Gujarat High Court
Bhavnagar Municipal Corpo vs Shailesh Mansinhbhai Solanki on 27 June, 2014
Author: A.G.Uraizee
Bench: A.G.Uraizee
C/SCA/27286/2006 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 27286 of 2006
with
SPECIAL CIVIL APPLICATION NO. 27287 of 2006
with
SPECIAL CIVIL APPLICATION NO. 27289 of 2006
with
SPECIAL CIVIL APPLICATION NO. 27291 of 2006
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE A.G.URAIZEE
=========================================
1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the
interpretation of the Constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================= BHAVNAGAR MUNICIPAL CORPO.....Petitioner(s) Versus SHAILESH MANSINHBHAI SOLANKI....Respondent(s) ========================================= Appearance:
MR HS MUNSHAW, ADVOCATE for the Petitioner(s) No. 1 MR TR MISHRA, ADVOCATE for the Respondent(s) No. 1 RULE SERVED for the Respondent(s) No. 1 ========================================= CORAM: HONOURABLE MR.JUSTICE A.G.URAIZEE Date : 27/06/2014 COMMON CAV JUDGMENT Page 1 of 12 C/SCA/27286/2006 CAV JUDGMENT The petitioner corporation has challenged the legality and validity of the common judgment and award dated 27 th March 2006 passed by the Labour Court, Bhavnagar in Reference (LCB) No.341 of 1999, 343 of 1999, 438 of 1999 and 344 of 1999 whereby the Labour Court has partly allowed the References filed by the workmen and directed the Corporation to reinstate the respondent workmen in service with 50% back wages and continuity of service.
2 Heard Mr H.S. Munshaw, learned counsel for the petitioner Corporation and Mr T.R. Mishra, learned counsel for the respondent workmen.
3 The brief resume of the facts of the present group of petitions is that the respondentworkmen were inducted by the petitioner - Corporation in service as per the following details reflected in the claim made by the respondentworkmen:
Petitioner of Post Period Post Period
SCA No.27286 of 2008 Apprentice 30.09.1995 Contract 23.10.1997
[Ref. LCB No.341/1999] Lineman to workman to 10.3.1999
29.09.1996
SCA No.27287 of 2008 Apprentice 15.09.1993 Contract 23.10.1997
[Ref. LCB No.343/1999] Lineman to workman to 10.3.1999
14.09.1995
SCA No.27289 of 2008 Apprentice Two years Contract 23.10.1997
[Ref. LCB No.438/1999] Lineman prior to workman to 10.3.1999
SCA No.27291 of 2008 Apprentice 30.03.1993 Contract 23.10.1997
[Ref. LCB No.344/1999] Lineman to workman to 10.3.1999
29.03.1996
4 After completion of the initial period, the respondentworkman
entered into contract with the petitioner corporation for specific period of 180 days. Their services came to be terminated on completion of the contract period of 10.3.1999. In spite of these facts, the responden raised industrial dispute and preferred Reference before the Labour Page 2 of 12 C/SCA/27286/2006 CAV JUDGMENT Court, Bhavnagar being Reference No.341 of 1991, 343 of 1991, 344 of 1991 and 438 of 1999 for reinstatement and back wages. The References preferred by the respondent workmen came to be partly allowed by the learned Presiding Officer, Labour Court No.2, Bhavnagar and directed the petitioner to reinstate the respondent workmen in service with 50% back wages treating them to be in continuous service. The petitioner corporation is not happy with the award passed by the Labour Court, Bhavnagar and therefore the petitioner corporation has approached this Court under Article 227 of the Constitution of India to challenge the common judgment and award passed by the Labour Court, Bhavnagar.
5 Mr H.S. Munshaw, learned counsel for the petitionerCorporation has contended that the respondentworkmen being contractual workmen have right to continue till contractual period if otherwise their conduct, etc. is found to be good. His further contention is that Section 2(oo)(bb) of the Industrial Disputes Act, 1947 and not Section 25F of the Industrial Disputes Act is applicable to the present case and still the learned Labour Judge has erred in passing the impugned award in favour of the respondentworkmen holding that Section 25F is applicable as the respondentworkmen have completed 240 days of service and therefore he has urged that the impugned common award may be quashed and set aside.
