Holding

The principles of natural justice must be read into clause 13(2)(iv) of the certified standing orders, making termination without a domestic enquiry violative of Articles 14 and 21 and therefore invalid.

Summary

D.K. Yadav, a workman of J.M.A. Industries Ltd., was deemed to have abandoned his post after being absent for more than eight days and was terminated under clause 13(2)(iv) of the company's certified standing orders. The employer did not conduct a domestic enquiry nor gave Yadav an opportunity to be heard, and the Labour Court upheld the termination. Yadav appealed to the Supreme Court, arguing that the termination violated the principles of natural justice and the constitutional guarantees of equality and livelihood under Articles 14 and 21. The Court held that the certified standing order must be read with the principles of natural justice; an automatic loss of lien without a fair hearing is arbitrary and unconstitutional. Consequently, the termination was set aside, Yadav was ordered reinstated with fifty percent of back wages, and the employer's letter of termination was quashed. The decision underscores that procedural fairness is mandatory in employment dismissals, even where statutory standing orders exist.

Issues considered

The termination of service under certified standing order clause 13(2)(iv) without a domestic enquiry violates the principles of natural justice.
Whether Articles 14 and 21 of the Constitution apply to employer‑initiated termination and require a just, fair, and reasonable procedure.
Whether the provisions of the Industrial Disputes Act, 1947 (sections 25F, 25FF, 25FFF) and the definition of retrenchment under section 2(oo) limit the employer's power to terminate.
Whether certified standing orders expressly exclude the application of natural justice principles.

Legislation cited

Constitution of Indias. Article 14, s. Article 21
Industrial Disputes Act, 1947s. Section 25F, s. Section 25FF, s. Section 25FFF, s. Section 2(oo)
Industrial Employment (Standing Orders) Act, 1946s. Section 5

Subjects

termination of servicenatural justiceArticle 14Article 21certified standing ordersIndustrial Disputes Actre‑trenchmentprocedural fairnessemployment law

Judgment

A D.K. YADAV

v.

J.M.A. INDUSTRIES LTD.

MAY 7,1993

[KULDIP SINGH, V. RAMASWAMI AND K. RAMASWAMY, JJ]

Constitution of India, 1950:

Articles 14 and 21-Rigltt of private employer to tenninate service under
certified standing order, without holding rµiy domestic enqu.iry-Whetlter viola-
c tive ofprinciples ofnatural justice and fundamental rights-Held: Since termina-
tion of service results in deprivation of right to livelihood, it is to be effected in
accordance with just.fair and reasonable procedure.
.....
Article 141-Precedents-Reconsideration ofon new grounds-Whether &
D when permissible.

Industrial Disputes Act, 1947:

Sections 25F, 25FF and 25FFF-Retrenchment under Certified Standing
Orders-Whether attracts principles of natural justice-Whether employer's
E action to be fair, just and reasonable.

Section 2(00)-Retrenchment-Meaning and scope of

Industrial Employment (Standing Orders) Act, 1946:
F
Section 5..:_cert(fied Standing Orders-Absentefrom duty- Deemed ter-
mination of service wit/tow enquiry or opportunity of !tearing-Validity
of-Whether attract principles o{natural justice and Articles 14 and 21 of the .
Constitution-Whether principles of natural justice to be read into clause 13 (2)
(iv) of Certified Standing Orders.
G
Administrative Law:

Rule of natural justice-Aim of-Whether principles of natural justice
H applicable to both quasi-judicial as well as administrative action.

'·.:i'.'O
D.K. YADA V v. J.M.A. INDUSTRIES 931

The respondent-company termiriated the appellant's services on the A
ground that since he had willingly absented from duty continuously for more
than 5 days from December 3, 1980, without leave or prior information 01r
intimation or previous permission of the management, he had been deemed
to have left the service of the company on his own and lost the lien and the
appointment with effect from December 3, 1980. It relied on clause 13(2) (iv)
of the Certified Standing Order in support of its action. B

The appellant's plea that despite bis reporting to duty on December 3,
1980 and every day continuously thereafter, he was prevented entry at the
gate and was not allowed to sign the attendance register and that he was not
permitted to join duty without assigning any reasons, was not accepted.
c
The Labour Court upheld the termination order as legal and valid. It
held that the appellant bad failed to prove his case, that the action of the
. ,. respondent was in accordance with the Standing Orders and it was not a
termination nor retrenchment under the Industrial Disputes Actand that the
appellant in terms of Standing Orders lost bis lien on bis appointment and was · D
not entitled to reinstatement.

