Hajee M.A. Mohammed Kannu Sons v. S.A. Nazarudeen and The Appellate Authority under Section 18(2) of the Kerala Shops and Commercial Establishments Act, 1960 and Deputy Labour Commissioner and Secretary, State Advisory Contract Labour Board, Thiruvananthapuram

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN** **TUESDAY, THE 22ND JULY 2008 / 31ST ASHADHA 1930** **OP.No. 7588 of 1999(C)** **---------------------------------** **PETITIONER:** - **-------------------** **HAJEE M.A, MOHAMED KANNU SONS, (FORMERLY HAJEE MOHAMMED KANNU & BROTHERS), HARDWARE MERCHANT, MARAKKADA ROAD, CHALAI, THIRUVANANTHAPURAM-36, A PARTNERSHIP FIRM REPRESENTED BY ITS PARTNER, A.M. IBRAHIM.** **BY ADV. SRI.U.K.RAMAKRISHNAN (SR.), ADV. SRI.E.K.MADHAVAN.** **RESPONDENTS:** **-----------------------** **1. SRI. S.A. NAZARUDEEN, T.C. 43/252, AMBADI, THOTTAM, MANACAUD.P.O., THIRUVANANTHAPURAM.** **2. THE APPELLATE AUTHORITY UNDER SECTION 18 (2) OF THE KERALA SHOPS AND COMMERCIAL ESTABLISHMENTS ACT, 1960 AND DEPUTY LABOUR COMMISSIONER AND SECRETARY, STATE ADVISORY CONTRACT LABOUR BOARD, THIRUVANANTHAPURAM.** **BY ADV. SRI.S.RAJASEKHARAN NAIR, SRI.M.S.VIJAYACHANDRA ABABU .** **THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 27/06/2008, THE COURT ON 22/07/2008 DELIVERED THE FOLLOWING:** ## **O.P. NO. 7588/1999-C:** ## **APPENDIX** ## **PETITIONERS' EXHIBITS:** **EXT.P.1: COPY OF THE NOTICE DTD. 26/08/1998 (REGISTERED POST WITH A/D.) OF THE PETITIONER TO THE R.1.** ## **EXT.P.2: COPY OF THE ORDER DTD. 30/11/1998 OF THE R.2. IN S.A. 27/92.** ## **RESPONDENTS' EXHIBITS: NIL.** **//TRUE COPY//** **prv.** **CR** ## **P.N.Ravindran, J. ================= O.P.No.7588 of 1999 =================** ## **Dated this the 22[nd] day of July, 2008.** ## **JUDGMENT** The petitioner is a partnership firm carrying on business in hardware, tools and paint. It is said to be the successor of the firm M/s. Hajee M.A. Mohammed Kannu & Brothers. 2. The first respondent in the Original petition was a Shop Assistant in the firm, M/s. Hajee M.A. Mohammed Kannu & Brothers. On 5.9.1988 he was placed under suspension and a memo of charges alleging misconduct was issued. It was alleged that he was a late comer, that he used to leave the establishment early without permission, that he was wilfully disobeying lawful instructions given by the employer, that he was intentionally destroying the properties of the establishment and was supplying more items than what was actually required by the customers with the oblique motive of causing loss to the employer. As his explanation to the memo of charges was not satisfactory, a domestic enquiry was conducted. The Enquiry Officer found him guilty of the charges. A copy of the enquiry report was furnished to him and he was called upon to show cause why he OP 7588/99 -: 2 :- should not be dismissed from service. As the explanation offered by the first respondent was not satisfactory, he was dismissed from service on 4.5.1989. 3. The first respondent filed an appeal before the second respondent under section 18(2) of the Kerala Shops and Commercial Establishments Act, 1960 challenging the order of dismissal. The appeal was filed on 9.6.1989 and it was numbered as S.A.No.10 of 1989. It was later renumbered as S.A.No.27 of 1992. M/s. Hajee M.A. Mohamed Kannu & Brothers, the sole respondent in the appeal appeared and filed its objections. The validity of the domestic enquiry held into the charges was considered as a preliminary issue. By order passed on 17.6.1998, after 9 long years, the Appellate Authority held that the enquiry was not validly and properly conducted. The Appellate Authority further held that the findings of the Enquiry Officer are perverse. The enquiry report was set aside. The appeal thereafter stood posted for hearing to 10.8.1998. On that day, it was adjourned to 26.8.1998. On 26.8.1998, the counsel appearing for the employer filed a memo stating that the management has decided to cancel the order dismissing the employee from service. A copy of the order passed in that regard on 26.8.1998 (Ext.P1 herein) was also produced before the Appellate Authority. The counsel appearing for the OP 7588/99 -: 3 :- employee sought time for filing objections and the appeal was adjourned to 14.9.1998. On 14.9.1998, the counsel for the employee filed objections to the memo filed by the employer and the case was adjourned to 28.9.1998 for hearing on the objections. On 28.9.1998, the appeal was adjourned as requested by counsel on both sides to 14.10.1998. On 14.10.1998, the counsel for the employer filed an affidavit along with a petition praying for dismissal of the appeal. The counsel for the employee thereupon sought time for filing a reply and the appeal was accordingly adjourned to 26.10.1998. On 26.10.1998, the counsel for the employer filed a hearing note producing along with **-** it a copy of the decision of this Court in **President, Eraveli Co operative Consumers' Stores Ltd.