C/SCA/7736/2020 JUDGMENT DATED: 18/02/2026

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/SPECIAL CIVIL APPLICATION NO. 7736 of 2020

With

R/SPECIAL CIVIL APPLICATION NO. 7863 of 2020

With

R/SPECIAL CIVIL APPLICATION NO. 7864 of 2020

With

R/SPECIAL CIVIL APPLICATION NO. 7865 of 2020

With

R/SPECIAL CIVIL APPLICATION NO. 7866 of 2020

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK Sd/-

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Approved for Reporting Yes No

✓

==========================================================

MOTHER DAIRY FRUIT AND VEGETABLE PVT LTD

Versus

DILIPBHAI BHAGVANSINH PADHIYAR

================================================================

Appearance:

MR DC DAVE SENIOR COUNSEL WITH MR JIGAR M PATEL(3841) for the

Petitioner(s) No. 1

MR GIRISH M DAS(2323) for the Respondent(s) No. 1

==========================================================

CORAM:HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK

Date : 18/02/2026

COMMON ORAL JUDGMENT

1.Since similar and identical issues arise for consideration

in all the above petitions, with consent of the learned counsels

appearing for both the sides, the petitions are heard together

and are being decided by this common judgment.

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CHALLENGE:

2.The petitioner has filed present petitions under Articles

226 and 227 of the Constitution of India r/w the provisions of

Industrial Disputes Act, 1947 (hereinafter referred to as the

"I.D. Act") challenging the impugned orders dated 27.12.2019

passed by the Presiding Officer, Labour Court, Anand

(hereinafter referred to as the "Labour Court") in Reference

(L.C.A) Nos.103 of 2015, 104 of 2015, 105 of 2015, 106 of

2015 and 107 of 2015, whereby the said references came to

be partly allowed by the Labour Court and granted

reinstatement in favour of the respondents herein on their

original posts with continuity of service.

PRAYER:

3. The petitioner has sought substantially identical reliefs in

all the captioned petitions, the only variation being the

respective reference numbers. In order to avoid repetition and

for the sake of convenience, the reliefs prayed for in Special

Civil Application No. 7736 of 2020 are reproduced herein. In

the said petition, i.e. Special Civil Application No. 7736 of

2020, the petitioner has, inter alia, prayed as under:

"6(A) This Hon'ble Court may be pleased to issue a writ of or

in the nature of, Certiorari or any other appropriate writ,

order or direction quashing and setting aside the Award

dated 27-12-2019 passed by the Presiding Officer, Labour

Court, ANAND in Reference (L.C.A.) No.104 of 2015-

Annexure"A" and be further pleased to dismiss the aforesaid

Reference (L.C.A.) No.104 of 2015 of the Respondent;

(B) Pending admission, disposal and final hearing of the

present petition, this Hon'ble Court may be pleased to stay

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the operation, implementation, effect and execution of Award

dated 27-12-2019 passed by Presiding Officer, Labour Court,

ANAND in Reference (L.C.A.) No.104 of 2015-Annexure"A"

(C) Such other(s) and further relief(s) which this Hon'ble

Court may deem fit to be granted in the interest of justice."

FACTS OF THE CASE:

4.The facts giving rise to the present petitions are that the

petitioner is a company incorporated under the provisions of

the Companies Act, 1956. It manufactures, markets, and sells

milk and milk products, including cultured products, ice

cream, paneer, and ghee, under the brand name “Mother

Dairy”. The petitioner company also has a diversified product

portfolio comprising edible oils, fruits and vegetables, frozen

vegetables, pulses, and processed foods such as fruit juices

and jams, catering to the daily requirements of households.

4.1 The respondents were initially appointed purely on a

contractual basis pursuant to orders dated 28.12.2002 for a

fixed term of three months, commencing from 01.01.2003 and

concluding on 31.03.2003, which appointments were duly

accepted by them. Thereafter, their contractual tenure was

extended from time to time during the years 2003–2004.

Subsequently, by communication dated 29.07.2004, the

petitioner offered them permanent appointments to the posts

of Operator-cum-Technician Grade-III / Executive Grade-III at

its Neem Biocide Plant, Anand, which offers were duly

accepted by the respondents. In terms of Condition No. 6 of

the appointment order, their services were liable to transfer,

thereby reserving to the petitioner the right to transfer the

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respondents to any of its plants in accordance with

administrative exigencies and organizational requirements.

4.2 As the operations carried on by the petitioner at its

Neem Biocide Plant at Anand, Gujarat, had become

commercially unviable, the petitioner took a conscious

decision to close down the said plant and accordingly effected

its closure. Such closure would ordinarily have entailed

termination of the services of the employees working therein,

including the respondents. However, with a view to

safeguarding their employment and avoiding termination, the

petitioner, instead of dispensing with their services,

transferred the respondents to its other plants situated at

Budge-Budge, West Bengal/Kolkata and Etawah, Uttar

Pradesh vide communications dated 25.09.2014, and to

Guwahati/Srinagar vide communications dated 11.09.2014.

The respondents were directed to report for duty at their

respective transferred locations within a period of six days

from the date of communication.

