- Bookmark
- Share
- CaseIQ
Gujarat State Road Transport Corporation v. Chaudhary Popatbhai Revabhai
Factual and Procedural Background
The respondent, Chaudhary Popatbhai Revabhai (workman), was employed as a driver by the appellant, Gujarat State Road Transport Corporation (the Corporation). On 3 June 1994 an accident occurred while he was on duty; he was arrested and prosecuted. The Corporation initiated departmental proceedings and, before the criminal court determined the criminal proceedings, the workman was found guilty in the departmental inquiry and punished by withholding one increment. That departmental order attained finality. The criminal prosecution continued and culminated in the workman's conviction, which was maintained by the High Court and was not taken to the Supreme Court nor set aside.
Upon receiving information of the final conviction, the Corporation, relying on Regulation 81 of its Service Regulations, terminated the workman's services. The workman filed a reference before the Labour Court, Kalol (Reference No. 92 of 1999). The Labour Court set aside the termination and ordered reinstatement with continuity of service but without back wages (award dated 12.11.2002). The Corporation filed Special Civil Application No. 11225 of 2003; the Single Judge dismissed it by judgment dated 25.11.2003. The Corporation then appealed to the Division Bench under Section 15 of the Letters Patent. The Division Bench (R.S. Garg, J.) heard the matter and issued the opinion summarized here.
Legal Issues Presented
- Whether the appeal to the Division Bench under the Letters Patent was maintainable, given the Single Judge's treatment of the matter as one under Article 227 rather than Article 226 of the Constitution of India.
- Whether termination of employment upon a final criminal conviction, exercised under Regulation 81 of the Service Regulations, amounts to a disciplinary punishment (and therefore falls outside the definition of "retrenchment" under Section 2(oo) of the Industrial Disputes Act, 1947) or whether it should be treated as retrenchment.
- How Regulation 81 of the Service Regulations is to be interpreted—specifically, whether the phrase "shall be liable to be terminated" confers discretion on the employer or mandates termination upon final conviction.
- Whether the Labour Court had jurisdiction to treat the termination as retrenchment and grant reinstatement, or whether the Corporation was justified in terminating service under Regulation 81.
- Whether the High Court or Labour Court could or should intervene under Section 11-A of the Industrial Disputes Act to modify the punishment awarded (i.e., to interfere with termination imposed under Regulation 81).
Arguments of the Parties
Appellant's Arguments (Corporation)
- The termination following the workman's final criminal conviction was not double jeopardy but a valid exercise of the Corporation's power under Regulation 81 of the Service Regulations.
- The Labour Court misapplied the definition of "retrenchment" in Section 2(oo) of the Industrial Disputes Act and misinterpreted Regulation 81.
- Once an employee is convicted and the conviction attains finality, the employee's services must be terminated under Regulation 81—no discretion exists to retain a convicted person in service.
Respondent's Arguments (Workman)
- Termination in this case amounted to "retrenchment" because the definition of "retrenchment" in Section 2(oo) of the Act defines termination by the employer for any reason whatsoever (except specified exclusions) as retrenchment.
- Regulation 81 gives discretion to the appointing authority—the language "shall be liable to be terminated" indicates that the employer may, in a given case, choose not to terminate services.
- The workman had an unblemished record of 15 years' service, and termination would be too harsh a punishment; therefore the Labour Court's order for reinstatement (without back wages) should be sustained.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court first dealt with the procedural objection about maintainability. Counsel for the respondent argued that because the Single Judge refused to interfere under Article 227, the appeal was not maintainable. The Court examined the record and found that the writ application was brought under Article 226 (not Article 227) and that the Single Judge had, in effect, mischaracterized the matter as one under Article 227 and thereby under-estimated his jurisdiction. Given the nature and scope of arguments before the Single Judge — including the Corporation's contention that the Labour Court lacked jurisdiction when Regulation 81 was applied — the Division Bench held that the matter was properly one under Article 226 and therefore the appeal under the Letters Patent was maintainable.
On the substantive issue the Court examined the definition of "retrenchment" in Section 2(oo) of the Industrial Disputes Act. The Court emphasized the opening qualification in that definition: "otherwise than as a punishment inflicted by way of disciplinary action." The Court drew a distinction between general exceptions listed in clauses (a), (b), (bb) and (c) and the special exception of termination as a disciplinary punishment. The key analytical step was to determine whether termination following a final conviction under Regulation 81 should be treated as a disciplinary punishment (special exception) or as retrenchment.
