P.M. THANKA v. TRACO CABLE COMPANY LTD.

the same are heard together and being disposed of by this common judgment.

2. The employer - respondent Company to retrench its 94 workmen, approached the government seeking its permission for the same. Out of 94 workmen, 74 persons were appointed to the post, on the basis of the advice given from the P.S.C. With respect to 20 remaining persons, as their post to which they were appointed, were not notified for the advice of P.S.C. The government refused the sanction, which sought by the 1st respondent Company under Section 25N of the Industrial Disputes Act. Admittedly the appointment of those 94 workers were made during the period between 1991 to 1996. As the government declined sanction, the 1st respondent Company filed a review petition before the government to review its earlier decision or to WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 2 refer the dispute to the Industrial Tribunal under Section 10 of the Industrial Disputes Act. Thus the government accepted the alternative proposal and accordingly referred the dispute for adjudication. Initially it was pending in the Industrial Tribunal, Alappuzha but subsequently the same withdrawn and transferred to the Industrial Tribunal, Kozhikode wherein dispute was registered as I.D No.11/97. The issue referred for adjudication was “ whether the orders issued by the Secretary, (Labour) specified authority under Section 25 N of the Industrial Disputes Act, in proceedings No. 31276/A2/96/LBR dated 26-12-1996 rejecting the proposal of the management of Traco Cable Company for retrenchment of 94 workmen mentioned in the application is justifiable. If not what is the remedy”.

3. During the enquiry in the tribunal, from the side of the management as well as the workmen, one witness each was examined. Ext M1 to M24 were marked from the side of the WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 3 management whereas Exts. W1 to W28 were marked from the side of the workmen as documentary evidence. The tribunal by its Award dated 16-6-1997 found that the proposed termination of service of 74 workmen covered by Ext.M12 do not amount to retrenchment and as such no need to obtain permission from the Government under Section 25 N of the I.D Act. With regard to 20 workmen covered by Ext.M13 application, the proposal for termination of them, it is found that the reasons stated for retrenchment are not genuine and adequate and the proposal for retrenchment is detrimental to the interest of the workmen concerned and thus the management is not entitled to get permission for retrenchment under Section 25 N of the ID Act.

4. The government subsequently issued an order G.O(MS) 99/2005/ID dated 29-7-2005 by which the government has decided to regularize the service of 19 persons mentioned therein prospectively from the date of that government order. The persons WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 4 shown as serial No. 1 and 8 in Ext.P9 are the petitioners in WP(C)No.22278 of 2006. Persons shown as serial Nos. 5,6 and 7 in the very same government order are the petitioners in WP(C) No.22263 of 2006. On the basis of the above government order the 1st respondent Company/management issued Ext P7 and P8 orders with respect to the petitioners in WP(C) No. 22278 of 2006 regularizing their service in that Company with effect from 29-7-2005, the date of the government order. Ext.P6 is the order issued in favour of the 1st petitioner in WP(C) 22263 of 2006 and similar orders issued to other petitioners also. Therefore in this writ petition also, the petitioners challenging the government order and the consequent order issued by the Company, giving effect to the regularization of the petitioner only prospectively with effect from the date of the above government order.

5. I have heard the learned Counsel Shri. Asok M. Cheriyan appearing for the petitioners in this writ petitions and also Shri. WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 5 E.K.Nandakumar, learned Counsel appearing for the 1st respondent Company and also the Govt. Pleader.

