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Saturday, August 17, 2013

Industrial Dispute Act - Since the claim was made after six years of termination, compensation only awarded to the workman = “Whether 18.02.86 termination of labour Shri Mohan Lal S/o Shri Dhanna Lal (Post-Mistri), who has been represented by Regional Secretary, Hind Mazdoor Sabha, Kota Cantt., from service by the Employer – Assistant Engineer, Rajasthan State Agriculture Marketing Board, Sub-Division – Kota is legal and justifiable? If not, then applicant – labour is entitled to get what relief and compensation?”= In our opinion, interest of justice will be subserved if in lieu of reinstatement, the compensation of Rs.1,00,000/- (one lac) is paid by the appellant (employer) to the respondent (workman). We order accordingly. Such payment shall be made by the appellant to the respondent within six weeks from today failing which the same will carry interest @ 9% per annum. 23. The appeal is partly allowed to the above extent with no order as to costs.

                   published in                                         

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                 CIVIL  APPEAL NO.      6795         OF 2013
                  (Arising out of SLP(C) No.11305 of 2006)

           Assistant Engineer, Rajasthan State
           Agriculture Marketing Board, Sub-Division, Kota    … Appellant


           Mohan Lal                                          …Respondent


           R.M. LODHA, J.

                       Leave granted.
           2.          The consequent relief to be granted to  the  workman
           whose termination is held to be illegal being  in  violation  of
           Section 25-F of the Industrial Disputes Act,  1947  (for  short,
           “ID Act”) is the sole question for our decision in this  appeal.
Were it not for the argument strongly pressed  by  the  learned
           counsel for the respondent that
 the delay in raising  industrial
           dispute in the absence of any such objection having been  raised
           by the employer before the Labour Court is no  ground  to  mould
           the relief of reinstatement, we would not  have  gone  into  the
           question which is already answered in a long line  of  cases  of
           this Court.
           3.          Mohan Lal, the workman, was engaged as  “Mistri”  on
           muster roll by  the  appellant,  employer,  from  01.11.1984  to
           17.02.1986.  On 18.02.1986,   the services of the  workman  were
           terminated. While doing so, the workman was  neither  given  one
           month’s notice nor was he paid one month salary in lieu of  that
           notice. He was also not paid retrenchment compensation.
           4.          In 1992, the workman raised industrial dispute which
           was referred by the appropriate government to the Labour  Court,
           Kota (Rajasthan) for adjudication. The dispute referred  to  the
           Labour Court reads as under:
                       “Whether 18.02.86 termination of  labour  Shri  Mohan
                       Lal S/o Shri Dhanna Lal (Post-Mistri), who  has  been
                       represented  by  Regional  Secretary,  Hind   Mazdoor
                       Sabha, Kota Cantt., from  service by the  Employer  –
                       Assistant  Engineer,  Rajasthan   State   Agriculture
                       Marketing Board, Sub-Division –  Kota  is  legal  and
                       justifiable? If  not,  then  applicant  –  labour  is
                       entitled to get what relief and compensation?”

