L. Robert D'souza Vs. The Executive
Engineer Southern Railway & ANR [1982] INSC 20 (16 February 1982)
DESAI, D.A.
DESAI, D.A.
MISRA, R.B. (J)
CITATION: 1982 AIR 854 1982 SCR (3) 251 1982
SCC (1) 645 1982 SCALE (1)466
CITATOR INFO :
R 1983 SC 500 (2) E 1983 SC1320 (11) E&D
1990 SC1808 (5)
ACT:
Industrial Disputes Act, 1947, sections 2(oo)
and 25F, scope of-"Termination of service for any reason whatsoever"
in the definition "retrenchment" clarified.
Construction of Section 9A-Casual labour,
termination of services of-Railway Establishment Code, Rules 2501 and 2505,
explained.
HEADNOTE:
The appellant joined service as a gangman in
Southern Railway on July 1, 1948. In course of his service he was transferred
to various places. While he was working as a Lascar at Ernakulam, he was
transferred, sometime in March 1970 by way of punishment for his Union
activities in the capacity of General Secretary of the Southern Railway
Construction Workers Union, Ernakulam, to Podannur in Tamil Nadu. However, his
transfer was cancelled and he joined duty on 20-2-1971 at Ernakulam. The
Ministry of Labour, Government of India, by its letter dated April 23, 1974
directed treatment of his entire period of absence from 8th March, 1970 to 19th
February, 1971 as duty. Later, the appellant approached the Labour Court for
recovering some of his dues which remained pending for a long time. As the
appellant and those similarly situated were likely to reach the age of
superannuation and by the unfair labour practice, namely, treating them only as
'daily rated labour', of the Railway Administration, they were likely to be
denied the full retirement benefits, appellant and several others filed a writ
petition in the High Court of Kerala, praying for a direction that they should
be treated at least as temporary railway servant with attendant benefits.
During the pendency of the matter, in connection with the demand for all the
benefits granted by the Central Pay Commission being extended to the category
of employees to which the appellant belonged the appellant undertook a fast,
but broke the same on September 28, 1974 at the intervention of the Assistant
Labour Commissioner. Taking advantage of the appellant's absence, the
respondents terminated his service with retrospective effect, i.e., from
18-9-1974 on the ground of unauthorised absence. A learned single Judge having
dismissed the same, the matter was taken in appeal before the Division Bench.
In the appeal, it was contended that the termination of service of the
appellant in the circumstances would constitute retrenchment within the meaning
of section 25F of the Industrial Disputes Act, 1947 and, therefore, the order
of termination was invalid. The matter was referred to the Full Bench which
held that there was no retrenchment and dismissed the appeal. Hence, the appeal
by special leave.
Allowing the appeal, the Court 252
HELD: 1. The expression "termination of
service for any reason whatsoever" in the definition
"retrenchment" in section 2(oo) of the Industrial Disputes Act, 1947
covers every kind of termination of service except those not expressly included
in section 25F or not expressly provided for by other provisions of the Act
such as sections 25FF and 25FFF. The excepted categories are (i) termination by
way of punishment inflicted pursuant to disciplinary action; (ii) voluntary
retirement of the workman; (iii) retirement of the workman on reaching the age
of superannuation if the contract of employment between the employer and the
workman concerned contains a stipulation in that behalf; (iv) or termination of
the services on the ground of continued ill- health. Once the case does not
fall in any of the excepted categories, the termination of service even if it
be according to automatic discharge from service under agreement would
nonetheless be retrenchment within the meaning of expression in section 2(oo)
of the Act. It must as a corollary follow that if the name of the workman is
struck off the roll, that itself would constitute retrenchment. [259 B-C, 206
H, 261 A-B] Delhi Cloth & General Mills Ltd. v. Shambhu Nath Mukherji,
[1978] 1 SCR 591, followed.
State Bank of India v. N. Sundera Money,
[1976] 3 S.C.R. 160; Hindustan Steel Ltd. v. Presiding Officer, Labour Court,
[1977] 1 S.C.R. 586; Santosh Gupta v, State Bank of Patiala, [1980] 2 S.C.R.
884 at 892; Mohan Lal v. Bharat Electronics Ltd., [1981] 3 S.C.C. 225, referred
to.
1:2. There is neither apparent nor real
conflict between the decision of the constitution bench in Hariprasad
Shivshanker Shukla v. A.D. Divikar, [1957] S.C.R. 121 and the later five
decisions commencing from Sundera Money and ending with Mohanlal's case.
Re-examining a contention over again so as to cover the familiar ground would,
apart from giving a gobye to the doctrine of stare decisis, would be a sheer
waste of time and mere lengthening of the judgment.
[260 C-D] Surendra Kumar Verma & Ors. v.
Central Government Industrial-cum-Labour Court, New Delhi & Anr., [1981] 4
S.C.C. 443, View of Pathak, J. held inapplicable.] 2:1. Notice contemplated by
clause (a) of section 25F would not be dispensed with, in view of the provision
contained in proviso (b) of section 9A, which is an independent provision
having no co-relation with section 25F. [264 B] 2:2. Section 9A imposes an
obligation on the employer, who promises to effect any change in the conditions
of service applicable to any workman in respect of any matter specified in the
Fourth Schedule to give notice as therein provided and the employer is
precluded from effecting the change without giving to the workman likely to be
effected by such change, notice in the prescribed manner of the nature of the
change proposed to be effected, and the change cannot be effected within 21
days of the giving of such notice. In order to attract section 9A the change
proposed must be in the conditions of service applicable to 253 the workman in
respect of any matters specified in the Fourth Schedule. If the proposed change
falls in any of the matters specified in the Fourth Schedule the change can be
effected after giving notice in the prescribed manner and waiting for 21 days
after giving such notice. In order to attract section 9A the employer must be
desirous of effecting a change in conditions of service in respect of any
matter specified in Fourth Schedule. If the change proposed does not cover any
matter in Fourth Schedule section 9A is not attracted and no notice is
necessary. [262 E-G] Workmen of Sur Iron & Steel Co. (P) Ltd. v. Sur Iron
& Steel Company (P) Ltd., [1971] LLJ 570; Tata Iron & Steel Company
Ltd. v. Workmen, [1973] 1 SCR 594; Assam Match Co. Ltd. v. Bijoy Lal Sen,
[1974] 1 SCR 116, referred to.
