REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos. 19857-19858 OF 2017
(ARISING OUT OF SLP (C) Nos.11956-11957 of 2015)
District Development Officer
& Anr. ...Appellant(s)
VERSUS
Satish Kantilal Amrelia ….Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1) Leave granted.
2) These appeals are filed against the final
judgment and order dated 01.12.2014 passed by
the High Court of Gujarat at Ahmedabad in Civil
Application No.10519 of 2014 in Letters Patent
Appeal No.1878 of 2006, wherein the High Court
dismissed the Letters Patent Appeal filed by the
appellant herein in default and further declined to
1
restore the appeal when prayed by the appellant.
The Letters Patent Appeal arose out of judgment
and final order of the Single Judge dated
21.04.2006 in Special Civil Application No.8390
whereby the learned Single Judge dismissed the
writ petition filed by the appellant and affirmed the
Award dated 01.02.2006 passed by Labour Court,
Bhavnagar in Reference Case No.166 of 1992.
3) The controversy involved in the appeals is
confined to short facts, which, however, need
mention hereinbelow to appreciate the same.
4) The appellant is the Panchayat Department of
State of Gujarat having its office at Bhavnagar. The
respondent - Satish Kantilal Amrelia worked in the
appellant's Revenue Department at Bhavnagar as a
Peon-cum-Driver on daily wages from 18.12.1989 to
31.05.1990 (5 months 15 days) and then started
giving his services again as daily wager in
appellant's another branch (Small Saving) from
01.06.1990 to 12.02.1992 (1 year 9 months) on
2
daily payment of Rs.27.55 (Rs.Twenty Seven and
Fifty Five Paisa). The respondent's tenure was then
discontinued with effect from 12.02.1992 vide order
dated 23.03.1992 (Annexure P-4).
5) The respondent felt aggrieved of his
termination and initiated two actions against the
appellant. In the first instance, challenging his
termination order dated 23.03.1992 from the
services, the respondent filed Civil Suit No.141 of
1992 in the Civil Court at Bhavnagar. During the
pendency of the civil suit, he also approached to the
State (Labour Commissioner) and prayed for making
Industrial Reference to the concerned Labour Court
under Section 10 of Industrial Disputes Act, 1947
(hereinafter referred to as “the Act”) for deciding the
legality and propriety of his termination order.
6) The Labour Commissioner made an Industrial
Reference No.166 of 1992 to the Labour Court No. 2
at Bhavnagar for deciding the legality and
correctness of the termination order and for
3
regularization of respondent's services.
7) The 2nd Joint Civil Judge (SD), Bhavnagar, vide
judgment/decree dated 03.05.1994 decreed the
respondent’s suit, set aside the termination order
and directed the appellant (State) to re-instate the
respondent in service with all consequential
benefits.
8) Against the judgment/decree of the Trial
Court, the appellant filed first appeal being Civil
Appeal No.45/1994 before the Assistant Judge,
Bhavnagar. The Appellate Court, by order dated
30.09.2003, allowed the appellant's appeal, set
aside the judgment/decree of the Trial Court and
dismissed the respondent's civil suit. In substance,
the Appellate Court upheld the respondent's
termination order.
9) The Labour Court, however, by Award dated
01.02.2006 (Annexure P-9) answered the Reference
in respondent's favour. Applying the provisions of
the Act, the Labour Court held that since the
4
respondent was able to prove that he has worked for
240 days continuously in one previous calendar
year, he was entitled to get the protection of the Act.
It was held that it was a case of illegal retrenchment
because the respondent was not paid any prior
retrenchment compensation before termination of
his services. The Labour Court also held that there
was violation of Section 25-G of the Act in passing
the termination order. The Labour Court
accordingly directed the appellant(State) to
re-instate the respondent in service along with
payment of 40% back wages.