** v. **Deputy Labour Commissioner** - 1977 K.L.T. 541. It was contended that when the employer cancels the order dismissing the employee from service, the Appellate Authority ceases to have jurisdiction to go into the merits of the appeal, but can only dismiss it. The counsel for the first respondent was thereupon directed to submit his reply to the hearing note submitted by the counsel for the employer within seven days. The counsel appearing for the first respondent employee, relying on the **-** decision of this Court in **Secretary, Fatima Co operative Credit Society Limited** v. **Appellate Authority** - 1994(3) I.L.R. Kerala 193 OP 7588/99 -: 4 :- contended that the Appellate Authority is empowered to direct reinstatement of the employee or to direct payment of compensation in lieu of reinstatement. By Ext.P2 order passed on 30.11.1998, the Appellate Authority overruled the contentions of the employer and directed the employer to pay a lumpsum compensation of Rs.50,000/to the employee in lieu of reinstatement in service. The employer was directed to pay the compensation within 30 days failing which it was ordered that penalty and interest at the rate of 18% per annum will be imposed and the amount recovered under the Kerala Revenue Recovery Act, 1968. The petitioner firm has in this Original Petition challenged Ext.P2 and prayed for the following reliefs: "i) to issue a writ in the nature of certiorari or any other appropriate writ, order of direction calling for the records relating to Ext.P2 order dated 30.11.1998 of the second respondent in S.A.No.27/92 and to quash Ext.P2 order. ii) to declare that the first respondent is not entitled to get any reliefs in S.A.No.27/92 and the second respondent has no jurisdiction to proceed with S.A.No.27/92. Though notice of this Original Petition has been served on the first respondent employee, he has not chosen to enter appearance and file a counter affidavit. OP 7588/99 -: 5 :- 4. I heard Sri.P.V.Lohithakshan, the learned counsel appearing for the petitioner. The learned counsel contended that as the order dismissing the employee from service has been revoked and a decision has been taken to reinstate him in service, the Appellate Authority ceases to have jurisdiction to pass orders on the appeal. Reliance was placed on the decision of a Division Bench of the Travancore-Cochin High Court in **V.Ramabhadran** v. **P.K.Somasekharan and others** - **-** A.I.R. 1953 Tra-Co. 325 and of this Court in **President, Eraveli Co operative Consumers' Stores Ltd.** v. **Deputy Labour Commissioner** - 1977 K.L.T. 541 in support of the said contention. The learned counsel further contended that even though the Appellate Authority had by order passed on 17.6.1998 set aside the enquiry, it was open to the employer to adduce evidence in support of the charges and that the Appellate Authority was bound to afford the employer an opportunity to adduce evidence in support of the charges. Therefore the Appellate Authority erred in passing the impugned order, it was contended. Reliance was placed on the decision of the Apex Court in **The United Planters Association of Southern India** v. **K.G. Sangameswaran and another** - 1997(1) L.L.J. 1104 and of this Court in **Parameswaran Elayidam** v. **Mutual Aid Bankers** - 1999 (2) K.L.T. 322 in support of the said contention. The learned counsel OP 7588/99 -: 6 :- further contended that in any view of the case, the Appellate Authority ought to have afforded the employer an opportunity to adduce evidence in support of the charges, if it was of the view that Ext.P1 cannot be accepted and acted upon. ## 5. The facts in **V.Ramabhadran's Case** (supra) are as follows: The Trivandrum branch of the Oriental Government Security Life Assurance Company Ltd. terminated the services of one of its employees on 30.4.1951. The employee concerned thereupon filed an appeal under Section 41 of the Travancore-Cochin Shops and Establishment Act before the Labour Commissioner, the Appellate Authority constituted under the said Act. The appeal was presented on 17.5.1951. When the issue came to the notice of the head office of the employer company, the authorities in the head office on being satisfied that the order passed by the branch office on 30.4.1951 discharging the employee from service was not properly passed, instructed the branch office to withdraw and cancel the order passed on 30.4.1951, place the employee under suspension pending enquiry and hold an enquiry into the allegations against him. As directed by the head office, the branch office at Thiruvananthapuram issued a communication dated 28.5.1951 (within one week from the date on which the appeal was presented) intimating the employee that the OP 7588/99 -: 7 :- order passed on 30.4.1951 discharging him from service has been withdrawn and cancelled and that he would be under suspension from that date pending enquiry. The communication dated 28.5.1951 was served on the employee on 28.5.1951 itself. The employer contended inter alia that in view of the communication issued on 28.5.1951, the order challenged in appeal has become non-existent