Executive Engineer vs Babubhai Nathalal Patel

M.R. Shah, J.

1 As both these petitions arising out of the impugned judgment and award passed by the Labour Court, Mehsana dated 20.3.2010 passed in Reference (LCM) No. 198 of 2008, as they are being disposed of by this common judgment and order. As such both these petitions are cross petitions.

Special Civil Application No. 10801 of 2010 has been preferred by the Petitioner-Executive Engineer, Dharoi Canal Sub-Division, No. 10, Unja, Dist. Mehsana challenging the impugned judgment and award dated 20.3.2010 passed by the Presiding Officer of the Labour Court, Mehsana passed in Reference (LCM) No. 198 of 2008, by which the Labour Court has directed the Petitioner to reinstate the Respondent without back wages but with continuity of service.

2.1. So far as Special Civil Application No. 13779 of 2010 is concerned, the same is filed by the workman challenging the aforesaid impugned judgment and award dated 20.3.2010 passed by the Labour Court, Mehsana in so far as denying back wages to the workman, while passing order of reinstatement.

It appears that the Respondent-workman worked as daily wager in the year 1983 to 1985 and he worked for 194 days in the year 1983, 294 days in the year 1984 and 86 days in the year 1985. That as and when work was available, he was offered work. That after a period a 15 years, the Respondent workman raised an industrial dispute alleging inter alia that his services came to be terminated and/ or he is retrenched without following any procedure as required under the provisions of Industrial Disputes Act, more particularly, Section 25F of the Industrial Disputes Act. It is to be noted that though No. evidence was produced to show that he worked in between in the year 1986 to 1999, he made a wrong statement that he worked in the 1999 also. That the said dispute was referred to Labour Court, Mehsana, which was numbered as Reference (LCM) No. 198 of 2008 and Labour Court by impugned judgment and award partly allowed the said reference directing the Petitioner to reinstate the workman without back wages on the ground that his services were terminated and/ or retrenched in the year 1985 without any notice and/ or notice pay and / or retrenchment compensation as required u/s 25F of the Industrial Disputes Act and therefore, the same was in breach of Section 25F of the Industrial Disputes Act, 1947. Being aggrieved and dissatisfied with the impugned judgment and award, the Petitioner-Executive Engineer as well as Respondent-workman have preferred the present Special Civil Applications.

Shri Soni, learned AGP appearing on behalf of the Petitioner-Executive Engineer has vehemently submitted that the Labour Court has materially erred in directing the Petitioner to reinstate the Respondent that too after a period of 22 years and even in case where the dispute was raised after a period of 15 years. It is submitted that as such the concerned workman made a false statement in the statement of claim that his services have been terminated and/ or retrenched on and from 31.3.1999. It is submitted that when the Respondent failed to produce any evidence that he worked upto 31.3.1999, the said false statement was only with a view to bring the dispute within the period of limitation or reasonable time. It is submitted that even otherwise considering the fact that the Respondent was serving as a daily wager and he worked for 194 days in the year 1983, 294 days in the year 1984 and 86 days in the year 1985, he had not worked for more than 240 days in last preceding year and therefore, also Labour Court has materially erred in holding that there was a breach of Section 25F of the Industrial Disputes Act. It is further submitted that even considering the fact that the Respondent was serving as daily wager and the day on which the work was available he was offered the work and at the end of day his services comes to an end, the case squarely falls within Section 2(oo)(bb) of the Industrial Disputes Act and therefore, finding given by the Labour Court that there is a breach of Section 25F of the Industrial Disputes Act, cannot be sustained. It is further submitted that in any case, assuming without admitting in the year 1985 there was a breach of Section 25F of the Industrial Disputes Act, 1947, in that case, also Labour Court has not justified in directing the Petitioner to reinstate after a period of 22 years and Respondent can be compensated in terms of lump sum monetary compensation. Shri Soni, learned AGP has heavily relied upon the decision of the Hon''ble Supreme Court in the case of Senior Superintendent Telegraph, Bhopal v. Santosh Kumal Seal and Ors. reported in (2010) 6 SCC 773 as well as in the case of Jagbir Singh Vs. Haryana State Agriculture Marketing Board and Another,

Shri Vaishnav, learned advocate for the Respondent-workman has tried to support the impugned judgment and award passed by the Labour Court so far as reinstatement is concerned. It is submitted that when on appreciation of evidence the Labour Court has specifically found that there was a breach of Section 25F of the Industrial Disputes Act, the same is not required to be interfered with by this Court in exercise of powers under Article 227 of the Constitution of India. It is submitted that in fact the Labour Court has materially erred in denying the back wages to the workman. It is submitted that once the termination/ retrenchment is found to be in breach of Section 25F of the Industrial Disputes Act, the back wages must follow and therefore, the Labour Court has committed an error in not awarding any back wages. Therefore, it is requested to dismiss the petition filed by the Executive Engineer and allow the petition filed by the workman.

