Delhi District Court
Nitin Kumar vs M/S Depatment Of Trade And Taxes on 10 March, 2025
IN THE Court OF SH. ARUN KUMAR GARG
PRESIDING OFFICER : LABOUR Court-III
ROUSE AVENUE COURTS COMPLEX : NEW DELHI.
CNR No. DLCT13-002619-2020
Ref. No. F.24(239)/18/Ref./CD/Lab./1059 Dated 11.11.2019
LIR No. 1017/2020
Sh. Nitin Kumar S/o Sh. Tara Chand,
(Mentioned at Sr. No. 8 in Annexure 'A' of Reference)
R/o H.No. 35/362, Trilok Puri,
Chilla, East Delhi, Delhi-110091. ..... Workman
VERSUS
1. M/s. Department of Trade & Taxes,
Through its Commissioner,
Govt. of NCT of Delhi, Vyapar Bhawan,
I.P. Estate, New Delhi-110002.
2. M/s. G.A. Digital World Pvt. Ltd.,
S-14, 2nd Floor, Aditya Mal, Near ICICI Bank,
Indirapuram, Ghaziabad, Uttar Pradesh-201014.
3. M/s. Intelligent Communication Systems
India Limited (ICSIL),
Okhla Industrial Estate, Phase-III,
New Delhi-110020. ..... Managements
Date of Institution of the case : 04.03.2020
Date on which Award is passed : 10.03.2025
AWARD
1. By this Award, I will dispose off the reference dated
11.11.2019 qua Sh. Nitin Kumar S/o Sh. Tara Chand (whose
name is mentioned at Sr. No. 8 of Annexure A to the reference),
received from the office of Deputy Labour Commissioner,
District Central, Labour Department, Govt. of NCT of Delhi U/s
10(1)(C) & 12(5) of Industrial Disputes Act, 1947 vide order no.
LIR No. 1017/2020
Nitin Kumar Vs. M/s. Department of Trade And Taxes
Award dated 10.03.2025 Page 1 of 25
Ref. No. F.24(239)/18/Ref./CD/Lab./1059 Dated 11.11.2019,
whereby, the following issue has been referred to this Court for
adjudication:-
"Whether the termination of services of Workman
Sh. Ashish Kumar & 13 others as per annexure 'A'
by the Management is illegal/ or unjustified and if
so, to what relief is he entitled and what directions
are necessary in this respect?"
2. The aforesaid reference was received by this Court on
04.12.2019 in respect of present Claimant and 13 others, as per
Annexure A, whereafter, present claim was segregated and
directed to be registered separately by Ld. Predecessor of this
Court vide order dated 04.03.2020.
3. The present Statement of claim was thereafter filed by
Workman on 10.06.2022. Brief case of Claimant, as per his
statement of claim, is that he had joined the services of
Management no. 1 on 08.07.2016, as a Data Entry Operator,
against a salary of Rs. 11,271/- per month, however, no
appointment letter was ever issued by Management in his name
despite repeated requests of Claimant. It is further his case that
he had continuously worked for Management no. 1 since the
year 2016, though, he was recruited through Management no. 3
pursuant to a contract between Management no. 1 and
Management no. 3, which has expired on 31.01.2019.
4. Later on, according to him, Management no. 1 introduced
him with Management no. 2 and instructed him, alongwith other
employees, to get themselves registered with Management no. 2.
It is further his case that he was in continuous employment of
LIR No. 1017/2020
Nitin Kumar Vs. M/s. Department of Trade And Taxes
Award dated 10.03.2025 Page 2 of 25
Management no. 1 until 15.05.2019 and his last drawn wages
were Rs. 14,855/- per month after deduction of PF. On
15.05.2019, according to him, his services were illegally
terminated by Management despite the fact that Management no.
1 had entered into the contract with Management no. 2 until
30.11.2019. Workman has thereafter approached Dy. Labour
Commissioner (Central), Labour Department, Govt. of NCT of
Delhi vide complaint dated 05.07.2019, however, due to non
cooperative attitude of Managements, matter could not be settled
between the parties leading to present reference dated
11.11.2019.
5. It is further his case that his services were illegally
terminated by Management without any charge sheet or inquiry
and hence, he is entitled to his reinstatement with full back
wages, continuity of service and other consequential benefits,
more so, when he is unemployed with effect from the date of
termination of his services by Management.
