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CASE NO.:

Appeal (civil) 892 of 2001

PETITIONER:

INDIAN PETROCHEMICALS CORPN. LTD. & ANR.

Vs.

RESPONDENT:

SHRAMIK SENA & ANR.

DATE OF JUDGMENT: 29/01/2001

BENCH:

Syed Shah Mohammed Quadri & S.N. Pukhan.

JUDGMENT:

L...I...T.......T.......T.......T.......T.......T.......T..JJ U D G M E N T

Syed Shah Mohammed Quadri, J.

Leave is granted.

The Judgment and order of a Division Bench of the High

Court of Judicature at Bombay in Writ Petition No.979 of

2000 passed on April 26, 2000, is brought under challenge in

this appeal by special leave. Appellant No.1 is Government

of India Undertaking and appellant No.2 is its General

Manager (hereinafter they will be referred to as the

management). The first respondent is the union of workmen

of appellant No.1 and the second respondent is its member

and a workman (hereinafter they will be referred to as the

workmen).

To comprehend the controversy in this appeal, narration

of the following facts will be useful.

The management is running a canteen in compliance with

the requirements of Section 46 of the Factories Act, 1948,

in which the workmen were employed purporting to be the

employees under a contractor. The litigation between the

parties commenced with the filing of Writ Petition No.2206

of 1997 by the workmen in the High Court of Judicature at

Bombay seeking a direction that they (specified in the

Annexure A thereto) be absorbed as regular employees of

the management with parity of pay-scales and other service

conditions applicable to regular employees with effect from

their actual date of entry into service with the contractor.

On August 29, 1997, the High Court disposed of the writ

petition taking the view that as the workmen were engaged in

a statutory canteen they ipso facto became the employees of

the principal employer, namely, the management and ordered

their absorption subject to conditions (a) to (e) which will

be referred to presently. That judgment was assailed by the

management in this Court, by special leave, in Civil Appeal

No.1854 of 1998. And inasmuch as the High Court imposed

certain conditions for their absorption, the workmen also

filed Civil Appeal No.1855 of 1998, by special leave of this

Court. Those appeals were dismissed by a three Judge Bench

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of this Court on August 4, 1999, reported in Indian

Petrochemicals Corporation Ltd. & Anr. Vs. Shramik Sena &

Ors. [1999 (6) SCC 439]. Thereafter, for similar reliefs

the workmen filed Writ Petition No.5817 of 1999 in the High

Court, but the same was dismissed as withdrawn on November

17, 1999. The present writ petition which has given rise to

this appeal, is the third in the series. The High Court, by

the judgment impugned in this appeal, held, in regard to

condition (a), that for purposes of regularisation of the

workmen the maximum age limit should be taken as the age of

superannuation and, in regard to condition (e), that the

workmen who did not fulfil conditions for regularisation

should be retrenched in terms of the provisions of Chapter

V-B of the Industrial Disputes Act, 1947 (for short, the

I.D. Act) and directed that the process of regularisation

of the workmen in accordance with the said judgments be

completed within two months from the date of the impugned

judgment. The validity of the pronouncement of the High

Court on those two aspects is assailed by the management in

this appeal before us.

Mr.T.R.Andhyarujina, the learned senior counsel

appearing for the management, submitted that it was the case

of the management that the maximum age limit of 25 years

would be applicable as on the date of their entry into

service and not as on the date of hearing of the present

writ petition but the High Court had not appreciated

properly the contention of the management and having

erroneously interpreted condition (a), directed that the age

of superannuation should be taken as the maximum age limit

which in effect had altered condition (a). The second

contention of the learned counsel relates to retrenchment

compensation. He argued that condition (e) provided that

the workmen who could not be absorbed, should be considered

for future absorption in accordance with the provisions of

Section 25H and be paid retrenchment compensation in

accordance with law but the High Court introduced a new

condition, viz., retrenchment of workmen under Section 25N

of the I.D.Act, which had nullified condition (e), as such

the impugned judgment was illegal and liable to be set

aside. Mr.K.K. Singhvi, the learned senior counsel

appearing for the workmen, contended that they had been

working for number of years and as no rules were applicable

to them for purposes of their absorption, the maximum age

limit that could be taken into consideration was only the

age of superannuation as was done by the Supreme Court in

Railway Parcel & Goods Handling Mazdoor Union & Ors. Vs.

Union of India & Ors. [2000 (1) LLJ 1050]. In any event,

submitted Mr.Singhvi, there existed in the management the

power to relax the age limit, therefore, the management

should relax the age limit and absorb the workmen. The

conditions laid down for regularisation of the workmen, it

was submitted, were virtually lifted from the decisions in

R.K. Panda & Ors. Vs. Steel Authority of India & Ors.

