Taj Rhein Shoes Company Limited ... vs State Of U.P. And 2 Others
2021 Latest Caselaw 7781 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Court No. - 38
 

 
Case :- WRIT - C No. - 43801 of 2017
 

 
Petitioner :- Taj Rhein Shoes Company Limited Thru Manager
 
Respondent :- State Of U.P. And 2 Others
 
Counsel for Petitioner :- Diptiman Singh
 
Counsel for Respondent :- C.S.C.,Monika Arya,Sarwar Ali Siddique
 

 
Hon'ble Yashwant Varma,J.

Heard Sri Diptiman Singh, learned counsel for the petitioner and Sri Piyush Shukla, learned Standing Counsel. Although the respondent workman is duly represented, none has appeared when the matter was called.

The petitioner assails the validity of the award dated 11 May 2017 in terms of which the Labour Court has answered a reference in favour of the respondent workman. It has proceeded to annul an order of 31 March 1996 which it has recognized to be one of retrenchment and directed payment of full back wages.

According to the petitioner, the respondent workman was appointed as a Stitcher (Trainee) in terms of a letter of appointment dated 21 March 1995. The aforesaid appointment order further provided that he would be appointed with effect from 01 April 1995. The appointment letter further prescribed that the respondent workman would be on probation for a period of six months and during this period, his services would be terminable without any notice. The appointment letter further stipulated that on the expiry of the period of probation, the respondent workman would be confirmed in service in accordance with an order made in writing to that effect and upon the management finding that his work was satisfactory. This very stipulation empowered the petitioner to extend the period of probation.

The relevant clauses of the appointment order are extracted hereinbelow: -

"2. You will be on Probation for a period of six months w.e.f. the date of your joining duties with us. During the probationary period, your services are terminable without any notice on either side or payment in lieu thereof.

3. On expiry of Probationary Period, you will be confirmed in services of the Company in writing provided in the opinion of the Management your work is considered satisfactory at the discretion of the Management your work is not found satisfactory your services can either be terminated or your Probation Period can be extended twice for a period of six months each. During the extended period of probation also, your services are terminable without any notice or payment on either side. After your confirmation in the services of the Company, in writing your services are terminable by giving one month's (30 days) notice on either side or payment of one month's salary in lieu of notice."

On 01 December 1995, the probationary period of the respondent workman was extended till 31 March 1996. That order was in the following terms: -

"This is with reference to the letter of appointment dated 01.04.95 appointing you as "Trainee" on Probation.

Please note that your performance during the probation period has not been satisfactory and as such your probation is extended till 31st March, 1996.

Unless, therefore, you improve your performance, the management shall be constrained to terminate your probationary appointment."

A few days before the date when the probation period of the respondent workman would have come to an end, the petitioner passed an order of 29 March 1996 stating that his services would stand terminated on expiry of the probationary period of appointment. Along with that order, they also tendered one month's notice pay and fifteen days wages towards retrenchment compensation. Aggrieved by the aforesaid action, the respondent workman appears to have move the appropriate government for reference of an industrial dispute. It is in the aforesaid backdrop and pursuant to the reference made by the appropriate government on 25 October 2007 that the impugned award has come to be made.

The Labour Court has principally placed reliance upon the evidence led by the respondent workman to hold that there appeared to be a serious dispute with regard to the date from which the respondent workman was initially engaged. It has also doubted the extension of the probation period of the respondent workman by noting that although his performance was appraised on 29 December 1995, the petitioner appears to have extended the probationary period by an order of 01 December 1995. The Labour Court additionally relying upon the documentary evidence which was led, has found and held that the respondent workman appears to have been engaged from 01 June 1994 and that when computed from that date, it was manifest that he had completed 240 days of service in a calendar year and his services terminated in violation of Section 6N of the U.P. Industrial Disputes Act, 1947.

