M/S. SCOOTERS INDIA LTD.

M. MOHAMMAD Y AQUB AND ANR.

NOVEMBER 21, 2000

(S. RA.IENDRA BABL: AND S.N. \!ARIA VA, JJ.] B

Labour Laws:

Industrial Dispute-Retrenchment Workman's name removed from the roll of the company under standing order and was not a//owed to join his C duty-Held, this amounted to retrenchment-Further, such standing order canr:ot be used for termination of services without fo//owing the provisions of law regarding retrenchment- - Principles of Natural Justice-Administrative Law.

Respondent's name was removed from the roll of the company under D the standing order. An industrial dispute was raised. Labour Court held that there was retrenchment and directed reinstatement of the respondent with continuity of service and full back wages. The award was challenged by the appellant. High Court dismissed the petition. Hence, this appeal.

Dismissing the appeal, this Court

HELD : I. I. There cannot be any automatic termination of the workmen on the basis of standing order. Principles of natural justice has to be complied with. As the workman was not allowed to join duty, standing order could not have been used for terminating his services. More so the requisite material and evidence shows that there was retrenchment without following the provisions of law, Thus, the termination was illegal. 15-C-FI

Scooter India & Ors. v. Vijai E. V. Eldred 1199816 SCC 549, affirmed.

to.

C/Jtrun India Ltd v. Shammi Bhan & Anr. 1199816SCC538, referred G

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1471 of 1999.

From the Judgment and Order dated 13.5.98 of the Allahabad High Court in W.P. No. 5666 of 1984.

SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A Manoj Swarup, Ms. Lalita Kohli, Miland Kumar and Ms. Maulina Swarup for the ppellant.

M.A. Chinnasamy and K.C. Sudarshan for the Respondents.

The Judgment of the Court was delivered by

B S.N. V ARIA VA, J. This Appeal is against an Order dated 13th May, 1998 by which the writ petition filed by the Appellant has been dismissed.

Briefly stated the facts are as follows:

The I st Respondent was appointed as unskilled workman w.e.f. 9th September, 1974 and was then promoted to the post of a semi-skilled worker C w.e.f. 7th June, 1975.

On I st August, 1976 the Respondent's name was removed from the roll of the Company under Standing Order 9.3.12. The said Standing Order reads as follows :

"9.3.12 Any workman who remains absent from duty without leave in excess of the period of leave originally sanctioned or subsequently extended for more than I 0 consecutive days, he shall be deemed to have left the services of the Company of his own accord, without notice, thereby terminating his contract of service with the Company and his name will, accordingly, be struck off the E rolls."

The Respondent raised an industrial dispute, which was referred for adjudication to the Labour Court, Lucknow.

By an Award dated 20th July, 1984, the Labour Court held that there was retrenchment. The Labour Court held that as the provisions of law, regarding F retrenchment, had not been followed the termination was illegal. The Labour

Court directed reinstatement with continuity of service and full back wages.

The Appellant filed the Writ Petition challenging the Award. The Writ Petition came to be dismissed by the impugned order dated 13th May, 1998.

G Mr. Swarup submitted that there was no retrenchment. He submitted that the Respondent had been suspended from 28th June, 1976 to 7th July, 1976 and was to join duty after 7th July, 1976. He submitted that the Respondent did not join duty. He submitted that the Respondent was personally advised by the Chief Personnel Officer of the Company to join his duty on 23rd July, 1976, failing which his name would be removed from the roll. Mr. Swarup H submitted that the Chief Personnel Officer of the Company wrote a letter

SCOOTERS INDIA LTD. v. M. MOHAMMAD YAQUB [YARIAVA, J.] 3

dated 24th July, 1976, calling upon the Respondent to join duties latest by A 30th July, 1976, failing which his name would be removed from the rolls of the company. He submitted that the Respondent still failed to join duty. He submitted that under these circumstances the Appellant is entitled to remove the name of the Respondent from the roll of the company under the above mentioned Standing Order. He submitted that such removal does not amount B to retrenchment.

He relied upon the judgment in the case of Scooters India and Ors. v.

Vijai E. V. Eldred, reported in [1998] 6 S.C.C. 549, wherein in respect of Standing Order 9 .3 .12, it has been observed as follows :

"It is also extraordinary for the High Court to have held clause C 9.3.12 of the standing orders as invalid. Learned counsel for the respondent rightly made no attempt to support this part of the High Court's order."


