http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 9

CASE NO.:

Appeal (civil) 5124 of 2004

PETITIONER:

R.M. Yellatti

RESPONDENT:

The Asst. Executive Engineer

DATE OF JUDGMENT: 07/11/2005

BENCH:

S.N. VARIAVA,Dr. AR. LAKSHMANAN & S.H. KAPADIA

JUDGMENT:

J U D G M E N T

KAPADIA, J.

The appellant questions the correctness of the judgment

of the High Court of judicature at Karnataka at Bangalore

whereby the High Court, in Appeal, allowed the writ petition

filed by the Assistant Executive Engineer (SD-I), Athani and

set aside the order of the Labour Court dated 27.10.1999

directing reinstatement with 50% back wages from the date of

the award till the date of reinstatement.

Facts necessary for the disposal of this appeal are as

follows:

Appellant was appointed as a daily waged earner by the

Assistant Executive Engineer on 26.11.1988. He worked up to

20.6.1994, on which day his services were terminated. He was

getting salary of Rs.910/- per month. On termination, appellant

claimed that he had continuously worked for more than 240

days immediately prior to 20.6.1994 (date of termination) and

that his services were wrongly terminated without complying

with the provisions of section 25-F of the Industrial Disputes

Act, 1947 (hereinafter referred to as "the 1947 Act").

Consequently, he contended that the above termination

constituted illegal retrenchment which was liable to be set

aside. The above industrial dispute was referred by the State

Government to the labour court vide reference under section

10(I)(c) of the 1947 Act. The reference was in following terms:

"Whether the management was justified in

removing the claimant from service w.e.f.

20.6.1994? If not, to what reliefs the claimant was

entitled for?"

On receipt of the said reference, the labour court issued

notices to the concerned parties. The management resisted the

reference by filing its counter statement by which the

management contended that the appellant was not a worker in

terms of section 2(s) of the 1947 Act and consequently, he was

not entitled to claim benefit of section 25-F of the said Act.

The management also submitted that the "Irrigation

department" was not an "industry" under the said 1947 Act and

consequently, the question of compliance of section 25-F did

not arise. Further, the appellant contended that the reference

was time barred.

By award dated 27.10.1999, the labour court held that the

appellant was appointed as daily waged earner and that he was

a workman under section 2(s) of the 1947 Act. The labour

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 9

court found on facts and on the basis of evidence led before it

that the appellant had worked with SD-1 at Athani continuously

for more than 240 days prior to 20.6.1994 (date of termination);

that the then Assistant Executive Engineer had issued a

certificate (Ex.W1) to the effect that the appellant had worked

from 24.11.1988 to 20.6.1994; that although the appellant had

been cross-examined on behalf of the management, there was

no material to disbelieve the certificate Ex.W1. The labour

court found that Ex.W1 was duly proved. It contained the

signature of the then Asstt. Executive Engineer. Further, the

labour court came to the conclusion that the management had

suppressed the material evidence from the Court. We quote

hereinbelow the findings given by the labour court in this

connection:

"\005 At the outset I have to state that the

respondent has not placed all the material records

before the Court and on the other hand, the

respondent has followed the method of pick and

choose and produced some records before the

Court for some period and they are marked as

Exh. M.1 to M.15. As per the evidence of MW.1

who has no personal knowledge of claimant has

spoken on the basis of records. As per the

respondent the claimant has not at all worked with

the respondent at any point of time namely with

H.B.C. Athani, Belgaum District. However, when

the respondent was called upon to produce the

N.M.R. extracts for relevant period, it has chosen

to produce Ex. M.1 to M.5 and consolidated

statement showing the period for which the

claimant had worked as on 20.6.1994. As per the

documentary evidence adduced on behalf of the

respondent and the oral version of MW.1, the

claimant had worked only for a period of 84 days

during the year 1993 and for a period of 43 days

during the year 1994 up to 20.6.1994. The

respondent has not chosen to produce the N.M.R.

