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whether the appellants are entitled to claim the relief of payment of retrenchment compensation.



CIVIL APPEAL No. 1389 OF 2015
(Arising out of SLP(C) No.33509/2011)
Oshiar Prasad and Others Appellant(s)
The Employers in relation to
Management of Sudamdih
Coal Washery of M/s BCCL,
Dhanbad, Jharkhand Respondent(s)


Abhay Manohar Sapre, J.
1. Leave granted.
2. This civil appeal is filed by the unsuccessful writ petitioners
against the judgment and order dated 17.06.2011 passed by the High Court of
Jharkhand at Ranchi in L.P.A. No. 447 of 2009 which arises out of the order
dated 03.09.2009 passed by the learned single Judge of the High Court in
C.W.J.C. No. 616 of 1999(R).
3. By impugned judgment, the Division Bench dismissed the appellants’
intra court appeal and upheld the order of the writ court, which had
dismissed the appellants’ writ petition and in consequence upheld the award
dated 21.12.1998 passed by the Labour Court in Reference Case No. 75 of
4. In order to appreciate the controversy involved in this appeal, it is
necessary to set out the facts in detail.
5. The respondent – M/s Bharat Coking Coal Ltd (hereinafter referred to
as “the BCCL”) is a Government of India undertaking. It is engaged in the
business of manufacture and sale of various kinds of coal. It has a
colliery at Dhanbad, Jharkhand known as “Sudamdih Coal Washery”.
6. On 24.07.1974, the BCCL invited tenders for construction of Washery
on Turnkey basis for running the colliery. The contract was awarded to
one Company – M/s MC Nelly, Bharat Engineering Company Ltd. (hereinafter
referred to as “the Contractor”). An agreement was accordingly executed
between the BCCL and the Contractor on 29.01.1976. Since the execution of
the work was to be done on turnkey basis, the Contractor was required to do
every thing to make the Washery operational. The work included the
complete design of the Washery, supply of materials required for
construction of plant, building, installation of machinery, all kinds of
construction of the structures of Washery etc.
7. Pursuant to the contract, the Contractor started the work in 1977 by
employing several skilled and unskilled workers and completed the same by
December 1979. After completion of the work, the Contractor terminated the
employment of all the workers and offered them retrenchment compensation as
per the provisions of Section 25 of Industrial Disputes Act, 1947 (in short
“the Act”) except 39 skilled workers, who were retained to look after the
maintenance work of Washery after it was made operationalized. These 39
workers continued to work. After retaining their services for about one
year, the Management terminated the services of these 39 employees in
January, 1981. These 39 employees raised a dispute demanding their
absorption and continuation in service with the BCCL. Since their demands
were not accepted, a reference was made under Section 10 of the Act to
Industrial Tribunal No. 3 Dhanbad vide Reference Case No. 58 of 1981 to
answer the following question:
“Whether the management of Sudamdih Coal Washery of M/s Bharat Coking Coal
Ltd., P.O. Sudamdih, Dist. Dhanbad are justified in not absorbing Sarvashri
Gorakh Sharma and 38 others as their regular employees? If not, to what
relief are the said workmen entitled?”

8. The Industrial Tribunal by its award dated 03.03.1983 answered the
reference in workers’ favour and directed that 39 workers be absorbed by
the BCCL in their employment as their regular employees and they be given
all such consequential benefits to which they were entitled to claim due to
their regularization in the services of BCCL. The BCCL did not challenge
the award and implemented the directions by absorbing and regularizing
these 39 workers in their employment.
9. It may be mentioned that five workers (including the appellants
herein), who claimed to be working in the same project, filed Title Suit
No. 51/1980 against the BCCL in the Court of Munsif 2nd Dhanbad under Order
I Rule 11 of the Code of Civil Procedure, 1908 for declaration that they
are entitled to continue in their services under the BCCL and prayed that
their services be absorbed and regularized in the services of BCCL with all
consequential benefits. They also prayed for an injunction restraining the
BCCL from terminating their services pending civil suit.
10. The Trial Court, however, on contest declined to grant the temporary
injunction to the plaintiffs. It is not in dispute that during the pendency
of the suit, the services of these workers were discontinued. They were,
therefore, no more in the employment.
11. By judgment and decree dated 27.05.1983, the trial Court decreed the
suit and held that the plaintiff’s are entitled to continue in services of
12. Felt aggrieved, the BCCL filed Title Appeal No. 71 of 1983 before
the Appellate Court. The Appellate Court by judgment and order dated
16.12.1986 dismissed the appeal and confirmed the judgment and decree of
the Trial Court.
13. The BCCL pursued the matter further and filed an appeal being Second
Appeal No.23 of 1987(R) before the High Court. The High Court, by judgment
and order dated 05.03.1993 allowed the Second Appeal and set aside the
judgment and decree of the two Courts which had decreed the plaintiffs’
suit. It was held that the suit was not maintainable in the light of
provisions of Labour laws.
14. Against the aforesaid judgment, the plaintiffs (workers) filed
Special Leave Petition being Special Leave Petition (C) No. 4495 of 1994
before this Court. By order dated 14.11.1994, this Court, after granting
leave, dismissed the appeal (C.A. No.8403/1994) with a liberty to the
plaintiffs/appellants to approach the Industrial Tribunal for claiming any
appropriate relief, if so advised.
15. It is with this background, the plaintiffs (five workers) approached
the Central Government under Section 10 of the Act and also on behalf of as
many as 150 workers espousing their cause in representative capacity for
their absorption and regularization and prayed for making an industrial
reference to the Industrial Tribunal for its adjudication. The Government
acceded to their request and accordingly made the following reference to
the Industrial Tribunal to adjudicate:
“Whether the management of Sudamdih Coal Washery of M/s Bharat Coking Coal
Ltd., P.O. Sudamdih, Dist. Dhanbad are justified in not absorbing Ainuel
Haque and 150 others (as in the list annexed) as their regular employees?
If not, to what reliefs are the said workmen entitled?”