6 Mr Munshaw has, in the alternative, contended that if this Court does not agree with his submission, then, at the most, looking to the length of service put in by the respondentworkmen, they are entitled to lump sum amount of reasonable compensation in lieu of reinstatement as directed by the Labour Court. In respect of the alternative submission, Mr Munshaw has relied upon the following decisions:
Page 3 of 12 C/SCA/27286/2006 CAV JUDGMENT(1) Assistant Engineer, Rajasthan Development Corporation & Another v. Gitam Singh, (2013) 5 SCC 136 (2) Bharat Sanchar Nigam Limited v. Man Singh, (2012) 1 SCC 558
7 Per contra, Mr T.R. Mishra, learned counsel for the respondent workmen has supported the impugned common award of the Labour Court and has urged that the Labour Court has recorded a definite finding that the respondent workmen have completed more than 240 days of service and therefore no illegality or irregularity is committed by the Labour Court. Hence, the impugned award does not warrant any interference. He would further submit that when the termination is found to be illegal, reinstatement is normal rule and hence the alternative submission of the learned counsel Mr Munshaw for the Corporation regarding payment of lump sum amount of compensation is out of question. In spite of his submission, Mr Mishra has relied upon the following decisions:
(1) Harjinder Singh v. Punjab State Warehousing Corporation, (2010) 3 SCC 192.
(2) Deepali Gundu Surwase v. Kranti Juniour Adhyapak & Ors. , 2013 (139) FLR 541 (para 33) (3) Mr Mishra has also relied upon an unreported order dated 21st April 2010 of this Court in Special Civil Application No.11156 of 2009 and unreported CAV judgment dated 30 th December 2010 passed in Letters Patent Appeal No.2290 of 2010 in Special Civil Application No.11156 of 2009.
8 The contention of the learned counsel Mr Munshaw for the petitioner that Section 2(oo)(bb) of the ID Act is applicable and not Section 25F of the ID Act for extending the benefit to the workmen concerned on the basis of having completed 240 days of service cannot Page 4 of 12 C/SCA/27286/2006 CAV JUDGMENT be countenanced. It would be relevant to quote Sections 2(oo)(bb) and 25F of the ID Act as under to appreciate the contention of Mr Munshaw, learned counsel for the appellant:
"2(oo) 'retrenchment' means the termination by the employer of the 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 (bb) termination of the service of the workman as a result of the nonrenewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or
(c) xxxx"
"25F. Conditions precedent to retrenchment of workmen. - No workman enjoyed 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;
(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to 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 Page 5 of 12 C/SCA/27286/2006 CAV JUDGMENT Gazette."
9 A bare reading of aforesaid provisions of the ID Act makes it explicitly clear that Section 20(oo)(bb) is applicable to the contractual workmen while provisions of Section 25F are for protection of workmen who have put in 240 days of continuous service. The argument that the services of the respondentworkmen are terminated after the contract period is over sounds attractive, but the evidence led before the Labour Court makes it abundantly clear that the respondentworkmen had put in around 270 days of continuous service. Moreover, the Labour Court has recorded a definite finding on the basis of documentary and ocular evidence led before it to the effect that the contract for service executed between the respondents is a hogwash and the same is created to circumvent the provisions of the ID Act. Therefore, the submission of Mr Munshaw, learned counsel for the petitionerCorporation that Section 25F is not applicable and the petitioner Corporation has rightly terminated the services of the respondents in view of Section 20(oo)(bb) of the ID Act has no substance.
10 Mr Mushaw, learned counsel for the petitioner Corporation has placed heavy reliance on the judgment of the Apex Court in the case of Assistant Engineer, Rajasthan Development Corporation & Another (supra) and Bharat Sanchar Nigam Limited v. Man Singh (supra) to submit that the respondents have worked for relatively short period with the petitioner corporation and therefore instead of directing reinstatement reasonable amount of compensation in lieu of reinstatement may be awarded.
11 The Honourable Supreme Court in the case of Assistant Engineer, Rajasthan Development Corporation & Another (supra) has held in paragraph 22 as under:
Page 6 of 12 C/SCA/27286/2006 CAV JUDGMENT"22 From the long line of cases indicated above, it can be said without any fear of contradiction that this Court has not held as an absolute proposition that in cases of wrongful dismissal, the dismissed employee is entitled to reinstatement in all situations. It has always been the view of this Court that there could be circumstance(s) in a case which may make it inexpedient to order reinstatement. Therefore, the normal rule that dismissed employee is entitled to reinstatement in cases of wrongful dismissal has been held to be not without exception. Insofar as wrongful termination of dailyrated workers is concerned, this Court has laid down that consequential relief would depend on host of factors, namely, manner and method of appointment, nature of employment and length of service. Where the length of engagement as daily wager has not been long, award of reinstatement should not follow and rather compensation should be directed to be paid. A distinction has been drawn between a daily wager and an employee holding the regular post for the purposes of consequential relief.
