Allahabad High Court
Duncans Industries Ltd.Fertiliser ... vs State Of U.P. And Others on 10 August, 2020
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. - At Residence RESERVED A.F.R. Case :- WRIT - C No. - 30660 of 2000 Petitioner :- Duncans Industries Ltd. Fertiliser Division, Panki Respondent :- State of U.P. and Others Counsel for Petitioner :- B.K.Mukerjee,P.K.Mukerjee,S. Catterjee Counsel for Respondent :- S.M.A.Kazmi, D. Chauhan, Ms. Bushra Maryam, Pankaj Srivastava, Rakesh Kumar, Rohit Shukla, S.C. Vikram, S.M.A.Kazmi, Vikram D. Chauhan Hon'ble J.J. Munir,J.
1. The petitioners are Employers disillusioned with an award of the Presiding Officer, Industrial Tribunal (3), U.P., Kanpur passed in an industrial dispute between them and their workmen. The original petitioners were a certain Duncans Industries Limited (formerly known as Chand Chhap Fertilizer and Chemicals Limited, Fertilizer Division, Panki, Kanpur). It appears that due to losses suffered in business by Duncans they became sick and were declared a sick industrial company by the Board of Industrial and Financial Reconstruction (for short, 'the BIFR'), under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 vide order dated 21.07.2007. The State Bank of India were appointed the operating agency to explore avenues for revival of the sick industrial company. In proceedings before the BIFR, a certain M/s. Kanpur Fertilizer and Cement Limited proffered to work in joint venture for revival of the sick industrial company. The operating agency acting on the said offer, drew up and presented a draft Rehabilitation Scheme on January the 16th, 2012 to the BIFR. This scheme was sanctioned by the BIFR in terms that the fertilizer undertaking of Duncans would be transferred to and vest in M/s. Kanpur Fertilizers and Cement Limited, as a going concern. The sanctioned Rehabilitation Scheme also transferred all liabilities of Duncans to M/s. Kanpur Fertilizers and Cement Limited, including pending legal proceedings. It is in this manner that the petitioners' name has now been changed to M/s. Kanpur Fertilizers and Cement Limited, Panki, Kanpur.
2. M/s. Kanpur Fertilizers and Cement Limited sought impleadment in place of Duncans through Civil Misc. Application No. 199844 of 2012. This application was allowed by an order of the Court dated 22.08.2012. The petitioners, originally called Duncans Industries Limited (Fertilizer Division), Panki, Kanpur, have since been virtually substituted as M/s. Kanpur Fertilizers and Cement Limited, Panki, Kanpur. The petitioners have been impleaded under their new name and style, rather incongruously as petitioner No. 1/1. The petitioners ought to have been impleaded as M/s. Kanpur Fertilizers and Cement Limited, with their particulars, after striking out the name of Duncans from the array. Nevertheless, that need not detain this Court any further, except for a remark that M/s. Kanpur Fertilizers and Cement Limited, Kanpur, Panki are and shall be the sole petitioner of this writ petition in place of Duncans.
3. The Employers have moved this Court praying for a writ, order or direction in the nature of certiorari to quash the award of the Presiding Officer, Industrial Tribunal (3), U.P., Kanpur (Published on 10.05.2000) passed in Adjudication Case No. 162 of 1989 between the Employers and their twenty-seven workmen, twenty-four of whom are arrayed here as respondent nos. 6 to 29. The respondents-workmen are hereinafter referred to as 'the workmen'. Four of the workmen are dead and have been substituted by their heirs and legal representatives vide an order of this Court dated 10.09.2018. The future reference to workmen, shall include those legal representatives. The award passed by the Labour Court, last mentioned, shall hereinafter be called ''the impugned award'.
4. It must be recorded here that in the writ petition, challenge was laid to the vires of the provisions of Section 4-E (2) and (3) of the Uttar Pradesh Industrial Disputes Act, 1947. This challenge, however, was given up by the learned Counsel for the Employers, during the hearing on 11.02.2020. The challenge is, therefore, confined to the validity of the impugned award.
5. Proceedings before the Labour Court commenced on a reference made under Section 4-K of the U.P. Industrial Disputes Act vide order dated 28.09.1989, in the following terms (translated into English from Hindi vernacular):
"Whether the Employers are obliged to declare 38 workmen detailed in the attached schedule, permanent? If yes, from what date and with what particulars?"
6. It appears that an industrial dispute was raised by the Fertilizer Workers Union, Kanpur, impleaded here as respondent no.5 (for short, 'the Union'), acting on behalf of the workmen. The reference aforesaid led to registration of Adjudication Case No.162 of 1989 on the file of the Presiding Officer, Industrial Tribunal (3), U.P. Kanpur. He issued notice to the parties asking them to put in their pleadings. The Employers put in their written statement dated 01.02.1990. They further filed an amended written statement. The workmen filed a written statement through the Union, dated 29.11.1989. A reply to the amended written statement was filed by the workmen on 28.10.1994. The Employers filed a rejoinder statement dated 27th March, 1990 and the workmen filed their rejoinder statement dated 16th September, 1997.
7. In support of the Employers' case, four witnesses were examined, that is to say, Captain Chopra, Mrs. P. Ganguli, Daud Khan and Captain Tripathi. Likewise, on behalf of the workmen four persons, to wit, Chhotelal, Jaspal, Binda Prasad and A.K. Srivastava were examined as witnesses. The testimony of the Employers' witnesses and the workmen's witnesses is on record as Annexures to this petition. The documentary evidence, which finds mention in the impugned award, has not been placed before the Court, either by the Employers or the workmen. These documents have been noticed in the award as EW-1 to 9 and W-12 to 28, which appear to be the Employees State Insurance identity cards. There is also Exhibit W-10-11 relating to M/s. Dev Kumar and Narain Dixit, respectively, that is said to be the log book showing their dates of employment as 20.08.1985 and 12.11.1982, in that order. Exhibits E-1 and E-2 relate to Sobhnath, who was retained as a casual hand. These are two applications dated 01.12.1985 and 26.08.1986 relating to his employment as a casual hand. Likewise, Exhibits E/3, 4 and 5 relate to Rampyare. It is a form dated 26.08.1986 for his casual employment. Likewise, there are Exhibits E-6 to E-24 all relating to different workmen, being applications and other documents all of which appear to be evidence about the date of their employment. There is one Exhibit E/5, which is an internal advertisement relating to some post described as a GC in the packing plant. This reference to evidence has been drawn from the description of it in the impugned award. There is no mention of this documentary evidence in the writ petition or the other pleadings of parties before this Court. The Labour Court, after hearing parties, passed the impugned award, answering the reference in favour of the workmen, in terms that the Employers were ordered to appoint the workmen as permanent with effect from the date of the award and to pay them wages, besides other benefits admissible to permanent workmen. It has been brought to the notice of this Court, through the third Supplementary Affidavit, sworn on 7th February 2019, that of the 38 workmen whose dispute was referred to the Adjudication of the Labour Court, eleven were excluded from Adjudication proceedings on account that some of them died whereas others joined other establishments.
8. It is pointed out that the adjudication proceedings went ahead in relation to 27 workmen alone. Of them it is said in paragraph no.5 of the affidavit under reference that 24 workmen, who were parties to the adjudication case and were interested in the matter, got themselves impleaded personally.