It was held that principles of natural justice had to be read into such a clause and the principles of natural justice had to be complied with. It was held that the employee had to be informed of the grounds for which action was proposed to be taken against him for overstaying the leave. It was held that G a Standing Order which provided for automatic termination of service of a permanent employee would be bad if it did not purport to provide an opportunity of hearing to the employee whose services are treated to have come to an end automatically. It must be mentioned that the authority in Scooters India's case (supra) was cited before this Court. In respect of that cas!:' it was held as follows : H

SUPREME COURT REPORTS !2000] SCPP. 5 S.C.R.

A "22. Learned counsel for the petitioner has placed strong reliance

upon a decision of this Court in Scoorers India v. Vijay E V Eldred, 1996 (6) S.C.C. 549, in support of his contention that any stipulation for automatic termination of services made in the Standing Orders could not have been declared to be invalid. We have been referred to a stray sentence in that judgment, which is to the following effect :

"It is also extraordinary for the High Court to have held clause 9.3.12 of the Standing Orders as invalid."

This sentence in the judgment cannot be read in isolation and we must refer to the subsequent sentences which run as under :

"Learned counsel for the respondent rightly made no attempt to support this part of the High Court's order. In view of the fact that we are setting aside the High Court's judgment, we need not deal with this aspect in detail."

23. In view of this observation, the question whether the stipulation for automatic termination of services for overstaying the leave would be legally bad or not, was not decided by this Court in the judgment relied upon by Mr. Manoj Swarup. In that judgment the grounds on which the interference was made were different. The judgment of the High Court was set aside on the ground that it could not decide the disputed question of fact in a writ petition and the matter should have been better left to be decided by the Industrial Tribunal. Further, the High Court was approached after more than six years of the date on which the cause of action had arisen without there being any cogent explanation for the delay. Mr. Manoj Swarup contended that it was conceded by the counsel appearing on behalf of the employee that the provision in the Standing Orders regarding automatic termination of services is not bad. This was endorsed by this Court by observing that :

"Learned counsel for the respondent rightly made no attempt to support this part of the High Court's order."

This again cannot be treated to be a finding that provision for automatic termination of services can be validly made in the Certified Standing Orders. Even otherwise, a wrong concession on a question of law, made by a counsel, is not binding on his client Such concession H cannot constitute a just ground for a binding precedent. The reliance

SCOOTERS l'JDIA LTD. v. M. MOllAMMA.D Y AQLB [VARIAVA . .I.] 5

placed by Mr. Manoj Swarup on this judgment. therefore, is wholly A out of place."

We are in complete agreement with the ratio laid down in this case as well as the observations made by this Court in respect of the stray observation in Scooters India's case (supra).

Therefore, it is clear that there could not be any automatic termination of the Respondent on the basis of Standing Order 9.3.12. Principles of natural

justice :ias to be complied with.

The question which then arises is whether the principles of natural justice were followed in this case. As has been set out herein above Mr. C

Swarup had submitted that the workman had been given an opportunity to join the duty and that he did not join duty even though repeatedly called upon to do so. It is contended that principles of natural justice have been complied with in this case. However, the material on record indicates otherwise.

The Labour Court in its Award sets out and accepts the Respondent's case D that he had not been allowed to join duty. The Respondent has given evidence that even though he personally met Chief Personnel Officer he was still not allowed to enter the premises. The evidence is that in spite of slip Ext. W.2, he was prevented from joining duty when he attempted to join duty. The slip Ext. W.2 had been signed by the Security Inspector of the Appellant. This showed that the Respondent had reported for work. As against this evidence E the Appellant has not Jed any evidence to show that the workman had not reported for duty. Even though the slip Ex. W.2 had been proved by the workman, the Security Inspector, one Mr. Shukla, was not examined by the Appellant. Further the evidence of the Senior Time Keeper of the Appellant established that the workman had worked for more than 240 days within a period of 12 calender months immediately preceding the date of termination F of service. This was proved by a joint inspection report, which was marked as Ext. 45/A. It was on the basis of this material and this evidence that the Labour Court came to the conclusion that there was retrenchment without following the provisions of law. As the workman was not allowed to join duty, Standing Order 9.3.12 could not have 'been used for terminating his services. G

In this view of the matter, in our view, the decisions of the Labour Court as well as High Court are correct and require no interference. Accordingly, the Appeal stands dismissed. There will, however, be no order as to costs.

N.J.

Appeal dismissed. H