1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). 9067 OF 2014

K.V. ANIL MITHRA & ANR. ….APPELLANT(S)

VERSUS

SREE SANKARACHARYA UNIVERSITY

OF SANSKRIT & ANR. ….RESPONDENT(S)

WITH

CIVIL APPEAL NO(S). 9068 OF 2014

J U D G M E N T

Rastogi, J.

1. The instant appeals have been preferred against the judgment

and order dated 4

th January, 2010 setting aside the Award passed by

the Industrial Tribunal dated 14

th November, 2005 answering the

reference in affirmative terms holding the termination of the

appellants-workmen to be void being in violation of Section 25F of

the Industrial Disputes Act, 1947(hereinafter being referred to as the

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“Act 1947”) with a direction of treating the workmen deemed to be in

service till their services are validly terminated with 50% back wages.

2. The brief facts culled out and relevant for the purpose are that

the 1

st respondent-University was established by an Ordinance viz.

Sree Sankaracharya University of Sanskrit Ordinance, 1993. The

appointments of non-teaching staff in different categories, viz.,

Watchman, Attenders, Peons, Sweepers, Assistant Cooks, Assistant

Matrons, Drivers, Helpers, Waiters, Gardeners, Clerical Assistants

were made at different points of time on daily wage basis during the

period 1993-1995 under the orders of the then Vice Chancellor.

3. Their services came to be regularized by the 1

st respondent

giving them the status of regular employees by an order dated 7

th

May, 1996. It appears that as some objections were raised

questioning the manner in which the regularisation had taken place,

the 1

st respondent by a later order dated 24

th March, 1997 de-

regularised the non-teaching staff/employees and in consequence

thereof, their services came to be terminated. So far as the order of

de-regularisation passed by the 1

st respondent dated 24

th March,

1997 is concerned, it has attained finality after the Division Bench of

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the High Court of Kerala has upheld the order of de-regularisation

dated 24

th March, 1997 taking note of the initial engagement as daily

wager and the appointment being without going through the process

of selection as prescribed under the scheme of University Ordinance

recorded a finding that the order of de-regularisation passed by the

authorities is valid and justified and left the question of non-

observance of the provisions of the Act 1947 open to be examined in

the appropriate proceedings known to law.

4. It may be further noticed that the grievance of the teaching and

non-teaching staff was jointly examined by the Division Bench of the

High Court while deciding the writ appeal under its common

impugned judgment dated 23

rd March, 2000. Para 10 of the

judgment of the Division Bench of the High Court dated 23

rd March,

2000 relevant for the purpose is reproduced as under:-

10. Other point raised related to non -observance of the

requirements of the ID Act. As rightly observed by learned single

Judge, same is not to be decided in Article 226 applications since

appellants, if they are so advised and feel that they have a right

under the ID Act, can approach the forum. This position was

highlighted by apex Court in Basant Kumar Sarkar and Others Vs.

Eagle Rolling Mills Ltd.(AIR 1954 SC 1200) and Rajasthan State

Road Transport Corpn. Vs. Krishna(JT 1005(4) SC 343).

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5. The appellants raised an industrial dispute pursuant to which

the appropriate Government made the reference order dated 8

th April,

2003 for adjudication by the Industrial Tribunal as under:-

“Whether the de-regularization of regularized employees in the

Annexure appended and their subsequent termination by the

management of Sree Sankaracharya University of Sanskrit is legal

and justifiable? If not what relief they are entitled to?”

6. It may be noticed that the nature of appointment as a daily

wager was not the subject matter of reference and undisputedly, so

far as the order of de-regularisation dated 24

th March, 1997 is

concerned, that was not open to be examined by the Tribunal

pursuant to a reference made as it has attained finality by the

judgment of the Division Bench of the High Court after recording a

finding that the 1

st respondent-University was justified in passing the

order of de-regularisation of such employees who were appointed

without going through the process of selection prescribed under the

University Ordinance and were appointed on daily wage basis and

such appointments could not have been regularised by the 1

st

respondent-University.