4.3 Thereafter, the petitioner addressed further

communications dated 07.10.2014 and 16.10.2014 to the

respondents, reiterating its direction and calling upon them to

report for duty at their respective transferred locations.

Despite such communications, the respondents failed and

neglected to comply. Upon it becoming evident that the

respondents were not willing to join duties at the transferred

places, the petitioner was constrained to issue orders dated

19.12.2014 terminating their services. At the time of issuance

of the termination orders, all admissible terminal dues were

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duly calculated and paid to the respondents and the

respondents were accepted the same.

4.4 After accepting the terminal dues, the respondents raised

industrial disputes seeking reinstatement with full back wages

before the Assistant Labour Commissioner, Anand, who

referred the disputes for adjudication to the Labour Court,

Anand. The references were registered as Reference (L.C.A.)

Nos. 103 of 2015, 104 of 2015, 105 of 2015, 106 of 2015, and

107 of 2015.

4.5 Before the learned Labour Court, the respondents filed

their statement of claim at Exh. 5, contending that their

termination was illegal and unjustified. The petitioner, in

response, filed its written statement at Exh. 12, specifically

denying the allegations and averments made in the statement

of claim. Upon hearing the parties and after due appreciation

of the oral and documentary evidence on record, the Labour

Court partly allowed the references and directed

reinstatement of the respondents with continuity of service.

4.6 Being aggrieved and dissatisfied with the impugned

orders dated 27.12.2019, passed by the Labour Court, Anand

in Reference (L.C.A.) Nos. 103 of 2015, 104 of 2015, 105 of

2015, 106 of 2015, and 107 of 2015, the petitioner has

preferred the present petitions.

5. Heard Mr. Dhaval C. Dave, learned Senior Counsel assisted

by Mr. Jigar M. Patel, learned counsel for the petitioner

company and Mr. Girish M. Das, learned counsel for the

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respondents in all the petitions.

SUBMISSIONS ON BEHALF OF PETITIONER:

6. Mr. D.C. Dave, learned Senior Counsel appearing for the

petitioner, has submitted that the impugned orders passed by

the Labour Court are wholly erroneous, illegal, arbitrary and

contrary to the facts and evidence on record. It is contended

that the Labour Court has travelled beyond the jurisdiction

vested in it while passing the impugned orders in favour of the

respondents. According to Mr. Dave, learned Senior Counsel,

the terms of reference were limited to the question as to

whether the respondents were entitled to reinstatement with

consequential benefits or not. However, the Labour Court

went beyond the scope of the reference and proceeded to

examine the issue of non-compliance with the provisions of

the I.D. Act in relation to the closure of the unit. It is therefore

submitted that, while rendering the impugned orders on such

grounds, the Labour Court exceeded its jurisdiction and acted

beyond the scope of the reference.

6.1 Mr. Dave, learned Senior Counsel has further submitted

that it is well settled by a catena of decisions that the Labour

Court cannot travel beyond the scope and ambit of the terms

of reference. It is contended that, in the present case, the

impugned orders clearly demonstrate that the Labour Court

has exceeded the scope of the reference and adjudicated

issues not referred to it. It is therefore submitted that, the

impugned orders are erroneous, illegal, unjust, arbitrary and

capricious, and therefore deserve to be quashed and set aside.

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6.2 Mr. Dave, learned Senior Counsel for the petitioner, has

submitted that the respondents were initially appointed on a

contractual basis sometime in 1997 and were subsequently

regularised and appointed to regular posts in or around the

year 2004. It is further submitted that owing to financial

constraints and the declining operational capacity of the

plant, the petitioner company took a decision to close down

the said unit. Consequently, orders were issued transferring

the concerned workmen to other units of the company which

were functional and operational. Learned Senior Counsel has

further contended that, since the respondents failed to report

for duty at their respective transferred places, the petitioner

company was left with no alternative but to issue orders of

retrenchment dated 19.12.2014. It is further submitted that

the petitioner company duly paid all statutory and retiral

dues, including retrenchment compensation, gratuity and

other admissible benefits payable to the respondents, and that

the said amounts were deposited in their respective accounts

and accepted by them without any protest or objection.

6.3 Mr. Dave, learned Senior Counsel for the petitioner, has

submitted that, after having received all statutory and retiral

benefits, the respondents, with mala fide intent, raised

industrial disputes and filed reference cases before the

Labour Court. It is contended that the terms of reference did

not pertain to the legality of the closure of the unit or to any

alleged breach of the provisions of Section 25(o) of the I.D.

Act. However, the Labour Court, according to the learned

Senior Counsel, travelled beyond the scope of the reference

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and took into consideration aspects which were neither

relevant nor within the ambit of the issues referred for

adjudication while passing the impugned awards. It is further

submitted that the material facts and legal position were not

properly appreciated by the Labour Court, and therefore the

impugned orders passed by the Labour Court are contrary to

the settled principles of law and are liable to be quashed and

set aside.

