Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 10690-10691 OF 2014

(Arising out of S.L.P. (C) Nos. 36800-36801 of 2012)

Bhavnagar Municipal Corporation etc. …Appellants

Vs.

Jadeja Govubha Chhanubha & Anr. …Respondents

J U D G M E N T

T.S. THAKUR, J.

1.Leave granted.

2.These appeals arise out of a judgement and order

dated 20

th

July, 2012 passed by the High Court of Gujarat at

Ahmedabad whereby Letters Patent Appeal No.878 of 2012

filed by the appellant-Corporation has been dismissed and

the order passed by the learned Single Judge of that Court

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Page 2 partly modifying the award made in favour of the respondent

affirmed.

3.The respondent, it appears, was employed as a

Conductor in the Transport Department of the appellant-

Corporation on daily-wage basis in October, 1987. He claims

to have served in that capacity till 31

st

March, 1989 when his

services were terminated. Aggrieved by the termination, the

respondent raised an industrial dispute before the Assistant

Labour Commissioner, Bhavnagar who tried to resolve the

same by way of conciliation but since the conciliation

proceedings also failed, Reference No.459 of 1990 was made

to the Labour Commissioner at Bhavnagar for adjudication of

the dispute between the parties. The Labour Court allowed

the parties to adduce evidence in support of their respective

versions and eventually came to the conclusion that the

respondent had indeed worked as a Conductor with the

appellant-Corporation between 3

rd

October, 1987 and 31

st

March, 1989. The Labour Court in the process rejected the

appellant's case that the respondent had worked only for 58

days as Badli Conductor and was not, therefore, entitled to

protection of Section 25F of the Industrial Disputes Act,

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Page 3 1947. The Labour Court placed reliance upon a Xerox copy of

a certificate allegedly issued by an officer of the appellant-

Corporation certifying that the respondent had worked as a

Conductor for the period mentioned above. The Labour Court

drew an adverse inference against the appellant-Corporation

for its omission to produce relevant record to prove that the

respondent-workman had worked only for 58 days hence not

entitled to the benefit of any retrenchment compensation.

The Labour Court on that basis held the termination of

the respondent from service to be illegal and directed

reinstatement with 65% back wages.

4.Aggrieved by the award made by the Labour Court the

appellant-Corporation filed Special Civil Application

No.11508 of 2002 which was heard and partly allowed by a

learned Single Judge of the High Court of Gujarat at

Ahmedabad by his order dated 24

th

April, 2012. The High

Court referred to the evidence adduced by the parties before

the Labour Court and came to the conclusion that the

appellant-Corporation had not been able to prove its

assertion that the respondent had worked for 58 days only.

The High Court held that the findings recorded by the Labour

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Page 4 Court to the effect that the respondent had worked between

3

rd

October, 1987 and 31

st

March, 1989 were supported by

sufficient evidence and material on record. Having said so,

the High Court opined that the award of back wages of 65%

was not justified as the Labour Court had not given any

cogent reasons while directing such back wages nor had the

Labour Court examined whether the respondent was

gainfully employed during the intervening period. The award

to the extent it directed payment of 65% back wages was,

therefore, held to be perverse by the learned Single Judge of

the High Court which part was accordingly set aside and the

writ petition partly allowed.

5.Dissatisfied with the order passed by the Single Judge

the appellant-Corporation filed Letters Patent Appeal No.878

of 2012 which, as noticed earlier, was dismissed by a

Division Bench of the High Court by its order dated 20

th

July,

2012. The Division Bench was of the view that the findings

recorded by the Labour Court did not suffer from any

infirmity to call for any interference specially when the other

employees of the appellant-Corporation appear to have been

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Page 5 absorbed by the Corporation upon closure of its Transport

Department.

6.On behalf of the appellant-Corporation it was argued

that the findings recorded by the Labour Court to the effect

that the respondent had worked as a Conductor between 3

rd

October, 1987 and 31

st

March, 1989 was not supported by

any evidence and was, therefore, perverse. It was contended

that the solitary piece of evidence which the respondent had

produced in support of his version was a Xerox copy of a

certificate allegedly issued by an officer of the appellant-

Corporation who was never summoned as a witness. Apart

from the said document and the self-statement of the

respondent there was no other material to support the

findings that the respondent had indeed worked for 240 days

as alleged by him before his termination. On the contrary, it

was proved by the documents placed on record by the

appellant that the respondent was a Conductor who had

worked for just about 58 days hence was not entitled to any

protection under Section 25F of the Industrial Disputes Act,

1947. It was urged that the Labour Court had wrongly drawn

an adverse inference against the appellant-Corporation,

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Page 6 overlooking the settled legal position that the burden of

proof lay on the workman to establish that he was in

continuous employment for a period of 240 days to be

entitled to question the termination of his employment

without retrenchment compensation. The Single Judge of the

High Court and so also the Division Bench failed to

appreciate the essence of the controversy and fell in error in

upholding the award made by the Labour Court.

