S. GOVINDARAJUversusK.S.R.T.C. & ANR.

                                                                   509

                                                                          A
                               S. WVINDARAJU
                                      v.
                             K.S.R.T.C. &ANR.

                               APRIL 15, 1986
                                                                          B
                  [K,N. SINGH AND 0, CHINNAf'l'A REDDY, JJ.]

 ~-~      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 e;cplanation - Entitlement          c
  ~and necessity of.

» Y           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/re11K1ved from service as unsuitable for the post, he   0
       will forfeit his chance for the appointment in terms of his
       selection.

          The appellant was selected for appointment as Conductor
  I'- inthe Karnataka State Road Transport Corporation - a
    statutory authority constituted under the Road Transport              E
    Corporation Act 1950. His name was placed on the select list
    prepared by the Selection Colllllittee constituted under the
    Karnataka State Road Transport Corporation (Cadre and
 "f Recruitment) Regulation 1982, He was not given a regular
    appointment but, he was appointed to work aa Conductor in
 -¥ temporary vacancy. lie continued to work for a period of llKlre       F
  ' 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            G
    deleted from the select list.

              The appellant challenged the validity of teI'llination
       order before the High Court in a Writ Petition. The High Court
       di81d.aeed the Writ Petition holding that the order of
       tend.nation was made in terms under which employment waa given     H
    510                  SUPREME COURT REPORTS        [1986] 2 s.c.R.

A
    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
B   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]
c
          2. The Karnataka Road Transport Corporation (Cadre and .J
    Recruitment) Regulations 1982 which regulate the conditions of
    service of its employees, are statutory in nature having been lf \.
    framed under s. 45(2)(c) of the Road Transport Corporation
    Act. Once a candidate is selected and his name is included in
D   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.li
E   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 'Y
F   right to be considered for employment, opportunity of
    explanation 1111St be afforded to the employee concerned. -~
    [513 D-E; 513H; 514 A-C]

          CIVIL APPELLATE    JURISDICTION        Ci vi 1   Appeal   No.
    1339(NL) of 1986.
G
          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.
H
          G.B. Pai, N.D.B. Raju, Miss Deepa and Vineet Kumar for
    the Respondent.
                           S, GOVINDARAJU v. K.S.R.T.C.   [SINGH, J,]       511

                      The Judgment of the Court was delivered by                  A

                      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       B
                termination of service on the ground that it was violative of
                Sec. 25F cf 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          c
          1' list prepared by the Selection Collllllittee constituted under the
              Karnataka State Road Transport Corporation (Cadre and
           Y 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 11K>re
              than 240 days. While he was working as conductor his services       D
              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
           t. shall stand deleted from the select list. The appellant
              challenged the validity of termination order before the High        E
              Court of Karnataka by means of a petition under Art. 226 of
              the Constitutien 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       F
      .. .., was given to him and it did not a11K>unt 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     G
                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-      H
    512                    SUPREME COURT REPORTS       fl986J 2 s.c.R.

A
    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. Sbri. N. Sondra Money, A.I.R. 1976 s.c.
    1111; Santosh Gupta v. State Banlt of Patiala, A.I.R. 1980 s.c.
    1219; Mohan Lal v. Management B,E., A.I.R, 1981 S.C. 1253 and
B   Management LS.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
C   retirement of workman; or (b) retirement of the workman on
    reaching the age of superannuation if the contract of an _,f
    employment between the employer and the workman concerned
    cc.ntains a stipulation in that behalf or (c) termination of 'f
    the service of a workman on the ground of continued ill
    health. By the amending Act 49 of 1984 a new clause (bb) was
D   added to Sec. 2(00). 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 ..
E             not include -

               (a) x

               (b) x
                       x

                       x
                              x

                              x
                                   x

                                   x
                                         .x

                                         x
                                              x

                                              x
                                                   x

                                                   x
                                                                              -
F             "(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".
G
          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(00). The validity of Section 2(oo)(bb) was not challenged
H   before us. The learned counsel for the appellant urged that if
               S. GOVINDARAJU v. K.S.R,T.C,    [SINGH, J,]       513

                                                                        A
....;, the view of the High Court is accepted it would enable
       unscrupulous emloyers to provide a stipulation 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 Act to the          B
       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 Le. the
       termination order being violative of principles of natural
       justice.

           The Karnataka State Road Transport Corporation is a          c
).. 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              D
     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       E
      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           F
 't- terminated/removed from service as unsuitable for the post he
      will forfeit his chance for the appointment in terus 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     G
      appointment. Once a candidate is selected and his name is
      included in the select list for appointment in accordance with
r"f 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             H
    514                  SUPREME COURT REPORTS     (1986] 2 S.C.R.

A
    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
B   natural justice. Before the services of an employee are
    terminated, resulting into forfeiture of his right to be
    considered for employement, opportunity of explanation ID.1st 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     ~
c   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 'Y 4
    paid his back wages and other benefits. The appeal is allowed
    with costs.
D


    M.L.A.                                         Appeal allowed.