6. The learned Counsel for the petitioners submits that challenging Ext.P6 Award the 1st respondent management had approached this court on an earlier occasion by filing WP(C) No. 22043 of 1997 but subsequently the same was withdrawn and thus the award became final. Similarly the employees aggrieved by the Award, mainly the persons coming under the category of 74 in number approached this court by filing WP(C)No.3786 of 2006. The learned Counsel for the petitioners pointed out that by issuing government order No. G.O(MS) 99/2005/ID dated 29-7-2005 the government has decided to regularize the service of those 94 workmen, against whom the management initiated retrenchment proceedings. However against the decision of the government no permission was accorded, though the management approached the Labour Court, the Labour WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 6 Court as per its Award declared that the management need not obtain the permission from the government with respect to 74 workmen for retrenchment, whereas it is specifically held that the reason stated for terminating 20 workers are not genuine and found against the management. Therefore according to the learned Counsel for the petitioners, when the service of the petitioners in WP(C) No. 22278 of 2006 were confirmed by the management, the management cannot now on the basis of order issued by the government, regularize their service only prospectively and Ext.P7 and P8 orders of the management on the strength of Ext.P9 government order are per se illegal and arbitrary. Similar contention, are also taken with respect to WP(C)No.22263 of 2006. Ext.P7 government order and the order of the management that Ext.P6 are illegal and liable to be set aside

7. On the other hand Shri.E.K.Nandakumar, learned Counsel appearing for the 1st respondent Company management submitted WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 7 that the tribunal has not gone into the correctness of the appointment of the petitioners herein and there is no finding thereon. Therefore the petitioners herein cannot claim that their service is also liable to be regularized as in the case of the workers who are coming under the category of 74 workers. In support of the above contention, the learned Counsel placed reliance on the decision of the Apex Court in Post Master General, Kolkata and Others v. Tutu Das (Dutta) reported in 2007(5) SCC 317. According to the learned Counsel for the respondents the petitioners are not entitled to get the benefit of R1(b) government order for regularization of their service with retrospective effect.

8. I have carefully considered the arguments advanced by the learned Counsel appearing for the petitioners and the learned Counsel appearing for the 1st respondent management and also the learned Govt. Pleader and the materials on record.

9. Admittedly the entire issues originated from the move of the WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 8 management for retrenching 94 workers those who were appointed during the period between 1991 to 1996. Whatever may the reasons highlighted by the management for retrenchment of those workers, the government has declined sanction under Section 25 N of the I.D. Act. Consequent to which the management raised the dispute which ultimately culminated in the Award in question. The above industrial dispute as indicated arose out of the reference made by the government under Section 10 of the I.D Act and in order to answer the question, an elaborate inquiry was undertaken by the tribunal and thus after taking evidence, the tribunal came into certain specific finding on the basis of which the Award was passed. The petitioners now before this court are among the 20 workmen covered under Ext.M13 marked in the Award. It appears to me that it is unnecessary to refer the discussions and findings of the tribunal with respect to the other workers and their issues. WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 9

10. Under item No.2 in the Award, the tribunal has found and held that the proposal for termination of service of 20 workmen covered under Ext.M13 application are not coming within the purview of P.S.C and it is specifically found that since the reasons stated for their retrenchment are not genuine and adequate and the proposal for retrenchment is detrimental to the workmen concerned, the management is not entitled to get permission for their retrenchment under Section 25N of the I.D Act. Though the management had preferred a writ petition before this Court challenging the award including the findings which indicated above, the management has subsequently withdrawn the same. In this juncture it is relevant to note that the services of petitioners in WP(C)No. 22278 of 2006 were confirmed by the 1st respondent Company as per Exts.P3 and P5 orders respectively. Thus the service of the first petitioner was confirmed with effect from 1-3- 1995, whereas the service of the 2nd petitioner was confirmed with WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 10 effect from 9-3-1996. In the case of the service of the petitioners in WP(C) 22263/06 no such confirmation orders were issued, though they were in service, because of the matter was pending before the tribunal. But Ext.P4 order like memos were issued in the name of the petitioners therein extending their probation period. However the government as per the G.O indicated above has decided to regularize the service of the petitioners and other workmen only with prospective effect. The petitioners are aggrieved by the above decision of the government treating them, separately, from the 74 workmen and giving them regularization only prospectively, whereas 74 persons were given retrospective effect from the date of their initial appointment itself. Hence the above approach is highly discriminative and arbitrary.

