State of Rajasthan and Another vs Rati Ram and Others

M.N. Bhandari, J.—By this writ petition, a challenge has been made to the award dated 29.5.2000, where reference has been answered in favour of the respondent-workman. It is stated that respondent-workman was engaged as daily rated employee and worked hardly for few months in breaks. The termination of the respondent workman is held to be illegal being violative of the provisions of section 25F of the Industrial Disputes Act, 1947 (for short ''the Act''). The Labour Court awarded reinstatement with continuity in service and 60% back wages by ignoring the nature of appointment. Counsel submits that an employee not engaged as per the rules rather worked only on daily rated basis on muster-roll, has no right of reinstatement in view of catena of judgments of the Hon''ble Apex Court as well as this Court.

Referring to the evidence before the Labour Court and working on muster-roll for few days as is coming out from Annexure-5, it is submitted that workman was engaged on daily wage basis. In the affidavit of Suresh Chand Mishra, para 7 indicates that permanent work does not exist. When the nature of the appointment of the workman and all the relevant facts regarding his status exist, the labour Court should have awarded compensation to the respondent workman instead of reinstatement with back wages. The prayer is accordingly made to interfere in the impugned award and thereby order of reinstatement with 60% back wages may be substituted by the award of compensation. This is more so when workman was earning during the intervening period.

Learned Counsel for respondent workman on the other hand submits that impugned award is perfectly legal and justified. Once the Labour Court came to the conclusion that there is a violation of the provisions of section 25F, G & H of the Act of 1947, an employee cannot be denied benefit of reinstatement with 60% back wages as a consequence thereof, more so when work undertaken by the petitioner is of continuous nature.

It is stated that reinstatement can be denied under special circumstance and not otherwise. A reference has been made to the judgments in the case of Om Prakash Raigar v. State of Rajasthan, 1996 (3) WLC (Raj.) 429, Cotton Corporation of India Ltd. and another v. State of Rajasthan and others 2010 (127) FLR 311 (Raj.).

I have gone through the arguments raised by learned Counsel for the parties and considered the record as well as judgments cited at the bar.

It is a case where the learned labour Court passed an award answering the reference in favour of the workman. Since termination was found to be illegal, an order of reinstatement with 60% back wages has been passed. The challenge to the award is limited to the relief granted to the respondent workmen. It is prayed that instead of reinstatement with 60% back wages respondent workman should have been given compensation looking to the nature of the appointment and the fact that he was not appointed by the means provided under the rules. Other than the aforesaid no other ground has been raised herein.

To substantiate his arguments, learned Counsel has made a reference to the judgment of this Court in the case of Pushpender Kumar v. Assistant Engineer and another, in D.B. Civil Special (Writ) No. 466/2010 decided on 24.11.2011. Therein similar controversy was considered by the Division Bench in reference to the catena of judgments of the Hon''ble Apex Court wherein reinstatement was substituted by award of compensation. In the aforesaid case, workman was only a casual beldar and discontinued in violation of the provisions of the Act of 1947, but then was awarded compensation in lieu of reinstatement.

In the case of Jaipur Development Authority v. Ramsahai and another, (2006) 11 SCC 648 : 2006 (111) FLR 1176 (SC) the Hon''ble Apex Court held that looking to the special facts and circumstances, award of Rs. 75000/- would be in satisfaction to the order of reinstatement with back wages. Para 28 of the said judgment is quoted hereunder for ready reference:

We would, therefore, process on the basis that there had been a violation of sections 25G and 25H of the Act, but, the same by itself, in our opinion, would not mean that the Labour Court should have passed an award of reinstatement with entire back wages. This Court time and again had held that the jurisdiction u/s 11A must be exercised judiciously. The workman must be employed by State within the meaning of Article 12 of the Constitution of India, having regard to the doctrine of public employment. It is also required to recruit employees in terms of the provisions of the rules for recruitment framed by it. The respondent had not regularly served the appellant. The job was not of perennial nature. There was nothing to show that he, when his services were terminated, any person who was junior to him in the same category, had been retained. His services were dispensed with as early as in 1987. It would not be proper to direct his reinstatement with back wages. We, therefore, are of the opinion that interest of justice would be sub served if instead and in place of reinstatement of his services, a sum of Rs. 75000/- is awarded to the respondent by way of compensation as has been done by this Court in a number of its judgments (See State of Rajasthan v. Ghyan Chand"). (2006) 7 SCC 755

Same way in the case of Jagbir Singh Vs. Haryana State Agriculture Marketing Board and Another, recently the Hon''ble Apex Court again considered the said issue and para 7 of the said judgment is quoted hereunder for ready reference:--

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 be meeting the ends of justice.

