Scooters India Ltd. Vs. M. Mohammad Yaqub & ANR  INSC 579 (21
S.R.Babu S. N. VARIAVA, 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
1st Respondent was appointed as unskilled workman w.e.f.
September, 1974 and
was then promoted to the post of a semi-skilled worker w.e.f. 7th June, 1975. On 1st 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 10 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
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 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. Mr.
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 submitted that the Chief Personnel Officer of
the Company wrote a letter dated 24th July, 1976, calling upon the Respondent to join duties latest by 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 to retrenchment.
relied upon the judgment in the case of Scooters India and Ors. vs. 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 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." On the other hand Mr. Chinnasamy has relied
upon the case of Uptron India Ltd. vs. Shammi Bhan and Anr.
in 1998 (6) S.C.C. 538. In this case it was held that such a standing order
conferred a discretion upon the management to terminate or not to terminate the
services of an employee who overstays the leave. It was held that the
discretion had to be based on an objective consideration of all circumstances
and material which may be available on record. It was held that questions which
would naturally arise are what circumstances compelled the employee to proceed
on leave, why he overstayed leave, was there any just and reasonable cause for
overstaying leave, whether he gave any further application for extension of
any medical certificate was sent if he had, in the meantime fallen ill. It was
held that such questions could only be answered by the management provided it
was inherent in the provision that the employee against whom action was
proposed to be taken on the basis of such a provision was given an opportunity
of hearing. 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 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 case it was held as follows
: "22. Learned counsel for the petitioner has placed strong reliance upon
a decision of this Court in Scooters 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 :
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 :
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."
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.
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 :
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 cannot
constitute a just ground for a binding precedent.
reliance placed by Mr. Manoj Swarup on this judgment, therefore, is wholly 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 had 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. 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 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.
had been signed by the Security Inspector of the Appellant. This showed that
the Respondent had reported for work. As against this evidence the Appellant
has not led 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 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. 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.