Ramaprasada Rao, J.:— The second respondent was appointed by the petitioners as regional superintendent of their Madras office. The letter of appointment is dated July 5, 1962. Under clause 2, while enumerating the duties annexed to the service, inter alia the letter provides that the second respondent should generally superintend all the business matters pertaining to the Madras office, function as a liasion between the head office and the clients of the petitioners' firm, and assume full responsibilities of sales, stocks, cash, assets, outstandings for collection, etc. His initial salary was fixed at Rs. 400. A period of probation of three months was provided for. Apparently, the second respondent was confirmed, but he served the petitioners firm for over three years. On September 3, 1965, the petitioners wrote to the second respondent that his control over the Madras office has proved to be an absolute source of loss, and gave him an opportunity to gear up his energies, so that the firm may run well-deservedly and economically. In fact, in that letter, they wanted to know what steps they could expect from the second respondent for increasing the earning capacity of the regional office. This was followed up by a letter dated September 4, 1965, which contains the gravamen of the charges against the second respondent by the petitioner. In the meantime, it may be noted that persons connected with the petitioners firm were deputed to enquire into the running and administration of their Madras office, and it is not disputed that a report was submitted by one such person, who enquired into the matter, a copy of which report, however, was not sent to the second respondent.
2. To continue the narrative, on November 4, 1965, the petitioners issued a notice terminating the services of the second respondent from December 1, 1965, but the material contents of this letter are important to adjudge the real issue in controversy. The petitioners would state that the second respondent was utterly incompetent and was unable to face the grim realities of the situation and failed to convince the management of his sincere bona fides and abilities to rise to the occasion. Secondly, it is stated that it was utter lack of sincere efforts on the part of the second respondent to promote the firm's business interests, which has contributed to the stagnation. Thirdly, the petitioners made it very clear that they were inclined to feel that the second respondent was grossly negligent in the discharge of his duties and responsibilities; and if one of their representatives had not come down to Madras, the business in all probability would have gone to the competitors.
3. In conclusion, they felt that they could no longer keep the second respondent in service and decided to terminate his employment with effect from December 1, 1965. As against this order of termination, the second respondent preferred an appeal under Section 41 of the Madras Shops and Establishments Act, 1947, to the Additional Commissioner for Workmen's Compensation, Madras. After the presentation of the appeal, the petitioners, apparently aggrieved by the stand taken by the second respondent, sought to outwit the entire proceedings by approaching the Commissioner for Labour twice and to see that the appeal was taken out from the purview of the Additional Commissioner for Workmen's Compensation, on the foot that the Madras Shops and Establishments Act would not apply to the facts and circumstances of the case. But the Commissioner of Labour did not accept the contentions of the petitioners, and thereafter the enquiry before the first respondent was concluded. The Additional Commissioner, after hearing the parties and after weighing the oral and documentary evidence before him, came to the conclusion that the termination was not proper, as it did not satisfy t???e material limbs of Section 41(1) of the Act. He effectually held that the notice of termination dated November 4, 1965, dispensing with the services of the second respondent as and from December 1, 1965, did not satisfy the statutory requirement of a month's notice. He also found that on an overall appreciation of the materials, as disclosed in the evidence, it cannot be said that the termination was for a reasonable cause, and that exectually the termination was for misconduct, specifically and squarely alleged as against the second respondent such misconduct not having been enquired into in a manner known to law and not having been established therein, he was of the view that the termination was improper. It is as against this order the present writ petition has been filed.
4. The learned counsel for the petitioners urges that the petitioners firm was not doing well and it was primarily their economic interest that was mainly responsible for the action they have taken in the matter, and they were reasonably satisfied that the continuance of the services of the second respondent in their firm is not conducive in commercial interests. In this view of the matter, it is stated that the petitioners, who were the sole persons to decide about the reasonableness of the cause for the termination, having so decided, it is not for the appellate court constituted under the statute under Section 41 of the Act or for this Court exercising jurisdiction under article 226 of the Constitution of India to interfere. The second point urged is that the notice of termination, though ex facie, is not regular, has been condoned, as is seen from the testimony of the second respondent, who in his evidence has stated that his services were terminated on December 10, 1965. As the notice has been correctly understood and acted upon by the second respondent, it is not open, it is suggestted, to the second respondent to canvass the propriety or regularity of the said notice and decide the issues against the petitioners.
