Delhi District Court
Case Workmen Of Nilgiri Coop. Marketing ... vs . on 3 February, 2011
IN THE COURT OF DR. T. R. NAVAL ADDITIONAL DISTRICT
& SESSIONS JUDGE / PRESIDING OFFICER LABOUR COURT
KARKARDOOMA COURTS, DELHI.
ID NO. 78/10 (New) 1078/98(Old)
Date of Institution : 15.09.1998
Date of Arguments : 21.01.2011
Date of Award : 03.02.2011
IN THE MATTER BETWEEN:
M/s Babu Lal Rajendar Kumar
252, Okhla Industrial Area,
Phase-III, New Delhi-20
The management
AND
ITS WORKMEN
Shri Niranjan Singh & Another
C/o Delhi State Kamgar Union,
Balmukund Khand, Giri Nagar,
Kalkaji, New Delhi-19
The workmen
AWARD
The Secretary (Labour), Government of NCT of Delhi vide its
order No. F.24(4024)/98/Lab./31899-903 dated 10.09.1998
referred an industrial dispute between the above mentioned
parties to the Labour Court with the following terms of reference:
"Whether the services of S/Sh. Niranjan Singh and
Harikishore have been terminated illegally and/or
unjustifiably by the management, and if so, to what relief
alongwith are they entitled and what directions are
ID No.78/10 1 of 17
necessary in this respect?"
2. The facts in brief of the workmen case are that the
workman Sh. Niranjan Singh had been working with the
management as an Operator for the last 4 years and his last
drawn salary was Rs.2950/- per month and Sh. Hari Kishore had
been working with the management as a Dye Fitter for the last 2
years and his last drawn salary was Rs.5,550/- per month. The
management was not implementing the labour laws like
minimum wages, ESI, P.F., bonus, appointment letter, identity
card, etc. and therefore, the workman alongwith other
employees of the management were collectively struggling for
implementation of labour laws and they also succeeded in
implementation of minimum wages Act. As a result thereof, the
management was annoyed and terminated their services on
20.06.1998. They sent a demand notice dated 20.06.1998 to the
management for their reinstatement in service but no fruitful
result came out. The Labour Inspector visited the establishment
of management on 22.06.1998 alongwith workman but the
management refused to reinstate them in service. The
management also refused to pay their earned wages. The refusal
of workman and termination of their services without following
the procedure provided U/s 2 (oo), 25 F, G and H of the Industrial
Dispute Act 1947, here in after referred to as the Act amounts to
illegal retrenchment. The management also failed to adhere to
the principles of natural justice before terminating their services
as the management neither issued any charge sheet to them nor
conducted any inquiry against them. They have been without
ID No.78/10 2 of 17
employment since the date of illegal termination of their
services. The workman prayed for their reinstatement in service
with full back wages.
3. The management contested their case on the grounds
inter-alia that there was no relationship of employer and
employee between the parties. The management denied all
other material allegations and prayed for dismissal of statement
of claim.
4. The workmen in their rejoinder controverted the
contentions made in the WS and reiterated the averments made
in the statement of claim.
5. On the pleadings of the parties, following issues were
framed:
1. Whether there was relationship of employer and
employee between the parties?
2. Whether services of the workmen were terminated
illegally and/or unjustifiably?
3. Relief.
6. In support of their case, workman Sh. Niranjan Singh
examined himself as WW1. He filed and proved his affidavit as
Ex. WW1/A and relied on documents Ex. WW1/1 to Ex. WW1/7.
The workman Sh. Hari Kishore examined himself as WW2. He
also filed and proved his affidavit as Ex. WW2/A and relied on
documents Ex. WW2/1 to Ex. WW2/7.
In order to prove its case, the management examined Shri
Shailender Gupta, partner of the management as MW1. He filed
ID No.78/10 3 of 17
and proved his affidavit as Ex. MW1/A and proved documents Ex.
MW1/1.
7. After closing of evidence of the parties, I have heard final
arguments of Authorized Representative/Counsel for both the
parties and perused file including written arguments.
8. On perusal of the pleadings of the parties, analysing the
evidence and material placed on record and considering
arguments addressed by Authorized Representative/Counsel for
the parties, I have formed my opinion on the issues and that are
discussed here in below issue-wise:
FINDINGS ON ISSUE NO.1
9. It has been argued on behalf of the management that
workmen were never employed in the management. The
workmen have failed to produce any document regarding their
employment in the management. The management relied on a
case Workmen of Nilgiri Coop. Marketing Society Lt. vs.