6.4 Mr. Dave, learned Senior Counsel for the petitioner, has

further submitted that the respondent in Special Civil

Application No. 7736 of 2020 has been receiving idle wages

without rendering any work pursuant to the interim order

passed by this Court dated 24.06.2020. It is further submitted

that the other respondents are likewise receiving idle wages

in terms of the interim orders passed by this Court dated

03.07.2020, and that such payment of wages has continued till

date without any services being rendered by them.

6.5 At this stage, Mr. Dave, learned Senior Counsel, has

pointed out before this Court to the fact that, after filing of the

present petitions, another reference came to be filed by the

Union challenging the closure of the unit. It is submitted that

the Union did not follow the statutory provisions of Section

25(o) of the I.D. Act and, without seeking prior permission,

raised the dispute, which was thereafter referred to the

Labour Court, Nadiad and registered as Reference (I.T.) No.

74 of 2018. It is further submitted that the said reference

came to be disposed of vide order dated 26.06.2022, as the

Union did not press the issue before the Labour Court.

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6.6 Mr. Dave, learned Senior Counsel has placed on record a

copy of the said order dated 26.6.2022 passed by the Labour

Court in Reference (IT) No. 74 of 2018 which is taken on

record.

6.7 Mr. Dave, learned Senior Counsel for the petitioner, in

support of his submissions, referred and relied upon the

following decisions of the Hon'ble Apex Court and this Court:-

(1) Bhogpur Cooperative Sugar Mills Ltd. vs.

Harmesh Kumar, reported in (2006) 13 SCC 28.

(2) Oshiar Prasad and Others vs. Employers in

Relation to Management of Sudamdih Coal Washery of

M/s. Bharat Coking Coal Limited, Dhanbad, Jharkhand

reported in (2015) 4 SCC 71,

(3)Tata Chemicals Limited vs. Okha Mandal

Majoor Sangh reported in 2017 (0) GUJHC 13394.

6.8Over and above the contentions raised in the present

petitions, the Learned Senior Council urges before the Court

that present petitions may be allowed and the impugned

orders passed by the Labour Court may be quashed and set

aside.

SUBMISSIONS ON BEHALF OF RESPONDENTS:

7. On the other hand, Mr. Girish Das, learned counsel

appearing for the respondents, has opposed the petitions and

submitted that there has been a serious breach of the

provisions of Section 25(o) of the I.D. Act. It is contended that,

upon due consideration of all relevant facts and evidence, the

Labour Court has rightly passed the impugned orders

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directing reinstatement of the respondents. According to the

learned counsel, there is no illegality, infirmity or

jurisdictional error in the findings recorded by the Labour

Court, and therefore this Court, while exercising its

supervisory jurisdiction under Articles 226 and 227 of the

Constitution of India, ought not to interfere with the same. It

is accordingly prayed that the petitions deserve to be

dismissed.

7.1 Mr. Girish Das, learned counsel for the respondents, has

further submitted that the respondents are not gainfully

employed in any establishment, nor are they receiving

adequate remuneration from any alternative employment. It is

contended that the petitioner dairy is statutorily bound to pay

to the respondents full wages last drawn, inclusive of any

maintenance allowance admissible to them, in view of the

provisions of Section 17-B of the I.D. Act. Learned counsel has

submitted that Section 17-B of the I.D. Act clearly provides

that where a Labour Court, Tribunal or National Tribunal, by

its award, directs reinstatement of any workman and the

employer prefers proceedings against such award before the

High Court or the Supreme Court, the employer shall be liable

to pay such workman, during the pendency of such

proceedings, full wages last drawn inclusive of any

maintenance allowance admissible under any rule, provided

that the workman has not been employed in any establishment

during such period.

7.2 Mr. Girish Das, learned counsel for the respondents, has

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submitted that Section 2(k) of the Industrial Disputes Act

defines an “industrial dispute” to mean any dispute connected

with employment or non-employment, or with the terms of

employment. It is contended that, in the present case, the

Labour Court has examined the terms of employment,

particularly Clause 6 of the appointment letter, while

adjudicating the reference. According to the learned counsel

for the respondents, the contention of the management that

the Labour Court has exceeded its jurisdiction is wholly

misconceived and contrary to the mandatory provisions of

law, and therefore cannot be sustained even for a moment.

7.3 Mr. Girish Das, learned counsel for the respondents, has

further submitted that when the respondents did not report

for duty at the transferred places, no departmental inquiry

was conducted prior to terminating their services. According

to him, the record does not disclose that any inquiry was held,

and therefore the action of the petitioner in terminating the

services of the workmen cannot be said to be legal or justified.

It is further submitted that Exh. 6/5, i.e. the transfer order,

indicates that the transfers were effected on account of

business exigencies and with a view to providing alternative

employment. However, the sworn depositions at Exh. 19 and

Exh. 25 disclose reasons for transfer which are materially

different from those stated in the transfer order.

7.4 Mr. Girish Das, learned counsel for the respondents has

also relied upon Section 2A of the Industrial Disputes Act to

submit that where an employer discharges, dismisses,

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retrenches or otherwise terminates the services of an

individual workman, any dispute arising between such

workman and the employer in connection with such

termination shall be deemed to be an industrial dispute.

