1993 (5) TMI 177 - SC - Indian Laws

Supreme Court overturns termination, emphasizes natural justice & statutory compliance

The appeal challenged the termination of the appellant's service, upheld by the Labour Court, Haryana. The termination was deemed legal based on the ... Principles of natural justice - domestic enquiry before termination - abandonment of service under standing orders - automatic loss of lien versus managerial action - definition of 'retrenchment' under Section 2(oo) - right to livelihood under Articles 14 and 21Principles of natural justice - abandonment of service under standing orders - domestic enquiry before termination - right to livelihood under Articles 14 and 21 - Validity of the respondent's action of striking off the appellant's name and treating him as having abandoned service under clause 13(2)(iv) of the Certified Standing Orders in the absence of any opportunity of hearing or domestic enquiry. - HELD THAT: - The Court held that although standing orders have statutory force and clause 13(2)(iv) contemplates loss of lien on prolonged unauthorised absence, the procedure in such standing orders must conform to the requirements of fairness implicit in Articles 14 and 21. The principles of natural justice - in particular the right to be informed of the case against one and a reasonable opportunity to present one's defence - apply to administrative actions which have civil consequences such as termination of employment. Precedents were examined to show that striking a name from the muster roll or treating absence as abandonment may amount to termination or retrenchment and cannot be effected without adherence to minimum fair procedure. Since the appellant asserted that he reported for duty but was prevented from entering and no enquiry or opportunity to explain was afforded by the management, the action was held to be arbitrary and violative of natural justice when clause 13(2)(iv) is read without importing fair hearing safeguards. The Court therefore read the requirement of a fair opportunity into the standing order to avoid arbitrariness and to make the procedure just, fair and reasonable under Articles 14 and 21. Having found the procedure defective, the Court exercised its remedial power to grant equitable relief rather than to decide the matter solely on the definition of 'retrenchment' in Section 2(oo).The letter terminating the appellant's service is quashed, the award of the Labour Court is set aside, the appellant is directed to be reinstated forthwith and to be paid back wages (the Court indicating that 50% of back wages meets the ends of justice) within three months; parties to bear their own costs.Final Conclusion: The appeal is allowed: termination effected by striking off the appellant for alleged unauthorised absence was held arbitrary and violative of the principles of natural justice as read into the standing order; the impugned letter is quashed, the appellant is to be reinstated and paid back wages (with the Court indicating 50% of back wages as adequate), to be paid within three months. Issues Involved:1. Legality of the termination of the appellant's service.2. Applicability of principles of natural justice.3. Compliance with statutory provisions under the Industrial Disputes Act, 1947.Summary:1. Legality of the termination of the appellant's service:The appeal was against the award of the Labour Court, Haryana, which upheld the termination of the appellant's service as legal and valid. The respondent claimed that the appellant wilfully absented from duty continuously for more than 8 days without leave or prior information, invoking clause 13(2)(iv) of its Certified Standing Order. The Tribunal found that the appellant failed to prove his case and that the respondent's action was in accordance with the standing orders, not constituting termination or retrenchment u/s 2(oo) of the Industrial Disputes Act, 1947.2. Applicability of principles of natural justice:The Supreme Court emphasized that the principles of natural justice must be read into standing order No. 13(2)(iv). The court held that the impugned action was violative of the principles of natural justice as no opportunity was given to the appellant to present his case, nor was any domestic enquiry conducted. The court stated that any action affecting the right to livelihood must be just, fair, and reasonable, in conformity with Articles 14 and 21 of the Constitution.3. Compliance with statutory provisions under the Industrial Disputes Act, 1947:The court referred to the definition of 'retrenchment' u/s 2(oo) and the mandatory procedure u/s 25F of the Act. It was held that the termination of service without complying with the principles of natural justice and statutory provisions was invalid. The court cited precedents where similar actions were deemed arbitrary and unjust.Conclusion:The appeal was allowed, setting aside the Labour Court's award and quashing the respondent's letter dated December 12, 1980. The court directed the respondent to reinstate the appellant forthwith and pay 50% of the back wages within three months. The parties were to bear their own costs.