Holding

The termination was not violative of the amended Rule 5 of the 1965 Rules but was violative of Section 25F of the Industrial Disputes Act, rendering it null and void; the respondent is entitled to reinstatement with continuity and 50% back wages plus consequential benefits.

Summary

The Delhi Municipal Corporation (MCD) terminated the services of Prem Chand Gupta, a temporary Section Officer, on 29 April 1966 after he had served continuously for more than 240 days in a calendar year. Gupta raised an industrial dispute; the Labour Court and a High Court Single Judge held the termination was lawful under Rule 5 of the Central Civil Services (Temporary Service) Rules and not a retrenchment under Section 25F of the Industrial Disputes Act, 1947. A Division Bench of the High Court reversed, holding the termination violated Rule 5 (as analogized to the 1965 Rules) and ordered reinstatement with full back wages. MCD appealed to the Supreme Court. The Court held that the amended Rule 5 of the 1965 Rules, which applied in 1966, did not require simultaneous payment of compensation, so the termination was not violative of that rule. However, the termination did breach Section 25F of the Industrial Disputes Act, making it null and void. Consequently, Gupta was entitled to reinstatement with continuity of service, 50% back wages, and all consequential benefits. The appeal was allowed with modified relief.

Issues considered

Whether the termination on 29-04-1966 violated Rule 5 of the Central Civil Services (Temporary Service) Rules, 1949 or the amended Rule 5 of the 1965 Rules.
Whether the termination amounted to retrenchment covered by Section 25F of the Industrial Disputes Act, 1947.
What relief, if any, should be granted to the respondent-workman.

Legislation cited

Central Civil Services (Temporary Service) Ruless. Rule 5 (1949), s. Rule 5 (1965)
General Clauses Act, 1897s. Section 8
Industrial Disputes Act, 1947s. 25F, s. 2(oo)

Subjects

temporary serviceterminationretrenchmentSection 25FIndustrial Disputes Actback wagesreinstatementDelhi Municipal CorporationCentral Civil Services Rulesper incuriamamendment

Judgment

..
MANAGEMENT OF M.C.D. A
v.
PREM CHAND GUPTA AND ANR.

DECEMBER 16, 1999

B
[S.B. MAJMUDAR AND UMESH C. BANERJEE, JJ.)
~
Service Law-Central Civil Services (Temporary Service) Rules 1949-
. Rule 5 read with Industrial Disputes Act, 1947-Section 2(oo) & 25F-
"'•' Scope and effect of-Services of respondent No. I terminated on April 29, c
1966 as he had not completed 240 days of continuous service for one
calendar year viz. April 1, 1965 to April 29, 1966-Held, termination was
violative of Section 25F of the Industrial Disputes Act, 1947 and therefore
the termination was null and void-Respondent reinstated in service with
continuity of service and consequential benefits including increments and
revisions of time scale and further service benefits but with 50% hack wages. D

Delhi Municipal Corporation Service Regulations, 1959-Regulation
4(1)-"Rulesfor the time being inforce"-Held, it means rules inforcefrom
time to time and not rules in force at a fixed point of time-In the instant case
"Rules" to mean amongst others, Central Civil Services (Temporary Service)
E
Rules, 1965.

Services of Respondent No.1 who had been appointed with effect from
May S, 1964, initially against a temporary post of Section Officer (Civil) and
who continued in service without any break against different posts till April
29, 1966 were terminated by the appellant Corporation. F
The Labour Court where 'the respondent raised an industrial dispute
held that the services of the respondent having been terminated by the
appellant in exercise of its powers under Rule S of the Central Civil Services
~
(Temporary Services) Rule 1949 and the said action of the appellant not
being punitive in nature, the respondent was not entitled to any relief. It G
further held that the termination could not also be covered under Section
25F of the Industrial Disputes Act, 1947 as his services were not terminated
due to staff being in excess of the requirement of the Corporation. Single
Judge of the High Court dismissed the writ petition assailing the aforesaid
' ·decision of the Labour Court and confirmed the finding recorded by the Labour
H
403
-:
404 SUPREME COURT REPORTS [1999] SUPP. 5 S.C.R.

A Court holding that the termination was as per Rule 5of1949 Rules and also
did not amount to any retrenchment as per Section 25F of _the Industrial
Disputes Act, 1947. However, the Division Bench in Letters Patent Appeal
allowed the appeal relying on this Court's decisjon in Senior Superintendent
RMS, Cochin v. K. V. Gopinath, (1973) 3 SCC 867 taking the view that the
termination was contrary to Rule 5 of 1949 Rules which is analogous to
B Rule 5of1965 Rules. It did not examine whether the impugned termination
was violative of Section 25F of the Industrial Disputes Act, 1947. It directed
reinstatement of the respondent in service with continuity and entitlement
to r"eceive all salaries and allowances from the appellant.
In appeal to this Court by the appellant Corporation, it was contended
C among other grounds that the Division Bench was patently in error in relying
upon the decision in Senior Superintendent RMS, Cochin v. K. V. Gopinath
as the said decision was expressly over-ruled by treating it to be per incuriam
by a later Bench in Union of India v. Arun Kumar Roy, [1986) l SCC 675;
reference to 1949 Rules was not in order as it had been amended by 1965
D Rules; it was not necessary to pay compensation simultaneously with the
order of termination and it could be paid later on and the conditions of
applicability of Section 25F were not fulfilled as the respondent was a
temporary hand, not confirmed in service and the appointment was for a fixed
period.

