D.K. YADAV v. J.M.A. INDUSTRIES LTD.

The Judgment of the Court was delivered by c K. RAMASWAMY, J. This appeal by special leave is against the award of the Labour Court, Haryana at Faridabad dated April 19, 1982 which was published . in the State Gazette on August 10, 1982. It upheld the terminationoftheappellant's service as legal and valid. The respondent, by its letter dated Decemb.er 12, 1980 which was received by the appellant on December 19, 1980, intimated that the D appellant wilfully absented from duty continuously for more than 8 days from December 3, 1980 without leave or prior information or intimation or previous permission from the management and, therefore, "deemed to have left the service of the company on your own account and lost your lien and the appointment with effect from December 3, 1980." In support thereof reliance was placed on clause E 1.3 (2) (iv) of its Certified Standing Order. The appellant averred that despite his reporting to duty on December 3, 1980 and everyday continuously thereafter he .was prevented entry at the gate and he was not allowed to sign the attendance register. He pleaded that he was not permitted to join duty wi~hout assigning any reasons. His letter of December 3, 1980 was marked herein as Annexure 'A' wherein he explained the circumstances in which he was prevented to join duty. F The Tribunal found that the appellant had failed to prove his case. The action of the respondent is in accordance with the standing Orders and it is not a termination nor retrenchment under the Industrial Disputes Act, 1947 for short 'the Act'. The appellant in terms of standing orders lost his lien on his appointment and so is not entitled to reinstatement. G Clause 13 (2) (i.V) standing order reads thus:

"If a workman remains absent without sanctioned leave or beyond ~he period of leave originally granted or subsequently extended, he shall lose his lien on his H

936 SUPREME COURT REPORTS [1993] 3 S.C.R. · --

A appointment unless.

(a) he returns within 3 calander days of the commencement of the absence of the expiry ofleave originally granted or subsequently extended as the case maybe; and

B (b) explains to the satisfaction of the manager/management the reason of his absence or his inability to return on the expiry of the leave, as the case may. The workman not reporting for duty within 8 calander days as mentioned above, shall be deemed to have automatically abandoned the services and lost his lien on his appointment. His name shall be struck off from the Muster Rolls in such an eventuality." c A reading thereof does indicate that if a workman remains absent without sanction of leave or beyond the period of the leave originally granted or subse- quently extended the employee loses his lien on employment unless he returns to duty.within eight calander days of the commencement of the absence or.the expiry D of leave either originally granted or subsequently extended. He has to give a satisfactory explanation to th.e Manager/Management of his reasons for absence or inability to return to the duty on the expiry of the leave. On completion of eight calander days' absence from duty he shall be deemed to have abandoned the s~rvices and lost his lien on his appointment. Thereafter the management has been empowered to strike off the name from the Muster Rolls. E Section 2(oo) of the Act defines '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-

F (a) voluntary retirement of the workman, or

(b) retirement of the workman on reaching the age of superannuation of the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or

G (c) termination of the service of a workman on the ground of continued ill health."

Section 25F prescribes mandatory procedure to be followed before· the H retrenchment becomes valid and legal and violation thereof visits with invalida-

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• tion of the action wfth consequential results. A

In Punjab Land Development and Reclamation Corporation l.Jd., Chandigar:h v. Presiding Officer, Labour Court, Chandigarh and Ors., (1990) 3 SCC 632 the Constitution Bench considered the scope of the word 'retrenchment' defined by s:Z(oo) and held in para 71 at page 716 that "analysing the definition of retrench- ment in Section 2(oo) we find that termination by the employer of the service of B a workman _would not otherwise have covered the cases excluded in Clauses (a) and (b) namely, voluntary retirement and retirement on reaching the stipulated age of retfrement or on the grounds of continued ill health. There would be no violational element of the employer. Their ~xpress exclusion implies tbat those

-- would otherwise have been included". In para 77 at page 719 it was further held that "right of the employer and the contract of employment has been effected by introducing Section 2(oo)". The contention of the management to terminate the c

service of an employee under the certified standing Orders and under the contracts of employment was negatived holding that the right of the management has been effected by introduction of s. 2(oo) ands. 25F of th~ Act. The second view was that the right as such has not been effected or taken away, but only an additional D social obligation has been imposed on the employer to abide by the mandate of s. 25F of the Act to tide over the financial difficulty which subserves the social policy. This court relied on the maxim-Stat pro ratione valuntas populi; the will of the people stands in place of a reason. In paragraph 82 at page 722 this court concluded that the definition in s.2(oci) of the Act of retrenchment means "the I