5. I shall take up the second point first. Section 41 of the Madras Shops and Establishments Act, 1947, the marginal note of which is ‘Notice of dismissal’ enjoins on an employer not to dispense with the services of a person employed continuously for a period of not less than six months except for a reasonable cause and without giving such person at least one month's notice, or wages in lieu of such notice. The proviso to sub-section (1) of Section 41 contemplates that in cases where the termination or dispensation is effected on a charge of misconduct, then such a charge should be proved at an enquiry held for the charges, and it should be supported by satisfactory evidence. It is not in dispute that in either of the circumstances mentioned in sub-section (1) of Section 41 of the Act, a right of appeal is provided in sub-section (2) therein, to the person employed within the time prescribed on the ground that there was no reasonable cause for dispensing with his services or on the ground that he had not been guilty of misconduct as held by the employer. The argument of Mr. Rajagopalan, the learned counsel for the petitioners, is that the facts and circumstances of this case too squarely fall in the main provision of sub-section (1) of Section 41, and the proviso thereto is not attract-ed. I am unable to agree. The conduct of the petitioner from the very beginning appears to be to dispense with the services of the second respondent. He has been accused very badly of gross negligence, incompetence and lack of sincere effort. It cannot be pretended that these accusations were made in the process of arriving at a reasonable cause for dispensing with the services of an employee. No doubt, it is for the employer to decide for himself subjectively as to Whether his employee's services have to be terminated or not. Even such subjective appraisal must depend upon cogent material which has to be placed before an independent Tribunal like the Appellate Tribunal constituted by the statute under Section 41(2) of the Act, who in the ultimate analysis should agree with the employer that there was such reasonable cause for termination. On the other hand, if vituperative epithets are recorded in writing and communicated to him, and he in turn refutes such allegations made against him and ultimately the employer decides to terminate his services on such accusations, it would be idle to contend that the dispensation of the service of the employee in those circumstances was for a reasonable cause. The vendetta is made clear and is part of the record. It has to be decided whether such charges so made by the employer are true, justified and proper. The enquiry which is necessary to adjudge whether such accusations are true, proper and regular, would be a domestic one, in which certain charges of misconduct are levelled against the employee, and without violence to the principles of natural justice, a fair trial is held, and thereafter an ultimate conclusion is arrived at on the matter in issue. But if bare allegation such as the charges enumerated above are made, and no further attempt is made either to call for an explanation from the employee or to give him a reasonable opportunity in an enquiry held for the purpose to refute or disprove the same, then it cannot be said that the employer, when he dispensed with the services of the person in such circumstances, did so for a reasonable cause.
6. Reliance was placed upon a decision of our Court in S. Janardhanam v. Additional Commissioner for Workmen's Compensation (1). Anantanarayanan, C.J, while explaining the expression ‘reasonable cause’ and holding that the question whether in a given case there was such ‘reasonable cause’ or not is not a question of law, but essentially a question of fact which has to be decided on the facts and circumstances in each case, observed (page):—
“But the question here is whether Section 41(1) would justify the termination of service, or otherwise. No doubt, this is not merely dependent upon the subjective satisfaction of the employer. The court has to be convinced that, not merely was the employer satisfied bona fide about the necessity for terminating the services, but that the necessity could be termed ‘reasonable’ ex facie.”
7. I am not satisfied that the necessity for the termination of the services of the second respondent was bona fide and was for a reasonable cause. It is entirely the result of the objective satisfaction of the employer, who categorised the various disabilities and disqualifications of his employee and branded him as negligent incompetent and insincere. Such matters on record cannot easily be equated to ???acts which could be normally held to have been proved to the subjective satisfaction of the employer. It has to be tested in a manner known to law, and if it has to be tested, an enquiry as to the misconduct alleged is imperative as per the proviso to Section 41(1) of the Act. If an enquiry is necessary, then the entire gamut of the procedure to be followed in such domestic enquiries has to be satisfied, and a decision arrived at therein. In the absence of such an enquiry, the first respondent rightly held that a mere notice terminating the services of the person, after so uncharitably levelling charges against him, would not be sufficient so as to satisfy the first part of Section 41(1) of the Act.
8. I also agree with him that the notice of termination dated November 4, 1965, does not satisfy the requirement of law. The dispensation is to take exect from December 1, 1965, which period would certainly fall short of a month, which is the statutory period provided for in Section 41. Reliance is placed upon an answer given by the second respondent in his evidence that his services were terminated on December 10, 1965. Factually, this answer is correct, because he was asked to lay down office on that day and hand over charge. In one of the letters which followed the letter dated November 4, 1965. an attempt was made by the petitioners to say that as the original notice fell short of a month, they were ertending it till December 10, 1965. It is an improper understanding of the true intent of the mandatory provisions in Section 41(1) of the Act. As initially the petitioner was not given a notice of termination of service, in accordance with law, he is entitled to complain. The notice also will not be regular and proper as it does not satisfy the essential pre-requisite in Section 41 of the Act. Hence, the order of the first respondent has to be upheld on this ground also.
9. The writ petition is, therefore, dismissed. But there will be no order as to costs.
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