Heard the learned advocates for the respective parties. It is to be noted and it appears that Respondent worked as daily wager between 1983 to 1985 and it emerges from the record that he worked for 194 days in the year 1983, 294 days in the year 1984 and 86 days in the year 1985. Though the Respondent did not worked thereafter he tried to make out a false case in the statement of claim that his services have been terminated and/ or retrenched from 31.3.1999. No. evidence has been produced by the Respondent to show that he worked after 1985 upto 31.3.1999. It appears that the false statement was made by the Respondent only with a view to bring the dispute within limitation and/ or within reasonable time. Therefore, it appears that dispute has been raised after a period of 15 years. It appears that as such Respondent has failed to prove that he has worked for 240 days in the last preceding year. Therefore, finding given by the Labour Court that there was a breach of Section 25F of the Industrial Disputes Act, cannot be sustained and the same deserves to be quashed and set aside. Even, assuming that there is a breach of Section 25, F, G and H of the Industrial Disputes Act, it appears that the Labour Court was not justified in ordering reinstatement after a period of 22 years that too as a daily wager.

In the case of Senior Superintendent Telegraph, Bhopal (Supra) and in the case of Jagbir Singh (Supra) the Hon''ble Supreme Court has observed and held that in case of daily wager even if it is found that the termination/retrenchment was in breach of Section 25 of the Industrial Disputes Act, reinstatement with full back wages is not automatically and instead a lump sum monetary compensation can be awarded. In para 7 to 14, the Hon''ble Supreme Court has held and observed as under:

It is true that earlier view of this Court articulated in many decisions reflected the legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention to the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice.

In U.P. State Brassware Corporation Ltd. v. Uday Narain Pandey, the question for consideration before this Court was whether direction to pay back wages consequent upon a declaration that a workman has been retrenched in violation of the provisions of the Section 6-N of the U.P. Industrial Disputes Act, 1947 (equivalent to Section 25F of `the Act, 1947'') as a rule was proper exercise of discretion. This Court considered a large number of cases and observed thus:

The Industrial Courts while adjudicating on disputes between the management and the workmen, therefore, must take such decisions which would be in consonance with the purpose the law seeks to achieve. When justice is the buzzword in the matter of adjudication under the Industrial Disputes Act, it would be wholly improper on the part of the superior courts to make them apply the cold letter of the statutes to act mechanically. Rendition of justice would bring within its purview giving a person what is due to him and not what can be given to him in law.

A person is not entitled to get something only because it would be lawful to do so. If that principle is applied, the functions of an Industrial Court shall lose much of their significance.

The changes brought about by the subsequent decisions of this Court, probably having regard to the changes in the policy decisions of the Government in the wake of prevailing market economy, globalisation, privatisation and outsourcing, is evident.

The Court, therefore, emphasised that while granting relief, application of mind on the part of the Industrial Court is imperative. Payment of full back wages, therefore, cannot be the natural consequence.

This Court in the case of Uttaranchal Forest Development Corporation v. M.C. Joshi2 held that relief of reinstatement with full back wages were not being granted automatically only because it would be lawful to do so and several factors have to be considered, few of them being as to whether appointment of the workman had been made in terms of statute/rules and the delay in raising the industrial dispute. This Court granted compensation instead of reinstatement although there was violation of Section 6-N of the U.P. Industrial Disputes Act, 1947 (equivalent to Section 25F) of the Act, 1947. This is what this Court said:

Although according to the learned Counsel appearing on behalf of the Appellant the Labour Court and the High Court committed an error in arriving at a finding that in terminating the services of the Respondent, the provisions of Section 6-N of the U.P. Industrial Disputes Act were contravened, we will proceed on the basis that the said finding is correct. The question, however, would be as to whether in a situation of this nature, relief of reinstatement in services should have been granted. It is now well settled by reason of a catena of decisions of this Court that the relief of reinstatement with full back wages would not be granted automatically only because it would be lawful to do so. For the said purpose, several factors are required to be taken into consideration, one of them being as to whether such an appointment had been made in terms of the statutory rules. Delay in raising an industrial dispute is also a relevant fact.