9. It has also been asserted in this affidavit in paragraph nos.6, 7, 8 and 9 that of the 24 workmen who have sought individual impleadment, the Union aside impleaded as respondent no.5, five have settled their dispute with the Employers, withdrawing their gratuity and other dues. In addition, of the remainder, seventeen workmen have attained the age of superannuation according to their provident fund declaration Forms 9, annexed as Annexure 9 to the writ petition. It is the stand of the Employers that 9 workmen alone wish to contest these proceedings in presenti.
10. This Court does not think so. No doubt photostat copies of the affidavits in relation to the five workmen who are said to have settled with the Employers outside Court have been annexed along with two earlier supplementary affidavits, but no such stand has been taken before this Court by the learned Counsel appearing for them. The fact that these five workmen have settled could be true or untrue. So long as the five workmen do not file their affidavits before this Court that they have settled, this Court cannot act on photostat copies of documents annexed to the Employers affidavit. As for those eight workmen, who are said to have retired, it does not mean that their rights under the award have been extinguished. If the award were to be enforced, the benefit of it would enure to them, their superannuation notwithstanding.
11. There is an added reason for this Court to believe that the workmen shown to have compromised, may not have done so. This is for the reason that the workmen, arrayed as respondent nos. 6, 15, 22 and 26, have died pending this petition and their widows have come forward to seek substitution, that has been granted by an order of this Court dated 10.09.2018. The Employers have placed on record a photostat copy of an affidavit of Smt. Balwanti, widow of late Toofani, impleaded to the writ petition as respondent no. 6. A copy of the affidavit filed along with the supplementary affidavit dated 24.07.2017, shows it to be one sworn on 10th March, 2017. The fact that Smt. Balwanti has pressed for substitution and secured it on 10.09.2018, does not support a case of settlement prima facie. This Court is, therefore, not inclined to accept a case about any kind of a settlement, in the absence of the concerned workmen saying so before this Court on their affidavit. The Labour Court has recorded a specific finding, in relation to eleven of the thirty-eight workmen, at whose behest this industrial dispute was raised, that they have opted out or otherwise become disassociated with the present industrial dispute. The names of the workmen, who have disassociated or exited the industrial dispute, are detailed in paragraph 8 of the impugned award. They are:
Sr. No. Names Reason of disassociation
1. Shiv Singh Negi Opted out of the dispute
2. Anil Kumar Srivastava Opted out of the dispute
3. Allauddin Opted out of the dispute
4. Jagdish Kumar Opted out of the dispute
5. H.K. Dwivedi Left service and joined KETELCO
6. Ramdas Left service and joined KETELCO
7. Ram Lal Left service and joined KETELCO
8. Ashok Kumar (II) Died
9. Ayodhya Prasad Died
10. Gajadhar Retired
11. Dukh Haran Retired The circumstances, in which these workmen have abandoned their rights in the instant industrial dispute, have been enumerated in the impugned award. Accordingly, this writ petition is being heard on the basis that of all the thirty-eight workmen, at whose instance this industrial dispute was raised by the Union, twenty-seven alone continue to be parties. This figure of twenty-seven largely accounts for the twenty four, who have become parties to this writ petition.
12. To put the record straight, of all the thirty-eight workmen, at whose instance this industrial dispute was raised, it is the twenty-seven workmen, detailed hereinafter (the heirs and legal representatives of the deceased workmen included), whose case shall be considered by this Court, regarding them as the parties to the industrial dispute. The names of these workmen are indicated below, along with the employment dates shown against their respective names:
Sr. No. Name Date of Engagement
1. Tufani 14.04.1985
2. Narayan Kumar (I) 24.01.1984
3. Jaspal Kumar 25.01.1984
4. Binda Prasad 24.01.1984
5. Krishna Kumar 15.03.1983
6. Narayan (Retired) 25.01.1984
7. Babu Lal 24.01.1984
8. Umesh Kumar 31.01.1984
9. Uma Shankar 26.01.1984
10. Dev Kumar 20.08.1985
11. Deen Dayal 14.06.1985
12. Anant Lal 17.09.1981
13. Asha Ram 27.08.1982
14. Sri Narayan Dixit 12.11.1982
15. Chhotey Lal 12.06.1985
16. Bange Lal 28.08.1986
17. Vijay Lal 26.11.1986
18. Jagdev 28.08.1986
19. Ganesh 28.08.1986
20. Vishram 28.08.1986
21. Chaunhar 28.08.1986
22. Jhinaku Yadav 28.08.1986
23. Sobhnath 28.08.1986
24. Robbin Bruth 16.04.1982
25. Ram Pyarey 27.08.1986
26. P.K. Dutta 06.02.1984
27. Chandrabhan Prasad 24.01.1984
13. Heard Sri S. Chatterjee, learned Counsel for the Employers and Ms. Bushra Maryam, learned Counsel appearing for the workmen.
14. The Labour Court has recorded findings to the effect that Exs. W/1 - W/28 show that the workmen have been employed with effect from the dates, indicated against their respective names, claimed by them. These dates of retention for the different workmen are also corroborated by the Employers' documents, filed as Exs. E/1 - E/24. There is then a remark by the Labour Court that these documents indicate that the workmen have been in continuous employment from their date of retention and have put in 240 days of service in the Employers' establishment, each year. The Labour Court has gone on to say that the Employers have urged that these workmen were retained as casual labourers, according to exigencies of work from time to time. They cannot, therefore, ask for regularization.
15. It is noted further by the Labour Court that the contra submission advanced on behalf of the workmen is that they have been retained to do work in the establishment of a perennial nature. They have been doing that work continuously since their engagement, putting in 240 days' service each year. They are, therefore, entitled to be made permanent. The Labour Court has taken note of a certain Employers' witness, who testified as EW-4 and acknowledged during his cross-examination that casual hands are retained in place of workmen, who are absent from duties.
16. The Labour Court has remarked that the Employers have not furnished any particulars, indicating which of the workmen were retained as casual hands to discharge duties, of which of the named absenting permanent workmen. It is also said by the Labour Court that the Employers have not testified to the effect whether the workmen are in continuous employment, from the date of their retention. The Labour Court has drawn an inference that from the evidence of this witness, it cannot be said that the workmen are not in continuous employment from the dates of their engagement. The Labour Court has then proceeded to hold that in view of all this evidence and circumstances, it would be incorrect to say that the workmen have been retained as casual hands, from time to time, according to exigencies of work. This stand of the Employers was found unacceptable.
17. The Labour Court has also noticed that the documents brought on record show that prior to engagement as casual hands by the establishment, these workmen were also retained by the Employers as workmen of a Labour Contractor. For the period of engagement, that the services of workmen were hired through the Labour Contractor, they have been disowned by the Employers as the Contractor's employees, with whom they had no kind of privity or relationship of Employer and Employee. The Labour Court has remarked that the Employers cannot forsake their obligations towards the workmen by dubbing them as the Labour Contractor's men, inasmuch as during the relevant period of time, these workmen worked for the Employers in their establishment, under their direct control. As such, the Employers were their principal Employer and the Labour Contractor, an agency for engagement alone.
