Gammon India Limited Vs. Niranjan Dass - Court Judgment

Excerpt:
- [p.b. gajendragadkar, c.j.,; k.n. wanchoo,; n. rajagopala ayyangar,; j.c. shah, jj.] the appellant and his mother (the lessors), granted a lease of an open site in the town of coimbatore to abirama chettiar under a registered 'deed dated september 19,1934. the annual rent stipulated under the lease was rs. 10,80 and the period of the lease was 20 years. the term under the lease was that the land was to be utilised for constructing buildings thereon for "purposes of cinema. drama etc." it was further agreed between the parties that at the end of the term the lessee would demolish the buildings which he had. constructed and deliver vacant possession of the site lo the lessor. abirama chettiar constructed a theatre on the site, and assigned his rights to the respondent-company. in an action against the company for a decree in ejectment and for mesne profits, the trial court awarded to the lessors a decree for possession and mesne profits. against the decree the company-respondent preferred an appeal to the district court which was transferred for trial to the high court. during the pendency of this appeal, the state of madras extended the madras city tenants' protection act, 3 of 1922, as amended by madras act 19 of 1955 to the municipal town of coimbatore. the company then applied under a. 9 of the act and on this application the high court directed that the lessors do sell to the company the site in dispute under s. 9 of the madras city tenants protection act, 1922. against payment of the full market value of the land on the date of the order. the order was confirmed in an appeal under the letters patent held: per gajendragadkar, c.j., shah and sikri, jj. section 12 has been enacted to protect the tenants against any contractual engagements which may have been made expressly or by implication to deprive themselves wholly or partially of the protection intended to be conferred by the statute. and the only class of cases in which the protection becomes ineffective is where the tenant has made a stipulation in writing registered as to the erection of buildings, erected after the date of the contract of lease. the stipulations not protected in s. 12 are only those in writing registered and relate to erection of buildings. such as restrictions about the size and nature of the building constructed, the building materials to be used therein and the purpose for which the building is to be utilised. (ii)section 9(1) of the act was manifestly in the interest of the general public to effectuate the mutual understanding between the, landlords and the tenants as to the duration of the tenancies, and to conserve building materials by maintaining existing buildings for purposes for which the leases were granted. restriction imposed upon the right of the landlord to obtain possession of the premises demised according to the terms of the lease would, therefore not be regarded as imposing an unreasonable restriction in the exercise of the right conferred upon the landlord by art. 19(1) of the constitution, because the restriction would be regarded as one in the interests of the general public. what s. 9 does is not so much to deprive the landlord of his property or to acquire his rights to it as to give effect to the real agreement between him and his tenant which induced the tenants to construct his building on the plot let out to him. if the law is not invalid as offending art. 19(1)(f) of the constitution, no independent infringement of art. 31(1) of the constitution may be set up. per wanchoo and ayyangar, jj (dissenting) (1) the preamble of the act would indicate that the act would not apply to afford protection in a case where by an express term in a registered lease deed a tenant agreed to surrender the site on which he had erected a building, where he specifically contracted that he would demolish the building and deliver vacant possession of the site on the termination of his tenancy. if the scope of the proviso to s. 12 had to be construed in the light of the preamble, it is obvious that the tenant who had entered into a contract with a stipulation of the sort as stated above could not be said to have constructed the buildings on another's land "in the hope that he would not be evicted so long as he pays rent for the land". the high court erred in interpretting the proviso to s. 12 of the act. (ii) these words "as to the erection of buildings" mean a stipulation which bears on or is in relation to the erection of buildings. such a construction would reconcile the proviso with the preamble which sets out the object sought to be achieved by the act. if the lease deed contains no stipulation whatsoever in regard to the erection of buildings, as was the case with the large number of leases in the city of madras which were entered into prior to the enactment of the act in 1922, the tenant who erected the building exconcessis without contravening any undertaking on his part, obtains protection under the act. the test would therefore be "did the parties advert to and have in mind the lontingency of the tenant erecting buildings on the leased land"? if they had and had included in a solemn registered instrument a provision which would bear upon the relative rights of the parties in the event of the erection of buildings on the site, the stipulation would have effect notwithstanding the act; for in such an event the tenant would not have constructed buildings on the land in the hope that he would not be disturbed from possession so long as he paid the rent agreed upon. - even apart from this, the termination of service for the reasons mentioned in the notice is not covered by any of the clauses (a), (b) and (c) of section 2(oo) which defines retrenchment and it is by now well-settled that where the termination of service does not fall within any of the excluded categories, the termination would be ipso facto reternchment. 