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PETITIONER: S. GOVINDARAJU

       Vs.

RESPONDENT: K.S.R.T.C. & ANR.

DATE OF JUDGMENT15/04/1986

BENCH: SINGH, K.N. (J) BENCH: SINGH, K.N. (J) REDDY, O. CHINNAPPA (J)

CITATION:  1986 AIR 1680            1986 SCR  (2) 509  1986 SCC  (3) 273        1986 SCALE  (1)794

ACT:      Karnataka   Road   Transport   Corporation   (Cadre   & Recruitment) Regulations,  1982 -  Regulation 10(5)  - State Road Transport Corporation - Conductor - Services terminated without enquiry  -  Legality  of  -  Whether  principles  of natural justice  violated -  Opportunity  of  explanation  - Entitlement and necessity of.

HEADNOTE:      Regulation 10(5)  of the  Regulations  (Karnataka  Road Transport Corporation  (Cadre and  Recruitment)  Regulations 1982  provides  that  during  temporary/Badli  employment  a candidate if  terminated/removed from  service as unsuitable for the post, he will forfeit his chance for the appointment in terms of his selection.      The appellant was selected for appointment as Conductor in the  Karnataka  State  Road  Transport  Corporation  -  a statutory authority  constituted under  the  Road  Transport Corporation Act 1950. His name was placed on the select list prepared by  the Selection  Committee constituted  under the Karnataka  State   Road  Transport  Corporation  (Cadre  and Recruitment) Regulation  1982. He  was not  given a  regular appointment but,  he was  appointed to  work as Conductor in temporary vacancy. He continued to work for a period of more than 240  days. While  he  was  working  as  Conductor,  his services were  terminated  under  Regulation  10(5)  of  the Regulations on  the ground of his being found unsuitable for the post  without giving any opportunity of explanation. The termination order  further stated  that the  appellant would forfeit his chance for appointment in terms of selection and his name shall stand deleted from the select list.      The appellant  challenged the  validity of  termination order before  the High  Court in  a Writ  Petition. The High Court dismissed  the Writ Petition holding that the order of termination was  made in  terms under  which employment  was given 510 to him  and it  did not amount to retrenchment in view of s. 2(00)(bb) of the Industrial Disputes Act 1947.      Allowing the appeal, ^      HELD 1.  The appellant was not afforded any opportunity

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of explanation  before the  issue  of  the  impugned  order. Consequently, the  order is  rendered null  and  void  being inconsistent  with   the  principles   of  natural  justice. Therefore the  order of  the High Court as also the order of termination are set aside and the appellant shall be treated in service  and be  paid his  back wages and other benefits. [514 C-D]      2. The  Karnataka Road Transport Corporation (Cadre and Recruitment) Regulations  1982 which regulate the conditions of service  of its employees, are statutory in nature having been  framed   under  s.  45(2)(c)  of  the  Road  Transport Corporation Act.  Once a  candidate is selected and his name is included  in the  select  list  in  accordance  with  the Regulations,  he   gets  a   right  to   be  considered  for appointment as  and when  vacancy arises.  On the removal of his name from Select List, serious consequences entail as he forfeits his  right to  employment  in  future.  In  such  a situation even  though the  Regulations do not stipulate for affording any  opportunity to the employee, the principle of natural justice would be attracted and the employee would be entitled  to   an  opportunity  of  explanation,  though  no elaborate inquiry  would be necessary. Giving an opportunity of explanation  would meet  the bare  minimal requirement of natural justice.  Before the  services of  an  employee  are terminated, resulting  into forfeiture  of his  right to  be considered for  employment, opportunity  of explanation must be afforded  to the  employee concerned. [513 D-E; 513H; 514 A-C]

JUDGMENT:      CIVIL  APPELLATE   JURISDICTION  :   Civil  Appeal  No. 1339(NL) of 1986.      From the  Judgment and  Order dated 19.6.85 in the High Court of Karnataka at Bangalore in W.P. No. 9171 of 1985.      R.K. Garg,  V. Laxminarayana  and  D.K.  Garg  for  the Appellant.      G.B. Pai,  N.D.B. Raju, Miss Deepa and Vineet Kumar for the Respondent. 511      The Judgment of the Court was delivered by      SINGH, J. Special Leave to appeal is granted.      This appeal  is directed  against the order of the High Court of Karnataka dismissing the respondents’ writ petition under Art.  226 of the Constitution challenging the order of termination of  service on  the ground that it was violative of Sec. 25F of the Industrial Disputes Act, 1947.      Briefly the  facts giving  rise to this appeal are that the appellant  was selected  for appointment as Conductor in the Karnataka  State Road  Transport Corporation constituted under the  Transport Act,  1950, his  name was placed on the select list  prepared by the Selection Committee constituted under the  Karnataka State Road Transport Corporation (Cadre and Recruitment) Regulation 1982. He was not given a regular appointment but  he was  appointed to  work as  conductor in temporary vacancy. He continued to work for a period of more than 240  days.  While  he  was  working  as  conductor  his services were  terminated by  the Order dt. 2-4/5 of 1985 on the ground  of his  being found unsuitable for the post. The termination order  further directed that the appellant would forfeit his chance for appointment in terms of selection and his name  shall stand  deleted from  the  select  list.  The appellant  challenged  the  validity  of  termination  order before the  High Court  of Karnataka  by means of a petition

