State of Punjab and Another vs Sadhu Singh and Another

Kanwaljit Singh Ahluwalia, J.—Present writ petition has been filed by the State of Punjab through Divisional Forest Officer, Pathankot praying that a writ in the nature of certiorari be issued and the award (Annexure P-2) dated 14th May, 1990 delivered by the Labour Court, Gurdaspur in favour of respondent No. 1-workman be quashed.

Briefly stated, respondent-workman Sadhu Singh served a demand notice on 11th October, 1988 and on a reference made by the State of Punjab, as to whether termination of services of Sadhu Singh workman was justified and in order?, he submitted a statement of claim on 20th March, 1989. It was pleaded by the workman that though he was employed by the Divisional Forest Officer, Pathankot in the month of January, 1977 on permanent basis against a permanent post, yet his services were terminated on 8th May, 1988 without any notice, chargesheet or payment of any retrenchment compensation. Hence, the workman stated that there had been violation of Section 25F of the Industrial Disputes Act, 1949 (hereinafter referred to as, ''the Act''). Furthermore, the workman stated that the persons junior to him in service were retained at the time of termination of his services. He prayed for reinstatement with continuity of service and full back wages.

The petitioner-State filed written statement, wherein it was stated that the workman was engaged on daily wage basis with effect from January 1977. He was not appointed against any permanent post and at the relevant time, he was working at Athwal Nursery. It was further stated that in the month of May 1988, services of the workman were terminated by the Forest Range Officer, Qadian, as there was shortage of work. Relying upon the pleadings made, following issues were framed by the Labour Court:

Whether termination of services of the workman is justified and in order?

Relief.

Subsequently, nobody appeared on behalf of the State of Punjab, and therefore, the State was proceeded against ex-parte. The workman appeared as WW-1 in his ex-parte evidence and reiterated as to what was stated in the claim petition. His evidence had gone unrebutted and unchallenged. The State had adduced no evidence. The Labour Court held that it was admitted in the written statement that the workman was engaged on daily wage basis from the month of January 1977 and he continued to perform his duties till 8th May, 1988, when his services were terminated. Thus, it was held that the workman had completed more than 240 days of service in 12 calendar months and it was obligatory on the part of the petitioner-State to comply with the provisions of Section 25F of the Act before terminating services of the workman. The workman was ordered to be reinstated with continuity of service and full back wages from the date of termination of his services till his reinstatement.

In the present writ petition, it has been urged that the Labour Court could not entertain the reference and pronounce the award as the Forest Department is not an industry and furthermore, since the workman was employed on daily wage basis on muster roll and was paid monthly salary on the basis of wages earned daily by a labourer, he could not be held to be a workman. Lastly, it was stated that there was no evidence available before the Labour Court that during the period of termination till his reinstatement, the workman was not gainfully employed, thus, full back wages could not be awarded in favour of the workman.

A Single Bench of this Court in an order passed on 6th September, 1991 noticed that the workman had been taken back into service and ordered that half of the wages be paid to the workman. However, payment of the remaining amount was stayed by the Bench.

Mr. Palvinder Singh, Senior DAG Punjab, appearing on behalf of the petitioner-State, has submitted that the Forest Department is not an industry, therefore, the Labour Court had no jurisdiction to adjudicate upon the claim of the workman and hence, the impugned award should be quashed.

The written statement filed to the claim petition of the workman has been annexed at Annexure P-1 with the present petition. No objection was taken therein to the effect that the Forest Department is not an industry and no such argument has been noticed in the award, as thereafter, the petitioner-State was proceeded against ex-parte. It has been held by a Single Bench of this Court in Principal Chief Conservator of Forests v. Paramjit Kaur 1996(1) SCT 357 that where this argument has not been raised before a Labour Court as to whether the Forest Department is an industry or not within the meaning of Clause (j) of Section 2 of the Act, the Department cannot be permitted to raise this plea in the writ petition. It was held that no evidence was led to show as to what is the nature of duties performed by the Forest Department. It was concluded that these are mixed questions of law and fact and the same cannot be allowed to be raised for the first time in a petition under Article 226 of the Constitution of India.

Furthermore, in the present writ petition, no averments have been made and the activities of the Forest Department are exclusively in the domain of sovereign function and the same cannot be undertaken by any private enterprise or organization. Even otherwise, this has come in evidence that the workman was employed in a Nursery.

