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Industrial Disputes Act – Workmen – terminated the service – no retrenchment compensation paid nor notice was issued nor paid wages as per sec.6N of the U.P. Industrial Disputes Act – Labour court awarded to reappoint the worker with back wages and consequential benefits – High court set aside the order of labour court and awarded to pay damages of one lakh to the worker – Apex court held that Therefore, we deem it fit to construe that the appellant has rendered continuous service for six continuous years (save the artificially imposed break) as provided under Section 25B of the I.D. Act and can therefore be subjected to retrenchment only through the procedure mentioned in the I.D. Act or the state Act in pari materia.=BHUVNESH KUMAR DWIVEDI ………APPELLANT VS. M/S HINDALCO INDUSTRIES LTD. ……RESPONDENT =2014 ( April.Part) http://judis.nic.in/supremecourt/filename=41493

Industrial Disputes Act – Workmen – terminated the service – no retrenchment compensation paid nor notice was issued nor paid wages as per sec.6N of the U.P. Industrial Disputes Act – Labour court awarded to reappoint the worker with back wages and consequential benefits – High court set aside the order of labour court and awarded to pay damages of one lakh to the worker – Apex court held that Therefore, we deem it fit to construe that the  appellant  has  rendered continuous service for six continuous years (save the  artificially  imposed break) as provided under Section 25B of the I.D. Act and  can  therefore  be subjected to retrenchment only through the procedure mentioned in  the  I.D. Act or the state Act in pari materia.=

he has worked for six calendar years from the  date  of  his

   appointment till the termination of his service and he has rendered  more

   than 240 days of continuous service in every  calendar  year  before  his

   termination. The respondent-employer terminated the services of appellant-

   workman on 27.7.1998 as per practice with the reason ‘sanction  expired’.

   The respondent-employer neither paid retrenchment compensation nor issued

   any notice or paid wages in lieu of the same to the appellant-workman  as

   mandated under Section 6N of the U.P. Industrial Disputes Act (for  short

   “the U.P. I.D. Act”).  The  respondent-employer  engaged  the  appellant-

   workman for work against a post which was permanent  in  nature  but  his

   appointment was made only for a temporary period from 1992 to  1998  with

   oblique motive  to deprive his statutory rights.  At  the  end  of  every

   working year, the workman was handed over a  receipt  of  ‘relieved  from

   work’ and after 4-6 days, he was again engaged for three  or  six  months

   but without proper procedure and in this manner, he was continuously made

   to work for full one year and each time the annual increase in wages  was

   shown in the fresh  appointment  letter.  During  the  entire  period  of

   service  of  the  appellant-workman  with  the  respondent-employer,  the

   management followed the process of annually terminating him from  service

   and again reappointing him in the same post by assigning the  same  Badge

   No., ID No. in the same department  of  Construction  Division  with  the

   marginal increase of salary and dearness allowance per month.=

     It is the further case of the appellant-workman that he  falls  within

   the definition of workman under s. 2(s) of the  I.D.  Act  and  has  been

   rendering service  since  the  day  of  his  appointment  on  30.12.1992.

   Therefore, termination of his contract is a clear case of retrenchment as

   opposed to the provision in Section 6N of the U.P. I.D. Act. The employer

   on the other hand, did not comply with the mandatory provision of s.  6-N

   of the U.P. I.D. Act which sets the conditions precedent to be  fulfilled

   prior to retrenchment of workmen which is in pari materia with s. 25N  of

   the I.D. Act. =

The  Labour  Court,  after

   conducting enquiry has adjudicated the  industrial  dispute  between  the

   parties by answering the points of dispute and passed an award in  favour

   of the appellant-workman holding that the termination of his  service  is

   not justified since the respondent has not produced any material evidence

   on record to justify the order of termination. Further, the Labour  Court

   has held that the appellant is entitled to reinstatement with back  wages

   and  other  consequential  benefits  as  if  his  services   were   never

   terminated.=

The  doctrine  of  laissez  faire  was  again  rejected  in  Glaxo

      Laboratories (I) Ltd. v. Presiding Officer, in the following words:

          “12. In the days of laissez faire  when  industrial  relation  was

          governed by the harsh weighted law of hire and fire the management

          was the  supreme  master,  the  relationship  being  referable  to

          contract between unequals and the action of the management treated

          almost sacrosanct.

The developing notions of  social  justice  and

          the  expanding  horizon  of  socio-economic  justice  necessitated

          statutory protection to  the  unequal  partner  in  the  industry,

          namely, those who invest blood and flesh against those  who  bring

          in capital.

Moving from the days when whim  of  the  employer  was

          suprema lex, the Act took a modest step to compel by  statute  the

          employer to prescribe minimum conditions  of  service  subject  to

          which employment is given.

The Act was enacted as its  long  title

          shows to require employers in industrial establishments to  define

          with sufficient precision the conditions of employment under  them

          and to make the said conditions known to workmen employed by them.

The movement was from status to contract, the contract  being  not

          left to be negotiated  by  two  unequal  persons  but  statutorily

          imposed.

 If  this  socially  beneficial  Act  was   enacted   for

          ameliorating the conditions of the weaker partner,  conditions  of

          service prescribed thereunder must receive such interpretation  as

          to advance the  intendment  underlying  the  Act  and  defeat  the

          mischief.”=

   We therefore conclude and hold that the  Labour  Court  was  correct  on

legal and factual principles in reinstating the appellant  along  with  full

back wages after setting aside the order of termination. 

The High  Court  on

the other hand, has erred by exceeding its jurisdiction  under  Article  227

of the Constitution of India in holding that  the  appellant  has  in  fact,

resigned by not joining his duty as a Badly worker and  also  awarding  that

retrenchment compensation to the tune of  [pic]1,00,000/-  will  do  justice

to the appellant without assigning reasons which is wholly unsustainable  in

law.

 

36. The learned counsel for the respondent had mentioned before  this  Court

about a settlement between the parties in this  matter  after  the  judgment

was reserved. 

Therefore, we have not  taken  into  consideration  such  plea

from the learned counsel of the respondent since it was taken up  after  the

hearing was over. 

Also the documentary evidence on record  produced  by  the

parties required us to reject the subsequent plea made by the respondent  in

this case.  

We therefore set aside the finding of  the  High  Court  in  the

impugned judgment and hold that the appellant is entitled  to  reinstatement

with full back wages from the date of the termination of  his  service  till

the date of his reinstatement and other consequential benefits which  accrue

to him by virtue of his employment with the respondent company. 

The  appeals are allowed, with no order as to costs.

     2014 ( April.Part) http://judis.nic.in/supremecourt/filename=41493
GYAN SUDHA MISRA, V. GOPALA GOWDA

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 4883-4884 OF 2014
(ARISING OUT OF SLP(C) NOS.554-555 OF 2012)

 
BHUVNESH KUMAR DWIVEDI ………APPELLANT

VS.

M/S HINDALCO INDUSTRIES LTD. ……RESPONDENT

J U D G M E N T
V.GOPALA GOWDA, J.