6. A written statement to the claim of Workman was thereafter
filed on behalf of Management no. 1 on 09.02.2023, wherein, the
Management no. 1 has objected to the maintainability of present
claim against Management no. 1 on the ground that neither
Management no. 1 is an industry, nor, Claimant falls within the
definition of Workman. Management no. 1 has also denied the
existence of any employer-employee relationship between the
Claimant and Management no. 1. It is the case of Management
no. 1 that pursuant to approval of Finance Department and
Services Department of Govt. of National Capital Territory of
Delhi, Management no. 1 had outsourced the services of 131
LIR No. 1017/2020
Nitin Kumar Vs. M/s. Department of Trade And Taxes
Award dated 10.03.2025 Page 3 of 25
Data Entry Operators (Contractual) w.e.f. 01.02.2019 to
30.11.2019 against the vacant posts of JA/LDC(s) through
Management no. 3, however, later on, the Finance Department,
with the approval of Chief Secretary of Govt. of National Capital
Territory of Delhi, directed Management no. 1 to outsource the
services of Data Entry Operators through GEM Portal as per
GFR 2017. In the meantime, as per Management no. 1,
Management no. 1 was allowed to outsource the services of Data
Entry Operators through Management no. 3 until 31.01.2019 or
till the award of contract to a new agency through GEM Portal.
7. Subsequently w.e.f. 01.02.2019, according to Management
no 1, contract for outsourcing of services of 131 Data Entry
Operators was awarded by Management no. 1 to Management
no. 2 through GEM portal. However, in order to avoid
hampering of smooth functioning of department at the time of
closing of financial year 2018-2019, Management no. 1
requested Management no. 2 to continue with the same Data
Entry Operators, who were earlier deployed at the establishment
of Management no. 1 pursuant to contract between Management
no. 1 and Management no. 3.
8. It is further the case of Management no. 1 that a notice U/s
91 Cr.PC dated 23.04.2019 was received by Management no. 1
from SHO PS Jama Masjid in terms of which an FIR dated
18.04.2019 U/s 420/120B IPC was registered against two of the
outsourced employees namely Mr. Kamal and Mr. Harish at PS
Jama Masjid, whereafter, the services of both the aforesaid
DEOs were surrendered by Management no. 1 to Management
no. 2 with a request to provide their suitable substitutes.
LIR No. 1017/2020
Nitin Kumar Vs. M/s. Department of Trade And Taxes
Award dated 10.03.2025 Page 4 of 25
Moreover, being a sensitive department, in order to rule out
developing of any vested interest in the long run and to avoid
recurrence of any such happening, according to Management no.
1, it was decided by the Competent Authority to surrender the
services of 108 other outsourced (contractual) Data Entry
Operators who were earlier outsourced through Management no.
3 w.e.f. 15.05.2019 (A/N). Workman, according to Management
no. 1, was one such Data Entry Operator who was replaced with
new candidates by Management no. 2. Management no. 1 has
thus prayed for dismissal of present claim of Workman with
heavy cost while alleging that it has never terminated the
services of Workman since there was no work contract executed
between Management no. 1 and Workman. Rather, according to
Management no. 1, it has taken a decision to replace the old
outsourced staff with a new staff of Management no. 2.
9. A separate written statement was thereafter filed on behalf
of Management no. 3 on 19.04.2023, wherein, it has alleged that
the present claim of Workman is not maintainable against
Management no. 3 since, admittedly, Workman was not in
employment of Management no. 3 on the date of alleged
termination of his services. It is the case of Management no. 3
that neither the Claimant falls with the definition of Workman
nor Management no. 3 falls within the definition of industry and
hence, there did not exist any industrial dispute within the
meaning of Section 2(k) of the Industrial Disputes Act,
conferring this Court with any jurisdiction to entertain the
present claim against Management no. 3. Management no. 3 has
thus prayed for dismissal of claim of Workman with exemplary
LIR No. 1017/2020
Nitin Kumar Vs. M/s. Department of Trade And Taxes
Award dated 10.03.2025 Page 5 of 25
cost.
10. A perusal of record reveals that Management no. 2 had
failed to file any written statement to the claim of Workman
despite repeated opportunities and hence, the defence of
Management no. 2 was struck off vide order dated 01.12.2023.
11. A rejoinder to the written statement of Management no. 3
was thereafter filed on behalf of Workman on 22.09.2023,
reiterating the stand taken by him in his statement of claim and
denying the contrary averments made by Management no. 3 in
its written statement. No rejoinder to the written statement of
Management no. 1 was, however, filed on behalf of Workman
despite repeated opportunities.