Assailing the aforesaid award, Sri Singh, learned counsel for the petitioner has contended that the evidence on which the Labour Court rested its decision, did not in any manner establish that the respondent workman had been engaged by the petitioner prior to 01 April 1995. Drawing the attention of the Court to the identity card purported to have been issued by the ESI Corporation, it was pointed out that the aforesaid did not bear the signature of any authorized representative of the petitioner. The document appearing at page 84, was also assailed with the learned counsel for the petitioner contending that the same also did not establish that the respondent workman had been engaged prior to the issuance of the appointment letter of 21 March 1995. Sri Singh further pointed out that the so-called identity card bore no details of the employer's name and in any case showed the designation of the respondent workman as that of an Operator when in fact admittedly he had been engaged as a Stitcher. Sri Singh has taken the Court through the oral testimony of the respondent workman as recorded in the proceedings before the Labour Court to submit that a perusal of the same establishes that the respondent workman had clearly admitted the appointment letter which had been marked as Exhibit 17 B-1. He further drew the attention of the Court to the testimony of the respondent workman who also accepted and admitted the communication of 29 March 1996 which had been marked as Exhibit E-3 as well as the receipt of retrenchment compensation in terms thereof. In light of the aforesaid, it was contended that the Labour Court clearly erred in answering the reference in favour of the respondent workman. It was additionally contended that the Labour Court appear to have proceeded on the assumption that the respondent workman stood confirmed automatically on expiry of the period of probation. He submitted that in light of clause 3 of the appointment letter, it was manifest that no presumption of automatic confirmation stood raised against the petitioner and that the relevant stipulations of the appointment letter clearly manifested the requirement of a positive act on the part of the employer confirming the workman before it could be said that the period of probation had come to an end. In support of his submissions, he relied upon the decisions rendered in Muir Mills Unit of NTC (U.P.) LTD. Vs. Swayam Prakash Srivastava and another [(2007) 1 SCC 491], Vidyavardhaka Sangha and another Vs. Y.D. Deshpande and another [2006 (111) FLR 397], M. Venugopal Vs. Divisional Manager, LIC of India, Machilipatnam, Andhra [1994 (2) SCC 323], Food Corporation of India, New Delhi Vs. J.S. Sirohi [2013 (138) FLR 20] and Sagari Leathers (P) LTD. Vs. Presiding Officer and others [2006 (110) FLR 1043]. It was lastly contended that the Labour Court had committed a gross illegality in granting full back wages while directing reinstatement more than 21 years after the termination of the respondent workman.

As this Court evaluates the award impugned, it is evident that although the respondent workman accepted the communication of 29 March 1996 (Exhibit E-3) the notice apprising him that he would no longer remain in employment after 31 March 1996 on the expiry of the probationary period as well the receipt of one month's notice pay and 15 days wages towards retrenchment compensation, the Labour Court has for inexplicable reasons proceeded to hold that the provisions of Section 6N stood violated. It becomes pertinent to note that the findings in this respect have come to be returned by the Labour Court without noticing the admission to this effect evident from the testimony of the respondent workman noticed above. The findings of violation of Section 6N consequently cannot sustain.

The Court also finds merit in the submission of learned counsel to the effect that the documentary evidence which was led did not establish the engagement of the respondent workman prior to the issuance of the appointment letter of 21 March 1995. The ESI identity card as rightly pointed out, did not carry the signature of any authorized representative of the petitioner. Similarly, the identity card which was relied upon also did not establish the employment of the respondent workman under the petitioner here. In any case the Court notes that the respondent workman did not place any material to establish the nature of his engagement with the petitioner prior to 01 April 1995. There was no disclosure of either the nature of his engagement or the post or position on which he had been engaged. In any case, the aforesaid issue pales into insignificance once it is evident from his oral testimony that the appointment letter and the terms and conditions thereof were admitted and accepted.

Once that be the position which emerges it is clear that the engagement of the respondent workman was on the post of Stitcher and on probation. The terms and conditions of the appointment letter clearly establish that no automatic confirmation was envisaged. Clause 3 clearly required a specific order in writing being passed confirming a probationer in service. The language of clause 3 clearly discounts any presumption of an automatic confirmation upon completion of the probationary period. In fact and to the contrary the language of the relevant clause clearly evidences the employer upon being satisfied with the nature of service rendered by the workman making an order in writing confirming him in service.

