Holding

Extra‑Departmental Agents are civil servants governed by statutory service rules and not workmen; therefore the Industrial Disputes Act does not apply to their termination.

Summary

The case concerned several Extra‑Departmental Agents (EDAs) of the Postal Department who were terminated without notice. The appellants argued that EDAs are appointed under specific service rules and are not permanent employees, therefore the Postal Department is not an "industry" and the agents are not "workmen" under the Industrial Disputes Act, 1947. The respondents contended that the Department is an industry and the agents are workmen, so termination required compliance with Section 25F of the Act. The Supreme Court held that EDAs are civil servants governed by statutory service and conduct rules, not workmen, and the Postal Department does not fall within the definition of an industry for the purposes of the Act. Consequently, termination must be effected under the service rules, with payment of one month’s allowance and dearness allowance, and the Tribunal’s order directing termination under the Act was set aside. The Court allowed some of the appeals, directing consideration of the respondents for future vacancies, while dismissing other appeals where the respondents had long service.

Issues considered

Whether Extra‑Departmental Agents of the Postal Department are "workmen" within the meaning of the Industrial Disputes Act, 1947.
Whether the Postal Department constitutes an "industry" under the Act.
Whether termination of such agents must comply with Section 25F of the Industrial Disputes Act.
Whether the service rules governing EDAs provide a separate procedure for termination and payment of allowance.

Legislation cited

Industrial Disputes Act, 1947s. 25F

Subjects

Industrial Disputes ActWorkmen definitionExtra‑Departmental AgentsPostal DepartmentTermination of serviceCivil servantService rulesIndustry definition

Judgment

I
..(

- SUB-DIVISIONAL INSPECTOR OF POST,
VAIKAM AND ORS. ETC.
A
v.
THEYYAM JOSEPH ETC.

FEBRUARY 2, 1996
B
- jK. RAMASWAMY AND G.B. PATI'ANAIK, JJ.]

Se1vice Law :

Postal Department-Extra Depa1tmental Staff Service Rules-Rules 6 C
& 7-Extra Depa1tmental Agents are Civil Servants regulated by conduct
Rules-Not workmen attracting the provisions of Industrial Disputes
Act-771erefore temiination of se1vices under the provisions of the Act not
justified-Since the Persons were appointed de hors the rules, entitled to
payment of one month allowance plus DA.-Could apply against vacancy
alising in future and should be considered-In one appeal since the employee D
has been working since 1983, T1ibunal's order not inteifered with--lndustrial
Disputes Act, 1947.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3385-86
of 1996 Etc. Etc.
E
From the Judgment and Order dated 27.6.90 of the Central Ad-
ministrative Tribunal, Ernakulam Bench Kerala, in O.A. No. 49/90 and
Order dated 26.10.90 in R.A. No. 107/90.

V.R. Reddy, Additional Solicitor General, N.N. Goswami, T.C. Shar-
ma, Hemant Sharma, C.V.S. Rao, A.D.N. Rao, Mrs. Anil Katiyar for the F
appellants.

A.S. Nambiar, P.K. Manohar, Ms. Shanta Vasudevan, Ms. Malini
Podwal and Amlan Ghosh for the Respondents.

The following Order of the Court was delivered : G

Leave granted.

We have heard the learned counsel on both sides.

Shri N.G. Malik, E.D. Packer was recruited on September 21, 1991 H
93
94 SUPREME COURT REPORTS [1996] 2 S.C.R.

A and sent for training from September 23, 1991 to October 2, 1991. The
respondent came to be appointed as a substitute w.e.f. September 21, 1991
without observing any formality of appointment, as a stop-gap arrange-
ment. It would appear that N.G. Malik had not reported for duty after the
training and the respondent continued in the post of E.D. Packer. On
August 2, 1993, without notice, he was terminated from service. He ap-
B proached the CAT, Ahmedabad Bench in O.S. No. 51/1994 and same are
the facts in all other cases. -
The Tribunal by its impugned order dated May 12, 1994 allowed the
case, set aside the orders of termination of Sailesh Kumar on the ground
C that the appellant is an industry and the respondent is a workman governed
by the Industrial Disputes Act, 1947 (for short, 'the Act'). Under Section
25F, no notice was issued terminating the service nor retrenchment com-
pensation was paid, therefore, the respondent is entitled to reinstatement
and it would be open to the appellant to take action against him according
D to the relevant provisions of the Act. Thus these appeals by special leave.
Similar views are expressed by all the 'Tribunals covered in the batch.