12. Thereafter, on the basis of pleadings of parties, following
issues were settled by Ld. Predecessor of this Court vide order
dated 01.12.2023:-
(i) Whether there existed relationship of employee and
employer in between the Claimant and the
Management no. 1 or Management no. 2 or
Management no. 3?OPW.
(ii) Whether the Management no. 1 is an industry
within the meaning of 2(j) of ID Act.? (OPW)
(iii) Whether the Claimant is Workman as defined
under Section 2(s) of the ID Act, 1947? (OPW)
(iv) Whether the services of the Claimant have been
illegally and unjustifiably terminated by the
Management no. 1 or Management no. 2 on
15.05.2019? If so, whether the Claimant is entitled for
reinstatement with full back wages and other
consequential reliefs as prayed for by the Claimant in
LIR No. 1017/2020
Nitin Kumar Vs. M/s. Department of Trade And Taxes
Award dated 10.03.2025 Page 6 of 25
his claim petition? (OPW)
(v) Relief, if any.
13. Workman has thereafter examined himself as WW-1 i.e. as
the sole witness in support of his case and tendered his evidence
by way of affidavit Ex.WW1/A along with a Copy of his
complaint dated 05.07.2019 filed before Dy. Labour
Commissioner (Central), Labour Department, Govt. of NCT of
Delhi.
14. WW-1 was duly cross-examined by Ld. ARs for
Managements no. 1 and 3, whereas, Management no. 2 had
failed to avail the opportunity to cross-examine the Workman.
During his cross-examination by Ld. AR for Management no. 1,
he was confronted with a Circular dated 15.05.2019, alongwith
the list annexed therewith, Ex. WW1/M1 (Colly). No other
witness was examined on behalf of Workman despite
opportunity and hence, on a separate statement of Workman,
Workman's evidence was closed vide order dated 02.05.2024.
15. Sh. Gulshan Miglani, Section Officer/GST Officer of
Management no. 1 has thereafter examined himself as M1W1 i.e.
as the sole witness in support of case of Management no. 1 and
has tendered his evidence by way of affidavit Ex.M1W1/A along
with following documents:
(i) Mark-A: Copy of letter dated 13.12.2018 regarding
outsourcing of 131 Data Entry Operators against the
vacant posts of Grade-IV.
(ii)Mark-B: Copy of contract dated 21.01.2019.
(iii)Mark-C: Copy of letter dated 25.04.2019 regarding
surrendering the services of Mr. Kamal and Mr. Harish.
LIR No. 1017/2020
Nitin Kumar Vs. M/s. Department of Trade And Taxes
Award dated 10.03.2025 Page 7 of 25
(iv)Mark-D: Copy of letter dated 13.05.2019 regarding
Deployment of 131 DEOs through outsourcing.
(v) Mark-E: Copy of response dated 16.09.2019 to the
letter dated 04.09.2019 of Dy. Labour Commissioner
regarding the case of Sh. Ashish Kumar & 13 Ors.
(vi) Ex.M1W1/1: Copy of identity card of Sh. Gulshan
Miglani, GST Officer.
16. He was duly cross-examined by Ld. LAC for Workman and
during his cross-examination has produced the following
documents:
(i) Ex.M1W1/6 (colly): Duly attested copies of
sanction orders with effect from 16.06.2016 to
28.02.2019 in the name of M/s. ICSIL.
(ii)Ex.M1W1/7 (colly): Duly attested copies of
sanction orders with effect from 02.04.2019 to
20.09.2019 in the name of M/s. GA Digital Web World
Pvt. Ltd.
(iii)Ex.M1W1/8 (colly): Duly attested copies of
invoices raised by the Contractors from time to time
upon Management no. 1 along with attendance sheets.
17. Ms. Deepti Gupta, Manager (Legal) of Management no. 3,
has thereafter tendered her evidence by way of affidavit Ex.
M3W1/A along with following documents:
(i) Ex.M3W1: Copy of her authorization letter.
(ii) Mark-M3W1/2: Copy of circular dated 29.03.2016.
(iii)Mark-M3W1/3: Copy of contract dated 13.02.2018.
(iv) Mark-M3W1/4: Copy of letter dated 13.12.2018.
18. She was duly cross-examined by Ld. LAC for Workman.
No other witness was examined on behalf of Managements no. 1
and 3 despite opportunity. Thereafter, on the submission of Ld.
