M/S Air India Ltd. vs Mahinder Singh & Anr.
2013 Latest Caselaw 5191 Del

$~R-185
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
+    W.P.(C) 7875/2001

                                          Decided on 13th November, 2013

       M/S AIR INDIA LTD.                            ..... Petitioner
                      Through:       Ms. Bhavna Dhami, Adv.

                          versus

       MAHINDER SINGH & ANR.                 ..... Respondents
                    Through: Ms. Seema Salwan and Mr. R.K.
                             Saini, Advs.

CORAM:
HON'BLE MR. JUSTICE A.K. PATHAK

                               (JUDGMENT)

A.K. PATHAK, J (ORAL)

1.     Petitioner-Management has challenged the Award dated 19th July,

2001 passed by the Industrial Tribunal-III, Delhi whereby petitioner has

been directed to reinstate the respondent no.1-Workman with continuity of

service and full back wages.


2.     Industrial dispute raised by the Workman was referred to Industrial

Tribunal by the Secretary (Labour), Government of NCT of Delhi, for

adjudication in following terms :-



W.P. (C) 7875/2001                                          Page 1 of 15
        "Whether the termination of the services of Sh. Mahender
       Singh is illegal and/or unjustified and if so, to what relief is he
       entitled and what directions are necessary in this respect?"



3.     Workman alleged that he was working with the Management from

29th July, 1986 as a Driver. He was eager to form a trade union in view of

the unfair labour practices adopted by the Management.            He protested

against the personal use of official car by the brother of Managing Director

at which the Managing Director got annoyed and in order to victimize him

Management transferred him from Palam Airport to Safdurjung Airport and

thereafter again to Palam Airport. Ultimately, his services were illegally

terminated on 10th August, 1988. Demand notice dated 9th September, 1988

served on the Management by him was replied by the Management vide

letter dated 19th September, 1988 but he was not taken back in service. His

termination was stigmatic. He prayed that he be reinstated with continuity

of service and full back wages.


4.     In the written statement, it was not denied that workman had been

working from 29th July, 1986. However, it was denied that his services were

terminated illegally.   It was alleged that workman was transferred due to

administrative exigencies and not by way of punishment. Due to his

W.P. (C) 7875/2001                                               Page 2 of 15
 unsatisfactory performance during the probationary period his service was

terminated. It was denied that termination was stigmatic. It was alleged that

Workman was not entitled to reinstatement. A preliminary objection was

taken to the effect that Management was owned by the Govt. of India,

therefore, appropriate Government was Central Government, thus, claim of

Workman was not maintainable.


5.     In rejoinder, Workman denied the allegations levelled in the written

statement and reaffirmed the averments made in the statement of claim.

Workman claimed that his performance was good, inasmuch as, no enquiry

was held by the Management to enquire about his conduct.


6.     On 13th May, 1992 following issues were framed by the Industrial

Adjudicator :-


       1.     Whether the reference is without jurisdiction and
              incompetent as alleged in the W/S?

       2.     As per terms of reference.

7.     Parties were afforded opportunity to lead evidence. Upon scrutiny of

evidence adduced by the parties, Industrial Adjudicator has held that

Workman had completed 240 days of regular service before issuing of letter

of appointment whereby he was put on probation.          Appointment letter

W.P. (C) 7875/2001                                            Page 3 of 15
 Ex.MW2/1had been issued just to deprive the Workman of his regular

service of 240 days and consequential benefits. Management had failed to

prove misconduct of Workman. On the contrary, from the statement of

Workman it could be safely inferred that Workman was victimised for his

raising objections about misuse of official car by the brother of Managing

Director. It was concluded that since Workman had completed 240 days of

service, Section 25-F of the Industrial Disputes Act, 1947 („the Act‟, for

short) was attracted for non compliance of Section 25-F the termination was

bad in law. Management was directed to reinstate the workman.


8.     Facts

, as unfolded, are that Workman was initially engaged on

temporary basis as a „Driver‟ between 29th July, 1986 and 29th July, 1987.

