Gujarat High Court
Junagadh Municipal Corporation vs Rajeshbhai Madhabhai Zala on 30 November, 2018
Author: Biren Vaishnav
Bench: Anant S. Dave, Biren Vaishnav
C/LPA/1441/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 1441 of 2018
In SPECIAL CIVIL APPLICATION NO. 10705 of 2016
With
R/LETTERS PATENT APPEAL NO. 1442 of 2018
In
SPECIAL CIVIL APPLICATION NO. 9801 of 2016
With
R/LETTERS PATENT APPEAL NO. 1443 of 2018
In
SPECIAL CIVIL APPLICATION NO. 9802 of 2016
With
R/LETTERS PATENT APPEAL NO. 1444 of 2018
In
SPECIAL CIVIL APPLICATION NO. 9803 of 2016
With
R/LETTERS PATENT APPEAL NO. 1445 of 2018
In
SPECIAL CIVIL APPLICATION NO. 9804 of 2016
With
R/LETTERS PATENT APPEAL NO. 1446 of 2018
In
SPECIAL CIVIL APPLICATION NO. 9807 of 2016
With
R/LETTERS PATENT APPEAL NO. 1447 of 2018
In
SPECIAL CIVIL APPLICATION NO. 9808 of 2016
With
R/LETTERS PATENT APPEAL NO. 1448 of 2018
In
SPECIAL CIVIL APPLICATION NO. 9809 of 2016
With
R/LETTERS PATENT APPEAL NO. 1449 of 2018
In
SPECIAL CIVIL APPLICATION NO. 9810 of 2016
With
R/LETTERS PATENT APPEAL NO. 1450 of 2018
In
SPECIAL CIVIL APPLICATION NO. 9806 of 2016
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JUNAGADH MUNICIPAL CORPORATION
Page 1 of 32
C/LPA/1441/2018 ORDER
Versus
RAJESHBHAI MADHABHAI ZALA
==========================================================
Appearance:
MR HS MUNSHAW(495) for the PETITIONER(s) No. 1
MR SAMIR GOHIL for the RESPONDENT(s) No. 1,2
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CORAM: HONOURABLE THE ACTING CHIEF JUSTICE ANANT S. DAVE
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 30/11/2018
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE BIREN VAISHNAV)
1. All these Letters Patent Appeals arise out of a common oral judgement dated 25.07.2018 passed by the learned Single Judge in the captioned Special Civil Applications. Before the learned Single Judge, by way of the captioned Special Civil Applications, the appellant - original petitioner - Junagadh Municipal Corporation had challenged the awards of the Labour Court, Junagadh by which the Labour Court had passed similar awards in all the Reference Cases directing the appellant to reinstate the respondents claimants on their original posts with continuity of service, however, without backwages.
2. Since the facts involved in the cases were almost similar, the petitions were heard and decided together and therefore these appeals are also heard and decided by way of a common judgement. The facts in brief are as under:
2.1 The respondents - claimants raised an industrial dispute alleging that the Junagadh Municipal Corporation had illegally terminated their services and therefore they were entitled to Page 2 of 32 C/LPA/1441/2018 ORDER reinstatement with all benefits. A reference was made by the appropriate government and was adjudicated by the Labour Court, Junagadh by separate orders of reference.
2.2 Statements of claim were filed by the claimants alleging that they were working as daily wagers, initially with the Joshipura Borough Municipality and subsequently with the Junagadh Municipal Corporation. It was their case that they had worked regularly and continuously and rendered service for 240 days in a year. It was their case that the appellant had abruptly terminated their services by oral order and in breach of the statutory provisions namely Sections 25F, 25G and 25H of the Industrial Disputes Act, 1947 (for short 'the Act').
2.3 The appellant opposed the claims of the workmen respondents herein on the ground that since the respondents were working as daily wagers, they had no right against the Corporation. It was further contended by them that in absence of any evidence about their employment and the total period of service rendered by them, the claimants had no right to claim reinstatement merely because they had worked on a daily wage basis, without being appointed through the regular process of selection. The Labour Court, after recording evidence and hearing the arguments, issued the directions as referred to hereinabove.
2.4 Arguments made by the learned advocate for the appellant before the Labour Court were reiterated by Mr. Munshaw, learned advocate appearing for the appellant Corporation. Before the learned Single Judge, it was contended that since the respondents claimants were not Page 3 of 32 C/LPA/1441/2018 ORDER appointed in accordance with the prescribed procedure, they did not have a right to demand that they be continued in service. That it was not open for them to allege about applicability of Sections 25F, 25G and 25H and therefore the Labour Court ought not to have held that the termination of services of the claimants was in breach of these provisions. It was further contended by the employer - appellant that since the claimants were engaged on a daily wage basis for a short period, there was no justification for the Labour Court to pass directions of reinstatement, that too with continuity of service.
If at all, according to the appellant, the Labour Court came to the conclusion that the termination was bad, reinstatement with continuity of service was unjustified and the Labour Court ought to have awarded lumpsum compensation.
2.5 For the workmen, learned advocate submitted that it was not open for the employer to plead exemption as the Labour Court had categorically, on appreciation of evidence, held that there was a breach of statutory provisions. A finding of fact was recorded that though the workmen had rendered more than 12 months of service, their services were terminated without following the prescribed procedure of law. Once the Labour Court had held that the claimants came to be discontinued in breach of statutory provisions, the direction to reinstate them cannot be said to be illegal or unjustified, particularly when no backwages were awarded.