2:3. Retrenchment to be valid must comply
with three conditions set out in section 25F. They are, (a) subject to the
proviso to clause (a) one month's notice in writing specifying the reasons for
retrenchment or wages in lieu of notice: (b) compensation to be paid according
to the measure provided in the clause, the payment to be simultaneous with the
retrenchment; and (c) the notice in the prescribed manner to be served on the
appropriate Government. It was obligatory upon the employer, who wants to
retrench the workmen to give notice as contemplated by clause (a) of section
25. [262 C-E] 2:4. A careful reading of sections 9A and 25F makes it clear that
when a workman is retrenched, no change in his conditions of service is affected.
No item in Fourth Schedule which sets out the conditions of service covers the
case of retrenchment. In fact retrenchment is specifically covered by item 10
of the Third Schedule. If retrenchment which connotes termination of service,
cannot constitute change in conditions of service in respect of any item
mentioned in Fourth Schedule section 9A would not be attracted. If section 9A
is not attracted, the question of seeking exemption from it in the case falling
under the proviso would hardly arise. Therefore, neither section 9A nor the
proviso is attracted in this case. That apart, none of the other pre-conditions
to a valid retrenchment have been complied with, because the very letter of
termination of service shows that services were deemed to have been terminated
from a back date which clearly indicates no notice being given, no compensation
being paid and no notice being given to the prescribed authority. Therefore,
termination of service, being retrenchment, for failure to comply with section
25F, would be void ab initio. [263 D-E, H, 264 A, C-D] 3:1. The test provided
is that for the purpose of determining the eligibility of casual labour to be
treated as temporary, the criterion should be the period of continuous work put
in by each individual labour on the same type of work and not the period put in
collectively by any particular gang or group of labourers. It is thus
abundantly clear that if a person belonging to the category of casual labour
employed in construction work other than work-charged projects renders six
months' continuous service without a break, by the operation of statutory rule
the person would be treated as temporary railway servant after the expiry of
six months of continuous employment. It is equally true of even seasonal
labour. Once the person acquired the status of temporary 254 railway servant by
operation of law, the conditions of his service would be governed as set out in
Chapter XXIII. The service of a temporary railway servant may be termined only
as provided in Rule 2301. [266 H, 267 A-B, E] 3:2. The underlying intendment of
the Rule 2501(b) (i)
has rendered six months' continuous service
would be placed in the category of temporary railway servant unless he is
employed on work-charged project. Rule 2501(b) (i) clearly provides that even
where staff is paid from contingencies, they would acquire the status of
temporary railway servants after expiry of six months of continuous employment.
[271 E- H] In the instant case: (i) the appellant acquired the status of
temporary railway servant long before the termination of his service and,
therefore, his service could not have been terminated under Rule 2505; (ii) he
never worked on projects but on a construction Unit. Construction Unit is a
regular Unit and cannot be equated to Project.
Every construction work does not imply
Project. Project is correlated to planned projects in which the workman is
treated as work-charged. Persons belonging to casual labour category cannot be
transferred but the appellant was transferred on innumerable occasions; (iii)
as a result of the appellant and others filing a writ petition, three co-
appellants were informed that they were treated as on regular employments and
ceased to belong to the category of casual labour. But for impugned termination
orders the appellant also would have been treated as temporary and therefore,
the appellant received discriminatory treatment offending Article 14 & 16
of the Constitution; and (iv) section 25F of the Industrial Disputes Act
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 the conditions set out in Act are satisfied. The appellant
would be a workman within the meaning of that expression in section 2(s) of the
Act. He has rendered continuous service for a period over twenty years.
Therefore, the first condition of section 25F that appellant is a workman who
has rendered service for not less than one year under the Railway
administration, an employer carrying on an industry, is satisfied. His service
is terminated which for the reasons herein before given would constitute
retrenchment. It is immaterial that he is a daily rated worker. He is either
doing manual or technical work and his salary was less than Rs. 500 and the
termination of his service does not fall in any of the excepted categories.
Therefore, assuming that he was a daily rated worker, once he has rendered
continuous uninterrupted service for a period of one year or more, within the
meaning of section 25B of the Act and his service is terminated for any reason
whatsoever and the case does not fall in any of the excepted categories,
notwithstanding the fact that Rule 2505 would be attracted, it would have to be
read subject to the provisions of the Act. Accordingly the termination of
service in this case would constitute retrenchment and for not complying with
pre-conditions to valid retrenchment the order of termination would be illegal
and invalid. [271 D, 272 A, G, 275 D-G] 3:3. Absence without leave constitutes
misconduct and it is not open to the employer to terminate service without
notice and inquiry or at any rate without complying with the minimum principle
of natural justice. Further 255 Rule, 2302 clearly prescribes the mode, manner
and methodology of terminating service of a temporary railway servant and
admittedly the procedure therein prescribed having not been carried out, the
termination is void and invalid. Accordingly, the same conclusion would be
reached even while accepting for the purpose of the facts of this case
simultaneously rejecting it in law that the termination does not constitute
retrenchment yet nonetheless it would be void and inoperative. [273 A-C]
OBSERVATION: Rule 2501 which permits a man serving for 10, 20, 30 years at a
stretch without break being treated as daily rated servant, is thoroughly
opposed to the notions of socio-economic justice and it is high time that
Railway administration brings this part of the provision of the Manual,
antiquarian and antediluvian, in conformity with the Directive Principles of
State Policy as enunciated in Part
IV of the Constitution. It is high time that these utterly unfair
provisions wholly denying socio-economic justice are properly modified and
brought in conformity with the modern concept of justice and faieplay to the
lowest and the lowliest in Railway administration. [273 C-D, 274 A-B] &
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1613 of 1979.
Appeal by special leave from the Judgment and
Order dated the 9th January, 1979 of the Kerala High Court in O.P. No. 4401 of
1974.
K.R.R. Pillai for the Appellant.
P.A. Francis and Miss A. Subhashini for the
Respondents.
The Judgment of the Court was delivered by
DESAI, J. Appellant L. Robert D'Souza joined service as a gangman at
Mangalapuram in Southern Railway on July 1, 1948. In course of his service he
was transferred to various places. When he was last working as Lascar at
Ernakulam, on October 8, 1974 the Executive Engineer (Construction), Ernakulam
intimated to him that his services were deemed to have been terminated from
September 18, 1974, from which date the appellant was said to have absented
himself from duty. This letter has an important bearing on the issues raised in
this appeal, and, therefore, relevant portion may be extracted here:
"You have absented yourself
unauthorisedly from 18.9.1974 and hence your services are deemed to have been
terminated from the day you have absented yourself. Please note.