In the case of State of M.P. and Ors. v. Lalit Kumar Verma3, this Court substituted the award of reinstatement by compensation. In yet another decision in the case of M.P. Administration v.Tribhuwan4, this Court reversed the High Court''s order directing reinstatement with full back wages and instead awarded compensation. It was opined:

In this case, the Industrial Court exercised its discretionary jurisdiction u/s 11-A of the Industrial Disputes Act. It merely directed the amount of compensation to which the Respondent was entitled had the provisions of Section 25-F been complied with should be sufficient to meet the ends of justice. We are not suggesting that the High Court could not interfere with the said order, but the discretionary jurisdiction exercised by the Industrial Court, in our opinion, should have been taken into consideration for determination of the question as to what relief should be granted in the peculiar facts and circumstances of this case. Each case is required to be dealt with in the fact situation obtaining therein.

We, therefore, are of the opinion that keeping in view the peculiar facts and circumstances of this case and particularly in view of the fact that the High Court had directed reinstatement with full back wages, we are of the opinion that interest of justice would be subserved if the Appellant herein be directed to pay a sum of Rs. 75,000 by way of compensation to the Respondent. This appeal is allowed to the aforementioned extent.

In the case of Sita Ram v. Moti Lal Nehru Farmers Training Institute5, this Court considered the question as to whether the Labour Court was justified in awarding reinstatement of the Appellants therein:

The question, which, however, falls for our consideration is as to whether the Labour Court was justified in awarding reinstatement of the Appellants in service.

Keeping in view the period during which the services were rendered by the Respondent (sic Appellants); the fact that the Respondent had stopped its operation of bee farming, and the services of the Appellants were terminated in December 1996, we are of the opinion that it is not a fit case where the Appellants could have been directed to be reinstated in service.

Indisputably, the Industrial Court, exercises a discretionary jurisdiction, but such discretion is required to be exercised judiciously. Relevant factors therefor were required to be taken into consideration; the nature of appointment, the period of appointment, the availability of the job, etc. should weigh with the court for determination of such an issue.

This Court in a large number of decisions opined that payment of adequate amount of compensation in place of a direction to be reinstated in service in cases of this nature would subserve the ends of justice. (See Jaipur Development Authority Vs. Ram Sahai and Another, , Madhya Pradesh Administration Vs. Tribhuban, and Uttaranchal Forest Development Corporation Vs. M.C. Joshi,

Having regard to the facts and circumstances of this case, we are of the opinion that payment of a sum of Rs. 1,00,000 to each of the Appellants, would meet the ends of justice. This appeal is allowed to the aforementioned extent. In the facts and circumstances of this case, there shall be No. order as to costs.

In Ghaziabad Development Authority and Anr. v. Ashok Kumar and Anr.6, this Court again considered the question whether the Labour Court was justified in awarding the relief of reinstatement with full back wages in favour of the workman and held:

The first Respondent was admittedly appointed on a daily wage of Rs. 17 per day. He worked for a bit more than two years. It has not been disputed before us that sanction of the State of U.P. Was necessary for creation of posts. The contention of the Appellant before the Labour Court that the post was not sanctioned after 31-3-1990 by the State was not denied or disputed. If there did not exist any post, in our opinion, the Labour Court should not have directed reinstatement of the first Respondent in service.

A statutory authority is obligated to make recruitments only upon compliance with the equality clause contained in Articles 14 and 16 of the Constitution of India. Any appointment in violation of the said constitutional scheme as also the statutory recruitment rules, if any, would be void. These facts were required to be kept in mind by the Labour Court before passing an award of reinstatement.

Furthermore, public interest would not be subserved if after such a long lapse of time, the first Respondent is directed to be reinstated in service.

We are, therefore, of the opinion that the Appellant should be directed to pay compensation to the first Respondent in stead and in place of the relief of reinstatement in service.