2.6 The learned Single Judge based on these submissions considered the propriety of the findings of the Labour Court on the basis of the material available on record. Before the learned Single Judge, a summary of relevant facts in respect Page 4 of 32 C/LPA/1441/2018 ORDER of each claimant in the petitions was placed and was so reproduced in the judgement of the learned Single Judge. The details which are reflected from the above statement are as under:
Sr. No. of Name of Respondent Period worked No Petition 1 SCA Kantilal Vaja (Joshipura) 2001 to 1.4.04 No.9796/16 Safai Kamdar 2 SCA Kantilal Vadher (Joshipura) 1999 to 1.4.04 No.9797/16 Safai Kamdar 3 SCA Mohan Chauhan 1999 to 1.4.04 No.9798/16 (Joshipura) Safai Kamdar 4 SCA Jagmal Vala (Joshipura) 1999 to 1.4.04 No.9799/16 5 SCA Narendra Pathak Sept. 97 to No.9800/16 (Joshipura), Apr.
Tax Dept 99 6 SCA Gopal Baraiya (Muni. Oct. 02 to No.9801/16 Corp.) 17.12.03 Safai Kamdar 7 SCA Sanjay Chudasma (Muni. Oct. 02 to No.9802/16 Corp.) 17.12.03 Safai Kamdar 8 SCA Ramesh Vadher (Muni. Oct. 02 to No.9803/16 Corp.) 17.12.03 Safai Kamdar 9 SCA Velji Jethwa (Muni. Oct. 02 to No.9804/16 Corp.) 17.12.03 Safai Kamdar 10 SCA Ramji Jethwa 1999 to 1.4.04 No.9805/16 (Joshipura) 11 SCA Mansukh Chudasama 1995 to No.9806/16 (Muni. Corp.) 26.1.05 Labourer 12 SCA Rajesh J. Vala (Muni. Oct. 02 to No.9807/16 Corp) 17.12.03 Page 5 of 32 C/LPA/1441/2018 ORDER Safai Kamdar 13 SCA Chunilal N. Vala (Muni. Oct. 02 to No.9808/16 Corp) 17.12.03 Safai Kamdar 14 SCAS Prakash K. Solanki Oct. 02 to No.9809/16 (Muni. Corp.) 17.12.03 Safai Kamdar 15 SCA Jitendra N. Parmar Oct. 02 to No.9810/16 (Muni. Corp.) 17.12.03 Safai Kamdar 16 SCA Kantaben Gohel (Joshipura) 2001 to 1.4.04 No.10584/16 Safai Kamdar 17 SCA Rajesh M. Jhala (Muni. Oct 02 to No.10705/1 Corp.) 17.10.03 6 Safai Kamdar [Emphasis Supplied]
3. Certain undisputed facts are culled out on the basis of the evidence so appreciated by the Labour Court and assessed by the learned Single Judge. Such undisputed facts are as under:
(I) The claimants were engaged as daily wagers (II) They were engaged without following the prescribed procedure.
(III) They were discontinued without notice after they had rendered service for about 12 months. (IV) They came to be discontinued not only without notice but without payment of retrenchment compensation and such discontinuance from service was not on the ground of misconduct.
3.1 Apart from these undisputed facts, the learned Single Judge on a close reading of the awards under challenge Page 6 of 32 C/LPA/1441/2018 ORDER noticed that the employees - claimants had made an application before the Labour Court stating that the employer should provide and produce documents related to their appointments, such as identity cards and attendance registers, salary slips because it was their specific case that their attendance was marked on loose sheets and salaries were paid by obtaining their signatures/thumb impressions on loose sheets. In absence of such documents, it was the claim of the employees that the employer be called upon to produce such documents with the aid of which the claimants could establish their total period of service. The Labour Court and the learned Single Judge in turn observed that the employees having made such an application, the onus to prove that the employees had not worked for 240 days shifted on the employer. The employer having failed to produce such documents, the Labour Court was justified in reaching to the conclusion that the claimants had worked for 240 days in the preceding 12 months before their termination. The Labour Court arrived at such findings on the basis of the decisions of the Apex Court in the cases of Assistant Executive Engineer [AIR 2006 SC 355]; Director, Fisheries Terminal Division v. Bhikubhai Meghajibhai Chavda [AIR 2010 SC 1236] and Municipal Corporation, Faridabad v. Siri Niwas [(2004) 8 SCC 195]. This was on the basis of the fact that the Labour Court was entitled to draw adverse inference and to assume that the claimants had worked for 240 days.
3.2 The learned Single Judge, therefore, found no fault in the decision taken by the awards under challenge holding that since the claimants - respondents herein had worked for a Page 7 of 32 C/LPA/1441/2018 ORDER period of 240 days in the preceding 12 months and that they were terminated without notice or retrenchment compensation, the claimants were entitled to reinstatement in service. In the opinion of the learned Single Judge, in the cases that were before him, it was clearly established that the procedure prescribed under Section 25F of the Act was not followed and therefore the appropriate relief, which the learned Single Judge and which the Labour Court thought it fit to grant was reinstatement in service with continuity but without backwages. In the latter part of the judgement, the learned Single Judge agreed with the submission of the employer that there was no violation of provisions of Section 25G and 25H of the Industrial Disputes Act, 1947. In other words, when the learned Single Judge agreed with the employer with regard to the fault of the Labour Court in arriving at the conclusion of violation of Sections 25G and 25H of the Act, the only ground on which the present appeals have been filed are against the observations of the learned Single Judge holding that the employer had committed a breach of Section 25F of the Act, on having presumed that the respondents - claimants had worked for 240 days by drawing an adverse inference against the appellant which in the appellant's submission, it could not have drawn.