E Disposing of the appeal, this Court
HELD: 1.1. The impugned judgment of the Division Bench of the High
Court suffers from a patent error of law as it had not noticed the amended
provisions of the proviso of Rule 5 of 1965 Rules consequent to which its
decision was treated to be per incuriam by the later decisions.
F [413-D; 414-D)
1.2. The phraseology "rules for the time being in force" would
necessarily mean, rules in force from time to time and not rules in force
only at a fixed point of time. (415-E)
1.3. The termination of respondent from service on April 29, 1966 was
G not violative of amended Rule 5 of 1965 Rules which only applied in his case.
There was no obligation on the part of the appellant Corporation to
simultaneously offer requisite compensation as a condition precedent to such
termination as it could be offered to him within a reasonable time later on.
The termination had to be treated to have come into force when the order of
H termination was passed and served on the respondent. [415-F-GJ
MANAqEMENT OF M.C.D. v. P.C. GUPTA 405
1.4. Though the respondent was never confirmed, the Corporation did A
not terminate his services but continued him in service. Not only that, on
October 1, 1964 after giving a short break in service he was reappointed and
from this date, though in temporary service, he continued to work on a vacant

·- permanent post and continued to serve as such for further 18 months upto
April 29, 1966 when he was visited with the impugned termination order. By
that time he had completed not less than 240 days of continuous service for
B
one calendar year viz. April 1, 1965 to April 29, 1966. Consequently Section
25 of the Industrial Disputes Act, 1947 got squarely attracted. Termination
of his service on April 29, 1966 was, therefore, in violation of Section 25F
of the Industrial Disputes Act, 1947 and was, therefore, null and void.
(416-G-H) C
1.5. For no fault of the contesting parties, the litigation has lingered
on for more than three decades. The termination order was as early as April
29, 1966 and after 33 years and more it is being set aside. To saddle the
appellant-Corporation and its exchequer, which is meant for public benefit,
with full back wages for the entire period would be too harsh. It is delay in D
disposal of cases in courts that has created this unfortunate situation for
both the sides. Respondent is also not at fault as he was clamouring for
justice all these years. The Labour Court and the Single Judge upheld the
termination order. Only the Division Bench set aside that order. This Court,
at SLP stage itself, while granting leave stayed reinstatement on November
17, 1997. All these factors point in the direction of not saddling the appellant- E
Corporation, a public body, with the burden of entire full backwages to be
granted to the respondent after a passage of 33 years since the termination
order. Further, the respondent could not have remained totally unemployed
though there is no clear evidence that he was gainfully employed.
(420-B-FJ F
l .6. As far as back wages are concerned, the Division Bench order is
modified by directing that the respondent would be entitled to get 50o/o of
back wages from the date of termination viz. April 29, 1966 till actual
reinstatement with continuity of service. The respondent would also be entitled
to all consequential benefits including increments and revisions of time scale G
and further service benefits. (421-B-C)

Union of India and Ors. v. Arun Kumar Roy, (1986) 1 SCC 675; Raj
Kumar v. Union of India and Ors., (1975) 4 SCC 13; The State Bank of India
v. Shri N. Sundera Money, (1976) 1SCC822 and Punjab land Development
and Reclamation Corporation ltd. Chandigarh v. Presiding Officer, Labour H
406 SUPREME COURT REPORTS [1999] SUPP. 5 S.C.R .

. A Court, Chandigarh and Ors., etc. etc., (1990) 3 SCC 882, relied on.
Superintendent RMS Cochin and Anr. v. K. V. Gopinath, Sorter, (1973)
3 sec 867, referred to.

Bir/a VXL Ltd. v. State of Punjab and Ors., (1998) 5 SCC 632;
B Rajasthan Adult Education Association and Anr. v. Ashok Bhattacharya &
Anr., (1998) 9 SCC 61 and Sunil Kumar S.P. Sinha v. Indian Oil Corporation
-
Ltd. Delhi and Anr., (1983) Vol. 16 LAB I.C. 1139, distinguished.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7764 of 1997
From the Judgment and Order dated 15.7.1997 of High Court of Delhi in
C Letters Patent Appeal No. 93 of I 982.

Ms. Binu Tamta, Ranjeet Kumar, G.D. Gupta and Ashok K. Mahajan for
the appearing parties.

The Judgment of the Court was delivered by

D S.B. MAJMUDAR, J. This_ appeal on grant of special leave to appeal
under Article 136 of the Constitution of India by the Management of Municipal
Corporation of Delhi against Respondent No. I, who is the only contesting
party, has brought in challenge the judgment and order of the Division _Bench
of the High Court of Delhi in Letters Patent Appeal No. 93 of 1982 by which
E the High Court directed reinstatement of Respondent No. I in service with (-
continuity entitling him to receive all salaries and allowances from the appellant-
Corporation. In order to appreciate the grievance of the appellant-
Corporation against the said order, a few relevant introductory facts need to
be noticed at the outset.

F Background Facts:

Respondent No. I (hereinafter referred to as the 'respondent-workman')
was appointed by the appellant-Corporation on the temporary post of Section
Officer (Civil) on 5.5.1964 with the condition that he would be considered for
confirmation after one year of satisfactory service. It is the case of the
G appellant-Corporation that the respondent-workman was never considered for
confirmation. On 1.8. I 964 he was informed that his services were not required
by the Corporation w.e.f. l.9.1964. Thus he ceased to be the employee of the
appellant-Corporation from that date. However, from 1.10. I 964 he was re-
appointed on a vacant post caused by the termination of services of another
employee. It is not in dispute between the parties that he continued to be in
H the service of the appellant~Corporation without any break till 31.3. I 965.
MANAGEMENT OF M ..C.D. v. P.C. GUPTA [S.B. MAJMUDAR, J.] 407

According to the appellant-Corporation, he was again re-employed on 1.4.1965 A
and he continued to be in service till 29.4.1966 when his services were
terminated. It becomes at once clear that though, according to the appellant-

- Corporation, the respondent-workman's services were terminated on 31.3.1965
and he was re-employed on the next day i.e. 1.4.1965, in substance there was
no break in his service. It is, therefore to be taken as a well established fact B
on record that from 1.10.1964 till 29.4.1966 for about 18 months the respondent-
workman was in continuous service as a temporary Section Officer (Civil) and
was working on a vacant substantive post caused by the termination of
services of another employee.