LIR No. 1017/2020
Nitin Kumar Vs. M/s. Department of Trade And Taxes
Award dated 10.03.2025 Page 8 of 25
ARs for Managements no. 1 and 3, their evidence was closed
vide order dated 11.12.2024, whereas, Management no. 2 has
already been proceeded ex-parte vide order dated 12.02.2024.
19. Final arguments were thereafter heard on behalf of
Workman as well as Managements no. 1 and 3. On the other
hand, none has come forward on behalf of Management no. 2 to
advance final arguments despite repeated opportunities.
20. It is submitted by Ld. LAC for Workman that Workman has
been able to prove all the averments, made by him in his
statement of claim, through his uncontroverted testimony in the
form of affidavit Ex.WW1/A, which is duly corroborated by the
admissions elicited during cross-examination of M1W1 and
M3W1, besides, the documents tendered by them in their
evidence. He submits that Claimant had joined the services of
Management no. 1 initially as an employee of Management no. 3
w.e.f. 08.07.2016 and was illegally terminated from his services
by Management no. 2 w.e.f. 15.05.2019. Under the aforesaid
circumstances, according to him, Workman is entitled to the
relief of his reinstatement into the services of Management no. 2
with full back wages since he is unemployed w.e.f. date of
termination of his services.
21. On the other hand, it is submitted by Ld. AR for
Management no. 1 that this Court has no jurisdiction to deal with
the claim of Workman qua Management no. 1 since Workman
has failed to discharge his onus to prove that Management no. 1
falls within the definition of Industry u/s 2(j) of Industrial
Disputes Act, 1947 or that he falls within the definition of
LIR No. 1017/2020
Nitin Kumar Vs. M/s. Department of Trade And Taxes
Award dated 10.03.2025 Page 9 of 25
Workman u/s 2(s) of the Industrial Disputes Act, 1947. Even
otherwise, according to him, Workman, during his cross-
examination, has categorically admitted that he had never been
on the muster roll of Management no. 1, nor, his salary was
being paid by Management no. 1. He submits that admittedly,
Workman was initially on the muster roll of Management no. 3
and later on, he became an employee of Management no. 2.
Moreover, according to him, Workman has also admitted that he
was receiving his salary from Management no. 3.
22. He submits that Workman, during his cross-examination,
has also admitted that his services were terminated by
Management no. 2. He further submits that during the cross-
examination of M1W1, he has produced all the documents in
support of plea of Management no. 1 in its written statement. In
view of aforesaid admissions on the part of Workman and
uncontroverted testimony of M1W1, which, according to him, is
duly corroborated by the documents tendered by him in his
evidence, he submits that the present claim of Workman is not
maintainable against Management no. 1.
23. So far as Management no. 3 is concerned, it is submitted by
Ld. AR for Management no. 3 that admittedly the Claimant was
not in employment of Management no. 3 on the alleged date of
his termination. In fact, according to her, Workman, during his
cross-examination, has admitted that he has not prayed for any
relief against Management no. 3. She has thus prayed for
dismissal of claim of Workman against Management no. 3.
24. I have heard the submissions made on behalf of the parties
LIR No. 1017/2020
Nitin Kumar Vs. M/s. Department of Trade And Taxes
Award dated 10.03.2025 Page 10 of 25
and have carefully perused the material available on record. My
issue-wise findings, on the issues settled by Ld. Predecessor of
this Court vide order dated 01.12.2023, are as follows:-
Issue no. (i): Whether there existed relationship of
employee and employer in between the Claimant and
the Management no. 1 or Management no. 2 or
Management no. 3?OPW
25. Onus to prove the aforesaid issue was upon Workman. It is
significant to note in this regard that the Claimant, in his
statement of claim, has impleaded three Managements as
Respondents, while, alleging that he was recruited by
Management no. 1 on a contract through Management no. 3 and accordingly joined the services of Management no. 1 on 08.07.2016 at the post of Data Entry Operator. After expiry of aforesaid contract between Management no. 1 and 3 w.e.f. 31.01.2019, according to Claimant, upon instructions of Management no. 1, Claimant got himself registered as an employee of new contractor i.e. Management no. 2, however, his services were illegally terminated on 15.05.2019 despite the fact that the contract between Management no. 1 and 2 was to remain in force until 30.11.2019.