3.3 In the present set of writ petitions which were filed by the claimants engaged by the Corporation, the learned Single Judge found that they had worked for more than 12 months and in their cases the factors which attracted applicability of section 25F were clearly established and the Labour Court's conclusion could not be faulted. The Labour Court was therefore right in awarding reinstatement with continuity of Page 8 of 32 C/LPA/1441/2018 ORDER service. In the opinion of the learned Single Judge, the Labour Court was right that once the breach of statutory provision is established as was so in the case of present claimants directly engaged by the Corporation, the claimants were entitled to reinstatement. However, the learned Single Judge reversed the finding and direction granting continuity of service.
4. In the present set of appeals, Mr. Munshaw, learned advocate appearing on behalf of the appellants has reiterated his submissions as raised before the learned Single Judge and contended that the respondents were daily wagers, not appointed on sanctioned posts and therefore not entitled to reinstatement. He further contended that in absence of any record to show that they have worked for more than 240 days, the Labour Court ought not to have drawn an adverse inference and set aside the termination on that ground. It was further contended by Mr. Munshaw that the span of service of such daily wagers in the Corporation was a short one and now that 15 years have passed since their termination, the respondents were not entitled to reinstatement and at best the Labour Court ought to have moulded the relief and granted compensation.
4.1 In support of his submission that the Labour Court rather than grant reinstatement, should have granted compensation, Mr. Munshaw relied on the decision of the Apex Court in the case of Hari Nandan Prasad & Anr. v. Employer I/R to Management of FCI & Anr. [AIR 2014 SC 1848 : (2014) 7 SCC 190]. He also placed reliance on the decision of the Apex Court in the case of Bharat Sanchar Page 9 of 32 C/LPA/1441/2018 ORDER Nigam Limited v. Bhurumal [(2014)7 SCC 177]. Support on these decisions was sought essentially to contend that looking to the nature of the post and duration of engagement, the Labour Court ought not to have granted reinstatement merely because there was a technical violation of 25F of the Industrial Disputes Act, 1947. He also relied on the decision of the Apex Court rendered in the case of Workmen Rashtriya Colliery Mazdoor Sangh vs. Bharat Coking Coal Limited and Another reported in (2016) 9 SCC 431.
5. As against the above, Mr. Samir Gohil, learned advocate appearing on behalf of the respondent in Letters Patent Appeal No. 1442 of 2018 has supported the order of the learned Single Judge which confirmed the award of the Labour Court.
6. Having considered the aforesaid submissions of the learned advocates, what emerges from the perusal of the judgement of the learned Single Judge is as under:
(a) The Labour Court on consideration of the material available on record came to the conclusion that though the claimants were appointed as daily wagers, they were discontinued from service without notice and payment of retrenchment compensation.
(b) The Labour Court also concluded that the rigors of Section 25F of the Act clearly applied since in addition to the failure of the Corporation to give notice and compensation, the claimants had rendered service for atleast 12 months preceding their termination.Page 10 of 32 C/LPA/1441/2018 ORDER
(c) From the tabular statement reproduced hereinabove and from the highlighted Special Civil Application Numbers of the claimants with which we are concerned in the present appeals, it is undisputed that the respondents claimants had worked for more than 240 days in the preceding 12 months.
(d) In arriving at the conclusion that the respondents had worked for such a period, the Labour Court had drawn adverse inference. In doing so, when we peruse the award of the Labour Court, what is apparent is that the respondents claimants had filed application Ex. 11 asking the Labour Court to direct the employer to produce various records such as vouchers, attendance sheets, muster rolls and the seniority lists which were in the custody of the employer. The Labour Court by an order dated 12.04.2010 had granted such application directing the employer to produce such evidence.
Despite such order, the employer did not produce such record and even the employer's witness one Shri Kalpeshbhai Gulabchand Tolia who deposed at Ex. 23 admitted that the attendance record of the claimants is maintained by the Junagadh Municipal Corporation and that no such record was admittedly produced. The Labour Court on the basis of such finding of fact, which was affirmed by the learned Single Judge, drew adverse inference in coming to a finding that the claimants respondents had completed 240 days in the preceding 12 months of service. In doing so, the Labour Court relied on a decision of the Apex Court in the case of Page 11 of 32 C/LPA/1441/2018 ORDER Director, Fisheries Terminal Division vs. Bhikubhai Meghajibhai Chavda reported in AIR 2010 SC 1236. In such judgement, the Apex Court had enunciated the proposition of law that once the workman claimed difficulty in access of documents, the burden of proof shifts on the employer. Para 15 thereof reads as under:
"15. Applying the principles laid down in the above case by this court, the evidence produced by the appellants has not been consistent. The appellants claim that the respondent did not work for 240 days. The respondent was a workman hired on a daily wage basis. So it is obvious, as this court pointed out in the above case that he would have difficulty in having access to all the official documents, muster rolls etc. in connection with his service. He has come forward and deposed, so in our opinion the burden of proof shifts to the employer/appellants to prove that he did not complete 240 days of service in the requisite period to constitute continuous service. It is the contention of the appellant that the services of the respondent were terminated in 1988. The witness produced by the appellant stated that the respondent stopped coming to work from February, 1988. The documentary evidence produced by the appellant is contradictory to this fact as it shows that the respondent was working during February, 1989 also. It has also been observed by the High Court that the muster roll for 1986-87 was not completely produced. The appellants have inexplicably failed to produce the complete records and muster rolls from 1985 to 1991, inspite of the direction issued by the labour court to produce the same. In fact there has been practically no challenge to the deposition of the respondent during cross-examination. In this regard, it would be pertinent to mention the observation of three judge bench of this court in the case of Municipal Corporation, Faridabad Vs. Siri Niwas [(2004) 8 SCC 195], where it is observed:
"A Court of Law even in a case where Page 12 of 32 C/LPA/1441/2018 ORDER provisions of the Indian Evidence Act apply, may presume or may not presume that if a party despite possession of the best evidence had not produced the same, it would have gone against this contentions. The matter, however, would be different where despite direction by a court the evidence is withheld."