On account of the aforesaid termination of service, the respondent- C
workman raised an industrial dispute and got it referred by the appropriate
Government for adjudication to the Labour Court, Delhi. The terms of reference
were as follows:

"Whether Prem Chand Gupta, Section Officer (Overseer) has been
wrongly and/or illegally discharged from service and if so, what relief D
is he entitled?"

The Labour Court, after hearing the parties, came to the conclusion that as
/; the respondent-workman's services were terminated by the appellant-
Corporation in exercise of its power under Rule 5 of the Central Civil Services
(Temporary Services) Rules, 1949 (hereinafter referred to as the 'Rules') and E
the said action of the appellant-Corporation was not punitive in nature, the
respondent-workman was not entitled to any relief. However, the Labour
Court further held on facts that the respondent-workman could be said to
have been terminated from service without payment of retrenchment
compensation as a condition precedent to such retrenchment. Still it was held F
that the said retrenchment could not be covered under Section 25-F of the,
Industrial Disputes Act, 1947 (hereinafter referred to as the 'l.D. Act') as he
was not terminated due to the staff being in excess of the requirement of the
Corporation. Thus even on the ground of violation of Section 25-F he was
not entitled to any relief. The said decision was rendered on 7.1.1970.
G
Being aggrieved by the said decision of Labour Court, the respondent-
workman filed a writ petition under Article 226 of the Constitution of India
before the High Court of Delhi. The learned Single Judge of the High Court
dismissed the said writ petition and confirmed the finding recorded by the
Labour Court. The learned Single Judge agreeing with the Labour Court held
that the respondent-workman's termination was as per Rule 5 of the Rules and H
408 SUPREME COURT REPORTS (1999] SUPP. 5 S.C.R.

A also did not amount to any retrenchment as per Section 25-F of the l.D. Act.
The writ petition was accordingly dismissed by the learned Single Judge on
8.4.1981.

Being aggrieved by the said decision of the learned Single Judge, the
respondent-workman filed Letters Patent Appeal No.93 of 1982 before the
·-
B Division Bench of the High Court. As noted earlier, the Division Bench of the
High Court allowed the said appeal by taking the view that the respondent-
workman' s termination was contrary to Rule 5 of the Rules which was analogous
to Rule 5 of the Central Civil Services (Temporary Service) Rules, 1965
(hereinafter referred to as the 'latter Rules'). For taking that view, the Division
C Bench of the High Court in the impugned judgment heavily relied upon a
decision of.this Court in the case Senior Superintendent R.MS., Cochin &
Anr. v. K.V. Gopinath, Sorter, (1973] 3 SCC 867. As the Division Bench
reached the aforesaid conclusion, it did not examine another ground placed
for consideration by the respondent-workman to the effect that the impugned
termination was violative of Section 25-F of the l.D. Act. The Letters Patent
D Appeal was allowed accordingly and the relief, as noted earlier, was ordered
to be granted to the respondent-workman.

Rival Contentions: f•

E Learned counsel, Ms. Binu Tamta, appearing for the appellant-
Corporation vehemently contended that the Division Bench of the High Court
was patently in error in relying upon the judgment of this Court in Senior
Superintendent, R.MS., Cochin and Anr. v. K. V. Gopinath Sorter's case
(supra) as the said decision was expressly overruled by treating it to be per
incuriam by a later bench of this Court in the case of Union of India and Ors.
F v. Arun Kumar Roy, [1986] I SCC 675. It was submitted by her that on
29.4.1966 when the respondent-workman's services were terminated, Rule 5 of
the Rules was not in force but only Rule 5 of the latter Rules as duly amended
had come into force. By the latter Rules, the earlier Rules were superceded ·
and, therefore, the reference to the Rules in Service Regulations of 1959
G framed by the appellant-Corporation had to be treated as reference to the
superceding and repealing rules i.e. the latter Rules and as per Rule 5 of the
latter Rules then applicable, it was not necessary for the appellant-Corporation
to pay compensation simultaneously with the order of termination and it
could be paid even later on. Thus the amended Rule 5 could be said to have
been duly complied with by the appellant-Corporation. That as this aspect
H was not noticed by the Division Bench, un-amended Rule 5 of the latter Rules
MANAGEME°t'!T OF M.C.D. v. P.C. GUPTA [S.B. MAJMUDAR, J.)409