and therefore, the Appellate Authority cannot adjudicate upon the validity of the said order. Overruling the said contention, the Appellate Authority proceeded to consider the appeal on its merits and passed an order on 30.11.1951 holding that the employee was discharged from service without reasonable cause. The employer was directed to reinstate the employee in service. The said order was challenged before the Travancore-Cochin High Court. A Division Bench of the TravancoreCochin High Court held that as the order of discharge passed on 30.4.1951 had been cancelled and withdrawn, the Appellate Authority had no jurisdiction to pass the impugned order. It was also held that when the order impugned is cancelled, it becomes non-existent and hence, it cannot form the basis of an appeal and that when the appeal has become infructuous and unnecessary, the Appellate Authority had **-** to dismiss the appeal on that ground. In **President, Eraveli Co operative Consumers' Stores Ltd.** v. **Deputy Labour** OP 7588/99 -: 8 :- **Commissioner** - 1977 K.L.T. 541, Balakrishna Eradi, J. (as his Lordship then was) following the decision of the Division Bench of the Travancore-Cochin High Court in **V.Ramabhadran** v. **P.K.Somasekharan and others** (supra), held that when the order challenged has become non-existent, the Appellate Authority ceases to **-** have jurisdiction to pass any order on the appeal. In **Eraveli Co operative Consumers' Stores** (supra), the employee was dismissed from service on 24.9.1966. He filed an appeal on 4.10.1966 before the Appellate Authority under Section 18 of the Kerala Shops and Commercial Establishments Act, 1960. On 2.10.1966, even before the appeal was filed, the Board of Directors of the employer society decided to cancel the order of dismissal and treat the employee as continuing under suspension pending enquiry. On receipt of notice of the appeal, the employer - society entered appearance and contended that as the order of dismissal was already cancelled by the society, the appeal filed by the employee was not maintainable. The Appellate Authority overruled the said contention, went into the merits of the appeal and directed reinstatement of the employee. The said order was challenged in this Court. It was held that as the original order of termination was cancelled, the Appellate Authority ceased to have jurisdiction to go into the merits of the appeal. OP 7588/99 -: 9 :- 6. In the instant case, the order dismissing the first respondent from service was passed on 4.5.1989. The appeal before the second respondent - Appellate Authority was presented on 9.6.1989. After 9 long years, the Appellate Authority found that there was no proper enquiry. The findings of the Enquiry Officer were found to be perverse and the enquiry was set aside by order passed on 17.6.1998. The appeal thereafter stood posted for hearing on 10.8.1998 and then on 26.8.1998. On 26.8.1998, the learned counsel appearing for Hajee M.A. Mohamed Kannu & Brothers, the sole respondent in the appeal filed a memo producing a copy of Ext.P1 stating that the management has decided to cancel the order of dismissal. The counsel appearing for the first respondent employee thereupon sought time for filing objections and the appeal was adjourned to 14.9.1998 for that purpose. The employee filed his objections on 14.9.1998 and the appeal was adjourned to 28.9.1998. On 28.9.1998 at the request of the counsel appearing on either side the appeal was adjourned to 14.10.1998. On 14.10.1998, the counsel for the first respondent in the appeal (Hajee M.A. Mohamed Kannu & Brothers) filed an affidavit along with a petition to dismiss the appeal. The counsel for the first respondent employee prayed for time to file a reply to the said petition. On 26.10.1998, the counsel for the respondent in the appeal OP 7588/99 -: 10 :- (Hajee M.A. Mohamed Kannu & Brothers) filed a hearing note along **-** with a copy of the decision of this Court in **Eraveli Co operative Consumers' Stores** (supra). By Ext.P2 order passed on 30.11.1998, the Appellate Authority overruled the contentions of the employer, allowed the appeal and passed the following order: "In the instant case there is nothing on records to show that the appellant has been validly re-instated into service as alleged by the counsel in the memo filed on 26.8.1998. There is no admission on the part of the counsel for the appellant that the appellant has been reinstated into service. In the circumstances I direct the respondent to make payment of lumpsum compensation for the period of non-employment of above 9 years. Admittedly the appellant has 7 years blemishless service with the respondent. Now he is aged 36 years. Chances of getting reemployment are remote. Had he not been dismissed, he would have got 23 more years of service. Considering all these relevant factors I award a lumpsum compensation amount of Rs.50,000/- in lieu of reinstatement into service. The respondent is directed to make payment of lumpsum amount of compensation as ordered