Keeping in view the fact that the Respondent worked for about six years as also the amount of daily wages which he had been getting, we are of the opinion that the interest of justice would be subserved if the Appellant is directed to pay a sum of Rs 50,000 to the first Respondent. The said sum should be paid to the Respondent within eight weeks from date, failing which the same shall carry interest at the rate of 12% per annum. The appeal is allowed to the aforesaid extent. However, in the facts and circumstances of this case, there shall be No. order as to costs.

13 In Mahboob Deepak v. Nagar Panchayat, Gajraula 7, it was observed:

Such termination of service, having regard to the fact that he had completed 240 days of work during a period of 12 months preceding the said date, required compliance with the provisions of Section 6-N of the U.P. Industrial Disputes Act. An order of retrenchment passed in violation of the said provision although can be set aside but as has been noticed by this Court in a large number of decisions, an award of reinstatement should not, however, be automatically passed.

The factors which are relevant for determining the same, inter alia, are:

(I)whether in making the appointment, the statutory rules, if any, had been complied with;

(ii)the period he had worked;

(iii)whether there existed any vacancy; and

(iv)whether he obtained some other employment on the date of termination or passing of the award.

The Respondent is a local authority. The terms and conditions of employment of the employees are governed by a statute and statutory rules. No. appointment can be made by a local authority without following the provisions of the recruitment rules. Any appointment made in violation of the said rules as also the constitutional scheme of equality as contained in Articles 14 and 16 of the Constitution of India would be a nullity.

Due to some exigency of work, although recruitment on daily wages or on an ad hoc basis was permissible, but by reason thereof an employee cannot claim any right to be permanently absorbed in service or made permanent in absence of any statute or statutory rules. Merely because an employee has completed 240 days of work in a year preceding the date of retrenchment, the same would not mean that his services were liable to be regularised.

Applying the legal principles, as noticed hereinbefore, the relief granted in favour of the Appellant by the Labour Court is wholly unsustainable. The same also appears to be somewhat unintelligible.

The High Court, on the other hand, did not consider the effect of non compliance with the provisions of Section 6-N of the U.P. Industrial Disputes Act, 1947. The Appellant was entitled to compensation, notice and notice pay.

It is now well settled by a catena of decisions of this Court that in a situation of this nature instead and in place of directing reinstatement with full back wages, the workmen should be granted adequate monetary compensation. (See Madhya Pradesh Administration Vs. Tribhuban,

In this view of the matter, we are of the opinion that as the Appellant had worked only for a short period, the interest of justice will be subserved if the High Court''s judgment is modified by directing payment of a sum of Rs 50,000 (Rupees fifty thousand only) by way of damages to the Appellant by the Respondent. Such payment should be made within eight weeks from this date, failing which the same will carry interest at the rate of 9% per annum.

It would be, thus, seen that by catena of decisions in recent time, this Court has clearly laid down that an order of retrenchment passed in violation of Section 25F although may be set aside but an award of reinstatement should not, however, be automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wagers has not been found to be proper by this Court and instead compensation has been awarded. This Court has distinguished between a daily wager who does not hold a post and a permanent employee.

Considering the aforesaid facts and circumstances of the case, this Court is of the opinion that in the facts and circumstance of the case, if the impugned judgment and award passed by the Labour Court is modified and Respondent is awarded a lump sum monetary compensation of Rs. 25,000/- in lieu of reinstatement and continuity of service and the same would sub-serve the ends of justice.

In view of the above and for the reasons stated above, Special Civil Application No. 10801 of 2010 is succeeds in part and the impugned judgment and award dated 20.3.2010 passed by the Presiding Officer of the Labour Court, Mehsana passed in Reference (LCM) No. 198 of 2008 is hereby modified to the extent that Petitioner to pay lump sum monetary compensation of Rs. 25,000/- to the Respondent workman in lieu of reinstatement and continuity of service, which shall be paid to the Respondent by Account Payee Cheque within a period of three months from today, failing which it shall carry interest at the rate of 9%. Rule is made absolute so far as Special Civil Application No. 10801 of 2010 is concerned. No. costs.

In view of order passed in Special Civil Application No. 10801 of 2010, Special Civil Application No. 13779 of 2010 preferred by the Respondent workman deserves to be dismissed and is accordingly dismissed. Rule discharged.