REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos. 19857-19858 OF 2017

(ARISING OUT OF SLP (C) Nos.11956-11957 of 2015)

District Development Officer

& Anr. ...Appellant(s)

VERSUS

Satish Kantilal Amrelia ….Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1)Leave granted.

2)These appeals are filed against the final

judgment and order dated 01.12.2014 passed by

the High Court of Gujarat at Ahmedabad in Civil

Application No.10519 of 2014 in Letters Patent

Appeal No.1878 of 2006, wherein the High Court

dismissed the Letters Patent Appeal filed by the

appellant herein in default and further declined to

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restore the appeal when prayed by the appellant.

The Letters Patent Appeal arose out of judgment

and final order of the Single Judge dated

21.04.2006 in Special Civil Application No.8390

whereby the learned Single Judge dismissed the

writ petition filed by the appellant and affirmed the

Award dated 01.02.2006 passed by Labour Court,

Bhavnagar in Reference Case No.166 of 1992.

3)The controversy involved in the appeals is

confined to short facts, which, however, need

mention hereinbelow to appreciate the same.

4)The appellant is the Panchayat Department of

State of Gujarat having its office at Bhavnagar. The

respondent - Satish Kantilal Amrelia worked in the

appellant's Revenue Department at Bhavnagar as a

Peon-cum-Driver on daily wages from 18.12.1989 to

31.05.1990 (5 months 15 days) and then started

giving his services again as daily wager in

appellant's another branch (Small Saving) from

01.06.1990 to 12.02.1992 (1 year 9 months) on

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daily payment of Rs.27.55 (Rs.Twenty Seven and

Fifty Five Paisa). The respondent's tenure was then

discontinued with effect from 12.02.1992 vide order

dated 23.03.1992 (Annexure P-4).

5)The respondent felt aggrieved of his

termination and initiated two actions against the

appellant. In the first instance, challenging his

termination order dated 23.03.1992 from the

services, the respondent filed Civil Suit No.141 of

1992 in the Civil Court at Bhavnagar. During the

pendency of the civil suit, he also approached to the

State (Labour Commissioner) and prayed for making

Industrial Reference to the concerned Labour Court

under Section 10 of Industrial Disputes Act, 1947

(hereinafter referred to as “the Act”) for deciding the

legality and propriety of his termination order.

6)The Labour Commissioner made an Industrial

Reference No.166 of 1992 to the Labour Court No. 2

at Bhavnagar for deciding the legality and

correctness of the termination order and for

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regularization of respondent's services.

7)The 2

nd

Joint Civil Judge (SD), Bhavnagar, vide

judgment/decree dated 03.05.1994 decreed the

respondent’s suit, set aside the termination order

and directed the appellant (State) to re-instate the

respondent in service with all consequential

benefits.

8)Against the judgment/decree of the Trial

Court, the appellant filed first appeal being Civil

Appeal No.45/1994 before the Assistant Judge,

Bhavnagar. The Appellate Court, by order dated

30.09.2003, allowed the appellant's appeal, set

aside the judgment/decree of the Trial Court and

dismissed the respondent's civil suit. In substance,

the Appellate Court upheld the respondent's

termination order.

9)The Labour Court, however, by Award dated

01.02.2006 (Annexure P-9) answered the Reference

in respondent's favour. Applying the provisions of

the Act, the Labour Court held that since the

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respondent was able to prove that he has worked for

240 days continuously in one previous calendar

year, he was entitled to get the protection of the Act.

It was held that it was a case of illegal retrenchment

because the respondent was not paid any prior

retrenchment compensation before termination of

his services. The Labour Court also held that there

was violation of Section 25-G of the Act in passing

the termination order. The Labour Court

accordingly directed the appellant(State) to

re-instate the respondent in service along with

payment of 40% back wages.

10)The appellant (State) felt aggrieved, filed writ

petition (Special Civil Application No.8390/2006)

before the High Court of Gujarat. By order dated

21.04.2006, the Single Judge dismissed the

appellant's writ petition and affirmed the Award of

the Labour Court. The appellant then filed Letters

Patent Appeal before the Division Bench of the High

Court but it was dismissed in default. The

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appellant applied for restoration of the Letters

Patent Appeal but it was dismissed and hence this

appeal by special leave was filed by the State before

this Court against the order of the Division Bench

as also against the order of the Single Judge.

11)Heard Ms. Jesal Wahi, learned counsel for the

appellants and Mr. Purvish Jitendra Malkan,

learned counsel for the respondent.

12)Having heard the learned counsel for the

parties and on perusal of the record of the case, we

are inclined to allow the appeals in part and while

setting aside the impugned orders (Single Judge and

Division Bench), modify the Award of the Labour

Court as indicated below.