extracts for a period of 12 months immediately

prior to 20.6.1994. Whether the name of the

claimant is found in such NMR extracts during the

said 12 calendar months prior to 20.6.1994 or not

is immaterial for respondent, it is for the Court to

arrive at conclusion or production of N.M.R.

records pertaining to the period of 12 calendar

months immediately prior to 20.6.1994. There is

no explanation offered on behalf of the respondent

for non-production of the said N.M.R. It is the

evidence of MW.1, the concerned NMR for the

said period are available. In my opinion MW.1

has suppressed the material evidence before the

Court. On perusing the oral evidence of MW.1 it

reveals that in order to suppress the real material,

it has not chosen to produce concerned N.M.R.\005"

On the question as to whether the Irrigation department

is an industry under the 1947 Act, the labour court followed the

decision of the Karnataka High Court holding that the Irrigation

department of the Government constituted an industry within

the meaning of section 2(j) of the 1947 Act. On the point of

limitation, the labour court held that the Limitation Act, 1963

was not applicable to the proceedings under section 10 of the

1947 Act. However, since there was a delay of three years in

raising the industrial dispute and since the appellant was only a

daily waged earner, the labour court directed the management

to reinstate the appellant into service as a daily wager with 50%

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 9

back wages from the date of the award till the date of

reinstatement.

Aggrieved by the said award, the management

challenged the award vide writ petition no.17636 of 2000. The

said writ petition was dismissed in limine vide order dated

7.6.2000.

Aggrieved by the decision of the learned Single Judge

dated 7.6.2000, the management carried the matter in appeal to

the division bench vide writ appeal no.5660 of 2000. By

impugned judgment, the division bench held that the certificate

produced by the appellant (Ex.W1) nowhere stated that the

appellant was in continuous service for 240 days; that there was

no evidence on record to show that the certificate was in fact

issued by Asstt. Executive Engineer and that the records

produced by the department showed that Ex.W1 was a

fabricated document. The division bench further observed that

the appellant herein had failed to produce the letter of

appointment, letter of termination or receipts indicating

payment of monthly salary. The division bench observed that

except the self-serving statement of the appellant in the witness

box, there was nothing on record to support his case of having

worked for 240 days. Following the judgment of this court in

the case of Range Forest Officer v. S.T. Hadimani reported in

(2002) 3 SCC 25, the division bench vide its impugned

judgment quashed the award passed by the labour court in

favour of the appellant. By the impugned judgment, the

division bench also set aside the order of the learned Single

Judge. Hence, this civil appeal.

Shri Mahale, learned advocate for the appellant

submitted that the division bench ought not to have interfered

with the concurrent findings given by the award of the labour

court dated 27.10.1999 and by the judgment of the learned

single judge dated 7.6.2000. He submitted that there was no

perversity in the findings recorded by the labour court. He

submitted that full opportunity was given to the management to

produce its records. He submitted that the management

suppressed the Nominal Muster Rolls (NMRs) which indicated

that the appellant had worked for the entire period between

22.11.1988 to 20.6.1994. It was submitted that in any event,

the entire record was not produced before the labour court

despite the management being asked by the court to do so and,

therefore, the labour court was right in coming to the

conclusion that the management had suppressed its records

from the court. In the circumstances, it was urged that the

division bench ought not to have interfered with the concurrent

findings of fact recorded by the labour court in its award dated

27.10.1999. Learned advocate further contended that the

workman had stepped into witness box; that he had tendered

and produced the certificate (Ex.W1) and that both the labour

court and the learned single judge had accepted its correctness

and, therefore, the division bench ought not to have interfered

with the said findings. Learned advocate further contended that

the appellant had worked for 240 days within the meaning of

section 25-F of 1947 Act and his non-employment constituted

retrenchment under section 2(oo) of the said Act. He

contended that the services of the appellant was terminated in

breach of section 25-F of 1947 Act and, therefore, the labour

court was right in ordering reinstatement. Learned advocate

further submitted that no reasons have been given by the High

Court for disbelieving Ex.W1 and for coming to the conclusion

that Ex.W1 was fabricated document. Learned advocate

further contended that the division bench of the High Court had

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 9

erred in placing reliance on the judgment of this court in the

case of Range Forest Officer (supra), as in the present case,

the appellant \026 workman had entered the witness box and had

produced cogent evidence in the form of certificate Ex.W1

which shows that the appellant had worked between

22.11.1988 to 20.6.1994 as a daily wager. Hence, the learned

advocate submitted that the division bench had erred in

interfering with the concurrent findings of fact.