A Division Bench of this Court, in Divisional Forest Officer Sirsa v. Jagdish 2004(1) SCT 699, has held as under:

In Divisional Forest Officer, Social Forestry Project, Hisar v. Presiding Officer, Industrial Tribunal, Hisar and Anr. (supra), a Division Bench of this Court considered the question whether the activities of the Forest Department fall within the definition of ''industry'' and answered the same in the affirmative. The Division Bench noticed that no material worth the name was produced before the Labour Court to show the nature of activities and work carried on by the Forest Department, but an affidavit of Principal Chief, Conservator of Forests was filed in the High Court to highlight salient features of National Forest Policy Resolution, 1988. The Division Bench referred to the affidavit of the Principal Chief Conservator of Forests and the judgments of the Supreme Court in Sub Divisional Inspector of Post, Vaikam and Ors. v. Theyyam Josheph 1996(2) SCT 273 (SC): 1996(1) RSJ 623 and of this Court in State of Punjab through Assistant Horticulture, Faridkot v. The Presiding Officer, Labour Court, Bhatinda and Anr. 1994(2) RSJ 130 as also the judgment of seven Judges Bench in Bangalore Water Supply and Sewerage Board Vs. A. Rajappa and Others, and a three Judges Bench in Chief Conservator of Forests and Anr. v. Jagannath Maruti Kondhare (supra) and held as under:

It is, thus, clear from the test laid down by the Apex Court in Bangalore Water Supply and Sewerage Board''s case (supra) and the observations of the Supreme Court in Jagannath Maruti Kandhare''s case (supra) that sovereign functions strictly understood (alone) qualify for an exemption not the welfare activities or economic adventures undertaken by the Government or statutory bodies. Even in the government departments discharging sovereign functions, if there are units which are severable, they can be considered to come within the meaning of ''industry'' as given in Section 2(j) of the Act. Simply because the Forest Department of the State of Haryana has a noble objective and has undertaken the Forest Development Projects, by no stretch of imagination, it can be said that the forest department discharges sovereign functions to qualify for exemption. The fact that the forest department is engaged in activities which do not necessarily make profits, does not alter the fact that it employees workers like the second respondent and carries on systematic activities which provides services for satisfying human wants for having pollution-free environment. In our opinion, therefore, having regard to the activities carried on by the forest department in the light on the test laid down in Bangalore Water Supply and Sewerage Board''s case, the forest department is an ''industry'' as defined in Section 2(j) of the Act.

The Division Bench distinguished the judgment of the co-ordinate Bench which had held that the Horticulture Department does not fall within the definition of ''industry'' by recording the following observations:

''The judgment in State of Punjab through Assistant Director, Horticulture, Faridkot''s case (supra) is of no help to the State counsel as he has failed to bring on record the material on the basis of which the Division Bench had held that the Horticulture Department, being a part and parcel of Agricultural Department is not an ''industry''. In absence thereof, it cannot be said that the Horticulture Department is at par with the Forest Department of Haryana or the activities carried on by Horticulture or Agricultural Department are akin to the activities carried on by the forest department.

In our opinion, the judgment of the Supreme Court in Chief Conservator of Forests and Anr. v. Jagannath Maruti Kondhare (supra) and of the Division Bench of this Court in Divisional Forest Officer, Social Forestry Project Hissar v. Presiding Officer, Industrial Tribunal, Hisar and Anr. (supra) have direct bearing on the objection raised by the petitioner to the maintainability of the reference and by applying the ratio of those decisions to the facts of this case, we hold that the activities of the Forest Department in relation to which the workman was employed fall with in the definition of ''industry'' u/s 2(j) of the Act and respondent No. 2 did not commit any illegality by deciding issue No. 3 against the petitioner.

At this stage, we may also notice the dominant nature test laid down by the Supreme Court in Bangalore Water Supply and Sewerage Board v. R. Rajappa (supra). The same is as under:

The dominant nature test:

(a) Where a complex of activities, some of which qualify or exemption, others not, involves employees on the total undertaking, some of whom are not ''workmen'' as in the University of Delhi case (supra) or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur (supra) will be the true test. The whole undertaking will be ''industry'' although those who are not ''workmen'' by definition may not benefit by the status.

(b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by government or statutory bodies.

(c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considerable to come within Section 2(j).

(d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby.

In Sub Divisional Inspector of Post, Vaikam and Ors. v. Theyyam Joseph and Ors. (supra) a Two-Judges Bench of the Supreme Court without making a reference to the judgment of seven-Judges Bench held that Postal Department is not an industry. In Bombay Telephone Canteen Employees'' Association, Prabhadevi Telephone Exchange Vs. Union of India and another, , a two-Judges Bench reiterated the view expressed in Theyyam Joseph''s case (supra), albeit after making reference to the judgment of seven-Judges Bench in Banglore Water Supply and Severage Board v. A Rajappa (supra). However, in General Manager, Telecom Vs. A. Srinivasa Rao and Others, , a three-Judges Bench declared that the two judgments rendered by two-Judges Benches in Theyyam Joseph''s case and Bombay Telephone Canteen Employees'' Association''s case do not lay down correct law. The three-Judges Bench observed as under:

With respect, were are unable to subscribe to this view for the obvious reason that it is in direct conflict with the seven-Judge Bench decision in Bangalore Water Supply case (supra) by which we are bound. It is needless to add that it is not permissible for us, or for that matter any Bench of lesser strength, to take a view contrary to that in Bangalore Water Supply (supra) or to bypass that decision so long as it holds the field. Moreover, that decision was rendered long back -nearly two decades earlier -and we find no reason to think otherwise. Judicial discipline requires us to follow the decision in Bangalore Water Supply and Sewerage Board Vs. A. Rajappa and Others, . We must, therefore, add that the decisions in Sub-Divisional Inspector of Post, Vaikam, and others Vs. Theyyam Joseph, etc.,, and Bombay Telephone Canteen Employees'' Association, Prabhadevi Telephone Exchange Vs. Union of India and another, ) cannot be treated as laying down the correct law.