13)Having gone through the entire record of the

case and further keeping in view the nature of

factual controversy, findings of the Labour Court,

the manner in which the respondent fought this

litigation on two fronts simultaneously, namely, one

in Civil Court and the other in Labour Court in

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challenging his termination order and seeking

regularization in service, which resulted in passing

the two conflicting orders - one in respondent's

favour (Labour Court) and the other against him

(Civil Court) and lastly, it being an admitted fact

that the respondent was a daily wager during his

short tenure, which lasted hardly two and half years

approximately and coupled with the fact that 25

years has since been passed from the date of his

alleged termination,we are of the considered

opinion that the law laid down by this Court in the

case of Bharat Sanchar Nigam Limited vs.

Bhurumal [(2014) 7 SCC 177] would aptly apply to

the facts of this case and we prefer to apply the

same for disposal of these appeals.

14)It is apposite to reproduce what this Court has

held in the case of Bharat Sanchar Nigam Limited

(supra):

“33. It is clear from the reading of the

aforesaid judgments that the ordinary

principle of grant of reinstatement with full

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back wages, when the termination is found to

be illegal is not applied mechanically in all

cases. While that may be a position where

services of a regular/permanent workman are

terminated illegally and/or mala fide and/or

by way of victimisation, unfair labour

practice, etc. However, when it comes to the

case of termination of a daily-wage worker

and where the termination is found illegal

because of a procedural defect, namely, in

violation of Section 25-F of the Industrial

Disputes Act, this Court is consistent in

taking the view that in such cases

reinstatement with back wages is not

automatic and instead the workman should

be given monetary compensation which will

meet the ends of justice. Rationale for

shifting in this direction is obvious.

34. The reasons for denying the relief of

reinstatement in such cases are obvious. It is

trite law that when the termination is found

to be illegal because of non-payment of

retrenchment compensation and notice pay

as mandatorily required under Section 25-F

of the Industrial Disputes Act, even after

reinstatement, it is always open to the

management to terminate the services of

that employee by paying him the

retrenchment compensation. Since such a

workman was working on daily-wage basis

and even after he is reinstated, he has no

right to seek regularisation [see State of

Karnataka v. Umadevi (3)17]. Thus when he

cannot claim regularisation and he has no

right to continue even as a daily-wage

worker, no useful purpose is going to be

served in reinstating such a workman and he

can be given monetary compensation by the

Court itself inasmuch as if he is terminated

again after reinstatement, he would receive

monetary compensation only in the form of

retrenchment compensation and notice pay.

In such a situation, giving the relief of

reinstatement, that too after a long gap,

would not serve any purpose.

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“35. We would, however, like to add a caveat

here. There may be cases where termination

of a daily-wage worker is found to be illegal

on the ground that it was resorted to as

unfair labour practice or in violation of the

principle of last come first go viz. while

retrenching such a worker daily wage juniors

to him were retained. There may also be a

situation that persons junior to him were

regularised under some policy but the

workman concerned terminated. In such

circumstances, the terminated worker should

not be denied reinstatement unless there are

some other weighty reasons for adopting the

course of grant of compensation instead of

reinstatement. In such cases, reinstatement

should be the rule and only in exceptional

cases for the reasons stated to be in writing,

such a relief can be denied.”

15)We have taken note of one fact here that the

Labour Court has also found that the termination is

bad due to violation of Section 25-G of the Act. In

our opinion, taking note of overall factual scenario

emerging from the record of the case and having

regard to the nature of the findings rendered and

further the averments made in the SLP justifying

the need to pass the termination order, this case

does not fall in exceptional cases as observed by

this Court in Para 35 of Bharat Sanchar Nigam

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Limited case (supra) due to finding of Section 25-G

of the Act recorded against the appellant. In other

words, there are reasons to take out the case from

exceptional cases contained in Para 35 because we

find that the appellant did not resort to any kind of

unfair practice while terminating the services of the

respondent.

16)In view of forgoing discussion, we are of the

considered view that it would be just, proper and

reasonable to award lump sum monetary

compensation to the respondent in full and final

satisfaction of his claim of re-instatement and other

consequential benefits by taking recourse to the

powers under Section 11-A of the Act and the law

laid down by this Court in Bharat Sanchar Nigam

Limited case (supra).

17)Having regard to the totality of the facts taken

note of supra, we consider it just and reasonable to

award a total sum of Rs.2,50,000/- (Rs.Two Lakhs

Fifty Thousand) to the respondent in lieu of his right

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to claim re-instatement and back wages in full and

final satisfaction of this dispute.

18)Let the payment of Rs.2,50,000/- be made by

the appellant(State) to the respondent within three

months from the date of receipt of this judgment

failing which the amount will carry interest at the

rate of 9% per annum payable from the date of this

judgment till payment to respondent.

19)In view of foregoing discussion, the appeals

succeed and are allowed in part. The impugned

order of the Division Bench and that of the Single

Judge are set aside. The Award of the Labour Court

dated 01.02.2006 is accordingly modified to the

extent indicated above.

………...................................J.

[R.K. AGRAWAL]

…...……..................................J.

[ABHAY MANOHAR SAPRE]

New Delhi;

November 28, 2017

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