http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 10

CASE NO.:

Special Leave Petition (civil) 16456-16460 of 2005

PETITIONER:

M/S. SRIRAM INDUSTRIAL ENTERPRISES LTD

RESPONDENT:

MAHAK SINGH & ORS

DATE OF JUDGMENT: 08/03/2007

BENCH:

Dr.AR. Lakshmanan & Altamas Kabir

JUDGMENT:

J U D G M E N T

ALTAMAS KABIR, J.

Five different writ petitions were filed by the different

respondents in these special leave petitions before the High

Court of Judicature at Allahabad against the awards made by

the Industrial Tribunal on 20th June, 1998. The said writ

petitions having been allowed by a common judgment dated

15th April, 2005, the petitioner herein, which was the common

respondent in all the writ petitions, has filed these special

leave petitions questioning the judgment and order of the

Allahabad High Court.

The writ petitioners/respondents herein claimed to have

been appointed by the petitioner between the years 1987-1991

and it is their case that they worked continuously from the

date of their appointment till they were retrenched in the

years 1994 and 1995 respectively. The specific case made out

by the respondents is that although they have worked

continuously from the date of their appointment for more

than 240 days in a calendar year, they have been illegally

retrenched from service in violation of the provisions of Section

6 N of the U.P. Industrial Disputes Act, 1947 ( for short 'the

U.P. Act').

The respondents raised a dispute relating to their

retrenchment which was ultimately referred by the State

Government to the Tribunal under Section 4 K of the aforesaid

Act to determine as to whether the termination of the services

of the workmen by the employer was just and/or illegal.

Pursuant to the said References, five separate Adjudication

Cases, being Nos. 134,139,132, 129 and 127 of 1995 were

registered by the Presiding Officer, Industrial Tribunal (V),

U.P.

In support of their contention that they had been illegally

retrenched, the respondents submitted that not only had they

worked continuously from the date of their appointment till

their services were terminated, but that they had been

allowed grade number and provident fund number and other

service benefits. It is also the case of the respondents that as

they had demanded other benefits to which they were entitled,

their services were terminated without any notice and

compensation being given to them. They accordingly claimed

reinstatement in service with all back wages.

The case of the petitioner herein is that since the sugar

industry is a seasonal industry, most of the work force are

engaged as casual and temporary hands during the

operational season and that this state of affairs is common to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 10

the entire sugar industry. It was also the case of the petitioner

that the real dispute was not with regard to the termination of

the services of the workmen, but with regard to their claim for

regularisation of their services. It was also the case of the

petitioner that the services of the workmen had never been

terminated since none of them had worked for 240 days in the

last 12 calendar months immediately preceding their alleged

date of termination.

As recorded by the Tribunal, the respondents had

produced bonus slips, wage slips, deduction of provident

fund slips and attendance cards for various months and other

documents available to them. They had also requested the

petitioner herein to produce certain documents which were in

its custody and included the Attendance Register, payment of

bonus record and various other documents relating to the

engagement of the respondents as workmen under it.

Admittedly, on behalf of the petitioner herein, only the extract

of the attendance record of the last 12 calendar months of the

workmen immediately preceding the date of their

retrenchment had been produced from which it was evident

that none of the workmen had worked for more than 240 days

during the said period. The Tribunal also noted that the

petitioner had failed to assign any cogent reason for not

producing the Attendance Registers of the previous years

and allowed the workmen to lead secondary evidence in

support of their case.

The Tribunal did not lay any importance to the non-

production of the documents asked for on the ground that

the petitioner did not keep such record relating to the

temporary hands and relied on the documents that had been

produced to come to a finding that the workmen had not put

in 240 days of service in a calendar year preceding the

termination of their services.

Being aggrieved by the awards passed by the Tribunal,

the workmen filed separate writ petitions praying for quashing

of the impugned awards and declaring their retrenchment to

be illegal, together with a prayer to reinstate them in service

with full back wages and continuity of service.

Drawing an adverse inference against the petitioner

herein for non-production of the documents in its possession

and holding that the petitioner had failed to discharge the

onus and disprove the workmens' claim, the High Court held

that under the circumstances the Tribunal should have

drawn an adverse presumption under Section 114 Illustration

(g) of the Indian Evidence Act, 1872 against the petitioner.