7. In view of the aforesaid discussion, we see no reason to dislodge this finding of fact of Labour Court which in turn was affirmed by the learned Single Judge when admittedly the respondent claimants had worked for a period of 240 days in the preceding 12 months and when their services were discontinued without notice or compensation.
8. The other contention of Mr. Munshaw that even if we were to agree with the findings of the learned Single Judge with regard to the breach of Section 25F of the Act, should this Court in exercise of appellate jurisdiction, agree with the finding that the respondents deserved reinstatement or should this Court, as contended by the learned advocate Mr. Munshaw mould the relief and award compensation.
8.1 Once it is established that the termination of the respondents - claimants is in violation of the provisions of Section 25F of the Act, it cannot be said that merely because the respondents - claimants were daily wagers, such violation should be treated as a technical violation only and therefore compensation rather than reinstatement be awarded. While considering the question whether the High Court was right in modifying the award of the Labour Court of reinstatement by awarding compensation, the Apex Court in the case of Gauri Shanker vs. State of Rajasthan reported in (2015) 12 Page 13 of 32 C/LPA/1441/2018 ORDER SCC 754 observed thus:
"22. The Labour Court has rightly followed the normal rule of reinstatement of the workman in his original post as it has found that the order of termination is void ab-initio in law for non compliance with the mandatory provisions of the Act referred to supra. However, the Labour Court is not correct in denying backwages without assigning any proper and valid reasons though the employer did not prove either its stringent financial conditions for denial of back wages or that workman has been gainfully employed during the period from the date of order of termination till the award was passed in favour of the workman except granting Rs.2,500/- as compensation for the suffering caused to the workman. The same is erroneously modified by the learned single Judge who recorded the finding of fact for the first time by holding that the workman is a casual employee intermittently working in the respondent Department.
23. The learned single Judge of the High Court has exceeded his jurisdiction under Articles 226 and 227 of the Constitution of India as per the legal principles laid down by this Court in the case of Harjinder Singh (supra) wherein this Court has held thus:-
"21. Before concluding, we consider it necessary to observe that while exercising jurisdiction under Articles 226 and/or 227 of the Constitution in matters like the present one, the High Courts are duty bound to keep in mind that the Industrial Disputes Act and other similar legislative instruments are social welfare legislations and the same are required to be interpreted keeping in view the goals set out in the preamble of the Constitution and the provisions contained in Part IV thereof in general and Articles 38, 39(a) to (e), 43 and 43A in particular, which mandate that the State should secure a social order for the promotion of welfare of the people, ensure equality between men and women and equitable Page 14 of 32 C/LPA/1441/2018 ORDER distribution of material resources of the community to sub-serve the common good and also ensure that the workers get their dues. More than 41 years ago, Gajendragadkar, J, opined that '10. ... The concept of social and economic justice is a living concept of revolutionary import; it gives sustenance to the rule of law and meaning and significance to the ideal of welfare State"
( State of Mysore v. Workers of Gold Mines AIR p. 928, para 10.)"
The said principle has been reiterated by this Court in Jasmer Singh v. State Of Haryana.
8.2 Even the Division Bench of this Court in Letters Patent Appeal No. 735 of 2017 and allied appeals has in extenso considered the case law vis-a-vis applicability of Section 25F of the Act and the consequential relief that the respondents claimants would deserve when admittedly there is a breach of such mandatory provision and held as under vide judgement dated 12.03.2018:
9.6 That law on sections 2(oo), 25F and 25B is no more res integra in view of judgment of the Apex Court in the case of Mohan Lal v. The Management of M/s. Bharat Electronics Ltd. [AIR 1981 SC 1253] in which the Apex Court extensively considered about the same. Paras 6 to 14 of the above judgment, read as under:
"6 If on October 19,1974, the appellant was not on probation and assuming maximum in favour of the respondent that he was a temporary employee, could termination of his service. even according to the respondent, not as and by way of punishment but a discharge of a temporary servant, constitute retrenchment within the meaning of section 2(oo), is the core question. Section 2(oo) reads as under:
"2(oo) "retrenchment" means the termination by the employer of the Page 15 of 32 C/LPA/1441/2018 ORDER service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include(
a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
(c) termination of the service of a workman on the ground of continued illhealth."
7 Niceties and semantics apart, termination by the employer of the service of a workman for any reason whatsoever would constitute retrenchment except in cases excepted in the section itself. The excepted or excluded cases are where termination is by way of punishment inflicted by way of disciplinary action, voluntary retirement of the workman, retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf, and termination of the service of a workman on the ground of continued illhealth. It is not the case of the respondent that termination in the instant case was a punishment inflicted by way of disciplinary action. If such a position were adopted, the termination would be ab initio void for violation of principle of natural justice or for not following the procedure prescribed for imposing punishment. It is not even suggested that this was a case of voluntary retirement or retirement on reaching the age of superannuation or absence on account of continued illhealth. The case does not fall under any of the excepted categories. There is thus termination of 525 service for a reason other than the excepted category. It would indisputably be retrenchment within the Page 16 of 32 C/LPA/1441/2018 ORDER meaning of the word as defined in the Act. It is not necessary to dilate on the point nor to refer to the earlier decisions of this Court in view of the later two pronouncements of this Court to both of which one of us was a party. A passing reference to the earliest judgment which was the sheet anchor till the later pronouncements may not be out of place. In Hariprasad Shivshankar Shukla v. A.D. Divikar, 1957 SCR 121 :(AIR 1957 SC 121] after referring to Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union, 1956 SCR 872 : (AIR 1957 SC 95) a Constitution Bench of this Court quoted with approval the following passage from the aforementioned case (at page 126 of AIR):
"But retrenchment connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff or the labour force is discharged as surplus age and the termination of services of all the workmen as a result of the closure of the business cannot therefore be properly described as retrenchment."
