Case BriefsTribunals/Commissions/Regulatory Bodies

Central Administrative Tribunal (CAT): The Bench of Justice L. Narasimha Reddy (Chairman) and Mohd. Jamshed (Member) held that premature retirement does not amount to punishment rather in the instant case it was a measure to add efficiency and honesty in the departments.

The applicant joined the Municipal Corporation of Delhi as Junior Engineer (JE) (Civil) in the year 1988. Thereafter, he was promoted to the post of Assistant Engineer (AE) (Civil) on ad hoc basis with effect from 13-09-2018. Through an order dated 31-10-2019, the respondents retired the applicant, by invoking the power under Fundamental Rule (FR) 56 (j) and Rule 48 of the CCS (Pension) Rules, 1972, before the latter attained the age of superannuation and the representation made by the applicant was rejected.

The applicant contended that he rendered meritorious service ever since he was appointed and in recognition of the same, he was assigned additional charge of various important posts. He further contended that though he had been issued number of charge sheets, he was exonerated in most of them. Further, it was argued by the applicant that his ACRs for 31 years were not only Very Good, but also Outstanding in certain years, and that he was not involved in any departmental case in which any penalty was imposed, after his promotion in 2018, and that the impugned order could not be sustained in law.

It was stated by the respondents that with a view to bring transparency and efficiency in their Corporation, they constituted a committee of senior most officers to review the case of Group-B officers, who crossed the age of 50 years, and after verifying the entire record of the applicant, the committee recommended his premature retirement. It was stated that the applicant was imposed punishments of various kinds under DMC Services (Control and Appeal) Regulations 1959, and that was taken into account, while reviewing the cases on completion of certain length of service. Moreover, the respondent had also given a brief background of the penalties imposed on the applicant. The respondent contended that the applicant was retired from service, before he attained the age of superannuation and it was not a measure of punishment and the order was passed by invoking the power under FR56 (j).

In Baikuntha Nath Das v. Distt. Medical Officer, (1992) 2 SCC 299, the Supreme Court had laid down the following principles:

  1. “An order of compulsory retirement is not a punishment. It implies neither stigma nor any suggestion of misbehaviour.
  2. The order has to be passed by the government on forming the opinion that it is in the public interest to retire a government servant compulsorily.
  3. Principles of natural justice have no place in the context of an order of compulsory retirement. This does not mean that judicial scrutiny is excluded altogether. While the High Court or this Court would not examine the matter as an appellate court, they may interfere if they are satisfied that the order is passed a) mala fide or b) that it is based on no evidence or c) that it is arbitrary – in the sense that no reasonable person would form the requisite opinion on the given material; in short, if it is found to be perverse order.
  4. The government (or the Review Committee, as the case may be) shall have to consider the entire record of service before taking a decision in the matter. The record to be so considered would naturally include the entries in the confidential records/character rolls, both favourable and adverse.
  5. If a government servant is promoted to a higher post notwithstanding the adverse remarks, such remarks lose their sting, more so, if the promotion is based upon merit (selection) and not upon seniority.
  6. An order of compulsory retirement is not liable to be quashed by a Court merely on the showing that while passing it uncommunicated adverse remarks were also taken into consideration.”

Again, in Pyare Mohan Lal v. State of Jharkhand (2010) 10 SCC 693, and Punjab State Power Corporation v. Hari Kishan Verma, (2015)13 SCC 156, the Supreme Court took the view that consideration of the record of an officer in this behalf, could not be confined to any particular period and the record in its entirety, needs to be taken note of.

Hence, the Bench observed that the premature retirement by invoking the power under FR.56 (j) does not amount to punishment and it is a measure to add efficiency and honesty in the departments. The Bench stated,

“The Tribunal can certainly interfere with the order of premature retirement in case there does not exist anything adverse to the employee in his entire career. However, if some material or facts as such exist, the Tribunal cannot go into the adequacy thereof.”

Noticing that the applicant faced more than 20 proceedings, the Bench stated, that the amount of hardship undergone by the Corporation could easily be imagined which justified why the respondents thought it fit to retire the applicant prematurely than to keep him on their rolls.

As observed by the Supreme Court, the record of the employee, in its entirety needs to be taken into account and it could not be compartmentalised, hence, the fact that the applicant was promoted, made no difference.

Hence, the premature retirement granted to the applicant was held not to be a punishment as the applicant was allowed all the retirement benefits and the only difference was that the retirement took place a bit earlier. The Bench further held that if the Corporation felt that the premature retirement of the applicant would be in its interest as well as of the public, the Tribunal could not find fault with that decision.[Ankur Tyagi v. North Delhi Municipal Corpn., O.A. No. 1744/2020, decided on 16-07-2021]


Kamini Sharma, Editorial Assistant has reported this brief.


Appearance by:

For the Applicant: Adv. Rajeev Sharma

For the Respondent: Adv. R.V.Sinha

Case BriefsHigh Courts

Jharkhand High Court: S.N.Pathak, J., held that the employees of Telco Recreation Club cannot claim parity in pay and other benefits at par with the regular employees of Telco Ltd. The Bench held that,

“When the initial appointment letter of the workmen has not been issued by the petitioner-Management, the question of parity in pay etc. with the employees of the petitioner-Management does not arise.”

Factual Matrix of the Case

The petitioner Company-Telco Ltd., was a leading manufacturer and seller of automobiles in the Country. In 1958, the company had started a separate department under the name and style of “Telco Recreation Club” for carrying activities of welfare and recreation of its employees. The said Telco Recreation Club was a Society registered under Societies Act having a separate legal entity of its own with its own source of income, its own constitution and bye-laws and had no direct connection with the petitioner-company and the petitioner company, under its corporate responsibility, provide financial assistance to several Societies in the area including the said Club.

The case of the petitioner-company was that it had no control over TELCO Recreation Club, which was run and managed by a Managing Committee elected/ selected by its members, yet one Indra Deo Prasad on behalf of 21 persons employed in Telco Recreation Club made a claim of parity in pay and other benefits at par with the regular employees of Telco Ltd. It was also the stand of the company that the government of Bihar had found Telco Recreation Club to be an independent establishment and had made a reference being Ref. Case No. 06 of 1991 to Industrial Tribunal, Ranchi, which was never challenged or objected by the employees of the said Club and therefore, the petitioner-company could not be treated to be the employer of the workmen of Telco Recreation Club.

Decision by the Labour Court

 The Labour Court held that there existed a relationship of employer and employees between the parties, and Telco Recreation Club was a department/wing of the company, and that petitioner-company provided all facilities to said Club and had direct control over the Managing Committee of the said Club as the General Manager of Telco Ltd. was the President of the Club; the reference was maintainable. The Labour Court had further held that the concerned workmen were also permanent employees of  Teclo Ltd., and hence, they were entitled to get pay and other benefits at par with the employees of Telco Ltd. Accordingly, the issue was decided in favour of the workmen.

Findings of the Court

Considering the rival submission of the parties and on perusal of Judgments brought on record, the Bench reached the conclusion that the impugned Award suffered from patent illegalities and was based upon errors of law. Admittedly, there was no relationship of employer-employee between the petitioner-Management and the concerned workman. The Bench clarified,

“Neither in the appointment of workmen nor in the process of their engagement, the petitioner-Management has played any role, therefore, the industrial disputes against the petitioner-Management is wholly illegal and uncalled for.”

The concerned workmen were being governed by the rules, regulations and bye-laws of the Club and not the petitioner-Management. Even the disciplinary control was of the Club and not of the Management. Hence, the findings of the Tribunal were totally perverse and error of law. Finding force in the arguments of the petitioner-company that the Club was incorporated as a separate body and concerned workmen were admittedly appointed by the Club and not by the petitioner-Management, the Bench opined that the claim of the concerned workmen was not sustainable.

Reliance was placed by the Court upon the decision of Supreme Court in Bengal Nagpur Cotton Mills v. Bharat Lal, (2011) 1 SCC 635,  wherein it had held that two of the well-recognized tests to find out whether the contract labourers are the direct employees of the principal employer are-

  • Whether the principal employer pays salary instead of the contractor?
  • Whether the principal employer control and supervises the work of the employees?

Accordingly, the Bench held that in the instant case on both these counts, the workmen had failed to establish their case as they could not establish that they were working directly under control and supervision of the management, hence, the question of the employer-employee relationship did not arise at all.

