State of Chhattisgarh and Another vs Umendi and Others

Hon''ble Mr. Satish K. Agnihotri, J.—Both the writ petitions viz. Writ Petition (L) Nos. 4374 & 4377 of 2010, involve common facts and question of law, thus, they are being disposed of by this common order.

The facts, in nutshell, as projected by the petitioner/State is as under:

WRIT PETITION (L) No. 4374 of 2010

Challenge in this petition is to the award dated 8-4-2009 (Annexure - P/1) passed by the Labour Court, Rajnandgaon, in Case No. 17/ID Act/2007 (Ref), wherein the Labour Court has directed the State to reinstate the respondent employees in service without back-wages.

Case of the employees before the Labour Court was that they were working on daily wages basis since 2-10-1984. However, all of a sudden, the State/petitioner terminated their services by order dated 6-9-2005 without assigning any reason and without affording an opportunity of hearing to the employees. The said order was challenged by the respondents before the Labour Court. The petitioner submitted its reply denying the allegations made by the respondent employees and further stated that the employees have never worked for a period of 240 days in a calendar year. After hearing the parties, the Labour Court has come to the conclusion that the provisions of Section 25F of the Industrial Disputes Act, 1947 (for short the Act, 1947'') was not complied with and thus, the retrenchment of the respondent employees was found illegal and directed the petitioner to reinstate the respondent employees in service without back-wages.

WRIT PETITION (L) No. 4377 of 2010

Challenge in this petition is to the award dated 31-7-2009 (Annexure - P/I) passed by the Labour Court, Rajnandgaon, in Case No. 18/ID Act/2008 (Ref), wherein the Labour Court has directed the State to reinstate the respondent employees in service without back-wages.

Case of the employees before the Labour Court was that they were working on daily wages basis since 1985. However, all of a sudden, the State/petitioner terminated their services by order dated 4-10-2004 without assigning any reason and without affording an opportunity of hearing to the employees. The said order was challenged by the respondents before the Labour Court. The petitioner submitted its reply denying the allegations made by the respondent employees and further stated that the employees have never worked for a period of 240 days in a calendar year.

After hearing the parties, the Labour Court has come to the conclusion that the provisions of Section 25F of the Act, 1947 was not complied with and thus, the retrenchment of the respondent employees was found illegal and directed the petitioner to reinstate the respondent employees in service without back-wages.

Mr. Thakur, learned Deputy Advocate-General appearing for the State/petitioners, submits that in both the cases, the respondent employees were appointed as daily wagers and thus, the respondents are not entitled to any relief as granting reinstatement on account of non-compliance of the provisions of Section 25-F of the Act, 1947 amounts to regularizing the services of the respondents. Their appointment was on daily wages basis, not in accordance with the constitutional scheme of employment. Mr. Thakur relies on the decisions of Madhyamik Siksha Parishad, U.P. Vs. Anil Kumar Mishra and others etc., , Senior Superintendent Telegraph (Taffic), Senior Superintendent Telegraph (Traffic) Bhopal Vs. Santosh Kumar Seal and Others,

On the other hand, Mr. Mazumdar & Shri Khare, learned counsel appearing for the respondent employees, submit that the provisions of the Act, 1947 is a separate code, which provides that in case of an employee, if he has worked for more than 240 days in the preceding year, compliance of Section 25-F of the Act, 1947 by granting retrenchment allowance is mandatory. In the case on hand, since no compensation was paid, thus, the award passed by the Labour Court does not warrant any interference. Even otherwise, the Labour Court has directed reinstatement without baok-wages. Learned counsel rely on the decisions of the Supreme Court in Gangadhar Pillai Vs. Siemens Ltd., . Harjinder Singh Vs. Punjab State Warehousing Corporation, and Incharge Officer and Another Vs. Shankar Shetty,

Having considered the submissions made by learned counsel appearing for the parties, perused the pleadings and documents appended thereto, there is no dispute that the respondents were appointed on daily wages basis, which has been held as illegal, not in accordance with the constitutional scheme of employment by the Supreme Court (See Secretary, State of Karnataka and Others Vs. Umadevi and Others, It is not the case of the respondents-employees that they were appointed in accordance with the provisions of law.

Now the question for consideration is that if an employee has worked for 240 days in the preceding year and the employee has been removed without payment of retrenchment allowance as provided under the provisions of section 25F of the Act, 1947, whether, reinstatement is a necessary consequence.

A Bench of three Hon''ble Judges of the Supreme Court, while considering the identical facts, in Madhyamik Siksha Parishad, U.P. Vs. Anil Kumar Mishra and others etc., held as under :

We are unable to uphold the order of the High Court. There were no sanctioned posts in existence to which they could be said to have been appointed. The assignment was an ad hoc one which anticipatedly spent itself out. It is difficult to envisage for them the status of workmen on the analogy of the provisions of the Industrial Disputes Act, 1947, importing the incidents of completion of 240 days'' work. The legal consequences that flow from work for that duration under the Industrial Disputes Act, 1947, are entirely different from what, by way of implication, is attributed to the present situation by way of analogy. The completion of 240 days'' work does not, under the law import the right to regularization. It merely imposes certain obligation on the employer at the time of termination of the service. It is not appropriate to import and apply that analogy, in an extended or enlarged form here.