Ms. Anitha Shenoy, learned advocate for the

management, on the other hand, urged that the "Irrigation

department" was not an "industry" as defined under section 2(j)

of the 1947 Act. She contended that the judgment of this court

in the case of Bangalore Water Supply & Sewerage Board v.

A. Rajappa reported in (1978) 2 SCC 213 has been referred to

the larger bench by a referral order dated 5.5.2005 in the case

of State of U.P. v. Jai Bir Singh reported in (2005) 5 SCC 1

and consequently, she requested this court to adjourn the matter

sine die.

On the merits of the matter, learned advocate submitted

that the burden of proof was on the appellant to show that he

had worked for 240 days in the preceding 12 months prior to

his alleged retrenchment; that the appellant-workman in the

present case had neither produced the letter of appointment nor

letter of termination and, therefore, there was nothing on record

to support his case of having worked for 240 days within the

meaning of "continuous service" as defined under section 25-B

of the 1947 Act. Learned advocate further contended that

Ex.W1 contained discrepancies and, therefore, the High Court

was right in holding that the said document was fabricated.

Learned advocate further contended that in any event Ex.W1

does not indicate as to whether the workman had worked for

each and every day between 22.11.1988 and 20.6.1994 or

whether he had worked for 240 days during the aforestated

period and in the circumstances, the labour court had erred in

coming to the conclusion that the appellant had worked for 240

days in the year preceding his termination. Therefore,

according to the learned advocate, the workman had failed to

discharge the burden of proving that he had worked for 240

days prior to the termination of his service. In this connection,

reliance was placed on the judgments of this court in the case

of Range Forest Officer (supra); Rajasthan State

Ganganagar S. Mills Ltd. v. State of Rajasthan & Others

reported in (2004) 8 SCC 161, M.P. Electricity Board v.

Hariram reported in (2004) 8 SCC 246.

At the outset, we may mention that we are not inclined to

adjourn the matter sine die pending the decision of the larger

bench as urged on behalf of the management, particularly in

view of the fact that there is nothing on record to indicate that

the management had argued the point in question. As stated

above, the labour court had ruled that the "Irrigation

department" was an "industry" in terms of section 2(j) of the

1947 Act. Against the award of the labour court, the

department had filed its writ petition in which the ground was

taken as a plea to the effect that the Irrigation department was

not an industry in terms of section 2(j) of the said Act.

However, there is nothing in the decision of the learned single

judge as well as in the impugned judgment to show as to

whether the management had argued on this aspect of the case

and, therefore, we are not inclined to await the decision of the

larger bench following referral order in the case of Jai Bir

Singh (supra). Even in the counter affidavit filed before this

court, no such plea has been taken.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 9

Now coming to the question of burden of proof as to the

completion of 240 days of continuous work in a year, the law is

well settled. In the case of Manager, Reserve Bank of India,

Bangalore v. S. Mani reported in (2005) 5 SCC 100, the

workmen raised a contention of rendering continuous service

between April, 1980 to December, 1982 in their pleadings and

in their representations. They merely contended in their

affidavits that they had worked for 240 days. The tribunal

based its decision on the management not producing attendance

register. In view of the affidavits filed by the workmen, the

tribunal held that the burden on the workmen to prove 240 days

service stood discharged. In that matter, a three-judge bench of

this court held that pleadings did not constitute a substitute for

proof and that the affidavits contained self-serving statements;

that no workman took an oath to state that they had worked for

240 days; that no document in support of the said plea was ever

produced and, therefore, this court took the view that the

workmen had failed to discharge the burden on them of proving

that they had worked for 240 days. According to the said

judgment, only by reason of non-response to the complaints

filed by the workmen, it cannot be said that the workmen had

proved that they had worked for 240 days. In that case, the

workmen had not called upon the management to produce

relevant documents. The court observed that the initial burden

of establishing the factum of continuous work for 240 days in a

year was on the workmen. In the circumstances, this court set

aside the award of the industrial tribunal ordering

reinstatement.

