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Case Number

Writ Petition No. 3530 of 1984

Advocates

Sri Vijay Narayan, Sri V. Thiagarajan and Sri M. Mohammed Ibrahim Ali.
Sri K.R Govindarajan and Sri A.L Somayaji.

Judges

S. Nainar Sundaram
E.J Bellie, JJ.

Acts

Nadu Shops and Establishments Act, 1947, hereinafter referred to as the Act.
rule 9(2) of the rules

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Smart Summary

Structured Summary of the Opinion (Delivered by Nainar Sundaram, J.)

Factual and Procedural Background

The petitioner was an employer within the meaning of the Tamil Nadu Shops and Establishments Act, 1947 ("the Act"). The second respondent was an employee of the petitioner. The second respondent purportedly tendered a letter of resignation dated 25 February 1980. The petitioner issued an order dated 26 February 1980 relieving the second respondent from service with effect from 27 February 1980, accepting that resignation.

The second respondent moved a proceeding under Section 41(2) of the Act before the first respondent (the Appellate Authority). Before the first respondent the following issues were framed: (1) whether the resignation letter of 25 February 1980 was genuine or forged; (2) whether the appeal was entertainable under the Act; (3) whether the appeal was barred by limitation; and (4) whether the appellant (petitioner in the writ petition) was entitled to the relief sought.

The first respondent found that the resignation letter of 25 February 1980 was forged (point 1), that the appeal by the second respondent was entertainable (point 2), and that the appeal was not barred by limitation in favour of the second respondent (point 3). On point (4) the first respondent held that the petitioner's order of 26 February 1980 was tantamount to dispensing with the second respondent's services without reasonable cause, and set aside that order of termination. The petitioner challenged the order of the first respondent by filing the present writ petition.

Legal Issues Presented

Whether the petitioner actually received a resignation letter from the second respondent and whether the resignation letter dated 25 February 1980 was genuine or forged.
Whether the appeal by the second respondent is entertainable under the Tamil Nadu Shops and Establishments Act (i.e., whether the Appellate Authority had jurisdiction under S. 41(2)).
Whether the appeal was barred by limitation.
Whether the petitioner (appellant in the writ petition) is entitled to the relief prayed for (i.e., to set aside the first respondent's order setting aside termination).

Arguments of the Parties

Appellant's (Petitioner's) Arguments — as advanced by Sri Vijay Narayan, learned counsel

Maintainability: The appeal before the first respondent was not maintainable because this was not a case of the employer dispensing with the services of the second respondent either for a reasonable cause or for proven misconduct under Section 41(1) — rather, it was a case of voluntary resignation by the second respondent, and therefore outside the jurisdiction of the Appellate Authority under S. 41(2).
Scope of Inquiry: The jurisdiction under S. 41(2) is summary in nature (reinforced by rule 9(2) of the rules under the Act) and does not permit the Appellate Authority to conduct a detailed factual investigation into disputed issues such as the genuineness of a resignation letter — it cannot be equated to the powers of a civil court or industrial forum.
Factual Assessment: The factual findings of the first respondent that the resignation letter was forged and that the petitioner had dispensed with services were improper and/or beyond the permissible scope of a summary enquiry and thus liable to be interfered with by the court in writ jurisdiction.

Respondent's (Second Respondent's) Position

The second respondent challenged the genuineness of the resignation letter dated 25 February 1980, asserting that the letter was not his and effectively alleging that he had not voluntarily resigned.
On that basis, the second respondent invoked the appellate process under S. 41(2) of the Act to challenge the relieving order of 26 February 1980.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Lakshmi Vilas Bank v. L.S. Pattabhi Chettiar [1970-II L.L.J 211] (Ismail, J.)	Held that superannuation (retirement on attaining prescribed age) is not necessarily an act of "dispensing with the services" of an employee for purposes of S. 41(1), and that in a straightforward case of superannuation an appeal under the relevant provision may be incompetent; but the judgment recognised that if superannuation were used as a cloak to terminate employment the result could be different.	The court rejected reliance on this case as establishing any broad rule that the Appellate Authority cannot inquire into whether services were dispensed with. The present court treated Lakshmi Vilas Bank as fact-specific and observed that it did not support a general proposition excluding factual investigation by the Appellate Authority when there are allegations of a cloak or device to terminate employment.
Needle Industries v. Additional Commissioner for Workmen's Compensation [1986-I L.L.J 408] (Single Judge) and Ramaswami v. Needle Industries (Private) Ltd. [1987 (1) M.L.J 448]	These authorities addressed situations where an employee had written a clear resignation which was acted upon by the employer; the Bench in Ramaswami held that where an employee voluntarily resigned and the employer acted on that resignation, relieving the employee does not amount to the employer "dispensing with the services" of the employee for purposes of S. 41(1).	The court examined the facts of those cases and concluded they do not lay down any general rule excluding enquiry by the Appellate Authority under S. 41(2). The court held that where the factual question is whether resignation was voluntary or whether the employer in reality dispensed with services, the Appellate Authority may investigate those questions; the cited cases are to be confined to their facts.