Allowing the appeal of the employee, this Court

HELD: 1.1. The action of the managementin terminating the appellant's
E
·service is violative of the principles of natural justice. Undtrr clause 13 (2) (iv)
of Certified Standing Orders, on completion of eight calendar days' absence
from duty an employee shall be deemed to have abandoned the services and
lost bis lien on his appointment. Thereafter, the management is empowered
to strike off the name from the Muster Rolls. But it is not correct to say that
expiry of eight days' absence from duty brings about automatic loss oflien on F
the post and nothing more need be done by the management to pass an order
terminating the service and per force termination is automatic. The prin·
ciples of natural justice must be read into the Standing Order No. 13 (2) (iv).
Otherwise, it would become arbitrary, unjust and unfair violating Article 14.

Kesltwanand Bharti v. Union of India, [1973] Suppl. S.C.R. 1 and State G
Bank of India v. Workmen of State Bank of India. and Anr. [1991] 1 S.C.C. 13,
referred to .

........
_. 1.2. In the instant case, admittedly, the management did notconductanv
domestic enquiry nor gave the appellant any opportunity to put forth his cas;. H
932 SUPREME COURT REPORTS (1993] 3 S.C.R.

A The Labour Court did not record any findings on the appellant's plea that
despite his reporting to duty on December 3, 1980 and on all subsequent days
and readiness to.join duty he was prevented from reporting to duty, nor he
was permitted to sign the attendance register, but held that the management
had power under clause 13 of the Certified Standing Orders to terminate the
service of the appellant. Under th; circumstances, the award of the Labour
·B Court is set aside. The respondent should reinstate the appellant forthwith
with 50 per cent of the back wages.

2.1. Certified Standing Orders have statutory force which do. not
expressly exclude the application of the principles of natural justice. Con-
e versely, the Industrial Disputes Act made exceptions for the application of
principles of natural justice by necessary Implication from specific provisions
in the Act like Sections 25F, 25FF, 25FFF etc. The need for temporary hands
to cope with sudden 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 is completed, the need to dispense wilh the
D services may arise. In that situation, on compliance of the provisions of
Section 25F resort could be had to re·trench the employees iii conformity
therewith. Particular statute or statutory rules or orders having statutory
Oavou.r may also exclude the application of the principles of natural justice
expressly or by necessary implication. In other respects, the principles of
natural justice would apply unless the employer should justify the exclusion ·
E on given special and exceptional exigend.es.

Col. J.N. Sinha v. Union of India & Anr., [1971] 1 S.C.R. 791, relied on.

3.1. Application of the principles of natural justice that no man should
be condemned unheard intends to prevent the authority to act arbitrarily
F
affecting the rights of the concerned person. No decision must be taken which
will affect the right of any person without.first being informed of the case and
be given hiDilber an opportunity of putting forward his/her case. An order
involving civil consequences must be made consistently with the rules of
natural justice. It is not so much to act judicially but to actfairly, namely, the
G procedure adopted must be just, fair and reasonable in the particular
circumstances of the case.

3.2. The procedure prescribed for depriving a person oflivelihood tpust.
meet the challenge of Article 14 of the Constitution and such law would be
H liable to be tested on the anvil of Article 14. The procedure prescribed by a
D.K. YADAV 1'. J.M.A. INDUSTRIES 933

statute or statutory rule or rules or orders affecting the civil rights or result A
in civil consequences would have to answer the requirement of the Article.
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. Article
14 has a _pervasive proceSi:ual potency and versatile quality, equalitarian it its
soul and allergic to discriminatory dictates. Equality is the antithesis of
arbitrariness. Therefore, the principles of natural justice are part of Arti<;le B
14 and the proc_edure prescribed by law must be right, just, fair and
- reasonable and not arbitrary, fanciful or oppressive.

Mohinder Singh Gill & Anr. v. The Chief Eleclion Commissioner & Ors. l
[1978) 2 S.C.R. 272; S1a1e of Orissa v. Dr. (Miss) Binapani Dei & Ors., [1967)
2 S.C.R. 625_; Stale of West Bengal v.Anwar Ali Sarkar. [1952) S.C.R. 284 and
c
Maneka Gandhi v. Union of India. [1978) 2 S.C.R. 621, relied on.
I

•• 'Bhu.:k's /mr l>i1·1im1111Y. 4th Ecln. p. 1-tX7; 1·ctcrrcd tu .
. ' \"-'.

