REP

ORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6585 0F 2008

(Arising out of S.L.P.(C) No. 7197 of 2006)

KANPUR ELECTRICITY SUPPLY

CO. LTD.

— APPELLANT (S)

VERSUS

SHAMIM MIRZA — RESPONDENT (S)

WITH

CIVIL APPEAL NO.6586 0F 2008

(Arising out of S.L.P.(C) No. 9586 of 2006)

J U D G M E N T

D.K. JAIN, J.:

Leave granted.

2.Since a common issue is involved in both the appeals, these

are being disposed of by this judgment.

3.The appeals are directed against two separate judgments

rendered by the High Court of Judicature at Allahabad,

upholding the Awards of: Labour Court (4) Kanpur in I.D.

No.70 of 1997 and Industrial Tribunal (3) Kanpur in I.D.

No.46 of 1997, collectively referred to as “the adjudicatory

authority”, whereby the appellant had been directed to

reinstate the respective respondents – namely, Shamim

Mirza and Manoj Srivastava, the two workmen, with full

back wages and continuity in service.

4.The appellant-company was constituted by the U.P. State

Government under Section 5 of the Electricity (Supply) Act,

1948 and was charged with several duties, as enumerated

under Section 18 of the said Act, in relation to generation,

transmission and distribution of electricity within the State.

The appellant opened various cash centres in different

divisions and sub-divisions for collection of electricity bills

and for the said purpose, invited tenders for installation of

Bradma Machines on contract basis. One such contract

was awarded to M/s Vivek and Associates in the year 1995.

Under the agreed terms and conditions, the machines were

to be operated by the said concern, through its employees,

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for which it was to be paid Rs.175/- per day, per machine.

The contract is stated to have continued till the year 1997.

5.Both the respondent-workmen raised an industrial dispute,

alleging that their services had been illegally terminated by

the appellant. Accordingly, the State Government referred,

under Section 4K of the U.P. Industrial Disputes Act, 1947

(for short ‘the Act’), the following dispute i.e. I.D. No.70 of

1997 for adjudication:

“Details of Industrial Dispute

Whether removal/termination of services of

the workman Shri Shamim Mirza, son of Shri

Atiq Mirza, Cashier, w.e.f. 2.9.1996 by the

Management is legal and justified? If not, to

which relief/consequential benefits and from

which date, the workman concerned is

entitled to?”

(Except for change of name of the workman and date of

termination of his services, the dispute referred in I.D. No.46

of 1997 was on similar lines.)

6.The case of the workmen in nutshell was that: they had

been appointed as cashiers at two sub-stations when the

3

appellant had adopted the policy of centralisation of all the

16-17 sub-stations for the purposes of collection of

electricity bills; several new appointments were made for

operating these new machines; before their appointment as

cashiers, they were all given six months training for this

work; apart from collecting the electricity bills, they were

also depositing the cash so collected in the Treasury in

Chief Office as per the instructions of the Assistant

Engineer (D); suddenly their services were terminated

without assigning any reason and without giving any notice

to them whereas persons junior to them were still working

on the posts of cashiers. Their plea was that since the

termination of their services was in violation of the

provisions contained in Sections 6N, 6P & 6Q of the Act,

they were entitled to be reinstated with continuity in service

and with full back wages.

7.In the written statement filed before the adjudicatory

authority, the stand of the appellant – management was

that there was no relationship of employer and employee

4

between them and the applicants and hence the dispute

was not an industrial dispute; the post of the cashier was a

promotion post which could be filled up by promotion from

the cadre of assistant cashier; the cash centres were opened

in various divisions and sub-divisions for the convenience

of the consumers for depositing their electricity bills;

tenders were invited for installing Bradma Machines in

these centres on contract basis; the tender was awarded in

favour of Vivek and Associates for the period from 1

st

July,

1995 to 30

th

June, 1996 which period was later extended

upto 31

st

July, 1997 and that the contractor was

responsible for the operation and upkeep of the machines,

though the cash was to be handled by appellant’s cashier or

its duly authorised representative and, therefore, the

question of applicants' employment with the appellant did

not arise at all. In other words, the stand of the appellant

was that the references in both the cases were factually and

legally incompetent as the applicants were not “workmen”

within the meaning of the Act.