In the case of Municipal Corporation, Faridabad v. Siri

Niwas reported in (2004) 8 SCC 195, the employee had worked

from 5.8.1994 to 31.12.1994 as a tube-well operator. He

alleged that he had further worked from 1.1.1995 to 16.5.1995.

His services were terminated on 17.5.1995 whereupon an

industrial dispute was raised. The case of the employee before

the tribunal was that he had completed working for 240 days in

a year; the purported order of retrenchment was illegal as the

conditions precedent to section 25-F of Industrial Dispute Act

were not complied with. On the other hand, the management

contended that the employee had worked for 136 days during

the preceding 12 months on daily wages. Upon considering all

the material placed on record by the parties to the dispute, the

tribunal came to the conclusion that the total number of

working days put in by the employee were 184 days and thus

he, having not completed 240 days of working in a year, was

not entitled to any relief. The tribunal noticed that neither the

management nor the workman cared to produce the muster roll

w.e.f. August, 1994; that the employee did not summon muster

roll although the management had failed to produce them.

Aggrieved by the decision of the tribunal, the employee filed a

writ petition before the High Court which took the view that

since the management did not produce the relevant documents

before the industrial tribunal, an adverse inference should be

drawn against it as it was in possession of best evidence and

thus, it was not necessary for the employee to call upon the

management to do so. The High Court observed that the

burden of proof may not be on the management but in case of

non-production of documents, an adverse inference could be

drawn against the management. Only on that basis, the writ

petition was allowed holding that the employee had worked for

240 days. Overruling the decision of the High Court, this court

found on facts of that case that the employee had not adduced

any evidence before the court in support of his contention of

having complied with the requirement of section 25-B of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 9

Industrial Dispute Act; that apart from examining himself in

support of his contention, the employee did not produce or call

for any document from the office of the management including

the muster roll (MR) and that apart from muster rolls, the

employee did not produce offer of appointment or evidence

concerning remuneration received by him for working during

the aforementioned period. It is in this light that this court,

speaking through Hon'ble Sinha, J., has held as follows:

"15. A court of law even in a case where

provisions of the Evidence Act apply, may

presume or may not presume that if a party despite

possession of the best evidence had not produced

the same, it would have gone against his

contentions. The matter, however, would be

different where despite direction by a court the

evidence is withheld. Presumption as to adverse

inference for non-production of evidence is

always optional and one of the factors which is

required to be taken into consideration is the

background of facts involved in the lis. The

presumption, thus, is not obligatory because

notwithstanding the intentional non-production,

other circumstances may exist upon which such

intentional non-production may be found to be

justifiable on some reasonable grounds. In the

instant case, the Industrial Tribunal did not draw

any adverse inference against the appellant. It

was within its jurisdiction to do so particularly

having regard to the nature of the evidence

adduced by the respondent.

16. No reason has been assigned by the High

Court as to why the exercise of discretional

jurisdiction of the Tribunal was bad in law. In a

case of this nature, it is trite, the High Court

exercising the power of judicial review, would not

interfere with the discretion of a Tribunal unless

the same is found to be illegal or irrational."

In the case of Range Forest Officer (supra), the dispute

was referred to the labour court as to whether the workman had

completed 240 days of service. Vide award dated 10.8.1988,

the tribunal held that the services were wrongly terminated

without giving retrenchment compensation. In arriving at this

conclusion, the tribunal stated that in view of the affidavit of

the workman saying that he had worked for 240 days, the

burden was on the management to show justification in

termination of the service. It is in this light that the division

bench of this court took the view that the tribunal was not right

in placing the burden on the management without first

determining on the basis of cogent evidence that the workman

had worked for 240 days in the year preceding his termination.