This observation was made in the context of the closure of an undertaking and being conscious of this position, the question of the correct interpretation of the definition of the expression `retrenchment' in section 2(oo) of the Act was left open. Reverting to that question, the view was reaffirmed but let it be remembered that the two appeals which were heard together in Shukla's case were caseof closure, one Barsi Light Railway Company Ltd., and another Shri Dinesh Mills Ltd., Baroda. With specific reference to those cases, in State Bank of India v. Sundara Money, (1976)3 SCR 160 : (AIR 1976 SC 1111) Krishna Iyer, J. speaking for a three Judge bench interpreted the expression `termination .... for any reason whatsoever' as under (at page 1114 of AIR):
"A breakdown of S. 2(oo) unmistakably expands the semantics of retrenchment. `Termination...for any reason whatsoever' are the key words. Whatever the reason, every termination spells retrenchment. So, the sole question is has the Page 17 of 32 C/LPA/1441/2018 ORDER employee's service been terminated ? Verbal apparel apart, the substance is decisive. A termination takes place where a term expires either by the active step of the master of the running out of the stipulated term. To protect the weak against the strong this policy of comprehensive definition has been effectuated Termination embraces not merely the act of termination by the employer, but the fact of termination howsoever produced. May be, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the armour of Section 25F and section 2(oo). Without speculating on possibilities, we may agree that `retrenchment' is no longer terra incognita but area covered by an expansive definition. It means `to end, conclude, cease'. In the present case the employment ceased, concluded, ended on the expiration of nine days automatically may be, but cessation all the same. That to write into the order of appointment the date of termination confers no moksha from section 25F(b) is inferable from the proviso to section 25F(1). True, the section speaks of retrenchment by the employer and it is urged that some act of volition by the employer to bring about the termination is essential to attract section 25F and automatic extinguishment of service by effluxion of time cannot be sufficient."
It would be advantageous to refer to the facts of that case to appreciate the interpretation placed by this Court on the relevant section. State Bank of India appointed the respondent by an order of appointment which incorporated the two relevant terms relied upon by the Bank at the hearing of the case. They were: (i) the appointment is purely a temporary one for a period of 9 days but may be terminated earlier, without assigning any reason therefor at the Bank's discretion; (ii) the Page 18 of 32 C/LPA/1441/2018 ORDER employment, unless terminated earlier, will automatically cease at the expiry of the period i.e. 18.11.1972. It is in the context of these facts that the Court held that where the termination was to be automatically effective by a certain date as set out in the order of appointment it would nonetheless be a retrenchment within the meaning section 2(oo) and in the absence of strict compliance with the requirements of section 25F, termination was held to be invalid. Continuing this line of approach, in Hindustan Steel Ltd. v. The Presiding Officer, Labour Court, Orissa and Ors., a bench of three judges examined the specific contention that the decision in Sundara Money's case runs counter to the construction placed on that section by a Constitution Bench and, therefore, the decision is per incuriam. This Court analysed in detail Shukla's case and Sundara Money's case and ultimately held that the Court did not find anything in Shukla's case which is inconsistent with what has been held in Sundara Money's case. In reaching this conclusion it was observed that in Shukla's case the question arose in the context of closure of the whole of the undertaking while in Hindustan Steel's case and Sundara Money's case the question was not examined in the context of closure of whole undertaking but individual termination of service of some employees and it was held to constitute retrenchment within the meaning of the expression. This question again cropped up in Santosh Gupta v. State Bank of Patiala. Rejecting the contention for reconsideration of Sundara Money's case on the ground that it conflicted with a Constitution Bench decision in Shukla's case and adopting the ratio in Hindustan Steel's case that there was nothing in the two aforementioned decisions which is inconsistent with each other and taking note of the decision in Delhi Cloth and General Mills Ltd. v. Shambu Nath Mukerjee wherein this Court had held that striking off the name of a workman from the rolls by the Page 19 of 32 C/LPA/1441/2018 ORDER management was termination of service which was retrenchment within the meaning of section 2(oo), the Court held that discharge of the workman on the ground that she had not passed the test which would enable her to obtain confirmation was retrenchment within the meaning of section 2(oo) and, therefore, the requirements of section 25F had to be complied with. It was pointed out that since the decision in Shukla's case, the Parliament stepped in and introduced section 25FF and section 25FFF by providing that compensation shall be payable to workman in case of transfer or closure of the undertaking, as if the workmen had been retrenched. The effect of the amendment was noticed as that every case of termination of service by act of employer even if such termination was as a consequence of transfer or closure of the undertaking was to be treated as `retrenchment' for the purposes of notice, compensation, etc. The Court concluded as under:
"Whatever doubts might have existed before Parliament enacted Sections 25FF and 25FFF about the width of section 25F there cannot be any doubt that the expression `termination of service for any reason whatsoever' now covers every kind of termination of service except those not 528 expressly provided for by other provisions of the Act such as sections 25FF and 25FFF."