Placing reliance on Bhuwanesh Kumar Dwivedi v. Hindalco Industries, (2014) 11 SCC 85,wherein, the Supreme Court had held that, “where Labour Court commits patent mistake in law in arriving at a conclusion contrary to law, the same can be corrected by the High Court. In the instant case, the Tribunal has committed a patent error of law to hold that the employer-employee relationship exists between the petitioner-Management and the concerned workman”; the Bench opined that

“In the instant case, the concerned workmen have sought for parity in pay and other benefits at par with the regular employees of TELCO Ltd. whereas the fact is that the petitioner-Management has never issued appointment letters to them rather these workmen were appointed by the Club, which is a separate entity.  When the initial appointment letter of the workmen has not been issued by the petitioner-Management, the question of parity in pay etc. with the employees of the petitioner-Management does not arise and as such the impugned Award suffers from patent illegalities and is fit to be interfered.”

In the backdrop of above, the impugned Award was quashed.  [Management of Motors Ltd. v. State of Jharkhand, 2021 SCC OnLine Jhar 413, decided on 18-06-2021]


Kamini Sharma, Editorial Assistant has reported this brief.


Appearance before the Court by:

For the Petitioner: Sr. Adv. Kamal Nayan Choubey, Sr.Adv. V.P. Singh, Adv.  Amit Kumar Das, Adv. Rashmi Kumar and Adv. Arun Kumar Singh

For the Respondents:     Sr. Adv. Ajit Kumar and Adv. Kumari Sugandha

For the State: GP-III O.P. Tiwari

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Administrative Tribunal (CAT):  Aradhana Johri, Member (A), partly allowed the instant application whereby the applicant had sought for issuance of directions for the release of gratuity and leave encashment which had been illegally withheld by the respondent.

The applicant was appointed to the post of Constable with the respondents on 31-07-1975. A CBI case was registered against the applicant under PC Act and he was suspended with effect from 09-11-1995. However, the suspension was subsequently revoked vide an order dated 28-03-2000. On 02-08-2001, the applicant was convicted by the Trial Court and, consequently, was dismissed from service. Again, the applicant was subsequently reinstated and superannuated on attaining the age of retirement on 31-08-2015. Though the applicant was paid provisional pension, his gratuity and leave encashment for 278 days leave which stood to his credit had been illegally withheld.

As per Rule 69 of the Central Civil Services (PensionRules1972

“(1)(c) No gratuity shall be paid to the Government servant until the conclusion of the departmental or judicial proceedings and issue of final orders thereon.”

The Tribunal relied on Mahanadi Coalfields Ltd. v. Rabindranath Choubey, 2020 SCC OnLine SC 470, wherein the Supreme Court had held that it was permissible for the employer to withhold the payment of gratuity even after the employee had attained his superannuation from service because of the pendency of disciplinary proceedings against him in view of Rule 34.3 of the Rules, 1978, the employer had a right to withhold gratuity during pendency of disciplinary proceedings.

Further, the Tribunal observed that 39 (3) reads as follows:

“(3) The authority competent to grant leave may withhold whole or part of cash equivalent of earned leave in the case of a Government servant who retires from service on attaining the age of retirement while under suspension or while disciplinary or criminal proceedings are pending against him.”

Consequently, the Tribunal ordered that leave encashment of 286 days should be paid to the applicant since the plea of money becoming recoverable had not been taken by the respondents. However, the demand of the applicant for release of gratuity and interest had been rejected.[Baldev Singh v. Union of India, O.A. 879 of 2020, decided on 02-03-2021]


Kamini Sharma, Editorial Assistant has reported this brief.

Case BriefsHigh Courts

Chhattisgarh High Court: A Division Bench of P.R. Ramchandra Menon and Parth Prateem Sahu JJ., dismissed the appeal being devoid of merits.

The facts of the case are such that one Rajendra Sharma was employed as Driver in the truck owned by non-applicant 1 and insured by non-applicant 2 who while driving from Bilaspur to Raigarh carrying dolomite was attacked and assaulted by some unknown persons with the intention to cause robbery and thereby eventually succumbed to death. FIR was lodged and an application under Section 10 of the Employees Compensation Act 1923 was filed before the Commissioner seeking compensation by the wife and children of the deceased which was thereby granted on grounds that the death happened during the course of employment and fastened the liability to pay on the employer.  Assailing the said order, employer appellant filed an appeal before High Court on grounds that the penalty was imposed without issuing show-cause notice and without affording opportunity of hearing to the employer as envisaged under Section 4A (3) (b) of the Employees’ Compensation Act 1923 wherein appeal was allowed and impugned order was set aside in part relating to the amount of penalty and remitted the matter back to pass award afresh after affording reasonable opportunity of hearing to the employer. The Commissioner had fresh proceedings and issued notice to the parties and awarded 50% of the awarded amount of compensation as penalty and held the employer liable to pay amount of penalty.

Counsel for the appellants-employer submitted that there was again non-compliance of the provisions of Section 4A (3) (b) of Employees Compensation Act 1923. He contended that unless and until there is specific notice in this regard, as directed in MA No.148/2003, the impugned order awarding penalty to the extent of 50% and fastening liability upon appellant is bad in law and liable to be set aside.

Counsel for the respondents submitted that the Commissioner after receipt of the case back on remand, drawn fresh proceeding, granted opportunity of hearing and producing evidence, but appellant employer failed to produce any evidence on the issue. He submitted that the Commissioner is well within four corners of law in awarding penalty of 50% as provided under Section 4A (3) (b) of the Employees’ Compensation Act 1923.

The Court observed that the only ground relevant to the facts is that whether without issuance of notice the entire proceeding drawn by the Commissioner would be considered vitiated or not. The Court further observed that the Appellant was well aware of the fact that the case has been remanded back to the Commissioner with a specific direction for appearance of the parties before the Commissioner and to decide the issue of penalty afresh. It was further observed that the issuance of notice as provided under Section 4A (3) (b) of the Act of 1923 to be mandatory is only to bring it to the knowledge of the employer that the penalty is to be imposed, so that the employer may submit explanation and evidence for the delay occurred in depositing amount of compensation and satisfy the Commissioner on the said issue.

The Court thus held that “In the case at hand, earlier appeal was filed by appellant challenging the order of award of penalty by the Commissioner on the ground of non-issuance of show-cause notice as envisaged under Section 4A(3)(b) of the Act of 1923, which was allowed and the case was remitted back to the Commissioner. Appellant was well aware as to why the case has been remanded back to the Commissioner and also about the proceeding drawn by the Commissioner, but even then appellant has not submitted any explanation nor produced any evidence in this regard. When once the case is remitted back to the Commissioner for limited purpose of considering award of penalty; the appellant appeared before the Commissioner and participated in the proceeding but failed to submit any explanation or bring on record any evidence on issue, then he cannot be permitted to again raise the same ground that specific notice in terms of Section 4A (3) (b) of the Act of 1923 has not been issued.”

 The Court thus dismissed the appeal as the appeal did not involve any question of law which is a prerequisite for entertaining appeal under Section 30 of Employees’ Compensation Act 1923.[Ramjilal Jagannath Partnership Firm v. Kusumdevi, 2020 SCC OnLine Chh 2051, decided on 17-11-2020]


Arunima Bose, Editorial Assistant has put this story together

Case BriefsTribunals/Commissions/Regulatory Bodies

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Coram of P. Venkata Subba Rao (Technical Member) and P. Dinesha (Judicial Member) allowed an appeal filed against Order-in-Appeal passed by Commissioner of Customs, Central Excise & Service Tax, (Appeals-II).

The appellant was a 100% Export Oriented Unit (EOU) and was engaged in research and development services of advanced pharmaceutical ingredients and other biopharma products, a wholly-owned subsidiary of Nektar USA. An employee of the parent company, Nektar USA, was sent to India on a secondment to work as a full-time Managing Director of the appellant company. During his tenure as the Managing Director of the appellant, the ‘secondee’ was a full-time employee of the appellant and that there was a relationship of employer-employee between the appellant and the ‘secondee’. Further, since the ‘secondee’ was a citizen of America, the parent company and the appellant company entered into a ‘salary reimbursement agreement’ for the sake of administrative convenience so that the salary of the ‘secondee’ would be paid in foreign currency outside India by the parent company which would be reimbursed by the appellant to its parent entity. The issue that arose was whether the reimbursement of salary paid to the ‘secondee’, to the parent company, Nektar USA amounted to consideration for the provision of manpower recruitment and supply agency services, within the meaning of section 65(68) of the Finance Act, 1994.

