Gangeshwar Prasad, J. - (1.) THIS special appeal originally came up for hearing before a Division Bench consisting of Jagdish Sahai and B.D. Gupta, JJ., who referred a question involved in the appeal to a Full Bench. A Full Bench was accordingly constituted and it recorded its answer to that question -vide S.P. Srivastava and Anr. v. Banaras Electric Light and Power Company, Ltd., Varanasi and Ors. . The appeal was then laid before us for hearing.
(2.) THE facts are not in controversy. The appellant, S.P. Srivastava, was an employee of respondent 1, Banaras Electric Light and Power Company (hereinafter called the company) and he was employed under a written agreement dated 11 July 1956. Under Clause 7 of the agreement each party was entitled to terminate the contract of service by giving one month's notice to the other party or paying one month's salary in lieu thereof. In December 1956, a certain sum of money was received as bonus not by the employee to whom it had to be disbursed but by someone else. The company reported the matter to the police which conducted an investigation but did not find the case fit for being sent to Court on account of some " technical flaw of law." The police however expressed the opinion that there was some evidence indicating the connivance of the appellant in the wrong disbursement. On 7 September 1957 the company terminated the service of the appellant purporting to act under Clause 7 of the service agreement. That gave rise to an industrial dispute and led to a reference by the State Government to the labour court at Gorakhpur. The labour court held that the notice of termination of service was not in accordance with the terms of service agreement and it made an award for the reinstatement of the appellant with full wages. A fresh notice of termination of service was then served upon the appellant which again purported to be under Clause 7 of the service agreement between the appellant and the company, and the appellant was paid one month's salary In lieu of a notice for that period. The dispute was again referred to the labour court, Gorakhpur, which, by its award dated 8 October 1959, held that the company had wrongfully and unjustifiably terminated the service of the appellant and that the appellant should, therefore, be reinstated with full wages and allowances, etc. One of the reasons given by the labour court for its award was that although standing Order 20 of the standing orders of the company provided for an opportunity to be given to the employee to explain his position no such opportunity was given to the appellant and the non -compliance of the said standing; order vitiated the termination. The company challenged the award dated 8 October 1959 of the labour court by means of a writ petition taking its stand upon the service agreement which, according to the company, prevailed over the standing orders. The stand was accepted as correct by Oak, J. (as he then was), and the writ petition was allowed. The appellant then preferred this special appeal. The question which the Division Bench hearing the appeal referred to the Full Bench was as follows: In the case of a conflict between the contract of service entered into between the employee and the company and the standing orders of the latter, which would prevail ? The answer which the Full Bench has given to the question is that the terms of a standing order would prevail over the terms of a contract which conflict with the standing order.
(3.) IN view of this answer it is no longer in dispute that if there is a conflict between the service agreement and the standing orders of the company in regard to termination of service, the matter will be governed by the standing orders. What Sri Jagdish Swarup, learned Counsel for the company, coo tended before us was that there was no such conflict and that the standing orders themselves provide for giving effect to the agreement between the parties with regard to the termination of service. In the judgment of the Full Bench it has been clearly stated that the Bench was assuming that there was a conflict. We have, therefore, to consider whether the submission of Sri Jagdish Swarup as to the absence of any conflict is correct. But before we proceed to do so, it is necessary to see the reason for the termination of the appellant's service. The notice dated 7 November 1958 gave no reason at all and stated that the service of appellant was being terminated under the provisions of Clause 7 of the service agreement. The writ petition filed by the company, however, leaves no room for doubt that the reason for the termination was that the company had lost confidence in the appellant. Paragraphs 4 to 7 of the petition narrate the facts connected with the disbursement of a certain amount of bonus to a wrong person and the conclusion reached by the police as a result of its investigation. Paragraph 8 states that the appellant ceased to enjoy the confidence of the company. Paragraphs 9 to 14 deal with the first termination of the appellant's service and his reinstatement under the first award of the labour court. Then comes Para. 15 which Bets forth in clear and unequivocal terms that because of the aforesaid circumstances as the petitioner concern had lost all confidence in S.P. Srivastava and continued to have misgiving about his reliability and character it was necessary to terminate his service. and then goes on to say that the notice dated 27 November 1958 was accordingly served upon the appellant. Therefore despite the silence of the notice as to the reason for, the termination of service, we have before us the reason given by the company itself in the plainest language. It is well -settled that whether or not termination of the service of an employee is in reality in exercise of the power to that effect contained in the contract of service has to be determined on the basis of the facts and circumstances of each case and the form in which the notice or order of termination of the service is clothed is not final and conclusive -vide Assam Oil Company v. its workmen and Murugan Mils, Ltd. v. Industrial Tribunal, Madras, and Anr., (1935) I L.L.J. 422. In the instant case, however, the reason for termination is not required to be investigated because it is a matter of admission.;