26. From the aforesaid pleadings of Workman, it is apparent that though he had initially joined the establishment of Management no. 1 as an employee of Management no. 3, however, after 31.01.2019, he had been working at the establishment of Management no. 1, as an employee of Management no. 2. Thus, as per his statement of claim, it is not even his case that he had ever been under direct employment of LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 11 of 25 Management no. 1 or that the Contract between Management no. 1 and Management no. 3 or for that matter, contract between Management no. 1 and 2 was either sham or camouflage.
27. On the other hand, during his cross-examination by Ld. AR of Management no. 1, he has categorically admitted that he had never been on the muster roll of Management no. 1 nor his salary was being paid by Management no. 1. He has admitted that he was on the muster roll of Management no. 3 and his salary was also being paid by Management no. 3. He has also admitted that after expiry of contract of Management no. 3 with Management no. 1, he became an employee of Management no. 2. He has also admitted that no demand in writing was ever made by him to Management no. 1 for issuance of any appointment letter in his name.
28. It is not even his case that after termination of his services by Management no. 2, he had ever approached Management no. 1 seeking his reinstatement into the services. He has taken a plea during his cross-examination that after the circular dated 15.05.2019, he had approached Management no. 2 for employment, but, Management no. 2 had refused to give him any employment. The aforesaid deposition of Workman during his cross-examination indicates that his services were apparently terminated by Management no. 2 and not by Management no. 1. In fact, Workman has failed to produce any document to prove that he had ever been in employment of Management no. 1.
29. So far as Management no. 3 is concerned, not only, in his statement of claim but also in his evidence by way of affidavit LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 12 of 25 and even during his cross-examination by Ld. AR for Management no. 3, Workman has admitted that as on the date of alleged termination of his services i.e. on 15.05.2019, he was not in employment of Management no. 3. In fact, he has admitted that he is not claiming any relief against Management no. 3. No doubt, Workman had admittedly remained in employment of Management no. 3 since July 2016 until 31.01.2019, however, this Court, in the present case, is concerned with the existence of employer-employee relationship between the parties as on the date of his alleged termination i.e. as on 15.05.2019.
30. It is the common case of Workman as well as Managements no. 1 and 3 that the Claimant, as on the date of his alleged termination i.e. as on 15.05.2019, was in employment of Management no. 2. Management no. 2 has failed to appear and to controvert the aforesaid fact by filing any written statement or through cross-examination of Workman. On the other hand, the documents tendered by Managements no. 1 and 3, in their evidence, clearly establish that the Claimant, as on the date of his alleged termination i.e. on 15.05.2019, was in employment of Management no. 2.
31. Issue no. (i) is thus decided with the observation that as on the date of alleged termination of Workman i.e. as on 15.05.2019, the employer-employee relationship existed merely between Management no. 2 and Claimant and that on the aforesaid date, Claimant was neither in employment of Management no. 1 nor of Management no. 3.
Issue no. (ii): Whether the Management no. 1 is an industry within the meaning of 2(J) of ID Act.? OPW LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 13 of 25
32. It is significant to note in this regard that Claimant has filed the present claim, while, impleading three respondents. He has impleaded the Department of Trade and Taxes of Govt. of NCT of Delhi as respondent/ Management no. 1 while alleging that he had joined the services of Management no. 1 on 08.07.2016 through Management no. 3. Respondent/ Management no. 1, in its written statement, filed on 09.02.2023, has taken a categorical plea that it, being the department of Govt. of NCT of Delhi, does not fall within the definition of employer/ industry under the provisions of Industrial Disputes Act 1947.
33. Thus, onus to prove that Management no. 1 is an industry, within the meaning of Section 2(j) of the Industrial Disputes Act, 1947, was upon the Workman, however, Workman has failed to lead any evidence on the aforesaid issue. The meaning of term 'industry' under the provisions of Section 2(j) of Industrial Disputes Act, 1947 is no longer res-integra in view of the authoritative pronouncement of 7 judge bench of Hon'ble Supreme Court of India in Bangalore Water Supply and Sewerage Board Vs. A. Rajappa & Ors. MANU/SC/0257/1978:
(1978)2SCC 213.
34. The functional test or triple test, popularly so called, for determination of question whether an organization falls within the purview of "industry" as per Section 2(j) of the Industrial Disputes Act, 1947, as laid down by Hon'ble Mr. Justice V.R. Krishna Iyer in his leading opinion in Bangalore Water Supply and Sewerage Board Vs. A. Rajappa & Ors.