State of Tamil Nadu and Ors., 2004 LLR 351. The Hon'ble
Supreme Court observed that:
"33. Determination of the vexed questions as to whether a
contract is a contract of service or contract for service and
whether the concerned employees are employees of the
contractors has never been an easy task. No decision of this
Court has laid down any hard and fast rule nor it is possible to
do so. The question in each case has to be answered having
regard to the fact involved therein. No single test be it control
test be it organization or any other test has been held to be the
determinative factor for determining the Jural relationship of
employer and employee.
34. There are cases arising on the borderline between what is
ID No.78/10 4 of 17
clearly an employer employee relation and what is clearly the
independent entrepreneurial dealing."
10. It has been argued that workmen had to prove that they
were under the employment of management for the period of
more than 240 days in a calendar year but they have failed to
prove the same. Counsel for the management further relied on a
case Range Forest Officer Vs. S.T. Hadimani, 2002 (3) SCC
25, wherein Hon'ble Supreme Court while dealing with the
question of proof of employment observed as under:
"2. In the instant case, dispute was referred to the Labour
Court that the respondent had worked for 240 days and his
service had been terminated without paying him any
retrenchment compensation. The appellant herein did not
accept this and contended that the respondent had not worked
for 240 days. The Tribunal vide its award dated 10.8.1998
came to the conclusion that the service had been terminated
without giving retrenchment compensation. In arriving at the
conclusion that the respondent had worked for 240 days the
Tribunal stated that the burden was on the management to
show that there was justification in termination of the service
and that the affidavit of the workman was sufficient to prove
that he had worked for 240 days in a year.***
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."
ID No.78/10 5 of 17
11. Counsel for the management further relied on cases
Municipal Corporation, Faridabad vs. Sriniwas, 2004 (103)
FLR, 187 (SC). It was held by the Apex Court that:
"For the said purpose it is necessary to notice the definition of
'Continuous Service' as contained in Section 25-B of the Act. In
terms of sub-Section (2) of Section 25-B that if a 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 240 days within a period of one
year, he will be deemed to be in continuous service. By reason
of the said provision, thus, a legal fiction is created. The
retrenchment of the respondent took place on 17.05.1995. For
the purpose of calculating as to whether he had worked for a
period of 240 days within one year or not, it was, therefore,
necessary for the Tribunal to arrive at a finding of fact that
during the period between 5.8.1994 to 16.5.1995 he had
worked for a period of more than 240 days. As noticed
hereinbefore, the burden of proof was on the workman."
12. He further relied on a case M. P. Electricity Board vs.
Hariram, 2004 (103) FLR 420 (SC). It was held by the Supreme
Court that 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 for the workman to adduce
an evidence apart from examining himself to prove the factum of
his being in employment of the employer.
13. My attention goes to a case R.M.Yellatti vs. Assistant
Executive Engineer, 2006 (108) FLR 213 SCC. It was held by
Apex Court that:
"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
aforestated judgments we find that this Court has repeatedly
taken the view that the burden of proof is on the claimant to
ID No.78/10 6 of 17
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 wages 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 wages 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."
[Emphasis added]
14. As per principles of law laid down in above mentioned
cases, particularly the case of R.M.Yellatti vs. Assistant
Executive Engineer (supra), the initial burden to prove was on
the workman that there was relationship of employer and
employees between the parties. Thereafter the burden to prove
that there was no relationship of employer and employee
between the parties, was on the management as the
management specifically pleaded that fact.
15. On analyzing the evidence on record, I came to the
ID No.78/10 7 of 17
conclusion that the evidence and material placed on record has
established that there was relationship of employer and
employees between the parties. The reasons which support my
decision, are firstly, the MW1 in his cross examination stated
that he could not tell whether Labour Inspector visited the
premises on 06.04.1998 because he used to visit occasionally.
He admitted that either he came to visit premises of the
management on complaint of any worker or for general
checking. He expressed his ignorance about the visit of Labour
Inspector on 22.06.1998 or about Ex.WW1/2. Ex.WW1/2 is Labour
Inspector's Report mentioning that the workmen Sh. Niranjan
Singh and Sh. Hari Kishore were found working with the
management. This report has supported the case of the
workmen.