7.On behalf of the respondent, it was contended that the

findings recorded by the Labour Court do not suffer from any

perversity to call for our interference. The Single Judge,

according to the learned counsel, has examined the

evidence on record and clearly held that there was sufficient

material to support the findings that the respondent had

worked for more than 240 days and was, therefore, entitled

to the protection of Section 25-F and that since no

retrenchment compensation had been paid at the time of

the termination of his employment, the order of termination

was illegal which entitled the respondent to reinstatement. It

was also contended that although sufficient number of years

had rolled back since the respondent last served with the

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Page 7 appellant-Corporation, yet the respondent was entitled to be

reinstated no matter the Transport Department of the

appellant-Corporation where the respondent was working

had been wound up. The fact that the similarly situated

workmen in the department had been adjusted, according to

the learned counsel, was a sufficient reason for the

respondent to seek reinstatement with or without back

wages.

8.It is fairly well-settled that for an order of termination of

the services of a workman to be held illegal on account of

non-payment of retrenchment compensation, it is essential

for the workman to establish that he was in continuous

service of the employer within the meaning of Section 25B of

the Industrial Disputes Act, 1947. For the respondent to

succeed in that attempt he was required to show that he was

in service for 240 days in terms of Section 25B(2)(a)(ii). The

burden to prove that he was in actual and continuous service

of the employer for the said period lay squarely on the

workman. The decisions of this Court in Range Forest

Officer v. S.T. Hadimani (2002) 3 SCC 25 , Municipal

Corporation, Faridabad v. Siri Niwas (2004) 8 SCC

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Page 8 195, M.P. Electricity Board v. Hariram (2004) 8 SCC

246, Rajasthan State Ganganagar S. Mills Ltd. v. State

of Rajasthan & Anr. (2004) 8 SCC 161 , Surendra Nagar

District Panchayat and Anr. v. Jethabhai Pitamberbhai

(2005) 8 SCC 450, R.M. Yellatti v. Assistant Executive

Engineer (2006) 1 SCC 106 unequivocally recognise the

principle that the burden to prove that the workman had

worked for 240 days is entirely upon him. So also the

question whether an adverse inference could be drawn

against the employer in case he did not produce the best

evidence available with it, has been the subject-matter of

pronouncements of this Court in Municipal Corporation,

Faridabad v. Siri Niwas (supra) and M.P. Electricity

Board v. Hariram (supra), reiterated in Manager,

Reserve Bank of India, Bangalore v. S. Mani (2005) 5

SCC 100. This Court has held that only because some

documents have not been produced by the management, an

adverse inference cannot be drawn against it.

9.The Labour Court has, in the case at hand, placed

reliance upon a Xerox copy of a certificate allegedly issued

by an officer of the appellant-Corporation stating that the

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Page 9 respondent was in the employment of the appellant-

Corporation as a Conductor between 3

rd

October, 1987 and

31

st

March, 1989. While it is true that the Xerox copy may

not be evidence by itself specially when the respondent had

stated that the original was with him, but had chosen not to

produce the same yet the fact remains that the document

was allowed to be marked at the trial and signature of the

officer issuing the certificate by another officer who was

examined by the appellant. Strict rules of evidence, it is

fairly well-settled, are not applicable to the proceedings

before the Labour Court. That being so the admission of the

Xerox copy of the certificate, without any objection from the

appellant-Corporation, cannot be faulted at this belated

stage. When seen in the light of the assertion of the

respondent, the certificate in question clearly supported the

respondent's case that he was in the employment of the

appellant-Corporation for the period mentioned above and

had completed 240 days of continuous service. That being

so, non-payment of retrenchment compensation was

sufficient to render the termination illegal. Inasmuch as the

Labour Court declared that to be so it committed no mistake

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Page 10 nor was there any room for the High Court to interfere with

the said finding especially when the findings could not be

described as perverse or without any evidence. The High

Court was also justified in directing deletion of the back

wages from the award made by the Labour Court against

which deletion, the respondent did not agitate either before

the Division Bench by filing an appeal or before us.

10.The only question that remains to be examined in the

above backdrop is whether reinstatement of the respondent

as a Conductor is imperative at this late stage. We say so

because the appellant claims to have worked for a period of

just about 18 months that too nearly three decades ago. The

respondent today may be past fifty if not more. The

Transport Department where he was working appears to

have been wound up and transport work out sourced. That

apart, this Court has in a series of decisions held that the

illegality in an order of termination on account of non-

payment of retrenchment compensation does not

necessarily result in the reinstatement of the workman in

service. This Court has, in cases where such termination is

found to be illegal, directed compensation in lieu of

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Page 11 reinstatement. We may at this stage refer to some of those

decisions:

11.In Mahboob Deepak v. Nagar Panchayat Gajraula

and Anr. (2008) 1 SCC 575, this Court held that since the

appellant had worked only for a short period, interest of

justice would be sub-served if the direction for reinstatement

was modified and compensatory payment of Rs.50,000/- in

lieu thereof directed to be substituted. Similarly in Sita

Ram and Ors. v. Moti Lal Nehru Farmers Training

Institute (2008) 5 SCC 75 , this Court took into

consideration the period during which the services were

rendered by the workman and instead of reinstatement

directed a lump sum payment of Rs.1,00,000/- in lieu

thereof.