7. The limited question in terms of the reference open to be

examined by the Tribunal was as to whether the termination

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which has been given effect to by the 1

st respondent was legal and

justified and if not, what relief the employee was entitled to.

8. The Industrial Tribunal, after taking into consideration the

material on record, returned a finding that the termination of the

appellants from service is in violation of Section 25F of the Act 1947

and as a natural consequence held the workman employee to be

deemed in service till their services are validly terminated with 50%

back wages. The relevant para 9 of the Award is as under:-

9. If we go through the pleadings in the written statement, it can

be seen that the service of the workmen which had started in various

dates in the year 1993, 94,95 and 96 had been regularized by the

university later through a proceedings dated 12.4.1996. From the

date of commencement of their service to the date of de -

regularization of their services, all of them were having continuous

service. About one year after from 12.4.96, their services were

terminated on the basis of decision of the syndicate of the university

dated 23.3.97. Such a decision was as per the judgment of the

Division Bench of the High Court in the earlier writ appeal judgment.

Therefore, from these admitted facts, it can be seen that all these

workmen were having continuous service and they had more than

240 days of service to their credit service. The management does

not have any case that the terminations effected on these workmen

concerned in this dispute were in compliance with Section 25-F of

the I.D. Act. On that sole ground it has to be declared that the

terminations effected in the case of workmen were in violation of Sec.

25-F of the I.D. Act. Therefore, they would deem to be in service till

their services are validly terminated strictly in accordance with

Industrial Disputes Act. In view of various decisions of the Supreme

Court and the settled position laid thereon, the only relief which can

be granted in this case is by way of declaration that the termination

of all workmen who had to their credit 240 days of continuous as

explained in Sec. 25 were illegal. As a natural consequence, all of

such workmen would deem to be in service till their services are

validly terminated. Because of that they entitled for full back wages

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also in the ordinary course. However, such entitlement cannot be

treated as a matter of rule always. I think it will be appropriate, if

all the workmen concerned are given 50% of the backwages.

9. The Award of the Tribunal dated 14

th November, 2005 came to

be challenged at the instance of the 1

st respondent before the learned

Single Judge of the High Court of Kerala. The learned Single Judge

without disturbing the finding of fact recorded by the Tribunal in its

Award held that each of the workmen has completed more than 240

days of service in the preceding 12 months from the alleged date of

termination and their services were terminated without observance

of Section 25F of the Act 1947 but further proceeded on the premise

that if the order of appointment of the workmen was not valid and

has not been made in terms of the procedure prescribed under the

Ordinance, such irregular appointments are not entitled to seek

protection of the Act 1947 and further observed that retrenchment

referred to under Section 25F applies to properly employed persons

who are in service and set aside the Award by a judgment dated 25

th

June, 2009. The relevant part is as under:-

“In my view, before proceeding to consider eligibility for relief

under Section 25F, the Tribunal should have considered whether

appointment of employees terminated was properly made. The

Syndicate of the University ordered termination only after finding

that the employees who got appointment was through irregular

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ways. Section 25F does not apply to as case of termination of

illegally appointed employees. On the other hand, retrenchment

referred to in Section 25F applies to properly employed persons who

were in service. So much so, the order passed by the Industrial

Tribunal declaring the termination of the employees as illegal is only

to be set aside and I do so. Consequently, the terminated employees

are not entitled to compensation ordered by the Tribunal under

Section 25F. During pendency of the W.P., some of the terminated

employees were granted wages under Section 17B of the Industrial

Disputes Act, under orders of this Court. Besides this, they are not

entitled to any other relief. The W.P. is therefore allowed setting

aside Ext. P14 award of the Industrial Tribunal.”

10. That order of the learned Single Judge came to be confirmed by

the Division Bench of the High Court on writ appeal being preferred

at the instance of the present appellants under the impugned

judgment dated 4

th January, 2010.