256 Since you are no longer on the rolls of
this office you should vacate the quarters allotted to you immediately failing
which action will be taken to evict you".
According to the appellant, up to the date of
unauthorised and illegal termination of his service he had rendered continuous
service for a period of 26 years yet the Railway administration wrongfully denied
him the status of a temporary and or regular workman and treated him a daily
rated casual labourer. This treatment according to the appellant was so unfair
that it prompted persons who were victims of this unfair treatment by the
Railway administration to form a Union named Southern Railway Construction
Workers Union, Ernakulam, of which the appellant was the General Secretary. The
Union submitted a charter of demands which presumably irritated the authorities
and chagrinned by it, the appellant was transferred to Podannur in Tamil Nadu
by way of punishment.
As the late Shri A.K. Gopalan, who was a
renowned trade union leader, espoused the cause of the appellant, his transfer
was cancelled and he was repasted and allowed to continue at Ernakulam after
paying the arrears of wages and granting continuity of service for the period
he did not join duty at the place of his transfer. This is quite evident from
the letter of the Under Secretary, Ministry of Labour, dated April 23, 1974,
which reads as under:
"With reference to your letter dated the
28th May, 1973, on the above subject, I am directed to say that it has been
reported by the Ministry of Railways that the Southern Railway Administration
has been advised that as you were transferred back to Ernakulam on 19th March,
1971, you should be deemed to have been on duty for the intervening period from
8th March, 1970 to 19th February, 1971, and your wages paid accordingly".
The local superiors of the appellant were
annoyed by the success of the appellant and they were on a look out for
settling the score with the appellant. In the meantime the appellant approached
the Labour Court for recovering some of his dues which remained pending for a
long time. As the appellant and those similarly situated were likely to reach
the age of superannuation and by the unfair labour practice of the Railway
administration they were likely to be denied the full retirement benefits,
appellant and several others filed a writ petition in the High Court of Kerala.
According 257 to the appellant, for the various reasons stated in the petition,
appellant and those similarly situated could not be treated as daily rated
casual labour and under the relevant rules appellant and his co-workers would
at least acquire the status of temporary railway servants and their services
could not be terminated in the manner in which the appellant's service was
terminated and that they would be entitled to all the retiral benefits. The
petition came up before a learned single judge who dismissed the same. The
matter was taken in appeal before the Division Bench. In the appeal it was
contended that the termination of service of the appellant in the circumstances
as set out earlier would constitute retrenchment within the meaning of section
25F of the Industrial Disputes Act, 1947 ('Act' for short), and therefore, the
order of termination, inter alia, is invalid.
The Division Bench found the question raised
before it of such importance and magnitude that it referred the same to the
Full Bench.
In the meantime the appellant was actively
pursuing his trade union activities. A demand was made that all the benefits
granted by the Central Pay Commission be extended to the category of employees
to which the appellant belonged and when these demands fell on deaf ears, it
was resolved to give a strike notice. The matter was taken in conciliation
which ultimately resulted in failure. The appellant approached the Central
Government to make a reference under s. 10 of the Act in respect of the demands
for adjudication by National Tribunal. As the Central Government was wobbling
in its approach, the appellant declared his intention to go on fast unto death
for redressal of the grievances suffered for decades by the lowest category of
railway employees. At that stage the Assistant Labour Commissioner intervened
and persuaded the appellant not to precipitate the matter. The appellant
accordingly broke his fast on September 28, 1974, in the hospital where he was
confined during his fast.
Taking advantage of his absence during the
fast immediately the order of termination of his service was served and this
led to the present proceedings which have culminated in this appeal.
The appellant, inter alia, contended before
the Full Bench of Kerala High Court that the termination of his service for the
reasons and in the manner brought about is illegal and invalid, that it was
victimisation for trade union activities; that it was unfair labour practice
and that it was mala fide. It was also contended that in view of his long uninterrupted
service admittedly over twenty years 258 he was at the minimum a temporary
railway servant and, therefore, his service cannot be terminated unless he was
rendered surplus or by way of disciplinary measure after complying with Article
311 of the Constitution. The legal submission put in the forefront was that in
the circumstances herein mentioned the termination of service constituted
'retrenchment' within the meaning of s. 25F of the Act and as the pre-condition
to valid retrenchment having not been satisfied, the termination is illegal and
invalid. The Full Bench answered the point referred to it against the appellant
holding that there is no retrenchment as contended for, on behalf of the
appellant and finally dismissed the petition. Hence this appeal by special
leave.
At the outset it must at once be pointed out
that the construction put by the Full Bench of the Kerala High Court on the
expression 'retrenchment' in s. 2(oo) of the Act that it means only the
discharge of surplus labour or staff by the employer for any reason whatsoever
is no more good law and in fact the decision of the Full Bench of Kerala High
Court in L. Robert D'Souza v. Executive Engineer, Southern Railway and Anr.,(1)
has been specifically overruled by this Court in Santosh Gupta v. State Bank of
Patiala (2) This Court has consistently held in State Bank of India v. N. Sundera
Money,(3) Hindustan Steel Ltd. v. Presiding Officer, Labour Court,(4) and Delhi
Cloth & General Mills Ltd. v. Shambhu Nath Mukherji,(5) that the expression
'termination of service for any reason whatsoever' now covers every kind of
termination of service except those not expressly included in s. 25F or not
expressly provided for by other provisions of the Act such as ss. 25FF and
25FFF. It was attempted to be urged that in view of the decision of this Court
in Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union,(6) the
ratio of which was re-affirmed by a Constitution Bench of this Court in
Hariprasad Shivshanker Shukla v. A.D. Divikar,(7) all the later decisions run
counter to the Constitution Bench and must be treated per in curium. This
contention need not detain us because first in Hindustan Steel Ltd. case, then
259 in Santosh Gupta's case (Supra) and lastly in Mohan Lal v. Bharat Electronics
Ltd.,(1) it was in terms held that the decision in Sundera Money's case was not
at all inconsistent with the decision of the Constitution Bench in Hariprasad
Shukla's case and not only required no reconsideration but the decision in
Sundera Money's case was approved in the aforementioned three cases. This
position is further buttressed by the decision in Delhi Cloth and General Mills
Ltd. case wherein striking off the name of a workman from the roll was held to
be retrenchment. It is, therefore, the settled law that the expression
'termination of service for any reason whatsoever' in the definition of the
expression 'retrenchment' in s. 2(oo) of the Act covers every kind of
termination of service except those not expressly included in s. 25F or not expressly
provided for by other provisions of the Act such as ss. 25FF and 25FFF. Two
things thus emerge, firstly, that the decision of the Full Bench of Kerala High
Court under appeal has been specifically overruled by this Court in Santosh
Gupta's case (Supra) and secondly, in view of the decision in Delhi Cloth
General Mills Ltd. case (Supra) striking off the name of a workman from the
rolls without anything more constitutes retrenchment within the meaning of the
expression 'retrenchment' in s. 2(oo). This emerging legal position alone would
be sufficient for us to allow the appeal and set aside the decision of the
Kerala High Court.