5

8.Upon consideration of the evidence produced by both the

parties, the adjudicatory authority formed the view that

though no appointment letters had been filed by the

workmen but it had come in evidence that before taking the

work, letters were issued to them by an Assistant Manager

of the appellant; though signatures of the applicants did

not appear in any of the columns of Electricity Cash and

Revenue (ECR) rolls but their designation as cashier had

been mentioned on all these sheets and in some of the

letters there were signatures of the Assistant Engineer; in

the contract given to M/s Vivek and Associates for

operating Bradma machines it had been mentioned that it

would be the responsibility of the contractor to operate

these machines at all the 16 sub-stations but the cash was

to be handled by the cashier of the appellant only but the

appellant had failed to prove that any of its other cashiers’

had handled the job of cash collection. It finally concluded

that on the basis of the documents submitted by the

workmen and for lack of proper rebuttal to these

documents, there was no ground to presume that the

6

workmen were the employees of the contractor and it stood

proved that, in fact, they were in the regular employment of

the appellant as cashiers. Thus, it was held that the

workmen having worked for more than 240 days, their

termination without notice and payment of compensation as

contemplated under Section 6N of the Act, was illegal.

9.Being aggrieved, the appellant filed writ petitions under

Article 226 of the Constitution, which have been dismissed

by the impugned orders. The High Court has held that the

Labour Court/Industrial Tribunal having considered all the

aspects of the matter in the light of the evidence on record,

no interference in exercise of power under Article 226 of the

Constitution was called for. However, while dismissing the

writ petition arising out of I.D. No.46 of 1997, the High

Court modified the Award to the extent that the workman in

that case would be entitled to 50% of the back wages

pursuant to the Award.

10.We have heard learned counsel for the parties.

7

11.Learned counsel appearing for the appellant strenuously

urged that both the adjudicatory authorities as well as the

High Court committed grave error by acting on factually and

legally erroneous premise. It was submitted that it was a

clear and definite stand of the appellant before the courts

below that the workmen were never employed by the

appellant and they were the employees of the contractor

working on the Bradma Machines installed by him for

collection of the electricity bills from the consumers; there

was no privity of contract between the appellant and the

workmen and, therefore, the provisions of the Act were not

attracted at all. Learned counsel contended that for

determining the employer-employee relationship both the

courts have failed to apply the test laid down by this Court

in Ram Singh & Ors. Vs. Union Territory, Chandigarh

& Ors.

1

It was also submitted that having observed that

the workmen had neither produced the letters of

appointment nor the salary slips, the courts below

committed a patent illegality in relying on the documents

1

(2004) 1 SCC 126

8

signed by the staff of the appellant for internal use to return

a finding that the workmen were the regular employees of

the appellant, which had the effect of putting the onus on

the employer to prove that the workmen were not his

employees. Reliance was placed on Range Forest Officer

Vs. S.T. Hadimani

2

to support the plea that it is for the

claimant to prove that he had worked for a particular

management. Lastly, relying on Nagar Panchayat

Kharkhauda Vs. Yogendra Singh

3

, learned counsel

submitted that the courts below again erred in awarding

back wages to the workmen in routine.

