1. The petitioner-company has a factory in the State of Maharashrta with sales offices at Calcutta, Madras and New Delhi. The second respondent was employed on 8th July, 1967 as sales officer in charge of the Madras office of the petitioner-company with effect from 1st July, 1967, subject to certain terms and conditions on a salary of Rs. 600 per month. On 9th January, 1971 the petitioner terminated the services of the second respondent with effect from 10th January, 1971, offering to him one month's salary in lieu of notice. Against the said order of termination, the second respondent preferred an appeal before the first respondent under Section 41(2) of the Tamil Nadu Shops and Establishments Act, herein after referred to as the Act. In that appeal the second respondent alleged that the termination of his services was not for a reasonable cause, and that the termination was a colourable exercise of power, for an alleged misconduct in respect of which no enquiry has been conducted by the petitioner. The petitioner filed a counter-statement in that appeal contending that the second respondent was mainly employed as a canvasser for the petitioner's products that, therefore, the provisions of Tamil Nadu Shops and Establishments. Act would not apply to him and that the appeal filed by him was incompetent in law. The petitioner further contended the termination of the second respondent's services was not for misconduct nor was it done with any ulterior motive and that because of certain difficulties it faced in running the Madras office the petitioner was impelled to terminate the services of the second respondent.
2. The first respondent, after due enquiry and after analysing the evidence adduced by the petitioner and the second respondent, set aside the petitioner's order dated 9th January, 1971 terminating the services of the respondent, after holding that the second respondent was not employed as a canvasser and, as such the jurisdiction under Section 41 of the Act is not taken away, that the termination of the services of the second respondent was not for a reasonable cause, and that though the order of termination does not refer to any misconduct on the part of the second respondent, termination of his services was as a result of certain allegations of misconduct against the second respondent on which no enquiry has been conducted by the petitioner. The validity of the order of the first respondent has been challenged in this writ petition.
3. The learned Counsel for the petitioner reiterates the same contentions which were urged before the first respondent. On the question as to whether the second respondent is a canvasser, the learned Counsel for the petitioner states that even in a case where the work of an employee is partly canvassing, he cannot invoke Section 41(2) of the Act and that it is not correct to hold as has been done by the first respondent that employees whose exclusive work is canvassing would alone come within the exempted category of Section 4(1)(b) of the Act.
4. On a due consideration of the matter, I am inclined to agree with the view of the Tribunal that the second respondent will not come under the exempted category of Section 4(1)(b) of the Act is as follows :
4(1) Nothing contained in this Act shall apply to-
(b) Person whose work involves travelling and persons employed as canvassers and care-takers ;
The words 'persons employed as canvassers ' occurring in Section 4(1)(b) normally refers to persons whose exclusive work is canvassing, and it will not include employees whose work partly includes canvassing. The order of appointment dated 8th July 67 states that the second respondent is appointed as sales officer in charge of the Madras office. A salesman or sales officer part of whose work is canvassing cannot be said to be merely a canvasser. If persons employed in any other capacity whose work involved canvassing were intended to be covered by Section 4(1)(b), the Section would have been differently worded. The words ' persons employed as canvassers ' found in Section 4(1)(b) cannot be equated to the expression ' persons whose work involved canvassing.' Which would have been appropriate language if employees whose work partly involves canvassing were to be covered by the section. The appointment orders sets out the duties of the second respondent as (1) promotion of sales of the company's products in the Southern zone including office administration. (2) Representation before the Government, semi-government and other customers and such other functions as may be assigned to him from the headquarters from time to time. (3) To have contract with the headquarters as regards the day-to-day activities of the Madras Office. (4) To work under instructions and guidance of the head office. Having regard to the above duties set out in the appointment order, it is not possible to say that the second respondent is merely a canvasser. The contention of the petitioner as to the maintainability of the appeal under Section 41 of the Act to the first respondent, therefore, fails.