In view of the last mentioned decision of three-Judges Bench of the Supreme Court, it must be held that all welfare/developmental activities of the government cannot be treated akin to the sovereign functions of the State and the government departments engaged in the developmental and welfare activities do not necessarily fall outside the ambit of the term ''industry'' u/s 2(j) of the Act.

We are further of the view that the activities of a government department engaged in welfare/development works cannot be treated as falling outside the definition of industry unless it is proved that such activities are akin inalienable sovereign functions of the State.

Thus, the plea raised by the petitioner-State that the Forest Department is not an industry, is to be rejected.

Counsel for the State has submitted that the initial appointment of the respondent-workman was not in consonance with the statutory regulations and Articles 14 and 16 of the Constitution of India and in view of Section 2(oo)(bb) of the Act, the dispute raised by the respondent-workman cannot be treated as an industrial dispute. Recently, this argument has been considered by Hon''ble the Apex Court in Harjinder Singh Vs. Punjab State Warehousing Corporation, , in which it has been held that the argument raised by counsel for the State cannot be accepted, for the first time, in the High Court when no such argument was raised before the Tribunal and also in the writ petition. In the present case, a reference was made in the month of March, 1989. The Labour Court had given its award on 14th May, 1990. It was the specific case of the workman that his juniors were retained in service and the principle of ''last come first go'' was not followed by the management. In Harjinder Singh''s case (supra), Hon''ble the Apex Court observed as under:

It is true that in the writ petition filed by it, the corporation did plead that the dispute raised by the appellant was not an industrial dispute because he had not worked continuously for a period of 240 days, the learned Single Judge rightly refused to entertain the same because no such argument was advanced before him and also because that plea is falsified by the averments contained in para 2 of the reply filed on behalf of the corporation to the statement of claim wherein it was admitted that the appellant was engaged as work charge Motor Mate for construction work on 5.3.1986 and he worked in that capacity and also as work munshi from 3.10.1986 and, as mentioned above, even after expiry of the period of three months'' specified in order dated 5.2.1987, the appellant continued to work till 5.7.1988 when the first notice of retrenchment was issued by the Managing Director of the corporation. Therefore, it was not open for the corporation to contend that the appellant had not completed 240 days service. Moreover, it is settled law that for attracting the applicability of Section 25G of the Act, the workman is not required to prove that he had worked for a period of 240 days during twelve calendar months preceding the termination of his service and it is sufficient for him to plead and prove that while effecting retrenchment, the employer violated the rule of ''last come first go'' without any tangible reason.

In view of the ratio of law laid down in Harjinder Singh''s case (supra), the award suffers from no infirmity. On the touchstone of the observations made by Hon''ble the Apex Court in Anoop Sharma Vs. Executive Engineer, Public Health Division No. 1 Panipat (Haryana), , the impugned award is to be upheld. In Anoop Sharma''s case (supra), Hon''ble the Apex Court, after examining the entire scheme of the Industrial Disputes Act, had said as under:

An analysis of the above reproduced provisions shows that no workman employed in any industry who has been in continuous service for not less than one year under an employer can be retrenched by that employer until the conditions enumerated in Clauses (a) and (b) of Section 25F of the Act are satisfied. In terms of Clause (a), the employer is required to give to the workman one month''s notice in writing indicating the reasons for retrenchment or pay him wages in lieu of the notice. Clause (b) casts a duty upon the employer to pay to the workman at the time of retrenchment, compensation equivalent to fifteen days'' average pay for every completed year of continuous service or any part thereof in excess of six months.

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This Court has used different expressions for describing the consequence of terminating a workman''s service/employment/engagement by way of retrenchment without complying with the mandate of Section 25F of the Act. Sometimes it has been termed as ab initio void, sometimes as illegal per se, sometimes as nullity and sometimes as non est. Leaving aside the legal semantics, we have no hesitation to hold that termination of service of an employee by way of retrenchment without complying with the requirement of giving one month''s notice or pay in lieu thereof and compensation in terms of Section 25F(a) and (b) has the effect of rendering the action of the employer as nullity and the employee is entitled to continue in employment as if his service was not terminated.

In view of the law laid down in Harjinder Singh''s case and Anoop Sharma''s case (supra), no interference is warranted in the present writ petition, and hence, the same is hereby dismissed. No costs.