As per case facts, the petitioner filed a complaint alleging unfair labor practices, claiming permanency after completing 240 days of continuous service, despite being engaged through repeated fixed-term appointments with ...
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AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.10960 OF 2024
Deepak Jijabrao Shitole,
Age 42 years, Sajguna Building,
S/No.81/1, Chaitraban Society,
Near Janvikas Patsanstha,
New Sangvi, Pune 0 411 027… Petitioner
Vs.
Yashwantrao chavan Academy of
Development Administration (YASHADA),
Pune, Raj Bhavan Complex,
Baner Road, Pune 411 007... Respondent
Mr. Nitin Kulkarni for the petitioner.
Mr. Tejesh Dande with Ms. Tanishka Chavan for the
respondent.
CORAM :AMIT BORKAR, J.
RESERVED ON :FEBRUARY 27, 2026.
PRONOUNCED ON:MARCH 17, 2026
JUDGMENT:
1.By the present writ petitions, the petitioner has challenged
the Judgment and Order dated 2 August 2023 passed by the
Industrial Court, Pune in Complaint (ULP) No. 275 of 2013.
2.The facts giving rise to the filing of the present writ petitions
are as follows. The petitioner had initially instituted a complaint
alleging unfair labour practices under Section 28(1) read with
1
ATUL
GANESH
KULKARNI
Digitally signed by
ATUL GANESH
KULKARNI
Date: 2026.03.17
12:27:56 +0530
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Item Nos. 5, 6, 9 and 10 of Schedule IV of the Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour
Practices Act, 1971 before the Industrial Court at Pune. The
petitioner contended that upon completion of 240 days of
continuous service, he was entitled to be made permanent and to
receive all consequential benefits of permanency from the date of
completion of such service till regularisation by the respondent. It
was pleaded that the petitioner was appointed on 10 July 2006 as
a Technical Assistant and that his engagement was continued from
time to time by granting artificial technical breaks of one day. It
was further contended that although appointment orders were
issued for fixed periods, the nature of duties performed by the
petitioner was perennial and continued so long as the respondent
establishment existed. According to the petitioner, such fixed term
appointments were adopted only to circumvent the rigours of
Section 25F of the Industrial Disputes Act, 1947 by taking recourse
to Section 2(oo)(bb) thereof. The petitioner was initially appointed
as Technical Assistant on 10 July 2006.
3.In the complaint filed before the Industrial Court, it was
further contended that the petitioner had rendered continuous
service exceeding 240 days and, therefore, the protection of
Section 2(oo)(bb) of the Industrial Disputes Act, 1947 was not
available to the respondent. Reliance was placed on Clause 4(c) of
the Model Standing Orders framed under the Industrial
Employment (Standing Orders) Act, 1946, to contend that on
completion of 240 days of continuous service, the petitioner stood
deemed to have acquired permanent status. It was also the case of
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the petitioner that upon completion of 240 days of continuous
service, the respondent was under an obligation to issue an order
conferring permanency. Since no such order was issued, it was
alleged that the respondent had committed breach of the Model
Standing Orders, particularly Clause 4(c), and thereby indulged in
unfair labour practices falling under Item No. 9 of Schedule IV of
the MRTU and PULP Act, 1971. During the pendency of the
complaint before the Industrial Court, the petitioner filed an
application seeking interim relief under Section 30(2) of the MRTU
and PULP Act, 1971, praying that the respondent be restrained
from terminating his services pending final adjudication of the
complaint. The Industrial Court issued notice to the respondent
and granted an order directing the parties to maintain status quo
with regard to the petitioner’s employment till the hearing of the
application for interim relief. Upon vacating the ad interim relief,
the respondent terminated the services of the petitioner on 9 April
2015. Aggrieved thereby, the petitioner filed a separate complaint
alleging unfair labour practice before the Labour Court seeking
reinstatement with full back wages, which proceedings are stated
to be pending before the Labour Court at Pune. After considering
the evidence on record and upon hearing both sides, the Industrial
Court dismissed the complaint filed by the petitioner by its order
dated 2 August 2023.
4.Learned Advocate appearing for the petitioners submitted
that it is an undisputed position that the respondent is a Trust
registered under the Societies Registration Act, 1860, initially as
Maharashtra Institute of Development Administration, and is also
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registered under the Bombay Public Trusts Act, 1950 bearing
Registration No. F-6370 dated 3 November 1990.
5.It was submitted that, by virtue of Section 2(4) of the
Bombay Shops and Establishments Act, 1948, the respondent Trust
squarely falls within the definition of a commercial establishment.