5. The second contention that has been urged by the petitioner is that the order of termination being for a sufficient cause, the first respondent erred in setting aside the same. As already stated. the respondent was appointed to look after the Madras office in 1967. It is alleged by the petitioner that there was fall in business, that there were discrepancies in remittances by the second, respondent to the head office, quarrels between the second respondent and the other staff, that in spite of many warnings the business in Madras office did not improve that because of these difficulties the petitioner had to terminate the services of the second respondent with a month's salary in lieu of notice and that, therefore, the termination of services of the second respondent should be taken to be for a reasonable cause. It is also contended that only in cases where the termination is for misconduct, an enquiry by the management is contemplated before an order of termination.
Section 41(1) of the Act reads :
No employer shall dispense with the services of a person employed continuously for a period of not less than six months, except for a reasonable cause and without giving such persons at least one month's notice, or wages in lieu of such notice, provided, however, that such notice shall not be necessary where the services of such person are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an enquiry held for the purpose.
A reading of the above section shows that if the termination is for a reasonable cause other than for misconduct, the services could be termination on payment of a month's salary in lieu of notice. But if the termination is for a misconduct, no such notice is necessary. The cause set out in the order of termination dated 9-1-1971 is that ' because of certain difficulties that the management has been facing in running the Madras office, it is not found possible to retain your services any longer.' Thus the only cause shows in the order of termination is that the management is facing certain difficulties in running the Madras office. What are the difficulties that the management has been facing in running the Madras office have not been set out in the order of termination. Therefore one has to naturally see as to what happened prior to the order of termination.
6. The difference of opinion seems to have arisen between the second respondent and one Padmanabhan working in the Madras office and repeated complaints have been made to the head office by either side against one another. The petitioner by a letter dated 25-11-1970 (Exhibit R40 before the first respondent) warned the second respondent of serious consequences if Padmanabhan is not allowed to perform his duties without interference by him as the second respondent's controversy with Padmanabhan has created complications and stated that the second respondent's misdemeanour is still pending for decision before the management. By a subsequent letter dated 24th December, 1970 (Exhibit R57) the petitioner tells the second respondent that if things are not improving in the Madras office, they shall be compelled to take drastic action, which the staff at the Madras office may not find very pleasant. Apart from this correspondence, the petitioner has pointed out in its letter dated 10-8-1970 (Exhibit R16) that since the performance of the Madras office is not quite encouraging, they are thinking of three alternatives, (1) the performance of the Madras office should improve, (2) closing down of the Madras office and l(3) to have a changed personnel to reactivate the branch if the petitioner does not receive from the second respondent substantial business within a month. There was also another allegation against the second respondent in respect of which explanations were called for from him. That , allegation was that he has utilised the company's funds to the extent of Rs. 3,300 for his personal needs without the knowledge or consent of the petitioner. The second respondent had admitted the allegations and executed a promissory note for the said sum of Rs. 3,300 in favour of the petitioner-company with two sureties. Thus the difficulties in running the Madras office referred to in the order of termination dated 9-1-1971 can only refer to the facts set out above, that is (1) the second respondent's quarrel with Mr. Padmanabhan, a staff in the Madras office (2) he did not procure enough business in the Madras office and (3) he misappropriated the company's funds to the extent of Rs. 3,300. The question is whether the termination of the services of the second respondent for these reasons will be a termination of services for misconduct or a mere termination on a month's notice.
7. The first respondent has held that the quarrel with the staff, fall in the business and misappropriation of the company's funds are all matters relating to the misconduct or misdemeanour of the second respondent and that the termination of services being motivated for the above reasons cannot be said to be a mere termination of service. Hence the termination of services of the second respondent in the guise of a simple order of termination with a month's notice cannot be held to be legal.
8. The learned Counsel for the petitioner contends that so long as the order of termination does not refer to any misconduct the termination order should have been upheld provided the termination was for a reasonable cause. As already stated, the cause alleged relates to the second respondent's conduct. The order of termination refer to the difficulties of the petitioner in running the Madras office and those difficulties are said to have arisen out of the second respondents' conduct in administering the Madras office.