This court held that it was for the claimant to lead evidence to

show that he had worked for 240 days in the year preceding his

termination; that filing of an affidavit is only his own statement

in his own favour which cannot be recorded as sufficient

evidence for any court or tribunal to come to the conclusion

that a workmen had worked for 240 days in a year. This court

found that there was no proof of receipt of salary or wages for

240 days; that letter of appointment was not produced; that

letter of termination was not produced on record and, therefore,

award was set aside.

In the case of Rajasthan State Ganganagar S. Mills Ltd.

(supra), the workman had alleged that he had worked for more

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 9

than 240 days in the year concerned, which claim was denied

by the management. The workman had merely filed an

affidavit in support of his case. Therefore, the division bench

of this court took the view that it was for the claimant to lead

evidence to show that he had worked for 240 days in the year

preceding his termination. This court observed that filing of an

affidavit was not enough because the affidavit contained self-

serving statement of the workman which cannot be regarded as

sufficient evidence for any court or tribunal to come to the

conclusion that the claimant had worked for 240 days in a year.

Further, this court found that there was no proof of receipt of

salary or wages for 240 days and, therefore, mere non-

production of the muster roll for a particular period was not

sufficient for the labour court to hold that the workman had

worked for 240 days as claimed. On the facts of that case, the

court found that even if the period for which the workman had

alleged to have worked was taken into account, as mentioned in

his affidavit, still the said workman did not fulfill the

requirement of completion of 240 days of service and,

therefore, this court set aside the award of the labour court.

In the case of M.P. Electricity Board (supra), the

workmen were engaged by the board on daily wages for

digging pits to erect electric polls. It was the case of the board

that on completion of the project, the employment was

terminated and whenever a similar occasion arose for digging

pits, the workmen were re-employed on daily wages and,

therefore, their employment was not permanent in nature nor

had the workmen completed 240 days of continuous work in a

given year. The project jobs came to an end in 1991 and the

workmen were never re-employed by the board. Being

aggrieved by the said non-employment, the workmen filed

applications under MP Industrial Relations Act seeking

permanent employment, primarily on the ground that they have

completed 240 days in a year and their discontinuation of

service amounted to retrenchment without following the legal

requirements. The board denied the allegations made in the

application before the labour court. An application was moved

before the labour court by the workmen seeking direction to the

board to produce the muster roll for the concerned period.

However, no other material was produced by the workmen to

establish the fact that they had worked for 240 days

continuously in a given year. Some of the workmen were also

examined before the labour court. However, no document was

produced in the form of letter of appointment, receipt

indicating payment of salary etc. After examining the entry in

the muster rolls, the labour court came to the conclusion that

the workmen had not worked for 240 days continuously in a

given year, hence, they could not claim permanency nor could

they term their non-employment as retrenchment. Aggrieved

by the award of the labour court, the workmen preferred an

appeal before the industrial court at Bhopal which took the

view that since the board has failed to produce the entire muster

roll for the year ending 1990, an adverse inference was required

to be drawn against the board and solely based on the said

inference, the industrial court accepted the case of the workmen

that they had worked for 240 days continuously in a given year.

Accordingly, the industrial court granted reinstatement to the

workmen with 50% back wages. Drawing of such an adverse

inference was challenged before this Court by the MP

Electricity Board. In the light of the aforestated facts, this

court opined that the industrial court or the High Court could

not have drawn an adverse inference for non-production of the

muster rolls for the years 1990 to 1992, particularly in the

absence of a specific plea by the claimants that they had

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 9

worked during the period for which muster rolls were not

produced. This court observed that initial burden of

establishing the factum of their continuous work for 240 days

in a year was on the workmen and since that burden was not

discharged, the industrial court and the High Court had erred in

ordering reinstatement solely on an adverse inference drawn

erroneously.

