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CASE NO.:

Appeal (civil) 6511 of 2005

PETITIONER:

Surendranagar District Panchayat

RESPONDENT:

Dahyabhai Amarsinh

DATE OF JUDGMENT: 25/10/2005

BENCH:

S.N. Variava & P.P. Naolekar

JUDGMENT:

JUDGMENT

(Arising out of SLP) No.24805 of 2003)

P.P. Naolekar, J.

Leave granted.

This appeal is directed against the Judgment of the

Division Bench of the High Court confirming the order of the

Single Judge and that of the Industrial Tribunal whereby the

appellant was directed to reinstate the respondent. The

brief facts of the case are that the services of the

respondent was terminated by an order dated 15.8.1985.

On 1.6.1992, i.e., nearly after 7 years the respondent sent a

Demand Notice to the appellant and ultimately the dispute of

termination of service of Respondent was referred to the

Industrial Tribunal. The respondent filed a claim petition

alleging therein that he was in service of the appellant for

more than ten years at the wages of Rs.10/- per day till he

had been terminated by an order dated 5.7.1985. It is

alleged that before the order of termination was issued,

provisions of the Industrial Disputes Act were not complied

with. An application was moved before the Labour Court for

direction to the employer-appellant to produce muster roll,

salary register from the year 1976 to 1986. The appellant

entered appearance and filed its counter alleging that the

respondent himself stopped coming to work; that there was

a gross delay of seven years in raising the dispute. The

workman was never engaged permanently and he was

employed for miscellaneous work i.e. whenever there was

work, he was called for it. It is alleged that the workman

had not completed 240 days of continuous service in the 12

months preceding the date of termination of his services. He

had worked for 114 days in the year 1982, 63 days in 1983,

124 days in 1984 and 64 days in 1985 and thus there was

no necessity for complying with legal requirement, before

terminating the service of the respondent, of following the

procedure laid down in Section 25F of the Industrial Disputes

Act.

The respondent examined himself and deposed

that he was employed for 10 years at the salary of Rs.470

per months whereas Mr. Vinod Misra, an official from the

appellant side was examined to show that the workman

never worked for 240 days in a year.

Before the Labour Court, oral evidence was given

by the respondent. The Labour Court relied on the oral

evidence of the respondent-workman and drew an adverse

inference for non-production of muster roll and the salary

register from the year 1976 to 1986 and held that the

respondent-workman had worked for more than 240 days

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and therefore his termination was illegal. The Labour Court

directed the reinstatement of the workman with back wages

of 20% from the date of reference for non-compliance of

sections 25 F, 25 G and 25 H.

The learned Single Judge dismissed the petition.

A letter patent appeal was filed and the Division Bench held

that the Labour Court was right in holding that the workman

by his oral statement had proved his case. Not only that the

workman under Ex.4, called upon the appellant-Panchayat

to produce his salary Register and muster roll from 1976 to

1986 and also to produce the seniority list of the workmen,

which were not produced. On the non-production by the

appellant, of the said documents the Labour Court had

rightly drawn an adverse inference against the appellant and

rightly held that the workman had worked for 240 days in a

year. The Court also held that one junior was retained,

whereas service of respondent was terminated.

Consequently, the Letters Patent Appeal was dismissed.

That is how the appellant has come before this Court,

challenging the order of reinstatement.

It is contended by the learned counsel for the

appellant-Panchayat that the Supreme Court by its number

of decisions has categorically held that the initial burden of

proof that the workman has worked for 240 days in a year

preceding the date of termination, lies on the workman and

that the workman has failed to discharge that burden. It is

further urged that it is not the case of the respondent-

workman that he was in continuous service of the Panchayat

for one year within the meaning of sub-section (1) of

Section 25B of the Industrial Disputes Act. The case of the

workman-respondent was that he had worked for 240 days

with the employer in a year, therefore, necessarily the

dispute raised by the workman, fall under sub-section (2) of

Section 25B of the Industrial Disputes Act, to be regarded as

his continuous service, wherein the workman had to prove

that he had actually worked for 240 days during the period

of 12 calendar months preceding the date of termination, to

be retrenchment under Section 2(oo) of the Act. The non-

production of the 10 years record by the employer does not

call for drawing an adverse inference against the Panchayat.

On the other hand, learned counsel for the respondent has

urged that the employer being in possession of the relevant

material, is duty bound to produce it and non-production of

the record, called for by the Labour Court, the Labour Court

was right in drawing an adverse inference. He further

contended that the employer being in possession of the

necessary material, burden lies on the employer to prove

that the workman had not worked for 240 days in a year

preceding the relevant period.