11. Mr. M.T. George, learned counsel for the appellants submits

that the finding of fact recorded by the Tribunal has been confirmed

by the High Court under the impugned judgment and it can be safely

noticed by this Court that the appellants were appointed on daily

wage basis in non-teaching staff category. Indisputedly, their

appointments were made without going through the process of

selection as being contemplated under the University Ordinance but

this is not the case of the respondents that either of the appellants

had either misrepresented/misled or committed fraud or either of

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them is not eligible in seeking employment in non-teaching category

and it is also not being disputed that each of them had been in

continuous service of more than 240 days in the preceding 12

months from the alleged date of termination.

12. Learned counsel submits that admittedly there was a violation

of Section 25F of the Act 1947. In consequence thereof, no error was

committed by the Tribunal in passing an Award treating them to be

deemed in service with 50% back wages unless validly terminated,

obviously after compliance of the mandatory requirement as

contemplated under clauses (a) and (b) of Section 25F of the Act

1947.

13. Learned counsel further submits that the finding which has

been recorded by the learned Single Judge and confirmed by the

Division Bench under the impugned judgment that if the

appointments are not being made in accordance with the procedure

prescribed by law, such employees are not entitled to seek protection

of the Act 1947, is legally unsustainable in law as the nature of

appointments is not a pre-condition for compliance of Section 25F

and scheme of the Act 1947 contemplates that if the employee who

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is a workman under Section 2(s) has been retrenched as

contemplated under Section 2(oo) and if was in continuous service

for more than 240 days in the preceding 12 months from the alleged

date of termination as contemplated under Section 25B of the Act,

the employer is under an obligation to comply with the mandatory

requirement of clauses (a) and (b) of Section 25F, its non-observance

as held by this Court, to be void ab initio bad with the consequential

order of reinstatement with full back wages and open for the

employer to pass a fresh order after due compliance in accordance

with law.

14. In support of his submissions, learned counsel placed reliance

on the judgments of this Court in State Bank of India Vs. Shri N.

Sundara Money

1; L. Robert D’Souza Vs. Executive Engineer,

Southern Railway and Another

2; Punjab Land Development and

Reclamation Corporation Ltd., Chandigarh Vs. Presiding

Officer, Labour Court, Chandigarh and Others

3 and Nagar

1

1976(1) SCC 822

2

1982(1) SCC 645

3

1990(3) SCC 682

10

Mahapalika(Now Municipal Corpn.) Vs. State of U.P. and

Others

4.

15. Per contra, Mr. R. Basant, learned senior counsel for the

respondents, while supporting the finding recorded by the Division

Bench of the High Court under the impugned judgment, submits that

after the finding has been recorded by the Division Bench in the

earlier round of litigation holding such appointments being conceived

in fraud and deceit are not entitled to seek protection of Section 25F

by those employees whose appointments have been declared as void

ab initio bad.

16. Learned counsel further submits that the term ‘retrenchment’

under Section 2(oo) although have been couched with the words “for

any reason whatsoever” but cannot be interpretated to protect those

who secured entry by backdoor and whose appointments are vitiated

by fraud and deceit as being observed by the Division Bench of the

High Court in the earlier round of litigation.

17. In support of his submission, learned counsel placed reliance

on the judgments of this Court in R. Vishwanatha Pillai Vs. State

4

2006(5) SCC 127

11

of Kerala and Others

5; Rajasthan Tourism Development

Corporation Ltd. And Another Vs. Intejam Ali Zafri

6 followed with

recent judgments in Satluj Jal Vidyut Nigam Vs. Raj Kumar

Rajinder Singh(Dead) through legal representatives and Others

7

and Punjab Urban Planning and Development Authority and

Another Vs. Karamjit Singh

8.