Leave granted.
2. These appeals are filed against the final judgment and order
dated 10.03.2011 passed by the High Court of Judicature at Allahabad
in Civil Misc. Writ Petition No. 8784 of 2002 and also against
judgment and order dated 12.10.2011 passed by the High Court of
Allahabad in Civil Misc. Review/Recall Application No. 118006 of
2011 by allowing the writ petition filed by the respondent-employer
and setting aside the award passed by the Labour Court which
substituted the same by issuing direction to the respondent-employer
(for short “the employer”) to pay a sum of [pic]1,00,000/- as
damages to the appellant-workman. The direction issued by the High
Court in its judgment further states that the amount shall either be
paid through draft to the workman or deposited before the Labour
Court within three months for immediate payment to the workman. In
case of default, 12% interest per annum shall be payable on
[pic]1,00,000/- after three months till actual
payment/deposit/realisation.
3. However, the backdrop of industrial dispute between the parties
is briefly stated hereunder to find out whether the appellant is
entitled for the relief as prayed in these appeals.
It is the case of the appellant-workman that he was appointed as
Labour Supervisor in the employer’s factory on 30.12.1992 and he worked
continuously in terms of Section 25B of the Industrial Disputes Act,
1947 (for short “the I.D. Act”) in the said post till 28.7.1998- the day
on which his services were terminated. It is the case of the appellant-
workman that he has worked for six calendar years from the date of his
appointment till the termination of his service and he has rendered more
than 240 days of continuous service in every calendar year before his
termination. The respondent-employer terminated the services of appellant-
workman on 27.7.1998 as per practice with the reason ‘sanction expired’.
The respondent-employer neither paid retrenchment compensation nor issued
any notice or paid wages in lieu of the same to the appellant-workman as
mandated under Section 6N of the U.P. Industrial Disputes Act (for short
“the U.P. I.D. Act”). The respondent-employer engaged the appellant-
workman for work against a post which was permanent in nature but his
appointment was made only for a temporary period from 1992 to 1998 with
oblique motive to deprive his statutory rights. At the end of every
working year, the workman was handed over a receipt of ‘relieved from
work’ and after 4-6 days, he was again engaged for three or six months
but without proper procedure and in this manner, he was continuously made
to work for full one year and each time the annual increase in wages was
shown in the fresh appointment letter. During the entire period of
service of the appellant-workman with the respondent-employer, the
management followed the process of annually terminating him from service
and again reappointing him in the same post by assigning the same Badge
No., ID No. in the same department of Construction Division with the
marginal increase of salary and dearness allowance per month.
4. It is the further case of the appellant-workman that during the
course of his employment with the respondent- employer, he had noticed
that very few workmen were actually made permanent by the management and
rest of the work force was deprived from the benefit of permanent post by
being kept on temporary basis or emergency basis, on daily wage basis or
on contract basis. Even though the Construction Division of the employer
has been in existence ever since the beginning of its establishment and
is necessary for continuous productions in factory, thousands of workmen
are employed in the said division in the above mentioned manner and very
few of them are made permanent. It is the further case of the appellant-
workman that in accordance with the regular orders passed in the practice
of the Company, the concerned workman always fell in the category of
workman but due to the improper and unfair labour practice as mentioned
in Schedule V under s. 2(ra) of the I.D. Act it has kept the appellant as
temporary workman for the period of employment, which is opposed to law.
5. It is the further case of the appellant-workman that he falls within
the definition of workman under s. 2(s) of the I.D. Act and has been
rendering service since the day of his appointment on 30.12.1992.
Therefore, termination of his contract is a clear case of retrenchment as
opposed to the provision in Section 6N of the U.P. I.D. Act. The employer
on the other hand, did not comply with the mandatory provision of s. 6-N
of the U.P. I.D. Act which sets the conditions precedent to be fulfilled
prior to retrenchment of workmen which is in pari materia with s. 25N of
the I.D. Act. The respondent-employer neither complied with the aforesaid
mandatory provisions nor did the respondent pay retrenchment compensation
or issue three months notice or notice pay in lieu of the same.
Therefore, as per the appellant-workman, termination from his service is
in contravention of the provisions of the U.P. I.D. Act and the legal
principle laid down by this Court in catena of cases in this regard which
will be adverted into the reasoning portion of the judgment. Therefore,
the appellant-workman had raised an industrial dispute with a request to
the state government to make reference for adjudication of existing
industrial dispute regarding the termination of service of the appellant
workman from his service by the employer. The Assistant Labour
Commissioner made Reference Order No. 1454 CP 15/98 dated 24.9.1999 to
the Labour Court at Varanasi. The reference was registered in Case no. 59
of 1999 by the Labour Court, Varanasi, U.P. The Labour Court, after
conducting enquiry has adjudicated the industrial dispute between the
parties by answering the points of dispute and passed an award in favour
of the appellant-workman holding that the termination of his service is
not justified since the respondent has not produced any material evidence
on record to justify the order of termination. Further, the Labour Court
has held that the appellant is entitled to reinstatement with back wages
and other consequential benefits as if his services were never
terminated.
6. Aggrieved by the said award, the respondent-employer filed Civil
Misc. Writ Petition No. 8784 of 2002 before the learned single Judge of
the High Court of Judicature at Allahabad questioning the correctness,
legality and validity of the award passed by the Labour Court taking the
following pleas:
(i) It is pleaded by the respondent that the appellant was employed
purely on temporary basis in the project jobs in the Construction
Division of the Company for specific periods and finally he was employed
with effect from 23.1.1998 for six months and his services automatically
came to an end as per terms of the contract of employment in the
appointment letter with effect from 28.7.1998 as a result of non renewal
of his contract of employment with the respondent.
(ii) It is further pleaded by the respondent that in the
Construction Division of the Company, time bound specific project
construction work was being undertaken from time to time and thus no
regular work force could be maintained for such project work. However, as
a gesture of goodwill and to maintain harmonious industrial relations,
the employees who worked in a project work were given preference for
employment in other project work on their own request. In the instant
case, the service of the appellant came to an end as per terms of his
employment in the specific project job in the Construction Division and
after completion of the term of aforesaid employment, the appellant has
also taken clearance of his dues.
(iii) It is further pleaded by the respondent that temporary
workmen working in such specific projects are also given preference for
employment in the main plant project subject to availability of vacancies
and their suitability. After completion of the terms of contract of
employment, the appellant was offered fresh employment as Badli worker
against vacancies in Potroom Department of the Company. He applied for
the same on 22.10.1998 and after completion of necessary formalities he
was selected against the said vacancy and was issued appointment letter
dated 23.10.1998. He joined his duties in Potroom Plant-II Department as
substitute workman but did not report to duty on his own and on the other
hand he raised baseless industrial dispute for unlawful gain.
(iv) It is further pleaded by the respondent that the service of
the appellant has not been terminated by the Company but because the
appellant did not report for duty on his own after joining duty as
mentioned above. Therefore, there is no industrial dispute between the
parties and the reference made by the appropriate authorities at the
instance of the workman to the Labour Court is bad in law. However, the
respondent craves leave of the Labour Court to add, amend, alter and
rescind its written statement and to produce evidence oral or
documentary, if found expedient at the relevant stages of the hearing.
However, no plea was made by the respondent in written form on the
provision of Section 2(oo)(bb) of the I.D. Act that the termination of
the appellant from his service falls within this provision. Nonetheless,
this legal ground without any factual foundation was pressed into
operation before the Labour Court at the time of addressing its rights.
The same has been addressed by the Labour Court rejecting the contention