MANU/SC/0257/1978: (1978)2SCC 213 was endorsed by as many as six out of seven Hon'ble Judges. Relevant observations LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 14 of 25 from the leading opinion of Hon'ble Mr. Justice V.R. Krishna Iyer in the aforesaid judgment, which are relevant for determination of the question before this Court whether the Management no. 1 falls within the definition of industry or not, are being reproduced herein below for ready reference:
"162. Banerji, amplified by Corporation of Nagpur, in effect met with its Waterloo in Safdarjung. But in this latter case two voices could be heard and subsequent rulings zigzagged and conflicted precisely because of this built-in ambivalence. It behoves us, therefore, hopefully to abolish blurred edges, illumine penumbral areas and over-rule what we regard as wrong. Hesitancy, half-tones and hunting with the hounds and running with the hare can claim heavy penalty in the shape of industrial confusion, adjudicatory quandary and administrative perplexity at a time when the nation is striving to promote employment through diverse strategies which need for their smooth fulfilment, less stress and distress, more mutual understanding and trust based on a dynamic rule of law which speaks clearly, firmly and humanely. If the salt of law lose its savour of progressive certainty wherewith shall it be salted? So we proceed to formulate the principles, deducible from our discussion, which are decisive, positively and negatively, of the identity of 'industry' under the Act. We speak, not exhaustively, but to the extent covered by the debate at the bar and, to that extent, authoritatively, until over-ruled by a larger bench or superseded by the legislative branch. I. 'Industry', as defined in Section 2(j) and explained in Bauerji, has a wide import.
(a) Where (i) systematic activity, (ii) organized by co-operation between employer and employee, (the direct and substantial element is LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 15 of 25 chimerical)(iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss e.g. making, on a large scale, prasad or food), prima facie, there is an 'industry' in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint private or other sector.
(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.
(d) If the organisation is a trade or business it does not cease to be one because of philanthropy animating the undertaking.
II. Although Section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to overreach itself.
(a) 'Undertaking' must suffer a contextual and associational shrinkage as explained in Banerji and in this judgment, so also, service, calling and the like. This yields the inference that all organized activity possessing the triple elements in I (supra), although not trade or business, may still be 'industry' (provided the nature of the activity, viz. the employer-
employee basis, bears resemblance to what we find in trade or business. This takes into the fold of 'industry' undertakings, callings and services adventure 'analogous' to the carrying on of trade or business'. All features, other than the methodology of carrying on the activity viz. in organizing the co-operation between employer and employee may be dissimilar. It LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 16 of 25 does not matter, if on the employment terms there is analogy.
III. Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or other sense of motivation for or resultant of the economic operations. The ideology of the Act being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition. Nothing less, nothing more.
(a) The consequences are (i) professions, (ii) Clubs (iii) educational institutions (iiia) co-
operatives, (iv) research institutes (v) charitable projects and (vi) other kindred adventures, if they fulfil the triple tests listed in I (supra), cannot be exempted from the scope of Section 2(j).
(b) A restricted category of professions, clubs, co-operatives and even Gurukulas and little research labs, may qualify for exemption if in simple ventures substantially and going by the dominant nature criterion substantively, in single simple ventures, no employees are entertained but in minimal matters, marginal employees are hired without destroying the non-employee character of the unit.
(c) If in a pious or altruistic mission many employ themselves, free or for small honoraria, or likely return mainly by sharing in the purpose or cause, such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical center or ashramites working at the bidding of the holiness, divinity or like central personality LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 17 of 25 and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant, relationship, then, the institution is not an industry even if stray servants, manual or technical, are hired. Such eleemosynary or like undertakings alone are exempt-not other generosity, compassion, developmental passion or project.
IV The dominant nature test :
(a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not 'workmen' as in the University of Delhi Case or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur, will be true test. The whole undertaking will be 'industry' although those who are not 'workmen' by definition may not benefit by the status.
(b) Notwithstanding the previous clauses, sovereign functions, strictly understood, alone qualify for exemption, not the welfare activities or economic adventures undertaken by government or statutory bodies.
(c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within Section 2(j).
(d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 18 of 25 otherwise may be covered thereby.
163. We over-rule Safdarjung, Solicitors' case, Gymkhana, Delhi University, Dhanrajgirji Hospital and other rulings whose ratio runs counter to the principles enunciated above, and Hospital Mazdoor Sabha is hereby rehabilitated."