Taking further note of the expression "continuous service"

under Section 2 (g) of the U.P. Act, the High Court found that

the termination of service of the workmen was in violation of

Section 6 N of the aforesaid Act. Basing its decision on its

aforesaid findings, the High Court quashed the awards passed

in the adjudication cases referred to above and directed the

petitioner herein to reinstate the workmen/respondents

herein with continuity of service and half back wages with

effect from 1995, being the date of their illegal retrenchment.

These special leave petitions have been filed against the

common judgment of the High Court by which the five writ

petitions were disposed of with the above-mentioned

directions.

The case made out by the petitioner herein before the

Tribunal and the High Court was reiterated by Mr. Ashok

Desai, learned senior advocate, appearing for the petitioner.

The main thrust of his submission was that since the

respondents had not completed 240 days of service in the

year preceding the date of alleged termination, the High

Court had erroneously reversed the findings of the Tribunal

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 10

on such score. Mr. Desai reiterated the contention of the

petitioner that work in the sugar industry was of a seasonal

nature and most of the work force was engaged as casual

labour on a temporary basis, which was generally confined to

six to seven months in a year. Mr. Desai submitted that the

Tribunal had correctly assessed the situation and the High

Court by drawing an adverse presumption for non-production

of the Attendance Register of prior years, had erroneously

arrived at the conclusion that the respondents-workmen had,

in fact, worked for more than 240 days in a calendar year prior

to termination of their services.

Mr.Desai submitted that it is settled law that the onus of

proof of having worked for 240 days within a calendar year

is on the employee. According to Mr. Desai, the employee was

required to discharge the burden of proving that he had

actually worked for 240 days in a calendar year, but the High

Court had wrongly shifted the onus on the employer in

contravention of the law as laid down by this Court in Range

Forest Officer vs. S.T. Hadimani, reported in (2002) 3 SCC

25. In the said case, this Court while considering a similar

issue observed as follows:-

"In our opinion, the Tribunal was not right

in placing the onus on the Management

without first determining on the basis of

cogent evidence that the respondent had

worked for more than 240 days in the year

preceding his termination. It was the case

of the claimant that he had so worked but

this claim was denied by the appellant. It

was then for the claimant to lead evidence

to show that he had, in fact, worked for 240

days in the year preceding his termination."

Mr. Desai also referred to the decision of this Court in the

case of Municipal Corporation, Faridabad vs. Siri Niwas,

reported in (2004) 8 SCC 195. In the said case, the

respondent's case relating to his termination from service had

been referred to the Labour Court. His case before the

Tribunal was that he had completed working for 240 days in a

year and the order of retrenchment was, therefore, illegal as

conditions precedent for passing such an order as contained

in Section 25F of the Industrial Disputes Act, 1947, (for short

'the Central Act') had not been complied with. Section 25F of

the Central Act is reproduced hereinbelow:-

Conditions precedent to retrenchment

of workmen.

"25F. 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 \026

(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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 10

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."

The contention of the appellant in the said case however

was that the respondent had worked only for 136 days during

the preceding 12 months on daily wages and had no lien

over the said job. In that background, this Court held that

the burden of proof was on the respondent-workman to show

that he had worked for 240 days in the preceding 12 months

prior to his retrenchment.

The same view was expressed by this Court in

Surendranagar District Panchayat vs. Dahyabhai

Amarsinh, reported in (2005) 8 SCC 750, wherein this Court

while referring to the decisions of this Court in the case of

Range Forest Officer (supra) and Municipal Corporation,

Faridabad (supra) and two other decisions in the case of

Rajasthan State Ganganagar S. Mills Ltd. vs. State of

Rajasthan and Anr., reported in (2004) 8 SCC 161 and M.P.

Electricity Board vs. Hariram, reported in (2004) 8 SCC

246, reiterated that the burden of proof lies on the workman to

show that he had worked continuously for 240 days in the

preceding one year prior to his retrenchment and it is for the

workman to adduce evidence apart from examining himself

to prove the fact that he had been employed for the said

period by the employer.