Shri Goswami, learned senior counsel for the appellants, contended
that appointment of these Extra-Departmental Agents are regulated under
the statutory instructions issued by the Director general of Postal and
E Telecommunication from time to time. Being governed by those statutory
rules, they are not permanent employees. They are only part-time
employees on contract basis subject to the conditions mentioned therein.
Therefore, neither the appellant is an industry nor is the respondent a
workmen under the provisions of the Act. The Tribunal, therefore, was
p · wrong in its finding that the provisions of the Act are attracted. The
learned counsel for the respondent and also Sri Nambiar, counsel appear-
ing for the other respondents, contended that the counsel who appeared
for Union of India before the Tribunal have conceded that the appellant
is in industry and, therefore, the Tribunal was right in its conclusion that
the procedure prescribed in the Act shall be followed. Since no notice
G under Section 25F of the Act was given, the termination of the service is
illegal and, therefore, is consistent with law.

Having regard to the contentions, the question arises whether the
appellant is an Industry? India as a sovereign socialist, secular democratic
H republic has to establish an egalitarian social order under rule of law. The
I
-1..

SUB-DIVNL. INSPECTOR OF POST v. THEYYAM JOSEPH 95

_..:q ....
welfare measures partake the character of sovereign functions and the A
traditional duty to maintain law and order is no longer the concept of the
State. Directive principles of State policy enjoin on the State diverse duties
under part IV of the Constitution and the performance of the duties are
constitutional functions. One of the duties of the State is to provide
telecommunication service to the general public and an amenity, and so is
B
an essential part of the sovereign functions of the State as a welfare State.
It is not, therefore, an industry.

The appointment of the respondent is governed by the Rules in
Section III of the compilation of Swamy's service Rules for Extra-
Departmental Staff in Postal Department. The Rules provide the method C
of recruitment thereunder. The age qualification has been prescribed
between 18 to 65 years. The educational qualifications have been
prescribed with. Matriculation as minimum qualification for Extra-
Departmental ED Sub-Postmasters and ED Branch Postmasters. VIII
Standard as minimum educational qualification has been prescribed for D
_, ED Delivery Agents, ED stamp Vendors and all other categories of EDAs
and preference is given to the candidates with Matriculation qualification.
Income limit and holding of property have been regulated in Rule 3
thereof. It is mentioned that the persons who take over the agency must be
one who has an adequate means of livelihood and is a resident of the place
as mentioned in the Rules. The persons are selected under the specified E
conditions, any appointment made is in the nature of a contract liable to
be terminated by notice given in writing. Sub-rules (3) to (5) prescribe the
verification of the antecedents and medical examination etc. Rule 6
provides that employment to disabled ex-service personnel is to be given.
Rule 7 gives preference to the SC and ST in appointments. Rule 8 finds F
the percentage of posts for the recruitment of the Scheduled Caste and
Scheduled Tribe candidates. Rule 9 gives right to appoint even the teachers
as Extra-Departmental Agents, Rule 10 prescribes the method of appoint-
ment of the teachers as Extra-Departmental Agents. Rule 11 prohibits
employment of near relation in the same office. Rule 12 prescribes appoint-
ment of ED Branch Post Master by Inspectors. Rule 13 prescribes G
provisional appointment of Extra Departmental Agents.

The scale of pay has been prescribed in Section V and for Calcula-
tion of Consolidate Allowance instructions are issued from time to time
under Rule 2.1 dealing with Extra Departmental Sub-Postmasters/ED H
96 SUPREME COURT REPORTS [1996] 2 S.C.R.

A Stores/ED Sub-record Clerks. The basic allowance payable to them shall
be subject to a minimum of Rs. 385 P.M. and maximum of Rs. 620 P.M.
The workload of them has been mentioned in Rule 2.1 (b)(c) (d), Rule 6
prescribes for Office Maintenance Allowance and Rule 5 for cycle al-
lowance. Rule 7 relates to Fixed Stationary Charge. It would thus be seen
that payment of salary has been regulated under these rules elaborated in
B further rules.