The Court analyzed Regulation 81, which states: "Notwithstanding the provisions of Regulation 61, the services of an employee, if he has been convicted in a criminal court or has been declared insolvent by a competent court, shall be liable to be terminated without notice by the appointing authority." The Court observed that for operation of Regulation 81 the establishment must show (i) an employer-employee relationship, (ii) that the employee has been convicted by a criminal court, and (iii) that the conviction has attained finality—each of which was undisputed here.
The Court rejected the Single Judge's interpretation that the word "liable" in the phrase "shall be liable to be terminated" conferred discretion on the Corporation. The Division Bench considered that the phrase must be read in context and that once a final conviction is reported, the establishment must act and the services "shall be terminated." The Court reasoned that reading "shall be liable to be terminated" as discretionary would conflict with the intent apparent from the language of the Regulation and the purpose of the rule—that a convicted person cannot be continued in service. Thus, the Court concluded that Regulation 81 contemplates termination as a consequence of final conviction and that such termination amounts to disciplinary action (i.e., a punishment), which falls within the special exception in Section 2(oo) and therefore is not "retrenchment" under that definition.
The Court addressed the respondent's plea about his unblemished record and 15 years' service, remarking that where the law prescribes a particular severe consequence for a wrongful act (illustratively described as "capital punishment" in the opinion), there is no scope for interference based on past good service. Consequently, termination under Regulation 81 was held to be justified on the available foundation.
The Court considered the possibility of intervention under Section 11-A of the Industrial Disputes Act. It explained that Section 11-A permits Labour Courts and Tribunals to interfere where the punishment is "shockingly disproportionate" and where there exists a range of permissible punishment (minimum to maximum) such that the adjudicating body can choose within those limits. However, where the regulation prescribes a single specific punishment (e.g., termination upon final conviction), courts do not have jurisdiction under Section 11-A to alter that punishment, because doing so would amount to rewriting the Regulation (interpreting "termination" as "may be terminated" or similar). Applying that principle, the Court held that no relief under Section 11-A was available to the workman in the present case.
Based on the foregoing analysis, the Division Bench found that the Single Judge's order was unsustainable: the Labour Court's award treating termination as retrenchment and ordering reinstatement was quashed.
Holding and Implications
Core Rulings:
- The appeal is allowed.
- The order passed by the learned Single Judge is set aside.
- The award made by the Labour Court is quashed.
- The reference is answered in the negative.
- Civil Application No. 591 of 2004 is finally disposed of and the petition is allowed.
Implications for the parties: The Corporation's termination of the respondent's services following his final criminal conviction under Regulation 81 is upheld as valid; the Labour Court's reinstatement order is quashed. The decision means that, in the circumstances of this case, termination upon final conviction is to be treated as disciplinary punishment (and thus does not constitute "retrenchment" under Section 2(oo) of the Industrial Disputes Act), and the courts will not substitute their view of punishment where the regulation prescribes a single distinct consequence.
The opinion does not assert or discuss having set any new legal precedent beyond the resolution of the parties' dispute, nor does it cite prior case law decisions as authority in its reasoning.
R.S Garg, J.:— Heard learned counsel for the parties. Short facts for disposal of the present appeal in nutshell are that the respondent-Chaudhary Popatbhai Revabhai (workman) was working as driver with the appellant-Gujarat State Road Transport Corporation (hereinafter referred to as “the Corporation”). On 3rd June 1994 when the workman was on duty as driver and plying the vehicle between Vadnagar and Mehsana an accident took place, the respondent was arrested and was ultimately prosecuted. The Department/establishment also initiated departmental proceedings. Before the Criminal Court decided the matter finally the workman was found guilty in the departmental inquiry and was awarded punishment of withholding of one increment. The said order had attained Finality. The prosecution launched at the instance of the Police continued and culminated into conviction of said driver. The order was maintained upto High Court. It is not the say of the workman that the order passed by the High Court has been taken to the Apex Court or the said order has been set aside, modified or nullified by any higher court. After receiving the information about conviction of the respondent, the appellant-establishment taking advantage of Rule 81 of the Service Regulations (hereinafter referred to as “the Regulations”) governing the service conditions of the workman terminated his services. Being aggrieved by the said termination the respondent-workman took up the matter to the Labour Court, Kalol in Reference (LCK) No. 92 of 1999. After hearing both the sides the Labour Court vide its award dated 12.11.2002 set aside the order of termination and allowed reinstatement of the workman with continuity of service without backwages for the intervening period. Being aggrieved by the outcome of the award the Corporation came to this Court in Special Civil Application NO. 11225 of 2003. The learned Single Judge having dismissed the Special Civil Application by his judgement dated 25.11.2003, the Corporation is before this Court under Section 15 of the Letters Patent.