16. Secondly, WW1 and WW2 in their statements proved not
only copy of demand notice dated 20.06.1998 sent to the
management as Ex.WW1/1, copy of general checking report
dated 04.05.1998 as Ex.WW1/2, copy of labour Inspector's
report dated 30.06.1998 as Ex.WW1/3, copy of complaint dated
10.06.1998 to the Police Post Incharge, Okhla Industrial Area as
Ex.WW1/4, another complaint dated 17.04.1998 as Ex.WW1/5,
copy of complaint dated 06.07.1998 addressed to the Assistant
Labour Commissioner Ex.WW1/4 but also proved on record copy
of complaint dated 22.07.1998 addressed to Factory Inspector as
Ex.WW1/6. All these documents, containing almost similar
allegations as mentioned in the present statement of claim,
corroborated and supported the case of the workmen.
ID No.78/10 8 of 17
17. Thirdly, MW1 in his cross examination stated that
management was running its factory at 252, Okhla Industrial
Estate, New Delhi. The management was a partnership firm
consisting of three partners namely himself, Sh. Narender Kumar
Gupta and Sh. Nagendra Gupta. He further deposed that he
could not tell the exact number of employees who were working
with his firm in 1998 without going through the record. In the
premises bearing no. 252, there were functioning atleast two
factories. One of them was the management and another was
factory of his cousin namely Sh. Kshitij Gupta who was running
his factory in the name and style of M/s Mit Sumi Electronics. Sh.
Kshitij Gupta is son of his uncle Sh. Narender Kumar Gupta. The
premises no. 252 was owned by his firm i.e., management. He
could not tell whether his cousin was owner of M/s Sparton Sales
Corporation. He explained that M/s Sparton Sales Corporation
belonged to his other cousin and affairs of that firm were being
looked after by his aunt who is wife of his uncle Sh. Narender
Kumar Gupta. He continued to admit that they were having good
relations with each other.
18. It has been argued on behalf of the workmen that there
was functional integrality between all the three establishments
as they were being run by the family members. Their telephone
numbers, office address and fax numbers were the same. MW1
admitted that all the three factories were being run in the same
premises. MW1 also admitted in his cross examination that one
of the other companies was being run by his cousin.
ID No.78/10 9 of 17
19. My attention goes to a case Bennett, Coleman & Co. Ltd.
v. Regional Provident Fund Comm., (Rajasthan)(DB)(Jaipur
Bench), 2008(4) S.C.T. 255 : 2008 L.I.C. 2434 : 2008(3) L.L.J.
782. The Rajasthan High Court observed as under:
"15. The Supreme Court in A.C.C. v. Their Workmen,
1960(1) LLJ 1 : (AIR 1960 SC 56) was called upon to decide
whether the cement factory and a lime stone quarry situated at
two different places could be treated as one establishment. The
lime stone quarry was situated at a distance of one and half
miles from the cement factory. It was held that there was unity
of purpose and functional integrity between quarry and the
factory. The Supreme Court held that the tests which could be
applied to decide as to what constitutes one establishment
would be unity of ownership, unity of management, supervision
and control, unity of finance and employment, unity of labour
and service conditions, functional integrity , general unity of
purpose and geographical proximity.
16. In South India Mill Owners' Association v. Coimbatore
District Textile Workers Union, AIR 1962 SC 1221, the
Supreme Court again held that several factors are relevant in
dealing with such problem. However, significance of several
relevant factors would not be the same in each case. Unity of
ownership, management and control would be a relevant factor.
General unity or functional may also be relevant factor. Unity of
finance may not be an irrelevant factor. Geographical proximity
may also be of some relevance. In some cases, the test would
be whether one concern forms integral part of another so that
together they constitute one concern. Their Lordships held that
the nexus of integration in the form of some essential
dependence of the one on the other may assume relevance.
Similarly , unity of purpose or design or even parallel or co-
ordinate activity intended to achieve a common object for the
purpose of carrying out the business of the one or the other may
also assume relevance and importance.
17. The Supreme Court in Regional Provident Fund
Commissioner, Jaipur v. Naraini Udyog and others,
(1996)5 SCC 522 while reversing the judgment passed by this
Court and restoring the order passed by the Commissioner in
somewhat identical circumstances made similar observations. In
ID No.78/10 10 of 17
that case, the Commissioner found that units had a common
branch at Bombay and common telephone at Kota for residence
and factory. Office of one unit was situated in the premises of
the other and accounts of both the units were maintained by the
same set of clerks. In those facts, the Commissioner held that
both of them constituted one establishment. It was held by the
Supreme Court that even if they were separately registered
under Factories Act, the Sales Tax Act, the ESIC Act and are
located at a distance of 3 Kms., in totality of circumstances,
they would still be liable to be treated as same establishment.
