Supreme Court Upholds State's Termination of Work-Charged Employees Under CPWD Code. Interpretation of 'Dismissed' in Paragraph 11 Includes Termination Simpliciter, Not Limited to Punitive Dismissal for Serious Misconduct.

Case Note & Summary

The dispute arose from the construction of the Hirakud Dam in Orissa, which was initially entrusted by the State of Orissa to the Central Waterways, Irrigation and Navigation Commission as its agent. The Commission employed a large number of persons in the work-charged establishment, whose service conditions were governed by the Central Public Works Department Code of 1929. After the completion of the first stage of the project, the State decided to take over the project from the Commission with effect from April 1, 1960, and to proceed with the second stage through its own Public Works Department. The work-charged employees were given an option to continue working under the State on the same pay and allowances and subject to the Code; they agreed and were allowed to continue. However, the State later discovered a marked disparity between the pay, allowances, and conditions of service of these Hirakud Dam work-charged personnel and those of the State's own Public Works Department work-charged personnel, leading to complications. Acting on the recommendation of the Hirakud Control Board, the State terminated the services of the work-charged personnel with effect from March 31, 1963, by giving one month's notice. The State clarified that those who elected to be re-employed on the scales of pay and conditions of service of the State Public Works Department would be re-employed. Of the 2,300 personnel, 1,200 left their services and 1,100 accepted re-employment. The employees were paid an amount equal to retrenchment compensation or wages in lieu of notice. Subsequently, the personnel of the work-charged establishment raised an industrial dispute contesting the termination. Conciliation failed, and the State Government referred the dispute to the Industrial Tribunal, Orissa, on February 13, 1964. The Industrial Tribunal held that under paragraph 11 of the Code, the employees were entitled to remain in service until the completion of the project. The State then filed writ petitions under Articles 226 and 227 of the Constitution before the Orissa High Court. The High Court held that the termination was justified under paragraph 11 of the Code because it provided that members of the work-charged establishment were entitled, if dismissed otherwise than for serious misconduct before completion of the work, to a month's notice or a month's pay in lieu of notice. The employees appealed to the Supreme Court by special leave. The core legal issue was the interpretation of the word 'dismissed' in paragraph 11 of the Code. The appellants contended that 'dismissal' meant only dismissal for serious misconduct, relying on the interpretation of the word in the Government of India Act, 1935, Article 311 of the Constitution, and Service Rules. The State argued that paragraph 11 gave the employer the power to terminate services by notice or pay in lieu thereof. The Supreme Court, after examining the context of paragraph 11, held that the provision for automatic termination upon completion of work, the provision for voluntary resignation by an employee upon one month's notice, and the provision for one month's notice or pay when a workman is dismissed otherwise than for serious misconduct all indicated that the word 'dismissed' was not limited to punitive dismissal. The Court observed that it would be incongruous to hold that an employee could resign but the employer could not terminate, and that no decision had held that a dismissed workman would be entitled to a month's notice. The dictionary meaning of 'dismissed' as 'to send away, to discard, to remove from office or employment' supported the view that it meant termination of service. The Court applied Dr. Bool Chand v. Chancellor, Kurukshetra University and referred to Purshotam Lal Dhingra v. Union of India. Accordingly, the Supreme Court dismissed the appeal and upheld the High Court's decision that the expression 'dismissed' in paragraph 11 covered termination simpliciter as well as punitive dismissal, and the State had the power to terminate the services on one month's notice or pay in lieu thereof.

Headnote

Issue of Consideration

Final Decision

The Supreme Court dismissed the appeal, upholding the High Court's decision that the State had power to terminate the services of work-charged employees under paragraph 11 of the Central Public Works Department Code by giving one month's notice or a month's pay in lieu of notice. The word 'dismissed' includes termination simpliciter, not just punitive dismissal for serious misconduct.

Law Points