7.5 Mr. Girish Das, learned counsel for the respondents, has

referred to and relied upon the decision of the Hon’ble Apex

Court in Babhutmal Raichand Oswal vs. Laxmibai R.

Tarta, reported in (1975) 1 SCC 858. He has contended

that even if the Labour Court has committed an error of fact,

however apparent it may be on the face of the record, the

same cannot be interfered with by the High Court in exercise

of its supervisory jurisdiction under Article 227 of the

Constitution of India by converting itself into a Court of

Appeal, particularly when the legislature has not conferred a

right of appeal and has made the decision of the subordinate

court or tribunal final.

7.6 Lastly, Mr. Girish Das, learned counsel for the

respondents urges before the Court that present petitions may

not be entertained and the same may be dismissed and the

impugned orders passed by the Labour Court, may be

confirmed.

ANALYSIS:

8. I have perused the relevant material and documents placed

on record. I have also gone through the impugned orders

passed by the Labour Court as well as the decisions cited by

both the sides.

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9.Considering the facts and circumstances of the case and

after hearing both the sides, the issues arise for consideration

before this Court are as under:-

1. Whether the Labour Court exceeded the jurisdiction

which is not vested in it and go beyond the scope of the

terms of reference, as provided under the provision of

Section 10(1) of the I.D. Act?

2. Whether the impugned order passed by the Labour

Court is sustainable in the eyes of law?

10.It prima facie appears from the record that the Labour

Court has travelled beyond the scope of the reference and has

committed errors both on facts and in law while appreciating

the evidence adduced before it. The findings recorded by the

Labour Court thus suffer from serious factual and legal

infirmities. The aforesaid decisions of the Hon’ble Apex Court

as well as this Court cited by learned Senior Counsel for the

petitioner clearly enunciate the ratio with regard to the scope

and ambit of Section 10(1)(c) of the I.D. Act. The said Section

10(1)(c) of the I.D. Act reads as under:–

"10. Reference of disputes to Boards, Courts or

Tribunals.—

(1) Where the appropriate Government is of opinion that any

industrial dispute exists or is apprehended, it may at any

time], by order in writing,

(c) refer the dispute or any matter appearing to be connected

with, or relevant to, the dispute, if it relates to any matter

specified in the Second Schedule, to a Labour Court for

adjudication;"

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11. At this stage, it is appropriate to refer the relevant

assertions of examination in chief of the respondents:-

12. So far as the respondent of Special Civil Application No.

7736 of 2020 is concerned, the said respondent has stated in

his examination in chief that he joined the company on

21.07.1997 as a Fitter and was later re-designated as

Attendant Operator. He rendered continuous service until his

termination and worked for more than 240 days in every year,

including the 12 months preceding termination. His service

record was clean and his last drawn salary was Rs. 28,452/-

per month. The company was engaged in manufacturing

neem-based pesticides and fertilizers at its Anand plant,

employing about 80 workers in three shifts. The respondent

was performing duties of machinery maintenance and plant

operations. The company, registered under the Companies

Act, 1956, has its head office at Delhi and several

establishments across India employing thousands of workers.

From December 2013, the company initiated steps for

permanent closure of the Anand plant by stopping budgeting

and procurement of raw materials. Production was completely

stopped from 01.03.2014 and the plant was locked. Instead of

paying retrenchment compensation upon closure, the

employees were transferred to different states. The

respondent was transferred to Etawah (U.P.) by order dated

25.09.2014. As the respondent did not report at the

transferred place, the company terminated his services on

19.12.2014 without conducting any departmental inquiry and

without paying retrenchment compensation. After

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termination, the respondent made sincere efforts to secure

employment at various places but remained unemployed.

13. So far as the respondent of Special Civil Application No.

7863 of 2020 is concerned, the said respondent has stated in

his examination in chief that he joined the petitoner company

on 06.03.1997 and remained in continuous service despite

change in the name of the company. Though his last

designation was Assistant Manager (Sales and Marketing), he

did not perform supervisory or managerial functions. His

duties were limited to promoting products, coordinating with

farmers and dealers, collecting payments, and submitting

required forms, without any authority to fix prices, grant

facilities, or make policy decisions. He had worked for more

than 240 days in every year, including the 12 months

preceding his termination. The Anand plant was permanently

closed from early 2014 after stoppage of budgeting and

procurement of raw materials. He was transferred to Srinagar

by order dated 11.09.2014, and thereafter his services were

terminated on 19.12.2014 without conducting any

departmental inquiry and without following the procedure

under Section 25(o) of the I.D. Act.

14. So far as the respondent of Special Civil Application No.

7864 of 2020 is concerned the said respondent has stated in

his examination in chief that he joined the petitioner company

on 01.08.1997 and continued in uninterrupted service despite

change in the name of the company. At the time of

termination, he was designated as Executive Grade-3;

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however, he was never assigned any managerial,

administrative, or supervisory powers. His duties were limited

to procurement and market support activities relating to

neem-based raw materials, collecting market data, preparing

prescribed forms, coordinating inward entries, sampling, and

documentation of finished goods. All decisions regarding

purchase, pricing, payment terms, or sales were taken by

superior officers. No employee worked under him and he had

no authority to place orders or take independent decisions.