Court's Reasoning and Analysis

The court proceeded through the main contested points by (a) considering the relevant statutory scheme (Section 41 of the Tamil Nadu Shops and Establishments Act) and (b) examining the factual record and precedent as relied on by the petitioner.

First, on the maintainability/ jurisdictional point the court explained that where an employee complains that his services have been dispensed with by the employer and the employer asserts that the employee voluntarily resigned, a jurisdictional question arises as to whether there was in fact a dispensation of services. The court held that it would be incorrect to construe the Act (or relevant precedents) so as to place that jurisdictional question beyond the Appellate Authority under S. 41(2). To read the law otherwise would risk rendering the statutory provisions nugatory. The court therefore rejected the petitioner's submission that the Appellate Authority had no power to probe whether the termination was a voluntary resignation or an act of dispensing with services.

Second, the court considered the precedents relied upon by the petitioner (Lakshmi Vilas Bank and Ramaswami/Needle Industries). It explained that those authorities were fact-specific: in Lakshmi Vilas Bank the Single Judge found actual superannuation on the facts and acknowledged that if retirement were used as a cloak the result could be different; in Ramaswami the Bench addressed an admitted resignation and relief given to the employer on those facts. The court said these decisions do not establish any broad rule excluding enquiry by the Appellate Authority into the factual question whether services were dispensed with or whether resignation was genuine.

Third, on the nature of the S. 41(2) enquiry and rule 9(2), the court recognised that the procedure to be followed by the Appellate Authority is summary and that reasons are to be recorded briefly. However, the court held that "summary" procedure does not exclude reception and consideration of relevant and appropriate evidence placed before the Authority. If the crucial factual question (voluntary resignation versus dispensation of services) were to be decided on inadequate evidence, that would give rise to grievance. Accordingly, a summary procedure still permits the parties to place evidence and the Appellate Authority to examine that evidence.

Fourth, with regard to the factual assessment undertaken by the first respondent, the court noted that the first respondent considered considerable material indicating the resignation letter dated 25 February 1980 was not genuine. That material included the opinion of a Handwriting Expert from the Tamil Nadu Forensic Science Laboratory, Madras (corroborated by oral evidence), and oral evidence for the petitioner through R. Ws. 1 to 3 which the first respondent found to contain inconsistencies and contradictions. The court observed that the factual adjudication by the first respondent did not suffer any infirmity warranting interference in writ jurisdiction. The court emphasised that it should not substitute its own view for the Appellate Authority's evaluation of facts except on well-accepted grounds for interference.

In sum, the court rejected the three points urged by the petitioner: (i) the jurisdictional bar argument; (ii) the contention that the Appellate Authority could not receive and assess evidentiary material in a summary enquiry; and (iii) the contention that the factual findings of the first respondent should be set aside.

Holding and Implications

Holding: The writ petition filed by the petitioner was dismissed. The court thus refused to interfere with the order of the first respondent which had set aside the petitioner's order of termination.

DISPOSITION: Writ petition dismissed; no order as to costs.

Implications: The direct effect of the decision is to leave standing the first respondent's order that had set aside the petitioner's order relieving the second respondent from service. The opinion does not purport to establish a new broad precedent excluding inquiry by the Appellate Authority; instead it confines prior authorities to their facts and confirms that the Appellate Authority may investigate the factual question whether a purported resignation was genuine or whether the employer in substance dispensed with services. The court did not announce any wider principle beyond the factual and procedural conclusions reached in this case.

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Sree Meenakshi Mills Thozhilalar Co-Operative Stores, Ltd. v. Assistant Commissioner Of Labour, Madurai

The Judgment of the Court was delivered by

Nainar Sundaram, J.:— The petitioner was an employer of the second respondent within the meaning of the Tamil Nadu Shops and Establishments Act, 1947, hereinafter referred to as the Act. On the basis that the second respondent tendered a letter of resignation on 25 February 1980, the petitioner by order, dated 26 February 1980, relieved the second respondent from services on 27 February 1980, accepting the resignation. The second respondent moved the process under S. 41(2) of the Act before the first respondent. Before the first respondent, on the contentions put forth by the parties, the following points arose for consideration:

(1) Whether the appeal petitioner actually tendered any resignation letter and whether the resignation letter, dated 25 February 1980, is a genuine one or a forged one?