12.Per contra, Mr. R. Venkataramani, learned senior counsel

appearing for Shamim Mirza, one of the workmen,

supporting the decision of the High Court, submitted that

apart from the fact that the evidence produced by the

workman was sufficient to prove that he was discharging

his duties as cashier and not as a Bradma Machine

Operator, even the official records show that he was

working as an employee of the appellant. Referring to the

2

(2002) 3 SCC 25

3

(2005) 13 SCC 428

9

application of the workman – Shamim Mirza, before the

Labour Court, inter alia, praying for summoning of some

documents from the appellant, including ECR register,

vouchers showing payment of salaries by the appellant to

him, learned senior counsel vehemently argued that on

appellant’s failure to produce these documents, the

adjudicatory authority was justified in drawing adverse

inference against them. It was also urged that the service of

the workman having been terminated much after the expiry

of the period of contract of Vivek and Associates, it stands

established that the workman was under the control of the

appellant and not the contractor. Relying on Bank of

Baroda Vs. Ghemarbhai Harjibhai Rabari

4

, learned

counsel urged that the workman having produced more

than prima facie evidence, no fault could be found with the

findings of fact recorded by both the courts below in favour

of the workman, this Court should be loathe to interfere.

13.Mr. Praveen Chaturvedi, learned counsel appearing for the

other workman – Manoj Srivastava, in order to buttress his

4

(2005) 10 SCC 792

10

argument that the respondent was under the administrative

control of the appellant, invited our attention to an office

note dated 26

th

July, 1994 (Ex.34) issued by the Managing

Director of the appellant to some of its cashiers, which

included the name of the respondent, threatening action

against them for not depositing the cash amounts collected

by them. He, thus, contended that the document proves,

beyond doubt, the employer-employee relationship between

the appellant and respondent.

14.Having considered the matter in the light of the material

referred to and relied upon by the adjudicatory authority, in

our judgment, the High Court was justified in declining to

interfere in both the matters.

15.It is trite that the burden to prove that a claimant was in

the employment of a particular management, primarily lies

on the person who claims to be so but the degree of proof,

so required, varies from case to case. It is neither feasible

nor advisable to lay down an abstract rule to determine the

employer-employee relationship. It is essentially a question

11

of fact to be determined by having regard to the cumulative

effect of the entire material placed before the adjudicatory

forum by the claimant and the management.

16.It is true that in the instant case, the workmen did not

produce the letters of appointment as also their salary slips

but they have been successful in adducing some

contemporaneous documentary evidence, including ECR

sheets bearing the signatures of the workmen and that of

another senior officer of the appellant company (Ex.W-7, W-

10 to W-15), which shows that they were collecting cash on

behalf of the appellant; depositing it in the van or central

office of the appellant and were answerable to the officials of

the appellant. In this regard, Clause 5 of the terms and

conditions of the contract awarded to Vivek and Associates

is also relevant, which provides as under:

“You will be responsible for the operation

of machines only. The cash handling is

to be done by K.E.S.A., Cashier or a

representative of K.E.S.A. duly authorised

by Dy. C.A.O./Head Cashier.”

12

17.It has come in evidence of the witnesses examined on

behalf of the workmen that it was only the respondents who

were collecting the cash and no other employee of the

appellant. No evidence was led by the appellant in rebuttal.

Furthermore, the appellant was called upon to produce the

official records but they failed to do so, with the result the

adjudicatory authority drew adverse inference against the

appellant. In the light of the factual scenario as emerging

from the evidence on record, we are convinced that the

workmen had discharged the burden which lay on them to

prove the employer-employee relationship with the

appellant. It is also pertinent to note that in both the cases,

evidence on record shows the engagement of the workmen

was prior to the award of contract to M/s Vivek and

Associates for the period starting 1

st

July, 1995. Workman

Shamim Mirza claims to have joined the appellant on 13

th

June, 1995 while workman Manoj Srivastava claims to have

joined on 17

th

June, 1994, which fact was not controverted

by the appellant. On the contrary, this fact stands proved

from Ex.34, an office note dated 26

th

July, 1994, containing

13

the name of Manoj Srivastava as one of the defaulting

cashiers. Workman Shamim Mirza has also placed on

record a certificate dated 9

th

September, 1996 issued by

Assistant Engineer, sub-station Kalyanpur, certifying that

he had worked at the cash collection office in the capacity of

a cashier with effect from 13

th

June, 1995 to 31

st

August,

1996 with honesty and hard labour. Other than this, he

had also done good job on his directions at other places.