The Tribunal relied upon the CESTAT judgments of Nissin Brake India Pvt. Ltd. v. CCE, 2018 SCC OnLine CESTAT 1690, reiterated in Komatsu (India) (P) Ltd. v. CST, and in Goldman Sachs Services (P) Ltd. v. CST.

The Tribunal while reproducing the relevant portion of Komatsu India (P) Ltd. v. CST allowed the appeal holding that the revenue was not disputing that the ‘secondee’ was always under the control and supervision of the appellant and that the appellant’s parent company had absolutely no obligation to pay the salary and other charges to the ‘secondee’ but for remitting secondee’s salary in foreign exchange based on the salary reimbursement agreement. [Nektar Therapeutics (India) (P) Ltd. v. CCE, 2020 SCC OnLine CESTAT 382, decided on 10-12-2020]


Sakshi Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Himachal Pradesh High Court: Vivek Thakur J., while allowing the present petition, made an elaborated discussion over conditions for granting benefit of service and regularization, in the light of Gauri Dutt v. State of Himachal Pradesh, HLJ 2008 (HP) 366.

Background

The petitioner in the instant case was appointed as daily waged surveyor on 1-11-1983 and in the same year, he served at the said position for 61 days. He continued to work as a daily waged Surveyor till 30-06-1987 and with effect from 01-07-1987 to 28-02-1988, he was engaged as daily waged beldar. Thereafter, from 01-03-1988 to 31-10-1989, he was engaged as daily waged Fitter, a Class-III post equivalent to the post of Surveyor. Since 01-11-1989 till his regularization, he was engaged as daily waged Surveyor continuously. Since 1984 till his regularization vide order dated 17-12-2002, with effect from 31-03-2000, he served for 240 days each in every calendar year as a daily waged employee, though in a different capacity, that is, Surveyor, Beldar and Fitter, as mentioned above.

It is also undisputed that pursuant to the decision of Government dated 28-02-2008, taken after passing of judgment by the present High Court in Gauri Dutt v. State of Himachal Pradesh, HLJ 2008 (HP) 366, petitioner was regularized, immediately on completion of 10 years as Surveyor with 240 days each in every calendar year, vide order dated 18-03-2008 from retrospective date with effect from 01-01-2000. Thereafter petitioner had represented to the respondent authority to take into consideration his service with effect from 1984 onwards as he had completed 240 days in each calendar year continuously after 01-01-1984 till his regularization. Feeling aggrieved by omission on the part of respondents authority to take any decision, he had approached this High Court by filing CWP No. 8325 of 2011, which was disposed of vide order dated 11-10-2011 with direction to the respondents-authority to take appropriate action in representation made by petitioner, which was pending consideration before the authority. In pursuance to the order passed by the present High Court, representation of the petitioner was considered by Engineer-in-Chief and was decided vide order dated 28-11-2011, whereby it was concluded by the authority that from 01-03-1988 to 31-10-1989, petitioner was engaged as daily waged fitter and thereafter he continued as daily waged surveyor till his regularization and as post of fitter was equivalent to the post of surveyor, service of the petitioner as fitter with effect from 01-03-1988 to 31-10-1989 was also taken into consideration for counting requisite years for his regularization as surveyor and as such work-charge status was conferred upon the petitioner with effect from 01-01-1998, instead of 01-01-2000.

By way of present petition, petitioner has assailed order dated 28-11-2011, claiming that his entire service with effect from 01-01-1984, since when he has been working as daily waged Surveyor, Beldar and Fitter, with 240 days in each calendar year, is required to be taken into consideration for the purpose of conferring work-charge status upon him and/or regularization of his service.

Observation

The Court referred to the case of  Gauri Dutt, where the essential question was precisely relevant for consideration in the instant case, that is,

Where if an employee has rendered service on daily waged basis on 2 separate posts in lower and higher scales, can the employee be given benefit of the service rendered by him in the lower scale and be regularized in the higher scale by combining the two services after 10 years?

The Division Bench in the aforementioned case held, “when an employee completes 10 years of continuous service combined in two scales, an option should be given to the employee to either accept work charge status in the lower scale or he may continue to work on daily rated basis in the higher scale and claim work charge status in the higher scale of completion of 10 years of continuous service in the said scale…However, if the employee on being given a chance to exercise his option does not convey his opinion within 30 days, he shall be granted work charge status in the lower scale by combining the service rendered in both the scales.” In essence the Bench observed that,

An employee, for regularization against higher scale, cannot have benefit of his service against lower scale for the purpose of counting 10 years service, however, for regularization against lower scale an employee can have benefit of his service against post of higher scale for counting 10 years.

The Court further admitted the fact that the facts of the present case are not exactly similar to the facts of the Gauri Dutt and in the same light observed, “… a case, like present one, wherein the employee initially and finally has been appointed to a post of higher scale and in between to a post of lower scale, has not been discussed and considered therein. However, the essence of the judgment is very clear that for regularization to the post of higher scale, services of employee against the post of higher scale are only to be taken into consideration, but not the services rendered against post having lower scale. Petitioner herein, has continuously served for 240 days in each calendar year w.e.f. 01-01-1984, though against different posts having different scales.”

Decision

While allowing the present petition the Court said, “Considering the entire facts and circumstances and also ratio laid down in Gauri Dutt’s case, I am of the considered opinion that services of petitioner with effect from 01-01-1984 to 30-06-1987 when he has served against the post of Surveyor, is required to be taken into consideration for counting his requisite years of service for the purpose of conferring work-charge status/regularization, because there is no break in his daily wage service since 01-01-1984 as though he was engaged against posts having different scales, but his services were never discontinued till his regularization and he had completed 240 days in every calendar year during this period. His services as daily waged Beldar with effect from, 01-07-1987 to 28-02-1988 are not to be taken into consideration for calculating the requisite years, rather has to be excluded for the purpose of calculation of requisite years. But at the same time this period is not to be considered as a period when petitioner has not served at all for the purpose of continuance of service and completion of 240 days in each calendar year. Though, this period is to be taken into consideration for purpose of continuation, but is not to be added to the period of service as Surveyor.”[Ashok Kumar v. State of Himachal Pradesh, CWPOA No. 842 of 2019, decided on 27-11-2020]


Sakshi Shukla, Editorial Assistant has put this story together.

Case BriefsSupreme Court

Supreme Court: In a case where a company provided trained and efficient security guards to clients, claimed that security guards were the employees of the client, the was bench of Navin Sinha* and Surya Kant, JJ has held that merely because the client pays money under a contract to the appellant and in turn the appellant pays the wages of such security guards from such contractual amount received by it, it does not make the client the employer of the security guard nor do the security guards constitute employees of the client.

Background

By Notification dated 17.05.1971[1] issued under Section 1(3)(b) of the EPF Act, the provisions of the EPF Act were made applicable to specified establishment rendering expert services and employing twenty or more persons.

The appellant contended that it was not covered by the said Notification since it was not engaged in rendering any expert services and merely facilitated in providing Chowkidars to its clients at the request of the latter. The salary was paid to the Chowkidars by the client who engaged their services and that the appellant had only 5 persons on its rolls.

The Assistant Provident Fund Commissioner on basis of balance sheets seized during a raid opined that

  • the appellant had more than twenty employees on its rolls and stood covered by the term “expert services” such as providing of personnel under the Notification.
  • wages were not paid directly by the clients to the security guards deployed by the appellant but that the payments were made by the clients to the appellant, who in turn disbursed wages to the security guards.
  • the remedy of an appeal before the Tribunal under Section 7-I was bypassed by the appellant instituting the writ petition directly.

The Allahabad High Court declined interference with the conclusion of expert services being rendered by the appellant. A review petition contending that the appellant stood duly registered under the Private Security Agencies (Regulation) Act, 2005 was also rejected.

