MANU/SC/0529/1993

Equivalent Citation: 1993GLH(2)174, JT1993(3)SC 617, (1993)IILLJ696SC , 1994(1)PLJR55, 1993(3)SC ALE39, (1993)3SC C 259, [1993]3SC R930,
1993(3)SC T537(SC )

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 166(NL) of 1983
Decided On: 07.05.1993
Appellants: D.K. Yadav
Vs.
Respondent: J.M.A. Industries Ltd.
Hon'ble Judges/Coram:
Kuldip Singh, V. Ramaswami and K. Ramaswamy, JJ.
Case Note:
Service - dismissal - Article 14 of Constitution of India - respondent
dismissed appellant from service for absenting himself without assigning
cause for absence - decision confirmed by Labour Court - appeal - standing
Order for dismissing workman from service for unexplained absence must be
read with principles of natural justice - without conducting domestic inquiry
and without giving opportunity of being heard termination of service
offended Article 14 - dismissal of appellant unfair and arbitrary exercise of
power - appeal allowed.
JUDGMENT
K. Ramaswamy, J.
1 . 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 termination of the appellant's service as legal and valid. The
respondent, by its letter dated December 12, 1980 which was received by the
appellant on December 19, 1980, intimated that the 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 13(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 without
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.
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.
2. Clause 13(2)(iv) standing order reads thus:
If a workman remains absent without sanctioned leave or beyond the period of

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 leave originally granted or subsequently extended, he shall lose his lien on his
appointment unless
(a) he returns within 8 calendar days of the commencement of the absence of
the expiry of leave originally granted or subsequently extended as the case
may be and
(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
be. The workman not reporting for duty within 8 calendar 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.
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 subsequently extended
the employee loses his lien on employment unless he returns to duty within eight
calendar days of the commencement of the absence or the expiry of leave either
originally granted or subsequently extended. He has to give a satisfactory explanation
to the Manager/Management of his reasons for absence or inability to return to the
duty on the expiry of the leave. On completion of eight calendar days' absence from
duty he shall be deemed to have abandoned the services and lost his lien on his
appointment. Thereafter the management has been empowered to strike off the name
from the Muster Rolls.
3 . 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 -
(a) Voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the
contract of employment between the employer and the workman concerned
contains a stipulation in that behalf: or
(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 retrenchment
becomes valid and legal and violation thereof visits with invalidation of the action with
consequential results.
4 . In Punjab Land Development and Reclamation Corporation Ltd., Chandigarh v.
Presiding Officer, Labour Court MANU/SC/0479/1990 : (1990)IILL J70SC Chandigarh
and Ors., the Constitution Bench considered the scope of the word 'retrenchment'
defined by Section 2(oo) and held in para 71 at page 716 that "analysing the definition
of retrenchment in Section 2(oo) we find that termination by the employer of the
service of 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 retirement or on the grounds 'of continued ill health. There would be no volitional
element of the employer. Their express exclusion implies that those would otherwise
have been included". In para 77 at page 719 it was further held 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

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 of Section 2(oo) and Section 25F of the Act. The second view was that the right as
such has not been effected or taken away, but only an additional social obligation has
been imposed on the employer to abide by the mandate of Section 25F of the Act to
tide over the financial difficulty which subserves the social policy. This court relied on
the maxim - Stat pro rationed valiant as 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
Section 2(oo) of the Act of retrenchment means "the termination by the employer of
the service of a workman for any reason whatsoever except those expressly excluded
in the section". Same view was taken by three benches of three Judges of this Court in
State Bank of India v. Sri Sundara Mani MANU/SC/0315/1976 : (1976)ILL J478SC ;
Delhi Cloth & General Mills Ltd. v. Shambhu Nath Mukherjee and Ors.
MANU/SC/0225/1977 : (1978)ILL J1SC and Hindustan Steel Ltd. v. The Presiding
Officer MANU/SC/0304/1976 : (1977)ILL J1SC Labour Court and two benches of two
judges in Robert D'Souza v. Executive Engineer, Southern Railway and Anr.
MANU/SC/0152/1982 : (1982)ILL J330SC and H.D. Singh v. Reserve Bank of India and
Ors. MANU/SC/0217/1985 : (1986)ILL J127SC took the same view. Therefore, we find
force in the contention of Sri R.K.Jain, the learned Senior counsel for the appellant
that the definition 'retrenchment' in Section 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, however, rest our conclusion on this point 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.
5 . The contention of Dr. Anand Prakash that since this 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 contention based on Clause 13 of the
certified standing order to support impugned action and the respondent is entitled to
canvass afresh the correctness of the view of the Constitution bench is devoid of force.
It is settled law that an authoritative law laid after considering all the relevant
provisions and the previous proceedings, 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 workman/employee. By
operation of Section 2(oo) the right of the employer under Clause 13(2)(iv), and the
contract of employment has been effected. Moreover in Ambika Prasad Mishra v. State
of U.P. and Ors. : [1980]3SCR1159 , a Constitution bench held that every new
discovery or argumentative novelty cannot undo or compel reconsideration of a
binding precedent. It does not lose its authority 'merely' because it was badly argued,
inadequately considered and fallaciously reasoned. In that case the ratio of this court
on Article 31A decided by 13 Judges bench in Keshwanand Bharti v. Union of India
(1973) Suppl. SCR 1 was sought to be reopened but this court negatived the same.
6. His contention that expiry of eight days' absence from duty brings about 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 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 consecutive days