on the basis of recording its reasons which will be dealt with in the
reasoning portion of this judgment.
7. On the other hand, the appellant, by filing a detailed counter
statement before the High Court has sought to justify the finding and
reasons recorded by the Labour Court contending that the Labour Court,
being a fact finding court, on appreciation of all pleadings and
undisputed facts regarding the periodical years of service rendered by
the appellant with the respondent, held that he had rendered continuous
service of 240 days in 12 calendar months. Therefore, the Labour Court
has held that the termination order was issued by the respondent without
complying with the mandatory statutory provisions of Section 6-N of U.P.
I.D. Act. The appellant pleaded that neither the compensation for
retrenchment was given to him nor was he issued the three months notice
nor notice pay in lieu of the same as mandated under Section 6-N of the
U.P. I.D. Act. The appellant further sought to justify the finding of the
Labour Court that periodical appointment of the appellant for the very
same post in the Construction Division of the respondent’s Plant with the
same Badge Number and marginal increase of basic pay and D.A. is unfair
labour practice in terms of Section 25-T of the I.D. which is punishable
under section 25-U of the I.D. Act. The High Court concurred with the
finding of the Labour Court wherein it has held that the respondent’s
action is in contravention of Section 6-N of the U.P. I.D. Act.
8. The respondent, on the other hand, contends that the finding on the
question of retrenchment is factual and legally not correct in view of
the fact that the termination of the service of the appellant falls
within the provision of Section 2(oo) (bb) of the I.D. Act. The High
Court has exercised its judicial review power under Articles 226 and 227
of the Constitution of India and also referred to the facts that after
termination of the service of the appellant from the post of Labour
Supervisor, he was offered with employment in the Potroom department
w.e.f. 23.10.1998, which he joined and later resigned from that post.
Therefore, though the Labour Court came to the conclusion on facts,
evidence on record and law on this aspect that keeping the workman as
Badli worker was unfair labour practice, the High Court has erroneously
held that engagement of some workers as Badli workers is a standard
practice in several establishments and is quiet permissible under law.
The High Court further came to erroneous conclusion that the appellant
did resign and having stated so, the High Court further made observation
that the least which was required from the respondent under such
circumstance, was to pay retrenchment compensation to the appellant in
terms of Section 6-N of the U.P. I.D. Act which was admittedly not done.
It was further held by the High Court that an employee engaged for a
particular project cannot be directed to be retained after the completion
of the project. However, since it was not stated by the respondent that
for which particular project or projects the appellant was employed,
despite the fact that he had been continuously working for six years on
different projects, the appellant was conferred with some rights since he
had been rendering permanent nature of work.
9. The High Court also referred to the resignation of the appellant from
the job of Badli worker and held that the same mitigates against his
claim. If he wanted permanent job and had been assured the same, he
should not have first applied to be selected as Badli worker and then
resigned just after selection. Having said so, the High Court with
reference to the facts and circumstances of the case, opined that it was
not a case of reinstatement with full back wages. However, by placing
reliance upon the judgment of this Court in the case of Harjinder Singh
v. Punjab State Warehousing Corporation[1], the correctness of the said
substituted award by the High Court is challenged in this appeal by the
appellant urging various facts and legal contentions.
10. The learned counsel Mr. Abdhesh Chaudhary appearing on behalf of the
appellant-workman submits that the finding and reasons recorded by the
High Court in reversing and setting aside the award of reinstatement with
back wages and other consequential benefits and substituting its award
with award of [pic]1,00,000/- as damages is erroneous in law since the
action of the respondent in terminating the services of the appellant is
in contravention of Section 6-N of the U.P. I.D. Act. While exercising
judicial review power by the High Court under Articles 226 and 227 of the
Constitution of India, though it has concluded on the points of dispute
in favour of the workman it has erroneously interfered with the award of
reinstatement with back wages and consequential benefits which by the
Labour Court. This finding by High Court is in violation of the decision
of this Court in the case of Harjinder Singh (supra) in which this Court
after adverting to the entire case law on the question of social justice
has examined the conferment of power upon the High Court and held that
the Labour Court in exercise of its original jurisdiction is the final
court of facts and grants of relief and the same cannot be interfered
with in exercise of its supervisory jurisdiction unless the award is
shown to be vitiated as erroneous in law. Therefore, the impugned
judgment and order is vitiated in law and is liable to be set aside.
11. Further, it is contended that the High Court has further failed to
take into consideration the relevant aspect of the matter namely, that
the Labour Court on appreciation of pleadings and evidence on record with
reference to undisputed fact of non-payment on retrenchment compensation
recorded that the Company neither obtained permission from the
appropriate Government to retrench the appellant from his services nor
did it issue any notice or wages in lieu of the same to him. The action
of termination of the service of the appellant on the ground that it is
an automatic termination for non-renewal of contract of the employment is
in contravention to the statutory provisions of the U.P. I.D. Act and the
law laid down by this Court in catena of cases, the relevant paragraphs
of which will be adverted to in the reasoning portion of this judgment.
On this ground also the impugned judgment is liable to be set aside and
the impugned award of the Labour Court is entitled to be restored.
12. It is further urged that the High Court has further failed to take
into consideration the fact that the award of damages as against
reinstatement without consequential benefits to the appellant while
having concurred with the finding of fact recorded by Labour Court after
adjudication of the dispute and also the holding by the Labour Cthat the
order of termination is a case of retrenchment and is done in non-
compliance of the mandatory requirements as provided under the statute
of U.P. I.D. Act is erroneous in law. Therefore, the impugned judgment of
the High Court is liable to be set aside.
13. Mr. Chander Udai Singh, the learned senior Counsel for the respondent-
employer sought to justify the award of damages and setting aside the order
of reinstatement with consequential benefits by the High Court by
contending that the appellant is not a permanent workman. He was engaged on
a temporary basis periodically and he had no permanent status as worker and
his services could not be continued by the employer. His termination from
service from the respondent Company was on account of the condition of
automatic termination w.e.f. 28.7.1998, whereby the contract employment has
come to an end. Therefore, according to the learned senior counsel for the
respondent, no order of termination was passed by the respondent. On the
other hand, the present case was a situation of automatic termination due
to non-renewal of contract which is covered under Section 2(oo) (bb) of the
I.D. Act and the same is an exception to retrenchment. This legal aspect,
according to the learned senior counsel has not been appropriately
appreciated by the Labour Court. The same has not been accepted by the
Division Bench of High Court in exercise of its jurisdiction under Articles
226 and 227 of the Constitution of India. Therefore, the award of damages
could not have been awarded by the Labour Court. However, the same has been
paid to the appellant and which is accepted by him. Therefore, he would
submit that the appellant is not entitled to the relief as prayed in this
appeal for the reason that if automatic termination of services on account
of the operation of the contract of employment Clause is contained in the
appointment order, then the claim of the appellant is not a case of
retrenchment and compliance of the requirement under Section 6-N of the
U.P. Act does not arise. The same aspect has not been taken into proper
perspective both by the Labour Court as well as the High Court. Though the
appellant has not challenged separately by filing SLP the correctness of
the impugned judgment can be challenged by the respondent as it has got the
right under the provisions of Order 41 Rule 33 CPC to question the
correctness of the finding recorded on the question of the termination by
the Labour Court and the High Court which made concurrent finding holding
that it is a case of retrenchment and the same is in contravention of
Section 6-N of the U.P. I.D. Act.