Dealing with the status of an employee upon the initial probationary period coming to an end and the oft repeated contention of automatic confirmation, this Court on a review of the legal precedents rendered on the subject in Batuk Nath Pandey Vs. Rajya Krishi Utpadan Mandi Parishad Thru Director And 2 Ors. [Writ A No.66515 of 2013 decided on 14 February 2020] held thus: -

"Notwithstanding the Court holding against the petitioner on this premise, it proceeds to deal with the contention of deemed confirmation which is addressed on the strength of the provisions made in the statutory rules. It is by now well settled that the contention of automatic or deemed confirmation would ultimately depend upon the language of the relevant statutory rules. Rule 21 in this case empowers the Appointing Authority to extend the period of probation for reasons to be recorded. It also puts in place a maximum period of probation with Rule 21(2) providing that in no case the period of probation shall stand extended by more than two years. However Rule 21(2) cannot be considered or interpreted in isolation. It must be read in conjunction with Rule 22 which deals with the subject of confirmation. As per that Rule a probationer stands confirmed consequent to an appointment being made by an order of the Appointing Authority. That order must come into existence at the end of the period of probation or extended period as the case may be. Rule 22 envisages the Appointing Authority making that order upon being satisfied that the probationer has satisfactorily completed training, his work and conduct during that period has been satisfactory, his integrity is certified and he is otherwise satisfied that he is fit for confirmation. When Rule 22 is read in its entirety, it is manifest that it clearly contemplates an application of mind by the Appointing Authority to the aspect of confirmation and thereafter making a positive order confirming the probationer in service. The law on the aforesaid subject was duly enunciated by the Supreme Court after noticing the line of decisions rendered on the subject in High Court of M.P. v. Satya Narayan Jhavar [(2001) 7 SCC 161] and while reiterating the principles enunciated in that decision the Supreme Court in Lawrence School v. Jayanthi Raghu [(2012) 4 SCC 793] observed: -

"27. After referring to the decisions in Dharam Singh [AIR 1968 SC 1210]), Sukhbans Singh [AIR 1962 SC 1711] and Shamsher Singh [(1974) 2 SCC 831] and other authorities, the three-Judge Bench expressed thus:- (Satya Narayan Jhavar case [(2001) 7 SCC 161: 2001 SCC (L & S) 1087: AIR 2001 SC 3234],

"11. The question of deemed confirmation in service jurisprudence, which is dependent upon language of the relevant service rules, has been the subject-matter of consideration before this Court, times without number in various decisions and there are three lines of cases on this point. One line of cases is where in the service rules or in the letter of appointment a period of probation is specified and power to extend the same is also conferred upon the authority without prescribing any maximum period of probation and if the officer is continued beyond the prescribed or extended period, he cannot be deemed to be confirmed. In such cases there is no bar against termination at any point of time after expiry of the period of probation. The other line of cases is that where while there is a provision in the rules for initial probation and extension thereof, a maximum period for such extension is also provided beyond which it is not permissible to extend probation. The inference in such cases is that the officer concerned is deemed to have been confirmed upon expiry of the maximum period of probation in case before its expiry the order of termination has not been passed. The last line of cases is where, though under the Rules maximum period of probation is prescribed, but the same requires a specific act on the part of the employer by issuing an order of confirmation and of passing a test for the purposes of confirmation. In such cases, even if the maximum period of probation has expired and neither any order of confirmation has been passed nor the person concerned has passed the requisite test, he cannot be deemed to have been confirmed merely because the said period has expired.