Similar view exists even in the case of State of Rajasthan Vs. Sarjeet Singh and Another, and relevant para 16 of the said judgment is quoted hereunder for ready reference:--

In terminating the services of Respondent 1, we would assume that violation of section 25G or 25H occurred (although there is no factual basis therefor), but in any event, the same would not mean that the Labour Court should have automatically passed an award of reinstatement in service with back wages. We, however, although ordinarily would have set aside the impugned award and consequently the judgment of the High Court; in exercise of our jurisdiction under Article 142 of the Constitution of India, we direct the State to pay a sum of Rs. 30,000 to respondent 1. Such payment should be made within eight weeks from date failing which the same shall carry an interest at the rate of 9% per annum. The appeal is allowed with the aforesaid directions. The parties shall pay and bear their own costs.

The aforesaid issue was considered by the Division Bench of this Court in the case of Manager, Bank of Rajasthan Limited, Bharatpur and another v. Shri Jugal Kishore Sharma and another, in D.B. Special Appeal (Writ) No. 491/2009 decided vide judgment dated 23.2.2010. Therein also, after considering the judgments of the Hon''ble Apex Court, order of reinstatement was substituted by the order of compensation. Recently, the Hon''ble Apex Court in the case of Incharge Officer and another v. Shankar Shetty. 2010 (127) FLR 187 (SC) held that the order of reinstatement cannot be automatic. Therein referring to the earlier judgments, it was held that benefit of reinstatement cannot be allowed in all cases. Paras 2, 3 and 5 of the said judgment are quoted hereunder for ready reference :-

The only question to be considered in this appeal by special leave is with regard to the relief of reinstatement granted to the respondent by the Single Judge of the High Court of Karnataka in his judgment and order dated August 13, 2011 and affirmed by the Division Bench vide its judgment and order dated December 9, 2004 in the writ appeal. Should 45 an order of reinstatement automatically follow in a case where the engagement of a daily wager has been brought to end in violation of section 25F of the Industrial Disputes Act, 1947 (for short ''ID Act'')? The course of decisions of this Court in recent years has been uniform on the above question. In the case of Jagbir Singh Vs. Haryana State Agriculture Marketing Board and Another, delivering the judgment of this Court, one of us (R.M. Lodha, J.) noticed some of the recent decisions of this Court -namely, U.P. State Brassware Corpn. Ltd. and Another Vs. Udai Narain Pandey, , Uttaranchal Forest Development Corporation Vs. M.C. Joshi, , State of M.P. and Others Vs. Lalit Kumar Verma, Madhya Pradesh Administration Vs. Tribhuban, Sita Ram and Others Vs. Moti Lal Nehru Farmers Training Institute, , Jaipur Development Authority Vs. Ram Sahai and Another, Ghaziabad Development Authority and Another Vs. Ashok Kumar and Another, and Mahboob Deepak Vs. Nagar Panchayat Gajraula and Another, and states as follows:

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 through the termination of an employee is in contravention of the prescribed procedure. Compensation instead of reinstatement has been held to be the ends of justice.

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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 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 employees.

Jagbir Singh has been applied very recently in the case of Senior Superintendent Telegraph (Traffic) Bhopal v. Santosh Kumar Seal and others, 2010 (125) FLR 736 (SC) decided on April 26, 2010 wherein this Court stated:

In view of the aforesaid legal position and the fact that the workmen were engaged as daily wages 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.