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under Art.  226 of  the Constitution  on the ground that the order of  termination was  void and  illegal  for  the  non- compliance of Sec. 25F of the Industrial Disputes Act, 1947. A learned  Single Judge  of  the  High  Court  of  Karnataka rejected the  petition holding that the order of termination was made  in terms  under which  employment was given to him and it  did not  amount to  retrenchment  in  view  of  Sec. 2(oo)(bb) of the Act.      Section 25F  of the  Industrial Disputes  Act  provides that no  workman employed  in any  industry who  has been in continuous service  for not  less than  one  year  under  an employer shall  be retrenched  by that employer until he has been  paid   retrenchment  compensation   which   shall   be equivalent to  15 days  average pay for completing a year of service or  any part  thereof in excess of 6 months. Section 25F was designed by the Parliament to safeguard the interest of  employees.  The  statutory  requirement  of  payment  of compensation is a condi- 512 tion precedent  for the  retrenchment of  a workman  and any termination without  payment  would  make  the  retrenchment order invalid  and inoperative,  as has  been held  by  this Court in  State Bank  of India  v. Shri.  N.  Sundra  Money, A.I.R. 1976  S.C. 1111;  Santosh  Gupta  v.  State  Bank  of Patiala, A.I.R.  1980 S.C.  1219; Mohan  Lal  v.  Management B.E., A.I.R.  1981 S.C.  1253 and  Management K.S.R.T.C.  v. Baraiah, A.I.R. 1983 S.C. 1320.      Section 2(oo)  defines  retrenchment  which  means  the termination by  the employer  of a  workman for  any  reason whatsoever, otherwise  than as a punishment inflicted by way of disciplinary  action, but  does not include (a) voluntary retirement of  workman; or  (b) retirement of the workman on reaching the  age of  superannuation if  the contract  of an employment between  the employer  and the  workman concerned contains a  stipulation in that behalf or (c) termination of the service  of a  workman on  the ground  of continued  ill health. By the amending Act 49 of 1984 a new clause (bb) was added to Sec. 2(oo). The amended provision runs as under :           2(oo) "retrenchment"  means the termination by the           employer of  the service  of  a  workman  for  any           reason whatsoever,  otherwise than as a punishment           inflicted by  way of disciplinary action, but does           not include -           (a) x    x    x    x    x    x    x           (b) x    x    x    x    x    x    x           "(bb) termination of the service of the workman as           a result  of the  non-renewal of  the contract  of           employment between  the employer  and the  workman           concerned on  its expiry or of such contract being           terminated under  a  stipulation  in  that  behalf           contained therein; or".      The High Court held that since the appellant’s contract for employment  contained a  stipulation that  his  services could be  terminated at  any time,  the termination  did not amount to  retrenchment in view of the newly added exception to Sec.  2(oo). The  validity of  Section 2(oo)(bb)  was not challenged before  us. The learned counsel for the appellant urged that if 513 the view  of the  High Court  is accepted  it  would  enable unscrupulous emloyers  to  provide  a  stipullation  in  the contract of  service for  terminating the  employment of the employees to  escape the  rigorous of  Sec. 25F  of the Act. This would  further confer arbitrary powers on the employers which would  be destructive of the protection granted by the

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Act to  the employees.  We do  not consider  it necessary to express any  opinion on  this question as in our opinion the appellant is  entitled to  succeed on another short question i.e. the  termination order being violative of principles of natural justice.      The Karnataka  State Road  Transport Corporation  is  a statutory authority  constituted under  the  Road  Transport Corporation  Act,   1950.   The   Corporation   has   framed Regulations (Karnataka  Road Transport  Corporation Cadre  & Recruitment Regulations)  1982 regulating  the conditions of service of its employees. These regulations are statutory in nature having  been framed  under sec.  45(2)(c) of the Road Transport Corporation  Act.  Admittedly  the  appellant  was selected by  the Selection  Committee constituted  under the aforesaid Regulations  and his  name  was  included  in  the select list  prepared for  the  purpose  of  appointment  as Conductor as and when vacancy would arise. His name was also included in  the Badli  list of  workers  and  in  pursuance thereof he  was given  employement. There is no dispute that the appellant  was allowed to be in continuous service for a period of  more than one year and while he was in continuous service the  impugned order  of termination  was  issued  in accordance with  Regulation 10(5). The relevant provision of Regulation  10(5)   provides  that   during  temporary/Badli appointment a  candidate if  terminated/removed from service as unsuitable  for the  post he  will forfeit his chance for the appointment  in terms  of his  selection.  There  is  no dispute that the appellant’s services were terminated on the ground of his being found unsuitable for the appointment and as a  result of  which his  name was deleted from the select list, and  he forfeited  his chance  for appointment. Once a candidate is selected and his name is included in the select list for  appointment in  accordance with the Regulations he gets a  right to  be considered  for appointment as and when vacancy arises.  On the  removal of his name from the select list serious  consequence entail as he forfeits his right to employment in future. In such a 514 situation even  though the  Regulations do not stipulate for affording any opportuniry to the employee, the principles of natural justice would be attracted and the employee would be entitled  to   an  opportunity  of  explanation,  though  no elaborate enquiry  would be necessary. Giving an opportunity of explanation  would meet  the bare  minimal requirement of natural justice.  Before the  services of  an  employee  are terminated, resulting  into forfeiture  of his  right to  be considered for  employement, opportunity of explanation must be afforded to the employee concerned. The appellant was not afforded any  opportunity of explanation before the issue of the impugned  order consequently  the order is rendered null and void  being inconsistent  with the principles of natural justice. We  accordingly allow  the appeal and set aside the order of  the High  Court and  also the order of termination and direct  that the  appellant shall  be treated in service and be paid his back wages and other benefits. The appeal is allowed with costs. M.L.A.                                       Appeal allowed. 515