18. The Labour Court has held that in these circumstances, during time that the workmen were engaged through the Labour Contractor, they would be considered to be retained by the Employers and part of their establishment. There is then an added remark that even if it be assumed that the period of time, during which the services of the workmen were secured through the Labour Contractor, is to be discounted, it would have no bearing on the workmen's rights here. This is so, because the relevant dates of retention in service, on the basis of which the workmen claim rights, are those when the workmen entered into direct engagement with the Employers de hors the agency of a Labour Contractor. It is quite another matter, the Labour Court says, that they have been shown by the Employers as casual hands, who have been paid on a daily-wage basis. In the opinion of the Labour Court, the continued description of the workmen as casual hands and their remuneration on daily-wages, cannot be said to be proper.
19. The Labour Court has gone on to say that it was the Employers' obligation to show by production of relevant records that the workmen did not render regular services in the establishment, and that they were hired from time to time, according to exigencies of work. But, the Employers have not proved anything to that effect. To the contrary, the workmen's witnesses have clearly testified to the fact that they have regularly worked in the Employers' establishment since their retention, and that during each year they have put in more than 240 days of service. It is also remarked that this testimony of the of the workmen's witnesses is corroborated by the Employers' evidence. There is no evidence by the Employers in rebuttal of this fact.
20. The Labour Court has also taken note of a submission advanced on behalf of the Employers that the workmen for themselves had accepted casual employment, which is indicated from their applications, and once the workmen had accepted casual engagement, they had no right to claim permanent status. The Labour Court has discarded this submission by holding that the Employers cannot shake off their constitutional obligations, falling back on what the workmen had said in their applications at the time of their first engagement. The Labour Court has remarked that whatever the workmen have said in their applications, at the time of their initial engagement, cannot work to deprive them perpetually of their rights, that otherwise accrue.
21. There is then a rather odd finding by the Labour Court, which says that according to general rule and law, if a workman is employed to do work of a permanent nature that he does regularly, and further puts in 240 days of service in a calendar year with the establishment, he cannot be deprived of regular pay scale. The Labour Court has gone further on to hold that it is true for a fact that the workmen have put in work in the same manner as permanent employees in the establishment, and that there is no difference between the work done by these workmen and the other permanent workmen.
22. The Labour Court has, accordingly proceeded to hold that the action of the Employers in retaining these workmen as casual hands, to undertake work of a perennial nature, is demonstrative of mala fides on the part of the Employers and a clear instance of unfair labour practice, which by any standard cannot be approved. The Labour Court has also said that the aforesaid action of the Employers is an exemplar of mala fides, vis-a-vis these workmen. Again at this stage, the Labour Court has reverted to its finding, that this Court has earlier called rather odd, that the workmen having put in 240 days of service during twelve calendar months continuously and more, they are entitled to the same benefit and pay scale as permanent workmen. The action of the Employers has been condemned as one contrary to social justice.
23. The Labour Court has held further on, that bearing in mind the facts, circumstances and evidence on record, it is clear that the workmen have been employed with effect from the dates shown against their respective names to undertake work of a permanent character, and that their work or conduct has never been found to be one that may occasion any complaint or demonstrate deficiency. There is no dearth of work with the Employers and, therefore, there is no reason to deprive them of any benefit.
24. The conduct of the Employers has, in substantial measure, been criticized by the Labour Court about the dilatory tactics adopted by them before that Court. The particulars of those tactics have been recorded. In conclusion, the Labour Court has awarded that the workmen be declared permanent by the Employers and that they are entitled to be declared permanent with effect from the date of the award. They have also been held entitled to consequential benefits.
25. Mr. Chatterjee, learned Counsel for the Employers has severely criticized the award. He submits that the impugned award is serious flawed, because the Labour Court has gone all wrong about inferring a claim for permanency on the basis of the workmen putting in 240 days of continuous work in each calendar year. He submits that the law relating to 240 days of continuous work, in a calendar year, is one that is relevant to a case of retrenchment and to judge the legality thereof. It is relevant under Section 6-N of the Uttar Pradesh Industrial Disputes Act, 1947 (for short, ''the Act'), but not at all relevant for the purpose of judging a claim to be declared permanent by a workman, or even regular, by a casual hand. In support of his contention, he places reliance on the decision of the Supreme Court in Chandra Shekhar Azad Krishi Evam Prodyogiki Vishwavidyalaya vs. United Trades Congress and another, (2008) 2 SCC 552. He has drawn the attention of the Court to paragraph 12 of the report in C.S. Azad Krishi Evam Prodyogiki Vishwavidyalaya (supra), where it is held:
"12. A feeble attempt, however, was made by the learned counsel appearing on behalf of Respondent 2 to state that he had been appointed against a permanent vacancy. In his written statement, he did not raise any such contention. It does not also appear from the records that any offer of appointment was given to him. It is inconceivable that an employee appointed on a regular basis would not be given an offer of appointment or shall not be placed on a scale of pay. We, therefore, have no hesitation in proceeding on the premise that Respondent 2 was appointed on daily wages. The Industrial Court in passing the impugned award proceeded on the premise that Respondent 2 had been working for more than 240 days continuously from the date of his engagement. It is now trite that the same by itself does not confer any right upon a workman to be regularized in service. Working for more than 240 days in a year was relevant only for the purpose of application of Section 6-N of the U.P. Industrial Disputes Act, 1947 providing for conditions precedent to retrench the workmen. It does not speak of acquisition of a right by the workman to be regularized in service.
(Emphasis by Court)
26. Mr. Chatterjee has further submitted that a workman, in order to acquire the status of a permanent workman, must be appointed in terms of the relevant rules. He submits that for the Employers the relevant rules, for a workman to acquire the status of permanency, find place in Clause 6.1 of the Recruitment Policy, that is part of the registered settlement dated 16.12.1985. He again emphasizes that merely working for a long period of time, and 240 days in each calendar year, has no legal basis to confer upon the workman the status of permanency. That status can only be acquired in terms of the relevant rules, detailed hereinbefore. In support of this contention, learned Counsel for the Employers has placed reliance on a decision of the Supreme Court in M.P. Housing Board and another vs. Manoj Shrivastava, (2006) 2 SCC 702. He has drawn the attention of the Court to paragraphs 10 and 15 of the report in M.P. Housing Board (supra), where it has been held by their Lordships:
"10. It is one thing to say that a person was appointed on an ad hoc basis or as a daily-wager but it is another thing to say that he is appointed in a sanctioned post which was lying vacant upon following the due procedure prescribed therefor.
15. A daily-wager does not hold a post unless he is appointed in terms of the Act and the Rules framed thereunder. He does not derive any legal right in relation thereto."