[1994 (5) SCC 304] and Parimal Chandra Raha & Ors. Vs.

Life Insurance Corporation of India & Ors. [1995 (2) Suppl.

SCC 611], so the conditions be interpreted in the light of

the judgments in those cases. As the workmen were found to

be the employees of the management, an industrial

establishment, and not of the contractor, argued Mr.Singhvi,

payment of retrenchment compensation could only be in terms

of Section 25N and not under Section 25F of the I.D. Act

and that in approving condition (e) the Supreme Court could

not have deprived the workmen of the benefits which they

would otherwise be entitled to under Chapter V-B of the I.D.

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Act. On the contentions raised by the learned counsel, the

question that merits our consideration is : what is the

true interpretation of conditions (a) and (e) imposed by the

High Court and confirmed by this Court.

It will be apt to refer to the relevant findings of this

Court and the conditions confirmed by this Court in the

aforementioned appeals. While negativing the contention of

the management that in view of the contract between the

management and the contractor the workmen could not be

treated as the employees of the management, this Court held

that on the facts of the case the contractor was engaged

only for the purpose of record and for all purposes the

workmen in that case were in fact the workmen of the

management. Further, the contention of the workmen that

after holding them the employees of the management there was

no reason to impose those conditions, was also rejected by

this Court observing as follows :

It should be borne in mind that the initial

appointments of these workmen are not in accordance with the

rules governing the appointments or the established policy

of recruitment of the management. The said recruitments

could also be in contravention of the various statutory

orders including the reservation policy. Further, the

respondent is an instrumentality of the State and has an

obligation to conform to the requirements of Articles 14 and

16 of the Constitution. In spite of the same the services

of the workmen are being regularised by the Court not as a

matter of right of the workmen arising under any statute but

with a view to eradicate unfair labour practices and in

equity to undo social injustice and as a measure of labour

welfare. Therefore, it is necessary that in this process

suitable guidelines or conditions be laid down at the time

of courts issuing directions to regularise the services of

the workmen so concerned depending upon the facts of each

case. This Court has consistently followed this practice in

the earlier cases of regularisation and we do no find any

reason to differ from the same.

The directions/conditions, referred to above, read thus

: Respondent 1 should absorb the employees listed in

Exhibit A to the petition, in its employment subject to

their fulfilling the following conditions:

(a) at the time of initial appointment the workmen

should be complying with the minimum and the maximum

age-limits prescribed under the policy of the Corporation;

(b) they must be medically fit according to the

standards prescribed by the Corporation;

(c) those who were appointed prior to the filing of the

writ petition must have three years minimum service to

their credit on the date of the present judgment;

(d) those who were appointed during the pendency of the

writ petition must have four years of minimum service to

their credit on the date of the present judgment;

(e) all those who are not absorbed in the service of the

Corporation for any of the reasons indicated above, their

cases shall be considered in accordance with the provisions

of the Industrial Disputes Act, 1947 when fresh recruitment

to the canteen staff is made by the Corporation;

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All the workmen who are not absorbed for any of the

conditions enumerated above, shall be given retrenchment

compensation in accordance with law.

Adverting to the first contention of

Mr.T.R.Andhyarujina, from a plain reading of condition (a),

extracted above, we find that the age eligibility for

regularising the services of the workmen, the minimum and

the maximum age limits prescribed under the policy of the

Corporation (18 years and 25 years respectively) has to be

considered as at the time of their initial appointment.

This condition is too clear to admit of any controversy.

Mr.Andhyarujina submitted that it was not the contention of

the management that the maximum age should be determined as

on the date of passing of the order by the High Court and

that on the wrong assumption that the management was denying

the benefit of regularisation to some of the workmen, the

High Court found fault with it and observed that it would

not be permissible for the Corporation (management) to deny

the benefit of regularisation to some of the workers on the

ground that they were not at the present time below the age

of 25 years and that it was merely a device reflective of an

unfortunate attempt on its part to evade its obligation to

comply with the direction issued by the High Court and

confirmed by this Court. A perusal of the impugned judgment

shows that the contention of the management before the High

Court was that the workmen who had crossed the age of 25

years at the time of regularisation, were not entitled to

that benefit. We cannot accept that the contentions urged

by the parties are not correctly recorded by the High Court.

We cannot go into the question as to what was really argued

before the High Court as we cannot allow the records of the

High Court to be contradicted. [See : State of Maharashtra

Vs. Ramdas Shrinivas Nayak & Anr. [1983 (1) SCR 8]. Be

that as it may, we have already pointed out that condition

(a), referred to above, does not warrant any polemic.