(2) Whether the appeal is entertainable under the Tamil Nadu Shops and Establishments Act?

(3) Whether appeal is barred by limitation?

(4) Whether the appellant is entitled to the relief prayed for?

2. On point (1) the first respondent held that the letter of resignation, dated 25 February 1980, was only a forged document and was not signed by the second respondent. On point (2), the first respondent held that the appeal by the second respondent is entertainable. On point (3), the finding of the first respondent has gone in favour of the second respondent. As a result, on point (4), the first respondent held that the order of the petitioner, dated 26 February 1980, relieving the second respondent from services from 27 February 1980 was tantamount to dispensing with the services of the second respondent without reasonable cause, and as a consequence, the first respondent set aside that order of termination. The petitioner is challenging the order of the first respondent in this writ petition.

3. Sri Vijay Narayan, learned counsel for the petitioner, would raise three points before us, desiring interference at our hands in writ jurisdiction. The first point is that the appeal by the second respondent before the first respondent itself was not maintainable since it was not at all a case of dispensing with the services of the second respondent by the petitioner either for a reasonable cause, or on a charge of misconduct, held proved at an enquiry held for the purpose, as contemplated under S. 41(1) of the Act, but it is a case of the second respondent voluntarily going out of service, and in that contingency it would not lie within the jurisdiction of the first respondent to probe into the grievance of the second respondent over his non-employment under S. 41(2) of the Act. The second point put forth by the learned counsel for the petitioner is that the jurisdiction of the first respondent under S. 41(2) of the Act and the rules framed thereunder, is summary with reference to an enquiry in an appeal under S. 41(2) of the Act, and this power cannot be equated to that of a civil Court or an industrial forum so as to enable him to investigate into the disputed factual aspects as to whether the resignation tendered by the second respondent was a genuine one or not. The third point taken by the learned counsel for the petitioner relates to the propriety of the factual assessment by the first respondent of the question as to whether the letter of resignation relied on by the petitioner as against the second respondent is a genuine one or not.

4. Expatiating the first point, learned counsel for the petitioner would submit that admittedly it is not a case of dispensing with the services of the second respondent by the petitioner on a charge of misconduct, supported by satisfactory evidence recorded at an enquiry held for the purpose as contemplated in the second part of S. 41(1) of the Act. So far as this aspect of the submission of the learned counsel for the petitioner is concerned, there need not be any disputation over the same because that is also not the case of the second respondent. However, the learned counsel for the petitioner would submit that it is also not a case of dispensing with the services of a person employed for a reasonable cause as contemplated in the first part of S. 41(1) of the Act because it postulates an unilateral act on the part of the employer in sending the person employed out of service and when of his own volition, the person employed goes out of service by tendering a letter of resignation, that provision also would not be attracted and thus the first respondent lacked jurisdiction to investigate into the grievance of the second respondent. In support of his submission, learned counsel for the petitioner places reliance on a pronouncement of Ismail, J., as he then was, in Lakshmi Vilas Bank v. L.S Pattabhi Chettiar [1970-II L.L.J 211]. That was a case of a dispute with reference to the process of superannuation resorted to by the employer as against the person employed and the person employed raising a dispute with reference to his actual age, so as to warrant superannuation. The learned Single Judge opined that the dispensing with the services for a reasonable cause or the dispensing with the services on a charge of misconduct, both of them, contemplate a termination of the services anterior and prior to the date on which the services would come to an end automatically either as a result of the terms in the contract of service or as a result of a rule applicable to the service in question, and in the case of retirement, on reaching the age of superannuation, the above element is not present, and, therefore, there is no scope for the contention that the relieving of an employee from his duties on the basis that he retired from service on reaching the age of superannuation would amount to dispensing with the services of an employee for a reasonable cause. In that contingency, the learned Single Judge held that the appeal by the employee was really incompetent. It must be noted here that the opinion of the learned Single Judge was expressed on the findings of fact that it was a case of superannuation on the employee attaining the prescribed age therefor. The learned Single Judge did go into the factual aspects with regard to the actual age of the employee and held that it was a case of superannuation. The learned Single Judge was perfectly conscious of the position that if in fact it was not really a case of superannuation, but a device with an ulterior motive on the part of the employer to dispense with the services of the employee under the cloak of superannuation, a different position would result. The following passage in the pronouncement of the learned Single Judge brings out the above position very clearly:

“… I may also mention one other feature. It may happen in a particular case, the retirement was used by the employer as a cloak for dispensing with the services of an employee where the motive for dispensing with the services is something different. In that event a different position may possibly result because no person will be allowed to evade the obligation imposed on him by law by having recourse to a cloak or guise under which he can take refuge in order to escape from such an obligation. The present case is not one such and while dealing with the second of the contentions, I shall refer to the facts of this case which support this conclusion of mine…”

We do not think that the learned counsel for the petitioner could draw any support from this pronouncement of the learned Single Judge for a general proposition that where a question arises as to whether the services of a person employed has been dispensed with or not as per S. 41(1) of the Act, there should not be an investigation into this aspect by the Appellate Authority under S. 41(2) of the Act.

5. When the person employed puts forth a complaint that his services have been dispensed with by the employer without a reasonable cause and in answer the employer says that it is not a case of dispensing with the services of the person employed by him by any unilateral act of his, certainly the jurisdictional issue arises as to whether it is a case of dispensing with services of the person employed or not, and to say that the jurisdictional issue is beyond the pale of an enquiry by the Appellate Authority under S. 41(2) of the Act, would practically make the provisions nugatory. Such should not be the result achieved by any judicial thinking or construction put on the provisions. If the learned Single Judge in Lakshmi Vilas Bank v. L.S Pattabhi Chettiar [1970-II L.L.J 211] (vide supra); is to be construed as an opinion contrary to the above principle, certainly we would hold that pronouncement is not good law. But, as already pointed out, the pronouncement of the learned Single Judge came to be rendered on the facts of that case, namely, that there was in fact a superannuation of the employee on his attaining the age of superannuation, and there is a factual finding to that effect rendered by the learned Single Judge in that pronouncement. The learned Single Judge has consciously delineated, as per the passage in his pronouncement extracted above, that if the factual position should be otherwise, different consequences would follow.

6. Next, Sri Vijay Narayan, learned counsel for the petitioner, would rely on the pronouncement of a Bench of this Court in Ramaswami v. Needle Industries (Private), Ltd. [1987 (1) M.L.J 448], for advancing the proposition that when the person employed sends a letter of resignation, and acting upon that, the employer relieves him from services, that would not constitute the employer dispensing with the services of the person employed, and as such the jurisdiction to probe into the matter under S. 41(2) of the Act will stand excluded. For assessing the propriety of the reliance placed by the learned counsel for the petitioner on the pronouncement, we are obliged to advert to the facts of the case dealt with by the Bench therein. In that case, on 12 January 1979 the person employed wrote a letter of resignation in unambiguous terms. That letter of resignation was accepted and acted upon, and in fact, accounts of the person employed were also settled. However, on 20 January 1979, the person employed wrote a letter to the employer stating that the letter of resignation, dated 12 January 1979, was obtained from him by coercion and threat, and he followed this by preferring an appeal to the Appellate Authority under S. 41(2) of the Act. The employer approached this Court with a prayer for the issue of a writ of prohibition, prohibiting the Appellate Authority under S. 41(2) of the Act from proceeding further with the hearing of the appeal preferred by the person employed. That case of the employer was dealt with initially by a learned Single Judge of this Court in Needle Industries v. Additional Commissioner for Workmen's Compensation [1986-I L.L.J 408]. In the pronouncement of the learned Single Judge, the factual aspects have been more fully discussed. It has been found that the person employed did admit the writing of the letter of resignation, and according to him, it was brought about by coercion of the employer. The learned Single Judge expressed the view that when the factum of writing of the letter of resignation is admitted, at once the case of the person employed falls to the ground. After expressing that opinion, the learned Single Judge held that there was no act of dispensing with the services of the employee, and on the facts of that case, there was no such act attributable to the employer. Ultimately, the learned Single Judge countenanced the prayer of the employer and issued the writof prohibition. The decision of the learned Single Judge was taken in appeal and that appeal was dealt with by the Bench in Ramaswami v. Needle Industries (Private), Ltd. [1987 (1) M.L.J 448] (vide supra). Taking note of the facts of that case and adverting to the provisions of S. 41 of the Act, the Bench found that the person employed in that case was relieved from his post in the services of the employer not on the basis of any initiative taken by the employer to dispense with the services of the person employed, but at the request of the person employed himself, who tendered his resignation on 12 January 1979. It was only in that context and on the facts of that case, the Bench has expressed the view that the relieving of the person employed from his duties will not constitute the employer dispensing with the services of the person employed. After carefully going through the facts of the case dealt with by the Bench, we are not able to say that any general ratio has been expressed by the Bench saying that the question as to whether there has been a dispensing with the services of the person employed by the employer is alien to an enquiry under S. 41(2) of the Act. If it is a case of a voluntary retirement on tendering resignation or a retirement of a person employed on his attaining the age of superannuation, it may not come within the ambit of the expression “dispense with the services of a person employed” occurring in S. 41(1) of the Act. But the moot question that will certainly arise in specified cases is as to whether the facts do make out such a dispensing with the services of a person employed or not. As we have already expressed, to say that an enquiry with a view to find out that factual position cannot be indulged in under S. 41(2) of the Act will lead to rendering the provisions nugatory. That could be and should be the scope of the enquiry on stated facts and such an enquiry need not be frowned upon as lacking in jurisdiction. We are not able to construe the pronouncement of the Bench in Ramaswami v. Needle Industries (Private), Ltd. [1987 (1) M.L.J 448] (vide supra), as saying anything contrary to the above proposition. Sri Vijay Narayan, learned counsel for the petitioner, would say that in the present case the second respondent admitted the giving of the letter of resignation. On a perusal of the entire records we could not find anything to say that the second respondent has admitted as his the signature found in the letter of resignation, dated 25 February 1980, which alone had been accepted and acted upon by the petitioner.