27. Learned Counsel for the Employers has buttressed the proposition canvassed by him that mere long continuance as a casual hand or a temporary would not entitle the workmen to claim permanency. He has drawn support for the proposition from the Constitution Bench decision of the Supreme Court in Secretary, State of Karnataka and others vs. Umadevi (3) and others, (2006) 4 SCC 1. He has invited the attention of this Court to paragraphs 45 and 47 of the report in Umadevi (supra), where it is held:
"45. While directing that appointments, temporary or casual, be regularized or made permanent, the courts are swayed by the fact that the person concerned has worked for some time and in some cases for a considerable length of time. It is not as if the person who accepts an engagement either temporary or casual in nature, is not aware of the nature of his employment. He accepts the employment with open eyes. It may be true that he is not in a position to bargain--not at arm's length--since he might have been searching for some employment so as to eke out his livelihood and accepts whatever he gets. But on that ground alone, it would not be appropriate to jettison the constitutional scheme of appointment and to take the view that a person who has temporarily or casually got employed should be directed to be continued permanently. By doing so, it will be creating another mode of public appointment which is not permissible. If the court were to void a contractual employment of this nature on the ground that the parties were not having equal bargaining power, that too would not enable the court to grant any relief to that employee. A total embargo on such casual or temporary employment is not possible, given the exigencies of administration and if imposed, would only mean that some people who at least get employment temporarily, contractually or casually, would not be getting even that employment when securing of such employment brings at least some succour to them. After all, innumerable citizens of our vast country are in search of employment and one is not compelled to accept a casual or temporary employment if one is not inclined to go in for such an employment. It is in that context that one has to proceed on the basis that the employment was accepted fully knowing the nature of it and the consequences flowing from it. In other words, even while accepting the employment, the person concerned knows the nature of his employment. It is not an appointment to a post in the real sense of the term. The claim acquired by him in the post in which he is temporarily employed or the interest in that post cannot be considered to be of such a magnitude as to enable the giving up of the procedure established, for making regular appointments to available posts in the services of the State. The argument that since one has been working for some time in the post, it will not be just to discontinue him, even though he was aware of the nature of the employment when he first took it up, is not one that would enable the jettisoning of the procedure established by law for public employment and would have to fail when tested on the touchstone of constitutionality and equality of opportunity enshrined in Article 14 of the Constitution.
47. When a person enters a temporary employment or gets engagement as a contractual or casual worker and the engagement is not based on a proper selection as recognised by the relevant rules or procedure, he is aware of the consequences of the appointment being temporary, casual or contractual in nature. Such a person cannot invoke the theory of legitimate expectation for being confirmed in the post when an appointment to the post could be made only by following a proper procedure for selection and in cases concerned, in consultation with the Public Service Commission. Therefore, the theory of legitimate expectation cannot be successfully advanced by temporary, contractual or casual employees. It cannot also be held that the State has held out any promise while engaging these persons either to continue them where they are or to make them permanent. The State cannot constitutionally make such a promise. It is also obvious that the theory cannot be invoked to seek a positive relief of being made permanent in the post."
28. Mr. Chatterjee has emphasized that the right to declare permanent, a casual hand is essentially an executive function, or so to speak the Employers' function. It cannot be done by judicial interpose or fiat. In support of his contention on this score, Mr. Chatterjee places reliance on the decision of the Supreme Court in Indian Drugs & Pharmaceuticals Ltd. vs. Workmen, Indian Drugs & Pharmaceuticals Ltd., (2007) 1 SCC 408. Learned Counsel for the Employers has drawn this Court's attention to paragraphs 37, 40, 43 and 44 of the report, where it has been held:
"37. Creation and abolition of posts and regularisation are purely executive functions vide P.U. Joshi v. Accountant General [(2003) 2 SCC 632: 2003 SCC (L&S) 191]. Hence, the court cannot create a post where none exists. Also, we cannot issue any direction to absorb the respondents or continue them in service, or pay them salaries of regular employees, as these are purely executive functions. This Court cannot arrogate to itself the powers of the executive or legislature. There is broad separation of powers under the Constitution, and the judiciary, too, must know its limits.
40. The courts must, therefore, exercise judicial restraint, and not encroach into the executive or legislative domain. Orders for creation of posts, appointment on these posts, regularisation, fixing pay scales, continuation in service, promotions, etc. are all executive or legislative functions, and it is highly improper for Judges to step into this sphere, except in a rare and exceptional case. The relevant case-law and philosophy of judicial restraint has been laid down by the Madras High Court in great detail in Rama Muthuramalingam v. Dy. Supdt. of Police [AIR 2005 Mad 1] and we fully agree with the views expressed therein.
43. In view of the above observations of this Court it has to be held that the rules of recruitment cannot be relaxed and the court/tribunal cannot direct regularisation of temporary appointees dehors the rules, nor can it direct continuation of service of a temporary employee (whether called a casual, ad hoc or daily-rated employee) or payment of regular salaries to them.
44. It is well settled that regularisation cannot be a mode of appointment vide Manager, Reserve Bank of India v. S. Mani [(2005) 5 SCC 100: 2005 SCC (L&S) 609: AIR 2005 SC 2179] (AIR para 54)."
29. Learned Counsel for the Employers has supplemented his contentions by urging that sickness of the industry in the hands of the Employers is also a relevant consideration, while judging a claim of the present kind. He submits that the Labour Court ought to have taken into account the fact that a sick company, running into heavy losses, may not have any post to accommodate a workman, ordered to be made permanent. Again, Mr. Chatterjee relies on the decision of the Supreme Court in Indian Drugs & Pharmaceuticals Ltd. (supra), where it has been held:
"54. In the present case, the appellant is a sick company which has been running on huge losses for many years, and is practically closed down. There are no vacancies on which the respondents could have been appointed. While we may have sympathy with them, we cannot ignore the hard economic realities, nor the settled legal principles."
30. Ms. Bushra Maryam, learned Counsel for the workmen, repelling the contentions of the learned Counsel for the Employers, submits that in case of an industrial dispute, decided under the labour laws by a competent Tribunal, considerations very different from those governing an adjudication of a service matter by this Court, under Article 226 of the Constitution or by their Lordships of the Supreme Court, under Article 32, apply. She urges that the principles evolved by the Constitution Bench in Umadevi (supra) have scant or no application in the context of an industrial dispute decided by a Labour Court under the Act. In support of her submissions, learned Counsel for the workmen has placed reliance upon a decision of the Supreme Court in Maharashtra State Road Transport Corporation and another vs. Casteribe Rajya Parivahan Karmchari Sanghatana, (2009) 8 SCC 556. She has invited the attention of the Court to the decision in Maharashtra State Road Transport Corporation (supra), where it is held:
"30. The question that arises for consideration is: have the provisions of the MRTU and PULP Act been denuded of the statutory status by the Constitution Bench decision in Umadevi (3) [(2006) 4 SCC 1: 2006 SCC (L&S) 753]? In our judgment, it is not.
31. The purpose and object of the MRTU and PULP Act, inter alia, is to define and provide for prevention of certain unfair labour practices as listed in Schedules II, III and IV. The MRTU and PULP Act empowers the Industrial and Labour Courts to decide that the person named in the complaint has engaged in or is engaged in unfair labour practice and if the unfair labour practice is proved, to declare that an unfair labour practice has been engaged in or is being engaged in by that person and direct such person to cease and desist from such unfair labour practice and take such affirmative action (including payment of reasonable compensation to the employee or employees affected by the unfair labour practice, or reinstatement of the employee or employees with or without back wages, or the payment of reasonable compensation), as may in the opinion of the court be necessary to effectuate the policy of the Act.
32. The power given to the Industrial and Labour Courts under Section 30 is 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.
33. The provisions of the MRTU and PULP Act and the powers of the Industrial and Labour Courts provided therein were not at all under consideration in Umadevi (3) [(2006) 4 SCC 1: 2006 SCC (L&S) 753]. As a matter of fact, the issue like the present one pertaining to unfair labour practice was not at all referred to, considered or decided in Umadevi (3) [(2006) 4 SCC 1 : 2006 SCC (L&S) 753] . Unfair labour practice on the part of the employer in engaging employees as 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 as provided in Item 6 of Schedule IV and the power of the Industrial and Labour Courts under Section 30 of the Act did not fall for adjudication or consideration before the Constitution Bench.