was erroneously pressed in service for voiding the termination order. The A
judgment under appeal, therefore, suffers from a patent error of law. So far as
the alternative contention about violation of Section 25-F of the I.D. Act is
concerned, it was submitted by her that Section 25-F did not apply to the
facts of the present case as the respondent-workman was a temporary hand
and was not confinned in service. That the conditions for applicability of B
Section 25-F were not fulfilled on the facts of the present case and as his
appointment was for a fixed period, as seen from his appointment order dated
5.5: 1964, Section 25-F did not apply.
Learned counsel for the respondent-workman, Shri Gupta, on the other
hand, submitted that the service regulations framed by the Corporation referred C
to the Rules of 1949. Thus, these Rules were incorporated in the service
' regulations by reference and as Rule 5 of the said Rules had not undergone
any amendment as was undergone by Rule 5 of the latter Rules, the decision
of this Court in Senior Superintendent, R.MS., Cochin and Anr. ·v. K. V.
Gopinath, Sorter's case (supra) squarely got attracted as it was rendered with
reference to un-amended Rule 5 of the latter Rules which was pari materia D
with Rule 5 of the Rules of 1949 and consequently the Division Bench had
rightly held the tennination of the respondent-workman to be violative of Rule
5 of the Rules. It was alternatively contended that the Labour Court on facts
had found that the condition precedent to retrenchment of the respondent-
workmaµ was not satisfied when his services were terminated on 29.4.1966.
That by that time, in any case, he had completed 18 months of continuous E
service starting from I. I 0.1964 which obviously was for more than 240 days
in a calendar year immediately preceding 29.4.1966. That there is no dispute
between the parties that retrenchment compensation was not offered to the
respondent-workman simultaneously with the tennination order, though it was
a condition precedent and hence the tennination became null and void. He p
submitted that though factually the Labour Court held that Section 25-F
would have been violated, it was in error when it took the view that because
tennination was not on account of the respondent-workman being an excess
staff there was no retrenchment within the meaning of Section 25-F of the I.D.
Act. He submitted that this view of the Labour Court relying upon earlier legal
position cannot be sustained in view of the later decisions of this Court. G
Therefore, in any case, it should be held that the impugned termination was
null and void and consequently the final order rendered by the Division
Bench remains well justified on record of this case and the appeal accordingly
deserves to be dismissed.
In the light of the aforesaid rival contentions, the following points arise H
410 SUPREME COURT REPORTS [1999) SUPP. 5 S.C.R.

A for our consideratjpn:

..
I. Whether impugned termination order of the respondent-
workman dated 29.4.1966 was violative of Rule 5 of the Rules or
for that matter Rule 5 of the latter Rules;
2 If the decision on the first point is in negative and in favour of
B the appellant...:._Corporation whether the impugned order of
tennination can be said to have violated Section 25-F of the I.D.
Act and consequently the final decision rendered by the Division
Bench can be sustained on that ground;

3. What appropriate final order?
c
We shall deal with the aforesaid points Seriatom.

Point No. J:

It has to be kept in view that the Service Regulations of 1959 framed
D by the Government of India under Clauses (a) and (e) of Sub-section (I) of
Section 98 read with Sub-section (l) of Section 480 of the Delhi Municipal
Corporation Act, 1957 defined 'Rules' to mean, amongst others, the Rules of
1949. We may tum to Rule 5. The relevant provisions of the said Rule 5 of
1949 Rules read as under:
E "5. (a) The service of a temporary government servant who is not in
quasi-pennanent service shall be liable to tennination at any time by
notice in writing given either by the government servant to the
appointing authority, or by the appointing authoritY to the government
servant.
F
(b) The period of such notice shall be one month, unless otherwise
agreed to by the Government and by the government servant;

Provided that the service of any such government servant may be
terminated forthwith by payment to him of a sum equivalent to the
G amount of his pay plus allowances for the period of the notice or as
the case may be, for the period by which such notice falls short of
one month or any agre.ed longer period .... "

A mere look at this Rule shows that if the service of a temporary government
servant has to be terminated forthwith without waiting for one month, the!Y· ·
H as laid down by the first proviso to the said rule, concerned government
MANAGEMENT OF M.C.D. v. P.C. GUPTA [S.B. MAJMUDAR, J.] 41 l
I

servant has to be given simultaneous payment of the sum laid down therein. A
It is this payment as a condition precedent that can snap forthwith the
relationship of employer and employee. Jt, therefore, becomes clear that any
order of termination which is not simultaneously supported by payment of
requisite amount as laid down by the proviso would not result in legal
termination of the service of the concerned government servant as per the
said Rule. It is not in dispute between the parties that along with the termination B
order the requisite compensation was not simultaneously offered by the
appellant-Corporation to the respondent-workman. The Division Bench of the
High Court took the view in the light of the said Rule that as it was analogous
to Rule 5 of the said Rules of 1965 and as the latter Rule also provided a
similar condition precedent to termination of service of temporary government C
servant, the termination of the respondent-workman was illegal and void.
However, what was missed by the Division Bench, with respect, was the
salient fact that the respondent-workman's service were terminated on 29.4.1966
~ when the Rules of 1949 were no longer on the· statue book. They stood
superceded by the latter Rules of 1965. It is, of course, true that the service
regulations referred to 1949 Rules but those Rules were superceded and got D
repealed and re-enacted under Article 309 of the Constitution of India by the
President of India by promulgating 1965 Rules consequently as laid down by
Section 8 of the General Clauses Act of 1897, reference in the service
regulations of the appellant-Corporation to 1949 Rules will have to be read
as reference to the re-enacted Rules of 1965 which had repealed the earlier E
Rules and had re-enacted 1965 Rules. Section 8 of the General Clauses Act,
1897 reads as under:

"8. Construction of references to repealed enactmertts-(1) Where
this Act, or any [Central Act] or Regulation made after the
commencement of this Act, repeals and re-enacts, with or without F
modification, any provision of a former enactment, then references in
any other enactment or in any instrument to the provision so repealed
shall, unless a different intention appears, be construed as references
to the provision so re-enacted."