One of such letter placed on record indicates that he was engaged on

contract for fixed period(s). Vide letter of appointment dated 29th June,

1987 he was appointed on the post of „Driver‟ pursuant to his application

and subsequent interview in a regular pay scale of Rs.480-14-620-16-700-

18-754/-. This letter of appointment was accepted by the Workman on 11th

August, 1981 and in token of acceptance he appended his signatures thereon.

He was put on probation for a period of one year initially with further

stipulation that such probation period may be extended or alternatively his

services may be terminated if performance was not found satisfactory. The

relevant Clause 4, as contained in the appointment letter dated 29th June,

1987, reads as under :-

"You will be on probation for a period of one year initially. If during such probationary period, you services are not found satisfactory, the period of probation may be extended or, alternatively, your service may be terminated."

9. Vide order dated 10th August, 1988 probation of the Workman was

not confirmed and his services were terminated. Relevant it would be to

refer the termination order at this stage, which reads as under :-

From:

COMPANY SECRETARY & CHIEF MANAGER CORPORATE AFFAIRS VAYUDOOT LTD.( HQRC) SAFDARJUNG AIRPORT NEW DELHI - 110003

To MR. MOHINDRA SINGH VAYUDOOT NEW DELHI

Ref. PF/HQ/Pers./2111 10-8-88

This has reference to your appointment letter No. PF/HQ/Pers/1489 dt. 29-6-87 for the post of Driver.

As per the clause no. 4 of the above mentioned letter, due to unsatisfactory performance your services are hereby being terminated with immediate effect.

SD/

(AMOD SHARMA)

CC: RM (HR)

SUPERVISOR (M.T.)

PERSONAL FILE

10. Before passing the aforesaid order appraisal report Ex. MW3/1 was

considered. A perusal of aforesaid order shows that workman was

terminated in terms of Clause 4 of the service as contained in the

appointment letter dated 29th July, 1981 duly accepted by the Workman on

11th August, 1987 and is not stigmatic. Workman was terminated during the

probation period since his performance was found unsatisfactory. Workman

was not terminated by way of punishment. Mere use of words

„unsatisfactory performance‟ will not make the termination order stigmatic.

In Muir Mills Unit of N.T.C. (U.P.) Ltd. vs. Swayam Prakash Srivastava &

Anr. 2007 II AD (S.C.) 32, on the expiry of probation period of Workman a

letter was issued to him stating therein that his performance was found

unsatisfactory and as such he had failed to complete the probationary period

successfully, thus, his service was being terminated. Use of words

„performance not being found satisfactory‟ was not taken as stigmatic. In

State of Punjab vs. Bhagwan Singh (2002) 9 SCC 636 Supreme Court held

that even if the termination order of the probationer refers to the

performance being „not satisfactory‟, such an order cannot be said to be

stigmatic and the termination would be valid. In Abhijit Gupta vs. S.N.B.

National Centre, Basic Sciences and others 2006 V AD (S.C.) 525 petitioner

was appointed as an „Administrative Officer‟. In the appointment letter it

was made clear that petitioner was being appointed on probation for a period

of one year. His probation period was extended because of his

unsatisfactory performance from time to time, inasmuch as, letters were

written to him intimating that his performance was not good. Finally by the

letter dated 7th April, 1998 he was informed that his services were

„unsatisfactory‟ in the areas of drive, initiative, promptness and leadership‟

and that despite advised verbally and through letter, what were deficiencies

in his work he had shown no imprudent. His attendance, office work and

attention to the academic work and the affairs of the guest house were also

unsatisfactory. He was informed that his probation period was not extended

on the expiration of his probation period on 9 th April, 1999 without further

extension. Petitioner challenged his termination on the ground that it was

stigmatic and by way of punishment for alleged misconduct. Supreme Court

did not find the letter punitive in nature and considered it to be termination

as a consequence of non confirmation of probation period.