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 amounts to misconduct and termination of service on such grounds without complying
with minimum principles of natural justice would not be justified. In Shambhunath's
case three Judges bench held that striking of the name of the workman for absence of
leave itself amounted to retrenchment. In H.D. Singh v. Reserve Bank of India and
Ors. (supra), this court held that striking of the name from the rolls amounts to an
arbitrary action. In State Bank of India v. Workmen of State Bank of India
MANU/SC/0355/1990 : (1990)IILL J586SC and Anr., a two judge bench of this court to
which one of us. K.R.S., J. was a member was to consider the effect of discharge on
one month's notice or pay in lieu thereof. It was held that it was not a discharge
simpliciter or a simple termination of service but one camouflaged for serious
misconduct. This court lifted the veil and looked beyond the apparent tenor of the
order and its effect. It was held that the action was not valid in law.
7 . The principle question is whether the impugned action is violative of principles of
natural justice. In A.K. Kriapak and Ors. v. Union of India and Ors.
MANU/SC/0427/1969 : [1970]1SCR457 , a Constitution bench of this court held that
the distinction between quasi judicial and administrative order has gradually become
thin. Now it is totally clipped and obliterated. 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 not covered by law validly made or expressly excluded as held in
Col. J.N. Sinha v. Union of India and Anr. MANU/SC/0500/1970 : (1970)IILL J284SC It
is 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
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 are completed, the need to dispense
with the services may arise. In that situation, on compliance of the provisions of
Section 25F resort could be had to retrench the employees in conformity there with
particular statute or statutory rules or orders having statutory flavour 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 its exclusion on given special and exceptional exigencies.
8. The cardinal point that has to be born 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, namely, the procedure adopted must be just, fair and
reasonable in the particular circumstances of the case. In other words application of
the principles of natural justice that no man should be condemned unheard intends to
prevent the authority to act arbitrarily effecting the rights of the concerned person.
9. It is a fundamental rule of law that no decision must be taken which will effect the
right of any person without first being informed of the case and be given him/ 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 and
Anr. v. The Chief Election Commissioner and Ors. MANU/SC/0209/1977 :
[1978]2SCR272 the Constitution Bench held that 'civil consequences' covers infraction
of not merely property or personal right but of civil liberties, material deprivations and
non-pecuniary damages. In its comprehensive connotation everything that affects a
citizen in 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. (miss) Binapani Dei and Ors. MANU/SC/0332/1967 :

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 (1967)IILL J266SC this court held that even an administrative, order which involves
civil consequences must be made consistently with the rules of natural justice. The
person concerned must be informed of the case. The evidence in support thereof
supplied and must be given 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.
10. In State of West Bengal v. Anwar Ali Sarkar MANU/SC/0033/1952 : 1952CriL J510
per majority, a seven Judge bench held that the rule of procedure laid down by law
comes as much within the purview of Article 14 of the Constitution as any rule of
substantive law. In Maneka Gandhi v. Union of India MANU/SC/0133/1978 :
[1978]2SCR621 another bench of seven judges held that the substantive and
procedural laws and action taken under them will have to pass the test under Article
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 there under for
showing cause against action 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 of or restriction on inherent
fundamental rights of citizens, must take care to see that justice is not only done but
manifestly appears to be done. They have a duty to proceed in a way which is free
from even the appearance of arbitrariness, unreasonableness or unfairness. They have
to act in a manner which is patently impartial and meets the requirements of natural
justice.
11. The law must therefore be now taken to be well-settled that procedure prescribed
for depriving a person of livelihood must meet the challenge of Article 14 and such law
would be liable to be tested on the anvil of Article 14 and the procedure 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 Article 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 the 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 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.
12. Therefore, fair play in action requires that the procedure adopted must be just,
fair and reasonable. The manner of exercise of the power and its impact on the right of
the person affected would be in conformity with the principles of natural justice.
Article 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 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. Article 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 Court that the
principles of natural justice are part of Article 14 and the procedure prescribed by law
must be just, fair and reasonable.

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 13. In Delhi Transport Corporation v. D.T.C. Mazdoor Congress MANU/SC/0031/1991
and Ors. this court held that right to public employment and its concomitant right to
livelihood received protective umbrella under the canopy of Articles 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 reasonable procedure prescribed under the provisions of the
Constitution and the rules made under proviso to Article 309 of the Constitution or the
statutory provisions or the rules, regulations or instructions having statutory flavour.
They must be conformable to the rights guaranteed in Part III and IV of the
Constitution. Article 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 Articles 14 and 21 so as to be just, fair and reasonable and not
fanciful, oppressive or at vagary. The principles of natural justice is an integral part of
the guarantee of equality assured by Article 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 of natural justice. Articles 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 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 substantive. The substance of the order is the soul and
the affect thereof is the end result.
1 4 . It is thus well settled law that right to life enshrined under Article 21 of the
Constitution would include right to livelihood. The order of termination of the service
of an employee/workman 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 opportunity to put forth his case is given and domestic
enquiry conducted' complying with the principles of natural justice. In D.T.C. v. D.T.C.
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 Article 14. The order terminating the service of the
employees was set aside.
15. 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 attendance register.
The Tribunal did not record any conclusive finding in this behalf. It concluded that the
management had power under Clause 13 of the certified Standing Orders to terminate
with the service of the appellant. Therefore, we hold that the principles of natural
justice must be read into the standing order No. 13(2)(iv). Otherwise it would become
arbitrary, unjust and unfair violating Articles 14. When so read the impugned action is
violative of the principles of natural justice.
16. 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. The award of the Labour
Court is set aside and the letter dated December 12, 1980 of the management is
quashed. There shall be a direction to the respondent to 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 accordingly. The parties would bear

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 their own costs.

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