Analysis

Private Security Agencies (Regulation) Act, 2005

The Act of 2005 defines a private security agency under Section 2(g) as an organization engaged in the business of providing security services including training to private security guards and providing such guards to any industrial or business undertakings or a company or any other person or property.  A licence is mandatory under Section 4 and those security agencies existing since earlier were mandated to obtain such licence within one year of coming into force of the Act.

A complete procedure is provided with regard to making of an application for grant of a licence under Section 7, renewal under Section 8 of the Act.The eligibility for appointment as a security guard with such security agency is provided under Section 10 of the Act.

Section 11 provides for the condition of the licence and the licence can be cancelled under Section 13. A private security agency under Section 15 is required to maintain a register inter alia with the names, addresses, photographs and salaries of the private security guards and supervisors under its control.

Private Security Agencies Central Model Rules, 2006

The 2006 Rules framed under the Act of 2005, requires verification by the security agency before employing any person as a security guard or supervisor in the manner prescribed. Proper security training of the person employed is the responsibility of the security agency under Rule 5, and Rule 6 prescribes the standard of physical fitness for security guards.

Under Rule 14 the security agency is required to maintain a Register in Form VIII, Part-I of which contains details of the management, Part¬II contains the name of guard, his parentage, address, photograph, badge no. and the salary with the date of commencement.

Part III contains the name of the customer, address, the number of guards deployed, date of commencement of duty and date of discontinuance.

Part IV contains the name of the security guard/supervisor, address of the place of duty, if accompanied by arms, date and time of commencement of duty and date and time of end of duty.

Conclusion

Considering the aforementioned analysis, the Court concluded that the appellant is engaged in the specialised and expert services of providing trained and efficient security guards to its clients on payment basis. The provisions of the Act of 2005 make it manifest that the appellant is the employer of such security guards and who are its employees and are paid wages by the appellant.

Merely because the client pays money under a contract to the appellant and in turn the appellant pays the wages of such security guards from such contractual amount received by it, it does not make the client the employer of the security guard nor do the security guards constitute employees of the client. The appellant therefore is squarely covered by the Notification dated 17.05.1971.

The Court further noticed that the appellant refused to show the statutory registers under the Act of 2005 to the authorities under the EPF Act.  It also took note of the letter dated 03.04.2001 written by the appellant, with the appellant’s balance sheet seized for the financial years 2003¬04, 2004-05,   2005¬06 and 2006¬07 showing payment of wages running into lacs.

The Court, hence, concluded that the appellant has more than 20 employees on its roles and hence, provisions of the Act therefore necessarily apply to it.

[Panther Security Services Pvt. Ltd. v. Employees’ Provident Fund Organisation, 2020 SCC OnLine SC 981, decided on 02.12.2020]


*Justice Navin Sinha has penned this judgment. Read more about him here

For appellant: Advocate S. Sunil

For Respondent: Advocate Divya Roy

[1] “G.S.R. No. 805 : In exercise of the powers conferred by clause   (b)   of   sub-section   (3)   of   Section   1   of   the Employees’ Provident Funds and Family Pension Fund Act, 1952 (19 of 1952), the Central Government hereby specifies that with effect from the  31st May, 1971, the said Act shall apply to every establishment rendering expert services such as supplying of personnel, advice on domestic or departmental enquiries, special services in rectifying pilferage, thefts and payroll, irregularities to factories   and   establishments   on   certain   terms   and conditions   as   may   be   agreed   upon   between   the establishment and the establishment rendering expert services and employing twenty or more persons.”
Case BriefsHigh Courts

Gauhati High Court: Achintya Malla Bujor Barua J., while reiterating the principle laid down by Supreme Court, with respect to calculation and payment of the retirement benefits, issued necessary directions to the respondent authorities.

Background

The petitioner working as an Assistant Teacher in Lower Muolhoi School in the district Dima Hasao, Assam, retired from service on 31-03-2018. After his retirement, when the matter was processed for payment of his pensionary benefits, the communication dated 05-06-2020 of the Finance and Accounts Officer in the office of the Directorate of Pension, Assam was made addressed to the District Primary Education Officer, Haflong, Assam, by which, it was provided that during his service tenure, the petitioner was paid a salary higher than his actual scale. Accordingly, by the said communication, the District Primary Education Officer, Haflong, Assam was required to do the needful. The said communication has been assailed in the present writ petition on the ground that as per the law laid down by the Supreme Court, recovery from the pensionary benefits cannot be made in respect of any salary that was paid to an employee during his service period for no fault of his own.

Observation

The Court observed, “The law in this respect has been settled by the Supreme Court in Shyam Babu Verma v. Union of India, (1994) 2 SCC 521 and State of Punjab v. Rafiq Masih, (2015) 4 SCC 334, wherein it had been held that in the event an excess salary is paid to an employee during his/her service tenure because of no fault of his/her, such excess payment cannot be recovered from the retirement benefits.”  Further, it was said, “(…) the ends of justice would be met if the authorities in the Pension Department make an assessment as to whether there was any contribution on the part of the petitioner in receiving such excess salary during his service tenure. In the event, if it is found that there was no such contribution from the petitioner leading to such excess payment, the authorities shall not insist upon the recovery in view of the law laid down by the Hon’ble Supreme Court as indicated above.”

Decision

Allowing the present petition, the Court stated the correct payment of the petitioner according to which the pension was to be calculated and not the higher pay which he derived during his service. Moreover, directions were given to conduct the assessment within a period of two months so to effectuate the entire process.[Hrangthalien Tamhrang v. State of Assam, 2020 SCC OnLine Gau 4499, decided on 24-11 2020]


Sakshi Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Himachal Pradesh High Court: A Division Bench of Tarlok Singh Chauhan and Jyotsna Rewal Dua, JJ., dismissing the present claim against the increment accrued post-retirement, reiterated the effect of relevant Pension Rules and settled precedents.

Brief Facts

Petitioner was appointed as Technical Assistant in the Department of Industries (Geological wing) on 01-03-1968 in the pay scale of Rs 250-550. He retired as Senior Hydrogeologist on 31-03-2003 in the pay scale of Rs. 10025- 15100. His grievance is that even after rendering twelve months of continuous service from 01-04-2002 to 31-03-2003, he has been retired without giving him the benefit of one increment which was due to him on 01-04-2003. A petition in this regard was moved before the Himachal Pradesh State Administrative Tribunal which was later dismissed by an order dated, 08-08-2016. Aggrieved by the same, the petitioner herein prays for the following reliefs, namely;

  1. To quash the order dated 08-08-2016, by the State Administrative Tribunal as it failed to give due consideration to the grounds raised by the petitioner.
  2. To strike down the offending part of impugned provision of R 56(a) of Fundamental Rules being unconstitutional to the extent it causes undue hardship and is discriminatory to the petitioner as it deprives him from getting the benefit of due and legitimate one increment even after rendering 12 months continuous and uninterrupted service for the reason that his date of birth falls on 1st April which also happens to be his date of next increment.
  3. Alternatively, the respondents may kindly be directed to grant necessary relaxations in favour of the petitioner by invoking the provision of FR 5-A as undue recurring financial hardship has been caused to the petitioner in his pension and pensionary benefits and thereby enabling the petitioner to get the benefits of one increment since the petitioner has already rendered 12 months continuous and uninterrupted service in the time scale of his post but on superannuation, has been illegally deprived of the benefits of one increment due to the wrong interpretation of FR 56(a) by the Respondents, with a further prayer to grant consequential necessary benefits flowing therefrom alongwith admissible interest on the arrears accruing thereto.

Contentions

Counsel for the petitioner, B. Nandan Vashishta and Rajesh Kumar, placed reliance on a ruling by the High Court of Madras, P. Ayyamperumal v. Registrar, CAT, WP No. 15732 of 2017, wherein it was observed, that on completing one year of service from 01-07-2012 to 30-06-2013, the petitioner therein became entitled to the benefit of increment which accrued to him ‘during that period’ though the increment fell due on 01-07-2013 when he was not in service. The counsel also brought into light that the Supreme Court dismissed an SLP and later a review petition against the same, insisting upon the rightful claim of the petitioner. He further pressed upon the observation of Delhi High Court in Gopal Singh v. Union of India, 1969 SCC OnLine Del 53 whereby relying upon the aforementioned judgment, the writ petition was allowed and respondents were directed to grant notional increment to the petitioner with effect from 01-07-2019 for the service rendered by him from 01-07-2018 to 30-06-2019.