16. The Industrial Tribunal by award dated 21.12.1998 answered the
reference against the workers. It was held that they were not entitled to
seek their absorption in the Services of BCCL as their regular employees.
The workers, felt aggrieved, filed C.W.J.C.No. 616 of 1999(R) before the
High Court. The learned single Judge by orders dated 03.09.2009 dismissed
the writ petition and upheld the award passed by the Tribunal. The workers
pursued the matter and filed intra Court appeal being L.P.A. No. 447 of
2009. The Division Bench by impugned judgment dismissed the appeal finding
no fault in the award. Challenging the said order, the workers filed this
appeal by way of special leave before this Court.
17. While assailing the legality and correctness of the impugned
judgment, Mr. R.P. Bhatt, learned Senior Counsel for the appellants mainly
urged two points. His first submission was that the Courts below erred in
not answering the reference in favour of the appellants and thereby Courts
below erred in not granting them the relief for which the reference was
made. His second submission was that since the identical reference
(Reference Case No.58/1981) made at the instance of 39 workers alike the
appellants was answered in workers’ favour vide award dated 03.03.1983, a
fortiori, the present reference being identical in nature should also have
been answered in favour of the appellants to maintain the parity. In other
words, the submission was that if one set of workers got the benefit
earlier in point of time from the Court, the other set of workers similarly
placed too should have been granted the same benefits. In the alternative,
learned Senior Counsel urged that in any event, the appellants were not
paid any retrenchment compensation, for which otherwise they were entitled
to get from the Contractor or/and BCCL as per the provisions of Section 25
of the Act read with the provisions of Contract Labour Prohibition and
Regulation Act, 1970 and hence to this extent, this Court can still direct
either Contractor or the BCCL or both, as the case may be, to pay the
retrenchment compensation to the appellants.
18. In Contra, learned Counsel for the respondent-BCCL supported the
impugned order and contended that no case is made out by the appellants to
interfere in the impugned order and hence the appeal merits dismissal.
19. Having heard the learned counsel for the parties and on perusal of
the record of the case, we find no merit in the main submissions of the
appellants but find substance in the alternative submission.
20. Before we examine the factual matrix of the case in hand, we consider
it apposite to take note of law laid down by this Court regarding the
powers of the appropriate Government in making reference under Section 10
of the Act and the jurisdiction of the Tribunal while answering the
reference. Indeed it is well settled and remains no more res integra.
21. One of the questions which fell for consideration by this Court in
Delhi Cloth and General Mills Co. Ltd. vs. The Workmen and Others (AIR 1967
SC 469) was that what are the powers of the appropriate Government while
making a reference and the scope and jurisdiction of Industrial Tribunal
under Section 10 of the Act.
22. Justice Mitter, speaking for the Bench, held as under:
“(8) ……Under S. 10(1)(d) of the Act, it is open to the appropriate
Government when it is of opinion that any industrial dispute exists to make
an order in writing referring
“the dispute or any matter appearing to be connected with, or relevant to
the dispute,…..to a Tribunal for adjudication” under s. 10(4)
“where in an order referring an industrial dispute to a Labour Court,
Tribunal or National Tribunal under this section or in a subsequent order,
the appropriate Government has specified the points of dispute for
adjudication, the Labour Court or the Tribunal or the National Tribunal, as
the case may be, shall confine its adjudication to those points and matters
incidental thereto.”