Analyzing 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

aforestated 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 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 earner, there will be

no letter of appointment or termination. There will also be no

receipt or proof of payment. Thus in most cases, the workman

(claimant) can only call upon the employer to produce before

the court the nominal muster roll for the given period, the letter

of appointment or termination, if any, the wage register, the

attendance register etc. Drawing of adverse inference

ultimately would depend thereafter on 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 lay 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 the concurrent findings of

fact recorded by the labour court unless they are perverse. This

exercise will depend upon facts of each case.

Now applying the above decision to the facts of the

present case, we find that the workman herein had stepped in

the witness box. He had called upon the management to

produce the nominal muster rolls for the period commencing

from 22.11.1988 to 20.6.1994. This period is the period borne

out by the certificate (Ex.W1) issued by the former Asstt.

Executive Engineer. The evidence in rebuttal from the side of

the management needs to be noticed. The management

produced five nominal muster rolls (NMRs), out of which 3

NMRs, Ex.M1, Ex.M2 and Ex.M3, did not even relate to the

concerned period. The relevant NMRs produced by the

management were Ex.M4 and Ex.M5, which indicated that the

workmen had worked for 43 days during the period 21.1.1994

to 20.2.1994 and 21.3.1994 to 20.4.1994 respectively. There is

no explanation from the side of the management as to why for

the remaining period the nominal muster rolls were not

produced. The labour court has rightly held that there is

nothing to disbelieve the certificate (Ex.W1). The High Court

in its impugned judgment has not given reasons for discarding

the said certificate. In the circumstances, we are of the view

that the division bench of the High Court ought not to have

interfered with the concurrent findings of fact recorded by the

labour court and confirmed by the learned single judge vide

order dated 7.6.2000 in writ petition no.17636 of 2000. This is

not, therefore, a case where the allegations of the workman are

founded merely on an affidavit. He has produced cogent

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

evidence in support of his case. The workman was working in

SD-1, Athani and Ex.W1 was issued by the former Asstt.

Executive Engineer, Hipparagi Dam Construction Division

No.1, Athani-591304. In the present case, the defence of the

management was that although Ex.W1 refers to the period

22.11.1988 to 20.6.1994, the workman had not worked as a

daily wager on all days during that period. If so, the

management was duty bound to produce before the labour court

the nominal muster rolls for the relevant period, particularly

when it was summoned to do so. We are not placing this

judgment on the shifting of the burden. We are not placing this

case on drawing of adverse inference. In the present case, we

are of the view that the workman had stepped in the witness

box and his case that he had worked for 240 days in a given

year was supported by the certificate (Ex.W1). In the

circumstances, the division bench of the High Court had erred

in interfering with the concurrent findings of fact.

Before concluding, we would like to make an

observation with regard to cases concerning

retrenchment/termination of services of daily waged earners,

particularly those who are appointed to work in Government

departments. Daily waged earners are not regular employees.

They are not given letters of appointments. They are not given

letters of termination. They are not given any written

document which they could produce as proof of receipt of

wages. Their muster rolls are maintained in loose sheets. Even

in cases, where registers are maintained by the Government

departments, the officers/clerks making entries do not put their

signatures. Even where signatures of clerks appear, the entries

are not countersigned or certified by the appointing authorities.

In such cases, we are of the view that the State Governments

should take steps to maintain proper records of the services

rendered by the daily wagers; that these records should be

signed by the competent designated officers and that at the time

of termination, the concerned designated officers should give

certificates of the number of days which the labourer/daily

wager has worked. This system will obviate litigations and

pecuniary liability for the Government.

Accordingly, we find merit in this appeal. We set aside

the impugned judgment of the division bench dated 3.9.2000

and we restore the award of the labour court dated 27.10.1999

in I.D. Reference No.59/97. The name of the appellant will be

restored as a daily wager in the nominal muster roll.

Accordingly, the appeal is allowed with no order as to

costs.