Various other decisions were also referred to by Mr.

Desai on the aforesaid point which are in consonance with

the decision of this Court in Range Forest Officer (supra).

Mr. Desai also contended that drawing an adverse

presumption for non-production of evidence is not applicable

in all cases where other circumstances may exist on the basis

whereof such intentional non-production may even be found

to be justifiable on reasonable grounds. In the instant case,

Mr. Desai submitted that since in paragraph 11 of the

respondent's written statement before the Industrial Tribunal

the pleading was restricted to the fact that he had worked for

more than 240 days in the year preceding the date of

termination, the appellant had thought it fit to produce the

Attendance Register for the said period only, namely, for the

period comprising the year preceding the date of termination

of the services of the respondents. In fact, it was the case of

the appellant before the Tribunal, as also the High Court,

that the Appellant-company did not maintain the records in

respect of temporary posts. He urged that since the workmen

had produced various documents in support of their claim

that they had worked continuously for more than 240 days

they should also have proof of their having worked for 240

days in any preceding year which could have been produced

before the Tribunal in order to prove that they had actually

worked for 240 days continuously during 12 calendar

months in any year prior to termination of their services. Mr.

Desai submitted that the respondents had failed to discharge

their onus of proving the aforesaid fact and the Tribunal had

rightly rejected their contention.

Mr. Desai reiterated the fact that in one case, the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 10

respondent had worked for only 162.5 days in the 12 months

preceding the date of termination of his services. Mr. Desai

also stated that the respondent had not worked at all in the

months of April, May, July, September and December, 1994

which fact had not been denied on behalf of the respondents.

Mr. Desai contended that most of the documents asked

to be produced on behalf of the respondents were irrelevant

to the fact at issue since even the Tribunal had framed an

issue as to whether the concerned workman had worked for

more than 240 days during the last one year of service. It is

on such basis that the Attendance Register for the preceding

year had been produced on the basis whereof the Tribunal

came to the finding that the respondent had not put in more

than 240 days of service on 1st February, 1995.

Mr. Desai urged further that the mere statement on

affidavit of a workman that he had worked for 240 days

continuously does not constitute sufficient proof in the

absence of other evidence. The said principle was referred to

in the Range Forest Officer (supra) case wherein it was held

that filing of an affidavit is only the statement made by the

workman in his own favour which could not be regarded as

sufficient evidence for any Court or Tribunal to arrive at a

conclusion that the workman had, in fact, worked for 240

days in a year. It was submitted that the same principle was

reiterated by this Court in the case of RBI vs. S. Mani,

reported in (2005) 5 SCC 100.

Mr. Desai submitted that while the Tribunal had

correctly assessed the legal position, the High Court had

wrongly shifted the burden of proving that the workman had

worked for 240 days or more in a calendar year on the

employer. It was submitted that having proceeded on such

erroneous basis, the High Court had arrived at a wrong

conclusion, in the absence of any other material evidence, that

the respondents had, in fact, worked for more than 240 days

in a calendar year preceding the date of termination of their

services and such finding was, therefore, liable to be set

aside.

Mr. Viswanathan, learned advocate, who appeared for

the workmen submitted that while the High Court had not

disturbed the findings of fact, it had only corrected the

jurisdictional error of the Labour Court which failed to

consider the difference in the definition of "continuous

service" mentioned in Section 25B 2(a) of the Central Act

and in Section 2 (g) of the U.P. Act. He pointed out that in the

definition given in the U.P. Act, the word "preceding" has not

been used. Consequently, it was urged that Section 2 (g) of

the U.P. Act does not require a workman to prove that he had

worked for 240 days continuously only during the preceding

period of 12 months prior to termination of his services. The

workman was, therefore, entitled to show that he had worked

for 240 days continuously in a calendar year for any year prior

to termination of his services. Mr. Viswanathan submitted

that the said period was not confined under the U.P. Act

only to the year preceding the date of termination.

In support of his submissions Mr. Viswanathan relied on

the decision of this Court in U.P. Drugs and

Pharmaceuticals Company Ltd. vs. Ramanuj Yadav and

Ors. reported in (2003) 8 SCC 334, where the said position

has been examined and explained.