above within 30 days of receipt of the intimation of order. Failing which penalty and interest @ 18% will be imposed and the amount recovered under Revenue Recovery Act. " 7. Ext.P2 does not disclose that any document proving the OP 7588/99 -: 11 :- dissolution and re-constitution of the firm Hajee M.A. Mohamed Kannu & Brothers was produced before the Appellate Authority. The partnership deed whereby the firm Hajee M.A. Mohamed Kannu Sons, which issued Ext.P1 communication on 26.8.1998 was constituted, was also not produced. The first respondent employee is out of service since 4.5.1989. No material was produced to show that the employer firm which was the sole respondent before the Appellate Authority stood dissolved or that the firm which issued Ext.P1 notice is its successor. No material was also produced before the Appellate Authority to show that any of the partners of the employer firm continue to be and are partners of the firm which issued Ext.P1. The terms on which the first respondent employee would be reinstated, whether he is entitled to back wages, etc. were also not disclosed to the employee or to the Appellate Authority. Even in this Original Petition the particulars referred to above are not set out. In Ext.P1, apart from merely stating that a decision has been taken to reinstate the employee in service, the terms of reinstatement in service are not set out. On the materials available, I am persuaded to take the view that the employer was attempting to take advantage of the law laid **- '** down by this Court in **President, Eraveli Co operative Consumers Stores Ltd.** v. **Deputy Labour Commissioner** (supra) by issuing OP 7588/99 -: 12 :- Ext.P1 notice, 9 long years after the employee was wrongly dismissed, as found by the Appellate Authority in its preliminary order. In the absence of any material to show that the decision evidenced by Ext.P1 reflects the decision of the employer and as the terms on which the employee is reinstated have not been pleaded or proved, the Appellate Authority cannot be faulted for not accepting Ext.P1. 8. As noticed by me earlier, in **V.Ramabhadran** v. **P.K.Somasekharan and others** (supra), the employee was dismissed from service on 30.4.1951. The appeal was filed on 17.5.1951 (within 17 days) and the order cancelling the order impugned in the appeal was passed on 28.5.1951 and communicated to the employee on the very same day. The order of the Appellate **-** Authority was passed on 30.11.1951. In **President, Eraveli Co operative Consumers' Stores Ltd.** v. **Deputy Labour Commissioner** (supra) the employee was dismissed from service on 24.9.1966. Even before the appeal was filed, the Board of Directors of the society that met on 2.10.1966, decided to cancel the order of the dismissal and treat the employee as continuing on suspension pending enquiry. While in the former case, the order cancelling the dismissal was passed within two weeks of the appeal being filed, in the latter, the order cancelling the order of dismissal was passed even before the OP 7588/99 -: 13 :- appeal was filed. In both the cases, the employer had at the earliest opportunity, revoked the order of dismissal and decided to place the employee under suspension and continue with the domestic enquiry. In the instant case, the employer contested the appeal for nine long years. Ext.P1 is dated 26.8.1998 and it was produced before the Appellate Authority along a memo on 26.8.1998 itself. Further as noticed earlier, it has not been shown that Ext.P1 is one issued by the employer firm. The firm which issued Ext.P1 did not choose to get itself impleaded in the appeal also. The jural relationship of master and servant between the petitioner and the first respondent has not been established. The employee was also not informed about the terms on which he would be reinstated. Therefore, the Appellate Authority was perfectly right in declining to accept and act upon Ext.P1. In my opinion, the order of dismissal being one passed by the firm, M/s. Hajee M.A. Mohamed Kannu & Brothers, only the said firm or its successor could have revoked the order of dismissal and reinstated the employee in service. It would be unjust and grossly inequitable to permit some one other than the employer to make an offer of reinstatement after nine long years have passed after the employee was dismissed from service and that too without the terms of reinstatement being disclosed. OP 7588/99 -: 14 :- 9. It was contended that the Appellate Authority ought to have in any view of the matter afforded the employer an opportunity to prove its case. The petitioner herein is Hajee M.A. Mohamed Kannu Sons. The petitioner firm is not a party to the appeal. It did not choose to get itself impleaded in the appeal. The details regarding the constitution of the petitioner firm are not available. Even the date on which it was constituted is not set out. Who are all its partners is not disclosed even in this Original Petition. Whether the petitioner firm came into existence as a result of