2. At the very inception learned counsel for the respondent raised a preliminary objection that as the learned Single Judge refused to interfere in the matter under Article 227 of the Constitution of India the appeal at the instance of the present appellant is not maintainable. After giving our anxious consideration to the argument and on going through the records we find that the appellant before us never approached the learned Single Judge or this Court under Article 227 of the Constitution of India. The cause title of the writ application would show that the same was filed under Article 226 of the Constitution of India. Assuming that label does not decide the fate of the parties then too the learned Single (sic) was required to look into the facts of the matter especially the arguments of the present appellant that the learned Labour Court had no jurisdiction under the law to maintain the reference or make an award in case Regulation 81 of the Regulations was observed by the appellant-Corporation. From the records it would clearly appear that the appellant-Corporation has exercised its power under Regulation 81 of the Regulations and they were submitting before the Labour Court that the Labour Court would have no jurisdiction in the matter and the Labour Court despite such argument has observed that the present was a case of retrenchment. Taking into consideration the totality of the circumstances, the nature of the dispute and the scope of the arguments we are of the opinion that the present was a matter under Article 226 of the Constitution of India and the learned Single Judge even otherwise failed to exercise his jurisdiction under Article 226 of the Constitution of India, underestimating his own jurisdiction by simply observing that the present was a matter under Article 227 of the Constitution. In view of the discussion aforesaid we hold that the appeal is maintainable.
3. Learned counsel for the appellant submitted that the present was a case where the respondent-workman was not subjected to double jeopardy, but was a case where in exercise of the powers conferred under Regulation 81 of the Regulations the establishment/appellant has terminated the services of the workman. His submission is that the learned Single Judge misapplied the definition of ‘retrenchment’ as given under Section 2(oo) of the Industrial Disputes Act, 1947 (hereinafter referred to as “the Act”) and further erred in misinterpreting Regulation 81 of the Regulations. His further submission is that once an employee of the Corporation is convicted, then his services will have to be terminated. On the other hand learned counsel for the respondent taking us through the definition of the word, ‘retrenchment’ submitted that each and every termination would amount to retrenchment and in the present matter the workman has been subjected to retrenchment. His further submission is that Regulation 81 of the Regulations gives discretion to the authority and in a given case the authority may or may not terminate the services of an employee. The last of his submissions was that the respondent-workman has a good track record and has put in 15 years of unblemished service with the appellant-Corporation, therefore, termination from services would be too harsh a punishment. He submits that the appeal deserves to be dismissed.
4. The learned Single Judge has referred to the definition of the word, ‘retrenchment’ as given in section 2(oo) of the Act. The definition reads 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) 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
(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) termination of the service of a workman on the ground of continued ill health;”
5. The learned Single Judge has observed that termination by the employer for any reason except as shown in clauses (a), (b), (bb) or (c) would tantamount to retrenchment. In our considered opinion in ordinary circumstances the observation made by the learned Single Judge would be correct, but the opening words of section 2(oo) of the Act cannot be lost sight of. The opening words are—
““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- …”
(Emphasis supplied.)
6. The words “otherwise than as a punishment inflicted by way of disciplinary action” would make it clear that clauses (a), (b), (bb) and (c) are general exceptions and any punishment inflicted by way of disciplinary action would be a special exception. While interpreting the law one should not lose sight of a fine distinction between general exception and special exception. The general exceptions are given in clauses (a), (b), (bb) and (c) and the special exception is termination as a punishment inflicted by way of disciplinary action. In the present matter the employer says that once an employee is convicted and the conviction has attained finality then such person is to be removed/terminated from the services and such removal/termination would be result of a disciplinary action because no convicted person can be continued in services. In the present matter we will have to look into the intent behind Regulation 81 of the Regulations, to find out whether termination is by way of a punishment as a result of the disciplinary action. If we hold that Regulation 81 of the Regulations relates to a disciplinary action and termination is by way of a punishment then the definition as provided under Section 2(oo) of the Act would certainly tilt the balance in favour of the employer/appellant.