The High Court while passing the judgment and order and substituting the
award of the Labour Court has already granted damages of [pic]1,00,000/- as
retrenchment compensation. The appellant is not entitled to the relief as
prayed for in this appeal for another reason namely, that he had accepted
the damages awarded in the impugned judgment by the High Court. Therefore,
this Court need not interfere with the impugned judgment.

14. Another legal contention urged by the learned senior counsel for the
respondent is that the appellant is not entitled to back wages since he is
not employed with the respondent-Company and has not even filed application
under Section 17B before the High Court when the award passed by the Labour
Court was challenged by the respondent. Further, the appellant admitted
that he did not claim wages under the Act which would clearly go on to show
that the appellant was not employed and therefore, he is not entitled to
back wages as awarded by the Labour Court. Hence, the award of the back
wages by the Labour Court is bad in law and the same has been modified by
the High Court having regard to the facts of the case which need not be
interfered with by this Court in exercise of its power under Article 136 of
the Constitution of India.

15. With reference to the above legal contentions the following points
would arise for our consideration :-

1) Whether the exercise of power by the High Court under
Articles 226 and 227 of the Constitution and setting aside
the award of reinstatement, back wages and other
consequential reliefs and awarding [pic]1,00,000/- towards
damages is legal and valid?
2) Whether the concurrent finding recorded by the Labour Court
and High Court on the question of termination of services
of the workman holding that the case of retrenchment falls
under Section 6-N of the U.P. I.D. Act is void ab initio
and not accepting the legal plea that the case falls under
Section 2 (oo) (bb) of the Act is correct, legal and valid?
3) Whether the workman is entitled for reinstatement with full
back wages and other consequential reliefs ?
4) What Award?

Answer to point No. 1
16. The appellant has claimed that the High Court has modified the award
passed by the Labour Court which has awarded reinstatement of the appellant
with full back wages and other consequential benefits to simply awarding
compensation to the tune of [pic]1,00,000/- by the High Court in lieu of
reinstatement with back wages and consequential benefits which order is bad
in law in the light of the legal principles laid down by this Court in the
catena of cases. In the case of Heinz India (P) Ltd. v. Union of India[2],
this Court, on the issue of the power of the High Court for judicial review
under Article 226, held as under:
“60. The power of judicial review is neither unqualified nor
unlimited. It has its own limitations. The scope and extent of the
power that is so very often invoked has been the subject-matter of
several judicial pronouncements within and outside the country. When
one talks of ‘judicial review’ one is instantly reminded of the
classic and oft quoted passage from Council of Civil Service Unions
(CCSU) v. Minister for the Civil Service [1984] 3 All ER 935, where
Lord Diplock summed up the permissible grounds of judicial review
thus:
Judicial Review has I think developed to a stage today when, without
reiterating any analysis of the steps by which the development has
come about, one can conveniently classify under three heads the
grounds on which administrative action is subject to control by
judicial review. The first ground I would call ‘illegality’, the
second ‘irrationality’ and the third ‘procedural impropriety’.
By ‘illegality’ as a ground for judicial review I mean that the
decision-maker must understand correctly the law that regulates his
decision-making power and must give effect to it. Whether he has or
not is par excellence a justiciable question to be decided, in the
event of dispute, by those persons, the judges, by whom the judicial
power of the State is exercisable.
By ‘irrationality’ I mean what can by now be succinctly referred to as
‘Wednesbury unreasonableness’. It applies to a decision which is so
outrageous in its defiance of logic or of accepted moral standards
that no sensible person who had applied his mind to the question to be
decided could have arrived at it. Whether a decision falls within this
category is a question that judges by their training and experience
should be well equipped to answer or else there would be something
badly wrong with our judicial system… …
I have described the third head as ‘procedural impropriety’ rather
than failure to observe basic rules of natural justice or failure to
act with procedural fairness towards the person who will be affected
by the decision. This is because susceptibility to judicial review
under this head covers also failure by an administrative tribunal to
observe procedural rules that are expressly laid down in the
legislative instrument by which its jurisdiction is conferred, even
where such failure does not involve any denial of natural justice.”

Further, in the case of Devinder Singh v. Municipal Council, Sanaur[3], it
was held that :

“22. ……A careful analysis thereof reveals that the High Court neither
found any jurisdictional infirmity in the award of the Labour Court
nor it came to the conclusion that the same was vitiated by an error
of law apparent on the face of the record. Notwithstanding this, the
High Court set aside the direction given by the Labour Court for
reinstatement of the Appellant by assuming that his initial
appointment/engagement was contrary to law and that it would not be in
public interest to approve the award of reinstatement after long lapse
of time. In our view, the approach adopted by the High Court in
dealing with the award of the Labour Court was ex facie erroneous and
contrary to the law laid down in Syed Yakoob v. K.S.
Radhakrishnan  AIR (1964) SC 477, Swaran Singh v. State of Punjab
(1976) 2 SCC 868 P.G.I. of Medical Education & Research, Chandigarh v.
Raj Kumar  (2001) 2 SCC 54, Surya Dev Rai v. Ram Chander Rai  (2003) 6
SCC 675 and Shalini Shyam v. Rajendra Shankar Path (2010) 8 SCC 329.
23. In Syed Yakoob v. K.S. Radhakrishnan (supra), this Court
identified the limitations of certiorari jurisdiction of the High
Court under Article 226 of the Constitution in the following words:

The question about the limits of the jurisdiction of High Courts in
issuing a writ of certiorari under Article 226 has been frequently
considered by this Court and the true legal position in that behalf is
no longer in doubt. A writ of certiorari can be issued for correcting
errors of jurisdiction committed by inferior courts or tribunals:
these are cases where orders are passed by inferior courts or
tribunals without jurisdiction, or is in excess of it, or as a result
of failure to exercise jurisdiction. A writ can similarly be issued
where in exercise of jurisdiction conferred on it, the court or
tribunal acts illegally or improperly, as for instance, it decides a
question without giving an opportunity to be heard to the party
affected by the order, or where the procedure adopted in dealing with
the dispute is opposed to principles of natural justice. There is,
however, no doubt that the jurisdiction to issue a writ of certiorari
is a supervisory jurisdiction and the court exercising it is not
entitled to act as an appellate court. This limitation necessarily
means that findings of fact reached by the inferior court or tribunal
as result of the appreciation of evidence cannot be reopened or
questioned in writ proceedings. An error of law which is apparent on
the face of the record can be corrected by a writ, but not an error of
fact, however grave it may appear to be. In regard to a finding of
fact recorded by the tribunal, a writ of certiorari can be issued if
it is shown that in recording the said finding, the tribunal had
erroneously refused to admit admissible and material evidence, or had
erroneously admitted inadmissible evidence which has influenced the
impugned finding. Similarly, if a finding of fact is based on no
evidence, that would be regarded as an error of law which can be
corrected by a writ of certiorari. In dealing with this category of
cases, however, we must always bear in mind that a finding of fact
recorded by the tribunal cannot be challenged in proceedings for a
writ of certiorari on the ground that the relevant and material
evidence adduced before the tribunal was insufficient or inadequate to
sustain the impugned finding. The adequacy or sufficiency of evidence
led on a point and the inference of fact to be drawn from the said
finding are within the exclusive jurisdiction of the tribunal, and the
said points cannot be agitated before a writ court. It is within these
limits that the jurisdiction conferred on the High Courts under
Article 226 to issue a writ of certiorari can be legitimately
exercised.
In the second judgment – Swaran Singh v. State of Punjab (supra), this
Court reiterated the limitations of certiorari jurisdiction indicated
in Syed Yakoob v. Radhakrishnan (supra) and observed:

In regard to a finding of fact recorded by an inferior tribunal, a
writ of certiorari can be issued only if in recording such a finding,
the tribunal has acted on evidence which is legally inadmissible, or
has refused to admit admissible evidence, or if the finding is not
supported by any evidence at all, because in such cases the error
amounts to an error of law. The writ jurisdiction extends only to
cases where orders are passed by inferior courts or tribunals in
excess of their jurisdiction or as a result of their refusal to
exercise jurisdiction vested in them or they act illegally or
improperly in the exercise of their jurisdiction causing grave
miscarriage of justice.”