25 of 1970 is upheld and confirmed and this appeal must therefore fail and accordingly it is dismissed.d.a. desai, j.1. respondent shri niranjan dass was employed as a senior clerk by the appellant-company as per the appointment order contained in the letter dated april 10, 1962. the letter of appointment inter alia provided that the respondent may be posted anywhere in india or abroad as per the requirements of the company and it was signed by its zonal manager, central zone, delhi. respondent continued to serve in that capacity when on september 14, 1967, he was served with notice terminating his services. the notice reads as under :due to the reduction in the volume of business of the company as a result of the recession in (sic) services will not be required by the company after the 14th october, 1967, and this may be treated as statutory notice of one month of termination of your service.your leave shall run concurrently with the notice period, and you may avail of leave due to you, if any, during the notice period.personnel section at head office have been advised to settle your dues, and you may write to them in the matter.we take this opportunity to thank you for your past services, and it is very unfortunate that the present circumstances have compelled us to issue this notice.should it be possible for us to offer you a job at any of our works sites at a later date, we shall make you a fresh offer at that time.respondent raised an industrial dispute and the appropriate government by the order dated may 30, 1968 referred the industrial dispute for adjudication to the industrial tribunal. the reference was couched in the following language,whether the retrenchment of shri niranjan dass is unjustified or illegal and if so, what directions are necessary in this respect. 2. by the award dated february 25, 1969. the industrial tribunal held that the retrenchment of the respondent was illegal and unjustified and gave a declaration that he continues to be in service of the appellant-company and is entitled to his wages till he is lawfully retrenched. appellant-company challenged the award in civil writ no. 462 of 1969 filed by it in the high court of delhi. a learned single judge held that as the delhi office of the appellant-company was closed, the case of the respondent would be governed by section 25fff being termination consequent upon closure, and therefore payment of compensation was not a condition precedent and the 'termination of service was valid, the learned judge accordingly set aside the award and remitted the matter to the tribunal to decide what directions, if any, are necessary in respect of retrenchment of the respondent in the light of the discussion in the judgment respondent preferred letters patent appeal no. 25 of 1970 against the decision of the learned single judge. a division bench of delhi high court held that the reference made by the appropriate government required the industrial tribunal to consider whether the retrenchment was illegal or unjustified and therefore it was implicit in the reference itself that it was a case of retrenchment, validity of . which to be examined in the reference and therefore it was not open to the learned single judge to change the 'base' of the reference and to come to the conclusion that the case was one of closure of the the industrial undertaking governed by section 25fff of the industrial disputes act. approaching the matter from this angle, the division bench set aside the decision of the learned single judge and restored the award made by the industrial tribunal. hence this appeal by the company by special leave.3. the industrial tribunal held that respondent was retrenched from service by the appellant and the pre-conditions for a valid retrenchment were not complied with and therefore the respondent was entitled to a declaration that he continues to be in service with all the benefits flowing from the said declaration. a learned single judge of the high court interfered with this award holding that the appellant-company had closed its delhi office and therefore the termination of service was consequent upon the closure and even if it constitutes retrenchment, the case would be governed by section 25fff which does not prescribe payment of compensation as a condition-precedent to a valid termination of service by way of reternchment. in the letters patent appeal at the instance of the respondent, the division bench set aside the judgment of the learned single judge holding that it was not open to the learned single judge to hold that it was a case of closure covered by section 25fff because it was implicit in the reference that the case was one of retrenchment and the only question with the industrial tribunal was called upon to decide was whether the retrenchment was unjustified or illegal. it is not necessary to examine the view expressed by the division bench of the high court whether the assumption underlying an order of reference is unquestionable at the hearing of the reference. the question, however, is whether the learned single judge, who interfered with the award of the tribunal was justified in coming to the conclusion that the case was one of closure covered by section 25fff or the industrial tribunal was