12 Again, the Honourable Supreme Court in the case of Bharat Sanchar Nigam Limited v. Man Singh (supra) has held in paragraphs 4 and 5 as under:
"4 This Court in a catena of decisions has clearly laid down that although an order of retrenchment passed in violation of Section 25F of the Industrial Disputes Act may be set aside but an award of reinstatement should not be passed. This Court has distinguised between a daily wager who does not hold a post and a permanent employee.
5. In view of the aforementioned legal position and the fact that the respondent workmen were engaged as "daily wagers" and they had merely worked for more than 240 days, in our considered view, relief of reinstatement cannot be said to be justified and instead, monetary compensation would meet the ends of justice."
13 Mr Mishra, learned counsel for the respondentworkmen has vehemently has opposed the submission of learned counsel for the petitioner for payment of compensation in lieu of reinstatement by Page 7 of 12 C/SCA/27286/2006 CAV JUDGMENT relying upon the judgment of the Apex Court in the case of Harjinder Singh (supra) more particularly paragraph 20 thereof, which reads as under:
"20. The distinction between Sections 25F and 25G of the Act was recently reiterated in Bhogpur Coop. Sugar Mills Ltd. v. Harmesh Kumar (2006) 13 SCC 28 : (2006 AIR SCW 6084), in the following words :
"We are not oblivious of the distinction in regard to the legality of the order of termination in a case where Section 25F of the Act applies on the one hand, and a situation where Section 25 G thereof applies on the other. Whereas in a case where Section 25F of the Act applies the workman is bound to prove that he had been in continuous service for 240 days during twelve months preceding the order of termination in a case where he invokes the provisions of Sections 25G and 25H thereof he may not have to establish the said facts. See : Central Bank of India v. S. Satyam (1996 AIR SCW 3138); Samishta Dube v. City Board, Etawah (1999 AIR SCW 694); SBI v. Rakesh Kumar Tewari (2006 AIR SCW 235) and Jaipur Development Authority v. Ram Sahai (2006 AIR SCW 5963)."
In view of the, above discussion, we hold that the learned Single Judge of the High Court committed serious jurisdictional error and unjustifiably interfered with the award of reinstatement passed by the Labour Court with compensation of Rs. 87,582/ by entertaining a wholly unfounded plea that the appellant was appointed in violation of Articles 14 and 16 of the Constitution and the Regulations."
14 In Deepali Gundu Surwase (supra) the Honourable Supreme Court has culled out the following propositions in paragraph 33 of the judgment, after considering various judgments rendered by the Honourable Supreme Court :
"i) In cases of wrongful termination of service, reinstatement with continuity of service and back wages is the normal rule.
ii) The aforesaid rule is subject to the rider that while deciding the issue of back wages, the adjudicating authority or the Court may take into consideration the length of service of the Page 8 of 12 C/SCA/27286/2006 CAV JUDGMENT employee/ workman, the nature of misconduct, if any, found proved against the employee/workman, the financial condition of the employer and similar other factors.
iii) Ordinarily, an employee or workman whose services are terminated and who is desirous of getting back wages is required to either plead or at least make a statement before the adjudicating authority or the Court of first instance that he/she was not gainfully employed or was employed on lesser wages. If the employer wants to avoid payment of full back wages, then it has to plead and also lead cogent evidence to prove that the employee/workman was gainfully employed and was getting wages equal to the wages he/she was drawing prior to the termination of service. This is so because it is settled law that the burden of proof of the existence of a particular fact lies on the person who makes a positive averments about its existence.
It is always easier to prove a positive fact than to prove a negative fact. Therefore, once the employee shows that he was not employed, the onus lies on the employer to specifically plead and prove that the employee was gainfully employed and was getting the same or substantially similar emoluments.
iv) The cases in which the Labour Court/Industrial Tribunal exercises power under Section 11A of the Industrial Disputes Act, 1947 and finds that even though the enquiry held against the employee/workman is consistent with the rules of natural justice and / or certified standing orders, if any, but holds that the punishment was disproportionate to the misconduct found proved, then it will have the discretion not to award full back wages. However, if the Labour Court/Industrial Tribunal finds that the employee or workman is not at all guilty of any misconduct or that the employer had foisted a false charge, then there will be ample justification for award of full back wages.
v) The cases in which the competent Court or Tribunal finds that the employer has acted in gross violation of the statutory provisions and/or the principles of natural justice or is guilty of victimizing the employee or workman, then the concerned Court or Tribunal will be fully justified in directing payment of full back wages. In such cases, the superior Courts should not exercise power under Article 226 or 136 of the Constitution and interfere with the award passed by the Labour Court, etc., Page 9 of 12 C/SCA/27286/2006 CAV JUDGMENT merely because there is a possibility of forming a different opinion on the entitlement of the employee/workman to get full back wages or the employer's obligation to pay the same. The Courts must always be kept in view that in the cases of wrongful / illegal termination of service, the wrongdoer is the employer and sufferer is the employee/workman and there is no justification to give premium to the employer of his wrongdoings by relieving him of the burden to pay to the employee/workman his dues in the form of full back wages.