On the basis of the rival contention, it is necessary

for us to consider the scope and ambit of the relevant

provisions, namely Section 2 (oo), Section 25B and Section

25F of the Industrial Disputes Act. The appropriate

provisions are reproduced below:

Section 2(oo)

"retrenchment" means the termination by the

employer of the service of a workman for any reason

whatsoever, otherwise than as punishment inflicted by

way of disciplinary action, but does not include -

a) voluntary retirement of the workman; or

b) retirement of the workman on reaching the age of

superannuation if the contract of employment between

the employer and the workman concerned contains a

stipulation in that behalf; or

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bb) termination of the service of a workman as a result

of the non-renewal of the contract of employment between

the employer and the workman concerned on its expiry or

of such contract being terminated under a stipulation in

that behalf contained therein; or

c) termination of the service of a workman on the

ground of continued ill-health;

Section 25B: Definition of Continuous Service: - For

the purposes of this Chapter -

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

for a period if he is, for that period, in uninterrupted

service, including service which may be interrupted on

account of sickness or authorized leave or an accident or

as strike which is not illegal, or a lock-out or a cessation of

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

workman;

(2) where a workman is not in 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 employer --

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

period of twelve calendar months preceding the date with

reference to which calculation is to be made, has actually

worked under the employer for not less than --

(i) one hundred and ninety days in the case

of a workman employed below ground in a

mine ; and

(ii) two hundred and forty days, in any other

case;

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

period of six calendar months preceding the date with

reference to which calculation is to be made, has actually

worked under the employer not less than --

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

workman employed below ground in a mine;

and

(ii) one hundred and twenty five days, in any

other case.

Explanation-For the purposes of clause (2), the number of

days on which a workman has actually worked under an

employer shall Include the days on which --

(i) he has been laid-off under an agreement or as

permitted by Standing Orders made under the Industrial

Employment (Standing Orders) Act, 1946 (20 of 1946), or

under this Act or under any other law applicable to the

industrial establishment;

(ii) he has been on leave with full wages, earned in the

previous years ;

(iii) he has been absent due to temporary disablement

caused by accident arising out of and in the course of his

employment ; and

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

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

leave does not exceed twelve weeks.

Section 25F - Conditions precedent to retrenchment

of workmen: - No workman employed in any industry

who has been in continuous service for not less than one

year under an employer shall be retrenched by that

employer until --

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(a) the workman has been given one

month's notice in writing indicating the reasons

for retrenchment and the period of notice has

expired, or the workman has been paid in lieu

of such notice, wages for the period of the

notice ;

(b) the workman has been paid, at the time

of retrenchment, compensation which shall be

equivalent to fifteen days' average pay for

every completed year of continuous service or

any part thereof in excess of six months; and

(c) notice in the prescribed manner is served

on the appropriate Government or such

authority as may be specified by the

appropriate Government by notification in the

Official Gazette.

As per Section 25F, no workman who is in

continuous service for not less than one year under an

employer shall be retrenched by that employer unless

conditions laid therein are fulfilled. The retrenchment is

defined in Clause (oo) of Section 2 of the Industrial Disputes

Act 14 of 1947 (hereinafter referred to as Act). Under the

definition termination of the service of a workman by the

employer by any reason whatsoever, otherwise than, as a

punishment, by way of disciplinary action, would constitute

retrenchment except in cases accepted in the Section itself,

they are :- i) a voluntary retirement of a workman; ii)

retirement of a workman on reaching the age of

superannuation; iii) termination of the service of a workman

as a result of non-renewal of the contract of employment; or

iv)termination of the service on the ground of continued ill-

health of the workman. Unless these reasons are existed

and proved, termination by the employer of the service of a

workman for any reason, would constitute retrenchment.

Therefore, if the employer is to retrench the workmen

employed in his industry who is in continuous service has to

follow the provisions of Section 25F of the Act. To attract

provisions of Section 25F, the workman claiming protection

under it, has to prove that there exists relationship of

employer and employee;that he is a workman within the

meaning of Section 2(s) of the Act; the establishment in

which he is employed is an industry within the meaning of

the Act and he must have put in not less than one year of

continuous service as defined by Section 25B under the

employer. These conditions are cumulative. If any of these

conditions are missing the provisions of Section 25F will not

attract. To get relief from the court the workman has to

establish that he has right to continue in service and that his

service has been terminated without complying with the

provisions of Section 25F of the Act. The Section postulates

three conditions to be fulfilled by an employer for getting a

valid retrenchment, namely :-

i) one month's clear notice in writing indicating the

reasons for retrenchment or that the workman has

been paid wages for the period of notice in lieu of

such notice;

ii) payment of retrenchment compensation which

shall be equivalent to 15 days average pay for every

completed year of continuous service or any part

thereof, in excess of six months;

iii) a notice to the appropriate Government in the

prescribed manner.