 
17. The judgments mentioned above can be read with the judgment of this
court in Harjinder Singh’s case (supra), the relevant paragraph of which
reads as under:
“21. Before concluding, we consider it necessary to observe that while
exercising jurisdiction under Articles 226 and/or 227 of the
Constitution in matters like the present one, the High Courts are duty-
bound to keep in mind that the Industrial Disputes Act and other
similar legislative instruments are social welfare legislations and
the same are required to be interpreted keeping in view the goals set
out in the Preamble of the Constitution and the provisions contained
in Part IV thereof in general and Articles 38, 39(a) to (e), 43 and 43-
A in particular, which mandate that the State should secure a social
order for the promotion of welfare of the people, ensure equality
between men and women and equitable distribution of material resources
of the community to subserve the common good and also ensure that the
workers get their dues. More than 41 years ago, Gajendragadkar, J.
opined that:
“10. … The concept of social and economic justice is a living
concept of revolutionary import; it gives sustenance to the rule
of law and meaning and significance to the ideal of welfare
State.”
(State of Mysore v. Workers of Gold Mines13, AIR p. 928, para 10.)

 

18. A careful reading of the judgments reveals that the High Court can
interfere with an Order of the Tribunal only on the procedural level and in
cases, where the decision of the lower courts has been arrived at in gross
violation of the legal principles. The High Court shall interfere with
factual aspect placed before the Labour Courts only when it is convinced
that the Labour Court has made patent mistakes in admitting evidence
illegally or have made grave errors in law in coming to the conclusion on
facts. The High Court granting contrary relief under Articles 226 and 227
of the Constitution amounts to exceeding its jurisdiction conferred upon
it. Therefore, we accordingly answer the point No. 1 in favour of the
appellant.

Answer to point No. 2
19. No plea was made by the respondent in its written statement filed
before the Labour Court with regard to the provision of Section 2(oo)(bb)
of the I.D. Act. Nonetheless, this legal ground without any factual
foundation was pressed into operation before the Labour Court by the
learned counsel for the respondent. The same has been addressed by the
Labour Court by rejecting the said contention by assigning its own reasons.
Before we record our finding on this contention, it is pertinent to mention
the provision of Section 2 (oo) (bb) of the I.D. Act, which reads thus:
“2 (oo) “retrenchment” means the termination by the employer of the
service of a workman for any reason whatsoever, otherwise than as a
punishment inflicted by way of disciplinary action, but does not
include-
[(bb) termination of the service of the workman as a result of the non-
renewal of the contract of employment between the employer and the
workman concerned on its expiry or of such contract being terminated
under the stipulation in that behalf contained therein; or]”

20. It is argued by the learned counsel for the appellant that there is no
provision in pari materia to this provision in the U.P. I.D. Act.
Therefore, even if the service of the appellant is terminated on expiry of
the contract period of service, it would fall within the definition of
retrenchment under the U.P. I.D. Act for non compliance of the mandatory
requirement under Section 6-N of the U.P. I.D. Act. The order of
termination against the appellant is rendered void ab initio in law,
therefore, the appellant is entitled to be reinstated with back wages and
consequential benefits. In support of this contention, the learned counsel
has aptly relied upon the decision of this Court in U.P. State Sugar
Corporation Ltd. v. Om Prakash Upadhyay[4], with regard to the
applicability of the provision of Section 2(oo) (bb) of the I.D. Act which
was amended provision after the U.P. I.D. Act, the relevant paragraphs of
which read as under:
“3. On the application of the State Act or the Central Act to the
case on hand, the High Court followed the Division Bench ruling in Jai
Kishun v. U.P. Coop. Bank Ltd. and made it plain that the provision of
Section 2 (oo)(bb) of the Central Industrial Dispuutes Act would not
apply in respect of proceedings arising under the U.P. Industrial
Disputes Act. The High Court also noticed the contrary view in this
regard in the case of Pushpa Agarwal v. Regional Inspectress of Girls
Schools, Meerut but held that in Jai Kishun case the relevant
provisions had been duly considered which are not taken note of in
Pushpa Agarwal case and on that basis, it followed the decision in Jai
Kishun case. It is this judgment that is brought in appeal before us
in these proceedings.
……..
5. The law is settled that under the Central Act every case of
retrenchment would not include a case of contractual termination which
came to be introduced under the Central Act by amending Act 49 of 1984
which purports to exclude from the ambit of definition “retrenchment”
inter alia: (i) termination of service of a workman as a result of the
non- renewal of contract of employment between the employer and the
workman concerned on its expiry, or (ii) termination of the contract
of employment in terms of a stipulation contained in the contract of
employment in that behalf. Such a case is not available under the U.P.
Industrial Disputes Act. If the U.P. Industrial Disputes Act covers
the present case then termination of the services of the respondent
would certainly result in retrenchment while it is not so under the
Central Industrial Disputes Act in view of the exceptional clauses
referred to above. While the former situation results in retrenchment,
the latter situation does not amount to retrenchment if the same case
would arise under the State Industrial Disputes Act. Thus operation of
the two enactments would bring to the forefront the obvious repugnancy
between them. In such a case as to how the question is to be resolved
needs to be considered in the present case.
6. Inasmuch as the enactments, both by the State and the Centre, are
under the Concurrent List, we are urged to look to Article 254(2) of
the Constitution of India. If we view from that angle, the U.P.
Industrial Disputes Act also covers the same field as the Central
Industrial Disputes Act. However, Section 2 (oo) (bb) is obviously a
special provision enacted under in order to understand the meaning of
“retrenchment” and that is the law made by Parliament subsequent to
State enactment and naturally falls within the proviso to Article
254(2). If that is so, the Central Industrial Disputes Act. Therefore,
we would have taken that view but for the special provisions in the
Central Act which we will advert to hereinafter.
7. Section 1(2) of the Central Act provides that the Act ‘extends to
the whole of India’ and this sub-section was substituted for the
original sub- section (2) by the Industrial Disputes (Amendment and
Miscellaneous Provisions) Act, 1956 (36 of 1956) with effect from 29-8-
1956. Under that Act, Section 31 (which came into force from 7-10-
1956) has been introduced which reads as follows:
’31.Act not to override State laws.- (1) If, immediately before the
commencement of this Act, there is in force in any State any
Provincial Act or State Act relating to the settlement or adjudication
of disputes, the operation of such an Act in that State in relation to
matters covered by that Act shall not be affected by the Industrial
Disputes Act, 1947 as amended by this Act’.
Sub- section (1) of the said section makes it clear that the operation
of the State Act will not be affected by the Central Act…”

 
21. The learned counsel for the appellant therefore, rightly submitted that
Section 2 (oo) (bb) of the I.D. Act will not be attracted in the present
case and on the other hand, the provision of Section 6-N of the U.P. I.D.
Act is required to be fulfilled mandatorily by the respondent to retrench
the appellant from his service.

22. The learned senior counsel for the respondent has not brought in his
argument to counter the above legal contention except contending that the
provision of Section 2(oo) (bb) of the I.D. Act would be applicable to the
fact situation of the case as the appellant has been in contract employment
in the project. But, we are inclined to hold that s. 2 (oo) (bb) of the
I.D. Act is not attracted in the present case on two grounds:
Firstly, in the light of the legal principle laid down by this Court
in the case of U.P. State Sugar Corporation Ltd. (supra), the provisions of
the U.P. I.D. Act remain unaffected by the provision of the I.D. Act
because of the provision in s. 31 of the Industrial Disputes (Amendment and
Miscellaneous Provisions) Act, 1956. Hence, s. 2 (oo) (bb) is not attracted
in the present case.
Secondly, the claim of the respondent that the appellant was a
temporary worker is not acceptable to us. On perusal of facts, it is
revealed that his service has been terminated several times and he was
subsequently employed again till his service was finally terminated on
27.7.1998. His brief periods of contracts with the respondent have been
from 28.12.1992 to 28.12. 1993 for the first time, from 3.4.1994 to
29.12.1994 for the second time, from 10.1.1995 to 5.1.1996 for the third
time, from 16.1.1996 to 11.1.1997 for the fourth time, from 20.1.1997 to
21.1.1998 for the fifth time and from 27.1.1998 to 27.7.1998 for a final
time at the end of which his service was terminated.

