Page 1 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos.3209-3210 OF 2015

(Arising Out of SLP (C) Nos.7105-7106 of 2014)

UMRALA GRAM PANCHAYAT ……APPELLANT

Versus

THE SECRETARY, MUNICIPAL

EMPLOYEES UNION & ORS. ……RESPONDENTS

J U D G M E N T

V. GOPALA GOWDA, J.

Delay condoned. Leave granted.

2. These appeals have been filed by the appellant

against the final judgment and order dated

23.07.2013 passed in Letters Patent Appeal No.

551 of 2013 in Misc. Civil Application No.3071

of 2012 in Special Civil Application No. 7082 of

1994, by the High Court of Judicature of Gujarat

at Ahmedabad, whereby the High Court has

dismissed the same as being not maintainable and

has upheld the judgment and order of the learned

single Judge of the High Court dated 13.07.2010,

passed in Special Civil Application No. 7082 of

Page 2 2

1994, which is also impugned herein, wherein the

application filed by the appellant has been

dismissed by the High Court by confirming the

Award dated 15.05.1991 passed by the Labour

Court in Reference (LCD) No. 6 of 1988.

3. For the purpose of considering the rival legal

contentions urged on behalf of the parties in

these appeals and with a view to find out

whether this Court is required to interfere with

the impugned judgment and orders of the High

Court as well as the Award of the Labour Court,

the necessary facts are briefly stated

hereunder:

The appellant-Gram Panchayat was duly

established under the provisions of the Gujarat

Panchayat Act, 1993 (in short ‘the Act’). The

workmen of the Panchayat, some of whom are now

deceased and are being represented by their

legal heirs, were appointed to the post of safai

kamdars of the appellant-Panchayat and have

served for many years, varying from 18 years, 16

years, 8 years, 5 years etc. They were however,

Page 3 3

considered as daily wage workers and were

therefore, not being paid benefits such as pay

and allowances etc. as are being paid to the

permanent safai kamdars of the appellant-

Panchayat.

4. On 23.07.1987, the workmen raised an industrial

dispute before the Conciliation Officer at

Bhavnagar, through the respondent no.1,

Municipal Employees Union (for short “Union”)

stating therein that after rendering services

for a number of years, the workmen are entitled

to the benefit of permanency under the

appellant-Panchayat. The settlement between the

workmen and the appellant-Panchayat failed to

resolve amicably during the conciliation

proceedings and therefore, the failure report

was sent to the Dy. Commissioner of Labour,

Ahmedabad, who referred the same to the Labour

Court vide Reference (LCD) No.6/88. The Labour

Court by its Award held that the workmen are to

be made permanent employees as safai kamdars in

the appellant-Panchayat. The Labour Court has

Page 4 4

further directed the appellant-Panchayat that

the workmen should be paid wages, allowances and

other monetary benefits as well for which they

are legally entitled to.

5. Aggrieved by the Award of the Labour Court, the

appellant-Panchayat filed an appeal before the

single Judge of the High Court, whereby the same

was dismissed and it was held that the view

taken by the Labour Court is just and proper as

it has assigned cogent and convincing reasons

for arriving at the conclusion that the services

of the concerned workmen should be made

permanent as the other employees of the

appellant. The appellant, thereafter, filed an

LPA before the Division Bench of the High Court,

which was also dismissed as not maintainable.

Hence, these appeals have been filed by the

appellant seeking to set aside the judgments and

orders of the High Court as well as the Award

passed by the Labour Court.

Page 5 5

6. It has been contended by Mr. Mahendra Anand,

the learned senior counsel on behalf of the

appellant that the workmen were not appointed on

a permanent basis as the rules and regulations

as prescribed under the provisions of the Act

have not been followed. He has further contended

that the High Court has erred in upholding the

Award passed by the Labour Court as the same is

illegal and there is non application of mind by

the courts below. The Labour Court has wrongly

held that there are 13 permanent posts available

for the category in which the concerned

employees are working as the other three

employees who are made permanent employees have

been made so only because there were clear

vacant posts available in the approved strength

in the capacity in which these three employees

were made permanent and thus, there is no

question of any discrimination or unfair labour

practice on the part of the appellant-Panchayat

in not making the concerned workmen as permanent

employees of the appellant.

Page 6 6

7. It has been further contended by the learned

senior counsel that the concerned workmen were

engaged in the services, as and when required by

the appellant-Panchayat and it is not obligatory

on the part of the appellant-Panchayat to

provide work to the workmen on a day-to-day

basis and the appellant-Panchayat has no control

over them as there is no employer-employee

relationship between them. It has been further

contended by him that the appellant-Panchayat

has no right to make them permanent employees.

For making their services permanent in the

appellant-Panchayat, an application has to be

made before the District Panchayat, Bhavnagar

and a demand has to be raised before it and the

recruitment of the employees of the appellant-

Panchayat is done by the Gujarat Panchayat

Service Selection Board and directions will be

issued on its behalf. However, there are no such

directions issued in relation to the concerned

workmen.