10) The appellant (State) felt aggrieved, filed writ
petition (Special Civil Application No.8390/2006)
before the High Court of Gujarat. By order dated
21.04.2006, the Single Judge dismissed the
appellant's writ petition and affirmed the Award of
the Labour Court. The appellant then filed Letters
Patent Appeal before the Division Bench of the High
Court but it was dismissed in default. The
5
appellant applied for restoration of the Letters
Patent Appeal but it was dismissed and hence this
appeal by special leave was filed by the State before
this Court against the order of the Division Bench
as also against the order of the Single Judge.
11) Heard Ms. Jesal Wahi, learned counsel for the
appellants and Mr. Purvish Jitendra Malkan,
learned counsel for the respondent.
12) Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to allow the appeals in part and while
setting aside the impugned orders (Single Judge and
Division Bench), modify the Award of the Labour
Court as indicated below.
13) Having gone through the entire record of the
case and further keeping in view the nature of
factual controversy, findings of the Labour Court,
the manner in which the respondent fought this
litigation on two fronts simultaneously, namely, one
in Civil Court and the other in Labour Court in
6
challenging his termination order and seeking
regularization in service, which resulted in passing
the two conflicting orders - one in respondent's
favour (Labour Court) and the other against him
(Civil Court) and lastly, it being an admitted fact
that the respondent was a daily wager during his
short tenure, which lasted hardly two and half years
approximately and coupled with the fact that 25
years has since been passed from the date of his
alleged termination, we are of the considered
opinion that the law laid down by this Court in the
case of Bharat Sanchar Nigam Limited vs.
Bhurumal [(2014) 7 SCC 177] would aptly apply to
the facts of this case and we prefer to apply the
same for disposal of these appeals.
14) It is apposite to reproduce what this Court has
held in the case of Bharat Sanchar Nigam Limited
(supra):
“33. It is clear from the reading of the
aforesaid judgments that the ordinary
principle of grant of reinstatement with full
7
back wages, when the termination is found to
be illegal is not applied mechanically in all
cases. While that may be a position where
services of a regular/permanent workman are
terminated illegally and/or mala fide and/or
by way of victimisation, unfair labour
practice, etc. However, when it comes to the
case of termination of a daily-wage worker
and where the termination is found illegal
because of a procedural defect, namely, in
violation of Section 25-F of the Industrial
Disputes Act, this Court is consistent in
taking the view that in such cases
reinstatement with back wages is not
automatic and instead the workman should
be given monetary compensation which will
meet the ends of justice. Rationale for
shifting in this direction is obvious.
34. The reasons for denying the relief of
reinstatement in such cases are obvious. It is
trite law that when the termination is found
to be illegal because of non-payment of
retrenchment compensation and notice pay
as mandatorily required under Section 25-F
of the Industrial Disputes Act, even after
reinstatement, it is always open to the
management to terminate the services of
that employee by paying him the
retrenchment compensation. Since such a
workman was working on daily-wage basis
and even after he is reinstated, he has no
right to seek regularisation [see State of
Karnataka v. Umadevi (3)17]. Thus when he
cannot claim regularisation and he has no
right to continue even as a daily-wage
worker, no useful purpose is going to be
served in reinstating such a workman and he
can be given monetary compensation by the
Court itself inasmuch as if he is terminated
again after reinstatement, he would receive
monetary compensation only in the form of
retrenchment compensation and notice pay.
In such a situation, giving the relief of
reinstatement, that too after a long gap,
would not serve any purpose.
8
“35. We would, however, like to add a caveat
here. There may be cases where termination
of a daily-wage worker is found to be illegal
on the ground that it was resorted to as
unfair labour practice or in violation of the
principle of last come first go viz. while
retrenching such a worker daily wage juniors
to him were retained. There may also be a
situation that persons junior to him were
regularised under some policy but the
workman concerned terminated. In such
circumstances, the terminated worker should
not be denied reinstatement unless there are
some other weighty reasons for adopting the
course of grant of compensation instead of
reinstatement. In such cases, reinstatement
should be the rule and only in exceptional
cases for the reasons stated to be in writing,
such a relief can be denied.”