Consequently, in view of Section 38B of the said Act, the provisions
of the Industrial Employment (Standing Orders) Act, 1946 become
applicable to the respondent. It was further submitted that the
respondent admittedly employs more than fifty employees and,
therefore, once the Model Standing Orders become applicable, it
was mandatory for the respondent to obtain exemption under
Section 13B of the Industrial Employment (Standing Orders) Act,
1946, if the service conditions of employees were governed by
separate rules. Learned counsel submitted that the Industrial Court
failed to properly appreciate the statutory definition of
“commercial establishment” under Section 2(4) of the Bombay
Shops and Establishments Act, 1948, including the amended
provision. Reliance was placed on the definition to contend that
societies registered under the Societies Registration Act and
charitable or other trusts carrying on any business, trade,
profession, or activities incidental or ancillary thereto are expressly
included within its scope, irrespective of whether such activities
are carried out for profit.
6.It was further submitted that the Industrial Court erred in
concluding that the respondent was not carrying on any business,
trade, or profession. Attention was invited to the annual reports
placed on record, which reflected income generated through
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course fees, sales income, project income, other income, and
activities of the Management Development Centre. According to
the petitioners, these documents clearly establish the commercial
nature of the respondent’s activities, and the finding recorded by
the Industrial Court was therefore perverse and contrary to the
evidence on record. Learned counsel submitted that although
training is one of the activities undertaken by the respondent, it is
not the sole activity. Reliance was placed on the admissions made
by the respondent’s witness in cross examination to demonstrate
that the respondent is engaged in multiple activities including
research, training, consultancy, and publication. It was contended
that such activities, whether undertaken for gain or otherwise,
bring the respondent within the ambit of a commercial
establishment under Section 2(4) of the Bombay Shops and
Establishments Act, 1948. It was further submitted that the
respondent cannot be treated as an instrumentality of the State
merely because it receives grants from the Government of
Maharashtra. It was contended that the settled legal position is
that receipt of government grants, by itself, does not render an
institution an instrumentality of the State under Article 12 of the
Constitution of India. Unless the Government can sue or be sued in
respect of the acts of such institution, it cannot be regarded as a
State instrumentality. Learned counsel submitted that there is no
material to show that the respondent institution was created by
statute or that any principal and agent relationship exists between
the Government and the respondent. The mere presence of
Government officers on the Board of Directors does not confer the
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status of a State instrumentality. It was pointed out that the
respondent is admittedly registered under the Bombay Public
Trusts Act and the Societies Registration Act and is governed by its
Board of Governors and not under the direct control of the State
Government.
7.It was submitted that the finding of the Industrial Court that
completion of 240 days of service does not confer a right to
permanency is contrary to Clause 4(c) of the Model Standing
Orders. Learned counsel contended that Clause 4(c) specifically
provides that a Badli or temporary workman who has rendered
uninterrupted service aggregating to 240 days in the preceding
twelve months shall be made permanent by a written order signed
by the Manager. Therefore, the finding of the Industrial Court was
stated to be contrary to the statutory mandate as well as the law
laid down by the Supreme Court in Jet Airways Ltd., and hence
liable to be set aside.
8.Reliance was placed on the judgment of the Supreme Court
in
Bharatiya Kamgar Karmachari Mahasangh v. Jet Airways Ltd.,
(2023) 20 SCC 178, wherein it has been held that a cumulative
reading of the relevant clauses indicates that a workman
completing 240 days of service becomes entitled to permanency,
and that no contract, settlement, or agreement curtailing such
statutory right can prevail over the Standing Orders. It was
contended that the Standing Orders, being beneficial legislation,
override any contractual arrangement waiving employee rights. On
this basis, it was submitted that the findings of the Industrial Court
are contrary to the law declared by the Supreme Court.
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9.Learned counsel further submitted that the Industrial Court
erred in holding that fixed term appointment orders would
automatically attract Section 2(oo)(bb) of the Industrial Disputes
Act, 1947 and thereby exclude the applicability of Clause 4(c) of
the Model Standing Orders. According to the petitioners, such
reasoning is contrary to the law laid down by the Bombay High
Court in Saudi Arabian Airlines and by the Supreme Court in
Jet
Airways
. It was contended that the conclusion of the Industrial
Court that the Industrial Employment (Standing Orders) Act was
not applicable to the respondent, and that the petitioners were not
entitled to permanency despite completion of 240 days of
continuous service, is contrary to settled legal principles and
therefore liable to be quashed as perverse.
10.It was further submitted that there was no material before
the Industrial Court to indicate that the post occupied by the
petitioner had ceased to exist or that the work itself had come to
an end. Even assuming that the petitioner was appointed as a
Project Assistant, the project work admittedly continued and there
was no contention that the projects had been closed or
discontinued. It was submitted that the respondent institution
regularly undertakes projects from various public and private
bodies, and therefore it cannot be contended that no work survives
so as to justify discontinuation of the petitioner’s services.