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To attract the provisions of Section 25F, one of the

condition required is that the workman is employed in any

industry for a continuous period which would not be not less

than one year. Section 25B of the Act defines continuous

service for the purposes of Chapter V-A "Lay-off and

Retrenchment". The purport of this Section is that if a

workman has put in an uninterrupted service of the

establishment, including the service which may be

interrupted on account of sickness, authorized leave, an

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

of work, that is not due to any fault on the part of the

workman, shall be said to be a continuous service, for that

period. Thus the workmen shall be said to be in continuous

service for one year i.e., 12 months irrespective of the

number of days he has actually worked with interrupted

service, permissible under Section 25B. However, the

workmen must have been in service during the period, i.e.,

not only on the date when he actually worked but also on

the days he could not work under the circumstances set out

in Sub-Section (1). The workmen must be in the

employment of the employer concerned on the days he has

actually worked but also on the days on which he has not

worked. The import of Sub Section(1) of Section 25B is

that the workmen should be in the employment of the

employer for the continuous, uninterrupted period for one

year except the period the absence is permissible as

mentioned hereinabove. Sub-section (2) of Section 25B

introduces the fiction to the effect that even if the workman

is not in continuous service within the meaning of Clause (i)

of Section 25-B for the period of one year or six months he

shall be deemed to be in continuous service for that period

under an employer if he has actually worked for the days

specified in clause (a) and (b) of Sub-s(2). By the legal

fiction of Sub-s2(a) (i), the workmen shall be deemed to be

in continuous service for one year if he is employed

underground in a mine for 190 days or 240 days in any

other case. Provisions of the Section postulate that if the

workmen has put in at least 240 days with his employer,

immediately prior to the date of retrenchment, he shall be

deemed to have served with the employer for a period of

one year to get the benefit of Section 25F.

For the purposes of calculation of number of days

worked by the employee, by fiction his days of absence from

work have been included if the workman has been laid off

under an agreement or as permitted by Standing Orders

made under the Industrial Employment (Standing Orders)

Act 1946, (20 of 1946), or under the Industrial Disputes Act

1947, or in any other law applicable to the industrial

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

in the previous year; (iii) has been absent due to temporary

disablement caused by accident arising out of and in the

course of employment ; and (iv) has been on maternity

leave, in case the employee is a female, however, that the

total number of such maternity leave does not exceed 12

weeks.

In S.K. Verma vs. The Central Government

Industrial Tribunal-cum-Labour Court, New Delhi, AIR

1981 S.C. 422, speaking for three Judges Bench, O.

Chinnappa Reddy, J. while considering the original provisions

of Section 25B and the amendment brought about by Act 36

of 1964 of Section 25B of the Act, has said that Section 25F

requires that a workman should be in a continuous service

for not less than one year under an employer before that

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provision applies. While so, present, S.25-B(2) steps in and

says that even if a workman has not been in continuous

service under an employer for a period of one year, he shall

be deemed to have been in such continuous service for a

period of one year, if he has actually worked under the

employer for 240 days in the preceding period of twelve

months.

In the matter of Mohan Lal vs. Management

of M/s. Bharat Electronics Ltd., (1981) 3 S.C.C. 225,

this Court has said that sub-s.(2) of Section 25B

comprehends a situation where a workman is not in

continuous service within the meaning of sub-section (1) for

a period of one year or six months, he shall be deemed to be

in continuous service under an employer for a period of 12

months just preceding the date with reference to which

calculation is to be made, has actually worked under that

employer for not less than 240 days. It is not necessary for

the purpose of Sub-s. (2)(a) that the workman should be in

service for a period of one year and that his service is

continuous service within the meaning of sub-s.(1). If his

case is governed by sub-s.(1) then it need not be covered

by sub-s.(2). Sub-s.(2) envisages a situation not governed

by sub-s.(1) and sub-s.(2) provides for a fiction to treat a

workman in continuous service for a period of one year

despite the fact that he has not rendered uninterrupted

service for one year but has rendered service for a period

of 240 days during the period of 12 Calendar months

counting backwards and just preceding the relevant date,

being the date of retrenchment.