15) We have taken note of one fact here that the
Labour Court has also found that the termination is
bad due to violation of Section 25-G of the Act. In
our opinion, taking note of overall factual scenario
emerging from the record of the case and having
regard to the nature of the findings rendered and
further the averments made in the SLP justifying
the need to pass the termination order, this case
does not fall in exceptional cases as observed by
this Court in Para 35 of Bharat Sanchar Nigam
9
Limited case (supra) due to finding of Section 25-G
of the Act recorded against the appellant. In other
words, there are reasons to take out the case from
exceptional cases contained in Para 35 because we
find that the appellant did not resort to any kind of
unfair practice while terminating the services of the
respondent.
16) In view of forgoing discussion, we are of the
considered view that it would be just, proper and
reasonable to award lump sum monetary
compensation to the respondent in full and final
satisfaction of his claim of re-instatement and other
consequential benefits by taking recourse to the
powers under Section 11-A of the Act and the law
laid down by this Court in Bharat Sanchar Nigam
Limited case (supra).
17) Having regard to the totality of the facts taken
note of supra, we consider it just and reasonable to
award a total sum of Rs.2,50,000/- (Rs.Two Lakhs
Fifty Thousand) to the respondent in lieu of his right
10
to claim re-instatement and back wages in full and
final satisfaction of this dispute.
18) Let the payment of Rs.2,50,000/- be made by
the appellant(State) to the respondent within three
months from the date of receipt of this judgment
failing which the amount will carry interest at the
rate of 9% per annum payable from the date of this
judgment till payment to respondent.
19) In view of foregoing discussion, the appeals
succeed and are allowed in part. The impugned
order of the Division Bench and that of the Single
Judge are set aside. The Award of the Labour Court
dated 01.02.2006 is accordingly modified to the
extent indicated above.
………...................................J.
[R.K. AGRAWAL]
…...……..................................J.
[ABHAY MANOHAR SAPRE]
New Delhi;
November 28, 2017
11
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos. 19857-19858 OF 2017
(ARISING OUT OF SLP (C) Nos.11956-11957 of 2015)
District Development Officer
& Anr. ...Appellant(s)
VERSUS
Satish Kantilal Amrelia ….Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1) Leave granted.
2) These appeals are filed against the final
judgment and order dated 01.12.2014 passed by
the High Court of Gujarat at Ahmedabad in Civil
Application No.10519 of 2014 in Letters Patent
Appeal No.1878 of 2006, wherein the High Court
dismissed the Letters Patent Appeal filed by the
appellant herein in default and further declined to
1
restore the appeal when prayed by the appellant.
The Letters Patent Appeal arose out of judgment
and final order of the Single Judge dated
21.04.2006 in Special Civil Application No.8390
whereby the learned Single Judge dismissed the
writ petition filed by the appellant and affirmed the
Award dated 01.02.2006 passed by Labour Court,
Bhavnagar in Reference Case No.166 of 1992.
3) The controversy involved in the appeals is
confined to short facts, which, however, need
mention hereinbelow to appreciate the same.
4) The appellant is the Panchayat Department of
State of Gujarat having its office at Bhavnagar. The
respondent - Satish Kantilal Amrelia worked in the
appellant's Revenue Department at Bhavnagar as a
Peon-cum-Driver on daily wages from 18.12.1989 to
31.05.1990 (5 months 15 days) and then started
giving his services again as daily wager in
appellant's another branch (Small Saving) from
01.06.1990 to 12.02.1992 (1 year 9 months) on
2
daily payment of Rs.27.55 (Rs.Twenty Seven and
Fifty Five Paisa). The respondent's tenure was then
discontinued with effect from 12.02.1992 vide order
dated 23.03.1992 (Annexure P-4).