termination by the employer of the service of a workman for any reason whatso- i ever except those expressly excluded in the section". Same view was taken by . three benches of three Judges of this Court in State Bank ofIndia v. Sri N. Sundara Mani; [1976) 3 SCR 160; Delhi Cloth & General Mills ltd. v. Shambhu Nath Mukherjee & Ors,[1978) 1 SCR 591.and Hindustan Steel Ltd. v. The Presiding Officer. Labour dourtj.1971) l SCR 586 and two benches of two judges in Robert F D 'Souza v. Executive Engineer, Southern Railway andAnr. [1982) 1 SCC 645 and H.D. Singh v. Reserve Ban~ of India and Ors. [1985] 4 SCC 201 took the same view. Therefore, we find force in the contention of Sri R.K. fain, the learned Senior • counsel for the appellant that the definition 'retrenchment' in S.2(oo) is a comprehensive one intended to cover any action of the management to put an end to the employment of an employee for any reason whatsoever. We need not, G however, rest our conclusion on this"J'oint as in our considered view it could be decided on the other contention raised by Sri Jain that the order is violative of the principles of natural justice. We are impressed with that argument. Before dealing with it, it is necessary to dispose of inter related contentions raised by Dr. Anand Prakash. ti

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A The contention of Dr. Anand Prakash that since this appeai was deleted from the constitution bench to be dealt with separately, the finding of the constitution bench deprived the respondent of putting forth the contention based on Cl. 13 of the certif!ed standing order to support impugned action and the respondent is entitled to, carivass afresh the correctneSS of the view of the constitution bench is devoid of (orce. It is settled law that an authoritative law laid after considering all B the relevant provisions and the previous precedents, it is no longer open to be · recanvassed the same on new grounds or reasons that may be put forth in its support unless the court deemed appropriate to refer to a larger bench in the larger public interest to advance the cause of justice. The constitution bench in fact went into the self same question vis-a-vis the right of the employer to fall back upon the relevant provision of the certified standing Orders to terminate the service of the c workman/employee. By operation of S. 2(oo) the right of the employer under Cl.13(2) (iv), and the contract of employment has been effected. Moreover in . Ambika Prasad Mishra v. State of U.P. and Ors., [1980] 3 SCC 719 at 72-23 para 5 & 6. A constitution bench held that every new discovery or argumentative nove!ty cannot undo or cgmpel reconsideration of a binding precedent. It does not lose its authority 'merely' because it was badly argued, inadequately considered and fallaciously reasoned. In that case the ratio of this court on Art. 3 lA decided. by 13 Judges bench in Keshwanand Bhaniv. Union of India [1973] Suppl. SCR was sought to be reopened but this court negatived the same .

. His contention that expiry of eight' days' absence from duty brings about automatic loss of lien on the post and nothing more need be done by the management to pass an order terminating the service and per force termination is automatic, bears no substance. The constitution bench specifically held that the right of the employer given under the standing Orders gets effected by statutory operation. In Robert D' Souza's case (supra) in para 7, this court rejected the contention that on .expiry of leave the termination of service is automatic and nothing further could be done. It was further held that striking of the name from the rolls for unauthorised absence from duty amounted to termination of service and absence from duty for 8 consequitive days amounts to misconduct and termination of service on such grounds without complying with minimum prin- ciples of natural justice would not be justified. In Shambhunath 's case three Judges G bench Qeld that striking of the naine of the workman for absence of leave itself amounted to retrenchment. In H.D. Singh v. Reserve Bank ofIndia & Ors. (supra), this court held that striking of the name from the rolls am<;mnts to an arbitrary action. In State Bank ofIndia v. Workmen of State Bank oflnd.ia andAnr.1[1991] >---- 1 sec 13, a two judge bench of this court to which one of US, K.R.S.,J. was a H ;'. member was to consider the effect of discharge on one month's notice or pay in