vi) In a number of cases, the superior Courts have interfered with the award of the primary adjudicatory authority on the premise that finalization of litigation has taken long time ignoring that in majority of cases the parties are not responsible for such delays. Lack of infrastructure and manpower is the principal cause for delay in the disposal of cases. For this the litigants cannot be blamed or penalised. It would a mount to grave injustice to an employee or workman if he is denied back wages simply because there is long lapse of time between the termination of his service and finality given to the order of reinstatement. The Courts should bear in mind that in most of these cases, the employer is in an advantageous position visà vis the employee or workman. He can avail the services of best legal brain for prolonging the agony of the sufferer, i.e., the employee or workman, who can ill afford the luxury of spending money on a lawyer with certain amount of fame. Therefore, in such cases it would be prudent to adopt the course suggested in Hindustan Tin Works Private Limited v. Employees of Hindustan Tin Works Private Limited (supra).
vii) The observation made in J.K. Synthetics Ltd. v. K.P. Agrawal (supra) that on reinstatement the employee/workman cannot claim continuity of service as of right is contrary to the ratio of the judgments of three Judge Benches referred to hereinabove and cannot be treated as good law. This part of the judgment is also against the very concept of reinstatement of an employee/workman."
15 Having heard learned counsel on either side and having perused the record of the petition I am of the opinion that the submission of the learned counsel, Mr Mushaw for the appellant for awarding the Page 10 of 12 C/SCA/27286/2006 CAV JUDGMENT compensation in lieu of reinstatement needs to be accepted. It is true that the Apex Court in the case of Deepali Gundu Surwase (supra) has culled out a proposition that in cases of wrongful termination of service reinstatement with continuity of service and back wages is the normal rule. The emphasis here would be on the use of phrase 'reinstatement is the normal rule'. At the same time, the Apex Court has not laid down this proposition as a rule of thumb. Therefore, if the facts of the case demand that in the backdrop of facts and circumstances compensation in lieu of reinstatement would meet the ends of justice, the Court's powers are not restricted and compensation in lieu of reinstatement can always be granted. In the present case, as recorded by the Labour Court, the respondents had put in more than 270 days of continuous service prior to their termination. As held by the Honourable Supreme Court in the case of Assistant Engineer, Rajasthan Development Corporation & Another (supra), looking to the short period of service rendered by the respondent with the petitioner Corporation, I am of the opinion that ends of justice would be met if the compensation in lieu of reinstatement as awarded by the Labour Court by the impugned award is granted to the respondents in terms of ratio of the Honourable Supreme Court in the case of Assistant Engineer, Rajasthan Development Corporation & Another (supra).
So far as unreported order dated 21st April 2010 of this Court in Special Civil Application No.11156 of 2009 and unreported CAV judgment dated 30th December 2010 passed in Letters Patent Appeal No.2290 of 2010 in Special Civil Application No.11156 of 2009 are concerned, it is specifically stated therein that the said decision should not be treated as a precedent. Therefore, for deciding the present petitions, I am of the opinion that the aforesaid order and judgment cannot be considered.
Page 11 of 12 C/SCA/27286/2006 CAV JUDGMENT16 The next question that is required to be determined is as to the reasonable quantum of compensation which should be awarded to the respondent workmen in lieu of reinstatement. It is explicitly clear from the record that the respondents have rendered services with the petitioner Corporation between 1995 and 1999 and hence considering the wages prevailing during the period of employment of the respondent workmen with the petitioner corporation, the service the respondent workmen would put in if they are reinstated and steep rise in the living standard in the living standard, I am of the opinion that the compensation of Rs.1 lakh to each of the respondents in lieu of reinstatement and would be just compensation.
17 For the reasons aforesaid, the present petitions deserve to be accepted in part. The judgment and award dated 27th March 2006 passed by the Labour Court, Bhavnagar in Reference (LCB) No.341 of 1999, 343 of 1999, 438 of 1999 and 344 of 1999 whereby the Labour Court has partly allowed the References filed by the workmen and directed the Corporation to reinstate the respondent workmen in service with 50% back wages and continuity of service is modified to the effect that each of the respondents be paid Rs.1 lakh as compensation in lieu of reinstatement and back wages. The petitioner is directed to pay the aforesaid amount within eight weeks from today. Rule is made absolute to the above extent. In the facts of the case, there shall be no order as to costs.
(A.G.URAIZEE,J) mohd Page 12 of 12