5) The respondent felt aggrieved of his
termination and initiated two actions against the
appellant. In the first instance, challenging his
termination order dated 23.03.1992 from the
services, the respondent filed Civil Suit No.141 of
1992 in the Civil Court at Bhavnagar. During the
pendency of the civil suit, he also approached to the
State (Labour Commissioner) and prayed for making
Industrial Reference to the concerned Labour Court
under Section 10 of Industrial Disputes Act, 1947
(hereinafter referred to as “the Act”) for deciding the
legality and propriety of his termination order.
6) The Labour Commissioner made an Industrial
Reference No.166 of 1992 to the Labour Court No. 2
at Bhavnagar for deciding the legality and
correctness of the termination order and for
3
regularization of respondent's services.
7) The 2nd Joint Civil Judge (SD), Bhavnagar, vide
judgment/decree dated 03.05.1994 decreed the
respondent’s suit, set aside the termination order
and directed the appellant (State) to re-instate the
respondent in service with all consequential
benefits.
8) Against the judgment/decree of the Trial
Court, the appellant filed first appeal being Civil
Appeal No.45/1994 before the Assistant Judge,
Bhavnagar. The Appellate Court, by order dated
30.09.2003, allowed the appellant's appeal, set
aside the judgment/decree of the Trial Court and
dismissed the respondent's civil suit. In substance,
the Appellate Court upheld the respondent's
termination order.
9) The Labour Court, however, by Award dated
01.02.2006 (Annexure P-9) answered the Reference
in respondent's favour. Applying the provisions of
the Act, the Labour Court held that since the
4
respondent was able to prove that he has worked for
240 days continuously in one previous calendar
year, he was entitled to get the protection of the Act.
It was held that it was a case of illegal retrenchment
because the respondent was not paid any prior
retrenchment compensation before termination of
his services. The Labour Court also held that there
was violation of Section 25-G of the Act in passing
the termination order. The Labour Court
accordingly directed the appellant(State) to
re-instate the respondent in service along with
payment of 40% back wages.
10) The appellant (State) felt aggrieved, filed writ
petition (Special Civil Application No.8390/2006)
before the High Court of Gujarat. By order dated
21.04.2006, the Single Judge dismissed the
appellant's writ petition and affirmed the Award of
the Labour Court. The appellant then filed Letters
Patent Appeal before the Division Bench of the High
Court but it was dismissed in default. The
5
appellant applied for restoration of the Letters
Patent Appeal but it was dismissed and hence this
appeal by special leave was filed by the State before
this Court against the order of the Division Bench
as also against the order of the Single Judge.
11) Heard Ms. Jesal Wahi, learned counsel for the
appellants and Mr. Purvish Jitendra Malkan,
learned counsel for the respondent.
12) Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to allow the appeals in part and while
setting aside the impugned orders (Single Judge and
Division Bench), modify the Award of the Labour
Court as indicated below.
13) Having gone through the entire record of the
case and further keeping in view the nature of
factual controversy, findings of the Labour Court,
the manner in which the respondent fought this
litigation on two fronts simultaneously, namely, one
in Civil Court and the other in Labour Court in
6
challenging his termination order and seeking
regularization in service, which resulted in passing
the two conflicting orders - one in respondent's
favour (Labour Court) and the other against him
(Civil Court) and lastly, it being an admitted fact
that the respondent was a daily wager during his
short tenure, which lasted hardly two and half years
approximately and coupled with the fact that 25
years has since been passed from the date of his
alleged termination, we are of the considered
opinion that the law laid down by this Court in the
case of Bharat Sanchar Nigam Limited vs.
Bhurumal [(2014) 7 SCC 177] would aptly apply to
the facts of this case and we prefer to apply the
same for disposal of these appeals.
14) It is apposite to reproduce what this Court has
held in the case of Bharat Sanchar Nigam Limited
(supra):
“33. It is clear from the reading of the
aforesaid judgments that the ordinary
principle of grant of reinstatement with full
7
back wages, when the termination is found to
be illegal is not applied mechanically in all
cases. While that may be a position where
services of a regular/permanent workman are
terminated illegally and/or mala fide and/or
by way of victimisation, unfair labour
practice, etc. However, when it comes to the
case of termination of a daily-wage worker
and where the termination is found illegal
because of a procedural defect, namely, in
violation of Section 25-F of the Industrial
Disputes Act, this Court is consistent in
taking the view that in such cases
reinstatement with back wages is not
automatic and instead the workman should
be given monetary compensation which will
meet the ends of justice. Rationale for
shifting in this direction is obvious.
