Page 1 C.A.@SLP(c)Nos.554-555 of 2012 - 1 -

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

Page 2 C.A.@SLP(c)Nos.554-555 of 2012 - 2 -

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 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

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

Page 3 C.A.@SLP(c)Nos.554-555 of 2012 - 3 -

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

Page 4 C.A.@SLP(c)Nos.554-555 of 2012 - 4 -

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.

Page 5 C.A.@SLP(c)Nos.554-555 of 2012 - 5 -

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

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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

Page 7 C.A.@SLP(c)Nos.554-555 of 2012 - 7 -

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

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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

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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

Page 10 C.A.@SLP(c)Nos.554-555 of 2012 - 10 -

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

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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

Page 12 C.A.@SLP(c)Nos.554-555 of 2012 - 12 -

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

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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

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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

Page 15 C.A.@SLP(c)Nos.554-555 of 2012 - 15 -

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

Page 16 C.A.@SLP(c)Nos.554-555 of 2012 - 16 -

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

1

(2010) 3 SCC 192

Page 17 C.A.@SLP(c)Nos.554-555 of 2012 - 17 -

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 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

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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

Page 19 C.A.@SLP(c)Nos.554-555 of 2012 - 19 -

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

Page 20 C.A.@SLP(c)Nos.554-555 of 2012 - 20 -

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

Page 21 C.A.@SLP(c)Nos.554-555 of 2012 - 21 -

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

Page 22 C.A.@SLP(c)Nos.554-555 of 2012 - 22 -

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.

Page 23 C.A.@SLP(c)Nos.554-555 of 2012 - 23 -

The High Court while passing the judgment and order

and substituting the award of the Labour Court has

already granted damages of 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,

Page 24 C.A.@SLP(c)Nos.554-555 of 2012 - 24 -

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 1,00,000/- towards damages

is legal and valid?

(2)Whether the concurrent finding

recorded by the Labour Court and High

Page 25 C.A.@SLP(c)Nos.554-555 of 2012 - 25 -

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 1,00,000/- by the High Court in lieu of

Page 26 C.A.@SLP(c)Nos.554-555 of 2012 - 26 -

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'.

2

(2012) 5 SCC 443

Page 27 C.A.@SLP(c)Nos.554-555 of 2012 - 27 -

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.”

Page 28 C.A.@SLP(c)Nos.554-555 of 2012 - 28 -

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:

3

(2011) 6 SCC 584

Page 29 C.A.@SLP(c)Nos.554-555 of 2012 - 29 -

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

Page 30 C.A.@SLP(c)Nos.554-555 of 2012 - 30 -

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

Page 31 C.A.@SLP(c)Nos.554-555 of 2012 - 31 -

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

Page 32 C.A.@SLP(c)Nos.554-555 of 2012 - 32 -

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 Mines 13,

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

Page 33 C.A.@SLP(c)Nos.554-555 of 2012 - 33 -

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-

Page 34 C.A.@SLP(c)Nos.554-555 of 2012 - 34 -

[(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

Page 35 C.A.@SLP(c)Nos.554-555 of 2012 - 35 -

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

4

(2002) 10 SCC 89

Page 36 C.A.@SLP(c)Nos.554-555 of 2012 - 36 -

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

Page 37 C.A.@SLP(c)Nos.554-555 of 2012 - 37 -

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

Page 38 C.A.@SLP(c)Nos.554-555 of 2012 - 38 -

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

Page 39 C.A.@SLP(c)Nos.554-555 of 2012 - 39 -

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

Page 40 C.A.@SLP(c)Nos.554-555 of 2012 - 40 -

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

Page 41 C.A.@SLP(c)Nos.554-555 of 2012 - 41 -

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.

Page 42 C.A.@SLP(c)Nos.554-555 of 2012 - 42 -

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.

Page 43 C.A.@SLP(c)Nos.554-555 of 2012 - 43 -

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

5

AIR 1976 SC 1111

Page 44 C.A.@SLP(c)Nos.554-555 of 2012 - 44 -

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:

Page 45 C.A.@SLP(c)Nos.554-555 of 2012 - 45 -

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

Page 46 C.A.@SLP(c)Nos.554-555 of 2012 - 46 -

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

Page 47 C.A.@SLP(c)Nos.554-555 of 2012 - 47 -

(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

6

(2010) 5 SCC 497

Page 48 C.A.@SLP(c)Nos.554-555 of 2012 - 48 -

(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

Page 49 C.A.@SLP(c)Nos.554-555 of 2012 - 49 -

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

7

(2013) 11 SCC 626

Page 50 C.A.@SLP(c)Nos.554-555 of 2012 - 50 -

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:

8

(2005) 5 SCC 591

Page 51 C.A.@SLP(c)Nos.554-555 of 2012 - 51 -

“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.”

Page 52 C.A.@SLP(c)Nos.554-555 of 2012 - 52 -

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.

……..

9

(2013) 10 SCC 324

Page 53 C.A.@SLP(c)Nos.554-555 of 2012 - 53 -

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

Page 54 C.A.@SLP(c)Nos.554-555 of 2012 - 54 -

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

Page 55 C.A.@SLP(c)Nos.554-555 of 2012 - 55 -

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

Page 56 C.A.@SLP(c)Nos.554-555 of 2012 - 56 -

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

Page 57 C.A.@SLP(c)Nos.554-555 of 2012 - 57 -

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

Page 58 C.A.@SLP(c)Nos.554-555 of 2012 - 58 -

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

Page 59 C.A.@SLP(c)Nos.554-555 of 2012 - 59 -

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

Page 60 C.A.@SLP(c)Nos.554-555 of 2012 - 60 -

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

Page 61 C.A.@SLP(c)Nos.554-555 of 2012 - 61 -

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.

Page 62 C.A.@SLP(c)Nos.554-555 of 2012 - 62 -

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 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

Page 63 C.A.@SLP(c)Nos.554-555 of 2012 - 63 -

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.