His service record was clean and he worked for more than

240 days in every year, including the 12 months preceding

termination. The Anand plant was permanently closed in early

2014 after stoppage of budgeting and procurement of raw

materials. The company did not follow the procedure under

Section 25(o) of the I.D. Act. He was transferred to Kolkata by

order dated 25.09.2014 and thereafter terminated on

19.12.2014 without any departmental inquiry.

15. So far as respondent of Special Civil Applicaiton No. 7865

of 2020 is concerned the said respondent has stated in his

examination in chief that he joined the petitioner company on

15.07.1997 as an Operator and continued in uninterrupted

service despite change in the name of the company. Though

later designated as Marketing Executive and Assistant

Manager, he did not exercise any managerial, administrative,

or supervisory powers and no such authority was ever

conferred upon him. His duties were limited to field work,

promoting neem-based fertilizers and pesticides, coordinating

with farmers and dealers, forwarding dealership forms, and

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collecting payments. He had no authority to appoint dealers,

fix prices, grant discounts, or decide payment terms. No

employee worked under him. His last drawn salary was Rs.

52,000/- per month. His service record was clean and he had

worked for more than 240 days in every year, including the 12

months preceding termination. The Anand plant was

permanently closed in early 2014 after stoppage of budgeting

and procurement of raw materials. Instead of following the

procedure under Section 25(o) of the I.D. Act, employees were

transferred. The respondent was transferred to Guwahati by

order dated 11.09.2014 and subsequently terminated on

19.12.2014 without any departmental inquiry.

16. So far as respondent of Special Civil Applicaiton No. 7866

of 2020 is concerned the said respondent has stated in his

examination in chief that he was appointed on 21.03.1997 as

an Attendant Operator and continued in uninterrupted service

despite change in the name of the company. His designation

and duties remained the same throughout, and his service

record was satisfactory. He had worked for more than 240

days in every year of service, including the 12 months

preceding his termination on 19.12.2014. At the Anand Unit,

neem-based fertilizers and pesticides were manufactured, and

he was working as a Plant Operator. The company, registered

under the Companies Act, operates several dairies and

processing plants across India employing thousands of

workers. The Anand plant was permanently closed in early

2014 after stoppage of budgeting and procurement of raw

materials, and production was completely halted. Instead of

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obtaining prior permission and properly retrenching

employees, all employees were transferred to distant states.

The respondent was transferred to Baj Baj, West Bengal by

order dated 25.09.2014. As the transfer was illegal and no

equivalent work was available, he did not report there.

Consequently, his services were terminated on 19.12.2014

without conducting any departmental inquiry. Though

retrenchment compensation was paid, one month’s notice pay

was not paid and prior permission of the State Government

was not obtained.

17.So far as the cross examinations of the all the

respondents are concerned, they have admitted that despite

receiving letters dated 07.10.2014 and 16.10.2014 directing

them to report for duty at the transferred place, they neither

reported for duty nor gave any written reply, and had not

raised any written objections to the transfer (though they

claim to have raised an oral objection). They have also

admitted that due to their failure to report, the company had

to make alternative arrangements and by letter dated

19.12.2014 their services were terminated and that all service

benefits, including notice pay, gratuity, leave encashment and

other dues, were calculated and deposited in their bank

accounts, and that they have not returned the said amounts.

The have also admitted that they have not made any written

application for alternative employment.

18. So as to deal with the issues arise for consideration, it

would be appropriate to briefly refer to the facts of the case in

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order to determine whether the Labour Court has properly

appreciated the same or not.

19.That all the respondents herein were appointed purely

on contractual basis somewhere in 1997. In continuation of

that, order dated 28.12.2002 came to be issued by the

petitioner for a period of three months commencing from

1.1.2003 and ending on 31.3.2003 and the said order of

appointment was duly accepted by the respondents.

Thereafter, the petitioner extended the services of the

respondents till 2003-2004 and then, their services were

regularized and they have been appointed on regular different

posts vide appointment orders dated 29.7.2004. The

appointment orders dated 29.4.2004 are placed on record and

clause No. (6) of the said appointment orders read as under:-

"(6) As an employee of the Neem Biocide Plant, you can be

posted at Anand or transferred to any other place in India

from time to time at the sole discretion of the management."

20. Due to financial constraints, the manufacturing activities

of the plant were closed, and consequently, the company

decided to shift all its workers to different places where its

other units were functioning. Accordingly, transfer orders

were issued in favour of all the respondents. However, the

respondents chose not to join at their respective transferred

places and neither responded to the transfer orders nor

furnished any explanation. Ultimately, the petitioner company

passed orders of retrenchment after paying retrenchment

compensation and all other legal dues payable to the

respondents.