Sheet anchor of Mr. Francis's submission is
that this Court should proceed on the construction of expression 'retrenchment'
as set out in Hariprasad Shukla's case, and ignore the construction of the
expression 'retrenchment' put in the decisions of this Court in Sundera Money's
Hindustan Steel Ltd. case, Santosh Gupta's case, Delhi Cloth & General
Mills Ltd. case as being per in curium. We are not disposed to undertake this
recurring futile exercise for obvious reason those on four different occasions,
in Hindustan Steel Limited case, a Division Bench of this Court consisting of
Chandrachud, Goswami and Gupta, JJ. in Sundera Money's case, a Bench consisting
of Chandrachud, Krishna Iyer and Gupta, JJ; in Santosh Gupta's case, a Bench
consisting of Krishna Iyer and O. Chinnappa Reddy, JJ. and a Bench of two
judges consisting of Gupta, J. and one of us in Mohanlal's case, have repeatedly
undertaken this very detailed exercise and held that there is no inconsistency
of any nature and kind nor any conflict, contradiction or repugnancy between
the decision of the Constitution Bench in Hariprasad Shukla's case and
aforementioned later four decisions 260 and they stand in harmony with each
other and the later decisions take note of an amendment in the relevant
provisions of Industrial Disputes Act and, therefore, the construction put on
the expression 'retrenchment' in the aforementioned decisions pronounced the
settled view of this Court. We, therefore, consider it futile and waste of
precious time of the Court to re-examine the submission of Mr. Francis
negatived on four different occasions in the past. Undoubtedly, Mr. Francis
pointed out that in Surendra Kumar Verma & Ors. v. Central Government
Industrial Tribunal-cum-Labour Court, New Delhi & Anr.,(1) Pathak, J.
in his concurring judgment has stated that
his concurrence with the majority view propounded by Reddy, J. should not be
taken to imply his agreement with the interpretation of s.
2(oo) rendered in Santosh Gupta's case. It
may, however, be mentioned that the majority in that case has affirmed the
earlier decision. Therefore, after meticulously examining on five distinct and
different occasions, it is clearly and unequivocally stated that there is
neither apparent nor real conflict between the decision of the Constitution
Bench in Hariprasad Shukla's case and the later five decisions commencing from
Sundera Money and ending with Mohanlal's case, it would be sheer waste of time
and merely adding to the length of the judgment to re-examine this contention
over again, so as to cover the familiar ground.
As we are not prepared to examine the
contention over again, the submission of Mr. Francis that 'retrenchment'
contemplates some overt act on the part of the employer, that it inheres the
principle of last come first go which again requires an overt act on the part of
the employer;
that when retrenched workmen and required to
be re-employed, first option for re-employment has to be given to the
retrenched workmen, which necessitates some overt act on the part of the
employer, would be beside the point and of no relevance and significance. The
reference to Rules 76, 77 and 78 of the Industrial Disputes (Central Rules).
1957, does not advance his case a step further. The definition of expression
'retrenchment' in s. 2(oo) is so clear and unambiguous that no external aids are
necessary for its proper construction. Therefore, we adopt as binding the well
settled position in law that if termination of service of a workman is brought
about for any reason whatsoever, it would be retrenchment except if the case
falls within any of the excepted categories, i.e., (i) termination by way of
punishment inflicted pursuant to disciplinary action; (ii) voluntary retirement
of the work- 261 man; (iii) retirement of the workman on reaching the age of
superannuation if the contract of employment between the employer and the
workman concerned contains a stipulation in that behalf; (iv) or termination of
the service on the ground of continued ill-health. Once the case does not fall
in any of the excepted categories the termination of service even if it be
according to automatic discharge from service under agreement would nonetheless
be retrenchment within the meaning of expression in s. 2(oo). It must as a
corollary follow that if the name of the workman is struck off the roll that
itself would constitute retrenchment, as held by this Court in Delhi Cloth
& General Mills Ltd. case. We specifically refer to this case because the
facts in the case before us are on all fours with the facts in the
aforementioned cases and on parity of reasoning and judicial comity the same
conclusion must follow unless something to the contrary is indicated. In that
case respondent S. N. Mukherji who was recruited as a labourer came to be
promoted in course of time to the post of Motion Setter. On October 1, 1964, pursuant
to some re-organisation in the establishment the post of Motion Setter was
abolished. The management offered employment to the respondent S. N. Mukherji
on any other suitable post, which was indicated to be the post of Assistant
Line Fixer (Assistant Grade I) without loss of wages. He was to be on
probation. The management found him unsuitable for this post even after
extending the period of probation by 9 months and therefore offered him post of
Fitter on the same pay which he, as a Motion Setter, used to get. The response
of S. N. Mukherji to this offer was that he should be given a further
opportunity to show his efficiency in his job and if he fails to improve, he
would tender his resignation voluntarily. The management did not reply to the letter
with the result that the workman did not report for work at the newly offered
post. On January 19, 1966, the management wrote to the workman that his name
has been struck off from the rolls with effect from August 24, 1965, for
continued absence without intimation. Such termination of service was held to
be covered by the expression 'retrenchment' and it was struck down on the
ground that the pre-condition to valid retrenchment was not complied with. It
would thus appear that it is consistently held by this Court that termination
of service for any reason whatsoever except the excepted categories would
constitute retrenchment within the meaning of the expression in the Act. And
here recall the order of termination of service of the appellant wherein it is
stated that "You have absented yourself unauthorisedly from 19.8.1974 and
hence your services are deemed to have been terminated from the day you have
absented yourself." Is any other 262 conclusion possible save and except
the one recorded by this Court in Delhi Cloth & General Mills Ltd case that
this constitutes retrenchment and for non-compliance with pre- condition, it is
invalid.