11.Learned counsel submitted that the terms of appointment
issued to the petitioner were opposed to public policy, and that
continued engagement on a contractual basis for an uninterrupted
period exceeding four years amounted to exploitation. It was
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argued that the respondent, being expected to act as a model
employer in a welfare state, ought not to impose unfair, illegal, or
inequitable conditions of employment upon persons who have no
real bargaining power and are compelled to accept such terms. In
support of the aforesaid submissions, learned Advocate for the
petitioner placed reliance on the judgments of the Supreme Court
in
Jaggo v. Union of India and Others, 2024 SCC OnLine SC 3826.
12.Per contra, learned Advocate Mr. Dande appearing for the
respondent submitted that the contractual engagement of the
petitioner commenced on 5 April 2013 and came to an end on 4
March 2014 in terms of the contract executed between the parties.
It was contended that the respondent is an instrumentality of the
Government of Maharashtra. The Maharashtra Institute of
Development Administration, subsequently renamed as YASHADA,
was established pursuant to Government Resolution dated 24 May
1984 issued by the Government of Maharashtra, which provided
that the respondent would function under the administrative
control of the General Administration Department of the State
Government. It was submitted that the Institute was established to
undertake training and capacity building activities of the
Government, and Clause 4 of the said Government Resolution
expressly provides for supervisory and controlling powers of the
General Administration Department over the respondent
institution. Learned counsel further submitted that the
Memorandum of Association of the respondent indicates that the
institution functions as an apex training body of the Government
of Maharashtra, entrusted with providing training and related
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services, prescribing standards of proficiency, and recommending
management inputs in matters concerning public administration
and productivity of various organisations, agencies, and
institutions.
13.It was submitted that the Industrial Court has rightly held
that mere completion of 240 days of service does not confer a right
to permanency. According to the respondent, since the institution
is an instrumentality of the State, the provisions of the Model
Standing Orders are not applicable. It was further contended that
there were no sanctioned posts available in the establishment of
YASHADA for project work and that the petitioner was engaged
purely on contractual basis for a fixed duration project. The
commencement and expiry dates of the contract were expressly
mentioned therein, and therefore the petitioner was bound by the
contractual terms and conditions and was not entitled to claim
protection or continuance beyond the expiry of the contractual
period. Learned counsel submitted that the petitioner is bound by
the terms of the contract entered into with the respondent and that
such contractual engagement squarely falls within the ambit of
Section 2(oo)(bb) of the Industrial Disputes Act, 1947.
Consequently, it was contended that the petitioner is not entitled
to claim permanency or any relief based on continuous service.
14.It was further submitted that even assuming, without
admitting, that the provisions of the Industrial Employment
(Standing Orders) Act, 1946 and the Model Standing Orders
framed thereunder are applicable to the respondent, the
respondent would still be entitled to appoint employees on
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contractual basis by virtue of Clause 31 of the Model Standing
Orders. Reliance was placed on Clause 31, which provides that
nothing contained in the Standing Orders shall operate in
derogation of any law for the time being in force or to the
prejudice of any right arising under a contract of service,
customary usage, agreement, settlement, or award applicable to
the establishment. Learned counsel therefore submitted that it is a
consistent practice in YASHADA to undertake projects dependent
upon funding agencies, and that manpower is engaged specifically
for such project based activities. The petitioner, according to the
respondent, was appointed only for a particular project and his
engagement was co terminus with the duration and requirements
of that project.
REASONS AND ANALYSIS:
15.The Bombay Shops and Establishments Act provides a
meaning to the expression “commercial establishment”. It does not
restrict the term only to places which earn profit. The definition
also includes societies and trusts which carry on business, trade,
profession, or any activity connected with such work. The real test
is the nature of the activities it actually carries on. In the present
case, the annual reports produced on record show that the
respondent conducts training programmes, consultancy work,
research activities, publications and also runs the Management
Development Centre. These activities generate income in the form
of course fees, project income and other receipts. The documents
placed on record therefore clearly reflect organised and systematic
functioning of the institution. These records give a clear picture of
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how the respondent operates in practice. Looking to this material,
it becomes evident that the respondent answers the description of
a “commercial establishment” under the Bombay Shops and
Establishments Act and is therefore required to follow the legal
obligations attached to such establishments.
16.Once the respondent is treated as a commercial
establishment and it is also not disputed that it employs more than
the minimum number of employees prescribed under Act, the
provisions of the Industrial Employment Standing Orders Act
automatically come into operation. In such a situation the Model
Standing Orders apply unless the employer has framed and
obtained certification of its own standing orders. These Model
Standing Orders lay down the statutory terms which regulate
service conditions of employees.
17.In view of this position, the finding recorded by the
Industrial Court that the respondent does not carry on any
business or trade cannot be accepted. The annual reports placed
on record and the admissions made by the witness of the
respondent clearly show that the respondent carries on several
organised activities which generate income. The Industrial Court
does not appear to have examined these documents carefully.