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21. It is an admitted position that the respondents accepted

the amounts towards retrenchment compensation and other

legal dues, and in their oral evidence it has been admitted

that, till the date of their deposition, they had not returned the

said amounts which were deposited in their respective

accounts by the company. Thereafter, they raised an

industrial dispute contending that their services had been

terminated and that they were entitled to reinstatement with

all consequential benefits. The terms of reference to that

effect were forwarded by the Assistant Labour Commissioner,

as reflected in the impugned award.

22. However, the Labour Court travelled beyond the scope of

the terms of reference, which is wholly illegal and contrary to

the settled principles of law laid down by the Hon’ble Apex

Court. Therefore, in my opinion, the Labour Court exceeded

its jurisdiction and enlarged the scope of the reference while

deciding the same and passing the impugned orders. All these

facts have been admitted by the concerned respondents in

their affidavits in lieu of examination-in-chief and have been

further confirmed in their cross-examinations.

23. At this stage, it is appropriate to refer the decision of the

Hon'ble Apex Court in the case of Bhogpur Cooperative

Sugar Mills (supra) wherein, the Hon'ble Apex Court has

held as under:-

"D. Labour Law-Industrial Disputes Act, 1947-Ss. 10 and 25-

G-Terms of reference under S.10-Binding nature of-

Consideration of question of compliance with S.25-G, when

reference was only as to whether termination of services was

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justified-Impermissibility.

7. The Labour Court derived its jurisdiction from the terms in

reference. It ought to have exercised its jurisdiction within

the four corners thereof.

8. The principal question which was referred by the State

Government was as to whether the termination of services of

the respondent was justified. The Labour Court was,

therefore, not required to go into the question as to whether

the appellant was bound to take the services of the

respondent in all subsequent seasons or not."

24.Yet, in another decision of the Hon'ble Apex Court in the

case of Oshiar Prasad (supra), the Hon'ble Apex Court has

held as under:-

"B. Labour Law - Industrial Disputes Act, 1947 - S. 10 -

Powers of appropriate Government to make reference -

Jurisdiction of Tribunal while answering reference - Scope -

Reference pertaining to absorption/regularisation of

appellants and others whose services were terminated long

back - Validity - Held, appropriate Government is empowered

to make reference only when "industrial dispute exists" or "is

apprehended between the parties" - Further held, Tribunal

while answering reference has to confine its enquiry to

question(s) referred and has no jurisdiction to travel beyond

or/and terms of reference

- In instant case, services of appellants and those at whose

instance reference was made were terminated long back

prior to making reference - Thus, they were not in service

either of contractor or/and respondent BCCL - Consequently,

question of their absorption or regularisation did not arise

nor could have been gone into on merits since it is not

possible to direct absorption/regularisation employees not in

service - Absorption/Regularisation can be claimed and/or

granted only when contract of employment subsists- Hence,

only dispute which existed for being referred to Tribunal was

in relation to appellants' employment and its legality/validity -

Reference made to examine issue of absorption, was thus,

misconceived and was incapable of being answered in favour

of appellants.

18. One of the questions which fell for consideration by this

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Court in Delhi Cloth and General Mills Co. Ltd. v. Workmen

was that what are the powers of the appropriate Government

while making a reference and the scope and jurisdiction of

Industrial Tribunal under Section 10 of the Act.

19. Mitter, J., speaking for the Bench, held as under: (Delhi

Cloth and General Mills case, AIR p.472, paras 8-9)

“(8) ……Under Section 10(1)(d) of the Act, it is open to

the appropriate Government when it is of opinion that

any industrial dispute exists to make an order in writing

referring

'the dispute or any matter appearing to be connected

with, or relevant to the dispute…..to a Tribunal for

adjudication” Under Section. 10(4)

“10.(4) Where in an order referring an industrial

dispute to a Labour Court, Tribunal or National

Tribunal under this section or in a subsequent order,

the appropriate Government has specified the points of

dispute for adjudication, the Labour Court or the

Tribunal or the National Tribunal, as the case may be,

shall confine its adjudication to those points and

matters incidental thereto.'

(9) From the above it therefore appears that while it is

open to the appropriate Government to refer the

dispute or any matter appearing to be connected

therewith for adjudication, the Tribunal must confine its

adjudication to those points of dispute referred and

matters incidental thereto. In other words, the Tribunal

is not free to enlarge the scope of the dispute referred

to it but must confine its attention to the points

specifically mentioned and anything which is incidental

thereto. The word ‘incidental’ means according to

Webster’s New World Dictionary:

“happening or likely to happen as a result of or in

connection with something more important; being

an incident; casual; hence, secondary or minor,

but usually associated:”

“Something incidental to a dispute” must therefore

mean something happening as a result of or in

connection with the dispute or associated with the

dispute. The dispute is the fundamental thing while

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something incidental thereto is an adjunct to it.

Something incidental, therefore, cannot cut at the root

of the main thing to which it is an adjunct to it…..”

