JUDGMENT V.G. Oak, J.
1. This writ petition arises out of an industrial dispute. The British India Corporation Limited, Kanpur, are the petitioner.
2. M.A. Khan, who is respondent 5 in this writ petition, was an employee of the petitioner. On 26 April 1954, the general manager of the petitioner-company issued a notice to M.A. Khan terminating his services with effect from 27 April 1954. The employee was to he given salary for one month in lieu of notice. M.A. Khan complained that the termination of his services was wrongful. The State Government referred the industrial dispute to Sri S.N. Saxena, adjudicator for arbitration. He gave an award on 10 June 1955 holding that M. A. Khan's discharge was unjustified. The adjudicator, therefore, directed the petitioner to pay M. A. Khan salary for sixteen months. An appeal filed by the petitioner was dismissed by the Labour Appellate Tribunal of India, Lucknow. The present writ petition is directed against the appellate order of the Labour Appellate Tribunal and against Sri Saxena's award.
3. We heard Sri R.S. Pathak for the petitioner. M.A. Khan filed a counter-affidavit sometime back. But today he is not represented before us. The learned standing counsel stated that he did not wish to oppose the writ petition.
4. We understand that the Labour Appellate Tribunal no longer sits at Lucknow. The question, therefore, arose whether we can Issue a writ to the Labour Appellate Tribunal. Sri Pathak stated that he did not now wish to get the Labour Appellate Tribunal's order quashed. The petitioner would be satisfied, if the adjudicator's award is quashed. We, therefore, considered the question whether it is possible to quash the adjudicator's award without quashing the Labour Appellate Tribunal's order passed in appeal. As explained by a Special Bench of the Calcutta High Court in East India Commercial Limited v. Collector of Customs and Anr. , It is possible to quash the adjudicator's award without quashing the Labour Appellate Tribunal's order. We shall, therefore, confine ourselves to the validity of Sri Saxena's award.
5. The question referred for arbitration was whether termination of service of M.A. Khan was wrongful or unjustified. There was a contract of service between the parties. Annexure A to the petition is a copy of that contract. Clause (4) of the agreement between the parties provided that the employee would be liable to be discharged forthwith without notice, if the branch has any suspicion of any dishonest action, etc., against the employee. Clause (5) of the agreement runs thus:
(5) that your employment may be terminated by the branch at any time by one month's notice in writing, or by the payment of one month's salary in lieu of notice....
Annexure B to the petition is a copy of the order of discharge, dated 26 April 1954. It appears that the order of discharge was passed as provided by Clause (5) of the agreement between the parties. Prima facie the order of discharge, dated 26 April 1954 is lawful.
6. The adjudicator considered whether the order of discharge could be held unjustified, in spite of the agreement between the parties. In support of his view that the discharge was wrongful, the adjudicator relied upon two circumstances. The first circumstance was that, the management entered into the agreement with Khan about ten months after he joined the service. Khan could not refuse to sign the agreement, for fear of loss of employment. The second ground given by the adjudicator was that Khan was discharged without any charge or enquiry. The question is whether for, the reasons given by the adjudicator, the order of discharge can be said to be wrongful.
7. The question how far industrial authorities can interfere with private contracts was discussed by their lordships of the Supreme Court in Rohtas Industries, Ltd. v Brijnandan Pandey and Ors. 1956--II L.L.J. 444 their lordships observed on p. 419:
The Courts reach their limit of power when they enforce contracts which the parties have made. An Industrial dispute is not so fettered and may create new obligations or modify contracts in the interest of industrial peace to protect, legitimate trade union activities and to protect unfair practice or victimization.
8. In J.K. Cotton Manufacturers, Ltd., Kanpur v. J.N. Tewari and Ors. one of us had occasion to consider whether anxiety of an employee to avoid unemployment is a ground for avoiding an agreement for service lawfully executed between the parties. It was observed on p. 642:
The fact that one party was in a strong bargaining position does not establish coercion, fraud or misrepresentation. So the contract could not be avoided on that ground.
9. The adjudicator remarked that the course of natural justice was denied to Khan. The award does not explain how the course of natural justice was denied. As already explained, the order of discharge was In terms of Clause (5) of the agreement between the parties. The adjudicator found that the employers had suspicion against Khan, and did not repose confidence in him. That itself was sufficient justification for terminating Khan's services. The order of discharge did not cast any slur on Khan's character or competence. In the case of a discharge of service on the ground that the employer had no longer confidence in the employee, no question of any enquiry arises. The impugned award makes no reference to Khan's trade union activities. It has not been held that interference with the agreement between the parties was necessary to prevent unfair practice of victimization. We, therefore, find that In the present case the adjudicator went beyond the limits placed on the powers of an adjudicator by Rohtas Industries, Ltd. v. Brijnandan Pandey 1956-II L.L.J. 444. We are of opinion that the adjudicator was wrong in law in interfering with the order terminating Khan's services. The adjudicator's award must, therefore, be set aside.
10. The petition is allowed. We quash the adjudicator's award, dated 10 June 1956. The petitioner will get his costs from opposite party No. 5.
(ii) within seven days of the date of retrenchment, if no such notice has been given but the workman is paid wages in lieu of notice;
(iii) (a) at least one month before the date of termination of service, if such date is specified in an agreement where the retrenchment is carried out under an agreement; and
(b) on the date of such agreement, where the date of termination is not so specified.
From this sub-rule it is clear that it is open to an employer to retrench a workman and then to send a notice to the State Government within seven days of doing that. Therefore, if he complies with this provision, that is, if he sends a notice to the Government seven days after the retrenchment of the workman, the retrenchment will be perfectly valid. From this it would follow that the service of a notice upon the Government is not a condition precedent to the making of retrenchment. It is merely a condition and nothing more. Non-compliance with a condition of this kind would, therefore, amount not to an illegality, but to an irregularity, which could be waived. From the stand taken by the Government in this case, it is clear that the Government waived this irregularity. In the circumstances, it must be held that the retrenchment of the petitioners 2 and 3 was not illegal at all.
11. That being the position, we uphold the order of the learned single Judge and dismiss this appeal. Though we dismiss the appeal, we do not think fit to award costs of appeal to respondent 2, because they had in fact failed to fulfil one of the requirements of Section 25F, that is, serve a notice on the Government as required by Rule 80. We, therefore, direct that costs of this appeal will be borne by the parties as incurred.
12. Liberty to the petitioners' attorneys to withdraw the sum deposited in Court.