23. Very interestingly, the periods of service extends to close to 6 years
save the artificial breaks made by the respondent with an oblique motive so
as to retain the appellant as a temporary worker and deprive the appellant
of his statutory right of permanent worker status. The aforesaid conduct of
the respondent perpetuates ‘unfair labour practice as defined under Section
2(ra) of the I.D. Act, which is not permissible in view of Sections 25T
and 25U of the I.D. Act read with entry at Serial No. 10 in the Vth
Schedule to the I.D. Act regarding unfair labour practices.
Section 2 (ra) reads thus:
“unfair labour practice” means any of the practices mentioned in the
Vth Schedule.

Further, Entry 10 of Vth Schedule reads as under:
“5. To discharge or dismiss workmen-
….
(10). To employ workmen as ‘badlis’, casuals or temporaries and to
continue them as such for years, with the object of depriving them of
the status and privileges of permanent workmen.”

 
24. The respondent, in order to mitigate its conduct towards the appellant
has claimed that the appellant was appointed solely on contract basis, and
his service has been terminated in the manner permissible under Section 2
(oo) (bb) of the I.D. Act. However, we shall not accept this contention of
the respondent for the following reasons:-
(i) Firstly, the respondent has not produced any material evidence on
record before the Labour Court to prove that it meets all the required
criteria under the Contract Labour (Regulation and Abolition) Act,
1970, to be eligible to employ employees on contractual basis which
includes license number etc.
(ii) Secondly, the respondent could not produce any material evidence
on record before the Labour Court to show that the appellant was
employed for any particular project(s) on the completion of which his
service has been terminated through non-renewal of his contract of
employment.
25. Therefore, we deem it fit to construe that the appellant has rendered
continuous service for six continuous years (save the artificially imposed
break) as provided under Section 25B of the I.D. Act and can therefore be
subjected to retrenchment only through the procedure mentioned in the I.D.
Act or the state Act in pari materia.

26. Therefore, we answer the point No. 2 in favour of the appellant holding
that the Labour Court was correct in holding that the action of the
respondent/employer is a clear case of retrenchment of the appellant, which
action requires to comply with the mandatory requirement of the provision
of Section 6-N of the U.P. I.D. Act. Undisputedly, the same has not been
complied with and therefore, the order of retrenchment has rendered void ab
initio in law.

 

Answer to Point No.3
27. Having answered point No. 2 in favour of the appellant, we also answer
the point No. 3 in his favour since we construe that the appellant is a
worker of the respondent Company providing continuous service for 6 years
except for the artificial breaks imposed upon him with an oblique motive by
the respondent Company. We hold that the termination of service of the
appellant amounts to “retrenchment” in the light of the principle laid down
by three judge bench decision of this Court in State Bank of India v. Shri
N. Sundara Money[5] and attracts the provision of S. 6-N of the U.P. I.D.
Act. The case mentioned above illustrates the elements which constitute
retrenchment. The relevant paragraphs read as under:
“9. A break-down of Section 2(oo) unmistakably expands the semantics
of retrenchment. ‘Termination…for any reason whatsoever’ are the
keywords. Whatever the reason, every termination spells retrenchment.
So the sole question is has the employee’s service been terminated?
Verbal apparel apart, the substance is decisive. A termination takes
place where a term expires either by the active step of the master or
the running out of the stipulated term. To protect the weak against
the strong this policy of comprehensive definition has been
effectuated. Termination embraces not merely the act of termination by
the employer, but the fact of termination howsoever produced. May be,
the present may be a hard case, but we can visualise abuses by
employers, by suitable verbal devices, circumventing the armour of
Section 25F and Section 2(00). Without speculating on possibilities,
we may agree that ‘retrenchment’ is no longer terra incognita but area
covered by an expansive definition. It meats ‘to end, conclude,
cease’. In the present case the employment ceased, concluded, ended on
the expiration of nine days automatically maybe, but cessation all the
same. That to write into the order of appointment the date of
termination confers no moksha from Section 25F(b) is inferable from
the proviso to Section 25F(1). True, the section speaks of
retrenchment by the employer and it is urged that some act of volition
by the employer to bring about the termination is essential to attract
Section 25F and automatic extinguishment of service by effluxion of
time cannot be sufficient. An English case R.V. Secretary of
State (1973) 2 ALL E.R. 103; was relied on, where Lord Denning, MR
observed:
I think the word ‘terminate’ or ‘termination’ is by itself ambiguous.
It can refer to either of two things-either to termination by notice
or termination by effluxion of time It is often used in that dual
sense in landlord and tenant and in master and servant cases. But
there are several indications in this paragraph to show that it refers
here only to termination by notice.
Buckley L. J, concurred and said:
In my judgment the words are not capable of bearing that meaning. As
counsel for the Secretary of State has pointed out, the verb
‘terminate’ can be used either transitively or intransitively. A
contract may be said to terminate when it comes to an end by effluxion
of time, or it may be said to be terminated when it is determined at
notice or otherwise by some act of one of the parties. Here in my
judgment the word ‘terminated’ is used in this passage in para 190 in
the transitive sense, and it postulates some act by somebody which is
to bring the appointment to an end, and is not applicable to a case in
which the appointment comes to an end merely by effluxion of time
Words of multiple import have to be winnowed judicially to suit the
social philosophy of the statute. So screened, we hold that the
transitive and intransitive senses are covered in the current context.
Moreover, an employer terminates employment not merely by passing an
order as the service runs. He can do so by writing a composite order
one giving employment and the other ending or limiting it. A separate,
subsequent determination is not the sole magnetic pull of the
provision. A preemptive provision to terminate is struck by the same
vice as the post-appointment termination. Dexterity of diction cannot
defeat the articulated conscience of the provision.”
28. Section 6N of the U.P. I.D. Act which is in pari materia to s. 25N of
the I.D. Act reads thus:
“[6-N. Condition precedent to retrenchment of workmen.- No workman
employed in any industry who has been in continuous service for not
less than one year under an employer shall be retrenched by that
employer until,-
a) the workman has been given one month’s notice in writing
indicating the reasons for retrenchment and the period of
notice has expired or the workman has been paid in lieu of
such notice wages for the period of the notice;
Provided that no such notice shall be necessary if the retrenchment is
under an agreement which specifies the date of termination of service;
b) the workman has been paid, at the time of retrenchment,
compensation which shall be equivalent to fifteen days’
average pay for every completed year of service or any part
thereof in excess of six months; and
c) notice in the prescribed manner is served on the State
Government]”

Evidently, the above said mandatory procedure has not been followed in the
present case. Further, it has been held by this Court in the case of Anoop
Sharma v. Executive Engineer, Public Health Division No. 1 Panipat[6] as
under:
“13….. 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. This Court has
repeatedly held that Section 25F(a) and (b) of the Act is mandatory
and non-compliance thereof renders the retrenchment of an employee
nullity – State of Bombay v. Hospital Mazdoor Sabha  AIR 1960 SC
610, Bombay Union of Journalists v. State of Bombay  (1964) 6 SCR
22, State Bank of India v. N. Sundara Money  (1976) 1 SCC 822, Santosh
Gupta v. State Bank of Patiala  (1980) 3 SCC 340, Mohan Lal v.
Management of M/s. Bharat Electronics Ltd. (1981) 3 SCC 225, L. Robert
D’Souza v. Executive Engineer, Southern Railway  (1982) 1 SCC
645, Surendra Kumar Verma v. Industrial Tribunal  (1980) 4 SCC
443, Gammon India Ltd. v. Niranjan Das (1984) 1 SCC 509, Gurmail Singh
v. State of Punjab  (1991) 1 SCC 189 and Pramod Jha v. State of Bihar
(2003) 4 SCC 619. 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.
(Emphasis laid by this Court)
Therefore, in the light of the law provided in the I.D. Act and its
state counterpart through the U.P. I.D. Act and also on the basis of the
legal principle laid down by this Court, we hold that the termination of
service of the appellant was illegal and void ab initio.