18. In M/s. Rajasthan Prem Krishan Goods Transport Co. (1997
Lab IC 146), supra, the Supreme Court on analysis of the
findings recorded by Regional Provident Fund Commissioner
held that there was unity of purpose of the two units therein on
each count in as much as the place of business is common, the
management is common and the letter heads bear same
telephone numbers and 10 out of 13 partners of the appellant
firm are common and further that the trucks plied by the two
entities are owned by the partners and are being hired through
both the units. It was further found that respective employees
engaged by two entities when added together bring the
integrated entities within the grip of Act. On facts it was held
that a legitimate inference can be drawn that they were one
unit. It was held that Regional Provident Fund Commissioner
could "pierce the veil and read between the lines without the
outwardliness of the two apparents."
19. When we apply the law as consistently laid down by the
Supreme Court in the judgements referred to above, we find
that there are some such factors in the case in hand, on the
basis of which the legitimate inference could be drawn by the
Commissioner that the three companies referred to above have
functional integrity and unity of purpose. Mere separate
incorporation and registration of these companies under the
Indian Companies Act and under very many other enactments,
could not make them different units. The Regional Provident
Fund Commissioner, in our view, was well within his rights to
pierce the veil and read between the lines without the
outwardliness of the two apparents. He had ample to arrive at
such a satisfaction in the scope of Section 2A read with Section
7A of the Act while deciding the claim of infancy made by the
appellants."
20. The principles of law laid down in this case also support the
ID No.78/10 11 of 17
case of the workmen as proximity of all the three establishments
referred to herein above, and their control by close relative, their
common facilities such as telephone number, lead to the
presumption that there was functional integrality of all the
above mentioned three establishments including the
management.
21. Fourthly, although the management filed and proved
photostat copies of record of register, employment and
remuneration collectively as Ex.MW1/1, yet the management has
failed to file and prove record of all the three concerns working
at the said premises in spite of the fact that there was functional
integrality of all these three concerns and these concerns were
being run by family members of the management. This leads to
the presumption under Section 114(g) of Evidence Act to the
effect that entire record was not produced as it was not
favourable to the workmen.
22. Lastly, workmen Sh. Niranjan Singh and Sh. Hari Kishore
examined themselves in support of their case as WW1 and WW2
respectively. WW1 in his affidavit Ex.WW1/A interalia stated that
he had been working with the management since 4 years on the
post of Helper and the management terminated his services on
20.06.1998. WW2, in his affidavit Ex.WW2/A deposed that he had
been working with the management since 2 years on the post of
Dye Fitter and the management terminated his services on
20.06.1998. In their cross examinations nothing could come out
which could establish that they were not the employees of the
ID No.78/10 12 of 17
management.
In view of the reasons, discussion and evidence on record
and particularly discussed here in above, this issue is decided in
favour of the workmen Sh. Niranjan Singh and Sh. Hari Kishore
and against the management.
FINDINGS ON ISSUE NO.2
23. It has been established under the findings of issue No. 1
that the workmen Sh. Niranjan Singh and Sh. Hari Kishore were
the employees of the management. WW1 in his affidavit
Ex.WW1/A told the period of his service as 4 years. WW2 in his
affidavit Ex.WW2/A stated the length of his service with the
management as 2 years. Their testimonies were found credible
and trustworthy. This has established that the workmen Sh.
Niranjan Singh and Sh. Hari Kishore had been in continuous
service of the management for a period of more than 240 days
preceding the date of termination of their services by the
management. It is not the case of the management that the
management either assigned any reason to them or issued any
notice or offered or paid notice pay or retrenchment
compensation. It is also not the case of the management that the
management either served any show cause notice or charge
sheet on the workmen or got conducted any enquiry against any
of them. This has established that there was violation of
provisions of Section 25 of the Act.
24. Both the WWs in their respective affidavits also stated that
the management violated the provisions of Section 25 G and H of
ID No.78/10 13 of 17
the Act. A perusal of cross examination of WW1 and WW2 has
established that none of these workmen were cross examined on
the point of preparation of seniority list or observance/adherence
of the principle, "Last come first go". Affidavit of MW1 is also
silent on this aspect. This has further established that there was
violation of provisions of Section 25 G and 25 H of the Act as
neither the management prepared nor it was maintaining the
seniority list nor it was observing the principle of "Last come first
go".