The stand of the appellant on the said certificate was that

this Assistant Engineer was not competent to issue such a

certificate. Be that as it may, the said document does show

that the workman did work with the appellant even prior to

the award of the contract to Vivek and Associates.

18.Moreover, Shamim Mirza has also placed on record a copy

of an office memorandum dated 5

th

May, 2007, issued by

the appellant indicating that another cashier, namely,

Kailash Verma, stated to be similarly situated and who had

also obtained an award in his favour, the appellant had

arrived into an agreement with him. The said person has

14

been reinstated in service by the appellant on the post of a

cashier in the pay scale of Rs.4200-100-6400 subject to his

complying with certain terms and conditions imposed on

him, which does prima facie show that the appellant has

been adopting some sort of pick and choose policy.

19.As regards the rulings of this Court relied upon by learned

counsel for the appellant, in our view, these are of little

assistance to the appellant. All these cases deal with the

question of regularisation of the services of workmen, in

particular those who were engaged as daily wager or on

contract or for specific period/fixed term, which is not the

case here. It is manifest that the only dispute referred to

the adjudicatory authority was in regard to the termination

of the services of the workmen without following the

procedure laid down in the Act.

20.In the light of the aforenoted factual matrix and the

evidence on record, we are of the opinion that the courts

below were justified in holding that both the workmen have

established their claim of having worked with the appellant

15

for more than 240 days as their employees. We find no

reason whatsoever to interfere with the impugned

judgments to that extent.

21.The next question for determination is whether the

respondents are entitled to the back-wages for the period

they were out of service?

22.It is true that once the order of termination of service of an

employee is set aside, ordinarily the relief of reinstatement

is available to him. However, the entitlement of an

employee to get reinstated does not necessarily result in

payment of full or partial back-wages, which is independent

of reinstatement. While dealing with the prayer of back-

wages, factual scenario, equity and good conscience and a

number of other factors, like the manner of selection;

nature of appointment; the period for which the employee

has worked with the employer etc.; have to be kept in view.

All these factors are illustrative and no precise formula can

be laid down as to under what circumstances full or partial

16

back-wages should be awarded. It depends upon the facts

and circumstances of each case.

23.In General Manager, Haryana Roadways Vs. Rudhan

Singh

5

a three-Judge Bench of this Court has observed

that there cannot be a strait jacket formula for awarding

relief of back-wages and an order of back-wages should not

be passed in a mechanical manner. It has been held that a

host of factors, like the manner and method of selection

and appointment; the nature of appointment, namely,

whether ad hoc, short term, daily wage, temporary or

permanent in character; and the length of service, which

the workman had rendered with the employer are required

to be taken into consideration before passing any order for

award of back-wages. [See: also Haryana State

Electronics Development Corpn. Ltd. Vs. Mamni

6

; U.P.

State Brassware Corpn. Ltd. & Anr. Vs. Uday Narain

Pandey

7

and U.P. SRTC Vs. Mitthu Singh

8

]

5

(2005) 5 SCC 591

6

(2006) 9 SCC 434

7

(2006) 1 SCC 479

8

(2006) 7 SCC 180

17

24.Bearing in mind the afore-noted broad parameters, we are

of the opinion that the facts at hand do not warrant

payment of back-wages to the respondents. In both the

cases, though the respondents have succeeded in

establishing that they were in the employment of the

appellant when their services were terminated but nothing

has been brought on record to show that they were selected

through a regular recruitment process. It has also not been

shown whether they were actually qualified for the post of a

cashier. Besides, on their own showing they had worked

with the appellant for about two years when their services

were terminated. These circumstances, in our view,

disentitle them from their claim for back wages.

Accordingly, the orders of the High Court to the extent they

affirm the directions of the adjudicatory authority with

regard to the payment of back wages are set aside.

25.Consequently, for the aforesaid reasons, both the appeals

are allowed to the extent indicated above. However, in the

circumstances, there will be no order as to costs.

18

…………………………………J.

(C.K. THAKKER)

…………………………………J.

(D.K. JAIN)

NEW DELHI;

NOVEMBER 7, 2008.

19