In the matter of Workman of American Express

International Banking Corporation vs. Management of

American Express International Banking Corporation

reported in 1985 (4) S.C.C. 71, the Court has said that the

explanation of Section 25 B is not exhaustive. It does not

purport that only those days which are mentioned in the

Explanation to Section 25B(2) of the Act should be taken

into account for the purpose of calculating the number of

days on which the workman had actually worked though he

had not worked on those days. The Court said that the

expression "actually worked under the employer" is only

clarificatory and cannot be used to limit the expanse of the

main provision. The expression "actually worked under the

employer" is capable of comprehending the days during

which the workman was in employment and was paid wages

by the employer and there is no reason why the expression

should be limited by the explanation.

In the matter of Standard Motor Products of

India Ltd. vs. Parthasarthy, (1985) 4 S.C.C. 78, this

Court has said that the actual working for less than 240 days

would include Sundays and other paid holidays if the

workman is in employment of the employer although for less

than a period of 12 months.

These decisions in unambiguous words laid down

that Sub-s.(1) and (2) of Section 25B comprehends different

situations for the calculation of continuous service for not

less than one year and continuous service which is less than

one year but for 240 days in 12 months preceding the date

of termination under an employer.

In Mohan Lal vs. Management of M/s. Bharat

Electronics Ltd. (1981) 3 SCC 225, it is said by this

Court that before a workman can claim retrenchment not

being in consonance of Section 25F of the Industrial

Disputes Act, he has to show that he has been in continuous

service of not less than one year with the employer who had

retrenched him from service.

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In Range Forest Officer vs. S.T. Hadimani,

(2002) 3 S.C.C. 25 - (At Page 26, Para 3), this Court

held that "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. Filing of an affidavit is only his

own statement in his favour and that cannot be regarded as

sufficient evidence for any court or tribunal to come to the

conclusion that a workman had, in fact, worked for 240 days

in a year. No proof of receipt of salary or wages for 240

days or order or record of appointment or engagement for

this period was produced by the workman. On this ground

alone, the award is liable to be set aside."

More recently, in Rajasthan State Ganganagar

S. Mills Ltd. vs. State of Rajasthan & Another, (2004) 8

S.C.C. 161, Municipal Corporation, Faridabad vs. Siri

Niwas, (2004) 8 S.C.C. 195 and M.P. Electricity Board

vs. Hariram, (2004) 8 S.C.C. 246, this Court has

reiterated the principal 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 alleged

retrenchment and it is for the workman to adduce an

evidence apart from examining himself to prove the factum

of his being in employment of the employer.

In the light of the aforesaid, it was necessary for

the workman to produce the relevant material to prove that

he has actually worked with the employer for not less than

240 days during the period twelve calendar months

preceding the date of termination. What we find is that apart

from the oral evidence the workman has not produced any

evidence to prove the fact that he has worked for 240 days.

No proof of receipt of salary or wages or any record or order

in that regard was produced; no co-worker was examined;

muster roll produced by the employer has not been

contradicted. It is improbable that workman who claimed to

have worked with the appellant for such a long period would

not possess any documentary evidence to prove nature of

his engagement and the period of work he had undertaken

with his employer. Therefore, we are of the opinion that the

workman has failed to discharge his burden that he was in

employment for 240 days during the preceding 12 months of

the date of termination of his service. The Courts below

have wrongly drawn an adverse inference for non production

of the record of the workman for ten years. The scope of

enquiry before the Labour Court was confined to only 12

months preceding the date of termination to decide the

question of continuation of service for the purpose of Section

25F of the Industrial Disputes Act. The workman has never

contended that he was regularly employed in the Panchayat

for one year to claim the uninterrupted period of service as

required under Section 25B(1) of the Act. In the fact &

situation and in the light of the law on the subject, we find

that the workman-respondent is not entitled for the

protection or compliance of Section 25F of the Act before his

service was terminated by the employer. As regards non-

compliance of Sections 25G and 25H suffice is to say that

Witness Vinod Mishra examined by the appellant has stated

that no seniority list was maintained by the department of

daily wagers. In the absence of regular employment of the

workman, the appellant was not expected to maintain

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seniority list of the employees engaged on daily wages and

in the absence of any proof by the respondent regarding

existence of the seniority list and his so called seniority no

relief could be given to him for non-compliance of

provisions of the Act. The courts could have drawn adverse

inference against the appellant only when seniority list was

proved to be in existence and then not produced before the

court. In order to entitle the court to draw inference

unfavourable to the party, the court must be satisfied that

evidence is in existence and could have be proved.

As a result of the discussion above, the appeal is

allowed. The orders passed by the Labour Court and the

High Court are set aside. However, as a result of the order

passed by the Labour Court, if the respondent was employed

in service, the wages paid to him shall not be recovered.

There shall be no order as to the cost.