Regarding Mr. Desai's submissions that this Court had

consistently laid down that it is for the workmen to prove that

they had worked for 240 days in a calendar year, Mr.

Viswanathan submitted that this Court had in the case of

R.M. Yellatty vs. Assistant Executive Engineer, reported in

(2006) 1 SCC 106, observed as under:-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 10

"Analysing the above decisions of this

Court, it is clear that the provisions of the

Evidence Act in terms do not apply to the

proceedings under Section 10 of the

Industrial Disputes Act. However,

applying general principles and on

reading the aforesaid judgments, we find

that this Court, has repeatedly taken the

view that the burden of proof is on the

claimant to show that he had worked for

240 days in a given year. This burden is

discharged only upon the workman

stepping up in the witness box. This

burden is discharged upon the workman

adducing cogent evidence, both oral and

documentary. In cases of termination of

services of daily-waged earners, there will

be no letter of appointment of

termination. There will also be no

receipt of proof of payment. Thus in

most cases, the workman (the claimant)

can only call upon the employer to

produce before the court the nominal

muster roll for the given period, the letter

of appointment of termination, if any, the

wage register, the attendance register,

etc. Drawing of adverse inference

ultimately would depend thereafter on the

facts of each case. The above decisions

however make it clear that mere

affidavits or self-serving statements

made by the claimant workman will not

suffice in the matter of discharge of the

burden placed by law on the workman to

prove that he had worked for 240 days in

a given year. The above judgments

further laid down that mere non-

production of muster rolls per se

without any plea of suppression by the

claimant workman will not be the ground

for the Tribunal to draw an adverse

inference against the management.

Lastly, the above judgments lay down

the basic principle, namely, that the High

Court under Article 226 of the

Constitution will not interfere with

concurrent findings of fact recorded by

the Labour Court unless they are

perverse. This exercise will depend upon

the facts of each case."

Mr. Viswanathan submitted that in these cases, the

workmen had discharged their initial onus by producing

whatever documents were in their custody. The onus had

thereafter shifted to the petitioner when the workmen asked

for production of Attendance Registers and the Muster Rolls

from 1991 onwards. On the failure of the petitioner to

produce the said documents, the High Court had rightly

drawn an adverse presumption.

Mr. Viswanathan then urged that in appropriate cases,

the High Court in Writ Jurisdiction could interfere with the

findings of fact of the courts below as had been held by this

Court in the case of Trambak Rubber Industries Ltd. vs.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 10

Nashik Workers Union And Ors., reported in (2003) 6 SCC

416. In any event, the powers of judicial review of the High

Court under Article 227 are very wide and it empowered the

High Court to ensure that the courts and tribunals, inferior

to the High Court, discharged their duties and obligations.

Mr. Viswanathan urged that the workmen had produced

whatever documents were in their possession, such as,

attendance cards, wage slips, bonus slips, provident fund

deduction slips from 1991 onwards and since other relevant

documents such as attendance registers and muster rolls were

with the petitioners, the workmen filed an application for

summoning the said documents which were, not however,

produced by the petitioner on account whereof the High Court

was compelled to draw an adverse presumption in terms of

Section 114, Illustration (g) of the Evidence Act.

Mr. Viswanathan submitted that while the Tribunal had

failed to notice the difference in the definition of the

expression "continuous service" in Section 6 N of the U.P. Act

as against its definition in Section 25 B in the Central Act, the

High Court had correctly interpreted the same in the

judgment impugned in these proceedings.

Mr. Viswanathan submitted that no case had been made

out on behalf of the petitioner to interfere with the findings of

the High Court and the directions ultimately given therein to

reinstate the respondents-workmen and to pay them half

their back wages with effect from 1995 when their services

were illegally terminated.