Before referring to other contentions of Mr.
Francis, we may dispose of one contention based upon construction of s. 9A of
the Act as in our opinion, it is utterly untenable.
Mr. Francis says that if valid retrenchment
presages a notice contemplated by s. 25F, the same would stand dispensed with
in view of the proviso (b) of s. 9A of the Act and therefore even if the termination
is held to be retrenchment, the same would be valid. There are two basic
fallacies in this submission. Retrenchment to be valid must comply with three
conditions set out in s. 25F. They are (a) subject to the proviso to clause
(a), one month's notice in writing specifying the reasons for retrenchment or
wages in lieu of notice; (b) compensation to be paid according to the measure
provided in the clause, the payment to be simultaneous with the retrenchment;
and (c) the notice in the prescribed manner to be served on the appropriate
Government. If the termination in this case otherwise constitutes retrenchment
admittedly clauses (b) and (c) of s. 25F have not been complied with. That
apart, the submission that in view of the provision contained in proviso (b) of
s. 9A, the notice contemplated by clause (a) of s. 25F would be dispensed with,
is without merits.
Section 9A imposes an obligation on the
employer, who proposes to effect any change in the conditions of service
applicable to any workman in respect of any matter specified in the Fourth
Schedule to give notice as therein provided and the employer is precluded from
effecting the change without giving to the workman likely to be affected by
such change, notice in the prescribed manner of the nature of the change
proposed to be effected, and the change cannot be effected within 21 days of
the giving of such notice. In order to attract s. 9A the change proposed must
be in the conditions of service applicable to the workman in respect of any
matters specified in the Fourth Schedule. If the proposed change falls in any
of the matters specified in the Fourth Schedule the change can be effected
after giving notice in the prescribed manner and waiting for 21 days after
giving such notice. There is a proviso to s. 9A which exempts the employer from
giving the notice of change if the case falls in any of the two provisos.
According to Mr. Francis the case would be covered by proviso (b). It reads as
under:
"9A. No employer, who proposes to effect
any change in the conditions of service applicable to any workman in 263
respect of any matter specified in the Fourth Schedule, shall effect such
change- (a) x x x x (b) x x x x Provided that no notice shall be required for
effecting any such change:
(a) x x x x (b) where the workmen likely to
be effected by the change are persons to whom the Fundamental and Supplementary
Rules, Civil Services (Classification, Control and Appeal) Rules, Civil
Services (Temporary Service) Rules, Revised Leave Rules, Civil Services Regulations,
Civilians in Defence Services (Classification, Control and Appeal) Rules, or
the Indian Railway Establishment Code or any other rules or regulations that
may be notified in this behalf by the appropriate Government in the Official
Gazette, apply".
It was obligatory upon the employer, who
wants to retrench the workmen to give notice as contemplated by clause (a) of
s. 25. When a workman is retrenched it cannot be said that change in his
conditions of service is effected. The conditions of service are set out in
Fourth Schedule. No item in Fourth Schedule covers the case of retrenchment. In
fact, retrenchment is specifically covered by Item 10 of the Third Schedule.
Now, if retrenchment which connotes termination of service, cannot constitute
change in conditions of service in respect of any item mentioned in Fourth
Schedule, S. 9A would not be attracted. In order to attract s. 9A the employer
must be desirous of effecting a change in conditions of service in respect of
any matter specified in Fourth Schedule. If the change proposed does not cover
any matter in Fourth Schedule s. 9A is not attracted and no notice is
necessary. See Workmen of Sur Iron & Steel Co. (P) Ltd. v. Sur Iron &
Steel Company (P) Ltd., Tata Iron & Steel Company Ltd. v. Workmen and Assam
Match Co. Ltd. v. Bijoy Lal Sen. Thus if s. 9A is not attracted the question of
seeking exemption from it in the case falling under 264 the proviso would
hardly arise. Therefore, neither s 9A nor the proviso is attracted in this
case. The basic fallacy in the submission is that notice of change contemplated
by s.
9A and notice for a valid retrenchment under
s. 25F are two different aspects of notice, one having no co-relation with the
other. It is, therefore, futile to urge that even if termination of the service
of the petitioner constitutes retrenchment it would nevertheless be valid
because the notice contemplated by s. 25F would be dispensed with in view of
the provision contained in s. 9a, proviso (b). That apart, it is an
indisputable position that none of the other pre-conditions to a valid
retrenchment have been complied with in this case because the very letter of
termination of service shows that services were deemed to have been terminated
form a back date which clearly indicates no notice being given, no compensation
being paid and no notice being given to the prescribed authority. Therefore,
termination of service, being retrenchment, for failure of comply with s. 25F,
would be viod ab initio.
Mr. Francis next contended that as the appellant
belonged to the category of casual labour as defined in rule 2501 in Chapter
XXV of the India Railway Establishment Manual ('Manual' for short), no notice
prior to termination of his service is necessary or required by law in view of
the provisions contained in Rule 2505. The submission is that in the case of
casual labour the service will be deemed to have been terminated when such
employee absents himself or no the close of the day.
Rule 2501 reads as under:
"2501. Definition- (a) Casual labour refers
to labour whose employment is seasonal, intermittent, sporadic or extends over
short periods. Labour of this kind is normally recruited from the nearest
available source. It is not liable to transfer, and the conditions applicable
to permanent and temporary staff do not apply to such labour, (b) The casual
labour on railway should be employed only in the following types of cases,
namely:
(i) Staff paid from contingencies except
those retained for more than six months continuously. Such of those persons who
continue to do the same work 265 for which they were engaged or other work of
the same type for more than six months without a break will be treated as
temporary after the expiry of the six months of continuous employment.
(ii) Labour on projects, irrespective of
duration, except those transferred from other temporary or permanent
employment.