Reverting to the facts of this case, termination of service of the appellant does not fall within any of the excepted, or to be precise, excluded categories. Undoubtedly therefore the termination would constitute retrenchment and by a catena of decisions it is well settled that where prerequisite for valid retrenchment as laid down in section 25F has not been complied with, retrenchment bringing about termination of service is ab initio void. In State of Bombay and Ors. v. The Hospital Mazdoor Sabha and Ors., this Court held that failure to comply with the requirement of section 25F which prescribes a condition Page 20 of 32 C/LPA/1441/2018 ORDER precedent for a valid retrenchment renders the order of retrenchment invalid and inoperative. In other words, it does not bring about a cessation of service of the workman and the workman continues to be in service. This was not even seriously controverted before us. 10 It was, however, urged that section 25F is not attracted in this case for an entirely different reason. Mr. Markendaya contended that before section 25F is invoked, the condition of eligibility for a workman to complain of invalid retrenchment must be satisfied. According to him unless the workman has put in continuous service for not less than one year his case would not be governed by section 25F. That is substantially correct because the relevant provision of section 25F provides as under:
"25F. "No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until:(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service;
(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent of fifteen days' average pay (for every completed year of continuous service) or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government (or such authority as may be specified by the appropriate government by notification in the Official Gazette)."
Before a workman can complain of retrenchment being not in consonance with section 25F, he has to show that he has been Page 21 of 32 C/LPA/1441/2018 ORDER in continuous service for not less than one year under that employer who has retrenched him from service. Section 25B is the dictionary clause for the expression `continuous'. It reads as under;
"25B (1) a workman shall be paid to be in continuous service for a period if he is, for that period in uninterrupted service, including service which may be interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal, or a lockout or a cessation of work which is not due to any fault on the part of the workman; (2) where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer -
( a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than
(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and
(ii) two hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made has actually worked under the employer for not less than -
(i) ninety five days, in the case of a workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case.
Explanation - For the purposes of clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which
(i) he has been laid off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, Page 22 of 32 C/LPA/1441/2018 ORDER 1946, or under this Act or under any other law applicable to the industrial establishment;
(ii) he has been on leave with full wages, earned in the previous years;
(iii)he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
11 Mr. Markendaya contended that clauses (I) and (2) of section 25B provide for two different contingencies and that none of the clauses is satisfied by the appellant. He contended that subsection (I) provides for uninterrupted service and subsection(2) comprehends a case where the workman is not in continuous service. The language employed in subsections (1) and (2) does not admit of this dichotomy. Subsections (1) and (2) introduce a deeming fiction as to in what circumstances a workman could be said to be in continuous service for the purposes of Chapter VA. Subsection (1) provides a deeming fiction in that where a workman is in service 531 for a certain period he shall be deemed to be in continuous service for that period even if service is interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal or a lockout or a cessation of work which is not due to any fault on the part of the workman. Situations such as sickness, authorised leave, an accident, a strike not illegal, a lockout or a cessation of work would ipso facto interrupt a service. These interruptions have to be ignored to treat the workman in uninterrupted service and such service interrupted on account of the aforementioned causes which would be deemed to be uninterrupted would be continuous service for the period for which the workman has been in service. In industrial employment or for that matter in any service, sickness, authorised leave, an accident, a strike which is not illegal, a lockout and a cessation Page 23 of 32 C/LPA/1441/2018 ORDER of work not due to any fault on the part of the workman, are known hazards and there are bound to be interruptions on that account. Subsection (I) mandates that interruptions therein indicated are to be ignored meaning thereby that on account of such cessation an interrupted service shall be deemed to be uninterrupted and such uninterrupted service shall for the purposes of Chapter VA be deemed to be continuous service. That is only one part of the fiction.
12 Subsection (2) incorporates another deeming fiction for an entirely different situation. It comprehends a situation where a workman is not in continuous service within the meaning of subsection (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer for a period of one year or six months, as the case may be, if the workman during the period of 12 calendar months just preceding the date with reference to which calculation is to be made, has actually worked under that employer for not less than 240 days.
Subsection (2) specifically comprehends a situation where a workman is not in continuous service as per the deeming fiction indicating in subsection (1) for a period of one year or six months. In such a case he is deemed to be in continuous service for a period of one year if he satisfies the conditions in clause (a) of subsection (2). The conditions are that commencing the date with reference to which calculation is to be made, in case of retrenchment the date of retrenchment, if in a period of 12 calendar months just preceding such date the workman has rendered service for a period of 240 days, he shall be deemed to be in continuous service for a period of one year for the purposes of Chapter VA. It is not necessary for the purposes of subsection (2) (a) that the workman should be in service for a period of one year. If he is in service for a period of one year and that if that service is continuous service within the meaning of subsection (1) Page 24 of 32 C/LPA/1441/2018 ORDER his case would be governed by subsection (1) and his case need not be covered by subsection (2). Subsection (2) envisages a situation not governed by subsection (1). And subsection (2) provides for a fiction to treat a workman in continuous service for a period of one year despite the fact that he has not rendered uninterrupted service for a period of one year but he has rendered service for a period of 240 days during the period of 12 calendar months counting backwards and just preceding the relevant date being the date of retrenchment. In other words, in order to invoke the fiction enacted in subsection 2(a) it is necessary to determine first the relevant date, i.e., the date of termination of service which is complained of as retrenchment. After that date is ascertained, move backward to a period of 12 months just preceding the date of retrenchment and then ascertain whether within the period of 12 months, the workman has rendered service for a period of 240 days. If these three facts are affirmatively answered in favour of the workman pursuant to the deeming fiction enacted in subsection 2(a) it will have to be assumed that the workman is in continuous service for a period of one year and he will satisfy the eligibility qualification enacted in section 25F. On a pure grammatical construction the contention that even for invoking subsection (2) of section 25B the workman must be shown to be in continuous service for a period of one year would render subsection (2) otiose and socially beneficial legislation would receive a set back by this impermissible assumption. The contention must first be negatived on a pure grammatical construction of subsection (2). And in any event, even if there be any such thing in favour of the construction, it must be negatived on the ground that it would render subsection (2) otiose. The language of subsection (2) is so clear and unambiguous that no precedent is necessary to justify the interpretation we have placed on it. But as Mr. Markandaya referred to some authorities, we will briefly notice Page 25 of 32 C/LPA/1441/2018 ORDER them.