Having carefully considered the submissions made on

behalf of the respective parties and the statutory provisions,

we are of the view that a decision in this matter will depend

on the understanding of the expression "continuous service"

as used in Section 6 N read with Section 2 (g) of the U.P. Act

as against its usage in Section 25 B (2) (a) (ii) of the Central

Act. In order to appreciate the difference between the two

provisions, Sections 6N and 2(g) of the U.P. Act and Section

25 B 2 (a) (ii ) of the Central Act are reproduced hereinbelow:-

"6-N. 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\027

(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

notice:

Provided that no such notice shall be

necessary if the retrenchment is under an

agreement which specifies a date for the

termination of service;

(b) the workman has been paid, at the

time of retrenchment,

compensation which shall be

equivalent to fifteen days' average

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 10

pay for every completed year of

service or any part thereof in

excess of six months, and

(c) notice in the prescribed manner is

served on the State Government.

2g. 'Continuous service' means

uninterrupted services, and

includes service which may be

interrupted merely on account of

sickness or authorized 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,

and a workman, who during a

period of twelve calendar months

has actually worked in an

industry for not less than two

hundred and forty days shall be

deemed to have completed one

year of continuous service in the

industry.

Explanation.\027In computing the number

of days on which a workman has

actually worked in an industry, the

days on which \026

(i) he has been laid off under the

agreement or as permitted by

standing order made under the

Industrial Employment (Standing

Orders) Act, 1946, or under this

Act or under any other law

applicable to the industrial

establishment, the largest

number of days during which he

has been so laid off being taken

into account for the purposes of

this clause,

(ii) he has been on leave with full

wages, earned in the previous

year, and

(iii) in the case of a female, she has

been on maternity leave; so

however that the total period of

such maternity leave shall not

exceed twelve weeks, shall be

included;

Definition of continuous service.

25B. For the purposes of this

Chapter,-

(2) Where a workman is not in

continuous 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 10

employer\027

(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\027

(ii) two hundred and forty days,

in any other case;"

As pointed out by Mr. Viswanthan, the exclusion of the

word "preceding" from Section 2 (g) of the U.P. Act indicates

that a workman in order to be in continuous service may have

worked continuously for a period of 240 days in any calendar

year during his period of service. In fact, such an

interpretation has already been given by this Court in the

case of U.P. Drugs and Pharmaceuticals Company Ltd.

(supra). The case made out by the respondents before the

Tribunal was also on the same lines in the Adjudication cases

filed before the labour court, where the respondents had

made out a case that they had never worked as temporary

hands but had worked continuously from 26th February, 1991

to 31st January, 1995 without break.

In the light of the aforesaid case made out by the

respondents, the Tribunal was persuaded on behalf of the

petitioner herein to decide the case of the workmen on the

basis of the materials produced by the petitioner for the year

preceding the date of termination of their services from which

it was shown that the workmen had not completed 240 days

of continuous service in the said year.

The said approach, in our view, was erroneous in view

of the decision of this Court in the case of U.P. Drugs and

Pharmaceuticals Company Ltd. (supra). The petitioner

had wrongly described the documents relating to attendance

for the years 1991 onwards as far as the respondents are

concerned, as being irrelevant and the Tribunal has also

accepted the said reasoning. Consequently, instead of

drawing an adverse presumption for non-production of the

said records, the Tribunal accepted the contention of the

petitioner that the workmen had not worked for more than

240 days in the year preceding the date of their termination

nor had the workmen filed any proof to show otherwise.

In our view, the High Court adopted the correct approach

while deciding the controversy between the parties upon a

correct understanding of the law as contained in Section 6 N

read with Section 2 (g) of the U.P. Act which is applicable to

these petitions.

Having correctly interpreted the provisions of Section 6 N

of the U.P. Act, the High Court rightly drew an adverse

presumption for non-production of the Attendance Registers

and the Muster Rolls for the years 1991 onwards. The best

evidence having been withheld, the High Court was entitled to

draw such adverse inference. The views expressed by this

Court on the question of burden of proof in Range Forest

Officer's case (supra) were watered down by the subsequent

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10

decision in R.M. Yellatty's case (supra) and in our view the

workmen had discharged their initial onus by production of

the documents in their possession.

On the question of judicial review, the submissions made

by Mr. Viswanathan has force and we are inclined to accept

the same.

In view of what has been indicated hereinabove, we are

satisfied that no interference is called for with the judgment

and directions given by the High Court which had been

impugned in these petitions and the special leave petitions

are accordingly dismissed. Interim order dated 16th August,

2005, stands vacated.

There will be no order as to costs.