18. In the alternative, learned counsel further submits that

assuming that there was a violation of Section 25F of the Act 1947,

still there cannot be an automatic reinstatement as being considered

by this Court and each of the workmen had worked for a period 1993-

1997 and they were de-regularised by an order dated 24

th March

1997, they may be entitled for reasonable compensation in lieu of

reinstatement looking to the period of service rendered by each of

them and further submits that granting 50% back wages is grossly

unfair as each of the workmen, during pendency of the litigation,

under Section 17B has received his last pay drawn and a total sum

of Rs. 36.68 lakhs has been paid to the contesting appellants-

5

2004(2) SCC 105

6

2006(6) SCC 275

7

2019(14) SCC 449

8

2019(16) SCC 782

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workmen and in the given circumstances, the finding recorded by the

Division Bench does not call for any interference.

19. We have heard learned counsel for the parties and with their

assistance perused the material available on record.

20. It is an admitted case of the parties that Act 1947 is applicable

on the 1

st respondent-University and they are under an obligation to

comply with the provisions of the Act 1947. It is also admitted that

the 1

st respondent is the employer as defined under Section 2(g) and

the dispute which was raised is an industrial dispute as defined

under Section 2(k) and the present appellants are the workmen as

defined under Section 2(s) and the termination which was given effect

to by the 1

st respondent was a retrenchment as defined under Section

2(oo) and it is not the case of the 1

st respondent that their termination

falls in any of the exceptions defined under Section 2(oo) of the Act

1947.

21. Section 2(oo) relevant for the purpose is reproduced as under:-

(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—

(a) voluntary retirement of the workman; or

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(b) retirement of the workman on reaching the age of

superannuation if the contract of employment between

the employer and the workman concerned contains a

stipulation in that behalf; or

[(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 a stipulation in that

behalf contained therein; or]

(c) termination of the service of a workman on the

ground of continued ill-health;]

22. The term ‘retrenchment’ leaves no manner of doubt that the

termination of the workman for any reason whatsoever, otherwise

than as punishment inflicted by way of disciplinary action are being

termed as retrenchment with certain exceptions and it is not

dependent upon the nature of employment and the procedure

pursuant to which the workman has entered into service. In

continuation thereof, the condition precedent for retrenchment has

been defined under Section 25F of the Act 1947 which postulates

that workman employed in any industry who has been in continuous

service for not less than one year can be retrenched by the employer

after clauses (a) and (b) of Section 25F have been complied with and

both the clauses (a) and (b) of Section 25F have been held by this

Court to be mandatory and its non-observance is held to be void ab

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initio bad and what is being the continuous service has been defined

under Section 25B of the Act 1947. It may be relevant to quote

Section 25B and clause (a) and (b) of Section 25F of the Act 1947

which are reproduced as under:-

25B. Definition of continuous service.- For the purposes of this

Chapter

(1) a workman shall be said to be in continuous service for a period

if he is, for that period, in uninterrupted service, including service

which may be interrupted on account of sickness or authorised leave

or an accident or a strike which is not illegal, or a lock-out or a

cessation of work which is not due to any fault on the part of the

workman;

(2) where a workman is not in continuo us service within the

meaning of clause (1) for a period of one year or six months, he shall

be deemed to be in continuous service under an employer—

(a) for a period of one year, if the workman, during a

period of twelve calendar months preceding the date

with reference to which calculation is to be made, has

actually worked under the employer for not less than--

(i) one hundred and ninety days in the case of a

workman employed below ground in a mine; and (ii) two

hundred and forty days, in any other case;

(b) for a period of six months, if the workman, during a

period of six calendar months preceding the date with

reference to which calculation is to be made, has

actually worked under the employer for not less than--

(i) ninety-five days, in the case of a workman employed

below ground in a mine; and (ii) one hundred and

twenty days, in any other case. Explanation.--For the

purposes of clause (2), the number of days on which a

workman has actually worked under an employer shall

include the days on which-- (i) he has been laid-off

under an agreement or as permitted by standing orders

made under the Industrial Employment (Standing

Orders) Act, 1946 (20 of 1946), or under this Act or

under any other law applicable to the industrial

establishment; (ii) he has been on leave with full wages,

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earned in the previous years; (iii) he has been absent

due to temporary disablement caused by accident

arising out of and in the course of his employment; and

(iv) in the case of a female, she has been on maternity

leave; so, however, that the total period of such

maternity leave does not exceed twelve weeks.]