11. According to the learned counsel, the petitioners are on better footing when compared with other 74 workers because even according to the Labour Court, those 74 workers can be retrenched WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 11 from the service even in the absence of sanction from the government. But the learned counsel pointed out that in the case of petitioners who come among 20 workmen has got better footing since the Labour Court has specifically found that the reason to retrench those 20 workers are not genuine and therefore according to the counsel for the petitioners, petitioners are also entitled to get same treatment as in the case of other 74 workmen who were given regularization with retrospective effect. It is also the contention of the learned counsel for the petitioners that the petitioners in WP(C) No.22263 of 2006 are also entitled to get confirmed their service as in the case of the petitioners in the other writ petitions, so also the consequent regularization.

12. Vehementaly opposing the above contention, the learned counsel for the respondent with the aid of the decision of the Apex Court in Post Master General, Kolkata and Ors. v. Tutu Das (Dutta) reported in 2007(5)SCC 317 submitted that no right is WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 12 created or vested with the petitioners as their appointment itself were illegal and therefore they are not entitled to claim regularization with similarly situated persons. Learned counsel submitted that equality is a positive concept and cannot inducted where any illegality has been committed or any legal right is established. The learned counsel invited my attention to para.12,13 and 14 of the above decision of the Apex Court. The relevant passage of the above decision referred by the learned Counsel are extracted hereunder: “ One aspect needs to be clarified. There may be cases where irregular appointments (not illegal appointment) as explained in S.V.Narayanappa, R.N.Nanjundappa and B.N.Nagarajan and referred to in para 15 above, of duly qualified persons in duly sanctioned vacant posts might have been made and the employees have continued to work for ten years or more but without the intervention of orders of the courts or of tribunals. The question of regularization of the services of such employees may have to be considered on merits in the light of the principles settled by this Court in the cases above referred to and in the light of this judgment. In that context, the Union of India, the State Government and their instrumentalities should take steps to regularise WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 13 as a one-time measure, the services of such irregularly appointed, who have worked for ten years or more in duly sanctioned posts but not under cover of orders of the courts or of tribunals and should further ensure that regular recruitments are undertaken to fill those vacant sanctioned posts that require to be filled up, in cases where temporary employees or daily wagers are being now employed. The process must be set in motion within six months from this date. We also clarify that regularization, if any already made, but not sub judice, need not be reopened based on this judgment, but there should be no further bypassing of the constitutional requirement and regularizing r making permanent, those not duly appointed as per the constitutional scheme”. Thus on the basis of the above decision the learned counsel submitted that when the petitioners' appointment and regularization itself was illegal, they cannot press into service Article 14 of the Constitution of India for getting an equal treatment given to certain other persons whose appointment were also illegal.

13. On a consideration of the particular facts and circumstances involved in the present case I am of the view that the dictum laid down by the Apex Court in the above decision is not applicable WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 14 and relevant in the present case. There the whole question was regularization of employees who completed 240 days and whether the claim of the appointment therein for getting same treatment as in the case of similarly situated persons in that case. Admittedly in the present case the issue is not regularization of the petitioners in their service on the other hand the giving of effect of regularization either retrospectively or prospectively.

14. The learned counsel for the petitioners vehementaly argued that the petitioners are on a better footing when compared with the 74 workmen who were sought to be retrenched by the management. With respect to their case the tribunal found that for retrenching them from service sanction from the government under Section 25 N were not required. But in the case of the petitioners, who are among the 20 workmen, the tribunal has held that the reason set forth by the management to retrench them from service are not genuine and adequate and the proposal for retrenchment is WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 15 detrimental to the interest of the workmen. So according to the learned counsel for the petitioners the petitioners are entitled to get a better treatment when compared with the 74 other workmen in whose favour regularization effected retrospectively. Thus according to the learned counsel there is a hostile discrimination.