Additional Advocate General, Vinod Thakur and Shiv Pal Manhans, placed reliance upon a decision rendered on 29-07-2020 by the Madhya Pradesh High Court in Madhav Singh Tomar v. M.P. Power Management Co. Ltd., WP No. 9940 of 2020, wherein relying upon an earlier order passed by a Division Bench of the High Court in writ appeal No. 717 of 2016, the writ petition claiming next annual increment due immediately after retirement was dismissed keeping in view the Fundamental Rules governing service conditions of the petitioner. Reliance was also placed upon a Full Bench decision of Andhra Pradesh High Court delivered on 27-01-2005 in Principal Accountant General v. C. Subba Rao, where the impugned order of the Tribunal holding the employee entitled to an annual increment that fell due on 01-01-2002 after his retirement on 31-12-2001, was quashed and set aside.

Observations

The Court made significant observations including relevant rules and cases;

FR 56 (a); a Government servant retires on the last day of the month in which he attains the age of superannuation. In case his date of birth is the first of a month, then he shall retire on the afternoon of the last day of the preceding month on attaining age of superannuation. Petitioner with the date of birth as 01-04-1945 had retired from sevice on 31-03-2003 on attaining 58 years of age.

FR 17(1); provides that an officer shall begin to draw pay and allowances attached to the post with effect from the date when he assumes duties of that post and shall cease to draw them as soon as he ceases to discharge those duties.

Rule 5 of CCS Pension Rules; says that date of retirement of the person shall be treated as his last working day and his claim to pension shall be regulated by provisions of rules in force at the time of his retirement.

Rule 83(1) of CCS Pension Rules; pension becomes payable from the date a Government servant ceases to be borne on the establishment.

Rule 34 of CCS Pension Rules provides for determination of average emoluments with reference to emoluments drawn by a Government servant during last ten months of the service. Under Rule 33 ‘emoluments’ means basic pay as defined in Rule 9(21)(a)(i) of Fundamental Rules which a Government servant was receiving immediately before his retirement.

Denying any claims of availing the increment by the petitioner, subsequently accrued, the Court observed, “The petitioner was not on duty on 01-04-2003. Increment can be drawn only when an employee is on duty. The increment in terms of FR 24 & 26 did not become due during the period of service of the petitioner. Therefore, increment on 01-04-2003 cannot be sanctioned in favour of petitioner on the ground that he had completed twelve months of continuous service. The date of increment falls due on the first day of the succeeding month after the retirement. Petitioner retired on the basic pay drawn by him on 31-03-2003, that is, his date of retirement. His pension has to be determined accordingly. Petitioner had become pensioner on 01-04-2003. He cannot be held entitled to any increment which may fall due post his retirement. He is entitled only to those increments which fall due to him during the period of his service.”

With respect to the contention of the petitioner that the judgment by the Madras High Court was upheld by the Supreme Court, by rejecting SLP as well as Review petition against the same, the Court observed, “It is settled law that an order refusing Special Leave to Appeal may either be a speaking order or the non speaking one. In either case, it will not attract doctrine of merger. In the instant case, the order refusing Special Leave to Appeal is non-speaking, therefore, it does not stand substituted in place of the order under challenge. In this regard, it would be appropriate to refer to paragraph 44 of the judgment passed by apex Court in (2000) 6 SCC 359 titled Kunhayammed v. State of Kerala, relied upon in (2019) 4 SCC 376, titled Khoday Distilleries Ltd. v. Sri Mahadeshwara Sahakara Sakkare Karkhane Ltd., Kollegal.”

The Court further cited State of Orissa v. Dhirendra Sunder Das, (2019) 6 SCC 270, where the principle of law was reiterated that dismissal of an SLP in limine without giving any detailed reason does not constitute any declaration of law or a binding precedent under Article 141.

Decision

Dismissing the present petition on lack of merits, the Court concurred with the findings of the tribunal and further took up the task of clarifying the effect of the dismissal of SLP, in the absence of any speaking order.[Hari Prakash v. State of Himachal Pradesh, 2020 SCC OnLine HP 2362, decided on 06-11-2020]


Sakshi Shukla, Editorial Assistant has put this story together

Op EdsOP. ED.

Background

In the background of the unprecedented slump that the Indian economy is currently going through on account of the Covid-19 pandemic and the resulting lockdowns, it had become imperative to bring in some long awaited changes to the Indian labour laws to provide businesses with more leeway to operate and adapt to stay competitive in the global markets. This was also necessary from the point of view of making India self-sufficient. But as the three Codes (recently passed by Parliament in the absence of any significant opposition) set about to revamp the entire Indian Labour Law, what does it entail for the Indian industry and its workmen? In this article we shall be taking a closer look at the Industrial Relations Code, 2020[1].

The Industrial Relations Code, 2020 seeks to consolidate and modify the laws relating to trade unions, conditions of employment in industrial establishments or undertakings and investigation and settlement of industrial disputes. It shall replace the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947.

Changes to legal terms

Interestingly, the explanation for the term “appropriate government” mentions that the Central Government shall continue to be the appropriate Government for the Central Public Sector Undertakings even where the Government has divested its stake to below 50%. This could potentially provide a pathway to the Government to undertake further divestment in the PSUs in the future while assuaging the redressal demands of the PSUs employees.

The scope of coverage has been widened to include all employees including supervisory, managerial and administrative staff that were up to now excluded from the ambit of the Industrial Disputes Act. The scope of the term “employer” has also been widened to include almost all employer including contractors and legal representatives of a deceased employer, which were up to now not a part of the said term under the Industrial Disputes Act. Similarly, the definition of the term “workers” (which replaces the term “workman” used in the Industrial Disputes Act) also includes persons employed in supervisory work and even includes working journalists and sales promotion employees. By extension, the widening of these terms also serves to extend the ambit of “industrial dispute” itself.

The definition of the term “industry” has also been elaborated upon to include most enterprises for production, supply and distribution of goods while excluding charitable organisation, sovereign function of the Government and domestic workers.

The definitions of “lay-off”, “lock out” and “retrenchment” have not seen much of a significant change. The term “strike” will now include absenteeism or refusal to work of more than 50% workers. The term “wages” for the purposes of this Code will now constitute basic pay, dearness allowance and retaining allowance, while specifically excluding bonus, HRA, PF contribution of employer, conveyance allowance, overtime allowance, commission, gratuity and any other retirement benefits.

A positive role for the Trade Unions

The new Code prescribes that to be registered and recognised any Trade Union must have (and must continue to have post registration) at least the subscription of 10% workmen or 100 workmen employed in an industrial establishment, whichever is less. Despite being considered body corporates unto themselves the Trade Unions shall be excluded from the purview of the Societies Registration Act, 1860, the Cooperative Societies Act, 1912, the Multi-State Cooperative Societies Act, 2002 and the Companies Act, 2013.

Despite retaining the concept of a Works Committee, the new Code also recognises the recognised Trade Union (the Trade Union with the subscription of 51% or more workers in case of more than one Trade Union) as the sole negotiating union or the negotiating council. Disputes between rival Trade Unions or between Trade Unions and its constituent workers will be adjudicated by the Tribunal. As a precautionary measure to the overtaking of such Trade Unions by external vested interest or mere political aspirants, the Code provides that at least a half of the office bearers of the Trade Union in an unorganised sector shall be persons actually employed in the establishment or the industry.

The Standing Orders under the new law shall apply to every industrial establishment with 300 or more workers (up from the Industrial Disputes Act where this threshold was 100).  The Central Government shall make model standing orders and the employers shall follow suit with their draft standing orders based thereupon within 6 months therefrom. The Trade Unions shall be consulted therein and the draft Standing Orders shall then be certified by a Certifying Officer.

Push for Alternate Dispute Redressal mechanisms  

In my opinion, where the new Code truly shines is in its significant push to avail multiple avenues outside of the traditional labour courts for grievance and dispute redressal. A laudable initiative in the new Code is the provision for the constitution of a Grievance Redressal Committee in all establishments employing 20 or more workers as an in-house redressal mechanism for fast-track redressal (within 30 days) of the grievances of individual workers. The appeal there from goes to the Conciliation Officer. The appeal from the Conciliation Officer in turn goes to the Industrial Tribunal.