(iii) Seasonal labour who are sanctioned for
specific works of less than six months duration. If such labour is shifted from
one work to another of the same type, e.g., relaying and the total continuous
period of such work at any one time is more than six months' duration, they
should be treated as temporary after the expiry of six months of continuous
employment. For the purpose of determining the eligibility of labour to be
treated as temporary, the criterion should be the period of continuous work put
in by each individual labour on the same type of work and not the period put in
collectively by any particular gang or group of labourers.
x x x Note : (1) x x (2) Once any individual
acquires temporary status, after fulfilling the conditions indicated in (i) or
(iii) above, he retains that status so long as he is in continuous employment
on the railways. In other words, even if he is transferred by the administration
to work of a different nature he does not lose his temporary status.
(3) x x x (4) Casual labour should not be
deliberately discharged with a view to causing an artificial break in their
service and thus prevent their attaining the temporary status.
266 (5) x x x Rule 2505 may as well be
extracted. It reads as under:
"2505. Notice of termination of
service-Except where notice is necessary under any statutory obligation, no
notice is required for termination of service of the casual labour.
Their services will be deemed to have
terminated when they absent themselves or on the close of the day.
Note: In the case of a casual labourer who is
to be treated as temporary after completion of six months' continuous service,
the period of notice will be determined by the rules applicable to temporary
Railway servants".
In order to satisfactorily establish that the
applicant belonging to the category of casual labour whose service by deeming
fiction enacted in Rule 2505 will stand terminated by the mere absence, it must
be shown that the appellant was employed in any of the categories set out in
clause (b) of rule 2502. What has been urged on behalf of the respondent is
that the appellant was employed in construction work and, therefore, labour on
projects irrespective of duration would belong to the category of casual
labour. That, however, does not mean that every construction work by itself
becomes a work-charged project. On the contrary sub clause (1) of clause (b) of
rule 2501 would clearly show that such of those persons belonging to the
category of casual labour who continued to do the same work for which they were
engaged or other work of the same type for more than six months without a break
will be treated as temporary after the expiry of the six months of continuous
employment. Similarly, seasonal labour sanctioned for specific works for less
than six months' duration would belong to the category of casual labour.
However, sub clause (iii) of clause (b) of rule 2501 provides that if such
seasonal labour is shifted from one work to another of the same type, as for
example, 'relaying' and the total continuous period of such work at any one
time is more than six months' duration, they should be treated as temporary
after the expiry of six months of continuous employment. The test provided is
that for the purpose of determining the eligibility of casual labour to be
treated as temporary, the criterion should be the period of continuous work put
in by each individual 267 labour on the same type of work and not the period
put in collectively by any particular gang or group of labourers.
It is thus abundantly clear that if a person
belonging to the category of casual labour employed in construction work other
than work-charged projects renders six months' continuous service without a
break, by the operation of statutory rule the person would be treated as
temporary railway servant after the expiry of six months of continuous
employment. It is equally true of even seasonal labour. Once the person
acquired the status of temporary railway servant by operation of law, the
conditions of his service would be governed as set out in Chapter XXIII.
Rule 2301 in Chapter XXIII defines a
temporary railway servant. It reads as under:
"2301. Definition-A 'temporary railway servant'
means a railway servant without a lien on a permanent post on a Railway or any
other administration or office under the Railway Board. The term does not
include 'casual labour', a 'contract' or 'part time' employee or an
'apprentice'." The service of a temporary railway servant may be
terminated as provided in Rule 2301. The benefits which a temporary railway
servant enjoys are set out in the same chapter.
The question, therefore, is whether the
appellant who was recruited as casual labour continued to be the same or he had
acquired the status of temporary railway servant at the time of termination of
his service. In the affidavit filed in the High Court the respondents contended
that the appellant was employed in construction work on work-charged project.
The High Court did not examine this contention on merits and, therefore, it has
become obligatory upon us to probe it.
The appellant has stated that he joined as a
Gangman on July 1, 1948 at Mangalapuram and he was transferred in 1953 to
Pindur in Mysore State. He confessed that he does not have any record to show
this employment but urged that if the pay roll of the relevant period would be
produced by the Railway administration, the fact alleged would be completely
borne out. We would bypass this controversial period, without recording any
finding on it one way or the other.
The appellant further contends that on
November 15, 1954, on transfer he joined in the office of Inspector of Works
268 at Mangalore and since then he has been in continuous employment in the
construction branch of the Southern Railway till the date of his illegal
termination of service on October 8, 1974. These averments are incontrovertible
and have not rightly been controverted before us, in view of unimpeachable
evidence produced by the appellant. The Executive Engineer, Ernakulam, where
the appellant at the relevant time, i.e. September 5, 1966, was working,
addressed a letter to various Executive Engineers inquiring from them whether
the surplus staff on his establishment could be absorbed by any of them. The
material portion of the letter reads as under:
Ext. P-3 Executive Engineer's Office,
Ernakulam Dated 5.9.1966 Subject :- Surplus staff (Casual labour staff)
absorption of ----- "Since the major portion of the work in this
construction unit is over the list of the C.L. staff who are likely to be
rendered surplus by 30.9.66 and 31.12.66 due to expiry of sanction to the post
held by them, is enclosed.
Please advise whether you can absorb any of
these personnel in your construction division so that they may be relieved in
time if they are willing".
Enclosures:
(1) List.