11. In Chaitanya Prakash and Another vs. H. Omkarappa 2010 II LLJ 146

(SC), Supreme Court held thus :-

"It is no longer res integra that even if an order of termination refers to unsatisfactory service of the person concerned, the same cannot be said to be stigmatic. In this connection, we make a reference to the decision of the decision of the Supreme Court in Abhijit Gupta vs. S.N.B. National Centre, Basic Sciences (supra), wherein also a similar letter was issued to the concerned employee intimating him that his performance was unsatisfactory and, therefore, he is not suitable for confirmation. We have considered the ratio in light of the facts of the said case and we are of the considered opinion that the basic facts of the said case are almost similar to the one in hand. There also, letters were issued to the concerned employee to improve his performance in the areas of his duties and that despite such communications the service was found to be satisfactory. In the result, a letter was issued to him pointing out that his service was found to be unsatisfactory and that he was not suitable for confirmation and, therefore, his probation period was not extended and his service was terminated, which was challenged on the ground that the same was stigmatic for alleged misconduct. The

Supreme Court negative the said contention and upheld the order of termination.

(Emphasis supplied by this court)

12. Accordingly, I am of the view that the impugned order is not

stigmatic and termination of Workman is simplicitor in terms of Clause 4 of

the appointment letter.

13. Learned counsel for the Workman has vehemently contended that

Workman had completed 240 days of service in the year prior to the date of

his termination, thus, compliance of Section 25-F of the Act was mandatory,

irrespective of the fact that Workman was a probationer. Reliance has been

placed on Delhi Cantonment Board vs. Central Govt. Industrial Tribunal &

Ors. 129 (2006) Delhi Law Times 610 (DB). In the said case a Division

Bench of this Court, in the context of definition of „Workman‟ as contained

in Section 2(s) of the Act, held thus "a perusal of the above definition shows

that there is no distinction in industrial law between a permanent employee

and a temporary employee. As long as the person is employed to do any

manual, unskilled, skilled, technical, operational, clerical or supervisory

work for hire or reward, he is a Workman under the Industrial Disputes Act,

and will get the benefits of that Act".

14. I do not find much force in the above contention of learned counsel.

In Mahesh Chand vs. Management of M/s LE Meridien 2013 LLR 899, a

Single Judge of this Court has considered Delhi Cantonment (supra) and has

held thus :-

"34. From the above, it would be observed that the Supreme Court has consistently taken the view that the termination of the services of a probationer in terms of a stipulation contained in the contract of employment does not tantamount to „retrenchment‟ within the meaning of Section 2(oo) of the Act, as it is covered by clause (bb) of Section 2(oo).

35. Since the judgment in Punjab Land Development (supra) is not an authority for the proposition decided in Kalyani Sharp India Ltd. (supra), Escorts Limited (supra), Ms. Venugopal (supra), Management of Apparel Export Promotion Council (supra), the ratio of the judgment in Punjab Land Development (supra) does not render the subsequent decisions referred to above, per incuriam. It has already been noticed, Delhi Cantonmetn Board (supra) does not refer to the judgments Kalyani Sharp India Ltd. (supra), Escorts Limited (supra), M. Venugopal (supra), Management of Apparel Export Promotion Council (supra). I, therefore, prefer to follow the view taken in Kalyani Sharp India Ltd. (supra) etc. over the view of the Division Bench in Delhi Cantonment Board (supra)."

(Emphasis laid by this court)

15. Relevant it would be to refer to Section 2(oo)(bb) of the Act at this

stage, which reads as under :-

Section 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) ......................................

(b) ...................................... (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

(c) ........................................

16. In M. Venugopal vs. Divisional Manager, Life Insurance Corporation

of India, Machilipatnam, A.P. and Anr. (1994) 2 SCC 323 service of the

Workman was terminated during the extended probation period on account

of non-fulfilment of the condition of achieving minimum business target

stipulated in the order of appointment. Supreme Court held that termination

of services of the Workman was not deemed to be "retrenchment" within the

meaning of Section 2(oo) of the Act even in respect of the period prior to

introduction of clause (bb) in Section 2(oo) of the Act. Thus, non

compliance of the requirements of Section 25-F was held not to vitiate or

nullify the order of termination of Workman. In Escorts Limited vs.