Further, in keeping with the times, the new Code has done well to introduce Alternate Dispute Resolution in the Industrial Dispute Redressal mechanism by providing for the provision for voluntary reference and redressal of disputes by way of arbitration. The new Code further provides recognition to settlements (both within and outside conciliation proceedings) and arbitration awards by making them binding on the parties involved.

Besides the usual Industrial Tribunal, the new Code also provides for the establishment of one or more National Industrial Tribunals which shall adjudicate such disputes (by consensus), that are deemed to be of national importance or concern establishments in more than one States, as are referred to it. A very important aspect of the new Code is that it shall also affect all pending disputes which will be transferred to the appropriate forum under the new Code and adjudicated either de novo or from the present stage as deemed fit.

An interesting aspect of the Code is that the appropriate State Government or the Central Government gets a choice to exercise veto on enforcement of any award on “public grounds affecting the national economy or social justice” subject to the subsequent approval of such executive action by the State Legislature or Parliament as the case may be.

The new Code also allows workers to recover money from their employers by initiating proceedings in the prescribed manner with the appropriate Government.

Hire and Fire or Misfire?

The general provisions for continuous service, lay-offs, retrenchment and notice before the closure of business remain more or less the same in the new Code as in the Industrial Disputes Act, 1947. However, where the new Code is a game-changer is in providing employers with more flexibility in hiring and firing by way of appointing fixed-term workers. At the same time, the new Code seeks to balance the scales by extending all the statutory benefits including gratuity to such fixed-term employees as are employed for over a year.

In another much-needed initiative, the new Code also provides for setting up a worker’s reskilling fund for retrenched workers with contribution from both, the employers as well as the appropriate Government.

While the new Code provides a breather for businesses by raising the threshold for the Standing Orders and also takes some laudable initiatives on the disputes redressal side, the major provisions pertaining to layoffs, lockouts and retrenchment (outside of the fixed term workers) remain largely the same and hence, continue to be severely regulated. Given the largely dismal outlook of the economy in the near future and the loss of several huge investments opportunities in the recent past, I fear that this may not be enough and that more sacrifices may be required for the revival of the badly hit Indian industry and to ensure that it is able to compete competitively with the more favourably placed economies for a bigger pie of the global trade of goods and services going forward.


* Advocate-on-Record, Supreme Court of India and disputes resolution lawyer at various Commercial Courts and Industrial Tribunals in Delhi. Author can be reached at gaggar.aditya@gmail.com

[1] The Industrial Relations Code, 2020  

Case BriefsHigh Courts

Madhya Pradesh High Court: G.S. Ahluwalia, J., dismissed the petition finding no ground for interference in the impugned order.

The petitioner has approached the Court under Article 226 of the Constitution of India whereby she has challenged the impugned order dated 15-06-2020. The petitioner who is holding the position of ANM has been transferred from Sub-Health Centre, Bhageh to Sub-Health Center, Chhimak.

Counsel for the petitioner, Prashant Sharma has relied heavily on the circular dated 6-9-2018 issued by the Secretariat Health Services, State of M.P. stating that no ANM should be attached to any other health organisation or headquarter other than their original place of posting.

The counsel for the respondent, Anmol Khedkar has contended that the transfer was requested by the petitioner herself and that she has been transferred within the tehsil.

While perusing the facts and averments made by the parties, the Court observed that the petitioner has completed 7 years of service at Sub-Health Centre, Bhageh and that petitioner’s services are required at Sub-Health Centre, Chhimak in wake of the ongoing Covid19 pandemic. The crux of the aforementioned circular is that ANM’s should continue working at their places of posting and they should not be attached to any other headquarter or health organisation. The circular in no way acts as a roadblock in the process of transfer of an ANM. Besides, the petitioner has been transferred within the same tehsil.

Eventually, the Court held that it cannot act as an appellate authority in cases of routine transfer or transfer based on an exigency. Decisions revolving around the transfer of employees fall within the domain of the authorities. No employee can make demands for posting at a particular place.

Hence, the Court dismissed the petition in the situation where there’s an absence of justifiable reasons for interference with the impugned order.[Sarita Vimal v. State of M.P., 2020 SCC OnLine MP 1597, decided on 22-07-2020]


Yashvardhan Shrivastav, Editorial Assistant has put this story together

Case BriefsHigh Courts

Telangana High Court: A Division Bench of Raghvendra Singh Chauhan, CJ and T. Vinod Kumar, J., while addressing a writ appeal observed that the High Court cannot decide whether the FIR is a false or frivolous one.

Facts

In the instant appeal, as per the facts of the case, petitioner was appointed as Village Assistant and later in February 2020 was promoted to Senior Assistant. By order dated 31-07-2020, the petitioner was suspended from his service.

On being aggrieved with the above, petitioner filed the petition before the Single Judge and further the same was dismissed and hence the appeal before this Court.

Contentions 

Petitioner’s Counsel, P.V. Ramana submitted that the allegations made against the petitioner relate to the year 2005-2006 and hence suspending the petitioner after a lapse of 14 years will not serve any fruitful purpose.

The alleged complaint made by Guda Rajeswar to the police on the basis of which a criminal case had been registered against the petitioner is also of the period 2005-2006. Also, the case made out on the said allegations was lost by the complainant before the revenue authorities. Hence the FIR is a false and frivolous one.

Decision and Analysis

Rule 8 of the Telangana Civil Services (Classification, Control and Appeal) Rules, 1991 states that an employee can be suspended either if a Criminal Case is pending or a Departmental Enquiry is contemplated.

In the present matter, Article of charges had been furnished on 31-07-2020 to the petitioner, which clearly points that a departmental enquiry has commenced.

It has also been noted that an FIR was registered against the petitioner for offences under Sections 420, 468, 471, 506 read with 34 of Penal Code, 1860.

Hence on referring the stated rule, it is clear that both the conditions prescribed under Rule 8 are fulfilled in the present matter.

High Court also noted that to determine whether FIR is false or frivolous is not to be decided by this Court. The veracity and authenticity of the FIR are to be decided by the Trial Court.

Bench while analysing the matter also stated that “suspension is not a punishment.”

Suspension is merely suspending the relationship between the employer and an employee.

Court stated that since the petitioner is facing both the Criminal Trial and a Departmental Enquiry, the employer cannot be saddled with such an employee.

In view of the above Court dismissed the appeal on finding no merits. [P. Narasimha Chary v. State of Telangana, 2020 SCC OnLine TS 1021, decided on 16-09-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): A Division Bench of Anil Choudhary (Judicial Member) and C.L. Mahar (Technical Member), allowed an appeal filed by the appellant who was an employee, “H‟ Cardholder working with Customs House Agent — Commercial Clearing Agencies Pvt. Limited, at the relevant time. In the impugned order against the importer, it was held that they have mis-declared in the Bill of Entry and prohibited goods were ordered to be confiscated absolutely and other goods allowed to be redeemed on payment of fine, along with demand of custom duty and penalty.

On specific information that Brij Enterprises were indulging into the smuggling of goods by misdeclaration of description, nature and quantity of the goods. The customs officer detained one container which was imported from Singapore. As per the bill of entry filed through CHA – M/s Commercial Clearing Agencies Pvt. Limited, the declared goods were 144 air conditioners as per the bill of entry. However, on inspection, it was found to contain 65 air conditioners, 940 cylinders of “Refrigerant 22” gas (prohibited goods) and 315 Sony Play Stations. Counsel for the appellant, Ms Reena Rawat urged that no case of collusion or aiding and abetting is made out against the appellant – employee of the CHA company. At best, the appellant has been working as an employee and no case is made out against him, for making any personal gain over and above his salary. Further, the non-joining of the investigation by the Director of the CHA company speaks that the CHA company is responsible and not this appellant.

The Tribunal while allowing the appeal set aside the penalty imposed under Section 112 (a) of the Customs Act and stated that no case of aiding and abetting is made out against this appellant. Appellant as an employee of the CHA company was working as per the instructions given to him by his senior. There is no case made out of any abnormal gain by the appellant to indicate any collusion or abetment on his part with the importer of the consignment under dispute Shri Goyal and/or Shri Brijesh Mishra. [Rajesh Gaba v. Commr. of Customs, 2020 SCC OnLine CESTAT 164, decided on 10-09-2020]


Suchita Shukla, Editorial Assistant has put this story together

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Administrative Tribunal, Ernakulam: The Coram of Bidisha Banerjee (Judicial Member) and Nandita Chatterjee (Administrative Member) allowed the application granting desired relief to the ailing applicant.