34. It is true that Dharwad Distt. PWD Literate Daily Wages Employees' Assn. [(1990) 2 SCC 396: 1990 SCC (L&S) 274: (1990) 12 ATC 902] arising out of industrial adjudication has been considered in Umadevi (3) [(2006) 4 SCC 1: 2006 SCC (L&S) 753] and that decision has been held to be not laying down the correct law but a careful and complete reading of the decision in Umadevi (3) [(2006) 4 SCC 1 : 2006 SCC (L&S) 753] leaves no manner of doubt that what this Court was concerned in Umadevi (3) [(2006) 4 SCC 1 : 2006 SCC (L&S) 753] was the exercise of power by the High Courts under Article 226 and this Court under Article 32 of the Constitution of India in the matters of public employment where the employees have been engaged as contractual, temporary or casual workers not based on proper selection as recognised by the rules or procedure and yet orders of their regularisation and conferring them status of permanency have been passed.
35. Umadevi (3) [(2006) 4 SCC 1: 2006 SCC (L&S) 753] is an authoritative pronouncement for the proposition that the Supreme Court (Article 32) and the High Courts (Article 226) should not issue directions of absorption, regularisation or permanent continuance of temporary, contractual, casual, daily wage or ad hoc employees unless the recruitment itself was made regularly in terms of the constitutional scheme.
36. Umadevi (3) [(2006) 4 SCC 1: 2006 SCC (L&S) 753] does not denude the Industrial and Labour Courts of their statutory power under Section 30 read with Section 32 of the MRTU and PULP Act to order permanency of the workers who have been victims of unfair labour practice on the part of the employer under Item 6 of Schedule IV where the posts on which they have been working exist. Umadevi (3) [(2006) 4 SCC 1: 2006 SCC (L&S) 753] cannot be held to have overridden the powers of the Industrial and Labour Courts in passing appropriate order under Section 30 of the MRTU and PULP Act, once unfair labour practice on the part of the employer under Item 6 of Schedule IV is established."
31. Learned Counsel for the workmen has also called attention to a decision of this Court in U.P. State Road Transport Corporation, Kanpur & Ann. vs. Roadways Karamchari Sanyukt Parishad and others, 2013 SCC OnLine All 13737, where following the decision of the Supreme Court in Maharashtra State Road Transport Corporation (supra), it has been held:
"19. These decisions are not applicable in the instant case, inasmuch as, these decision relates to power of the High Courts under Article 226 of the Constitution of India.
20. In the case of Maharashtra State Road Transport Corporation (AIR 2009 SC (Supp) 2656) (supra), the Supreme Court held that the labour court is not denuded with its powers to order permanency of the workers, who had been a victim of unfair labour practice. The labour court could create new rights and obligations between the Employers and its workers.
21. In the light of the aforesaid, this Court finds that when permanent vacancies were existing, the petitioner, being an instrumentality of the State, was under a legal obligation to fill up the post instead of getting the work done through part time employees. The work done by the workman was that of a full time workman. The practice adopted was a clear case of unfair labour practice and considering the facts that has been brought out in the instant case, the labour court was justified in holding that since the workman was working continuously for years and in the light of permanent post being available, rightly directed regularization of the service of the workman."
32. Learned Counsel for the workmen has argued that so far as factors about the health or the hard time faced by the Employers is concerned, if that be a relevant consideration in judging entitlement of the workmen to relief, it would be very iniquitous to smother the workmen out of existence for the slight inconvenience of the better endowed Employers. In support of her contention, Ms. Bushra Mariyam has placed reliance on the decision of the Supreme Court in M/s. Hindustan Tin Works Pvt. Ltd. vs. Employees of M/s. Hindustan Tin Works Pvt. Ltd. and others, (1979) 2 SCC 80. She has drawn the attention of the Court to paragraph 13 of the report, where it is held:
"13. Now, if a sacrifice is necessary in the overall interest of the industry or a particular undertaking, it would be both unfair and inequitous to expect only one partner of the industry to make the sacrifice. Pragmatism compels common sacrifice on the part of both. The sacrifice must come from both the partners and we need not state the obvious that the labour is a weaker partner who is more often called upon to make the sacrifice. Sacrifice for the survival of an industrial undertaking cannot be an unilateral action. It must be a two-way traffic. The management need not have merry time to itself making the workmen the sacrificial goat. If sacrifice is necessary, those who can afford and have the cushion and the capacity must bear the greater brunt making the shock of sacrifice as less poignant as possible for those who keep body and soul together with utmost difficulty."
33. Learned Counsel for the workmen has also placed reliance on a decision of the Supreme Court in Workmen of Bhurkunda Colliery of Central Coalfields Ltd. vs. Bhurkunda Colliery of Central Coalfields Ltd., (2006) 3 SCC 297 in aid of her submission that in cases of regularization under the Industrial Jurisprudence, different principles than those that govern regularization in service matters properly so called, apply.
34. Learned Counsel for the workmen has further placed reliance on a decision of the Supreme Court in Harjinder Singh vs. Punjab State Warehousing Corporation, (2010) 3 SCC 192 to buttress her submission that the ill-effects of relief to workmen on the financial health of the employer alone should not lure the Court into eschewing relief, to which the workman is otherwise entitled. She has relied on the following observations of their Lordships in Harjinder Singh (supra):
"30. Of late, there has been a visible shift in the courts' approach in dealing with the cases involving the interpretation of social welfare legislations. The attractive mantras of globalisation and liberalisation are fast becoming the raison d'être of the judicial process and an impression has been created that the constitutional courts are no longer sympathetic towards the plight of industrial and unorganised workers. In large number of cases like the present one, relief has been denied to the employees falling in the category of workmen, who are illegally retrenched from service by creating by-lanes and side-lanes in the jurisprudence developed by this Court in three decades. The stock plea raised by the public employer in such cases is that the initial employment/engagement of the workman/employee was contrary to some or the other statute or that reinstatement of the workman will put unbearable burden on the financial health of the establishment. The courts have readily accepted such plea unmindful of the accountability of the wrong doer and indirectly punished the tiny beneficiary of the wrong ignoring the fact that he may have continued in the employment for years together and that micro wages earned by him may be the only source of his livelihood.
31. It need no emphasis that if a man is deprived of his livelihood, he is deprived of all his fundamental and constitutional rights and for him the goal of social and economic justice, equality of status and of opportunity, the freedoms enshrined in the Constitution remain illusory. Therefore, the approach of the courts must be compatible with the constitutional philosophy of which the directive principles of State policy constitute an integral part and justice due to the workman should not be denied by entertaining the specious and untenable grounds put forward by the employer--public or private."