List of C.L. Staff Working in Xen's
Office/Ers. Sr. No. Name Presently working as Date of appointment X X X
10. Robert D'Souza. Peon/Lascar. 15.11.54 X X
X This evidence furnished from the record of the respondent and not
controverted by any affidavit to the contrary would establish that the
appellant was in continuous service from November 15, 1954. Recall here, the
fact that his service was terminated by the impugned order contained in the
letter Annexure 1 dated October 8, 1974. Therefore, apart from the period in
controversy from 1948 to 1964 269 it is unquestionably established that the
appellant was in continuous uninterrupted service from November 1954 to October
1974, a period of 20 years and he was working as Peon/Lascar. Undoubtedly he
has been referred to as belonging to casual labour staff but would it be fair
to hold that after 20 years of continuous service, he would still continue to
be a casual labour and therefore, his service could be terminable at will, and
he would not be entitled to any of the benefits which a temporary or a
permanent railway employee would enjoy ? There is, however, one more aspect to
which we would refer before we proceed to pronounce upon the status of the
appellant. The definition of casual labour extracted by us above clearly
indicates that person belonging to casual labour is not liable to transfer. The
appellant has stated that he was transferred to Madras in 1957, to Tuni in
Andhra Pradesh in 1958, to Rajahmundry in 1960, to Samalkhotan in 1961, to
Virudhnagar in 1962 and to Manamadurai in 1965 and then to Ernakulam in August
1965. It appears that he was again transferred from Ernakulam which was
seriously objected and he took up the matter with the higher authorities when
he was re-transferred to Ernakulam on March 19, 1971. This appears from the
letter of the Under Secretary in the Ministry of Labour addressed to the
appellant in which it is stated that the Ministry of Railways was advised that
the appellant be transferred back to Ernakulam, which advice has been carried
out and the intervening period for which he did not report for duty, i.e. from
March 6, 1970 to February 19, 1971, he would be paid the wages as if he was on
duty. In the face of these incontrovertible facts could it at all be said that
the appellant though transferred ad nauseum still continued to belong to the
category of casual labour ? An additional fact which buttresses this conclusion
may be referred to. The appellant and several others filed petition in the High
Court of Kerala from which the present appeal arises. All the petitioners
before the High Court contended that each of them having rendered continuous
service for decades they could not be said to be belonging to the category of
casual labour and if anything all of them had acquired status of temporary
employees. The respondent filed counter-affidavit and contended that the
appellant and his co-petitioners in the High Court never acquired the status of
temporary railway servant and each of them belonged to the category of casual
labour. During the pendency of the petition 270 in the High Court service of
the appellant was terminated but his co-petitioners continued in service. After
the dismissal of the writ petition by the learned single judge appellant and
three others preferred Writ Appeal No. 218 of 1973 in the same High Court. By
the time the appeal came up for hearing three co-appellants of the present
appellant who were appellants before the Division Bench were informed that they
were treated as on regular employment and ceased to belong to the category of
casual labour. Unfortunately as the service of the appellant was already
terminated he was not given this benefit. This fact clearly emerges from the
manner in which the Division Bench disposed of the appeal before it. The
relevant observation is as under:
"In view of the letters received from
the Executive Engineer, Southern Railway, addressed to Shri K.P. Pathrosa,
advocate, appearing for respondents in the writ appeal, it has become
unnecessary to consider this writ appeal on merits".
With reference to the appellant it was stated
as under:
"As regards the first appellant, it is
stated that he absented himself from duty and so he had been denied employment.
Since then another Writ Petition O.P. No. 4401/74 has been filed by the first
appellant and is now pending before this Court. The contention of the first
appellant including what has been raised in this petition will be considered in
O.P. 4401/74".
By the letters referred to by the Division
Bench, the Executive Engineer informed the advocate appearing for Railway
administration that appellants other than the present appellant were absorbed
as regular railway employees and hence the appeal has become infructuous.
Unfortunately for the appellant he was denied this benefit as his service was
already terminated. If his service was not terminated, his case was not
distinguishable from the case of his co- appellants and he would have been
entitled both in law and facts to the same treatment. The approach of the
Railway administration to say the least is amazing. For years they did not act
according to law and confer status of temporary railway servant on the
appellant and his colleagues in the High Court. When appellant espoused this
cause he was thrown out but his colleagues were given the benefit richly
deserved in law. This discriminatory treatment cannot 271 help the respondent
because appellant's case cannot be distinguished. If the status of temporary
railway employee was already acquired before the termination of service in the
manner brought about, the same would be ipso facto invalid. At this stage we
would again revert to the annexure to the letter of Executive Engineer dated
September 5, 1966, in which the name of the appellant appears at Serial No. 10.
One of the co-petitioners of the appellant in
the High Court, who got the benefit of regular employment pursuant to the writ petition,
was one Shri K.N. Balakrishna. His name appears at Serial No. 1 in the annexure
to the letter of Executive Engineer referred to above. His date of appointment
is shown to be March 24, 1954. It would thus appear at a glance that the case
of the appellant could not be distinguished from the case of Shri K.N.
Balakrishna and if Shri Balakrishna was accorded the status of regular
employee, the appellant could not be treated otherwise, but for a singular
unfortunate event of his termination of service. He could not be singled out
for such treatment, Had his service not been terminated, the Railway
administration could not have denied him the status and this status he would
have acquired long back. If by operation of law, to wit, Rule 2501 the
appellant had acquired the status of temporary railway servant by rendering
continuous uninterrupted service for more than six months, his service could
not have been terminated under rule 2505. It, however, needed moral force of
fast and costly court proceedings by a low daily paid workman against the Railway
administration in the High Court to obtain such meagre benefit. It would thus
clearly appear that even the appellant would have acquired the status of at
least a temporary railway servant. But we would rather like to refer to the
legal position in this behalf more accurately.
To start with, let us recall the rule 2501(b)
(i) and (iii) and note below rule 2505. The underlying internment of the
provision is that a casual labourer who has rendered six months' continuous
service would be place in the category of temporary railway servant unless he
is employed on work- charged project.
Rule 2501(b) (i) clearly provides that even
where staff is paid from contingencies, they would acquire the status of
temporary railway servants after expiry of six months of continuous employment.
But reliance was placed on rule 2501(b) (ii) which provides that labour on
projects, irrespective of duration, except those transferred from other
temporary or permanent employment would be treated as casual labour. In order
to bring the case within the 272 ambit of this provision it must be shown that
for 20 years appellant was employed on projects. Every construction work does
not imply project. Project is correlated to planned projects in which the
workman is treated as work-charged.
The letter dated September 5, 1966, is by the
Executive Engineer, Ernakulam, and he refers to the staff as belonging to
construction unit. It will be doing violence to language to treat the
construction unit as project. Expression 'project' is very well known in a
planned development.
Therefore, the assertion that the appellant
was working on the project is belied by two facts: (i) that contrary to the
provision in Rule 2501 that persons belonging to casual labour category cannot
be transferred, the appellant was transferred on innumerable occasions as
evidenced by orders Ext. P-1 dated January 24, 1962, and Ext. P-2 dated August
25, 1964, and the transfer was in the office of the Executive Engineer
(Construction); (ii) there is absolutely no reference to project in the letter,
but the department is described as construction unit. If he became surplus on
completion of project there was no necessity to absorb him.
But the letter dated September 5, 1966,
enquires from other executive engineers, not attached to projects, whether the
surplus staff including appellant could be absorbed by them.
This shows that the staff concerned had
acquired a status higher than casual labour, say temporary railway servant.