(9) From the above it therefore appears that while it is open to the
appropriate Government to refer the dispute or any matter appearing to be
connected therewith for adjudication, the Tribunal must confine its
adjudication to the points of dispute referred and matters incidental
thereto. In other words, the Tribunal is not free to enlarge the scope of
the dispute referred to it but must confine its attention to the points
specifically mentioned and anything which is incidental thereto. The word
‘incidental’ means according to Webster’s New World Dictionary :
“happening or likely to happen as a result of or in connection with
something more important; being an incident; casual; hence, secondary or
minor, but usually associated :”

“Something incidental to a dispute” must therefore mean something happening
as a result of or in connection with the dispute or associated with the
dispute. The dispute is the fundamental thing while something incidental
thereto is an adjunct to it. Something incidental, therefore, cannot cut at
the root of the main thing to which it is an adjunct to it…..”

23. The same issue came up for consideration before three Judge Bench in
a case reported in Pottery Mazdoor Panchayat vs. Perfect Pottery Co. Ltd.
and Another, (1979) 3 SCC 762. Justice Y.V. Chandrachud – the learned
Chief Justice speaking for the Court laid down the following proposition of

“10. Two questions were argued before the High Court: Firstly, whether the
tribunals had jurisdiction to question the propriety or justification of
the closure and secondly, whether they had jurisdiction to go into the
question of retrenchment compensation. The High Court has held on the first
question that the jurisdiction of the Tribunal in industrial disputes is
limited to the points specifically referred for its adjudication and to
matters incidental thereto and that the Tribunal cannot go beyond the terms
of the reference made to it. On the second question the High Court has
accepted the respondent’s contention that the question of retrenchment
compensation has to be decided under Section 33-C(2) of the Central Act.
11. Having heard a closely thought out argument made by Mr. Gupta on behalf
of the appellant, we are of the opinion that the High Court is right in its
view on the first question. The very terms of the references show that the
point of dispute between the parties was not the fact of the closure of its
business by the respondent but the propriety and justification of the
respondent’s decision to close down the business. That is why the
references were expressed to say whether the proposed closure of the
business was proper and justified. In other words, by the references, the
Tribunals were not called upon by the Government to adjudicate upon the
question as to whether there was in fact a closure of business or whether
under the pretence of closing the business the workers were locked out by
the management. The references [pic]being limited to the narrow question as
to whether the closure was proper and justified, the Tribunals by the very
terms of the references, had no jurisdiction to go behind the fact of
closure and inquire into the question whether the business was in fact
closed down by the management.”