35. As a closing note to her submission, learned Counsel for the workmen has referred to a Constitution Bench decision of the Supreme Court, rendered in the infant years of our Republic in Bharat Bank Ltd., Delhi vs. Employees of the Bharat Bank Ltd., Delhi, AIR 1950 (37) SC 188. In Bharat Bank Ltd. (supra), B.K. Mukherjea, J. (as His Lordship then was) held about the scope and amplitude of powers conferred on an Industrial Tribunal, besides the nature of an industrial dispute and the nature of the Tribunal's jurisdiction, thus:
"61. We would now examine the process by which an Industrial Tribunal comes to its decisions and I have no hesitation in holding that the process employed is not judicial process at all. In settling the disputes between the Employers and the workmen, the function of the Tribunal is not confined to administration of justice in accordance with law. It can confer rights and privileges on either party which it considers reasonable and proper, though they may not be within the terms of any existing agreement. It has not merely to interpret or give effect to the contractual rights and obligations of the parties. It can create new rights and obligations between them which it considers essential for keeping industrial peace. An industrial dispute as has been said on many occasions is nothing but a trial of strength between the Employers on the one hand and the workmen's organization on the other and the Industrial Tribunal has got to arrive at some equitable arrangement for averting strikes and lock-outs which impede production of goods and the industrial development of the country. The Tribunal is not bound by the rigid rules of law. The process it employs is rather an extended form of the process of collective bargaining and is more akin to administrative than to judicial function. In describing the true position of an Industrial Tribunal in dealing with labour disputes, this Court in Western India Automobile Association v. Industrial Tribunal, Bombay, 1949 F. C. R. 321 at p.345: A.I.R. (36) 1949 F.C. 111) quoted with approval, a passage from Ludwig Teller's well known work on the subject, where the learned author observes that "industrial arbitration may involve the extension of an existing agreement or the making of a new one or in general the creation of new obligations or modification of old ones, while commercial arbitration generally concerns itself with interpretation of existing obligations and disputes relating to existing agreements".
The views expressed in these observations were adopted in its entirety by this Court. Our conclusion, therefore, is that an Industrial Tribunal formed under the Industrial Disputes Act is not a judicial tribunal and its determination is not a judicial determination in the proper sense of these expressions."
(Emphasis by Court)
36. Learned Counsel for the workmen submits that given the wide powers of the Labour Court/ Industrial Tribunal to resolve industrial disputes under the Act, no exception can be taken to the impugned award, which has granted permanency to the workmen.
37. This Court has keenly considered the submissions advanced on behalf of both sides.
38. A perusal of the award does show that the Labour Court has time and again mentioned 240 days of continuous work done by the workmen during a calendar year, which it has considered to be some kind of a basis to infer a right to be declared permanent. This Court has no manner of doubt that 240 days of continuous work is a fact that is entirely irrelevant when considering a claim to be declared permanent. The factum of continuous service for 240 days in a calendar year is relevant under Section 6-N of the Act, which relates to retrenchment of a workmen. It has no relevance, so far as the right to claim a permanent status is concerned. As a proposition of law, continuous work for 240 days in a calendar year is absolutely irrelevant to a workman's right to claim regularization. The right to be declared permanent is but a facet of regularization. This question is no longer res integra in view of the decision of the Supreme Court in Chandra Shekhar Azad Krishi Evam Prodyogiki Vishwavidyalaya (supra).
39. The question, however, is that the Labour Court having taken into consideration one irrelevant factor, is it enough to vitiate findings on the more substantial issue that the workmen having been retained in service continuously for varying and long periods of time by the Employers to do work of a perennial nature, are victims of unfair labour practice. In order to assess the Employers' plea that the workmen were hired merely as casual hands to work in place of permanent workmen, the Labour Court has considered the Employers' case and evidence about this issue. It has been held that the Employers have not furnished any particulars, indicating which of the workmen were retained as casual hands to discharge duties, of which of the named absenting permanent workman. The Labour Court has also taken note of the fact that the Employers have not testified to the fact that the workmen have not been in their continuous employment from the date that they were initially retained. The Labour Court has, therefore, inferred that the Employers' case about the workmen, being retained on a casual basis, according exigencies of work, is not at all acceptable. The Labour Court has also taken into account the fact that prior to their direct engagement by the Employers, the workmen had been hired through a Labour Contractor and that during their engagement on contract also, they were under the direct control of the Employers. The Labour Court has concluded and reasonably so, that from the date these workmen have been engaged by the Employers, they are in their regular and continuous employment. It would be noticed that until date of reference of the industrial dispute, the longest of the serving workman had put in about eight years of service, whereas others had done seven years, six years, five years or four years, but no one less than three. There is no straitjacket formula about time to infer retention of a workman to do work of a perennial or permanent nature. It has to be gathered from the circumstances.
40. Here, in this Court's opinion, the Industrial Tribunal, from the Employers' case and evidence, the stand of the workmen and the attending circumstances, has drawn a reasonable conclusion that the workmen were retained by the Employers to do work of a perennial nature. They were not hired casually to fill in for absenting permanent workman or otherwise to cope with exigencies of work. The fact that the Industrial Tribunal has been, particularly, fascinated by the figure of 240 days of work, put in during each calendar year, by the workmen, no doubt an irrelevant consideration, does not detract from the overall soundness of the conclusion, considering other relevant factors that have entered judgment.
41. So far as this conclusion of the Industrial Tribunal is concerned, there is a further finding by the Industrial Tribunal to support it. It is about the failure of the Employers to produce records about the workmen's engagement that would demonstrate it to be casual, in broken spells and one resorted to meet the exigencies of work. This failure of the Employers to show by their records that the workmen were not in continuous employment, has been rightly accepted by the Industrial Tribunal to find for the workmen, pitted against the workmen's unrebutted testimony that they were in continuous employment during the entire period of time. The continuous engagement of the workmen has also been rightly made the basis of a finding by the Industrial Tribunal that the nature of work that led the Employers to retain the workmen, was of a perennial nature. In the opinion of this Court, no exception can be taken by the Employers, so far as this finding of the Industrial Tribunal goes.
42. The most formidable question that Mr. Chatterjee has posed is about the Industrial Tribunal's jurisdiction to declare a workman permanent by judicial determination. He has castigated the impugned award, on the basis of the principle that the right to regularize is an executive act or the Employer's decision. It is not something that can be thrust upon the Employer by judicial declaration. The said proposition, for a principle, does not brook doubt. The decision of their Lordships of the Supreme Court in Indian Drugs & Pharmaceuticals Ltd. (supra) is a firm exposition about it, where earlier authority of their Lordships, as also a decision of the Madras High Court has been noticed and approved.
43. The other submission of Mr. Chatterjee, which is again a facet of last forgoing submission, is that appointment to a permanent post cannot be made de hors the rules, by which the Employer is bound to recruit. He submits that regularization of a temporary or casual hand has been held to be unconstitutional and a violation of Articles 14 and 16 of the Constitution. Regularization has been firmly condemned as a backdoor entry to service that derogates from the fundamental right to equality in opportunity of employment to all citizens. Mr. Chatterjee has, in particular, emphasized that the Standing Orders, applicable to the Employer and Clause 6.1 of the Recruitment Policy, part of the registered settlement dated 16.12.1985, exclusively provide for the procedure through which a workman becomes permanent.
44. The reliance placed on behalf of the Employers to dispel the workmen's right to regularization, based on long and continuous engagement, deserves careful consideration. The decisions of the Supreme Court in M.P. Housing Board (supra) and, particularly, the Constitution Bench in Umadevi (supra) are bedrocks of support for the proposition that Employers canvass. There are, thus, two facets of the proposition: (1) that Courts and Tribunals, by exercise of the judicial power, cannot thrust regularization upon the executive or any Employer which is essentially an executive function. The right to declare some workman or employee permanent is but a facet of the power to regularize; and (2) regular appointment, which includes a permanent appointment, cannot be made de hors the relevant recruitment rules by the competent Authority on the ground of long continuance in service alone.
