M/S. SCOOTERS INDIA LTD.versusM. MOHAMMAD Y AQUB AND ANR.

                           M/S. SCOOTERS INDIA LTD.                                     A
                                            v.
                      M. MOHAMMAD Y AQUB AND ANR.

                                NOVEMBER 21, 2000

                 (S. RA.IENDRA BABL: AND S.N. \!ARIA VA, JJ.]                           B


           Labour Laws:
..
           Industrial Dispute-Retrenchment ·Workman's name removed from the
     roll of the company under standing order and was not a//owed to join his           C
     duty-Held, this amounted to retrenchment-Further, such standing order
     canr:ot be used for termination of services without fo//owing the provisions
     of law regarding retrenchment- - Principles of Natural Justice-Administrative
     Law.

           Respondent's name was removed from the roll of the company under             D
     the standing order. An industrial dispute was raised. Labour Court held that
     there was retrenchment and directed reinstatement of the respondent with
     continuity of service and full back wages. The award was challenged by the
     appellant. High Court dismissed the petition. Hence, this appeal.

           Dismissing the appeal, this Court                                            E

           HELD : I. I. There cannot be any automatic termination of the workmen
     on the basis of standing order. Principles of natural justice has to be complied
     with. As the workman was not allowed to join duty, standing order could not
     have been used for terminating his services. More so the requisite material
     and evidence shows that there was retrenchment without following the
                                                                                        F
     provisions of law, Thus, the termination was illegal. 15-C-FI

           Scooter India & Ors. v. Vijai E. V. Eldred 1199816 SCC 549, affirmed.

-    to.
           C/Jtrun India Ltd v. Shammi Bhan & Anr. 1199816SCC538, referred              G


           CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1471 of 1999.

           From the Judgment and Order dated 13.5.98 of the Allahabad High Court
     in W.P. No. 5666 of 1984.
                                                                                        H
     2                       SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A          Manoj Swarup, Ms. Lalita Kohli, Miland Kumar and Ms. Maulina Swarup
     for the ~ppellant.
           M.A. Chinnasamy and K.C. Sudarshan for the Respondents.
           The Judgment of the Court was delivered by
B         S.N. VARIA VA, 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 I st Respondent was appointed as unskilled workman w.e.f. 9th
     September, 1974 and was then promoted to the post of a semi-skilled worker
C    w.e.f. 7th June, 1975.
            On I st 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
D           leave in excess of the period of leave originally sanctioned or
            subsequently extended for more than I 0 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
E           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
F   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.
G        Mr. Swarup 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
H submitted that the Chief Personnel Officer of the Company wrote a letter
       SCOOTERS INDIA LTD. v. M. MOHAMMAD YAQUB [YARIAVA, J.]                    3
    dated 24th July, 1976, calling upon the Respondent to join duties latest by      A
    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         B
    to retrenchment.

          He relied upon the judgment in the case of Scooters India and Ors. v.
    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     C
            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. v. Shammi Bhan and Anr., reported in [1998] 6 S.C.C. 538. In this     D
    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 E
    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 leave; whether 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 F
    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 G
    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
    cas!:' it was held as follows :                                                   H
    4                     SUPREME COURT REPORTS !2000] SCPP. 5 S.C.R.

A           "22. Learned counsel for the petitioner has placed strong reliance
        upon a decision of this Court in Scoorers 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 :
B
             "It 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 :
c           "Learned 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."

D             23. In 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. Manoj Swarup. 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
E       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
F       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 :

            "Learned counsel for the respondent rightly made no attempt to
G           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
H       cannot constitute a just ground for a binding precedent. The reliance
   SCOOTERS l'JDIA LTD. v. M. MOllAMMA.D YAQLB [VARIAVA . .I.]                5

        placed by Mr. Manoj Swarup on this judgment. therefore, is wholly          A
        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).
                                                                                   B
      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 :ias 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.           C
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           D
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. W.2 had been signed by the Security Inspector of the Appellant. This
showed that the Respondent had reported for work. As against this evidence         E
the Appellant has not Jed 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         F
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.      G

      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.

N.J.                                                        Appeal dismissed.      H