12.In Ghaziabad Development Authority and Anr. v.

Ashok Kumar and Anr. (2008) 4 SCC 261 , this Court

made a similar order as is evident from the following

passage:

“10. We are, therefore, of the opinion that the

appellant should be directed to pay compensation to

the first respondent instead and in place of the relief

of reinstatement in service. Keeping in view the fact

that the respondent worked for about six years as

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Page 12 also the amount of daily wages which he had been

getting, we are of the opinion that the interest of

justice would be subserved if the appellant is

directed to pay a sum of Rs. 50,000/- to the first

respondent.”

[emphasis supplied]

13.To the same effect is decision of this Court in Jagbir

Singh v. Haryana State Agriculture Marketing Board

and Anr. (2009) 15 SCC 327 where this Court held that

while awarding compensation in lieu of reinstatement host of

factors should be kept in mind. The Court said:

16. While awarding compensation, the host of

factors, inter-alia, manner and method of

appointment, nature of employment and length of

service are relevant. Of course, each case will

depend upon its own facts and circumstances. In a

case such as this where the total length of service

rendered by the appellant was short and intermittent

from September 1, 1995 to July 18, 1996 and that he

was engaged as a daily wager, in our considered

view, a compensation of Rs.50,000/- to the Appellant

by Respondent No. 1 shall meet the ends of justice.”

[emphasis supplied]

14.Reference may also be made to the decision of this

Court in Senior Superintendent Telegraph (Traffic)

Bhopal v. Santosh Kumar Seal and Ors. (2010) 6 SCC

773, where this Court referred to the previous decisions on

12

Page 13 the subject to declare that even when a retrenchment order

passed in violation of Section 25(F) may be set aside,

reinstatement need not necessarily follow as a matter of

Court. The following passage from the decision is apposite:

14. It would be, thus, seen that by a catena of

decisions in recent time, this Court has clearly laid

down that an order of retrenchment passed in

violation of Section 25F although may be set aside

but an award of reinstatement should not, however,

be automatically passed. The award of reinstatement

with full back wages in a case where the workman

has completed 240 days of work in a year preceding

the date of termination, particularly, daily wagers

has not been found to be proper by this Court and

instead compensation has been awarded. This Court

has distinguished between a daily wager who does

not hold a post and a permanent employee.”

[emphasis supplied]

15.To the same effect is the decision of this Court in

Incharge Officer and Anr. V. Shankar Shetty (2010) 9

SCC 126, where this Court said:

“5. We think that if the principles stated in Jagbir

Singh and the decisions of this Court referred to

therein are kept in mind, it will be found that the

High Court erred in granting relief of reinstatement

to the respondent. The respondent was engaged as

daily wager in 1978 and his engagement continued

for about 7 years intermittently upto September 6,

1985 i.e. about 25years back. In a case such as the

present one, it appears to us that relief of

reinstatement cannot be justified and instead

monetary compensation would meet the ends of

justice. In our considered opinion, the compensation

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Page 14 of Rs. 1,00,000/- (Rupees One lac) in lieu of

reinstatement shall be appropriate, just and

equitable.”

[emphasis supplied]

16.The case at hand, in our opinion, is one such case

where reinstatement must give way to award of

compensation. We say so because looking to the totality of

the circumstances, the reinstatement of the respondent in

service does not appear to be an acceptable option.

Monetary compensation, keeping in view the length of

service rendered by the respondent, the wages that he was

receiving during that period which according to the evidence

was around Rs.24.75 per day should sufficiently meet the

ends of justice. Keeping in view all the facts and

circumstances, we are of the view that award of a sum of

Rs.2,50,000/- (Rupees Two Lacs Fifty Thousand only) should

meet the ends of justice.

17.In the result, we allow these appeals but only in part

and to the extent that the award made by the Labour Court

and the orders of the High Court shall stand modified to the

extent that the respondent shall be paid monetary

compensation of Rs.2,50,000/- (Rupees Two Lacs Fifty

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Page 15 Thousand only) in full and final settlement of his claim. The

amount shall be paid by the appellant-Corporation within a

period of two months from today failing which the said

amount shall start earning interest @ 12% p.a. from the date

of this order till actual payment of the amount is made to the

respondent.

……………………………..…….…..…J.

(T.S. THAKUR)

……………………………..…….…..…J.

New Delhi; (R. BANUMATHI)

December 3, 2014

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