13 In Sur Enamel and Stamping Works (P) Ltd. v. Their Workmen,(1964)3 SCR 616 : (AIR 1963 SC 1914) referring to Section 25B as it then stood read with Section 2(eee) which defined continuous service, this court held as under (at p.1917 of AIR):
"The position therefore is that during a period of employment for less than 11 calendar months these two persons worked for more than 240 days. In our opinion that would not satisfy the requirement of section 25B. Before a workman can be considered to have completed one year of continuous service in an industry it must be shown first that he was employed for a period of not less than 12 calendar months and, next that during those 12 calendar months had worked for not less than 240 days. Where, as in the present case, the workmen have not at all been employed for a period of 12 calendar months it becomes unnecessary to examine whether the actual days of work numbered 240 days or more. For, in any case, the requirements of section 25B would not be satisfied by the mere fact of the number of working days being not less than 240 days."
If section 25B had not been amended, the interpretation which it received in the aforementioned case would be binding on us. However, section 25B and section 2(eee) have been the subject matter of amendment by the Industrial Disputes (Amendment) Act, 1964. Section 2(eee) was deleted and section 25B was amended. Prior to its amendment by the 1964 amendment Act, section 25B read as under:
"For the purposes of ss. 25C and 25F a workman who during the period of 12 calendar months has actually worked in an industry for not less than 240 days, shall be deemed to have completed one year of continuous service in the industry."
14 We have already extracted section 25B Page 26 of 32 C/LPA/1441/2018 ORDER since its amendment and the change in language is the legislative exposition of which note must be taken. In fact, we need not further dilate upon this aspect because in Surendra Kumar Verma and Ors. v. Central Government Industrial cum Labour Court, New Delhi, (1980)4 SCC 443 : (AIR 1981 SC
422), Chinnappa Reddy. J., after noticing the amendment and referring to the decision in Sur Enamel and Stamping Works (P) Ltd case (AIR 1963 SC 1914), held as under (at p.426 of AIR):
"These changes brought about by Act 36 of 1964 appear to be clearly designed to provide that a workman who has actually worked under the employer for not less 534 than 240 days during a period of twelve months shall be deemed to have been in continuous service for a period of one year whether or not he has in fact been in such continuous service for a period of one year. It is enough that he has worked for 240 days in a period of 12 months, it is not necessary that he should have been in the service of the employer for one whole year."
In a concurring judgment Pathak J. agreed with this interpretation of section 25B(2). Therefore, both on principle and on precedent it must be held that section 25B(2) comprehends a situation where a workman is not in employment for a period of 12 calendar months, but has rendered service for a period of 240 days within the period of 12 calendar months commencing and counting backwards from the relevant date, i.e. the date of retrenchment. If he has, he would be deemed to be in continuous service for a period of one year for the purpose of section 25B and Chapter VA.
[emphasis supplied] 9.7 The above judgment still holds the field and the Apex Court reiterated the above, in the case of Surendranagar District Panchayat v.
Page 27 of 32 C/LPA/1441/2018 ORDERDahyabhai Amarsinh [(2005)8 SCC 750] and Gauri Shanker [supra]. In the case of Gauri Shanker [supra], the Apex Court revisited all earlier decisions in the cases of [1] Jasmer Singh v. State of Haryana [(2015)4 SCC 458], [2] Gauri Shanker v. State [2014 SCC OnLine Raj 936], State of Rajasthan v. Gauri Shanker [WP (C) No.4253 of 2002, order dated 18.11.2013], [4] Harjinder Singh v. Punjab State Warehousing Corpn. [[(2010)3 SCC 192], [5] Madan Pal Singh v. State of U.P. [[(2000)1 SCC 683], [6], Samishta Dube v. City Board, Etawah [(1999)3 SCC 14], [7] H.D.Singh v. RBI [(1985)4 SCC 201], [8] Gopal Krishnaji Ketkar v. Mohd. Haji Latif [AIR 1968 SC 1413], [9] Biltu Ram v. Jainandan Prasad [Civil Appeal No.941 of 1965], [10] Syed Yakoob v. K.S.Radhakrishnan [AIR 1964 SC 477], [11] State of Mysore v. Workers of Gold Mines [AIR 1958 the Hon'ble Supreme Court 923] and held that non production of muster rolls by the employer, adverse inference can be drawn and that scope of judicial review i.e. interference under Article 226 and 227 of the Constitution of India, High Court erred in interfering with the award of reinstatement and future salary. In the facts of these appeals also, findings of the Labour Court are supported by evidence with sufficient and cogent reasons and the writ court had no reason and material on record to persuade and convince the this court to differ with and set aside the findings of the Labour Court. Once such findings of the Labour Court are held not to be interfered with, consequently taking away continuity and/or backwages by the learned Single Judge is not sustainable. The Apex Court in paras 20, 22, 23 and 24 held as under:
"20 It is not in dispute that the workman was employed with the respondent Department in the year 1987 and on the basis of material evidence adduced by both the parties and in the absence of the non production of muster rolls on the ground that they are not available, which contention of the respondent Department is rightly not accepted by the Labour Court and it has recorded the finding of fact holding that the workman has worked from 1.1.1987 to 1.4.1992. The Labour Court Page 28 of 32 C/LPA/1441/2018 ORDER has drawn adverse inference with regard to non production of muster rolls maintained by them, in this regard, it would be useful to refer to the judgment of this Court in the case of Gopal Krishnaji Ketkar v. Mohd Haji Latif & Ors. [AIR 1968 SC 1413] wherein it was held thus: [AIR p.1416, para 5] :