We think that if the principles stated in Jagbir Singh and the decisions of this Court referred to therein are kept in mind, it will be found that the High Court erred in granting relief of reinstatement to the respondent. The respondent was engaged as daily wager in 1978 and his engagement continued for about 7 years intermittently upto September 6, 1985 i.e. about 25 years back. In a case such as the present one, it appears to us that relief of reinstatement cannot be justified and instead monetary compensation would meet the ends of justice. In our considered opinion, the compensation of Rs. 1,00,000/- (Rupees One lac) in lieu of reinstatement shall be appropriate, just and equitable. We order accordingly. Such payment shall be made within 6 weeks from today failing which the same shall carry interest at the rate of 9 per cent per annum.

Therein, a sum of Rs. 1 lac was awarded in lieu of reinstatement. The same view has been taken by the Hon''ble Apex Court even in the case of Senior Superintendent Telegraph (Traffic), Bhopal v. Santosh Kumar Seal and others. 2010 (125) FLR 736 (SC) Therein also the issue was in regard to retrenchment of a daily rated employee wherein considering earlier judgments, the Hon''ble Apex Court held that Rs. 40,000/- to each retrenched employee would be in satisfaction to the reinstatement as relief of reinstatement with back wages cannot be said to be automatic. Reference of paras 9,10 and 11 of the said judgment are relevant, thus quoted hereunder :--

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. v. Uday Narain Pandey, Uttranchal Forest Development Corpn. v. M.C. Joshi, State of M.P. v. Lalit Kumar Verma, M.P. Admn. v. Tribhuban, Sita Ram v. Moti Lal Nehru Farmers Training Institute, Jaipur Development Authority v. Ramsahai, GDA v. Ashok Kumar and Mahboob Deepak v. Nagar Panchayat, Gajraula.

In a recent judgment authored by one of us (R.M. Lodha, J.) in Jagbir Singh v. Haryana State Agriculture Mktg. Board the aforesaid decisions were noticed and it was stated (SCC pp. 330 & 335, paras 7,14):

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 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.

in view of the aforesaid legal position and the fact that the workmen 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 of (sic) monetary compensation would subserve the ends of justice. In our considered view, the compensation of Rs. 40,000/- to each of the workman (Respondents 1 to 14) shall meet the ends of justice. We order accordingly. Such payment shall be made within 6 weeks from today, failing which the same shall carry interest at the rate of 9% per annum.

The same view has been reiterated in the case of Indian Drugs and Pharmaceuticals Ltd. Vs. Workman, Indian Drugs and Pharmaceuticals Ltd.,

The judgments referred to above show that if nature of appointment is coming out in the pleadings or evidence and if a person has been appointed on daily rated basis then the order of reinstatement cannot be automatic.

Now the judgments cited by learned Counsel for respondent workman are to be discussed. In the case of Vikramaditya Pandey (supra), the Hon''ble Apex Court held that unless special circumstance exists, reinstatement cannot be denied in the case of illegal termination. The judgment aforesaid was not in reference to the provisions of the Act of 1947. Therein the order of reinstatement was given with 50% back wages. Similar view has been taken by the Division Bench of this Court in the earlier judgment in the case of Om Prakash Raigar (supra). However, I find that issue as to whether right of reinstatement is automatic or not, has not being dealt with and fact further remains that subsequent judgments of the Hon''ble Apex Court are required to be considered where earlier judgments have been considered and taking note of the judgments in recent past, issue has been dealt with. In the case of Cotton Corporation of India Ltd. (supra), therein issue as raised by learned Counsel for respondent was not even there. The argument was not raised that the order of reinstatement be substituted with compensation.

In the aforesaid background and looking to the recent judgments of the Hon''ble Apex Court on the issue where keeping in mind the nature of appointment, award of reinstatement has been substituted by the compensation, I am of the opinion that present matter is covered by those judgments. This is more so when the respondents were engaged on daily rated wages on muster-roll and worked for few months only.

In the aforesaid background, an award of reinstatement with back wages cannot be held to be legal, rather in place of reinstatement with back wages, the respondent employees are entitled to compensation as held by the Hon''ble Apex Court in the recent judgment referred to above. Accordingly, Impugned award is modified by setting aside the direction of reinstatement with back wages, with that of compensation which is quantified to Rs. 1 lakh in the present matter keeping in mind the status of the respondent employees and the period of service. With the aforesaid modification in the award, this writ petition so as the stay application stand disposed of.