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lieu thereof. It was held that it was not a discharge simplicitor or a simple termination of service but one camouflaged for serious misconduct. This court lifted the veil and lool<ed beyond the apparent tenor of the order and its effect. It was held that the action was not valid in law. , The principle question is whether the impugned action is violative of principles of natural justice. In AK. Kriapak and Ors. v. Union of India & Ors-.J [1969] 2 SCC 262 a Constitution bench of this court held that the distinction between quasi judicial and administrative order has gradually become thin. Now it is totally clipsed and obliterated. The aim of the rule of the natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rule_s operate in the area not covered by law validly made or expressly excluded as held c in Col.JN. Sinha v. Union ofIndia &Anr. [1971] 1SCR791.Itis settled law that certified standing orders have statutory force which do not expressly exclude the application of the principles of natural justice. Conversely the Act made excep- tions for the application of principles of natural justice necessary implication from specific provisions in the Act like Ss.25F; 25FF; 25FFF; etc, the need for temporary hands to cope with ~udden and temporary spurt of work demands appointment temporarily to a service of such temporary workmen to meet such exigencies and as soon as the work or service are completed, the need to dispense with the services mz.y arise. In that situation, on compliance of the provisions of s. 25F resort.could be had to retrench the employees in conformity therewith partic1:lar statute or statu.tory rules or orders having statutory flavour may also exclrde the application of the principles of natural justice expressly or by necc::sary implication. In other respects the principles of natural justice would app:y unless the employer should justify its exclusion on given spec1al and . e}'.:eptional exigencies. .

F The cardinal point that has to be borne in mind, in every case, is whether the person concerned should have a reasonable opportunity of presenting his case and the authority should act fairly, justly, reasonably and impartially. It is not so much to act judicially but is to act fairly, name Iy, the procedure adopted must be just, fair and reaspnable in the particular circumstances of the case. In other words application of the principles of natural justice that no man should be condemned G unheard intends to prevent the authority to act arbitrarily effecting the rights of the . concerned person.

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A It is a fundamental rule oflaw that no decision must be taken which will affect the right ofany person without first being informed of the case and be given hi~ her an opportunity of putting forward his/her case. An order involving civil consequences must be made consistently with the rules of natural justice. In Mohinder Singh Gill & Anr. v. The Chief Election Commissioner & Ors, [1978) 2 SCR 272 at 308F the Constitution Bench held that 'civil consequence' covers B · infraction of not merely property or personal right but of civil liberties, material deprivations and non-pecuniary damages. In its comprehensive connotion every thingthat affects a citizenin his'Civil life inflicts a civil consequence. Black's Law Dictionary, 4th Edition, page 1487 defined civil rights.are such as belong to every citizen of the state or country they include rights capable of.being enforced or redressed in a civil action. In State of Orissa v. Dr. (!Jiss) Binapani Dei & Ors., c this court held that even an administrative order which involves civil conse- quences must be made consistently with the rules of natural justice. The person concerned must be infomied of the case, the evidence in support thereof supplied and must be given a fair opportunity to meet the case before an adverse decision is taken. Since no such opportunity was given it was held that superannuation was in violation of principles of natural justice. D ' In State of West Bengal v.Anwar Ali Sarkar [1952] SCR 289, per majority, a seven Judge bench held that the rule of procedure laid down by law comes as much within the purview of Art. 14 of the Con~titution as any rule of substantive law. In Maneka Gandhi v. Union of J.ndia,.[1978] 2 SCR 621, another bench of seven judges held that the substantive and procedural laws and action taken under them will have to pass the test under Art. 14. The test of reason and justice cannot be abstract. They cannot be divorced from the needs of the nation. The tests have to be pragmatic otherwise they would cease to be reasonable. The procedure prescribed \ must be just, fair and reasonable even though there is no specific • provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an individual; which affects the right of that · individual. The duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action. Even executive authorities which take administrative action involving any deprivation or or restriction on inherent fundarnentaI rights of citizens, must take care to see that justice is not only done but manifestly appears to be done. They have a duty to proceed in a way which is free from even the appearance of arbitrariness, unreason.ableness or unfairness. They have to act i.n a manner which is patently impartial and meets the require- ments of natural justice.

The law must therefore be now taken to be well-settled that procedure prescribed for depriving a person oflivelihood must meet the challenge of Art.14.