"5. .........Even if the burden of proof does not lie on a party the Court may draw an adverse inference if he withholds important documents in his possession which can throw light on the facts at issue. It is not, in our opinion, a sound practice for those desiring to rely upon a certain state of facts to withhold from the Court the best evidence which is in their possession which could throw light upon the issues in controversy and to rely upon the abstract doctrine of onus of proof. In Murugesam Pillai v. Gnana Sambandha Pandara Sannadhi [(1916017)44 IA 98], Lord Shaw observed as follows:
"A practice has grown up in Indian procedure of those in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof, and failing, accordingly, to furnish to, the, Courts the best material for its decision. With regard to third parties, this may be right enough they have no responsibility for the conduct of the suit but with regard to the parties to the suit it is, in their Lordships' opinion an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the Court the written evidence in their possession which would throw light upon the This passage was cited with approval by this Court in a recent decision Biltu Ram & Ors. v. Jainandan Prasad & Ors. In that case, reliance was placed on behalf of the defendants upon the following passage from the decision of the Judicial Committee in Mt. Bilas Kunwar v. Desraj Ranjit Singh [(191415) 42 IA 202] : [IA p.206] Page 29 of 32 C/LPA/1441/2018 ORDER "But it is open to a litigant to refrain from producing any documents that he considers irrelevant; if the other litigant is dissatisfied it is for him to apply for an affidavit of documents and he can obtain inspection and production of all that appears to him in such affidavit to be relevant and proper. If he fails so to do, neither he nor the Court at his suggestion is entitled to draw any inference as to the contents of any such documents."
21 xxx 22 The learned single Judge of the High Court has exceeded his jurisdiction under Articles 226 and 227 of the Constitution of India as per the legal principles laid down by this Court in the case of Harjinder Singh [(2010)3 SCC 192] wherein this Court has held thus :
[SCC p.205, para 21]:
"21 Before concluding, we consider it necessary to observe that while exercising jurisdiction under Articles 226 and/or 227 of the Constitution in matters like the present one, the High Courts are duty bound to keep in mind that the Industrial Disputes Act and other similar legislative instruments are social welfare legislations and the same are required to be interpreted keeping in view the goals set out in the preamble of the Constitution and the provisions contained in Part IV thereof in general and Articles 38, 39(a) to (e), 43 and 43A in particular, which mandate that the State should secure a social order for the promotion of welfare of the people, ensure equality between men and women and equitable distribution of material resources of the community to subserve the common good and also ensure that the workers get their dues. More than 41 years ago, Gajendragadkar, J, opined that: "10 the concept of social and economic justice is a living concept of revolutionary import; it gives sustenance to the rule of law and meaning and significance to the ideal of Page 30 of 32 C/LPA/1441/2018 ORDER welfare State"
State of Mysore v. Workers of Gold Mines [APR 1958 SC 923]"
The said principle has been reiterated by this Court in Jasmer Singh v. State of Haryana [(2015)4 SCC 458].
24 Therefore, in view of the above said case, the learned single Judge in exercise of its powers under Articles 226 and 227 of the Constitution of India erroneously interfered with the award of reinstatement and future salary from the date of award till date of reinstatement as rightly passed by the Labour Court recording valid and cogent reasons in answer to the points of dispute holding that the workman has worked from 1.1.1987 to 1.4.1992 and that noncompliance of the mandatory requirements under sections 25F, 25G and 25H of the Act by the respondent Department rendered its action of termination of the services of the workman as void ab initio in law and instead the High Court erroneously awarded a compensation of Rs.1,50,000/- in lieu of reinstatement. The learned single Judge and the Division Bench under their supervisory jurisdiction should not have modified the award by awarding compensation in lieu of reinstatement which is contrary to the well settled principles of law laid down in catena of cases by this Court."
8.3 What, therefore, emerges on the perusal of the awards of the Labour Court, so affirmed by the learned Single Judge, is that the Labour Court on appreciation of evidence arrived at finding of fact that the respondents had worked for 240 days in the preceding 12 months prior to their discontinuance from service. That such discontinuance amounted to termination as it was without notice and payment of retrenchment compensation. The Labour Court was therefore Page 31 of 32 C/LPA/1441/2018 ORDER right that the mandate of Section 25F of the Act was not followed and therefore awarded reinstatement in service. Such finding of fact arrived at by the Labour Court has been affirmed by the learned Single Judge. The learned Single Judge had done so while exercising jurisdiction under Articles 226 & 227 of the Constitution of India. It cannot be said that such exercise of powers was in any manner erroneous when they were so done on appreciation of the finding of fact by the Labour Court which recorded valid and cogent reasons to answer the points in dispute.
9. In view of the foregoing reasons, Letters Patent Appeals are dismissed.
(ANANT S. DAVE, ACJ) (BIREN VAISHNAV, J) DIVYA Page 32 of 32