dissolution of the firm Hajee M.A. Mohamed Kannu & Brothers is not proved by any cogent material. A firm can be constituted or reconstituted only in writing. In short, there is no material to show that the firm, Hajee M.A. Mohamed Kannu & Brothers has ceased to exist and that the firm Hajee M.A. Mohamed Kannu Sons (the petitioner in this Original Petition) is the successor of the said firm. Though these are matters within the exclusive knowledge of the employer, it has chosen to leave everything to guess work. It is settled law that a partnership firm is not a natural or a juristic person. It is only a compendious name for the partners acting together. Unless it is shown that the employer firm has been dissolved and the petitioner firm was constituted as its successor, the petitioner firm does not have the locus standi to challenge Ext.P2. OP 7588/99 -: 15 :- Ext.P2 is an order passed in S.A.No.27 of 1992 filed by the first respondent herein against the firm Hajee M.A. Mohamed Kannu & Brothers. The direction in Ext.P2 is to the said firm to pay to the employee, a lumpsum compensation of Rs.50,000/- in lieu of reinstatement. As the petitioner has not proved by cogent material that it is the successor of the firm Hajee M.A. Mohamed Kannu & Brothers and that it has stepped into the shoes of the employer, it is not entitled to challenge Ext.P2. For the reasons stated above, I hold that there is no merit in the Original Petition. The Original Petition fails and accordingly it is dismissed. No costs. P.N.Ravindran, Judge. ess 9/7 OP 7588/99 -: 16 :- The petitioner thereupon issued Ext.P1 notice informing the employee that in view of the preliminary order passed by the Appellate Authority, it has decided to cancel the order dismissing him from service and to reinstate him in service. The fact that Ext.P1 notice was issued was not seriously disputed before the Appellate Authority. The only contention was that Ext.P1 is not one issued by the employer arrayed as the respondent in the appeal, but by some one else. Yet another contention raised was that no postal receipt or acknowledgment card evidencing despatch of Ext.P1 to the employee and its receipt by him was produced. Yet another contention raised was that the decision to reinstate the employee in service is passed after nearly 10 years and that too after the Appellate Authority held that the enquiry is invalid. 8. I have considered the submissions made at the Bar by the learned counsel for the petitioner. It is evident from the order passed by the Appellate Authority that a copy of Ext.P1 was produced before it. In the light OP 7588/99 -: 17 :- of the decision of this Court in **President Eraveli Co-operative Consumers' Stores Ltd.** v. **Deputy Labour Commissioner** - 1977 K.L.T. 541, which was rendered following the decision of the Division Bench of Travancore-Cochin High Court in A.I.R. 1953 Tra. Co. 325, it cannot be said that with the passing of Ext.P1, the order impugned in the appeal filed before the Second respondent ceased to exist. As noticed by this Court and by the Travancore-Cochin High Court in the decisions referred to above, on Ext.P1 being issued the order challenged in the appeal became non-existent in law. Nothing prevents the employer from withdrawing the order already passed terminating the service of one of its employees though an appeal from the order of dismissal was pending before the Appellate Authority. As noticed by Balakrishna Eradi, J. (as his Lordship then was), in 1977 K.L.T. 541 (supra), pendency of an appeal before the Appellate Authority does not debar the employer from cancelling a defective order. In the instant case, by the order passed on 17.6.1998, the Appellate Authority had found that the enquiry was not validly conducted. Within 10 days thereafter, Ext.P1 was issued cancelling the order of dismissal. 9. I therefore hold that with the issuance of Ext.P1, the appeal filed by the first respondent before the Appellate Authority challenging the order dismissing him from service became infructuous and that thereafter the Appellate Authority had no jurisdiction to entertain the appeal and pass orders thereon. In the view that I have taken and in view of the recitals in Ext.P1, I do not propose to go into the question whether the Appellate OP 7588/99 -: 18 :- Authority ought to have while overruling the contention of the petitioner, afforded it an opportunity to prove the charges alleged against the first respondent. 10. In the result, S.A.No.27 of 1992 on the file of the second respondent - Appellate Authority shall stand dismissed as infructuous in view of Ext.P1. However, taking note of the fact that for 9 long years the appeal was pending before the Appellate Authority and also the fact that this Original Petition was pending in this Court for the last nine years, I direct the petitioners to pay to the first respondent a sum of Rs.10,000/- as costs. The said amount shall be paid within one month from today. A memo to that effect shall be filed in this Court immediately thereafter.