34. The reasons for denying the relief of
reinstatement in such cases are obvious. It is
trite law that when the termination is found
to be illegal because of non-payment of
retrenchment compensation and notice pay
as mandatorily required under Section 25-F
of the Industrial Disputes Act, even after
reinstatement, it is always open to the
management to terminate the services of
that employee by paying him the
retrenchment compensation. Since such a
workman was working on daily-wage basis
and even after he is reinstated, he has no
right to seek regularisation [see State of
Karnataka v. Umadevi (3)17]. Thus when he
cannot claim regularisation and he has no
right to continue even as a daily-wage
worker, no useful purpose is going to be
served in reinstating such a workman and he
can be given monetary compensation by the
Court itself inasmuch as if he is terminated
again after reinstatement, he would receive
monetary compensation only in the form of
retrenchment compensation and notice pay.
In such a situation, giving the relief of
reinstatement, that too after a long gap,
would not serve any purpose.
8
“35. We would, however, like to add a caveat
here. There may be cases where termination
of a daily-wage worker is found to be illegal
on the ground that it was resorted to as
unfair labour practice or in violation of the
principle of last come first go viz. while
retrenching such a worker daily wage juniors
to him were retained. There may also be a
situation that persons junior to him were
regularised under some policy but the
workman concerned terminated. In such
circumstances, the terminated worker should
not be denied reinstatement unless there are
some other weighty reasons for adopting the
course of grant of compensation instead of
reinstatement. In such cases, reinstatement
should be the rule and only in exceptional
cases for the reasons stated to be in writing,
such a relief can be denied.”
15) We have taken note of one fact here that the
Labour Court has also found that the termination is
bad due to violation of Section 25-G of the Act. In
our opinion, taking note of overall factual scenario
emerging from the record of the case and having
regard to the nature of the findings rendered and
further the averments made in the SLP justifying
the need to pass the termination order, this case
does not fall in exceptional cases as observed by
this Court in Para 35 of Bharat Sanchar Nigam
9
Limited case (supra) due to finding of Section 25-G
of the Act recorded against the appellant. In other
words, there are reasons to take out the case from
exceptional cases contained in Para 35 because we
find that the appellant did not resort to any kind of
unfair practice while terminating the services of the
respondent.
16) In view of forgoing discussion, we are of the
considered view that it would be just, proper and
reasonable to award lump sum monetary
compensation to the respondent in full and final
satisfaction of his claim of re-instatement and other
consequential benefits by taking recourse to the
powers under Section 11-A of the Act and the law
laid down by this Court in Bharat Sanchar Nigam
Limited case (supra).
17) Having regard to the totality of the facts taken
note of supra, we consider it just and reasonable to
award a total sum of Rs.2,50,000/- (Rs.Two Lakhs
Fifty Thousand) to the respondent in lieu of his right
10
to claim re-instatement and back wages in full and
final satisfaction of this dispute.
18) Let the payment of Rs.2,50,000/- be made by
the appellant(State) to the respondent within three
months from the date of receipt of this judgment
failing which the amount will carry interest at the
rate of 9% per annum payable from the date of this
judgment till payment to respondent.
19) In view of foregoing discussion, the appeals
succeed and are allowed in part. The impugned
order of the Division Bench and that of the Single
Judge are set aside. The Award of the Labour Court
dated 01.02.2006 is accordingly modified to the
extent indicated above.
………...................................J.
[R.K. AGRAWAL]
…...……..................................J.
[ABHAY MANOHAR SAPRE]
New Delhi;
November 28, 2017
11