20. The same issue came up for consideration before three

Judge Bench in a case reported in Pottery Mazdoor Panchayat

v. Perfect Pottery Co. Ltd., Justice Y.V. Chandrachud, the

learned Chief Justice speaking for the Court laid down the

following proposition of law: ( (SCC pp. 764-65, paras 10-11) )

“10. Two questions were argued before the High Court:

Firstly, whether the tribunals had jurisdiction to

question the propriety or justification of the closure and

secondly, whether they had jurisdiction to go into the

question of retrenchment compensation. The High

Court has held on the first question that the jurisdiction

of the Tribunal in industrial disputes is limited to the

points specifically referred for its adjudication and to

matters incidental thereto and that the Tribunal cannot

go beyond the terms of the reference made to it. On the

second question the High Court has accepted the

respondent’s contention that the question of

retrenchment compensation has to be decided under

Section 33-C(2) of the Central Act.

11. Having heard a closely thought out argument made

by Mr. Gupta on behalf of the appellant, we are of the

opinion that the High Court is right in its view on the

first question. The very terms of the references show

that the point of dispute between the parties was not

the fact of the closure of its business by the respondent

but the propriety and justification of the respondent’s

decision to close down the business. That is why the

references were expressed to say whether the proposed

closure of the business was proper and justified. In

other words, by the references, the Tribunals were not

called upon by the Government to adjudicate upon the

question as to whether there was in fact a closure of

business or whether under the pretence of closing the

business the workers were locked out by the

management. The references [pic]being limited to the

narrow question as to whether the closure was proper

and justified, the Tribunals by the very terms of the

references, had no jurisdiction to go behind the fact of

closure and inquire into the question whether the

business was in fact closed down by the management.”

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21. The abovesaid principle of law has been consistently

reiterated in Firestone Tyre & Rubber Co. of India (P) Ltd. v.

Workmen, National Engg. Industries Ltd. v. State of

Rajasthan, Mukand Ltd. v. Mukand Staff & Officers’ Assn,

and State Bank of Bikaner & Jaipur v. Om Prakash Sharma.

22. It is thus clear that the appropriate Government is

empowered to make a reference under Section 10 of the Act

only when “Industrial dispute exists” or “is apprehended

between the parties”. Similarly, it is also clear that the

Tribunal while answering the reference has to confine its

inquiry to the question(s) referred and has no jurisdiction to

travel beyond the question(s) or/and the terms of the

reference while answering the reference. A fortiori, no

inquiry can be made on those questions, which are not

specifically referred to the Tribunal while answering the

reference.

23. Coming now to the facts of this case, it is an admitted

case that the services of the appellants and those at whose

instance the reference was made were terminated long back

prior to making of the reference. These workers were,

therefore, not in the services of either Contractor or/and

BCCL on the date of making the reference in question.

Therefore, there was no industrial dispute that “existed” or

“apprehended” in relation to appellants’ absorption in the

services of the BCCL on the date of making the reference.

24. Indeed a dispute regarding the appellants’ absorption was

capable of being referred to in reference for adjudication, had

the appellants been in the services of Contractor or/and

BCCL. But as said above, since the appellants’ services were

discontinued or/and retrenched (whether rightly or wrongly)

long back, the question of their absorption or regularization

in the services of BCCL, as claimed by them, did not arise and

nor this issue could have been gone into on its merits for the

reason that it was not legally possible to give any direction to

absorb/regularize the appellants so long as they were not in

the employment.

25. It is a settled principle of law that absorption and

regularization in the service can be claimed or/and granted

only when the contract of employment subsists and is in force

inter se employee and employer. Once it comes to an end

either by efflux of time or as per the terms of the Contract of

employment or by its termination by the employer, then in

such event, the relationship of employee and employer comes

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to an end and no longer subsists except for the limited

purpose to examine the legality and correctness of its

termination.

26. In our considered opinion, the only industrial dispute,

which existed for being referred to the Industrial Tribunal for

adjudication was in relation to termination of appellants’

employment and – whether it was legal or not? It is an

admitted fact that it was not referred to the Tribunal and,

therefore, it attained finality against the appellants.

27. In our considered opinion, therefore, the reference, even

if made to examine the issue of absorption of the appellants

in the services of BCCL, the same was misconceived."

25. In the decision of this Court in case of Tata Chemicals

Limited (supra) this Court has held as under:-

"Head Note:- Service and Labour - Constitution of India - Art.

226, 227-Industrial Disputes Act, 1947-S. 2(rr), 10(1) -

Contract Labour (Regulation and Abolition) Act, 1970-

Contract Labour (Regulation and Abolition) Rules, 1972-

R.25-46 workmen employed by respondent No. 2 Contractor,

charter of demand was raised for paying them the pay-scales

of unskilled workmen - respondent No. 2 Contractor

contended that Tribunal had no jurisdiction to entertain the

subject matter of reference - held, Deputy Labour

Commissioner has referred the dispute to the Industrial

Tribunal wherein five demands raised by the Union are

mentioned in the schedule and the said order of Reference

was not challenged by the Company or the workmen - if

schedule referred to Industrial Tribunal is carefully

examined, there is no reference in the said schedule that the

Union has demanded a particular amount on the basis of

amount paid to workmen of Company -there is only reference

with regard to payment of Rs. 12.10 daily with amount of DA

of Rs. 39.80 as revised from time to time to the skilled

workmen (pumpmen) other demands were also made by the

Union which has been referred to the Tribunal under the

Schedule there is no reference with regard to the allegation

that the contract entered into between the Company and the

Contractor is sham and bogus - further, from Schedule

referred to Tribunal, it cannot be said that there is any

reference with regard to similar type of work performed by

the workmen of the Contractor and principal employer and

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there is no reference with regard to disagreement with type