25F. Conditions 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:

(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

continuous service] or any part thereof in excess of six

months; and

(c) notice in the prescribed manner is served on the

appropriate Government [or such authority as may be

specified by the appropriate Government by notification

in the Official Gazette].

23. The scheme of the Act 1947 contemplates that the workman

employed even as a daily wager or in any capacity, if has worked for

more than 240 days in the preceding 12 months from the alleged date

of termination and if the employer wants to terminate the services of

such a workman, his services could be terminated after due

compliance of the twin clauses (a) and (b) of Section 25F of the Act

1947 and to its non-observance held the termination to be void ab

16

initio bad and so far as the consequential effect of non-observance of

the provisions of Section 25F of the Act 1947, may lead to grant of

relief of reinstatement with full back wages and continuity of service

in favour of retrenched workman, the same would not mean that the

relief would be granted automatically but the workman is entitled for

appropriate relief for non-observance of the mandatory requirement

of Section 25F of the Act, 1947 in the facts and circumstances of each

case.

24. The salient fact which has to be considered is whether the

employee who has been retrenched is a workman under Section 2(s)

and is employed in an industry defined under Section 2(j) and who

has been in continuous service for more than one year can be

retrenched provided the employer complies with the twin conditions

provided under clauses (a) and (b) of Section 25F of the Act 1947

before the retrenchment is given effect to. The nature of employment

and the manner in which the workman has been employed is not

significant for consideration while invoking the mandatory

compliance of Section 25F of the Act 1947.

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25. This can be noticed from the term ‘retrenchment’ as defined

under Section 2(oo) which in unequivocal terms clearly postulates

that termination of the service of a workman for any reason

whatsoever provided it does not fall in any of the exception clause of

Section 2(oo), every termination is a retrenchment and the employer

is under an obligation to comply with the twin conditions of Section

25F of the Act 1947 before the retrenchment is given effect to

obviously in reference to such termination where the workman has

served for more than 240 days in the preceding 12 months from the

alleged date of termination given effect to as defined under Section

25B of the Act.

26. This Court in State Bank of India(supra) while examining the

retrenchment of various nature of employments questioning the

interpretation of Section 2(oo) of the Act held as under:-

8. Without further ado, we reach the conclusion that if the workman

swims into the harbour of Section 25-F, he cannot be retrenched

without payment, at the time of retrenchment, compensation

computed as prescribed therein read with Section 25 -B(2). But,

argues the appellant, all these obligations flow only out of

retrenchment, not termination outside that species -of snapping

employment. What, then, is retrenchment? The key to this vexed

question is to be found in Section 2(oo) 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

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a punishment inflicted by way of disciplinary action, but does not

include—

(a) voluntary retirement of the workman; or

(b) retirement of the workman on reaching the age of

superannuation if the contract of employment between the employer

and the workman concerned contains a stipulation in that behalf;

or

(c) termination of the service of a workman on the ground of

continued ill-health;”

For any reason whatsoever — very wide and almost admitting of no

exception. Still, the employer urges that when the order of

appointment carries an automatic cessation of service, the period of

employment works itself out by efflux of time, not by act of employer.

Such cases are outside the concept of “retrenchment” and cannot

entail the burdensome conditions of Section 25-F. Of course, that a

one year and ten months “nine-days” employment, hedged is with

an express condition of temporariness and automatic cessation,

may look like being in a different street (if we may use a

colloquialism) from telling a man off by retrenching him. To retrench

is to cut down. You cannot retrench without trenching or cutting.