45. This Court has no manner of doubt that these principles are not open to question in the field of service law, where employment is either under the State or a State Instrumentality or any other Employer, but regulated by statutory rules. In the matter of enforcement of rights of workmen under the labour laws also, these principles would be attracted wherever the Employer, though an industry, is either the State or a State Instrumentality or otherwise governed in its relationship with the workmen by service rules that are statutory or partake of statutory flavour.
46. In cases, however, of industrial disputes, where the Employers are an industry, who are not in any way the State or a State Instrumentality or otherwise governed in their relationship with the workmen by statutory service regulations, the principles under consideration may not apply. The said principles would, particularly, not apply in cases of industrial disputes, where the Employers who are an industry and are not State or a State Instrumentality, or otherwise under statutory regulation governing employment, resort to unfair labour practice by retaining workmen on temporary or casual basis for long periods of time, in order to undertake work of a permanent or a perennial nature. These are cases where the Employers, who are an industry within the meaning of the Act, put up a facade of casual engagement of workmen that they continue for years together in order to eschew their liabilities under the laws, the Standing Orders or settlements, vis-a-vis their workmen. In cases like this, if the Industrial Tribunal were to find the action of the Employer continuing their workmen under a facade as casuals to do work of a permanent nature, an unfair labour practice, there is no principle that forbids the Tribunal under the Act from undoing that injustice. It would, of course, take the form of ordering the workman concerned to be regularized or ordered to be made permanent.
47. It must also be remarked that the principle in Umadevi (supra) that forbids Courts from ordering regularization is one confined to the High Courts and the Supreme Court in the exercise of their writ jurisdiction, under Article 226 or Article 32 of the Constitution. This distinction has been drawn by their Lordships of the Supreme Court in Maharashtra State Road Transport Corporation (supra). It has been indicated there that the decision in Umadevi (supra) does not denude the Labour Court of its powers to abate an unfair labour practice, if proved, and also to take affirmative action. In Umadevi, their Lordships were seized of a question about the powers of the Industrial and Labour Courts to grant relief of permanency of status to cleaners employed as temporaries or casuals with the Maharashtra State Road Transport Corporation, under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. It was held that "practice on the part of the employer in engaging employees as 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 as provided in Item 6 of Schedule IV and the power of the Industrial and Labour Courts under Section 30 of the Act did not fall for adjudication or consideration before the Constitution Bench" (the Constitution Bench in Umadevi).
48. In the present case also, the industrial dispute is about an unfair labour practice resorted to by the Employers of engaging the workmen for a long period of time in continuous employment to do work of a perennial nature, still dubbing them as casual hands. The Industrial Tribunal has recorded a positive finding that it is case of unfair labour practice by the Employers on the facts and circumstances that show that the Employers have retained the workmen as casual hands to do work of a perennial nature. The said finding is a pure finding of fact, based on appreciation of evidence, about which there is no demonstrable or manifest illegality. Once, it has been found by the Labour Court to be a case of unfair labour practice, there is no embargo upon the jurisdiction of the Industrial Tribunal to take remedial affirmative action, by ordering the Employers to declare the workmen permanent.
49. It must be noticed here that the decisions in M.P. Housing Board (supra) and Indian Drugs & Pharmaceuticals Ltd. (supra), were both rendered in the context of Labour Law Statutes. It, therefore, does need clarification that the principle about non application of the law forbidding regularization by judicial determination laid down in Umadevi (supra) and M.P. Housing Board (supra) as well as Indian Drugs & Pharmaceuticals Ltd. (supra), in fact, would not apply to decisions of industrial disputes by the Labour Courts/ Industrial Tribunals. The decision in M.P. Housing Board (supra) arose out of a dispute between the M.P. Housing Board and its employees, where the M.P. Housing Board was held to be a State within the meaning of Article 12 of the Constitution and found admittedly governed by an Act, the M.P. Grih Nirman Mandal Adhiniyam, 1972. It was also recorded for an undisputed proposition that the terms and conditions of employment under the M.P. Housing Board for its employees were governed by a statute, that is to say, the Act of 1972, last mentioned. Of course, to supplement the conditions of work for its employees or employees in general, the State of Madhya Pradesh had enacted the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961, whereunder also the Board had framed its Standing Orders. What cannot be lost sight of, is the fact that the rights of the workmen in M.P. Housing Board were claimed vis-a-vis an Employer, who were a State Instrumentality and the terms and conditions of employment were governed by a statute. It was not a case like the present one, where the employer is not remotely the State and there are no statutory rules, regulating the conditions of work, except the Standing Orders, framed under the Industrial Employment (Standing Orders) Act, 1946 (for short, ''the Act of 1946').
50. Likewise, in Indian Drugs & Pharmaceuticals Ltd., though the case arose from an industrial dispute, decided by the Labour Court, U.P., Dehradun, it eloquently figures there that the Employers were a Public Sector Undertaking with a plant located in Rishikesh, where they manufactured pharmaceuticals. Though in the said case, no statutory service rules, governing the relationship between the employer and employee, find mention, but the fact that the Employers were an Instrumentality of the State, bound by the principles, enshrined in Articles 14 and 16 of the Constitution, the rule in Umadevi (supra) would surely apply to a claim for regularization there. This is certainly not the position in the present case, where the Employers are not remotely a face of the State. The only issue, that has been raised, is that the workmen have not been appointed in accordance with the Standing Orders applicable to the Employers, framed under the Act of 1946, and that, therefore, the principles in Umadevi (supra), M.P. Housing Board (supra) and Indian Drugs & Pharmaceuticals Ltd. (supra) would work to exclude the Industrial Tribunal's jurisdiction to order regularization of any kind.
51. This question about the statutory force of Standing Orders also arose before their Lordships of the Supreme Court in Maharashtra State Road Transport Corporation (supra). The decision in Indian Drugs & Pharmaceuticals Ltd. (supra) was noticed apart from some others, particularly, those in State of Maharashtra and another vs. R.S. Bhonde and others, (2005) 6 SCC 751 and Divisional Manager, Aravali Golf Club and another vs. Chander Hass and another, (2008) 1 SCC 683. Their Lordships answered the question in Maharashtra State Road Transport Corporation, thus:
"45. The question now remains to be seen is whether the recruitment of these workers is in conformity with Standing Order 503 and, if not, what is its effect? No doubt, Standing Order 503 prescribes the procedure for recruitment of Class IV employees of the Corporation which is to the effect that such posts shall be filled up after receiving the recommendations from the Service Selection Board and this exercise does not seem to have been done but Standing Orders cannot be elevated to the (sic status of) statutory rules. These are not statutory in nature.
46. We find merit in the submission of Mr Shekhar Naphade, learned Senior Counsel for the employees that Standing Orders are contractual in nature and do not have a statutory force and breach of Standing Orders by the Corporation is itself an unfair labour practice. The employees concerned having been exploited by the Corporation for years together by engaging them on piece-rate basis, it is too late in the day for them to urge that procedure laid down in Standing Order 503 having not been followed, these employees could not be given status and privileges of permanency. The argument of the Corporation, if accepted, would tantamount to putting premium on their unlawful act of engaging in unfair labour practice.