4. Article 21 of the Constitution clubs life with liberty, dignity of person D
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 procedure established by law must be in conformity '
with the minimum fairness and processual justice, it would relieve legislative
callousness despising opportunity of being heard and fair opportunities of
defence. The ·order of termination of the service of an employee/workman E
·visits with civil consequences of jeopardising not only his/her livelihood but
also career and livelihood of dependents. Therefore, before taking any action
putting an end to the tenure of an employee/workman, fair play requires that
a reasonable opportlinity to put forth his case is given and domestic enquiry
conducted complying with the principles of natural justice.
F

Detlti Transport Corpn. v. D.TC. Mazdoor CoftgFess·and Ors .• [1991)
Suppl. 1 S.C.C. 600, relied on.

5.1. The aim of the rule of natural justice is to secure justice or to put it
negatively to prevent miscarriage of justice. These rules operate in the area G
not covered by law validly 1t1ade or expr:essly excluded.

5.2. There can be no distinction between a <JUasi-judicial function and an ~ '
administrative function for the purpose of principles of natural justice. The
aim o.f both administrative inquiry as well as the quasi-judicial enquiry is to H
934 SUPREME COURT REPoRTS [1993] 3 S.C.R.

A arriv~ at a just decision and if a rule of natural justice is calculated to secure
justice or to put it negatinly, to prevent miscarriage of justice, it must
logically be applicable both to quasi-judicial enquiry and administrative
enquiry and not only to quasi-judicial enquiry.

A.K. Kriapak and Ors. v. Union ofIndia & Ors. [1969] 2S.C.C. 262,relied
B on.

6.1. An authoritative law laid after consideri~g all the relevant provi-
sions and the previous precedents is no longer open to be recanvassed on new
grounds or reasons that may be put forth in its support unless the. Court
c deemed it appropriate to refer to a larger bench in the larger public interest
to advance the cause of justice.

Ambika Prasad Mishra v. Stare of U.P. & Ors. [1980] 3 S.C.C. 7.10 and
Keshwanand Bharti v. Unio!1 of India, [1973] Suppl. S.C.R. 1, relied on.

D 6.2. The Constitution Bench in fact went into the self same question vis-
a-vis the right ofthe employer to fall back upon the relevant provision of the
Certified Standing Orders to terminate the service of the workman/employee.
Therefore, it is not correct to say that since the present appeal was deleted
from the Constitution Bench to be dealt with separately, the finding of the
Constitution Bench deprived _the respondent of putting forth the plea based
E
on clause 13 of the Certified Standing Order to support the action in question
and the respondent is entitled to canvass afresh the correctness of the view of
the Constitution Bench.

7. The definition of 'retrenchment' in Section 2(oo) of the Industrial
F Disputes Act, 1947 is a comprehensh·e one intended to cover any action of the
· management to put an end to the employment of an employee for any reason
whatsoever.

Punjab Land Development and Reclamation Corpn. Ltd., Chandigarh v.
Presiding Officer, Labour Court, Chandigarh and Ors., [1990] 3 S.C.C. 632;
G State Bank of India v. Sri N. Sundara Mani, [1976] 3 S.C.R 160; Delhi Cloth &
General Mills Ltd. v. Shamb/111 Nath Mukherjee & Ors., [1978] 1 S.C.R. 591;
Hindustan Steel Ltd. v. The Presiding Officer, Labour Court, [1977] 1S.C.R.586:
Robert D' Souza v. Er:ec11tive Engineer Southern Railway and Anr., [1982] 1
S.C.C. 645 and H. D. Singh v. Reserve Bank of India & Ors., [1985] 4 S.C.C. 201, .
H referred to.
D.K. YADAV v. J.M.A. INDUSTRIES [K. RAMASWAMY. J.] 935

CIVILAPPELLATEJURISDICTION: Civil Appeal No. 166 (NL) of 1983. A

From, the Award dated 19 .4.1982 of the Labour Court, Haryana at Faridabad
in Reference No. 227 of 1981.

R.K. Jain, R.P. Singh, Aseem Malhotra, Ashish Verma, Manoj Goel, R.K.
Khanna and Ms. Abha R. Sharma for the Appellant. B

Dr. Anand Prakash, LGhosh for Mis Fox Manda! & Co. and Som Mandal
for the Respondent.

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-
D.K. YADAV v. J.M.A. INDUSTRIES [K. RAMASWAMY, J] 937

• 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 c
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
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

0 "
938 SUPREME COURT REPORTS [1993] 3 S.C.R.

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
D
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
E 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
F 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
D.K. YADA V v. J.M.A. INDUSTRIES [K. RAMASWAMY, J] 939

lieu thereof. It was held that it was not a discharge simplicitor or a simple A
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 B
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 D
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
E
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.
940 SUPREME COURT REPORTS [1993] 3 S.C.R.

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
E 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
F 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
G 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
H 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 A
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
942 SUPREME COURT REPORTS (1993] 3 S.C.R.

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
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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.

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