But dictionaries are not dictators of statutory construction where

the benignant mood of a law and, more emphatically, the definition

clause furnish a different denotation. Section 2(oo) is the master of

the situation and the Court cannot truncate its amplitude.

9. A breakdown of Section 2( oo) unmistakably expands the

semantics of retrenchment. Termination ... for any reason

whatsoever are the key words. Whatever the reason, every

termination spells retrenchment. So 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. Maybe,

the present may be a hard case, but we can visualise abuses by

employers, by suitable verbal devices, circumventing the armour of

Section 25-F and Section 2(oo). Without speculating on possibilities,

we may agree that “retrenchment” is no longer terra incognita but

area covered by an expansive definition. It means “to end, conclude,

cease”. In the present case the employment ceased, concluded,

ended on the expiration of one year ten months nine days —

automatically may be, but cessation all the same. That to write into

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the order of appointment the date of termination confers

no moksha from Section 25-F(b) is inferable from the proviso to

Section 25-F(1) [sic 25-F (a)]. 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 25-F and automatic extinguishment of service by

effluxion of time cannot be sufficient. An English

case R. v. Secretary of State

3

was relied on, where Lord Denning,

M.R. observed:

“I think that the word ‘terminate’ or ‘termination’ is by

itself ambiguous. It can refer to either of two things —

either to termination by notice or to 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 para 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 determination is not the sole

magnetic pull of the provision. A pre-emptive 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.

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27. It was later followed in L. Robert D’Souza(supra) and held as

under:-

25. Assuming we are not right in holding that the appellant had

acquired the status of a temporary railway servant and that he

continued to belong to the category of casual labour, would the

termination of service in the circumstances mentioned by the

Railway Administration constitute retrenchment under the Act?

26. Section 25-F of the Act provides that 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 the conditions set out in the Act are satisfied. The expression

“workman” is defined as under:

“2. In this Act, unless there is anything repugnant in

the subject or context,—

(s) “workman” means any person (including an

apprentice) employed in any industry to do any

skilled or unskilled manual, supervisory,

technical or clerical work for hire or reward,

whether the terms of employment be expressed or

implied, and for the purposes of any proceeding

under this Act in relation to an industrial dispute,

includes any such person who has been

dismissed, discharged or retrenched in

connection with, or as a consequence of, that

dispute, or whose dismissal, discharge, or

retrenchment has led to that dispute, but does

not include any such person—

(i) who is subject to the Army Act,

1950, or the Air Force Act, 1950, or

the Navy (Discipline) Act, 1934; or

(ii) who is employed in the police

service or as an officer or other

employee of a prison; or

(iii) who is employed mainly in a

managerial or administrat ive

capacity; or

(iv) who, being employed in a

supervisory capacity, draws wages

exceeding five hundred rupees per

21

mensem or exercises, either by the

nature of the duties attached to the

office or by reason of the powers

vested in him, functions mainly of a

managerial nature.”

27. There is no dispute that the appellant would be a workman

within the meaning of the expression in Section 2 (s) of the Act.

Further, it is incontrovertible that he has rendered continuous

service for a period over 20 years. Therefore, the first condition of

Section 25-F that appellant is a workman who has rendered service

for not less than one year under the Railway Administration, an

employer carrying on an industry, and that his service is terminated

which for the reasons hereinb efore given would constitute

retrenchment. It is immaterial that he is a daily-rated worker. He is

either doing manual or technical work and his salary was less than

Rs 500 and the termination of his service does not fall in any of the

excepted categories. Therefore, assuming that he was a daily-rated

worker, once he has rendered continuous uninterrupted service for

a period of one year or more, within the meaning of Section 25-F of

the Act and his service is terminated for any reason whatsoever and

the case does not fall in any of the excepted categories,

notwithstanding the fact that Rule 2505 would be attracted, it would

have to be read subject to the provisions of the Act. Accordingly the

termination of service in this case would constitute retrenchment

and for not complying with pro-conditions to valid retrenchment, the

order of termination would be illegal and invalid.