(emphasis supplied)

28. After so stating, it was further clarified as follows: (Satya Narayan Jhavar case [(2001) 7 SCC 161: 2001 SCC (L & S) 1087: AIR 2001 SC 3234],-

"37. Ordinarily a deemed confirmation of a probationer arises when the letter of appointment so stipulates or the rules governing service condition so indicate. In the absence of such term in the letter of appointment or in the relevant Rules, it can be inferred on the basis of the relevant Rules by implication, as was the case in Dharam Singh [AIR 1968 SC 1210]. But it cannot be said that merely because a maximum period of probation has been provided in the Service Rules, continuance of the probationer thereafter would ipso facto must be held to be a deemed confirmation which would certainly run contrary to seven-Judge Bench judgment of this Court in Shamsher Singh [(1974) 2 SCC 831: 1974 SCC (L & S) 550] and Constitution Bench decisions in Sukhbans Singh [AIR 1962 SC 1711] G.S. Ramaswamy [AIR 1966 SC 175] and Akbar Ali Khan [AIR 1966 SC 1842]."

More recently two learned Judges of the Supreme Court in Durgabai Deshmukh Memorial Sr. Secondary School and Another v. J.A.J. Vasu Sena and Another [2019 SCC Online SC 1075] reiterated the legal position as under:-

"51. It emerges from the consistent line of precedent of this Court that where the relevant rule or the appointment letter stipulates a condition precedent to the confirmation of service, there is no deemed confirmation of service merely because the services of a probationer are continued beyond the period of probation. It is only upon the issuance of an order of confirmation that the probationer is granted substantive appointment in that post. Rule 105(2) stipulates the satisfaction of the appointing authority as a condition precedent to the issuance of an order of confirmation. The argument advanced by the learned counsel for the first respondent that there is a deemed confirmation upon the continuation of service beyond the expiry of the period of probation is negatived by the express language of Rule 105(2). In this view, the continuation of services beyond the period of probation will not entitle the probationer to a deemed confirmation of service. The High Court has erred in holding that there is a deemed confirmation where the services of a probationer are continued beyond the expiry of the probationary period.

....

56.In the view that we have taken, the High Court has erred in concluding that the case of the first respondent falls within the second category of cases enumerated in Satya Narayan Jhavar. Rule 105(2) stipulates the satisfaction of the appointing authority as a condition precedent to the issuance of an order of confirmation. Admittedly, no order of confirmation was issued by the appointing authority. The case of the first respondent falls squarely within the third category of cases enumerated in Satya Narayan Jhavar wherein though the rules prescribe a maximum period of probation and the probationer is continued beyond the expiry of the probationary period, the substantive appointment of the probationer is subject to a specific act on the part of the appointing authority of issuing an order of confirmation. In the absence of an order of confirmation, the first respondent did not acquire the status of a confirmed employee."

From a reading of the principles so elucidated and on a due consideration of the provisions made in Rules 21 and 22, this Court is of the firm opinion that the submission of deemed or automatic confirmation cannot be countenanced. The position which emerges from a consideration of Rules 21 and 22 clearly puts the present case in what was described by the Supreme Court to be the third category of cases which were noticed in Satya Narayan Jhavar. On a conjoint reading of the two provisions it is manifest that the probationer would not stand confirmed automatically upon completion of the maximum period of probation as prescribed. This since the Rule clearly contemplates the Appointing Authority being satisfied that the officer/employee is entitled to be confirmed and proceeds to pass a positive order holding so."

From the aforesaid enunciation of law, it is manifest that the services of the respondent workman could not have been viewed as having been automatically confirmed. In any case, the communication of 01 December 1995 was also not denied. That communication had extended the period of probation till 31 March 1996. The services of the respondent workman came to be terminated prior to 31 March 1996 and thus during the extended period of probation. The Court further notes that the Labour Court has also not returned any findings with respect to the nature and status of the employment of the respondent workman while directing reinstatement and the payment of full back wages.

For all the aforesaid reasons, the Court is of the considered view that the award is clearly rendered unsustainable, arbitrary and is liable to be quashed.

Accordingly, the writ petition is allowed. The impugned award dated 11 May 2017 is hereby quashed and set aside.

Order Date :- 12.7.2021

Vivek Kr.

(Yashwant Varma, J.)