of work performed by the workmen employed by the

contractor as well as principal employer - Tribunal is having

jurisdiction to entertain the dispute referred to it by the

Deputy Labour Commissioner - Tribunal has not committed

any error Tribunal has also not considered the paying

capacity of the Contractor to pay the wages similar to the

wages paid by the Company to its workmen there is no

finding recorded by Tribunal that Contractor is having the

paying capacity to pay the wages equivalent to the wages

paid to the workmen of Company Contractor is making

payment of minimum wages to his workmen scope of

interference while exercising powers under Article 227 of the

Constitution of India is limited - however, in present case,

when the Tribunal has travelled beyond the terms of the

reference and not considered the relevant aspects of the

matter, this is a fit case where such powers are required to

be exercised Tribunal has committed an error to the aforesaid

extent by travelling beyond the terms of the reference and

not considering the paying capacity. Wait for my instruction

of the Contractor to pay the wages similar to the wages paid

to the workmen of the Company-therefore, matter remanded

back to the Tribunal for considering the issue afresh-petitions

partly allowed.

7. Though five demands were referred in the Schedule, in the

Statement of Claim, the Union raised 14 demands. The

Company as well as the Contractor submitted the written

statement and the Tribunal, after considering the oral as well

as documentary evidence produced before it, partly allowed

the Reference, whereby all the demands except demand no.3

as per the Schedule are allowed and the Contractor is

ordered to make the payment as per the said demand within

stipulated time limit from the date of Reference. The Tribunal

also ordered to pay the revision of such demands from time to

time while ensuring that the same shall not be less than the

respective benefits which are being paid to the employees of

the Company.

8. On behalf of the petitioners, mainly it has been contended

that the Tribunal has no jurisdiction to decide the dispute

because if the claim of the contractor's workmen is for grant

of same wages as paid to the workers of the Company, the

jurisdiction is with the Commissioner of Labour as per

condition no.5 of Licence Agreement. The contention of the

petitioners is that the Tribunal has gone beyond the terms of

the Reference by making an observation that the contract

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entered into between the Company and the Contractor is

sham and bogus. The third contention of the petitioners is

that the Tribunal has not considered the financial capacity of

the employer while giving direction to pay the same wages as

is being paid to the workmen of the Company. The Tribunal

ought to have considered the paying capacity of the

Contractor."

26.The aforesaid observations clearly indicate that the

jurisdiction of the Labour Court is limited to the scope of the

reference and cannot be expanded beyond the terms framed

by the appropriate Government.

27. It is evident that prior to terminating the services of the

respondents, the company had paid all statutory and retiral

dues, including retrenchment compensation, gratuity and

other admissible benefits payable to the respondents. The said

amounts were duly deposited in their respective accounts and

were accepted by them without any protest or objection.

Thereafter, the respondents raised an industrial dispute

seeking reinstatement with full back wages.

28.Therefore, in the present case, the Labour Court ought

to have decided only the issues that were specifically referred

to it. It was not open for the Labour Court to go beyond the

terms of reference and examine matters which were not part

of the dispute referred for adjudication.

29. By doing so, the Labour Court exceeded its jurisdiction

and committed errors in appreciating the facts and the law.

The impugned orders are therefore against the settled legal

position laid down by the Hon'ble Apex Court and this Court

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regarding the limited scope of powers under Section 10 of the

I.D. Act. The settled law, as laid down by Hon'ble Apex Court

and this Court clearly states that under Section 10 of the I.D.

Act, the labour Court must confine itself strictly to the terms

of the reference. Since the Labour Court ignored this

limitation, the impugned orders are contrary to law and

therefore, cannot be sustained.

30. In the facts of the present case, the Labour Court was

required to decide only the specific issues referred to it by the

appropriate Government. However, instead of confining itself

to the terms of the reference, the Labour Court examined

questions which were not part of the reference and granted

relief beyond what was sought. Thus, the Labour Court

travelled outside the scope of its jurisdiction.

31. For the foregoing reasons, the impugned orders cannot be

sustained and the present petitions deserve to be allowed.

Accordingly present petitions are allowed. The impugned

orders dated 27.12.2019 passed by the Labour Court in

Reference (L.C.A) Nos.103 of 2015, 104 of 2015, 105 of 2015,

106 of 2015 and 107 of 2015 are hereby quashed and set

aside. Rule is made absolute in each of the petition. The

condition imposed while granting interim relief qua

compliance of Section 17B of the I.D. Act vide orders dated

24.06.2020 and 03.07.2020 stands vacated forthwith. No

order as to costs.

Sd/-

(HEMANT M. PRACHCHHAK,J)

SURESH SOLANKI

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