D.K. YADAV 1·. J.M.A. INDUSTRIES [K. RAMASWAMY, J] 941

and such law would be liable to be tested on the anvil of Art. 14 and the procedure prescribed by a statute or statutory rule or rules or orders effecting the civil rights or result in civil consequences would have to answer the requirement of Art. 14. So it must be right, just and fair and not arbitrary, fanciful or oppressive. There can be no distinction between a quasi-judicial function and an administrative function for the purpose of principles of natural justice.~The aim of both administrative. inquiry as well as the quasi-judicial enquiry is to arrive at a just decision and if a B rule of natural justice is calculated to secure justice or to put it negatively, to prevent miscarriage of justice, it is difficult to see why it should be applicable only to quasi-judicial enquiry and not to administrative enquiry. It must logically apply to both. • Therefore, fair play in action requires that the procedure adopted must be c just, fair and reasonable. The manner of exercise of the power and its impact on the rights of the person affected would be in conformity with the principles of natural justice. Art. 21 clubs life with liberty, dignity of person with means of livelihood without which the glorious content of dignity of person would be reduced to animal existence. When it is interpreted that the colour and content of D procedure established by law must be in conformity with the minimum fairness and processual justice, it would relieve legislative callousness despising opportu- nity of being heard and fair opportunities of defence. Art. 14 has a pervasive processual potency and versatile quality, equalitarian in its soul and allergic to discriminatory dictates. Equality is the antithesis of arbitrariness. It is, thereby, conclusively held by this C?urt that the principles of natural justice are part of Art. E 14 and the procedure prescribed by law must be just, fair and reasonable.

In Delhi Transporr Corpn. v. D.T.C. Mazdoor Congress and Ors~[l991] Suppl. l sec 600 this court held that right to public employment and its concomitant right to livelihood received protective umbrella under the can copy of F Arts. 14 and 21 etc. All matters relating to employment includes the right to continue in service till the employee reaches superannuation or until his service is duly terminated in accordance with just. fair and reasonablt'llrocedure prescribed under the provisions of the c'onstitution and the rules made under the provisions of the constit.ution and the rules made under proviso to Art. 309 of the Constitution or the statutory provisions or .the rules, regulations or instructions having statutory G flavour. They must be conformable to the rights guaranteed in Part III and IV of the Constitution. Art. 21 guarantees right to life which includes right to livelihood. the deprivation thereof must be in accordance with just and fair procedure prescribed by law conformable to Arts. 14 and 21 so as to be just, fair and reasonable and not fanciful, oppressive or at vagary. The principles of natural H

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A justice is an integral part of the guarantee of equality assured by Art. 14. Any law made or action taken by an employer must be fair,just and reasonable. The power to terminate the service of an employee/workman in accordance with just, fair and reasonable procedure is an essential inbuilt or natural justice. Arts. 14 strikes at arbitrary action. It is not the form of the action but the substance of the order that is to be looked into. It is open to the court to lift the veil and gauge the effect of the B impugned action to find whether it is the foundation to impose punishment or Is only a motive. Fair play is to secure justice, procedural as well as suhstantiYe. The substance of the order is the soul and the affect thereof is the end result.

It is thus well settled law that right to life enshrined under Art. 21 of the Constitution would include right to livelihood. The order of termination of the c service of an employee/workman visits with ci vii consequences of jeopardising not on! y his/her Ii velihood but also career and Ii velihood of dependents. Therefore, before taking any action putting an end to the tenure of an empfoyee/workman fair play requires that a reasonable opportunity to put forth his case is given and domestic enquiry conducted complying with the principles of natural justice. In o D. TC. v. D. TC. Mazdoor Congress and Ors. (supra) the constitution bench. per majority. held that termination of the service of a workman giving one month's notice or pay in lieu thereof without enquiry offended Art. 14. The order terminating the service of the employees was set aside.

E In this case admittedly no opportunity was given to the appellant and no ,enquiry was held. The appellant" s plea put forth at the earliest was that despite his reporting to duty on December 3, 1980 and on all subsequent days and readiness to join duty he was prevented to report to duty, nor he be permitted to sign the

F attendance register. The Tribunal did not record any conclusive finding in this behalf. It concluded that the management had power under Cl. 13 of the certified Standing Orders to terminate with the sen'ice of the appellant. Therefore, we hold - that the prindples of natural justice must be read into the standing order No. 13 (2) (iv). Otherwise it would become arbitrary. unjust and unfair violating Arts. 14. When so read the impugned action is violative of th.e principles of natural justice.

G This conclusion leads us to the question as to what relief the appellant is entitled to. The management did not conduct any domestic enquiry nor given the appellant any opportunity to put forth his case. Equally the appellant is to blame himself for the impugned action. Under those circumstances 50 per cent of the back ·wages would meet the ends of justice. The appeal is accordingly allowed. H The award of the Labour Court is set aside and the letter dated December 12, 1980

D.K. YADAV , .. J.M.A. INDUSTRIES [K. RAMASWAMY, J] 943

of the management is quashed. There shall be a direction to the respondent to A reinstate the appellant forthwith and pay him back wages within a period of three months from the date of the receipt of this order. The appeal is allowed accord- ingly. The parties would bear their own costs.

N.P.V. Appeal allowed.