S. GOVINDARAJU versus K.S.R.T.C. & ANR.

SINGH, J. Special Leave to appeal is granted.

p. 511, margin A

This appeal is directed against the order of the High Court of Karnataka dismissing the respondents' writ petition under Art. 226 of the Constitution challenging the order of termination of service on the ground that it was violative of Sec. 25F cf the Industrial Disputes Act, 1947.

p. 511, margin A

Briefly the facts giving rise to this appeal are that the appellant was selected for appointment as Conductor in the Karnataka State Road Transport Corporation constituted under the Transport Act, 1950, his name was placed on the select list prepared by the Selection Collllllittee constituted under the Karnataka State Road Transport Corporation (Cadre and Recruitment) Regulation 1982. He was not given a regular appointment but he was appointed to work as conductor in temporary vacancy. He continued to work for a period of than 240 days. While he was working as conductor his services were terminated by the Order dt, 2-4/5 of 1985 on the ground of his being found unsuitable for the post, The termination order further directed that the appellant would forfeit his chance for appointment in terms of selection and his name shall stand deleted from the select list. The appellant challenged the validity of termination order before the High Court of Karnataka by means of a petition under Art. 226 of the Constitutien on the ground that the order of termination was void and illegal for the non-compliance of Sec. 25F of the Industrial Disputes Act, 1947. A learned Single Judge of the High Court of Karnataka rejected the petition holding that the order of termination was made in terms under which employment was given to him and it did not a11K>unt to retrenchment in view of Sec. 2(oo)(bb) of the Act.

p. 511, margin B

Section 25F of the Industrial Disputes Act provides that no workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until he has been paid retrenchment compensation which shall be equivalent to 15 days average pay for completing a year of service or any part thereof in excess of 6 months. Section 25F was designed by the Parliament to safeguard the interest of employees, The statutory requirement of payment of compensation is a condition precedent for the retrenchment of a workman and any "-'" termination without payment would make the retrenchment order invalid and inoperative, as has been held by this Court in State Bank of India v. Sbri. N. Sondra Money, A.I.R. 1976 s.c. 1111; Santosh Gupta v. State Banlt of Patiala, A.I.R. 1980 s.c.

pp. 511–512, margin F

1219; Mohan Lal v. Management B,E., A.I.R, 1981 S.C. 1253 and B Management LS.R.T.C. v. Baraiah, A.I.R. 1983 S.C, 1320,

p. 512

Section 2(oo) defines retrenchment which means the~~­ termination by the employer of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of

p. 512

disciplinary action, but does not include (a) voluntary retirement of workman; or (b) retirement of the workman on reaching the age of superannuation if the contract of an _,f employment between the employer and the workman concerned cc.ntains a stipulation in that behalf or (c) termination of 'f the service of a workman on the ground of continued ill

p. 512

health. By the amending Act 49 of 1984 a new clause (bb) was added to Sec. 2(00). The amended provision runs as under :

p. 512, margin C

2(oo) "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment

p. 512, margin D

inflicted by way of disciplinary action, but does .. not include - (a) x x x .x x x

p. 512, margin D

(b) x x x x - F "(bb) 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 under a stipulation in that behalf

p. 512, margin D

contained therein; or".

p. 512, margin E

The High Court held that since the appellant's contract for employment contained a stipulation that his services could be terminated at any time, the termination did not amount to )'-retrenchment in view of the newly added exception to Sec.

p. 512, margin E

2(00). The validity of Section 2(oo)(bb) was not challenged before us. The learned counsel for the appellant urged that if ....;, the view of the High Court is accepted it would enable unscrupulous emloyers to provide a stipulation in the contract of service for terminating the employment of the employees to escape the rigorous of Sec. 25F of the Act. This would further confer arbitrary powers on the employers which would be destructive of the protection granted bY the Act to the employees. do not consider it necessary to express any

pp. 512–513, margin E

opinion on this question as in our opinion the appellant is ~·.,.entitled to succeed on another short question Le. the termination order being violative of principles of natural justice.

p. 513, margin B

The Karnataka State Road Transport Corporation is a ).. statutory authority constituted under the Road Transport

p. 513, margin C

Corporation Act, 1950, The Corporation has framed Regulations ..,.(Karnataka Road Transport Corporation Cadre & Recruitment Regulations) 1982 regulating the conditions of service of its employees. These regulations are statutory in nature having been framed under sec. 45(2)(c) of the Road Transport Corporation Act. Admittedly the appellant was selected by the Selection Committee constituted under the aforesaid Regulations and his name was included in the select list

p. 513, margin C

prepared for the purpose of appointment as Conductor as and .. when vacancy would arise. His name was also included in the Badli list of workers and in pursuance thereof he was given employement. There is no dispute that the appellant was allowed to be in continuous service for a period of more than

p. 513, margin D

one year and while he was in continuous service the impugned ~ order of termination was issued in accordance with Regulation 10(5). The relevant provision of Regulation 10(5) provides

p. 513, margin E

that during temporary /Badli appointment a candidate if 't- terminated/removed from service as unsuitable for the post he will forfeit his chance for the appointment in terus of his selection. There is no dispute that the appellant's services were terminated on the ground of his being found unsuitable for the appointment and as a result of which his name was deleted from the select list, and he forfeited his chance for appointment. Once a candidate is selected and his name is

p. 513, margin E

included in the select list for appointment in accordance with r"f the Regulations he gets a right to be considered for appointment as and when vacancy arises. On the removal of his name from the select list serious consequence entail as he forfeits his right to employment in future. In such a situation even though the Regulations do not stipulate for )....affording any opportuniry to the employee, the principles of natural justice would be attracted and the employee would be entitled to an opportunity of explanation, though no elaborate enquiry would be necessary. Giving an opportunity of

pp. 513–514, margin G

explanation would meet the bare minimal requirement of natural justice. Before the services of an employee are terminated, resulting into forfeiture of his right to be considered for employement, opportunity of explanation ID.1st be+~ afforded to the employee concerned. The appellant was not afforded any opportunity of explanation before the issue of

p. 514

the impugned order consequently the order is rendered null and ~ void being inconsistent with the principles of natural justice. accordingly allow the appeal and set aside the -{ order of the High Court and also the order of termination and · direct that the appellant shall be treated in service and be 'Y 4 paid his back wages and other benefits. The appeal is allowed with costs. M.L.A. Appeal allowed.

p. 514, margin B