47. It was strenuously urged by the learned Senior Counsel for the Corporation that the Industrial Court having found that the Corporation indulged in unfair labour practice in employing the complainants as casuals on piece-rate basis, the only direction that could have been given to the Corporation was to cease and desist from indulging in such unfair labour practice and no direction of according permanency to these employees could have been given. We are afraid, the argument ignores and overlooks the specific power given to the Industrial/Labour Court under Section 30(1)(b) to take affirmative action against the erring employer which as noticed above is of wide amplitude and comprehends within its fold a direction to the employer to accord permanency to the employees affected by such unfair labour practice."
(Emphasis by Court)
52. It is, accordingly, held that the principles that forbid regularization by judicial interpose or order, generally in case of Employers and, particularly, in cases where the State is the Employer or the relationship of employer and employee is governed by statute, would have no application in the context of an Employer, who are an industry within the meaning of this Act, but not a State or one of its Instrumentality or one where relationship between the employer and employee is regulated by statute or statutory service rules. In a case of the latter kind, it would always be open for the Labour Court or the Industrial Tribunal to grant regularization, where it finds it to be a case of unfair labour practice.
53. This Court may now consider the last limb of the submission advanced by the learned Counsel for the Employers. It has been submitted that the Employers are a sick industry and due regard must be had to the Employers' economic health before thrusting upon them workmen, with rights of permanency, through industrial adjudication. Inspiration is again drawn for the said submission by the learned Counsel for the Employers from the concluding remarks of their Lordships of the Supreme Court in Indian Drugs & Pharmaceuticals Ltd. (supra). This Court may notice that about this particular issue, in a later judgment of the Supreme Court in Harjinder Singh (supra), observations of far-reaching import have been made in the context of granting relief of reinstatement to workmen, illegally found retrenched. It is, thus, always a matter of balancing competing interests of the tiny individual workmen with the better endowed Employer.
54. It is true that the Employer is not always in a very comfortable position and reinstatement or regularization thrust upon an Employer, with a tottering economic health, may wreak havoc. But, so far as the facts of the present case go, it has been brought on record by the Employers that out of the twenty-seven workmen, seven have settled during the pendency of the writ petition. This Court has not accepted that plea, earlier in this judgment, looking to the fact that there is no evidence about the settlement and no admission on behalf of the workmen about the said fact. It has also been said that of the remainder seventeen, eight have attained the age of superannuation, whose details are mentioned in paragraph 8 of the third Supplementary Affidavit, dated 7th January, 2019. There are then a number of facts brought on record through this supplementary affidavit saying that nine workmen are still in the working age group, whose details are disclosed in paragraph no.9.
55. It is pointed out that pending this writ petition, the original Employers, Duncans Industries suffered a huge financial loss, resulting in stoppage of production activity in March 2002. Consequently, the entire workmen engaged in production were laid off with effect from 01.07.2002. It is admitted in paragraph 12 of the supplementary affidavit that the workmen (the workmen who are respondents to this petition) were retained as casuals till the stoppage of production activity in 2002. It is further averred that in June, 2005, with the intervention of the Labour Commissioner, U.P., a tripartite settlement was arrived at between the recognized and majority Union, the Duncans (the original Employers) and the representatives of M/s. Kanpur Fertilizer and Cement Limited (the Employers who took over under the Rehabilitation Scheme later). This settlement was recorded on 21.06.2005 with the intervention of the Labour Commissioner, U.P. and registered with the Additional Labour Commissioner, U.P., Kanpur on 30.08.2005.
56. It is pointed out that by the aforesaid settlement, the workmen were covenanted to be paid 55% of their wages for the period of lay off, in thirty monthly installments. After tracing out details about the facts leading to the Rehabilitation Scheme, the course of proceedings before the BIFR and take over of the original Employers by M/s. Kanpur Fertilizer and Cement Limited, mention of which has been made in the opening part of this judgment, it is averred that M/s. Kanpur Fertilizer and Cement Limited, as the incoming Management, negotiated with the majority Union for the settlement of past dues of all employees of the Fertilizer Unit. A settlement is claimed to have taken place, where all the employees were asked to sign an undertaking that they would accept 25% of their wages for the special leave period between 01.06.2006 to September 2010. It is also said that be maintenance of the closed plant took about three years to recommence production, that involved change from naphtha gas technology to a gas based one. There is a very detailed description about how the Employers' plant became functional again. What is relevant is that production activities commenced in 2013 and the Employers absorbed the entire work force, including casual workmen till the beginning of 2014, when the Employers' plant resumed production. The Employers' claim that all the workmen were asked to sign an undertaking in terms of the settlement dated 06.06.2010 and resume duties. The workmen in general reported and resumed their duties after signing the undertaking in terms of the registered settlement dated 06.06.2010.
57. So far as the workmen (respondents here) are concerned, they refused to resume duty after signing the undertaking and served a legal notice through Shri Rajendra Bhole, Advocate dated 26.05.2014. A copy of that notice has been brought on record, as also the settlement dated 06.06.2010. It is averred on behalf of the Employers that casual workmen who are senior to the workmen (the respondents here) are still working as casuals and have not raised any dispute. It is also averred that there were a total of thirty casual workmen, prior to restart of the Employers' plant, after the transfer of undertaking from Duncans to M/s. Kanpur Fertilizer and Cement Limited. These thirty workmen are working with the Employers in different departments, as casual workmen. No fresh casuals have been engaged by the Employers, after commencement of production. There is a list of area-wise deployment of casual workmen annexed (not the respondents here), deployed in different departments of the Employers.
58. It is not the Employers' case anywhere that they have retrenched any of their casual hands or the workmen. The Employers have retained the workmen, may be after the lay off, during which they went out of production and had a change of Management, post settlement of a Rehabilitation Scheme by the BIFR. The substance of the matter is that requirement of the Employers is still there and the only disassociation of the workmen, as also their other workmen is during the period of lay off. These workmen have been, thus, part of the Employers' establishment since the decade of 1980s. It cannot, therefore, be gainsaid that the workmen were engaged as casual hands to take care of exigencies of work. They were retained to do work, that is perennial in nature, and have worked there entire lives with the Employers. After revival of production, according to the Employers, their association continues except some workmen, whose names are mentioned in the supplementary affidavit, having superannuated during this period.
59. Given the aforesaid circumstances and, of course, subject to whatever has happened during the layoff when there was no production, it is very difficult to discard the Industrial Tribunal's findings that the workmen are not mere casual hands to take care of exigencies of work. The insistence of the Employers that other workmen are also continuing as casuals, some of them senior to the workmen, because the Employers have not taken in permanent workmen through the procedure prescribed under the Standing Order, is apparently a specious plea. This Court thinks that the abiding retention of the workmen even during economically tumultuous times shows the permanent nature of the work that the workmen are engaged to do. Under these circumstances, to insist that the workmen at this distance of time still continue as casual hands smacks of unfair labour practice.
60. In the opinion of this Court, no illegality, much less a manifest illegality, can be found in the impugned award.
61. In the result, the petition fails and is dismissed. No order as to costs.
Order Date:- 10.8.2020 Anoop/ BKM