29. Therefore, the Labour Court was correct on factual evidence on record
and legal principles laid down by this Court in catena of cases in holding
that the appellant is entitled to reinstatement with all consequential
benefits. Therefore, we set aside the Order of the High Court and uphold
the order of the Labour Court by holding that the appellant is entitled to
reinstatement in the respondent-Company.

30. On the issue of back wages to be awarded in favour of the appellant, it
has been held by this Court in the case of Shiv Nandan Mahto v. State of
Bihar & Ors.[7] that if a workman is kept out of service due to the fault
or mistake of the establishment/ company he was working in, then the
workman is entitled to full back wages for the period he was illegally kept
out of service. The relevant paragraph of the judgment reads as under:
“5. …. In fact, a perusal of the aforesaid short order passed by the
Division Bench would clearly show that the High Court had not even
acquainted itself with the fact that the Appellant was kept out of
service due to a mistake. He was not kept out of service on account of
suspension, as wrongly recorded by the High Court. The conclusion is,
therefore, obvious that the Appellant could not have been denied the
benefit of backwages on the ground that he had not worked for the
period when he was illegally kept out of service. In our opinion, the
Appellant was entitled to be paid full backwages for the period he was
kept out of service.”

 
31. Further, in General Manager, Haryana Roadways v. Rudhan Singh[8], the
three Judge Bench of this Court considered the question whether back wages
should be awarded to the workman in each and every case of illegal
retrenchment. The relevant paragraph reads as under:
“There is no rule of thumb that in every case where the Industrial
Tribunal gives a finding that the termination of service was in
violation of Section 25-F of the Act, entire back wages should be
awarded. A host of factors like the manner and method of selection and
appointment i.e. whether after proper advertisement of the vacancy or
inviting applications from the employment exchange, nature of
appointment, namely, whether ad hoc, short term, daily wage, temporary
or permanent in character, any special qualification required for the
job and the like should be weighed and balanced in taking a decision
regarding award of back wages. One of the important factors, which has
to be taken into consideration, is the length of service, which the
workman had rendered with the employer. If the workman has rendered a
considerable period of service and his services are wrongfully
terminated, he may be awarded full or partial back wages keeping in
view the fact that at his age and the qualification possessed by him
he may not be in a position to get another employment. However, where
the total length of service rendered by a workman is very small, the
award of back wages for the complete period i.e. from the date of
termination till the date of the award, which our experience shows is
often quite large, would be wholly inappropriate.
Another important factor, which requires to be taken into
consideration is the nature of employment. A regular service of
permanent character cannot be compared to short or intermittent daily-
wage employment though it may be for 240 days in a calendar year.”
32. Subsequently, in the case of Deepali Gundu Surwase v. Kranti Junior
Adhyapak Mahavidyalaya[9] it was held by this Court as under:
“The propositions which can be culled out from the aforementioned
judgments are:
i) In cases of wrongful termination of service, reinstatement with
continuity of service and back wages is the normal rule.
iii) Ordinarily, an employee or workman whose services are terminated
and who is desirous of getting back wages is required to either plead
or at least make a statement before the adjudicating authority or the
Court of first instance that he/she was not gainfully employed or was
employed on lesser wages. If the employer wants to avoid payment of
full back wages, then it has to plead and also lead cogent evidence to
prove that the employee/workman was gainfully employed and was getting
wages equal to the wages he/she was drawing prior to the termination
of service. This is so because it is settled law that the burden of
proof of the existence of a particular fact lies on the person who
makes a positive averments about its existence. It is always easier to
prove a positive fact than to
prove a negative fact. Therefore, once the employee shows that he was
not employed, the onus lies on the employer to specifically plead and
prove that the employee was gainfully employed and was getting the
same or substantially similar emoluments.
……..
vi) In a number of cases, the superior Courts have interfered with the
award of the primary adjudicatory authority on the premise that
finalization of litigation has taken long time ignoring that in
majority of cases the parties are not responsible for such delays.
Lack of infrastructure and manpower is the principal cause for delay
in the disposal of cases. For this the litigants cannot be blamed or
penalised.
It would amount to grave injustice to an employee or workman if he is
denied back wages simply because there is long lapse of time between
the termination of his service and finality given to the order of
reinstatement. The Courts should bear in mind that in most of these
cases, the employer is in an advantageous position vis-à-vis the
employee or workman. He can avail the services of best legal brain for
prolonging the agony of the sufferer, i.e., the employee or workman,
who can ill afford the luxury of spending money on a lawyer with
certain amount of fame. Therefore, in such cases it would be prudent
to adopt the course suggested in Hindustan Tin Works Private Limited
v. Employees of Hindustan Tin Works Private Limited (supra).….”
(Emphasis laid by this Court)

33. In the present case, the respondent has made a vague submission to the
extent that:
“the conduct of the workman throughout the proceedings before the
High Court during 2002 to 2011 shows that he is continuously
gainfully employed somewhere. Admittedly even in the counter
affidavit in the said Writ Petition, it has not been stated that
the workman was not employed”