It is correct that in the aforesaid appeals while

confirming conditions (a) to (e) laid down by the High

Court, this Court referred to the decisions in Pandas case

(supra) and Rahas case (supra) but that fact would not

permit a different interpretation of condition (a)

whereunder the minimum and the maximum age as on the date of

initial appointment have to be looked into for purposes of

regularisation of services of the workmen in this case. The

High Court is, therefore, not justified in coming to the

conclusion that the maximum age referred to in condition (a)

meant the age of superannuation. No support can be drawn

for the said conclusion from the judgment of this Court in

Pandas case (supra) or in Railway Parcel & Goods Handling

Mazdoor Unions case (supra) as in those cases this Court

prescribed the age of superannuation as the maximum age for

absorption/regularisation whereas in the instant case this

Court confirmed, without any modification, condition (a)

imposed by the High Court, which needs to be interpreted

correctly and not altered with reference to other decisions.

We, therefore, cannot sustain the order of the High Court on

this aspect.

We are of the view that any further direction by this

Court in regard to relaxation of maximum age limit would

amount to recasting condition (a) which we are not inclined

to do. We may, however, observe that it will be open to the

management to relax maximum age limit in appropriate cases.

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The other point that remains to be considered is about

payment of retrenchment compensation; whether it should be

paid under the provisions of Section 25F or in terms of

Section 25N of the I.D.Act. It may be noticed here that

conditions (a) to (d), noted above, deal with the

requirements which have to be fulfilled by the workmen for

their regularisation. Such of the workmen who do not

satisfy them and are not eligible for regularisation, have

to be dealt with under condition (e) which incorporates

benefits for unabsorbed workmen who would be rendered out of

service. A close reading of condition (e) discloses that it

is in two parts. The first part provides for their

re-employment in accordance with the provisions of I.D. Act

as and when the management proposes to make fresh

recruitment to the canteen staff. The second part directs

payment of retrenchment compensation in accordance with law.

To understand the import of these two parts, it will be

necessary to bear in mind that the High Court imposed the

aforementioned conditions for purposes of absorption of the

workmen in the service of the management because though they

were treated as the employees of the management under the

Factories Act, they were purportedly working as the

employees of the contractor. Now, in the context of the

aforementioned findings recorded (that they are in fact the

workmen of the management) and the direction issued by this

Court for their regularisation in the service of

management that both the parts of condition (e) have to be

interpreted. It is difficult to assume that while

conferring the benefit of regularisation on the workmen,

subject of course to the said conditions, this Court

impliedly took away the rights available to the unabsorbed

workmen under the I.D. Act. There is nothing in the

judgment of this Court, in the above-mentioned appeals, to

suggest that the status of the workmen who remained

unabsorbed for non-fulfillment of conditions (a) to (d)

would be changed to that of retrenched employees. Equally

there is nothing therein to infer that it directs their

retrenchment in accordance with law. It is needless to

point out that once it is held that they are the employees

of the management, they can be retrenched only in accordance

with the provisions of the I.D. Act.

Mr.T.R.Andhyarujina, however, contended that having

regard to the provisions of Section 25N of the I.D. Act

retrenchment of unabsorbed workmen would be next to

impossible. We are unable to accede to such a broad

proposition. Whether retrenchment of an employee is

justified or not has to be determined by the appropriate

Government on the facts of each case. In our view, the

apprehension expressed by the learned counsel may not be

justified in a case where the workmen are found to be

lacking in the requisite eligibility criteria for absorption

laid down by the High Court and confirmed by this Court and

therefore cannot be continued in the present status.

However, this is not germane to the issue with which we are

concerned and should not detain us any longer.

From the above discussion, it follows that the

obligation to comply with condition (e) is contingent upon

the retrenchment of the workmen in accordance with law. It

is not disputed that the management is an industrial

establishment to which Chapter V-B complies; if that be so,

Sections 25N and 25H read with Section 25S will be

attracted. Therefore, we are of the view that the following

direction in the impugned order of the High Court, We

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direct that those workers who do not fulfill directions (a),

(b), (c) & (d) of the conditions for regularisation, be

retrenched in accordance with law after following the

provisions of Chapter V-B of the Industrial Disputes Act,

1947. does not correctly interpret condition (e). In our

view, condition (e) postulates that in the event of the

management choosing to retrench the workmen who do not

fulfil directions (a) to (d) of the conditions for

regularisation, they shall be paid retrenchment compensation

under Section 25N and their cases for re-employment should

be considered under Section 25H of the I.D. Act.

For all these reasons, the impugned order of the High

Court is set aside to the extent indicated above. The

appeal is allowed accordingly. There shall be no order as

to costs.