Case Note & Summary
The Supreme Court allowed the appeal filed by the Punjab Urban Planning and Development Authority (PUDA) against the judgment of the Punjab & Haryana High Court which had reinstated the respondent, Karamjit Singh, with subsistence allowance. The respondent was appointed as a daily wage Chowkidar on 01.12.1995 and his name was on the muster rolls till 31.03.1997. On 23.01.2001, the Government of Punjab issued a revised policy for regularization of daily wage employees who had completed 3 years of service. On 26.12.2001, PUDA issued an office order regularizing 102 daily wagers, including the respondent. However, two employees challenged the regularization, and the High Court directed PUDA to pass a speaking order. Upon scrutiny, it was found that the respondent had not completed 3 years of service prior to 22.01.2001, and his name was included fraudulently in connivance with officials. PUDA issued a show cause notice, held a personal hearing, and annulled the regularization on 22.05.2003. The respondent challenged this order, but the High Court dismissed his writ petition and granted him liberty to approach the Labour Court. The respondent raised an industrial dispute, which was dismissed by the Industrial Tribunal. The Single Judge of the High Court allowed the respondent's writ petition, holding that since his services were regularized, he was a permanent employee and could only be terminated after a disciplinary enquiry. The Division Bench affirmed this. The Supreme Court set aside these orders, holding that the respondent's regularization was obtained by fraud, and therefore, his appointment was void ab initio. The Court held that an employee who enters service by fraud is not entitled to the protections under the Industrial Disputes Act, 1947, and the termination without a disciplinary enquiry was valid. The Court allowed the appeal and dismissed the respondent's claim.
Headnote
A) Service Law - Regularization - Fraudulent Appointment - An employee who obtains regularization by fraud or collusion is not entitled to protection under the Industrial Disputes Act, 1947, and his termination without a disciplinary enquiry is valid. (Paras 5-7)
B) Industrial Disputes Act, 1947 - Sections 25-F, 25-G, 25-H - Applicability - The protections under these sections do not apply to an employee whose appointment is void ab initio due to fraud. (Paras 5-7)
C) Principles of Natural Justice - Applicability - Where an appointment is fraudulent, the principles of natural justice do not require a full-fledged disciplinary enquiry before termination; a show cause notice and personal hearing are sufficient. (Paras 5-7)
Issue of Consideration
Whether an employee who obtained regularization of services by fraudulent means is entitled to protection under the Industrial Disputes Act, 1947, and whether the termination of such an employee without a disciplinary enquiry is valid.
Final Decision
The Supreme Court allowed the appeal, set aside the judgment of the Division Bench and the Single Judge, and dismissed the respondent's claim. The Court held that the respondent's regularization was obtained by fraud, and therefore, his appointment was void ab initio. The termination without a disciplinary enquiry was valid, and the respondent is not entitled to any protection under the Industrial Disputes Act, 1947.
Law Points
- Fraud vitiates all transactions
- Regularization obtained by fraud is void ab initio
- No protection under Industrial Disputes Act for fraudulent appointment
- Principles of natural justice not applicable when appointment is fraudulent
Case Details
2019 LawText (SC) (4) 137
Civil Appeal No. 3925 of 2019 (Arising out of SLP (Civil) No. 29160 of 2018)
Punjab Urban Planning and Development Authority & Anr.
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Nature of Litigation
Civil appeal against the judgment of the Punjab & Haryana High Court in LPA No. 894 of 2018, which affirmed the Single Judge's order setting aside the termination of the respondent and directing reinstatement with subsistence allowance.
Remedy Sought
The appellant (PUDA) sought to set aside the High Court's judgment and uphold the termination of the respondent's services.
Filing Reason
The appellant challenged the High Court's order that the respondent's termination was illegal as it was done without a disciplinary enquiry, despite the respondent having obtained regularization by fraud.
Previous Decisions
The Industrial Tribunal, Patiala dismissed the respondent's reference on 15.10.2013. The Single Judge of the High Court allowed the respondent's writ petition on 07.02.2018, setting aside the Tribunal's award and directing reinstatement with subsistence allowance. The Division Bench dismissed the appellant's LPA on 09.07.2018.
Issues
Whether the respondent's regularization was obtained by fraud?
Whether the respondent is entitled to protection under the Industrial Disputes Act, 1947?
Whether the termination without a disciplinary enquiry was valid?
Submissions/Arguments
Appellant: The respondent did not complete 3 years of service and his name was fraudulently included in the regularization list. The termination was valid as the appointment was void ab initio.
Respondent: The regularization was valid, and being a permanent employee, he could only be terminated after a disciplinary enquiry. The termination violated principles of natural justice.
Ratio Decidendi
An employee who obtains regularization of services by fraudulent means is not entitled to protection under the Industrial Disputes Act, 1947. The termination of such an employee without a disciplinary enquiry is valid, as the appointment itself is void ab initio. Principles of natural justice do not require a full-fledged enquiry when the appointment is fraudulent.
Judgment Excerpts
The Respondent had sought to secure regularization of his services, even though he did not fulfill the pre-requisite of a minimum of 3 years of continuous service prior to 22.01.2001 as per the revised Policy of the Government of Punjab for regularization of work-charged, daily wage, and other similar categories of employees.
Since the appointment of the Respondent on regular basis was void on account of having been fraudulently obtained by collusion, the Respondent was not entitled to the protection under the provisions of the Industrial Disputes Act, 1947.
Procedural History
The respondent was appointed as a daily wage Chowkidar on 01.12.1995. His name was on muster rolls till 31.03.1997. On 26.12.2001, his services were regularized under a state policy. On 22.05.2003, the regularization was annulled after a show cause notice and personal hearing. The respondent challenged this in Writ Petition No. 8354 of 2003, which was dismissed on 23.10.2003. He then raised an industrial dispute, which was referred to the Industrial Tribunal, Patiala, and dismissed on 15.10.2013. The respondent filed Writ Petition No. 21519 of 2014, which was allowed by a Single Judge on 07.02.2018. The appellant filed LPA No. 894 of 2018, which was dismissed on 09.07.2018. The appellant then filed the present civil appeal.
Acts & Sections
- Industrial Disputes Act, 1947: 25-F, 25-G, 25-H