24. The abovesaid principle of law has been consistently reiterated in
M/s Firestone Tyre & Rubber Co. of India (P) Ltd. vs. The Workmen
Empoloyed, represented by Firestone Tyre employees’ Union AIR 1981 SC 1626,
National Engineering Industries Ltd. vs. State of Rajasthan & Ors., (2000)
1 SCC 371, Mukand Ltd. vs. Mukand Staff & Officers’ Association, (2004) 10
SCC 460 and State Bank of Bikaner & Jaipur vs. Om Prakash Sharma, (2006) 5
SCC 123.
25. It is thus clear that the appropriate Government is empowered to make
a reference under Section 10 of the Act only when “Industrial dispute
exists” or “is apprehended between the parties”. Similarly, it is also
clear that the Tribunal while answering the reference has to confine its
inquiry to the question(s) referred and has no jurisdiction to travel
beyond the question(s) or/and the terms of the reference while answering
the reference. A fortiori, no inquiry can be made on those questions, which
are not specifically referred to the Tribunal while answering the
26. Coming now to the facts of this case, it is an admitted case that the
services of the appellants and those at whose instance the reference was
made were terminated long back prior to making of the reference. These
workers were, therefore, not in the services of either Contractor or/and
BCCL on the date of making the reference in question. Therefore, there was
no industrial dispute that “existed” or “apprehended” in relation to
appellants’ absorption in the services of the BCCL on the date of making
the reference.
27. Indeed a dispute regarding the appellants’ absorption was capable of
being referred to in reference for adjudication, had the appellants been in
the services of Contractor or/and BCCL. But as said above, since the
appellants’ services were discontinued or/and retrenched (whether rightly
or wrongly) long back, the question of their absorption or regularization
in the services of BCCL, as claimed by them, did not arise and nor this
issue could have been gone into on its merits for the reason that it was
not legally possible to give any direction to absorb/regularize the
appellants so long as they were not in the employment.
28. It is a settled principle of law that absorption and regularization
in the service can be claimed or/and granted only when the contract of
employment subsists and is in force inter se employee and employer. Once
it comes to an end either by efflux of time or as per the terms of the
Contract of employment or by its termination by the employer, then in such
event, the relationship of employee and employer comes to an end and no
longer subsists except for the limited purpose to examine the legality and
correctness of its termination.
29. In our considered opinion, the only industrial dispute, which
existed for being referred to the Industrial Tribunal for adjudication was
in relation to termination of appellants’ employment and – whether it
was legal or not? It is an admitted fact that it was not referred to the
Tribunal and, therefore, it attained finality against the appellants.
30. In our considered opinion, therefore, the reference, even if made to
examine the issue of absorption of the appellants in the services of BCCL,
the same was misconceived.
31. Apart from this infirmity noticed in this case, we have also not been
able to find any parity in the facts of the earlier reference
(R.C.No.58/81) and the case in hand. As noted above, the earlier reference
was made to decide the absorption of 39 workers in the BCCL. This could be
made because they were in the service. So far as the present case is
concerned, the appellants were not in service.
32. It can safely be noted that merely because the workers in both the
references were working in one project by itself was not enough to give
them any right to claim parity with the claim of others. So long as, the
parity was not proved on all the relevant issues arising in the case, no
worker whether individual or collectively was entitled to claim the relief
only on the basis of similarity in the status qua employer.
33. In the light of foregoing discussion, we are of the considered
opinion that the reference made to examine the issue of appellants’
absorption qua the BCCL was incapable of being referred to on the said
question and in any event, it was incapable of being answered in favour of
the appellants.
34. That apart, when three Courts, despite this infirmity, went into the
facts and held that the appellants were not entitled to claim any
absorption in the services qua the BCCL, then in our considered opinion,
they were right in holding so and we do not find any good ground to go into
the factual issues de novo in our appellate jurisdiction. The factual
findings recorded by the three Courts are binding on this Court.
35. We, therefore, find no ground to set aside the impugned order and
accordingly uphold the same.
36. This takes us to the next question as to whether the appellants are
entitled to claim the relief of payment of retrenchment compensation.
Having given our anxious consideration to this issue, we are of the
considered view that having regard to the peculiar facts of this case and
the reasons, which we have set out hereinbelow, we are inclined to hold
that the appellants are entitled to claim the retrenchment compensation
from the Contractor/BCCL.
37. It is for the reason that firstly, the respondent in their written
statement filed before the Tribunal have offered to pay the retrenchment
compensation to all such workers in accordance with the provisions of
Section 25F of the Act. Secondly, no documents were filed by the respondent
to show that any such compensation was paid to the appellants or to any
worker till date by the respondent and lastly, more than three decades have
passed and yet the issues of absorption, and/or payment of compensation has
not attained finality.
38. Indeed, in similar circumstances, this Court in the case of Pottery
Mazdoor Panchayat’s case (supra) had directed payment of retrenchment
compensation to the workers and made the following pertinent observations
in the concluding paras:
“17. It is unnecessary to consider the second question as regards the
payment of retrenchment compensation and we will, therefore, express no
opinion as to whether the Tribunals had jurisdiction to go into that
question. Happily, the parties have arrived at a settlement on that
question under which, the respondent agrees to fix within a period of six
months from today the retrenchment compensation payable to the retrenched
workers in accordance with the provisions of Section 25FFF of the Central
Act, namely, the Industrial Disputes Act, 1947, without the aid of the
proviso to that section. After the retrenchment compensation is so fixed, a
copy of the decision fixing the compensation payable to each of the worker
will be sent by the respondent to the appellant Union. The workers or their
legal representatives, as the case may be, will then be entitled to receive
the retrenchment compensation from the respondent, which agrees to pay the
same to them. The respondent will be entitled to set off of the amounts of
retrenchment compensation already paid to the workers against the amounts
found due to them under this settlement. On receiving the retrenchment
compensation the workers concerned shall withdraw the applications, if any,
filed by them for relief in that behalf.

18. We would only like to add that the compensation which will be paid to
the workers will be without prejudice to their right, if any, to get
employment from the respondent in the new business as and when occasion

39. Following the course adopted by this Court in Pottery Mazdoor
Panchayat (supra), we direct the Industrial Tribunal to verify the case of
the appellants (150 or so) for deciding each worker’s claim for payment of
retrenchment compensation to him/her as per the provisions of Section 25F
of the Act and accordingly he/she be paid retrenchment compensation. In
case any worker has expired then his/her compensation amount be paid to
his/her legal representative after making proper verification of the case.
40. We, however, make it clear that the respondent would not raise any
objection about the maintainability of workers’ claim nor would raise any
objection on merits before the Tribunal and the inquiry would only confine
to determine the quantum of retrenchment compensation payable to each
41. The appellants and respondents would appear before the Tribunal on
16.02.2015 and file necessary documents to enable the Tribunal to verify
the claim of each worker for determining the quantum of compensation. The
Tribunal would issue notice to the Contractor to enable them to participate
in the proceedings in the light of provisions of Contract Labour
Prohibition and Regulation Act, 1970. The appellants and all such workers
can be represented through recognized Union before the Tribunal.
42. The entire exercise should be completed and payment be made to the
workers within six months.
43. With these directions, the appeal stands disposed of.


New Delhi;
February 02, 2015.


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