           5.          The Labour Court in its award dated 03.02.1999  held
           that the workman had completed more than 240 days in a  calendar
           year and his services were terminated in violation of Section 25-
           F of the ID Act. Having held that,  the  Labour  Court  declared
           that the workman was entitled to be reinstated  with  continuity
           in  service and 30% back wages.
           6.          The employer was successful in challenging the above
           award before the Single Judge of  the  High  Court.  The  Single
           Judge in his judgment dated 23.08.2001 though  agreed  with  the
           Labour Court that the employer had terminated workman’s services
           in violation of Section 25-F but he was of  the  view  that  the
           Labour Court was not justified in directing the reinstatement of
           the workman  because  the  workman  had  raised  the  industrial
           dispute after 6 years of his  termination.    Relying  upon  the
           decision of this Court in  Balbir  Singh[1],  the  Single  Judge
           substituted the order of reinstatement by the compensation which
           was quantified at Rs.5,000/-.
           7.          The workman challenged  the  order  of  the  learned
           Single Judge in an intra-court appeal.  The  Division  Bench  of
           the High Court allowed the workman’s  appeal  on  19.11.2005  by
           relying upon the decision of this Court in Ajaib Singh[2].   The
           Division Bench restored the award passed by the Labour Court.
           8.           In Nagar Mahapalika[3], it was held by  this  Court
           that non compliance with the provisions of Section  6-N  of  the
           U.P. Industrial Disputes Act, 1947 (this  provision  is  broadly
           pari materia with Section 25-F), although, leads to the grant of
           a relief of reinstatement with full back wages and continuity of
           service in favour of the workman, the same would not  mean  that
           such relief is to be granted automatically or  as  a  matter  of
           course.  It was emphasised that the Labour Court must take  into
           consideration the relevant facts for exercise of its  discretion
           in granting the relief.
           9.          The same Bench that  decided  Nagar  Mahapalika3  in
           Municipal  Council,  Sujanpur[4],  reiterated  the  above  legal
           position.  That was a case where the Labour  Court  had  granted
           reinstatement in service with full back wages to the workman  as
           statutory provisions  were  not  followed.  The  award  was  not
           interfered with by the High Court.  However, this Court  granted
           monetary compensation in lieu of reinstatement.
           10.         In Mamni[5] following Nagar Mahapalika3, this  Court
           held that the reinstatement granted to the workman because there
           was violation of Section 25-F, was not  justified  and  modified
           the order of reinstatement by directing that the  workman  shall
           be compensated by  payment of a sum of  Rs.25,000/-  instead  of
           the order of the reinstatement.
           11.         In M.C. Joshi[6], this Court was concerned with  the
           situation which was  very  similar  to  the  present  case.  The
           workman in that case was  employed  as  a  daily  wager  by  the
           Uttaranchal Forest Development Corporation on  01.08.1989.   His
           services were terminated on 24.11.1991 in contravention  of  the
           provisions of Section 6-N of the U.P. Industrial  Disputes  Act.
           He had completed 240 days of continuous  work  in  a  period  of
           twelve months preceding the order of termination.   The  workman
           approached the Conciliation  Officer  on  or  about  02.09.1996,
           i.e., after a period of about  five  years.   The  Labour  Court
           granted to the workman, M.C. Joshi, relief of reinstatement with
           50% back wages.  In the writ petition filed by the  Corporation,
           the direction of reinstatement was  maintained  but  back  wages
           were reduced from 50% to 25%.  This Court substituted the  award
           of reinstatement by compensation for a sum of Rs.75,000/-*.
           12.         In Ashok Kumar[7], this Court was concerned with the
           question as  to  whether  the  Labour  Court  was  justified  in
           awarding relief of reinstatement in favour of  the  workman  who
           had worked as daily wager for two  years.  His  termination  was
           held to be violative of  U.P.  Industrial  Disputes  Act.   This
           Court held that  the  Labour  Court  should  not  have  directed
           reinstatement of the workman  in  service  and  substituted  the
           order of reinstatement by awarding compensation  of  Rs.50,000/-
           13.         In Keshab Deb[8], the termination of the workman who
           was a daily wager, was held illegal on diverse grounds including
           violation of the provisions of Section 25-F.   This  Court  held
           that even in a case where  order  of  termination  was  illegal,
           automatic direction for reinstatement with full back  wages  was
           not  contemplated.   The  Court   substituted   the   order   of
           reinstatement by an award of compensation of  Rs.1,50,000/-****.