28. Later, in Punjab Land Development and Reclamation

Corporation Ltd., Chandigarh (supra), the Constitution Bench of

this Court examined the scope of the term ‘Retrenchment” under

Section 2(oo) of the Act in affirmative in paragraphs 14 and 82. The

relevant paras are as under:-

14. The precise question to be decided, therefore, is whether on a

proper construction of the definition of “retrenchment” in Section

2(oo) of the Act, it means termination by the employer of the service

of a workman as surplus labour for any reason whatsoever, or it

means termination by the employer of the service of a workman for

22

any reason whatsoever, otherwise than as a punishment inflicted by

way of disciplinary action, and those expressly excluded by the

definition. In other words, the question to be decided is whether the

word “retrenchment” in the definition has to be understood in its

narrow, natural and contextual meaning or in its wider literal

meaning.

82. Applying the above reasonings, principles and precedents, to the

definition in Section 2(oo) of the Act, we hold that “retrenchment”

means the termination by the employer of the service of a workman

for any reason whatsoever except those expressly excluded in the

section.

29. It leaves no manner of doubt that the nature of every

termination of a kind, by the service of a workman, for any reason

whatsoever, which the Legislature in its wisdom made a clarification

in its intention to be known to the employer that such of the workman

whose services, if to be terminated, will amount to retrenchment

under Section 2(oo) of the Act except those expressly excluded in the

section.

30. It is not open for us to examine the nature of employment

offered to the workman and the manner he had served the employer

is beyond the terms of reference made by the appropriate

Government dated 8

th April, 2003 and the fact is that if the service of

the workman has been terminated, it will be termed to be a

retrenchment under Section 2(oo) of the Act provided it does not fall

under any of those expressly excluded under the section. In every

23

retrenchment, the employer is not under an obligation to comply with

the twin conditions referred to under clauses (a) and (b) of Section

25F of the Act but in a case where the workman ha s been in

continuous service for more than 240 days in the preceding 12

months before the alleged date of termination as contemplated under

Section 25B, the employer is under an obligation to comply with the

twin conditions referred to under clauses (a) and (b) of Section 25F

of the Act 1947.

31. The consistent view of this Court is that such non-observance

has been termed to be void ab initio bad and consequence in the

ordinary course has to follow by reinstatement with consequential

benefits but it is not held to be automatic and what alternative relief

the workman is entitled for on account of non -observance of

mandatory requirement of Section 25F of the Act 1947 is open to be

considered by the Tribunal/Courts in the facts and circumstances of

each case.

32. What appropriate relief the workman may be entitled for

regarding non-compliance of Section 25F of the Act 1947 has been

24

considered by this Court in Bharat Sanchar Nigam Limited Vs.

Bhurumal

9. The relevant paras are as under:-

33. It is clear from the reading of the aforesaid judgments that the

ordinary principle of grant of reinstatement with full 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 mone tary

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) [(2006) 4 SCC 1]. 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.

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

9

2014(7) SCC 177

25

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.

33. It has been further followed in District Development Officer

and Another Vs. Satish Kantilal Amralia

10

.

34. In the instant case, the appellants had served as a daily wager

in non-teaching staff category from the year 1993-1997 and their

services were terminated in sequel to the order dated 24

th March,

1997 pursuant to which their services were de-regularized and that

has been upheld by the Division Bench of the High Court in writ

appeal preferred at the instance of the appellants in the earlier round

of litigation.

35. In the afore-stated facts, the High Court of Kerala in the earlier

round of litigation made certain adverse observations with regard to

the nature of appointment as a daily wager but still the alleged

termination was left open to examine the effect of non-observance of

10

2018(12) SCC 298

26

the Act, 1947 in the appropriate proceedings. Thus, what has been

observed by the Division Bench in its Judgment in the earlier round

of litigation may not have any relevance so far as the question which

has been examined by the Tribunal in answering the reference in

affirmative terms regarding non-observance of Section 25F of the Act

1947 and its consequential effect.

