Case Note & Summary
The dispute arose from the termination of employment of a Deputy Head Clerk by the Nagpur Electric Light and Power Company. The employee challenged the orders of suspension and termination by way of a writ petition under Article 226 of the Constitution before the Nagpur High Court. The company had Standing Orders duly approved under the Industrial Employment (Standing Orders) Act, 1946 and the Central Provinces and Berar Industrial Disputes Settlement Act, 1947. The employee had joined as a typist in 1936, risen to Deputy Head Clerk in 1947, and was drawing a basic salary of Rs 245 per month since 1952. In late 1955, he was called upon to explain certain irregularities regarding electricity bills and double adjustments in accounts. On 5 December 1955, he was suspended pending investigation, and on 7 December 1955, his services were terminated under Standing Order No.16(1) with effect from 31 January 1956, without disclosure of reasons. He challenged these orders, contending that the Standing Orders did not apply to him because no ticket had been issued and his ticket number was not in the departmental muster. The single Judge of the High Court dismissed the petition, holding that the employee was not covered by the Standing Orders and that his remedy lay in damages. However, a Division Bench in Letters Patent Appeal reversed, holding that the Standing Orders did not apply but the employee was nonetheless an 'employee' under the local Act, and that termination without statutory authority was void; it quashed the orders and awarded back wages. The company then appealed to the Supreme Court. The core legal issue was whether the Standing Orders applied to the respondent. The Court examined Standing Order No.2(a), which defined 'employees' as all persons employed in certain departments whose names and ticket numbers were included in departmental musters. It also noted that the Standing Orders defined 'workman' and required every workman to have a ticket. Applying the principles from Cortis v. Kent Water Works and Perumal Goundan, the Court held that the phrase 'whose names and ticket numbers are included' should be read as 'whose names and ticket numbers, if any, are included'. This interpretation avoided absurdity and was consistent with the distinction between employees and workmen. The Court reasoned that while every workman must have a ticket, an employee need not possess one; possession of a ticket was not an essential characteristic of an employee. Since the Standing Orders were made for the benefit of all employees, they applied to the respondent even though no ticket was issued to him. Consequently, the termination of his service under Standing Order No.16(1) was valid. The Court therefore allowed the appeal, set aside the Division Bench judgment, and dismissed the writ petition.
Headnote
A) Labour Law - Standing Orders - Interpretation of Definition of 'Employee' - Industrial Employment (Standing Orders) Act, 1946, Section 3; Central Provinces and Berar Industrial Disputes Settlement Act, 1947, Section 30 - The phrase 'whose names and ticket numbers are included in the departmental musters' in Standing Order No.2(a) was read as 'whose names and ticket numbers, if any, are included' so absence of a ticket number did not exclude an employee - The respondent, a Deputy Head Clerk, had no ticket and no ticket number in the muster, but the Court held that he was still an employee covered by the Standing Orders; Held that the contrary view of the Division Bench was erroneous. (Paras 1-11) B) Labour Law - Employees and Workmen - Distinction and Ticket Requirement - Industrial Employment (Standing Orders) Act, 1946; Central Provinces and Berar Industrial Disputes Settlement Act, 1947 - Under the Standing Orders, every workman must have a ticket, but not every employee is a workman; there may be employees without tickets, and possession of a ticket is not essential characteristic of an employee - The respondent was an employee, not necessarily a workman, hence the ticket requirement did not bar applicability of the Standing Orders; Held that the Standing Orders applied to him. (Paras 1-11) C) Labour Law - Applicability of Standing Orders - Coverage of Employees - Industrial Employment (Standing Orders) Act, 1946; Central Provinces and Berar Industrial Disputes Settlement Act, 1947 - Standing Orders apply to all employees for whose benefit they have been made - Termination of services in accordance with Standing Order No.16(1) was valid and not ultra vires - Held that the writ petition must fail because the Standing Orders applied and the termination was lawful. (Paras 1-11) D) Service Law - Termination of Service - Remedy for Wrongful Dismissal - Industrial Employment (Standing Orders) Act, 1946; Central Provinces and Berar Industrial Disputes Settlement Act, 1947 - If the Standing Orders did not apply, the relationship would be contractual and the only remedy would be a suit for damages for wrongful dismissal, not a writ under Article 226 of the Constitution - Since the Standing Orders applied, the termination under Standing Order No.16(1) was valid - Held that the High Court's interference was unjustified. (Paras 1-11)
Issue of Consideration
Whether the Standing Orders of the Company applied to the respondent even though no ticket was issued to him and his ticket number was not included in the departmental muster; whether termination of his service under Standing Order No.16(1) was valid; whether the High Court could grant relief under Article 226 if the Standing Orders did not apply.
Final Decision
The Supreme Court allowed the appeal, set aside the Division Bench judgment, and held that the Standing Orders applied to the respondent; termination of service under Standing Order No.16(1) was valid; the writ petition filed by the respondent must fail.
Law Points
- Legal points not extracted
- Standing Orders apply to all employees for whose benefit they have been made
- possession of ticket is not an essential characteristic of an employee
- the words 'whose names and ticket numbers are included in the departmental musters' must be read as 'whose names and ticket numbers
- if any
- are included'
- a distinction exists between employees and workmen under the Standing Orders
- termination of service under Standing Order No.16(1) is valid when the employee is covered by the Standing Orders
- if Standing Orders do not apply
- the remedy is damages for wrongful dismissal
- not a writ under Article 226.