           14.         In Jagbir Singh[9], the Court speaking  through  one
           of us (R.M. Lodha,J) in a case where the workman had worked from
           01.09.1995 to 18.07.1996 as a daily wager  granted  compensation
           of Rs.50,000/- to the workman in lieu of reinstatement with back
           15.         It is not necessary to  refer  to  subsequent  three
           decisions of this  Court,  namely,  Laxmi  Kant  Gupta[10],  Man
           Singh[11] and Santosh Kumar Seal[12], where the  view  has  been
           taken in line with the cases discussed above.  As  a  matter  of
           fact in Santosh Kumar Seal12, this Court awarded compensation of
             Rs.40,000/-  to  each  of  the  workmen  who  were   illegally
           retrenched as they were engaged as daily wagers about  25  years
           back and worked hardly for two or three years.  It was held that
           the relief of reinstatement cannot be said to be  justified  and
           instead granted monetary compensation.
           16.         Recently in the case of Gitam Singh[13], this  Court
           speaking through one of us (R.M. Lodha,J)  on  consideration  of
           the most of the  cases  cited  above  reiterated  the  principle
           regarding exercise of judicial discretion by the Labour Court in
           a matter where the termination of the  workman  is  held  to  be
           illegal being in violation of Section 25-F in these words : “The
           Labour  Court  has  to  keep  in  view  all   relevant  factors,
           including  the  mode  and  manner  of  appointment,  nature   of
           employment,  length  of  service,  the  ground  on   which   the
           termination has been set aside and  the  delay  in  raising  the
           industrial dispute before  grant  of  relief  in  an  industrial
           17.         Mr. Badri Prasad  Singh,  learned  counsel  for  the
           workman, however,  vehemently  contended,  which  was  also  the
           contention of the workman before the Division Bench,  that  plea
           regarding delay was  not  raised before the  Labour  Court  and,
           therefore, the delay in raising the  industrial  dispute  should
           not come in the way  of  the  workman  in  grant  of  relief  of
           reinstatement. He relied upon Ajaib Singh2. In  that  case,  the
           services  of  the  workman,  Ajaib  Singh  were  terminated   on
           16.07.1974.  Ajaib  Singh  issued  the  notice  of   demand   on
           18.12.1981.  No plea regarding delay was taken by  the  employer
           before the Labour Court. The Labour Court directed the  employer
           to reinstate Ajaib Singh with full back  wages.  The  award  was
           challenged before the High Court. The  Single  Judge  held  that
           Ajaib Singh was disentitled to relief  of  reinstatement  as  he
           slept over the matter for 7 years and confronted the  management
           at a belated stage when it might have  been  difficult  for  the
           management to prove the guilt of the workman.  The  judgment  of
           the Single Judge was upheld by the Division Bench. The  judgment
           of the Division Bench was challenged by the workman before  this
           Court. The Court was persuaded  by the grievance of the  workman
           that in the absence of any plea on behalf of  the  employer  and
           any evidence regarding delay, the workman could not be  deprived
           of the benefits under the I.D. Act merely on the  technicalities
           of law.  However, the Court was of the opinion that  on  account
           of  th  admitted  delay,  the  Labour  Court   ought   to   have
           appropriately moulded the relief by denying  some  part  of  the
           back wages.******
           18.   Ajaib Singh2, in our view, cannot be read as  laying  down
           an absolute proposition of law that where plea of delay  is  not
           raised by the employer, the  delay  in  raising  the  industrial
           dispute by the workman pales into insignificance and the  Labour
           Court will be  unjustified  in  taking  this  circumstance  into
           consideration for moulding the relief. On the contrary, in Ajaib
           Singh2, the Court said that on account of  admitted  delay,  the
           Labour Court ought to  have  appropriately  moulded  the  relief
           though this Court moulded the relief by denying the workman some
           part of the back wages.
           19.         In a subsequent  decision  in  Balbir  Singh1,  this
           Court observed that Ajaib Singh2 was confined to the  facts  and
           circumstances of that case. It is true that  in  Balbir  Singh1,
           the plea of delay was raised before the Industrial Tribunal  but
           we would emphasize the passage from Balbir Singh1 where  it  was
           said: “Whether relief to the workman should  be  denied  on  the
           ground of delay or it should be appropriately moulded is at  the
           discretion  of  the  Tribunal  depending  on   the   facts   and
           circumstances of the case.  No doubt the  discretion  is  to  be
           exercised judicially”.
           20.         We are clearly of the view  that  though  Limitation
           Act, 1963 is not applicable to the reference made under the I.D.
           Act but delay in raising industrial  dispute  is  definitely  an
           important circumstance which the Labour Court must keep in  view
           at the time of exercise of discretion irrespective of whether or
           not such objection has been raised by the other side. The  legal
           position laid down by this Court in Gitam  Singh13  that  before
           exercising its judicial discretion, the Labour Court has to keep
           in view all relevant factors including the mode  and  manner  of
           appointment, nature of employment, length of service, the ground
           on which termination has been set aside and the delay in raising
           industrial dispute before  grant  of  relief  in  an  industrial
           dispute, must be invariably followed.
           21.         Now, if the facts of the present case are seen,  the
           position that emerges is this:
the workman  worked  as  a  work-charged employee for a period from 01.11.1984 to 17.02.1986  
(in all he worked for 286 days during his employment).  
The services
           of the workman were terminated with effect from 18.02.1986.  
The workman raised the industrial dispute in  1992,  i.e.,  
after  6 years of termination. 
The Labour Court  did  not  keep  in  view
           admitted delay of 6 years in raising the industrial  dispute  by the workman. 
The judicial discretion  exercised  by  the  Labour
           Court is, thus, flawed and unsustainable.  
The Division Bench of the High Court was clearly in error in restoring  the  award  of the Labour  Court  whereby  reinstatement  was  granted  to  the workman. 
Though, the compensation awarded by  the  Single  Judge
 was too low and needed to be enhanced by the Division Bench  but surely  reinstatement  of  the  workman   in   the   facts   and
           circumstances is not the appropriate relief.
           22.          In  our  opinion,  interest  of  justice  will   be subserved if in  lieu  of  reinstatement,  the  compensation  of
           Rs.1,00,000/- (one lac) is paid by the appellant  (employer)  to  the respondent (workman). 
We order  accordingly.   Such  payment
shall be made by the appellant  to  the  respondent  within  si weeks from today failing which the same will carry interest @ 9% per annum.
           23.         The appeal is partly allowed  to  the  above  extent
           with no order as to costs.
                                                   (R.M. Lodha)

                                                   (Madan B. Lokur)
           NEW DELHI
           AUGUST 16, 2013.
           [1]    Balbir Singh v. Punjab Roadways; (2001) 1 SCC 133
           [2]     Ajaib  Singh  v.  Sirhind   Cooperative   Marketing-cum-
           Processing Service Society Limited and
                    Anr.; (1999) 6 SCC 82
           [3]    Nagar Mahapalika v. State of U.P. and Ors.; (2006) 5 SCC
           [4]    Municipal Council, Sujanpur v. Surinder Kumar; (2006) 5
           SCC 173
           [5]    Haryana State Electronics Development Corporation Ltd. v.
           Mamni; (2006) 9 SCC 434
           [6]    Uttaranchal Forest Development Corporation v. M.C. Joshi;
           (2007) 9 SCC 353
           *     * Pg. 358; (2007) 9 SCC 353
                 “We are, therefore, of the opinion that  keeping  in  view
            the nat?

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