35. A bare perusal of the aforesaid observation of Hon'ble Supreme Court shows that Hon'ble Supreme Court, in the aforesaid judgment, has laid down a functional test to determine whether an undertaking falls within the definition of industry within the meaning of Section 2(j) of the Industrial Disputes Act or not. It has been held by Hon'ble Supreme Court that the absence of profit motive and gainful object is irrelevant for determination whether an undertaking is industry or not, nor, an organization which is otherwise running trade or business ceases to be one because of philanthropy emanating the aforesaid undertaking. It has thus been held by Hon'ble Supreme Court that in order to bring an organization within the definition of industry, an undertaking/organization should have three features:
(i) It should be engaged in a systematic activity,
(ii) The systematic activity should be organized by co-operation between employer and employee; and
(iii) The Co-operation between employer and employee should be for production or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious) including material things or services geared to celestial bliss.
36. Consequently, it has been held by Hon'ble Supreme Court that the professions, clubs, educational institutions, Co-
LIR No. 1017/2020Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 19 of 25 operatives, research institutes, charitable projects and other kindered adventures cannot be exempted from the scope of Section 2(j) of the Industrial Disputes Act, 1947 if they fulfill the aforesaid triple test, whereas, a restricted category of such organizations may qualify for exemption, if they are engaged in single simple ventures, wherein, no employees are entertained except in minimal matters without destroying non-employee character of the unit. Moreover, Departments performing sovereign functions of the State have been excluded from the definition of "Industry".
37. While coming to the facts of case in hand, the Claimant has impleaded the Department of Trade and Taxes of Govt. of NCT of Delhi as Management no. 1, which, by no stretch of imagination, can be assumed to be an industry within the meaning of Section 2(j) of Industrial Disputes Act, 1947 as amplified by Hon'ble Supreme Court of India in the authoritative pronouncement of M/s Bangalore Water Supply case (Supra). It is a matter of common knowledge that the Department of Trade and Taxes of Govt. of NCT of Delhi is responsible for collection of revenue in the form of tax from the public which is a sovereign function of the State. Workman has failed to lead any evidence that the said department is also carrying out any activities which bring the said department within the purview of "industry".
38. Issue no. (ii) is thus decided against Workman.
Issue no. (iii): Whether the Claimant is Workman as defined under Section 2(s) of the ID Act, 1947? OPW LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 20 of 25
39. Onus to prove the aforesaid issue was upon Workman. A perusal of Section 2(s) of Industrial Disputes Act, 1947 shows that it defines the Workman so as to mean a person employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward. In the case in hand, it has already been observed hereinabove that the Claimant has failed to prove Management no. 1 to be an industry and hence, he cannot be considered to be a Workman qua Management no. 1. Admittedly he was not in employment of Management no. 3, as on the date of alleged termination of his services, and hence, cannot be considered to be a Workman even qua Management no. 3.
40. So far as Management no. 2 is concerned, it has already been proved on record that as on the date of his alleged termination, Claimant was deployed at the establishment of Management no. 1 as a data Entry Operator as an employee of Management no. 2. As per material available on record, Management no. 2 is apparently engaged in supplying manpower to Management no. 1 for its operations and hence, in my considered opinion, Claimant has been able to establish that he falls within the definition of Workman qua Management no.
2.
41. Issue no. (iii) is decided with the observation that Claimant has been able to prove himself to be a Workman, within the meaning of Section 2(s) of the Industrial Disputes Act, 1947, qua Management no. 2.
Issue no. (iv): Whether the services of the Claimant have been illegally and unjustifiably terminated by LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 21 of 25 the Management no. 1 or Management no. 2 on 15.05.2019? If so, whether the Claimant is entitled for reinstatement with full back wages and other consequential reliefs as prayed for by the Claimant in his claim petition? OPW
42. Onus to prove issue no. (iv) was upon Workman. It has already been observed hereinabove that Workman, in his statement of claim, though, has alleged that his services were illegally terminated w.e.f. 15.05.2019, however, he has failed to disclose the name of respondent, who has actually terminated the services of Workman. Even in his evidence by way of affidavit also, he has failed to disclose the name of Management, who, has allegedly terminated his services on 15.05.2019.
43. It was only during his cross-examination dated 02.05.2024 that he had denied a suggestion of Ld. AR for Management no. 1 that his services were terminated by Management no. 2 and not by Management no. 1 indicating that his services were purportedly terminated by Management no. 1. However, he has further elaborated that on the date of termination of his services, he had performed his duty for the half day and thereafter found a notice, under the signatures of Management no. 1, pasted on the notice board, to the effect that his services along with the services of various other employees had been terminated. He has however failed to place on record the aforesaid notice.