Presiding Officer & Anr. (1997) 11 SCC 521, Workman was appointed on

temporary basis for a period of two months. The terms of appointment

enabled the employer to terminate the services at any stage without

assigning any reason. The Supreme Court held that the termination of

services under the said terms even though effected before the expiry of the

specified period, did not amount to retrenchment. Consequently, Section

25-F and 25-G of the Act did not come into play. In Kalyani Sharp India

Ltd. vs. Labour Court No.1 Gwalior & Anr. (2002) 9 SCC 655, Workman

was terminated during the period of probation. The Labour Court as well as

the High Court took a view that termination amounted to retrenchment for

non-compliance of Section 25-F of the Industrial Disputes Act. Supreme

Court reversed the views of the Labour Court and the High Court and

observed thus :

"6 The order of employment itself clearly sets out the terms thereafter which makes it clear that the facility of providing training to him could be put to an end at any time without assigning any reason whatsoever and his services could be regularised only on satisfactory completion of his training. If these clauses are read together, it is clear he was under probation during the relevant time and if his services are not satisfactory, the same could be put an end to. It is clear that the respondent had been appointed as a Trainee Service Technician and for a period he had to undergo the training to the satisfaction of the appellant and if his work was not satisfactory during that period the facility could be withdrawn at any time

and he would be regularised only on completion of his training. Thus the respondent‟s services were terminated before expiry of the probationary period. In such a case, question of issue of notice before terminating the service as claimed by the respondent does not arise. Escorts case [(1997) 11 SCC 521 : 1998 SCC (L&S) 235] is identical with the present case. Following the said decision and for the reasons stated therein these appeals are allowed. The order made by the High Court affirming the award made by the Labour Court is set aside and the claim made by the respondent is dismissed."

17. In view of the Supreme Court judgments governing the field it can be

safely culled out that termination of service of a probationer in terms of the

stipulation contained in the contract of employment does not tantamount to

"retrenchment" within the meaning of Section 2(oo) of the Act since it is

covered by clause (bb) of Section 2(oo) of the Act. Thus, Section 25-F of

the Act does not get attracted in such cases. M. Venugopal (supra), Escorts

Limited (supra) and Kalyani Sharp (supra) have not been considered in

Delhi Cantonment Board (supra), thus, this judgment of Division Bench

cannot be preferred as against the settled legal proposition as laid down by

the Apex Court. A learned Single Judge of this Court has already

considered Delhi Cantonment (supra) in Mahesh Chand (supra) and has held

that in case of termination of a probationer Section 25-F of the Act is not

attracted in view of Section 2(oo)(bb) of the Act. I am in agreement with

my learned brother on this point and am of the view that in case of

termination of a probationer on account of non confirmation of probation

due to unsatisfied performance would not amount to retrenchment in view of

Section 2(oo)(bb) of the Act.

18. A Division Bench of this Court vide judgment dated 12 th July, 2013

passed in LPA 472/2013 titled Satish Kumar vs. Delhi Fire Services, in

somewhat similar circumstances, has taken similar view in the following

manner :-

"From the above, it is clear that retrenchment means termination by the employer of the services of a Workman for any reason whatsoever "except those expressly included in the section". For the point of time, when the Supreme Court was considering the cases before it, Section 2(oo)(bb) was not in vogue. However, the Supreme Court had noticed that provision because when the judgment was rendered, the amendment had been brought about and clause (bb) had been introduced. After examining the same and analysing it in detail, the Supreme Court came to the conclusion that every termination by an employer of the services of a Workman would amount to retrenchment except in those cases which were expressly excluded by the said Section 2(oo) of the said Act itself. Insofar as the present case of termination is concerned, we are of the opinion that it falls under the exception carved out in Section 2(oo)(bb) of the said Act inasmuch as the contract of employment of the appellant itself contained the stipulation

whereunder his services could be terminated without assigning any reason during the probation period."

19. Respondent was on probation and his service has been terminated in

view of his unsatisfactory performance in terms of Clause 4 of the

appointment letter, thus, his termination does not amount to „retrenchment‟

within the meaning of Section 2(oo) of the Act, thus, Industrial Adjudicator

has committed a patent error of law in holding that termination was bad for

non-compliance of Section 25 of the Act.

20. In the light of the above discussions, writ petition is allowed and

impugned Award is set aside.

A.K. PATHAK, J.

NOVEMBER 13, 2013 ga