Section II provides for EDA Conduct & Service Rules. Rule 6 deals
-
with power of termination and reads as under :

c "6. Tennination of Services. - (a) The services of an employee who
has not already rendered more than three years' continuous service
from the date of his appointment shall be liable to termination at
any time by a notice in writing given either by the employee to the
appointing authority or by the appointing authority to the
employee;
D
(b) the period of such notice shall be one month :

Provided that the service of any such employee may be terminated
forthwith and on such termination, the employee shall be. entitled
to claim a sum equivalent to the amount of his basic allowance
E
plus Dearness allowance for the period of the notice at the same
rates at the which he was drawing them immediately before the
termination of his services, or, as the case may be, for the period
by which such notice falls short of one month.

F Note. - Where the intend effect of such termination has to be
immediate, it should ·be mentioned that one month's basic al-
lowance plus Dearness Allowance is being remitted to the ED
Agent in lieu of the notice of one month through money order." -
Rule 7 prescribes the nature of the penalties which reads as under :
G
"7. Nature of penalties - The following penalties may, for good and
sufficient reasons arid as hereinafter provided, be imposed on an
employee by the appointing authority, namely :

H (i) Censure;
SUB-DIVNL. INSPECTOR OF POST v. THEYYAM JOSEPH 97

(ii) Debarring of ED Agents from appearing in the recruitment A
examination for the post of postman and/or from being considered
for recruitment as Postal Assistants/Sorting Assistants for a period
of one year or two years or for a period not exceeding three years;

(iii) Debarring of ED Agents from being considered for recruit-
ment of Group 'D' for a period not exceeding three years;
B

(iv) Recovery from allowance of the whole or part of any pecuniary
loss caused to the Government by negligence or breach of orders;

(v) Removal from service which shall not be a disqualification for C
future employment;

(vi) Dismissal from service which shall ordinarily be a disqualifica-
tion for future employment".

It would thus be seen that the method of recruitment, the conditions D
of ser:vice, the scale of pay and the conduct Rules regulating the service
conditions of ED Agents are governed by the statutory regulation. It is now
settled law of this Court that these employees are civil servants regulated
by these conduct rules. Therefore, by necessary implication, they do not
belong to the category of workmen attracting the provisions of the Act. The E
approach adopted by the Tribunal, therefore, is clearly illegal.

It is seen that the respondent was appointed as a substitute to the
regular candidate who did not ultimately turn up for duty after training.
The respondent having been appointed and having worked de hors the rule, F
therefore, remains to be an ad hoc Extra Departmental Packer. He will be
entitled under the conduct Rule 6 to the payment of the amount to be
calculated for one month allowance plus D.A. The same shall be paid. The
Tribunal was wholly wrong in directing the appellant to terminate the
services in accordance with the provisions of the Act. The respondent is at
liberty to apply for, along with other candidates, when any vacancy arises G
and is filled up. The appellant is directed to consider his case which will
also be done according to the rules. He may be considered if he is found
eligible and may be appointed to the post per rules.

The appeals are accordingly allowed. H
98 SUPREME COURT REPORTS [1996) 2 S.C.R.

A CA. No. 3387/96 (@ SLP (C) No. 2593/94)

Leave granted.

The facts of this case are that the respondent was selected on regular
basis as substitute to Extra-Departmental Packer at Calicut. While he was
B working, recruitment was made by calling the name from the Employment
Exchange. Since his name was not sponsored, he was terminated from
employment. In view of the ·reasoning given above, he being temporary
working candidate, he cannot get any right; however, his case is directed
to be considered along with other candidates and if he is found eligil\Ie, he
C may be considered and appointed according to the Rules.

The appeal is allowed.

CA. Nos. 3385-86 of 1996 (@ SLP Nos. 587-88/92)

Leave granted. Delay condoned.
D
· Though the principle of law laid down hereinbefore is settled, since
the respondent has been working since 1983, we decline to interfere with
the order passed by the Tribunal.

Appeals are accordingly dismissed. No costs.
E
G.N. Appeals dismissed.