7. Coming to the facts of the present case, the second repondent would impeach the letter of resignation, dated 25 February 1980, relied on by the petitioner for the purpose of relieving the second respondent from its services. The question which arises for consideration then is as to whether there was in fact a withdrawal from service by the second respondent on his own volition by tendering the resignation or was there an act of dispensing with the services of the second respondent by the petitioner. If the factual position is the former one, may be, it could be argued that the maintaining of an appeal under S. 41(2) is incompetent. But if the latter position has emerged, certainly that would attract S. 41 of the Act. Hence, we are not able to appreciate and sustain the first ground of attack put forth by the learned counsel for the petitioner.

8. The second point urged by the learned counsel for the petitioner is that the enquiry by an authority under S. 41(2) of the Act is summary in nature and the first respondent who dealt with the matter under S. 41(2) of the Act has transgressed the limits with reference to the scope of the enquiry and has indulged in holding a detailed enquiry, accepting materials with reference to the attack on the genuineness of the letter of resignation, dated 25 February 1980, and expressing an opinion against the petitioner. Learned counsel for the petitioner in this connection drew our attention to rule 9(2) of the rules framed under the Act. It is true that the said rule contemplates that the procedure to be followed by an authority under S. 41(2) of the Act shall be summary and he shall record briefly the evidence adduced and then pass the orders giving his reasons therefor. A reading of this rule does not convey any meaning that even the requisite and relevant evidence that should be looked into and that is being placed by the parties in substantiation of their case on the moot question will also stand excluded. By the procedure being summary, it cannot be stated that the’ adducing of the appropriate evidence will be out of place. If, on the other hand, if the moot question as to whether there was a voluntary resignation in contrast to the dispensing with the services of the person employed has come to be decided on inchoate and inadequate evidence, certainly that will give room for grievance one way or the other by the party aggrieved. Hence, we cannot frown upon the first respondent enquiring into the matter in an appropriate manner, permitting the parties to place their evidence in support of their case.

9. The third point taken by the learned counsel for the petitioner relates to the factual assessment of the question by the first respondent. There is considerable discussion of this question in the order of the first respondent impugned in the writ petition and he points out very many factual aspects which conclusively prove that the letter of resignation, dated 25 February 1980, relied on by the petitioner could not be a genuine one. There is the opinion of the Handwriting Expert from Tamil Nadu Forensic Science Laboratory, Madras, corroborated by his oral evidence placed before the first respondent. There was also the oral evidence placed on behalf of the petitioner through R. Ws. 1 to 3. Very many infirmities have been noticed in their evidence and which demonstrated that the evidence placed on behalf of the petitioner suffered inconsistencies and contradictions and hence no credence could be attached to such evidence. In our view, the factual adjudication by the first respondent does not suffer any infirmity, warranting interference at our hands, on any acceptable grounds. It is not as if we should convert ourselves into an appellate forum to scrutinise the propriety of the factual assessment by the first respondent, in the absence of any well-accepted exceptions. The above discussion obliges us to repel the case of the petitioner and accordingly this writ petition is dismissed. We make no order as to costs.

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