Once this conclusion is reached, the .result becomes obvious. We have to G
treat the relevant rules as defined by Regulation 2 of 1959 to mean the latter
Rules of 1965 which operated in 1966 April when the impugned termination
order was passed against the respondent-workman. In 1966, the relevant Rule
of the latter Rules was Rule 5 which read as under:
"5. Termination of temporary service-(l)(a) The services of temporary H
412 SUPREME COURT REPORTS (1999) SUPP. 5 S.C.R.

A Government servant who is not in quasi-permanent service shall be
liable to termination at any time by a notice in writing given either by
the government servant to the appointing authority ·or by the
appointing authority to the government servant;

(!:>) The period of such notice shall be one month:
B
Provided that the services of any such Government servant may be
terminated forthwith and on such termination the Government servant
shall be entitled to claim a sum equivalent to the amount of his pay
plus allowances for the period of the notice at the same rates at which
he was drawing them immediately before the termination of the services
C or as the case may be for the period by which such notice falls short
of one month."

The aforesaid Rule 5 of the latter Rules as amended operated from I st May,
1965. The very same Rule prior to its amendf!1ent read as under:

·D "5. Termination of Temporary Service.-(l)(a) The service of a
temporary Government servant who is not in quasi-permanent service
shall be liable to termination at any time by a notice in writing given
either by the government servant to the appointing authority or by
the appointing authority to the Government servant;

E (b) the period of such notice shall be one month:

Provided that services of any such Government servant may be
terminated forthwith by payment to him of a sum equivalent to the
amount of his pay plus allowances for the period of the notice at the
same rates at which he was drawing them immediately before the
F termination of his services or, as the case may be for the period by
which such notice falls short of one month."

A mere look at the earlier un-amended Rules 5 of the latter Rules shows, as
laid down by its the then un-amended proviso, that service of a temporary
government servant could not be tenninated forthwith without payment to
G·
him of the compensation equivalent to the sum provided therein. Such offer
of compensation, therefore, was a condition precedent to such termination
prior to the amendment of the proviso to the said Rule with retrospective
effect by the latter amended Rule, as seen above. The amended proviso to
Rule 5 of the latter Rules with effect from 1.5.1965 deleted the words "by
H payment to him" which were earlier found in the un-amended proviso to Rule
MANAGEMENT OF M.C.D. v. P.C. GUPTA [S.B. MAJMUDAR, J.] 413

5( 1) of the latter Rules. Instead after the word "forthwith" the words "and on A
such termination the government servant shall be entitled to claim" were
added. Thus, what was a condition precedent under the un-amended proviso
to Rule 5 of the latter Rules became a condition subsequent. Consequently,
after 1.5.1965, as per Rule 5 of the latter Rules there remained no necessity
for the employer while forthwith terminating the services of temporary B
government servant to offer him compensation simultaneously with the
termination order. Such service could be terminated forthwith and termination
would immediately come into force. Payment of appropriate compensation as
per the proviso to Rule 5 on or after 1.5.1965 could be effected even later on
though, of course, within reasonable time thereafter. This change in the Rule
with effect from 1.5 .1965 directly got attracted on the facts of the present case C
as the respondent-workman's services were terminated after this amendment
came into force as his services were terminated on 29.4.1966, as seen earlier.
... The Division Bench of the High Court placed reliance on the decisions of this
Court in Senior Superintendent, R.MS., Cochin and Anr. v. K. V. Gopinath,
Sorter's case (supra) which had unfortunately not noticed the amended
provision of the proviso of Rule 5 of the latter Rules and that is why the said D
decision was treated to be per incuriam by two later decision of this Court.
In the case of Raj.Kumar v. Union of India & Ors., [1975] 4 SCC 13
Alagiriswami, J. referring to the aforesaid amendment to Rule 5(1) of the latter
Rules made following pertinent observations in this connection in para 2 of
the report: E
"2. It was not brought to the notice of the High Court that the proviso
to sub-rule (1) of Rule 5 of the Central Civil Services (Temporary
Service) Rules 1965, had been amended with retrospective effect from
May 1, 1965."
F
After quoting the amended Rule 5 of the latter Rules, it has been observed
as under:

"The effect of this amendment is that on May l, 1965, as also on June
15, 1971, the date on which the appellant's services were terminated
forthwith it was not obligatory to pay to him a sum equivalent to the G
amount of his pay and allowances for the period of the notice at the
rate at which he was drawing them immediately before the termination
of the services or as the case may be for the period by which such
notice falls short. The government servant concerned is only entitled
to claim the sums hereinbefore mentioned. Its effect is that the decision
of this Court in Gopinath 's case (supra) is no longer good law. There H
414 SUPREME COURT REPORTS [1999] SUPP. 5 S.C.R.

A is no doubt that this rule is a valid rule because it is now well
. established that rules made under the proviso to Article 309 of the
Constitution are legislative in character and therefore can be given
effect to retrospectively. It follows that the decision of Delhi High
Court dismissing the appellant's writ petition is correct and this appeal
will have to be dismissed."
B
The same view was taken in a later decision of this Court in the case of Union
·of India and Ors. v. A.run Kumar Roy, (supra) wherein Khalid, J. speaking for
the two Judge Bench of this Court reiterated the view of this Court in the case
of Raj Kumar v. Union of India (supra) for holding that the decision of this
C Court in Senior Superintendent, R.M.S., Cochin and Anr. v. K. V. Gopinath,
Sorter's, case (supra) was no lon~r good law.