7. Regulation 81 of the Regulations reads as under:
“Notwithstanding the provisions of Regulation 61, the services of an employee, if he has been convicted in a criminal court or has been declared insolvent by a competent court, shall be liable to be terminated without notice by the appointing authority.”
8. The present is not a case relating to declaration of an incumbent as insolvent, therefore we are not addressing our attention to that part of the Regulation. Regulation 81 of the Regulations says that if an employee has been convicted in a criminal court then he shall be liable to be terminated without notice by the appointing authority. For application of Regulation 81 of the Regulations the establishment has to prove that there is a relationship of employer and employee, a particular employee has been convicted by criminal court, the conviction has attained finality and the convict/employee is liable to be proceeded against. In the present matter the relationship of employer and employee is not disputed, and conviction has attained finality-is undisputed. The matter has not been taken to any further court is an admitted situation and under the Regulations without notice by the appointing authority such a convict can be terminated. The relationship of employer and employee is to be snapped on happening of an event. In the present case happening of event would be conviction of the employee which has attained finality.
9. So far as the observations made by the learned Single Judge and the argument of the learned counsel for the respondent are concerned; that Regulation 81 of the Regulations in fact gives wide discretion to the employer is concerned, is now being taken up for consideration. The learned Single Judge has observed that the language suggests “services shall be liable to be terminated” and not “shall be terminated”. The learned Single Judge has observed that the word “liable” gives and confers discretionary powers on the Corporation to terminate or not to terminate the services of an employee. With due respect to the learned Single Judge in our considered opinion the interpretation put forth by the learned Single Judge is contrary to law. The words, “shall be liable to be terminated” would mean that a decision has been taken while the words, “shall be terminated” would mean an action to be taken.
10. In view of the language used in Regulation 81 of the Regulations the words are to be read in their true perspective. The moment a final conviction is reported to the establishment then, they have to take an action and the services shall be terminated. The law of interpretation clearly says that the intention of the Legislature or makers of the rule should be gathered from the language employed in the legislation or the rule. In the present matter the intention of the makers of the Regulation was that once a man is convicted by a competent criminal court or he has been declared insolvent by a competent court, his services shall be terminated. The services “shall be liable to be terminated” or “shall be terminated” would not make much difference because the moment an employee is convicted then under the Service Regulations or Service Conditions a convict cannot be continued in service. In the present matter the moment conviction of the respondent attained finality then there was no scope even for the establishment/appellant to show any clemency in favour of the employee by not terminating his services. We are unable to uphold the view of the learned Single Judge.
11. So far as the question relating to unblemished career of the respondent and 15 years of service rendered by him are concerned we can only say that for a wrong if a capital punishment can be awarded and if is rightly awarded then there would be no scope for any interference. The appellant/establishment was certainly justified in taking action under Regulation 81 of the Regulations because they had every foundation and requirement available to them.
12. It was faintly argued by the learned counsel for the respondent/workman that the present is a case where this Court should interfere under Section 11-A of the Act.
13. Section 11-A of the Act relates to powers of the Labour Courts, Tribunals and National Tribunals to give appropriate relief in case of discharge or dismissal of workmen. In a given case the Labour Court can interfere in the matter where they find that the punishment inflicted upon or awarded to the workman, is shockingly disproportionate. In a given case, if there is some scope for the Labour Court or High Court to interfere in a given matter, then the courts certainly can interfere, but interference on the question of punishment can only be made, if between the two limits punishment can be imposed or inflicted upon. There must be something minimum or something maximum. In a given case where one single punishment is provided for a lapse, wrong or misconduct, then no court would have any jurisdiction to interfere on the question of punishment. If in such a case the Court tends to interfere on the question of punishment then the said Court virtually would be rewriting the Regulation by interpreting that the word, “termination” should be read as ‘may be terminated’ or ‘is likely to be terminated’ That not being the intention of law no relief under Section 11-A of the Act also can be given to the respondent-workman. The order passed by the learned Single Judge is set aside and the award made by the learned Labour Court is quashed. The Appeal is allowed. The reference is answered in negative.
14. Consequently Civil Application No. 591 of 2004 is finally disposed of.
(YSL)Petition allowed.
Alert