In Senior Superintendent Telegraph (Traffic), Bhopal AIR 2010 SC 2140 (supra), the Supreme Court has observed as under: (Paras 6 &7 of AIR)

In the last few years it has been consistently held by this Court that relief by way of reinstatement with back-wages is not automatic even if termination of an employee is found to be illegal or is in contravention of the prescribed procedure and that monetary compensation in lieu of reinstatement and back-wages in cases of such nature may be appropriate. (See U.P. State Brassware Corpn. Ltd. and Another Vs. Udai Narain Pandey, Uttaranchal Forest Development Corpn. v. M.C. Joshi, 2007 AIR SCW 7305 State of M.P. and Others Vs. Lalit Kumar Verma, U.P. Admn. v. Tribhuban, 2007 Lab IC 1955 : AIR 2007 SCW 2357; Sita Ram and Others Vs. Moti Lal Nehru Farmers Training Institute, Jaipur Development Authority v. Ramsahai, 2007 Lab IC 274 : 2006 AIR SCW 5963 : 2007 LLR 92; GDA v. Ashok Kumar, 2008 Lab IC 1375 : AIR 2008 SC (Supp) 1334; Mahboob Deepak v. Nagar Panchayat, Gajraula, 2008 LLR 117 (SC).

In a recent judgment authored by one of us (R.M. Lodha, J.) in Jagbir Singh Vs. Haryana State Agriculture Marketing Board and Another, , the aforesaid decisions were noticed and it was stated : (SCC pp. 330 & 335, paras 7 & 14) (Para 7 & 15, Pp. 3005 & 3008 of AIR).

It is true that the 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 a 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 of the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice.

It would be, thus, seen that by a 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 by a 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.

In-view of the aforesaid legal position and the fact that the workman were engaged as daily wagers about 25 years back and they worked hardly for 2 or 3 years, relief of reinstatement and back-wages to them cannot be said to be justified and instead monetary compensation would subserve the ends of justice. In our considered view, the compensation of Rs. 40,000 to each of the workmen (respondents 1 to 14) shall meet the ends of justice. We order accordingly.Such payment shall be made within six weeks from today, falling which the same shall carry interest at the rate of 9% per annum.

In Harjinder Singh Vs. Punjab State Warehousing Corporation, the issue involved was application of provisions of Section 25G of the Act, 1947 wherein the principle of last come first go would be applicable. The Supreme Court held that the workman is not required to prove that he had worked for a period of 240 days during 12 calendar months. Thus, the same is not applicable to the facts of the instant case.

In Ramesh Kumar Vs. State of Haryana, it was held that where the retrenchment of the workman was found to be in contravention of the provisions of section 25F of the Act, 1947, the workman may be directed to be reinstated with consequential service benefits, but without back-wages. The ratio laid down by a larger Bench of the Supreme Court in Madhyamik Siksha Parishad, U.P. Vs. Anil Kumar Mishra and others etc., wherein it was held that reinstatement for non-compliance of the provisions of Section 25-F of the Act, 1947 is not automatic, were not placed before the Hon''ble Bench of the Supreme Court in Ramesh Kumar, 2010 Lab IC 1039) (SC) (supra).

It is a trite law that by virtue of Article 141 of the Constitution of India, the judgment of the constitution bench of the Supreme Court is binding on all the Courts including the Supreme Court till the same is overruled by a larger bench. (See Official Liquidator Vs. Dayanand and Others,

Thus, in view of the well-settled propositions of law, as aforestated, even if no retrenchment allowance was paid as required under the provisions of Section 25F of the Act, 1947, the respondents would not be entitled to reinstatement, automatically. Thus, instead of reinstatement, monetary compensation would sub serve the ends of justice.

The contention of learned counsel appearing for the respondent employees that the respondents are entitled to more compensation, as the employees have been working since 1984 & 1985 and their services have been terminated without complying with the provisions of Section 25F of the Act, 1947. The respondent employees have further approached the Labour Court immediately without any delay.

Having regard to the above-stated facts, each respondent employee is entitled to a sum of Rs. 1,00,000 (Rupees One Lakh) as compensation in lieu of reinstatement, which shall be appropriate, just and equitable. Such payment shall be made within a period of four weeks from the date of the order, failing which the same shall carry interest at the rate of 9% per annum.

In the result, the impugned orders dated 8-4-2009 (in W.P. (L) No. 4374 of 2010) and dated 31-7-2009 (in W.P. (L) No. 4377 of 2010) are quashed. Accordingly, both the writ petitions are allowed to the above extent. No order as to costs.