It must, therefore, be held that the impugned judgment of the Division
Bench suffers from a patent error of Jaw inasmuch as it relies upon the
decision of this Court in Senior Superintendent, R.M.S., Cochin and Anr. v.
D K. V. Goinath, Sorter's case (supra) which has no longer remained a good law
for deciding the validity of termination passed after 1.5.1965 when Rule 5 of
the later Rules got amended as. aforesaid.

It is not possible to agree with the contention of learned counsel for
E the respondent-workman that only 1949 Rules would apply to the facts of the
present case as they were incorporated by reference in the regulations. As
seen earlier, reference to 1949 Rules even for the purpose of incorporation
would be treated as reference to the latter Rules of 1965 which had superceded
1949 Rules resulting in repealing of 1949 Rules and their re-enactment under
Article 309 of the Constitution oflndia by 1965 Rules as clearly indicated by
F Section 8 of the General Clauses Act, 1897.

But even that apart, Regulation 4( I) of the very same Service Regulation
of 1959 clearly provides as follows:

"4(1) Unless otherwise provided in the Act or these regulations, the
G Rules for the time being in force and applicable to Government servants
in the service of the Central Government shall, as far as may be,
regulate the conditions of service of municipal officers and· other
municipal employees".

Excepted matters mentioned therein are not relevant for our present
H purpose. It, therefore, becomes clear that on a combined operation of
MANAGEMENT OF M.C.D. v. P.C. GUPTA [S.B. MAJMUDAR, J.)415

Regulation 2(b)(ii) and Regulation 4( I) of the Service Regulations, 1959, the A
relevant Rules which were in force in 1966 when the respondent-workman's
services were terminated were the latter Rules of 1965 and could not be earlier
Rules of 1949 which had got superceded and had ceased to exist on the statue
book.
In this connection, one submission of learned counsel for the respondent- B
workman may be noted. He submitted that as laid down by Regulation 4(1),
the Rules for the time being in force as mentioned therein would refer to only
th:lse Rules which were in force when Service Regt:lations of 1959 were
promulgated and not any latter Rules. It is difficult to countenance this
submission. Rules for the time being inforce will have a nexus with the
regulation of condition of service of the municipal officers at the relevant time C
as expressly mentioned in Regulation 4( I). Therefore, whenever the question
of regulation of conditions of service of the municipal officers comes up for
consideration, the relevant Rules in force at that time have to be looked into.
This is the clear thrust of Regulation 4( I). Its scope and ambit cannot be
circumscribed and frozen only to the point of time in the year 1959, when the D
Service Regulations were promulgated. If such was the intention of the framers
of the Regulation, Regulation 4(1) would have employed a different
phraseology, namely, "rules at present in force" instead of the phraseology
"rules for the time being in force". The phraseology "rules for the time being
in force" would necessarily means rules in force from time to time and not
rules in force only at a fixed point of time in 1959 as tried to be suggested E
by learned counsel for the respondent-workman.
As a result of the aforesaid discussion, it must be held that the
termination of the respondent-workman from service on 29.4.1966 was not
violative of amended Rule 5 of the latter Rules of 1965 which only applied in
his case. Therefore, there was no obligation, on the part of the appellant- F
Corporation to simultaneously offer requisite compensation to the respondent-
workman as a condition precedent to such termination and such compensation
could be offered to him within reasonable time later on. The termination had
to be treated to have come into force forthwith when the order of termination
was passed and served on the respondent-workman. Non-payment of requisite G
compensation as per the said Rule even later on did not attract any invalidating
.consequences. The first point of determination, therefore, is held in negative
in favour of the appellant and against the respondent-workman.
Point No. 2

Once Point No. I is held in favour of the appellant-Corporation, the H
416 SUPREME COURT REPORTS [1999) SUPP. 5 S.C.R.

A impugned judgment of the Division Bench of the High Court would have been
required to be set aside as it had rested only on the applicability of Rule 5
of the Rules read with Rule 5 of the latter Rules. As a consequence we would
have been required to remand these proceedings to the High Court for
reconsideration of the remaining points in the letters patent appeal of the
respondent-workman, as these points have not been considered by the
B Division Bench. However, we are not inclined to do so especially when the
impugned termination order is dated 29.4.1966. Thus, after passage of 33
years, it would be unfair and unjust to both the sides to keep the matter
pending for further couple of years which would be the inevitable result of
such a remand order. It is necessary for both the sides to know where they
C finally stand in connection with this litigation. We are also inclined to take
this view because of the fact that for all these years, the respondent-
workman has remained out of the job and if after a couple of years he
becomes entitled to appropriate relief against the appellant-Corporation, apart
from it being too harsh and even too late for him to resume duties, the
appellant-Corporation also would be saddled with avoidable further costs
D and liability to pay back-wages to the respondent-workman. Thus, in order
to shorten the litigation between the parties, we thought it fit to consider the
alternative contention canvassed by Shri· Gupta, learned counsel for the
respondent-workman in connection with the impugned order. Accordingly, we
proceed to deal with the altemi;itive question whether the impugned termination
E order was in violation of Section 25-F of the l.D. Act or not.