9. In my view, the facts of this case are on all fours with the case decided by Ramaprasada Rao, J., in Associated Corporation of Industries v. Additional Commissioner for Workmen's Compensation 1972 I L.L.J. 108. In that case also the employee was found by the management utterly incompetent and unable to face the grim realities of the situation and to convince the management of his abilities to rise to the occasion. It was also found that it was utter lack of sincere efforts on the part of the employee to promote the firm's business interests, which contributed to the stagnation and that he was grossly negligent in the discharge of his duties and responsibilities. For these reasons the employee's services were terminated by the management. The question arose as to whether the termination satisfied the main limb of Section 41(1). The learned Judge held that the conduct of the employer from the very beginning showed that he was keen to dispense with the services of the employee and that the above accusations were made in the process of arriving at a reasonable cause for dispensing with the services of the employee though it is for the employer to decide for himself subjectively as to whether the employee's services have to be terminated or not. While considering the scope of Section 41(1) of the Act the learned Judge has observed :
No doubt, it is for the employer to decide for himself subjectively as to whether his employee's services have to be! terminated or not. Even such subjective appraisal must depend upon cogent material which has to be placed before an independent Tribunal like the appellate Tribunal constituted by the statute under Section 41(2) of the Act' who in the ultimate analysis should agree with the employer that there was such reasonable cause for termination, On the other hand, if vituperative epithets are recorded in writing and communicated to him, and he in turn refutes such allegations made against him and ultimately the employer decides to terminate his services on such accusations, it would be idle to content that the dispensation of the service of the employee in those circumstances was for a reasonable cause. The vendetta is made clear and is part of the record. It has to be decided whether such charges so made by the employer are true, justified and proper. The enquiry which is necessary to adjudge whether such accusations are true, proper and regular, would be a domestic one, in which certain charges of misconduct are levelled against the employee, and without violence to the principles of natural justice, a fair trial is held, and hereafter an ultimate conclusion is arrived at on the matter in issue. But if bare allegations such as the charges enumerated above are made and no further attempt is made either to call for an explanation from the employee, or to give him a reasonable opportunity in an enquiry held for the purpose to refute or disprove the same, then it cannot be said that the employer, when he dispensed with the services of the person in such circumstances did so for a reasonable cause.
The above observations equally apply to the facts of this case. The difficulties experienced by the petitioner in running the Madras office which are referred to in the order of termination are only in relation to the alleged conduct of the petitioner. The order of termination is passed without a proper enquiry on such conduct and hence that order cannot be upheld as one made for a reasonable cause coming under the main part of Section 41(1).
10. The learned Counsel or the petitioner placed reliance on a decision of a Bench of this Court in Janardhanan v. Additional Commissioner for Workmen's Compensation : (1969)ILLJ507Mad , where Anantanarayanan, C.J., speaking for the Bench while considering the expression ' reasonable cause ' observed :
But the question here is whether Section 41(1) would justify the termination of service, or otherwise. No doubt, this is not merely dependent upon the subjective satisfaction of the employer. The Court has to be convinced that, not merely was the employer satisfied bona fide about the necessity for terminating the services, but that the necessity could be termed ' reasonable ' ex facie.
I am not able to see how the said decision helps the petitioner in this case. The Court has held in that case that it is not sufficient for the employer to satisfy himself bona fide about the necessity for terminating the services but he must also convince the appellate authority under Section 41 that the necessity for termination was ex facie reasonable. I have to, therefore, hold that in the absence of an enquiry on the petitioner's conduct a mere notice terminating the second respondent's services giving one month's salary in lieu of notice will not satisfy the requirements of Section 41(1) of the Act.
11. The result is the order of the first respondent is not vitiated for any reason and, therefore, the writ petition is dismissed. No costs.