PETITIONER:
S. GOVINDARAJU
Vs.
RESPONDENT:
K.S.R.T.C. & ANR.
DATE OF JUDGMENT15/04/1986
BENCH:
SINGH, K.N. (J)
BENCH:
SINGH, K.N. (J)
REDDY, O. CHINNAPPA (J)
CITATION:
1986 AIR 1680 1986 SCR (2) 509
1986 SCC (3) 273 1986 SCALE (1)794
ACT:
Karnataka Road Transport Corporation (Cadre &
Recruitment) Regulations, 1982 - Regulation 10(5) - State
Road Transport Corporation - Conductor - Services terminated
without enquiry - Legality of - Whether principles of
natural justice violated - Opportunity of explanation -
Entitlement and necessity of.
HEADNOTE:
Regulation 10(5) of the Regulations (Karnataka Road
Transport Corporation (Cadre and Recruitment) Regulations
1982 provides that during temporary/Badli employment a
candidate if terminated/removed from service as unsuitable
for the post, he will forfeit his chance for the appointment
in terms of his selection.
The appellant was selected for appointment as Conductor
in the Karnataka State Road Transport Corporation - a
statutory authority constituted under the Road Transport
Corporation Act 1950. His name was placed on the select list
prepared by the Selection Committee 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 more
than 240 days. While he was working as Conductor, his
services were terminated under Regulation 10(5) of the
Regulations on the ground of his being found unsuitable for
the post without giving any opportunity of explanation. The
termination order further stated 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 in a Writ Petition. The High
Court dismissed the Writ Petition holding that the order of
termination was made in terms under which employment was
given
510
to him and it did not amount to retrenchment in view of s.
2(00)(bb) of the Industrial Disputes Act 1947.
Allowing the appeal,
^
HELD 1. The appellant was not afforded any opportunity
of explanation before the issue of the impugned order.
Consequently, the order is rendered null and void being
inconsistent with the principles of natural justice.
Therefore the order of the High Court as also the order of
termination are set aside and the appellant shall be treated
in service and be paid his back wages and other benefits.
[514 C-D]
2. The Karnataka Road Transport Corporation (Cadre and
Recruitment) Regulations 1982 which regulate the conditions
of service of its employees, are statutory in nature having
been framed under s. 45(2)(c) of the Road Transport
Corporation Act. Once a candidate is selected and his name
is included in the select list in accordance with the
Regulations, he gets a right to be considered for
appointment as and when vacancy arises. On the removal of
his name from Select List, serious consequences entail as he
forfeits his right to employment in future. In such a
situation even though the Regulations do not stipulate for
affording any opportunity to the employee, the principle of
natural justice would be attracted and the employee would be
entitled to an opportunity of explanation, though no
elaborate inquiry would be necessary. Giving an opportunity
of 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 employment, opportunity of explanation must
be afforded to the employee concerned. [513 D-E; 513H; 514
A-C]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1339(NL) of 1986.
From the Judgment and Order dated 19.6.85 in the High
Court of Karnataka at Bangalore in W.P. No. 9171 of 1985.
R.K. Garg, V. Laxminarayana and D.K. Garg for the
Appellant.
G.B. Pai, N.D.B. Raju, Miss Deepa and Vineet Kumar for
the Respondent.
511
The Judgment of the Court was delivered by
SINGH, J. Special Leave to appeal is granted.
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 of the Industrial Disputes Act, 1947.
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 Committee 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 more
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 Constitution 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 amount to retrenchment in view of Sec.
2(oo)(bb) of the Act.
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 condi-
512
tion 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. Shri. N. Sundra Money,
A.I.R. 1976 S.C. 1111; Santosh Gupta v. State Bank of
Patiala, A.I.R. 1980 S.C. 1219; Mohan Lal v. Management
B.E., A.I.R. 1981 S.C. 1253 and Management K.S.R.T.C. v.
Baraiah, A.I.R. 1983 S.C. 1320.
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 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
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. By the amending Act 49 of 1984 a new clause (bb) was
added to Sec. 2(oo). The amended provision runs as under :
2(oo) “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) x x x x x x x (b) x x x x x x x
“(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
contained therein; or”.
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. 2(oo). The validity of Section 2(oo)(bb) was not
challenged before us. The learned counsel for the appellant
urged that if
513
the view of the High Court is accepted it would enable
unscrupulous emloyers to provide a stipullation 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. We do not consider it necessary to
express any opinion on this question as in our opinion the
appellant is entitled to succeed on another short question
i.e. the termination order being violative of principles of
natural justice.
The Karnataka State Road Transport Corporation is a
statutory authority constituted under the Road Transport
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 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 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 that during temporary/Badli
appointment a candidate if terminated/removed from service
as unsuitable for the post he will forfeit his chance for
the appointment in terms 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 included in the select
list for appointment in accordance with 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
514
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 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 must
be afforded to the employee concerned. The appellant was not
afforded any opportunity of explanation before the issue of
the impugned order consequently the order is rendered null
and void being inconsistent with the principles of natural
justice. We 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 paid his back wages and other benefits. The appeal is
allowed with costs.
M.L.A. Appeal allowed.
515