15. As evidenced by the government order it is crystal clear that the petitioners and 20 workmen are coming under the same category as that of 74 workmen because the management sought sanction for retrenchment of all 94 workmen, as a category, whose appointments were made between the period from 1991 to 1996. When the government declined sanction the management raised dispute in which the whole 94 workers were party to the dispute. After that the government issued order of regularization of all the workers of the same category whose appointments were made between 1991 to 1996. The whole proceedings are initiated for the retrenchment of 94 workmen including the petitioners and now WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 16 the government has issued orders to regularize the service of the above 94 workers and therefore the petitioners cannot be singled out from the above 94 workmen and to deny them the benefit of regularization retrospectively. Denial of regularization with retrospective effect, will amount to hostile discrimination especially when such a benefit given to other 74 workmen who belonging to similar category.

16. It is also the argument of the learned counsel for the petitioners that as evidenced by Exts.P3 and P5, the service of the petitioners in WP(C)No.22278 of 2006 were ought to have been confirmed and regularized much earlier. In the case of the petitioners in WP(C)No. 22263 of 2006 their appointments were also similar to that of the petitioners in the former writ petition and therefore their service are also deserved to be regularized, after the expiry of one year probation period as in the case of the petitioners in the former cases, especially their confirmation orders WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 17 were not issued for the simple reason that the matter was pending in the tribunal. According to the learned counsel, by issuing the impugned government order not only denied the retrospective effect of regularization as given to other set of 74 workmen, but their right to regularization by virtue of the confirmation orders already issued has also taken away and fixed its operation prospectively.

17. In this juncture it is pertinent to note that the appointment of the petitioners and 16 other workmen were made to the post for which the P.S.C advice was not at all required. But in the case of 74 workmen as correctly held by the tribunal there were no requirement for obtaining government sanction as the post coming within the purview of P.S.C. Thus it is crystal clear that the appointments of petitioners were made to the post to which the management can make appointment according to their selection process, but with respect to the post to which the 74 persons were WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 18 appointed, selection can be made only through PSC. Regarding the appointment of the petitioners to their respective post, the tribunal in an unequivocal terms has held that the petitioners were not recruited from the candidates supplied by the employment exchange is not legal and justified and said lapse is not an illegality so as to vitiate the very recruitment itself. The relevant portion of discussion and findings of the tribunal is extracted hereunder: “ From the above principles it is crystal clear that recourse to employment Exchange is only directory and its non recorse is not a fundamental defect so as to invalidate the related recruitments. The Employment Exchange acts as a man power supplying agency for selection and it is the look out of the employer to select suitable personnels for them. The statute does not deal with any selection procedure. It is not mandatory that the employer shall select from persons from the list furnished by the Employment Exchange. Ext.M24 is a letter of management dated 9- 10-1996 addressed to Government. It indicates that the management has resorted to other sources also for recruitment of personnels in their company and recourse to Employment Exchange is treated only as one of the several sources of candidates for WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 19 recruitment. It can be seen from Ext.M12 that they have made recruitments from evictees and there are recruitments made to regular posts from casual workers. Ext.M18 to Ext.M21 are personal files relating to S/Sri.V.R. Subash, C.T.Sivadas Panicker, A.C Ravindra Panicker and P.N. Thampi, it can be seen there from that they have started their career as casual workers and continuing in various posts not coming within the purview of PSC on permanent basis at present. They were not appointed in consultation with Employment Exchange. But they are not soughtto be retrenched along with 20 workmen's covered by Ext.M13 application. These aspects of the workmen's contentions are admitted by MW1 also in his evidence. It indicates non reference to Employment Exchange in the matter of recruitment is not considered as an irregularity by the management themselves. The proposal for termination of service of workmen is originated from Ext.M15 letter of Government dated Said letter is concerned about the 10-7-1996. recruitment made to the posts coming within the purview of PSC and recruitments made without consulting them. Said letter is not concerned about the non recourse to Employment Exchange in the matter of retrenchment. Considering the legal and factual aspects involved in the matter, the proposed termination of 20 workmen on the sole ground that they were not recruited from the candidates furnished by Employment Exchange is not legal and justified. Said lapse is not an illegality so as to vitiate the very recruitment itself. The proposed termination does not come within any of the excluded cases of terminations WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 20 in the definition of retrenchment as per Section 2(oo) of the Industrial Disputes Act, 1947. It is the settled position of the Law that a termination of service for any reason whatsoever except the excluded categories in the definition amounts to retenchment vide State Bank of India Vs. Sundarmoney 1976 I LLJ 478 SC. Therefore the proposed termination amounts retrenchment as per the said definition. Next aspect to be considered is whether the action of the Secretary (Labour) in not granting permission is justifiable in the light of the relevant points as per Section 25N of the I.D Act. Sub Section (3) of Section 25 N provides as to how the Government (specified authority) shall dispose of the applications for permission for retrenchment. Section 25N(3): “Whether an application for permission under sub section (1) has been made the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the persons interested in such retrenchment, may having regard to the genuineness and adequacy of the reasons stated by the employer, the interest of the workmen and all other relevant factors, by order and for reasons to be recorded in writing grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen. WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 21 Above section indicates that the authority shall consider the genuineness and adequacy the reasons advanced by the employer in support of the proposed retrenchment, the interest of the workmen and all other relevant factors in this regard while dealing with an application for permission for retrenchment. I have already found that the proposed termination is not legal and justified, which finding holds good in the light of the above considerations also. The reasons advanced for retrenchment are not adequate and genuine in the facts and circumstances of the case. Interest of workmen is at stake. Therefore, the action of 20 workmen is justifiable. Point No.3 is found accordingly”.