44. He was, however, confronted by Ld. AR of Management no. 1 with the copy of a circular dated 15.05.2019 Ex. WW1/M1 and he admitted that it was the same notice which was seen by him on the notice board of Management no. 1 on 15.05.2019. A bare perusal of the aforesaid circular/ notice shows that it has LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 22 of 25 neither been addressed nor endorsed to the Workman and the same is merely an intimation to all the Zonal/ Branch/ Ward In- Charges of Management no. 1 to the effect that services of 108 outsourced Data Entry Operators, including the claimant herein, as per the list enclosed with the aforesaid circular, had been surrendered to Management no. 2 w.e.f. 15.05.2019 (A/N) and hence, they must ensure that none of the aforesaid DEOs should be found working in any Section/ Branch/ Ward of the department after 15.05.2019.
45. In fact, when a suggestion to this effect was given by Ld. AR of Management no. 1 to Workman, he has tried to take a plea that after seeing the aforesaid circular, he visited Management no. 2, who, had refused to provide him with any employment indicating that he was trying to shift his stand regarding termination of his services by alleging that his services were terminated by Management no. 2. The aforesaid circular, in my considered opinion, thus, cannot be considered to be a termination order in respect of the services of Claimant, more so, when the Claimant has failed to prove existence of any employer-employee relationship between Management no. 1 on the one hand and himself on the other.
46. In view of the aforesaid discussion, in my considered opinion, Claimant has failed to prove termination of his services by Management no. 1, much less, illegally or unjustifiably.
47. So far as Management no. 2 is concerned, from the aforesaid discussion, it is apparent that Claimant, as on the date of alleged termination of his services, was under employment of LIR No. 1017/2020 Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 23 of 25 Management no. 2 and hence his services could only have been terminated by Management no. 2. However, as has already been observed hereinabove, Workman was found avoiding a clear stand regarding termination of his services by Management no.
2. Be that as it may, even if, it is assumed for the sake of arguments that his services were terminated by Management no. 2 on 15.05.2019, said termination cannot be considered to be illegal for want of any advance notice/ notice pay or retrenchment compensation i.e. for non compliance of provisions of Section 25F of Industrial Disputes Act, since, the Claimant had admittedly not completed 240 days of continuous service, within the year immediately preceding the date of his alleged termination, with Management no. 2, which is a pre-condition for applicability of provisions of Section 25F of the Industrial Disputes Act, 1947.
48. Moreover, in the absence of any specific plea on the part of Workman that his services were terminated by Management no. 2 on the ground of misconduct, without any show cause notice, charge sheet or inquiry, Court cannot presume illegal termination of his services by Management no. 2 by way of punishment, without following the principles of natural justice.
49. Under the aforesaid circumstances, in my considered opinion, Claimant has failed to prove illegal termination of his services either by Management no. 1 or by Management no. 2. In the absence of proof of the aforesaid fact, in my considered opinion, he is not entitled to his reinstatement with or without back wages or other consequential reliefs.
LIR No. 1017/2020Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 24 of 25
50. Issue no. (iv) is thus decided against Workman.
Issue no. (v) Relief, if any.
51. In view of my finding on issue no (iv) hereinabove, Workman is not entitled to any relief.
52. Present claim of Workman is thus dismissed and the reference dated 11.11.2019 qua Workman Sh. Nitin Kumar S/o Sh. Tara Chand is answered in negative in the following terms:
"Workman Sh. Nitin Kumar S/o Sh. Tara Chand, whose name is mentioned at serial no. 8 of Annexure A to the reference dated 11.11.2019, has failed to prove that his services were terminated by either of the managements illegally or unjustifiably and hence, he is not entitled to any relief."
53. Ordered accordingly.
54. Requisite number of copies of this award be sent to the competent authority for publication as per rules.
Announced in the open Court on this 10 th day of March, 2025.
This award consists of 25 number of signed pages. ARUN Digitally signed by
ARUN KUMAR
KUMAR GARG
Date: 2025.03.10
GARG 16:32:34 +05'30'
(ARUN KUMAR GARG)
Presiding Officer Labour Court-III
Rouse Avenue Court, New Delhi
LIR No. 1017/2020
Nitin Kumar Vs. M/s. Department of Trade And Taxes Award dated 10.03.2025 Page 25 of 25