And again construction unit is regular unit
all over the Indian Railways. It is a permanent unit and cannot be equated to
project. Therefore, the averment of the Railway administration that the
appellant was working on project cannot be accepted. He belonged to the
construction unit. He was transferred fairly often and he worked continuously
for 20 years and when he questioned the bona fides of his transfer he had to be
re-transferred and paid wages for the period he did not report for duty at the
place where he was transferred. Cumulative effect of these facts completely
belie the suggestion that the appellant worked on project.
Having rendered continuous uninterrupted
service for over six months, he acquire the status of a temporary railway
servant long before the termination of his service and, therefore, his service
could not have been terminated under Rule 2505.
Once it is held that by operation of
statutory rule in the Manual, the appellant had acquired a status of temporary
railway servant and assuming, as contended by Mr. Francis, that the termination
of service in the circumstances alleged does not constitute retrenchment
stricto sensu, would the termination be still valid ? 273 The answer is an
emphatic no. On the admission of the Railway administration, service was
terminated on account of absence during the period appellant was on fast.
Absence without leave constitutes misconduct and it is not open to the employer
to terminate service without notice and inquiry or at any rate without
complying with the minimum principle of natural justice. Further, rule 2302
clearly prescribes the mode, manner and methodology of terminating service of a
temporary railway servant and admittedly the procedure therein prescribed
having not been carried out, the termination is void and invalid. Accordingly,
the same conclusion would be reached even while accepting for the purpose of
the facts of this case simultaneously rejecting it in law that the termination
does not constitute retrenchment yet nonetheless it would be void and
inoperative.
We would be guilty of turning a blind eye to
a situation apart from being highly unethical, wholly contrary to
constitutional philosophy of secio-economic justice if we fail to point out
that Rule 2501 which permits a man serving for 10, 20, 30 years at a stretch
without break being treated as daily rated servant, is thoroughly opposed to
the notion of socioeconomic justice and it is high time that the Railway
administration brings this part of the provision of the Manual, antiquarian and
antediluvian, in conformity with the Directive Principles of State Policy as
enunciated in Part IV of the Constitution. It may be necessary for a big
employer like the railway to employ daily rated workmen but even here it is
made distinctly clear that in case of casual labour, the daily wage is fixed by
dividing monthly minimum wage by 26 so as to provide a paid holiday. Maybe, for
seasonal employment, or for other intermittent work daily rated workmen may
have to be employed. It may as well be that on projects work charged staff may
have to be employed because on the completion of the projects the staff may
become surplus. That was at a time when planning and projects were foreign to
the Indian economy. Today, Railways perspective plans spreading over decades.
If one project is complete another has to be taken over. Railway administration
has miles to go and promises to keep and this becomes clear from the fact that
the appellant, a daily rated workman, continued to render continuous service
for twenty years which would imply that there was work for daily rated workman
everyday for twenty years at a stretch without break and yet his status did not
improve and continued to be treated as daily rated casual labour whose service
can be terminated at the whim 274 and fancy of the local satraps. It is high time
that these utterly unfair provisions wholly denying socioeconomic justice are
properly modified and brought in conformity with the modern concept of justice
and fairplay to the lowest and lowliest in Railway administration.
Now, if appellant had become at least a
temporary railway servant he is entitled to many benefits set out in Rule 2303
onwards. We have no doubt in our minds that the appellant whose case was on par
with Shri K.N. Balakrishna who had already been offered regular employee
status, would be entitled to be placed in the same category and that too from
the date much earlier to the date of termination of his service. In this
situation termination of his service not being covered by any of the excepted
categories and not after notice would be retrenchment within the meaning of the
expression as used in the Act and for the failure to comply with the pre
condition the termination of service would be void.
Assuming we are not right in holding that the
appellant had acquired the status of a temporary railway servant and that he
continued to belong to the category of casual labour, would the termination of
the service in the circumstances mentioned by the Railway administration
constitute retrenchment under the Act ? Section 25F of the Act 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
the conditions set out in Act are satisfied. The expression 'workman' is
defined as under:
"In this Act, unless there is anything
repugnant in the subject or context:
"Workman" means any person
(including an apprentice) employed in any industry to do any skilled or
unskilled manual, supervisory, technical or clerical work for hire or reward, whether
the terms of employment be expressed or implied, and for the purposes of any
proceeding under this Act in relation to an industrial dispute, includes any
such person who has been dismissed, discharged or retrenched in connection
with, or as a consequence of, that dispute, or whose dismissal, discharge or
retrenchment 275 has led to that dispute, but does not include any such person-
(i) who is subject to the Army Act, 1950, or the Air Force Act, 1950 or the
Navy (Discipline) Act, 1934, or (ii) who is employed in the police service or
as an officer or other employee of a prison; or (iii) who is employed mainly in
a managerial or administrative capacity; or (iv) who, being employed in a
supervisory capacity, draws wages exceeding five hundred rupees per mensem or
exercises, either by the nature of the duties attached to the office or by
reason of the powers vested in him, functions mainly of a managerial
nature." There is no dispute that the appellant would be a workman within
the meaning of the expression in s. 2(s) of the Act. Further, it is
incontrovertible that he has rendered continuous service for a period over twenty
years.
Therefore, the first condition of s. 25F that
appellant is a workman who has rendered service for not less than one year
under the Railway administration, an employer carrying on an industry, and that
his service is terminated which for the reason hereinbefore given would
constitute retrenchment. It is immaterial that he is a daily rated worker. He
is either doing manual or technical work and his salary was less than Rs. 500/-
and the termination of his service does not fall in any of the excepted
categories. Therefore, assuming that he was a daily rated worker, once he has
rendered continuous uninterrupted service for a period of one year or more.
within the meaning of s. 25F of the Act and
his service is terminated for any reason whatsoever and the case does not fall
in any of the excepted categories. notwithstanding the fact that Rule 2505
would be attracted, it would have to be read subject to the provisions of the
Act. Accordingly the termination of service in this case would constitute retrenchment
and for not complying with pre-conditions to valid retrenchment, the order of
termination would be illegal and invalid.
276 Accordingly, we allow this appeal, set
aside the order of the High Court and declare that the termination of service
of the appellant was illegal and invalid and the appellant continues to be in
service and he would be entitled to full back wages and costs quantified at Rs.
2,000.
S.R. Appeal allowed.
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