right in holding that it is a case of retrenchment covered by section 25f of industrial disputes act. this point can be answered by mere reference to the notice served by the appellant-company on the respondent intimating to him that his services will no more be required effective from october 14, 1967. the notice as a whole has been extracted hereinbefore. the notice recites that as a result of recession in the volume of work of the company, services of the respondent would no more be required by the company after october 14, 1967 and this notice may be treated as a statutory notice as contemplated by section 25f(a). there is not even a whisper in the notice that as the delhi office is being closed down, the services of the respondent would not be required. an attempt was made while leading evidence before the industrial tribunal to show that the zonal office at delhi was closed on january 31, 1968 while the central zone office was closed somewhere in october, 1967. if by september, 1967, the appellant-company had resolved to close the office at delhi to which the respondent was attached, it is unthinkable that that aspect would not be recited in the notice. the necessity for termination of service of the respondent recited in the notice was recession in the work handled by the company. not even one word is stated in the notice that the office to which the respondent was attached was in the process of being closed down, so his services would no more be required. on a true construction of the notice, it would appear that the respondent had become surplus on account of reduction in volume of work and that constitutes retrenchment even in the traditional sense of the term as interpreted in pipraich sugar mills ltd. v. pipraich sugar mills mazdoor union [1956] scr 172 though that view does not hold the field in view of the recent decisions of this court in state bank of india v. n. sundar money : (1976)illj478sc hindustan steel ltd. v. the presiding officer. labour court, orissa and ors. : (1977)illj1sc ; santosh gupta v. state bank of patiala [1980] 3 scr 340; delhi cloth and general mills ltd: v. shambu nath mukerjee : (1978)illj1sc ; mohan lal v. management of bharat electronics ltd. : (1981)iillj70sc and l. robert d'souza v. the executive engineer, southern railway and anr. : (1982)illj330sc . the recitals averments in the notice leave no room for doubt that the service of the respondent was terminated for the reason that on account of recession and reduction in the volume of work of the company, respondent has become surplus. even apart from this, the termination of service for the reasons mentioned in the notice is not covered by any of the clauses (a), (b) and (c) of section 2(oo) which defines retrenchment and it is by now well-settled that where the termination of service does not fall within any of the excluded categories, the termination would be ipso facto reternchment. it was not even attempted to be urged that the case of the respondent would fall in any of the excluded categories. it is there indisputably a case of retrenchment.4. it is not disputed that the pre-requisite for a valid retrenchment as laid down in section 25f has not been complied with and therefore the retrenchment bringing about termination of service is ab initio void. viewed from this angle, the award of the industrial tribunal was correct and unassailable and the learned single judge was in error in interfering with the same. undoubtedly, the division bench of the high court has set aside the order of the learned single judge and restored the award for reasons of its own. however, for the reasons herein indicated, the decision of the division bench in letters patent appeal no. 25 of 1970 is upheld and confirmed and this appeal must therefore fail and accordingly it is dismissed.5. in the course of hearing of this appeal, it was stated that the respondent has reached the age of superannuation therefore physical re-instatement in service is not possible. appellant will have to establish that fact but in the event, the appellant shows that under a valid rule, respondent has reached the stage of superannuation and therefore physical re-instatement is not possible, it is hereby declared that the respondent shall continue to be in service un-interruptedly from the date of the attempted termination of service till the date of superannuation. respondent would be entitled to all back wages including the benefit of revised wages or salary if during the period there is revision of pay-scales with yearly increment, revised dearness allowance or variable dearness allowance and all terminal benefits if he has reached the age of superannuation such as provident fund, gratuity etc. back wages should be calculated as if the respondent continued in service uninterrupted. he is also entitled to leave encashment and bonus if other workmen in the same category were paid the same. it appears that the respondent has been unlawfully kept out of service, therefore it is but just that the appellant-company shall pay all the arrears as calculated according to the directions herein given with 12% interest from the date the amount became due and payable till realisation. appellant shall also pay costs to the respondent quantified at rs. 5,000. the appellant is directed to pay the amount as herein directed to be paid within 3 months from today.6. mr. jitendra sharma, learned counsel for the respondent stated that the costs awarded to the respondent be paid to the legal aid cell set up by indian association of lawyers in collaboration with womens' council.7. order accordingly.