 
Therefore, on the basis of the legal principle laid down by this Court in
the Deepali Gundu Surwase case (supra), the submission of the respondent
that the appellant did not aver in his plaint of not being employed, does
not hold since the burden of proof that the appellant is gainfully employed
post termination of his service is on the respondent. The claim of the
respondent that the appellant is gainfully employed somewhere is vague and
cannot be considered and accepted. Therefore, we hold that the appellant is
entitled to full back wages from the date of termination of his service
till the date of his reinstatement.
Answer to point No.4
34. The present case is a clear case of violation of the constitutional
principles expressly mentioned in the text. Before we make our concluding
findings and reasons, we wish to revisit the Harjinder Singh case (supra)
which made some pertinent points as under:
“22. In Y.A. Mamarde v. Authority under the Minimum Wages Act, this
Court, while interpreting the provisions of the Minimum Wages Act,
1948, observed: (SCC pp. 109-10)
“The anxiety on the part of the society for improving the general
economic condition of some of its less favoured members appears to
be in supersession of the old principle of absolute freedom of
contract and the doctrine of laissez faire and in recognition of
the new principles of social welfare and common good. Prior to our
Constitution this principle was advocated by the movement for
liberal employment in civilised countries and the Act which is a
pre-Constitution measure was the offspring of that movement. Under
our present Constitution the State is now expressly directed to
endeavour to secure to all workers (whether agricultural,
industrial or otherwise) not only bare physical subsistence but a
living wage and conditions of work ensuring a decent standard of
life and full enjoyment of leisure. This directive principle of
State policy being conducive to the general interest of the nation
as a whole, merely lays down the foundation for appropriate social
structure in which the labour will find its place of dignity,
legitimately due to it in lieu of its contribution to the progress
of national economic prosperity.”
27. In 70s, 80s and early 90s, the courts repeatedly negated the
doctrine of laissez faire and the theory of hire and fire. In his
treatise: Democracy, Equality and Freedom, Justice Mathew wrote:
“The original concept of employment was that of master and servant.
It was therefore held that a court will not specifically enforce a
contract of employment. The law has adhered to the age-old rule
that an employer may dismiss the employee at will. Certainly, an
employee can never expect to be completely free to do what he likes
to do. He must face the prospect of discharge for failing or
refusing to do his work in accordance with his employer’s
directions. Such control by the employer over the employee is
fundamental to the employment relationship. But there are
innumerable facets of the employee’s life that have little or no
relevance to the employment relationship and over which the
employer should not be allowed to exercise control. It is no doubt
difficult to draw a line between reasonable demands of an employer
and those which are unreasonable as having no relation to the
employment itself. The rule that an employer can arbitrarily
discharge an employee with or without regard to the actuating
motive is a rule settled beyond doubt. But the rule became settled
at a time when the words ‘master’ and ‘servant’ were taken more
literally than they are now and when, as in early Roman Law, the
rights of the servant, like the rights of any other member of the
household, were not his own, but those of his paterfamilias. The
overtones of this ancient doctrine are discernible in the judicial
opinion which rationalised the employer’s absolute right to
discharge the employee. Such a philosophy of the employer’s
dominion over his employee may have been in tune with the rustic
simplicity of bygone days. But that philosophy is incompatible with
these days of large, impersonal, corporate employers. The
conditions have now vastly changed and it is difficult to regard
the contract of employment with large-scale industries and
government enterprises conducted by bodies which are created under
special statutes as mere contract of personal service. Where large
number of people are unemployed and it is extremely difficult to
find employment, an employee who is discharged from service might
have to remain without means of subsistence for a considerably long
time and damages in the shape of wages for a certain period may not
be an adequate compensation to the employee for non-employment. In
other words, damages would be a poor substitute for reinstatement.
The traditional rule has survived because of the sustenance it
received from the law of contracts. From the contractual principle
of mutuality of obligation, it was reasoned that if the employee
can quit his job at will, then so too must the employer have the
right to terminate the relationship for any or no reason. And there
are a number of cases in which even contracts for permanent
employment i.e. for indefinite terms, have been held unenforceable
on the ground that they lack mutuality of obligation. But these
cases demonstrate that mutuality is a high-sounding phrase of
little use as an analytical tool and it would seem clear that
mutuality of obligation is not an inexorable requirement and that
lack of mutuality is simply, as many courts have come to recognise,
an imperfect way of referring to the real obstacle to enforcing any
kind of contractual limitation on the employer’s right of discharge
i.e. lack of consideration. If there is anything in contract law
which seems likely to advance the present inquiry, it is the
growing tendency to protect individuals from contracts of adhesion
from overreaching terms often found in standard forms of contract
used by large commercial establishments. Judicial disfavour of
contracts of adhesion has been said to reflect the assumed need to
protect the weaker contracting part against the harshness of the
common law and the abuses of freedom of contract. The same
philosophy seems to provide an appropriate answer to the argument,
which still seems to have some vitality, that the servant cannot
complain, as he takes the employment on the terms which are offered
to him.”
(emphasis added)
28. In Govt. Branch Press v. D.B. Belliappa, the employer invoked the
theory of hire and fire by contending that the respondent’s
appointment was purely temporary and his service could be terminated
at any time in accordance with the terms and conditions of appointment
which he had voluntarily accepted. While rejecting this plea as wholly
misconceived, the Court observed: (SCC p. 486, para 25)
“25. … It is borrowed from the archaic common law concept that
employment was a matter between the master and servant only. In the
first place, this rule in its original absolute form is not
applicable to government servants. Secondly, even with regard to
private employment, much of it has passed into the fossils of time.
‘This rule held the field at the time when the master and servant
were taken more literally than they are now and when, as in early
Roman law, the rights of the servant, like the rights of any other
member of the household, were not his own, but those of his
paterfamilias.’ The overtones of this ancient doctrine are
discernible in the Anglo-American jurisprudence of the 18th century
and the first half of the 20th century, which rationalised the
employer’s absolute right to discharge the employee. ‘Such a
philosophy’, as pointed out by K.K. Mathew, J. (vide his treatise:
Democracy, Equality and Freedom, p. 326), ‘of the employer’s
dominion over his employee may have been in tune with the rustic
simplicity of bygone days. But that philosophy is incompatible with
these days of large, impersonal, corporate employers.’ To bring it
in tune with vastly changed and changing socio-economic conditions
and mores of the day, much of this old, antiquated and unjust
doctrine has been eroded by judicial decisions and legislation,
particularly in its application to persons in public employment, to
whom the constitutional protection of Articles 14, 15, 16 and 311
is available. The argument is therefore overruled.”
29. The doctrine of laissez faire was again rejected in Glaxo
Laboratories (I) Ltd. v. Presiding Officer, in the following words:
“12. In the days of laissez faire when industrial relation was
governed by the harsh weighted law of hire and fire the management
was the supreme master, the relationship being referable to
contract between unequals and the action of the management treated
almost sacrosanct. The developing notions of social justice and
the expanding horizon of socio-economic justice necessitated
statutory protection to the unequal partner in the industry,
namely, those who invest blood and flesh against those who bring
in capital. Moving from the days when whim of the employer was
suprema lex, the Act took a modest step to compel by statute the
employer to prescribe minimum conditions of service subject to
which employment is given. The Act was enacted as its long title
shows to require employers in industrial establishments to define
with sufficient precision the conditions of employment under them
and to make the said conditions known to workmen employed by them.
The movement was from status to contract, the contract being not
left to be negotiated by two unequal persons but statutorily
imposed. If this socially beneficial Act was enacted for
ameliorating the conditions of the weaker partner, conditions of
service prescribed thereunder must receive such interpretation as
to advance the intendment underlying the Act and defeat the
mischief.”
35. We therefore conclude and hold that the Labour Court was correct on
legal and factual principles in reinstating the appellant along with full
back wages after setting aside the order of termination. The High Court on
the other hand, has erred by exceeding its jurisdiction under Article 227
of the Constitution of India in holding that the appellant has in fact,
resigned by not joining his duty as a Badly worker and also awarding that
retrenchment compensation to the tune of [pic]1,00,000/- will do justice
to the appellant without assigning reasons which is wholly unsustainable in
law.

36. The learned counsel for the respondent had mentioned before this Court
about a settlement between the parties in this matter after the judgment
was reserved. Therefore, we have not taken into consideration such plea
from the learned counsel of the respondent since it was taken up after the
hearing was over. Also the documentary evidence on record produced by the
parties required us to reject the subsequent plea made by the respondent in
this case. We therefore set aside the finding of the High Court in the
impugned judgment and hold that the appellant is entitled to reinstatement
with full back wages from the date of the termination of his service till
the date of his reinstatement and other consequential benefits which accrue
to him by virtue of his employment with the respondent company. The appeals
are allowed, with no order as to costs.
………………………………………………………………J.
[GYAN SUDHA MISRA]

 

 

………………………………………………………………J.
[V. GOPALA GOWDA]

 

New Delhi,
April 25, 2014.
———————–
[1] (2010) 3 SCC 192

[2] (2012) 5 SCC 443

[3] (2011) 6 SCC 584

[4] (2002) 10 SCC 89

[5] AIR 1976 SC 1111

[6] (2010) 5 SCC 497

[7] (2013) 11 SCC 626

[8] (2005) 5 SCC 591
[9] (2013) 10 SCC 324

 

 

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