12. We substantially dismiss the appeal (C.A. 934 of 1975) subject to the slight modification made above. There was some intervening suggestion for settlement of the dispute but it fell through. We are persuaded to make the observation based on that circumstance that social justice has two sides and, occasionally, one party or the other makes myopic mistakes resulting in further litigation.

Decision reasoning: 0[ds]In the particular facts and circumstances of this case, the respondent shall be put back where he left off, but his new salary will be what he would draw where he to be appointed in the same post today de novo. As for benefits, if any, flowing from service he will be ranked below all permanent employees in that cadre and will be deemed to be a temporary hand upto now. He will not be allowed to claim any advantages in the matter of seniority or other priority inter se among temporary employees on the ground that his retrenchment is being declared invalid by this Court. Not that we are laying down any general proposition of law, but make this direction in the special circumstances of the case. As for the respondents emoluments, he will have to pursue other remedies, if any.12. We substantially dismiss the appeal (C.A. 934 of 1975) subject to the slight modification made above. There was some intervening suggestion for settlement of the dispute but it fell through. We are persuaded to make the observation based on that circumstance that social justice has two sides and, occasionally, one party or the other makes myopic mistakes resulting in further litigation.The certificate issued by the High Court under Art. 133(1) is bad on its face, according to counsel for the respondent and the appeal consequently incompetent. We are inclined to agree that the grant of a constitutional passport to the Supreme Court by the High Court is not a matter of easy insouciance but anxious advertence to the dual vital requirements built into Art. 133(1) by specific amendment. Failure here stultifies the scheme of the Article and floods this Court with cases of lesser magnitude with illegitimate entry. A substantial question of law of general importance is a sine qua non to certify fitness for hearing by the apex Court. Nay, more, the question, however important andmust be of such pervasive import and deep significance that in the High Courts judgment it is imperatively needs to be settled at the national level by the highest bench. The crux of the matter has been correctly set out in a decision Union of India v. Hafiz Mohd, Said, I.L.R. (1973) 2 Del. 673, 676, of the Delhi High Court in words, which find our approval."