Subjective Reasons For Order Of Compulsorily Retirement Should Be Recorded On Material Available On Employee's Service Record: Rajasthan High Court

The bench held that such orders can be interfered with if the same is (a) malafide (b) based on no evidence or (c) so arbitrary in the sense that no reasonable person would form a requisite opinion on the given material.

Brief Facts:

The matter pertained to a decision of the Industrial Tribunal and Labour Court in Udaipur. The Tribunal had ruled in favor of the workman, deciding that the order of compulsory retirement dated October 16, 2001, was invalid. The Tribunal's decision deemed the workman's service as continuous from October 16, 2001, to the date of his retirement, entitling him to full salary and benefits for this period. Feeling aggrieved, the Management approached the Rajasthan High Court (“High Court”).

The Management argued that the Tribunal's decision was primarily based on the absence of certain documents, which led to an adverse inference against the Corporation. It contended that the order of the Screening Committee, which justified the compulsory retirement, was on record and demonstrated the rationale behind the decision. It claimed that the complete service file of the workman had gone missing during the Tribunal's proceedings, preventing the production of relevant documents. However, these documents were now submitted to the Court with the rejoinder.

Furthermore, the Management highlighted the delay in the workman's actions. The workman did not seek a review of the compulsory retirement until May 31, 2004, and awaited the Governor's decision for four years before filing a writ petition in 2007. This writ petition was dismissed on September 4, 2009, with instructions to approach the appropriate forum, yet the workman only raised the claim in 2015.

In response, the workman argued that the delay in filing the claim was not detrimental, as the workman had initially sought a review from the Governor in 2004, following procedural guidelines for government employees facing compulsory retirement. The prolonged period without a decision led to the 2007 writ petition, which sought a timely resolution. After the dismissal of this petition in 2009, the workman promptly pursued his claim, leading to the 2015 reference. He emphasized that delays in labor disputes are not necessarily fatal and relief can be adjusted rather than denied.

He further argued that the compulsory retirement order was issued without a hearing or reason, making it illegal.

Observations by the High Court:

The High Court noted that the only item attached was a list detailing previous proceedings and punishments against the workman, which neither substantiated the Management's arguments nor could be considered proven without being exhibited on record and rebutted by the opposite party. The High Court emphasized that the Management was given ample opportunity by the Labour Court to submit the relevant documents. Despite a specific order on November 22, 2019, instructing the management to place all relied-upon documents on record or face adverse inference, the Corporation failed to comply, leading the Labour Court to decide in favor of the workman in the absence of contrary evidence.

The High Court found no justification for the Corporation's failure to submit the documents that were in its possession before the Labour Court.

The High Court noted that compulsory retirement is not a punishment and can be based on the employer's subjective satisfaction, with limited scope for judicial review unless the decision is malafide, baseless, or arbitrary.

However, the High Court observed that no evidence was presented by the Management before the Labour Court to demonstrate its subjective satisfaction in compulsorily retiring the workman. Similarly, no documents or orders of punishment related to the workman's previous conduct were submitted before the High Court.

The High Court thus modified the Labour Court's award. It held that the workman would not be entitled to full salary for the period he did not work, based on the principle of “no work, no pay.” However, his services would be deemed continuous from October 16, 2001, until his retirement date, entitling him to notional benefits for that period and a revision of his pension accordingly.

Case Title: Chairman, Rajasthan State Road Transport Corporation, Parivahan Bhawan, Parivahan Marg, Jaipur (Raj.). and anr vs Kalu Ram Sharma

Case Number: S.B. Civil Writ Petition No. 13648/2022

Citation: 2024 LiveLaw (Raj) 92

Advocate for the Petitioner: Mr. Avin Chhangani with Ms. Prenal Lodha

Advocate for the Respondent: Mr. Sanjeet Purohit with Ms. Twinkle Purohit

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