The applicant has filed the present application seeking the disbursement of all the pensionary benefits with all consequential and incidental benefits due to him since his retirement and also in the future. The facts of the case are such that the applicant retired from the post of a police constable on 28-02-2017. He completed all the requisite formalities for disbursement of his post-retirement benefits. However, later he was informed that his service and office records were found to be incomplete and that his service register has been forwarded for verification meanwhile a recommendation for a provisional pension was made. Even after multiple representations for speedy disposal of all pensionary benefits, the same hasn’t been done by the respondent. Currently, the applicant is only drawing a provisional pension which is peanuts compared to what his actual monthly pension should be. Benefits to the tune of approximately Rs 30 lakhs are still due towards him from his employer department. The applicant has alleged that the delay in disbursement of full pension and terminal benefits is not due to the fault of the applicant but due to the laxity and callousness of the concerned higher officers. The applicant contends that he cannot be penalised for his senior’s fault. The applicant is a heart patient and he has landed in a tight spot both economically and mentally.

The applicant had earlier filed OA No. 56 of 2018 before this tribunal for a direction to the respondents to disburse the balance retirement benefits and balance pensionary benefits and the tribunal had disposed of the above OA by directing the respondents to consider his representation and dispose of the same by a speaking order within a period of two months. The respondent has still not initiated any steps to release the full pension.

Counsel for the respondent, S. Manu has submitted a detailed reply contending that the applicant is not entitled to receive the benefits prayed for. Upon verification of the service records, several discrepancies were revealed which indicated that the applicant used to habitually overstay his leave on several occasions without the permission of the competent authority and subsequently he was warned on several occasions. It is contended that there’s no deliberate delay on part of the respondents in sanctioning the pension. The applicant’s leave account is incomplete and there is a break in his service. Pensionary benefits can only be settled once the process of verifying the service record of the applicant is complete.

On careful perusal of the facts, circumstances and the arguments advanced this tribunal observed that it is evident that there is no serious dispute preventing the disbursement of full pension to the applicant. The applicant is entitled to receive his post-retirement benefits without any further delay.  The delay has been caused due to the actions of the department which failed to collect the details of applicant’s leave and period of overstay. More than two years have passed since his retirement and only a meager pension has been paid to him in this duration.

The tribunal finds no dispute regarding applicant’s eligibility of pension and the respondents have been directed to complete all the document-related formalities within a period of three months from the date of receipt of a copy of this order and pass necessary orders releasing the pensionary benefits entitled to the applicant. In the event of failure, the respondents will be liable to pay interest @ 12% per annum for the delay in granting the pensionary benefits to the applicant.

In view of the above, the present application has been allowed by the tribunal in applicant’s favour. [K. Koya v. Superintendent of Police, 2020 SCC OnLine CAT 333, decided on 07-09-2020]

Case BriefsHigh Courts

Punjab and Haryana High Court: While deliberating over a matter of wrongful termination of a public servant’s services, Anil Kshetarpal, J., allowed the writ petition granting relief to the petitioner and observed that, “Mere observation that the departmental inquiry at this stage does not appear to be justified is not sufficient to invoke powers under Clause (b) of the 2nd Proviso to Article 311(2) of the Constitution of India.”

The factual matrix in the present matter is such that the present writ petition has been filed by the petitioner under Article 226 of the Constitution of India for issuance of a writ in the nature of certiorari for quashing of order dated 04-03-2020 passed by the respondent, dismissing the petitioner from service under Clause (b) of the 2nd Proviso to Article 311(2) of the Constitution of India. The petitioner was dismissed from the post of Constable in Punjab police basis his involvement in two grave offences. The first offence is that of rape and subsequent blackmail and FIR No. 14 had been registered in connection with the same. The second offence dates back to the time when the police party went in for the arrest of the petitioner when the petitioner ran away after he was apprehended. Protesting the same, a group of villagers entered into a scuffle with the police personnel and indulged in vandalism. As a result of the attack, a police official endured serious physical harm and another’s wallet and id card was snatched from him.

As a result of the above-stated acts, the respondent invoked Clause (b) of the 2nd Proviso to Article 311(2) of the Constitution of India to remove/dismiss the petitioner from service while doing away with the requirement of holding a departmental inquiry.

Counsel for the petitioner, Abhimanyu Tiwari has contended that the respondent did not state the reasons behind the act of dispensing with the requirement of holding inquiry and hence the order is unsustainable in the eyes of law. Several judgments were cited by him in order to substantiate his claim including that of Union of India v. Tulsi Ram Patel, (1985) 3 SCC 398 and Reena Rani v. State of Haryana, (2012) 10 SCC 21.

Counsel for the respondent, Anu Chatrath, in his defence has cited the judgments passed in Kuldip Singh v. State of Punjab, (1996) 10 SCC 659 and Chandigarh Administration, U.T. Chandigarh v. Ajay Manchanda, (1996) 3 SCC 753.

The question of law that came before this Court for resolution is-

“Whether in absence of sufficient reasons recorded in writing dispensing with the requirement of holding inquiry in the alleged misconduct of employee by the authority, order of dismissal/removal from service of employee, passed in exercise of the powers under Clause (b) of the 2nd Proviso to Article 311(2) of the Constitution of India is sustainable?”

The Court examined the order dated 04-03-2020 carefully and observed that it is evident that no reason whatsoever has been recorded as to why holding of the inquiry is not reasonably practicable. The only thing mentioned is that “it does not seem justified to conduct departmental inquiry at this stage”. The court is of the opinion that Article 311 of the Constitution has been insufficiently complied with.

Article 311 clearly states that authority is empowered to dismiss or remove a person or to demote him but the reasons as to why it’s not reasonably practicable to conduct an inquiry have to be recorded in writing. In the present case, no such reasons have been stated by the respondents.

In both the FIR’s where the petitioner has been accused, it has to be established beyond a reasonable doubt that the accused committed those acts and that the concerned police department left no stone unturned to unearth the truth.

The Court is of the opinion that both the cases cited by the respondent’s counsel are irrelevant in the present case’s perspective.

In view of all the above, the Court allowed the writ petition directing the reinstatement of petitioner along with consequential benefits. However, the respondent is free to initiate any departmental inquiry with respect to the petitioner’s misconduct.[Sarabjit Singh v. State of Punjab,  2020 SCC OnLine P&H 1404, decided on 01-09-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Administrative Tribunal, Ernakulam: The Coram of P. Madhavan (Judicial Member) and K.V. Eapen (Administrative Member) disposed the application denying relief to the applicant finding no valid reason to interfere in Government’s order.

The applicant is an employee of the Indian Railways currently working as Chief Engineer Construction at Ernakulam. The applicant has claimed an out of the ordinary situation whereby he’s been subjected to frequent transfers without valid grounds. The applicant was deputed for 3 years to KRDC in 2017 and then he joined as Deputy Chief Engineer, Chennai on 09-05-2019. Later, he was promoted and posted as Chief Engineer Mangalore on 19-08-2019. Thereafter he was transferred to Ernakulam vide order dated 04-11-2019. The applicant has undergone 3 transfers within a period of one year which allegedly, is against Railway norms. The latest development is where he’s been transferred and posted as ADRM, Trivandrum (Annexure A1) in response to which he filed a representation but before deciding the same a transfer and posting order (Annexure A2) has been served to him. The applicant has claimed that the frequent transfers are arbitrary and against Railway transfer guidelines and has hence prayed for quashing of Annexure 1 & 2 and order for retention as Chief Engineer Ernakulam.

The applicant has contended that transfer to Trivandrum is a mutual one and that a minimum tenure of 2 years and maximum of 5 years at a posting is the usual practice in Railways.

Counsel for the respondent, Girija K. Kopal has stated in her reply that the applicant holds a transferable post and is obligated to be transferred to any place in the country. There’s no transgression of any statute or rule. It’s submitted that the applicant had no objections to his other transfers. All the transfers mentioned by the applicant are of routine nature resulting out of exigencies. No illegality or arbitrariness has been committed by the respondents.