36. At the same time, the finding which has been recorded by the

learned Single Judge and confirmed by the Division Bench of the

High Court in the impugned judgment that if the appointment has

not been properly made after going through the process of selection

as provided under the statutory rules/Ordinance, as the case may

be, if such irregular appointments are being terminated, Section 25F

will not apply to a case of termination of such appointed employees.

The view expressed by the High Court in the impugned judgment, in

our considered view, is unsustainable in law and is not in conformity

with the scheme of the Act 1947 and deserves to be set aside.

37. The submission made by learned counsel for the respondents

that after the finding has been recorded by the Division Bench of the

High Court in the earlier round of litigation holding the seal of

27

approval on the appointments of the appellants to an act which is

conceived in fraud and delivered in deceit, are not entitled to claim

benefit under Section 25F of the Act 1947. In our considered view,

the submission is without subst ance for the reason that

appointments are made in the instant case on daily wage basis under

the orders of the Vice Chancellor who is the competent/appointing

authority and merely because their appointments are not in

accordance with the procedure prescribed under the Ordinance

would not disentitle them from claiming protection under provisions

of the Act 1947.

38. The judgment in R. Vishwanatha Pillai(supra) on which

learned counsel for the respondents has placed reliance was a case

where the incumbent sought an appointment as Scheduled Caste

candidate. On complaint, it revealed that he was not a member of

the Scheduled Caste category and in that reference, a finding was

recorded that the appointment has been obtained by fraud. What

will be the consequence, it does not have any application in the facts

of the instant cases.

28

39. So far as the judgment in Rajasthan Tourism Development

Corporation Ltd. and another(supra) is concerned, it was a case

where the workmen had not worked for 240 days in the calendar year

which is the condition precedent for attracting the provisions of

Section 25F of the Act 1947. In those circumstances, a passing

reference has been made regarding non-observance of Section 25F of

the Act 1947, which, in our view, may not be of any assistance to the

respondents.

40. The next judgment relie d upon in Satluj Jal Vidyut

Nigam(supra) is the case of abolition of jagirs by virtue of the

Himachal Pradesh Abolition of Big Landed Estates and Land Reforms

Act, 1953. While examining the abolition of Jagirs under the Act,

reference has been made of fraud and deceit which has no application

in the facts of the instant case.

41. So far as the judgment in Punjab Urban Planning and

Development Authority and Another (supra) is concerned, it was a

case where three years’ service was required for seeking

regularization of service in terms of circular issued by the authority

under its policy dated 23

rd January, 2001 and the incumbent had

29

not completed three years of service for seeking regularization but

due to some inadvertence, his name was included in the list of

candidates who were regularized and after a show cause notice, his

services were terminated. In that context, reference has been made

which may not have any remote application on the facts of the case.

42. In the facts and circumstances of the instant cases and looking

into the nature of service rendered by the appellants as daily wager

for a short period, while upholding the termination of the appellants

being in violation of Section 25F of the Act 1947, we consider it just

and reasonable to award a lumpsum monetary compensation of

Rs.2,50,000/- (Rupees two lakh fifty thousand) to each of the

appellants-workmen in full and final satisfaction of the dispute in

lieu of right to claim reinstatement with 50% back wages as awarded

by the Tribunal.

43. The respondents shall pay the compensation as awarded by this

Court to each of the appellants-workmen within a period of three

months.

44. In view of the foregoing discussion, the appeals succeed and are

partly allowed. The impugned judgment of the High Court dated 4

th

30

January, 2010 is hereby set aside and the Award of the Industrial

Tribunal dated 14

th November, 2005 is modified to the extent

indicated above.

45. Pending application(s), if any, stand disposed of.

…………………………….J.

(AJAY RASTOGI)

…………………………….J.

(ABHAY S. OKA)

NEW DELHI

OCTOBER 27, 2021