To recapitulate, it is a well established fact on the record of this case
that the respondent-workman though initially appointed for one year from
5.5.1964 on a temporary post of Section Officer (Civil) was continued in
service after expiry of that year. His very appointment order of 5.5.1964
F mentioned that he could be considered for confirmation after one year of
satisfactory service. Even though he was never confirmed, the appellant-
Corporation did not terminate his services but continued him in service. Not
only that, but on 1.10.1964 after giving a short break in service and he was
re-appointed against a vacant post caused by termination of service of another
G employee. Thus, at least from 1.10.1964 even though in temporary service, he
continued to work on a vacant permanent post of Section Officer (Civil) and
continued to serve as such for further 18 months up to 29.4.1966 when he was
visited with the impugned termination order. By that time he had completed
not less than 240 days of continuous service for one calendar year immediately
proceeding 29 .4.1966 i.e. from 1.4.1965 to 29 .4.1966. Consequently, Section
H 25-F of the l.D. Act, 1947 got squarely attracted in his case. It reads as
MANAGEMENT OF M.C.D. v. P.C. GUPTA (S.B. MAJMUDAR, J.] 417

~~: A
"25-F. Conditions precedent to retrenchment of workman. 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-
B
(a) the workman has t.een given one month's notice in writing
indicating the reasons for retrenchment and the period of notice
has expired, or the workman has been paid in lieu of such notice,
wages for the period of the notice.

(b) the workman has been paid, at the time of retrenchment, C
compensation which shall be equivalent to fifteen days' average
pay (for every completed year of continuous service) or any part
thereof in excess of six months; and

(c) notice in the prescribed manner is served on the appropriate
Government (or such authority as may be specified by appropriate D
Government by notification in the Official Gazette.)"

It is not in dispute between the parties that these requirements were not
complied with by the appellant-Corporation while terminating the respondent-
workman's service. The Labour Court rightly held accordingly. However, having
so held on facts, the Labour Court found that Section 25-F would not apply E
for the reason that the respondent-workman's services were not terminated
because of his being an excess staff. The said reasoning of the Labour Court
ran parallel to the earlier decisions of this Court which had taken such a view
on interpretation of Section 25-F. But the said line of reasoning no longer held
the field in the light of the later decisions of this Court. In the case of The
State Bank of India v. Shri N. Sundara Money, [1976] 1 SCC 822, a three F
Judge Bench of this Court interpreting Section 25-F read with Section 2(oo)
of the l.D. Act, speaking through Krishna Iyer, J. in para 9 of the report clearly
laid down that in section 2(oo) the word 'termination' for any reason
whatsoever is the key word. Whatever the reason, every terminatio11 spells
retrenchment. A termination takes place where a term expires either by the G
active step of the master or the running out of the stipulated term. The said
decision of the three Judge Bench was approved by a Constitution Bench of
this Court ;n the case of Punjab land Development and Reclamation
Corporation ltd Chandigarh v. Presiding Officer, labour Court, Chandigarh
and Ors. etc. etc., [l 990] 3 SCC 682. In view of this settled legal position,
therefore, it must be held that termination of services of the respondent- H
418 SUPREME COURT REPORTS [1999] SUPP. 5 S.C.R.

A workman on 29.4.1966 which was admittedly not by way of punishment clearly
amounted to retrenchment attracting Section 25-F of the l.D. Act.

Learned .counsel for the appellant-Corporation, Ms. Binu Tamta, in order
to salvage the situation invited our attention to a decision of this Court in
the case of Bir/a VXL Ltd. v. State of Pujab and Ors., [1998] 5 SCC 632 and
B submitted that when the appointment is given for a fixed period, on expiry of
the said period the appointment would ceased by efflux of time and it could
not be said to be a retrenchment. In the aforesaid case, a two Judge Bench
of this Court was concerned with appointment order given to the third
respondent before this Court on 1.1.1983 which clearly stated that it was
C appoinment for two years up to 31.12.1984. When the said termination by
efflux· of time took place, Section 2(oo) of the l.D. Act had already got
amended by insertion of exception Clause (bb) therein which reads as under:

"termination of the service of the workman as a result of the non-
renewal of the contract of employment between the employer and the
workman concerned on its expiry or of such contract being terminated
D
under a stipulation in that behalf contained therein; or;"

Thus, it was a case of automatic termination of employment in the light of the
stipulation contained in the appointment itself. Such termination could not be
treated as retrenchment in the light of the excepted category indicated by
E Clause (bb) inserted in Section 2(oo) by the amending Act of 1984. It has to
be kept in view that respondent-workman's termination was prior to 1984
amendment to Sebion 25-F. Hence, it was squarely governed by the ratio of
decision of this Court in case of The State Bank of India v. Shri N. Sundara
Money (supra). It is, therefore, not possible to agree with the contention of
learned counsel for the appellant that termination of the. respondent-workman
F on 29.4.1966 would not be retrenchment. It has also be seen that even though
the earlier appointment of the respondent-workman was for one year from
5.5.1964 his re-appointment from 1.10.1964 was not for a fixed period and on
the contrary it continued up to 18 months and it was against a clear vacancy
of a permanent post caused on account of the termination of another employee.
G Consequently, reliance placed by learned counsel, Ms. Binu Tamta for the
appellant-Corporation on the aforesaid decision of this Court is of no avail
to her. She then invited our attention to a later decision of this Court in the
case of Rajasthan Adult Education Association & Anr. v. Ashoka Bhatacharya,
(Km) and Anr., [ 1998] 9 sec 61. In that case this Court was concerned with
the termination of a probationer temporary servant of account of unsatisfactory
H performance. A probationer employee was found to have not satisfactorily
,.,:
MANAGEMENT (?)F M.C.. D. v. P.C. GUPTA (S.B. MAJMUDAR, J.)419
• worked during his probation and her services were terminated w.e.f. 31.5.1989. A
This is also a case where after the amendment of Section 2(oo) by insertion
of Clause (bb) from 1984 such termination of probationers for unsatisfactory
work would remain outside the sweep of Section 25-F read with Section 2(00).
In the present case, as seen earlier, the termination was years back of29.4. l 966
when Section 2(oo) and (bb) was not on the statute book. Reliance was then
placed by learned counsel for the appellant-Corporation on a decision of a B
learned Single Judge of the Gujarat High Court in the case of Sunil Kumar
S.P. Sinha v. Indian Oil Corporation Ltd, Delhi and Anr., (1983) Vol 16
LAB.l.C.1139. This decision also cannot be of any avail to her for the simple
reason that the sa.id decision proceeded on its own facts. In para 14 of the
report, it has been clearly mentioned by the learned Single Judge that the c
employee in that case was not a workman and again there was no evidence
to show that all the requirements of Section 25-F were complied with for its
.... applicability. It was a direct writ petition in the High Court and in absence of
relevant data the said Section was held to be not applicable. The said judgment
rendered on its own facts, therefore, cannot be pressed in service in the light
of clear findings of fact reached by the Labour Court in the present case, D
~ which have remained well sustained on record, as seen by us earlier for
applicability of Section 25-F to the impugned termination of the respondent-
workman's services. As a result of the aforesaid discussion, it must be held
,\
that termination of the respondent-workman's service on 29.4.1966 was violative
of Section 25-F of the I.D. Act and was, therefore, null and void. The second E
point for determination is answered in affirmative against the appellant-
Corporation and in favour of the respondent-workman, subject to our decision
about appropriate relief to be given to the respondent-workman as will be
indicated while considering the last point for determination.