Page 7 7

8. On the other hand, it has been contended by Mr.

S.C. Patel, the learned counsel appearing on

behalf of the respondent-Union that the

concerned workmen have been working for many

years, such as 18 years, 16 years, 8 years

continuously and some of them have been working

for more than 5 years in the appellant-

Panchayat. They are not paid the monetary

benefits and allowances etc. as are being paid

to other permanent safai kamdars who are working

in the appellant-Panchayat. He has further

contended that the concerned workmen are doing

the same work as is being done by the permanent

safai kamdars and they have been working for

similar number of hours, i.e. eight hours per

day like the permanent employees of the

appellant-Panchayat. In spite of it, they are

being monetarily exploited by the appellant-

Panchayat by not being paid regular salary and

other monetary benefits for which they are

legally entitled to but are being paid much

lesser wage, i.e. Rs.390/- per month. Therefore,

the learned counsel has contended that the

Page 8 8

appellant is practicing unfair labour practice

as defined under Section 2(ra) of the Industrial

Disputes Act, 1947 (in short “the ID Act”) as

enumerated at Entry No.10 in the Fifth Schedule

to the ID Act. Therefore, the action of the

appellant-Panchayat is illegal and the workmen

should be allowed to get permanency in the said

posts.

9. With reference to the abovementioned rival

legal contentions urged on behalf of the

parties, we have to examine the impugned

judgements and orders of the High Court as well

as the Award passed by the Labour Court, to find

out whether any substantial question of law

would arise in these appeals to exercise the

appellate jurisdiction of this Court?

10. On a perusal of the same, we have come to

the conclusion that the High Court has rightly

dismissed the case of the appellant as the

Labour Court has dealt with the same in detail

Page 9 9

in its reasoning portion of the Award in support

of its findings of fact while answering the

points of dispute and the same cannot be said to

be either erroneous or error in law. In support

of the above said conclusions arrived at by us,

we record our reasons hereunder:

It is an admitted fact that the work which

was being done by the concerned workmen was the

same as that of the permanent workmen of the

appellant- Panchayat. They have also been

working for similar number of hours, however,

the discrepancy in the payment of wages/salary

between the permanent and the non-permanent

workmen is alarming and the same has to be

construed as being an unfair labour practice as

defined under Section 2(ra) of the ID Act r/w

Entry No.10 of the Fifth Schedule to the ID Act,

which is prohibited under Section 25(T) of the

ID Act. Further, there is no documentary

evidence produced on record before the Labour

Court which shows that the present workmen are

Page 10 10

working less or for lesser number of hours than

the permanent employees of the appellant-

Panchayat. Thus, on the face of it, the work

being done by the concerned workmen has been

permanent in nature and the Labour Court as well

as the High Court have come to the right

conclusion on the points of dispute and have

rightly rejected the contention of the

appellant-Panchayat as the same amounts to

unfair labour practice by the appellant-

Panchayat which is prohibited under Section

25(T) of the ID Act and it also amounts to

statutory offence on the part of the appellant

under Section 25(U) of the ID Act for which it

is liable to be prosecuted.

11. Further, the Labour Court has rightly held

that there is no restriction for the recruitment

of the workmen in the Panchayat’s set-up as

there is evidence to show that by making a

proposal, the District Panchayat has increased

the work force in the establishment of the

appellant-Panchayat and therefore, the

Page 11 11

contention urged by the learned senior counsel

appearing for the appellant-Panchayat that there

are only limited number of permanent vacancies

for the workmen in the Panchayat of the

appellant is not tenable in law.

12. Further, we have also taken note of the

fact that the financial position of the

Panchayat is not so unsound as no activity of

the Panchayat has been discontinued, as all the

other workers of the appellant-Panchayat are

being paid their wages regularly. Thus, there

would be no difficulty for the appellant-

Panchayat to bear the extra cost for the payment

of the wages/salary and other monetary benefits

to the concerned workmen if they are made

permanent.

13. Further, Section 25(T) of the ID Act

clearly states that unfair labour practice

should not be encouraged and the same should be

discontinued. In the present case, the principle

“equal work, equal pay” has been violated by the

Page 12 12

appellant-Panchayat as they have been treating

the concerned workmen unfairly and therefore,

the demand raised by the respondent-Union needs

to be accepted. The High Court has thus, rightly

not interfered with the Award of the Labour

Court as the same is legal and supported with

cogent and valid reasons.