18. Thus the tribunal is of the opinion that the petitioners recruitment though there is some irregularity, it is not an illegality so as to vitiate the very recruitment itself. It is pertinent to take note of the fact that though the management has preferred a writ petition against the findings of the tribunal, the same was subsequently withdrawn therefore all the findings of the tribunal has become final and now the management cannot plead against the findings of the tribunal. On examination of the matters under the above statutory and factual background it can be seen that the WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 22 petitioners appointment were recognized and their service were confirmed much earlier to the date of the government order by which the regularization given only with prospective effect or from the date of the government order. The severe consequence and the outcome of the above governmental action is the valuable right conferred upon the petitioners were taken away in arbitrary, unreasonably and illegally way. In short by issuing GO(MS) No.99/2005/ID dated 29-7-2005, the government has taken away the right of the petitioners with respect to the regularization of their service from the date of confirmation of their service in the case of petitioner in WP(C)No.22278 of 2006 and from the date of expiry of the probation period of the petitioners in WP(C) No.22263 of 2006. Thus the petitioners were denied regularization of their service with retrospective effect by singling out them from the 94 candidates those who are appointed during the period from 1991 to 1996 against whom retrenchment proceedings started, WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 23 while the others were given the benefit of regularization with retrospective effect.

19. In the light of the above facts, circumstances and discussions these writ petitions are allowed in the following terms: WP(C)No. 22263 of 2006: Exts.P7 and P8 are quashed to the extend it refuse to regularize the service of the petitioners with effect from the date of their service of initial appointment pursuant to Exts.P2 and P3. It is declared that the petitioners are entitled to be treated as regular employees of the 1st respondent Company with effect from the date of their joining duty pursuant to Exts.P2 and P3 with all consequential service benefits including pay and allowances. WP(C)No. 22278 of 2009 Exts.P7, P8 and P9 are quashed. The 1st respondent is directed to treat the petitioners as regular employees of the 1st respondent Company with effect from 1-3-1995 and 9-3-1996 WP(C) NO. 22263 OF 2006 & WP(C) NO. 22278 OF 2006 24 respectively for all purpose and provide them all consequential benefits including pay and allowances. Petitioners in both the writ petitions are directed to produce a copy of this judgment before the 1st respondent as early as possible and on receipt of such copy of this judgment the 1st respondent is directed to issue appropriate orders regularizing the service of the petitioners as indicated above and to quantify the arrears accordingly and to release the same to the petitioners immediately thereafter and at any rate the same shall be done within one month from the date of receipt of copy of this judgment. V.K. MOHANAN JUDGE