Point No. 3 F

We have now reached the stage for considering appropriate relief to be
granted in the light of our findings on Point No. 2. Once it is held that
termination of the respondent-workman on 29.4.1966 was null and void being
violative of Section 25-F of the 1.0. Act, the logical consequence would be
G
that he would be entitled to be re-instated in service with continuity and in
normal course would be entitled to full back-wages. However, in our view on
J the peculiar facts of this case, it will not be appropriate to grant full back-
wages to the respondent-workman even though he will be entitled to be re-
instated in service of the appellant-Corporation with continuity and all further
consequential benefits on that score, save and except the grant of full back- H
420 SUPREME COURT REPORTS [1999] SUPP. 5 S.C.R.

:.A wages, as indicated herein below:
The reasons for non-granting full back-wages from the date of his
termination of 29 .4 .1966 till actual re-instatement pursuant to the present order
can now be indicated. Firstly, for no fault of the contesting parties, the
litigation has lingered on for more than three decades. The termination order
B was as early as on 29.4.1966 and after 33 years and more it is being set aside.
To saddle the appellant-Corporation and its exchequer, which is meant for
public benefits, with full back-wages for entire period would be too harsh to
the appellant-Corporation. It is the delay in disposal of cases in the Courts
that has created this unfortunate situation for both the sides. Respondent-
C workman is also not at fault as he was clamouring for justice for all these
years. However, this delay in Court proceedings for no fault of either side
permits us not to burden the appellant-Corporation, being a public body, with
the full back-wages for the entire period of respondent-workman's
unemployment, especially when for no fault of either side actual work could
not be taken from the respondent-workman by the appellant-Corporation. It
D is true that the respondent-workman was always willing to work but he could
not be permitted to work so long as the termination order stood against him.
The Labour Court as well as the learned Single Judge upheld that order. Only
the Division Bench set aside that order. This Court at SLP stage itself while
granting leave stayed re-instatement order on 17 .11.1997. Two more years
E since elapsed during the pendency of this appeal before this Court. All these
factors together point in the directiCm of not saddling the appellant-
Corporation, a public body, with the burden of entire full back-wages to be
granted to the respondent-workman after the passage of 33 years since his
order of termination. The second reason is that the respondent-workman for
all these years could not have remained totally unemployed though there is
F no clear evidence that he was gainfully employ and was so well off that he
should be denied complete back-wages. But keeping in view the fact that for
all these long years fortunately the respondent-workman had survived and
has still two more years to reach the age of superannuation as we are told,
not granting him full back-wages on the peculiar facts of this case, would
G meet the ends of justice. We, therefore, pass the following order:
L The impugned order of Division Bench of the High Court insofar
as it holds that the termination order of the respondent-workman
dated 29.4.1966 was violative of Rule 5 of the relevant Rules is
~-
set aside.
H 2 However, the final order passed by the High Court ordering re-
MANAGEMENT OF M.C.D. v. P.C. GUPTA [S.B. MAJMUDAR, J.]421

instatement of the respondent-workman with continuity of service A
is upheld on the alternative ground holding. termination of
services of the respondent-workman on 29.4.1966 to be violative
of Section 25-F of the I.D. Act.

.,' 3. So far as back-wages are concerned, the impugned order of the
High Court is modified by directing that the respondent-workman B
will be entitled t<:> get 50% of back-wages from the date of his
termination i.e. from 29.4.1966 till his actual re-instatement in
service of the appellant-corporation wit!: continuity of service.
The respondent-workman will also be entitled to all other
consequential benefits including increments in the available time
scale and revisions of the time scale, if any, and also further C
service benefits as per the rules and regulations of the appellant-
Corporation being treated to have b~en in continuous service of
the appellant-corporation from 29.4.1966 all through out till re-
instatement. The appellant-corporation shall reinstate the
respondent-workman with continuity of service within 8 weeks D
from today and will also pay 50% back-wages as directed
hereinabove within that period. The appellant-Corporation will
also grant all other consequential benefits to the respondent-
workman in the light of this judgment. Appeal stands allowed as
1 aforesaid with no order as to costs in the facts and circumstances
' of the case. E
P.K.S. Appeal disposed of.