When material documentary evidence is ignored, the factual
conclusion drawn cannot stand in law. The finding therefore
cannot be sustained as it reflects an incorrect appreciation of the
material available on record.
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18.Clause 4(c) of the Model Standing Orders provides that a
badli or temporary workman who has completed 240 days of
uninterrupted service during the preceding twelve months shall be
made permanent by an order in writing issued by the Manager.
The intention behind this provision is to protect employees who
continue to work for long periods but are kept on temporary
footing only in name. Once the employee completes the required
length of service, the law treats that stage as the point where the
employee becomes entitled to permanency.
19.It is well settled that the Model Standing Orders are
intended to safeguard the rights of employees and to prevent
unfair service practices. When the provisions of the Standing
Orders are read together, it becomes clear that once the prescribed
period of service is completed, the workman acquires a legal right
to claim permanency. Such a right cannot be taken away by
agreements or contractual terms framed by the employer. Any
arrangement which inconsistent with a statutory protection cannot
prevail over the law. In the case of
Jet Airways, the Supreme Court
has clearly held that the statutory Standing Orders will prevail
over contractual terms which try to defeat or bypass these
protections.
20.Section 2(oo)(bb) of the Industrial Disputes Act states that
when a fixed term contract comes to an end and is not renewed,
such termination will not amount to retrenchment. It allows an
employer to appoint a person for a fixed period and to discontinue
the service when the contract period ends. However, this provision
cannot override other statutory protections which exist
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independently. The Model Standing Orders have the force of law.
Therefore, a contract of employment cannot be interpreted in a
manner which takes away the rights granted by the Standing
Orders.
21.In the present case, the respondent has attempted to describe
the petitioner as a fixed term employee engaged for a project and
has relied upon the contract which mentions a specific starting
date and ending date. However, the terms of a contract cannot be
read in isolation when the real nature of employment shows
something different. The material on record shows that the
petitioner continued to perform similar duties and his
appointments were renewed repeatedly with only technical breaks
in between. This pattern shows that the work continued and the
institution depended on his services. Such circumstances clearly
indicate continuity of employment. In such a situation, the
protection under Clause 4(c) of the Model Standing Orders would
apply even if the appointments are labelled as fixed term. An
employer cannot avoid the consequence of permanency by
dividing long service into a chain of short term contracts once the
employee has fulfilled the statutory requirement.
22.The respondent has also relied upon a Government
Resolution stating that the General Administration Department
exercises administrative supervision over the institution. It is also
pointed out that some government officers are members of the
governing body and that the institution receives government
grants. These circumstances may have some relevance, but they
are not sufficient by themselves to treat the institution as a State
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authority. For that purpose the Court must examine whether the
institution has been created by statute, whether the Government
exercises deep and effective control over its daily functioning,
whether the Government can be held legally responsible for its
acts, and whether the functions performed by the institution are so
closely connected with the State that it can be regarded as part of
the State. Merely because an institution is registered as a society
and a public trust, or because it receives grants from the
Government, it does not automatically become a State authority.
23.In the present case, the material produced by the petitioner
indicates that the respondent functions largely as a training and
consultancy institution carrying on organised activities of a
commercial nature. The Government Resolution relied upon only
speaks of administrative supervision. It does not show that the
institution has been created by a statute under Article 12 of the
Constitution. The record also does not indicate that the
Government exercises complete or exclusive control over the
functioning of the respondent. In these circumstances, it cannot be
said that the respondent is an instrumentality of the State.
Consequently, the respondent cannot deny the petitioner the
protection of statutory labour laws on that ground.
24.For the reasons recorded hereinabove, the following order is
passed:
(i) The writ petitions are allowed.
(ii) The Judgment and Order dated 2 August 2023 passed
by the Industrial Court, Pune in Complaint (ULP) No. 275 of
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2013 is quashed and set aside.
(iii) It is declared that the petitioner, having been appointed
on 10 July 2006 and having worked continuously thereafter,
completed 240 days of continuous service on 5 March 2007
within the meaning of Clause 4(c) of the Model Standing
Orders.
(iv) It is further declared that on completion of the said
period of 240 days of uninterrupted service, the petitioner
became entitled to be treated as a permanent employee in
the establishment in terms of Clause 4(c) of the Model
Standing Orders.
(v) The respondent is directed to treat the petitioner as
permanent from 5 March 2007, being the date on which the
petitioner completed 240 days of continuous service, and to
extend to the petitioner all consequential service benefits
flowing from such status.
(vi) The respondent shall compute and grant the
consequential monetary benefits within a period of three
months from the date of this judgment.
25.Rule is made absolute in the above terms. No order as to
costs.
(AMIT BORKAR, J.)
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