14. Therefore, the learned single Judge as well as

the Division Bench of the High Court have

exercised the power under Articles 226 and 227

of the Constitution of India and have rightly

held that the Labour Court has jurisdiction to

decide the industrial dispute that has been

referred to it by the Dy. Commissioner of

Labour, Ahmedabad. Reliance has been placed upon

the decision of this Court in the case of

Maharashtra State Road Transport Corporation and

Anr. v. Casteribe Rajya P. Karmchari

Sanghatana

1

, wherein it has been held thus:

“32.The power given to the Industrial

and Labour Courts under Section 30 is

1

(2009) 8 SCC 556

Page 13 13

very wide and the affirmative action

mentioned therein is inclusive and not

exhaustive. Employing badlis, casuals

or temporaries and to continue them as

such for years, with the object of

depriving them of the status and

privileges of permanent employees is an

unfair labour practice on the part of

the employer under item 6 of Schedule

IV. Once such unfair labour practice on

the part of the employer is established

in the complaint, the Industrial and

Labour Courts are empowered to issue

preventive as well as positive

direction to an erring employer.”

Further, reliance has been placed upon the

decision of this Court in the case of Durgapur

Casual Workers Union v. Food Corporation of India,

2

wherein it has been held thus:

“19. Almost similar issue relating to

unfair trade practice by employer and

the effect of decision of Umadevi (3)

in the grant of relief was considered

by this Court in Ajaypal Singh v.

Haryana Warehousing Corporation in

Civil Appeal No. 6327 of 2014 decided

on 9

th

July, 2014. In the said case,

this Court observed and held as

follows:

20. The provisions of Industrial

Disputes Act and the powers of

the Industrial and Labour Courts

provided therein were not at all

under consideration in Umadevi's

case. The issue pertaining to

unfair labour practice was

neither the subject matter for

decision nor was it decided in

Umadevi's case.

2

(2014) 13 SCALE 644

Page 14 14

21. We have noticed that

Industrial Disputes Act is made

for settlement of industrial

disputes and for certain other

purposes as mentioned therein. It

prohibits unfair labour practice

on the part of the employer in

engaging employees as casual or

temporary employees for a long

period without giving them the

status and privileges of

permanent employees….””

15. Thus, in the light of the above referred

cases of this Court, it is amply clear that the

judgments and orders of the High Court and the

Award passed by the Labour Court are reasonable

and the same have been arrived at in a just and

fair manner.

16. The reliance placed by the learned senior

counsel for the appellant upon the decision of

this Court in Secretary, State of Karnataka &

Ors. v. Umadevi & Ors.

3

, does not apply to the

fact situation of the present case and the same

cannot be accepted by us in the light of the

cogent reasons arrived at by the courts below.

3

(2006) 4 SCC 1

Page 15 15

17. In view of the reasons stated supra and in

the light of the facts and circumstances of the

present case, we hold that the services of the

concerned workmen are permanent in nature, since

they have worked for more than 240 days in a

calendar year from the date of their initial

appointment, which is clear from the evidence on

record. Therefore, not making their services

permanent by the appellant-Panchayat is

erroneous and also amounts to error in law.

Hence, the same cannot be allowed to sustain in

law.

18. For the reasons stated supra, we dismiss

the appeals and direct the appellants to treat

the services of the concerned workmen as

permanent employees, after five years of their

initial appointment as daily wage workmen till

they attain the age of superannuation for the

purpose of granting terminal benefits to them.

Page 16 16

19. The appellant is further directed to pay

the regular pay-scale as per the revised pay

scale fixed to the post of permanent safai

kamdars for a total period of 15 years to the

concerned workmen and the legal representatives

of the deceased workmen. The same shall be

implemented within six weeks from the date of

receipt of copy of this judgment and compliance

report of the same shall be submitted for the

perusal of this Court. No Costs.

…………………………………………………… J.

[V. GOPALA GOWDA]

………………………………………………… .J.

[C.NAGAPPAN]

New Delhi,

March 27, 2015

Page 17 17

ITEM NO.1A-For Judgment COURT NO.10 SECTION XV

S U P R E M E C O U R T O F I N D I A

RECORD OF PROCEEDINGS

C.A.No......./2015 @ SLP (C) No(s). 7105-7106/2014

(Arising out of impugned final judgment and order dated 23/07/2013

in LPA No. 551/2013,23/07/2013 in SCA No. 7082/1994,23/07/2013 in

MCA No. 3071/2012,13/07/2010 in SCA No. 7082/1994 passed by the

High Court Of Gujarat At Ahmedabad)

UMRALA GRAM PANCHAYAT Petitioner(s)

VERSUS

THE SEC.MUNICIPAL EMPLOYEE UNION & ORS Respondent(s)

Date : 27/03/2015 These petitions were called on for pronouncement

of JUDGMENT today.

For Petitioner(s)

Mr. Pukhrambam Ramesh Kumar,Adv.

For Respondent(s)

Mr. S. C. Patel,Adv.

Hon'ble Mr. Justice V.Gopala Gowda pronounced the

judgment of the Bench comprising His Lordship and Hon'ble Mr.

Justice C. Nagappan.

Leave granted.

The appeals are dismissed in terms of the signed

Reportable Judgment.

(VINOD KR. JHA) (MALA KUMARI SHARMA)

COURT MASTER COURT MASTER

(Signed Reportable judgment is placed on the file)