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Friday, May 9, 2014

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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