In view of the reasons, discussion and evidence on record
and particularly discussed here in above, this issue is decided in
favour of the workmen Sh. Niranjan Singh and Sh. Hari Kishore
and against the management and it is held that the
management terminated their services illegally and unjustifiably.
FINDINGS ON ISSUE NO. 3: RELIEF
25. In case of Kishan Swaroop Vs. Project and Equipment
Corporation of India Ltd.,MANU/DE/3010/2007 it was held by
Delhi High Court that in each and every case of illegal and
unjustified termination of services, the relief of reinstatement
and full back wages is not to be granted automatically and the
Labour Court can mould the relief by granting lump sum
compensation in lieu thereof.
26. In case of Allahabad Jal Sansthan v. Daya Shankar
Rai,(2005) 5 SCC 124, it was held that:
"6. A law in absolute terms cannot be laid down as to in
which cases, and under what circumstances, full back wages
can be granted or denied. The Labour Court and/or Industrial
ID No.78/10 14 of 17
Tribunal before which industrial dispute has been raised,
would be entitled to grant the relief having regard to the
facts and circumstances of each case. For the said purpose,
several factors are required to be taken into consideration".
27. In case of Hindustan Tin Works (P) Ltd. v. Employees
(1979) 2 SCC 80 a three-Judge Bench of Apex Court laid down:
"11. In the very nature of things there cannot be a
straitjacket formula for awarding relief of back wages. All
relevant considerations will enter the verdict. More or less, it
would be a motion addressed to the discretion of the
Tribunal. Full back wages would be the normal rule and the
party objecting to it must establish the circumstances
necessitating departure. At that stage the Tribunal will
exercise its discretion keeping in view all the relevant
circumstances. But the discretion must be exercised in a
judicial and judicious manner. The reason for exercising
discretion must be cogent and convincing and must appear
on the face of the record. When it is said that something is
to be done within the discretion of the authority, that
something is to be done according to the rules of reason and
justice, according to law and not humour. It is not to be
arbitrary, vague and fanciful but legal and regular***"
28. WW1 in his cross examination stated that he could not
get the job elsewhere despite making efforts to search job. He
worked casually and he earned about Rs.800/- per month. WW2
also deposed on the same lines and stated he casually got the
job on daily wage basis and earned about Rs.500/- per month. In
these circumstances, and keeping in view the facts and
circumstances of the present case, I am of the view that instead
of backwages, it would be just and proper to award them some
reasonable lump sum compensation.
ID No.78/10 15 of 17
ORDER
29. Consequent upon the decision of both the issues in favour of the workmen Sh. Niranjan Singh and Sh. Hari Kishore and against the management, terms of reference are answered in favour of both the workmen and against the management and it is held that termination of services of both the workmen was illegal and unjustified and therefore, they are entitled to get relief.
30. As both the workmen have suffered legal injury due to illegal action of the management and they cannot be put to their original posts, therefore, considering all the relevant factors including pay, length of service of the workmen and facts and circumstances of the case, I am of the view that it would be just, fair and appropriate if a compensation of Rs. 50,000/-(Rupees Fifty Thousands Only) is awarded in favour of workman Sh. Niranjan Singh and Rs. 25,000/- (Rupees Twenty Five Thousands Only) is awarded in favour of workman Sh. Hari Kishore and against the management.
31. The appropriate Government is advised to direct the management to pay Rs. 50,000/-(Rupees Fifty Thousands Only) to workman Sh. Niranjan Singh and Rs. 25,000/-(Rupees Twenty Five Thousands Only) to Sh. Hari Kishore within 30 days from the date of publication of this award failing which, they will also be entitled to get the future interest @ 8% from the date of award till the realization of the said amount.
ID No.78/10 16 of 17 Award is, accordingly passed.
32. Copy of award be sent to the Secretary Labour, Govt. of NCT, Delhi for publication as per rules.
33. Copy of award be also sent to Ld. Senior Civil Judge, District South Delhi in compliance of provisions of Sec. 11(10) of the Act as amended by Industrial Disputes (Amendment) Act, 2010 (No. 24 of 2010), which runs as under:-
"(10) The Labour Court or Tribunal or National Tribunal, as the case may be, shall transmit any award, order or settlement to a Civil Court having jurisdiction and such Civil Court shall execute the award, order or settlement as if it were a decree passed by it."
File be consigned to Record Room.
Announced in the Open Court
on 3rd February, 2011
(DR. T. R. NAVAL)
Additional District & Sessions Judge
Presiding Officer, Labour Court,
Karkardooma Courts, Delhi.
ID No.78/10 17 of 17