The tribunal on careful perusal of the facts and arguments advances observed, that the transfer orders of early postings were a result of administrative exigencies prevailing at that point. The contention of the applicant that the transfers are against norms and guidelines has been dismissed by the tribunal stating that it’s evident from the guidelines that there’s nothing preventing the transfers in case of administrative emergencies as the applicant is an ex-cadre employee.

The tribunal relied on the case of S.R. Venkataraman v. Union of India, (1979) 2 SCC 491 holding that courts can interfere in transfers only if its the result of a malafide exercise of authority or violation of statutory or policy provisions or if it’s done as a punitive measure or if there’s a contravention of natural justice. It has been remarked that, an employee has no vested right to hold on to a particular post when he is transferred to another post.

In view of the above, the tribunal found no reason to interfere in the transfer order basis the lack of merit in contentions raised by the applicant’s counsel alleging the transfer to be arbitrary and malafide.

Resultantly the application was disposed of, permitting the applicant to file a fresh representation to the competent authority for transfer to a convenient place, if exercised. [P.T. Benny v. Union of India, 2020 SCC OnLine CAT 305, decided on 13-08-2020]

COVID 19Hot Off The PressNews

Death of Coal India employees due to Corona Pandemic will be treated as accidental death and the kins of employee will get the same financial benefits as they get in the case of accidental death during duty, said Union Minister of Coal and Mines Shri Pralhad Joshi. The kins of employees deceased from Covid so far will also get protected.

“Putting their lives in danger Coal Indians have performed a tremendous job during Covid pandemic. They are relentlessly doing a good job. That’s why I proudly call them Coal Warriors. I have announced this benefit just to recognize their invaluable service to the nation.”, Shri Joshi said.

The Minister further said that commercial coal mining is going to fuel development in Jharkhand in coming years. Under the commercial auction of 09 coal mines in Jharkhand, the State is expected to earn more than Rs.3,200 crores in 1-year as revenue and almost 50,000 additional employment will be generated for the people of the State. Additionally, Jharkhand’s contribution to DMF will be around Rs 17 crores which can be used for development of regions around coalfield areas.

“Response of commercial mining auction is very good. Specially in Jharkhand we are getting 5 to 10 bidders for almost all of the mines put on auction. The state will get benefited from it and it will chart a new chapter of growth in the state.”, Shri Joshi said.

Stressing upon the need of commencement of commercial coal mining he said India still meets a fifth of its annual coal requirement through imports. Once commercial mining picks up, imports by independent thermal power plants and captive power plants are likely to be substituted, saving in potential import bill of around Rs 30,000 crore per every year. It will help in providing direct and indirect employment to more than 3 lakh manpower.


Ministry of Coal

[Press Release dt. 30-07-2020]

[Source: PIB]

Case BriefsHigh Courts

Madhya Pradesh High Court: Vandana Kasrekar, J., stayed the operation of the impugned order and directed the respondents to decide the representation of the petitioner expeditiously. 

In the pertinent case, the petitioner moved the High Court challenging the transfer order, by which his services were transferred from Primary School, Bherupada to Primary School, Himmatkhedi.

The counsel for the petitioner challenged the transfer order on the ground that the transfer order has been issued during the mid-academic session. He further relied upon the judgment passed by the Supreme Court in the case of Director of School Education v.  O. Karuppa Thevan, 1994 Supp (2) SCC 666, in which it was held that the employee should not be transferred during the mid-academic session unless administrative exigency requires. He further submitted that in the present case, it has not been mentioned in the transfer order, for which administrative exigency, the petitioner has been transferred. 

In light of the above, the Court stayed the operation of the transfer order and directed the respondent to consider and decide the representation of the petitioner in accordance with the law, within a period of one month from the date of receipt of a certified copy of this order. [Kailash Chand Aak v. State of M.P., 2019 SCC OnLine MP 3982, decided on 18-12-2019]

Case BriefsHigh Courts

Jharkhand High Court: Sanjay Kumar Dwivedi, J. heard a writ petition that sought to quash the order passed by the respondent whereby the petitioner had been inflicted with the punishment of stoppage of annual increment for six months in Departmental Proceeding.

The petitioner was a constable and was accused of coercion and it was alleged that he forcibly took a thumb impression on a blank paper. He was also accused of several offences under different sections of Penal Code, 1860. Pursuant to that charge, Enquiry Officer was appointed and departmental proceeding was initiated against the petitioner. The charges against the petitioner were proved and an enquiry report was not supplied to him in the first instance but along with the second show cause notice.

Learned counsel for petitioner, D.K. Dubey, contended that the lady who made the accusation told the Conducting Officer that she had not given any application in the hands of the petitioner nor did she know him. Furthermore, he argued that she had not made any complaint against the petitioner. Counsel, thus, pleaded that if there were no accusations against the petitioner, then the order was fit to be quashed.

Learned counsel for respondent, Rajesh Kumar Singh, submitted that impression was taken on a blank paper by the accused and she had stated that in the complaint petition, no explanation was given to her for the same. Also, it came later to her knowledge that no complaint was lodged against the petitioner. The counsel, further, submitted that the statement given by the lady that no complaint was filed against the accused was made under coercion.

The Court observed that the enquiry officer took into account the two complaints which were brought on record in the writ petition and the enquiry officer came to a conclusion that usage of coercion to obtain the statement in favor of the petitioner could not be ruled out and therefore, the petitioner was held guilty. The Court remarked that there was no illegality in the inquiry report and punishment order was in accordance with the law. Moreover, the Court remarked that when an employee was dismissed or removed from service and the inquiry was set aside because the report is not furnished to him, the non-furnishing of the report would cause prejudice to him or might not affect the nature of punishment at all. However, in the instant case, the petitioner was not able to highlight what prejudice had been caused to him due to non-supply of the enquiry report. Hence, the writ petition was dismissed.[Amiruddin v. State of Jharkhand, Writ Petition (S) No. 3142 of 2014, decided on 20-06-2019]

Case BriefsSupreme Court

Supreme Court: Stating that the essential qualifications for appointment to a post are for the employer to decide, the bench of Arun Mishra and Navin Sinha, JJ said,

“The court cannot lay down the conditions of eligibility, much less can it delve into the issue with regard to desirable qualifications being at par with the essential eligibility by an interpretive re­writing of the advertisement. Questions of equivalence will also fall outside the domain of judicial review.”

The Court further held that if the language of the advertisement and the rules are clear, the Court cannot sit in judgment over the same. If there is an ambiguity in the advertisement or it is contrary to any rules or law the matter has to go back to the appointing authority after appropriate orders, to proceed in accordance with law.

“In no case can the Court, in the garb of judicial review, sit in the chair of the appointing authority to decide what is best for the employer and interpret the conditions of the advertisement contrary to the plain language of the same.”

The Court was hearing the appeal filed against the order of the High Court holding that candidates possessing the requisite years of experience in research and development of drugs and testing of the same, are also eligible to be considered for appointment to the post of Assistant Commissioner (Drugs) and Drug Inspectors under separate advertisements dated 04.01.2012 and 31.03.2015.

It was submitted before the Court that the academic qualifications coupled with the requisite years of practical experience in the manufacturing and testing of drugs were essential qualifications for appointment. Research experience in a research and development laboratory was a desirable qualification which may have entitled such a person to a preference only. The latter experience could not be equated with and considered to be at par with the essential eligibility to be considered for appointment. It was argued that the High Court erred in misreading the advertisement to redefine the desirable qualification as an essential qualification by itself.

The Court said that the plain reading of the advertisement provides that a degree in Pharmacy or Pharmaceutical Chemistry or in medicine with specialization in Clinical Pharmacology or Microbiology from a University coupled with the requisite years of experience thereafter in manufacturing or testing of drugs were essential qualifications. Preference could be given to those possessing the additional desirable qualification of research experience in the synthesis and testing of drugs in a research laboratory.

The Court also said that

“an expert committee may have been constituted and which examined the documents before calling the candidates for interview cannot operate as an estoppel against the clear terms of the advertisement to render an ineligible candidate eligible for appointment.”

[Maharashtra Public Service Commission v. Sandeep Shriram Warade, 2019 SCC OnLine SC 652, decided on 03.05.2019]