Delhi District Court
Sh. Ashok Kumar Chaturvedi vs M/S. Pashupati Spinning And Weaving ... on 2 August, 2016
IN THE COURT OF SHRI UMED SINGH GREWAL
PO:LCXVII, ROOM NO. 22 : KKD COURTS :DELHI
LIR No.2082/16 (Old No. ID 165/07).
Unique ID No.02402C07448512007
Sh. Ashok Kumar Chaturvedi
S/o Sh. Harish Chandra Chaturvedi,
B50, Balram Nagar, P.O. Loni Distt. Ghaziabad, U.P.
............. Workman
Versus
M/s. Pashupati Spinning and Weaving Mills Ltd.,
Nirmal Tower, Barakhamba Road, Connaught Place,
New Delhi1.
..............Management
DATE OF INSTITUTION : 22.11.2007
DATE ON WHICH AWARD RESERVED : 29.07.2016.
DATE ON WHICH AWARD PASSED : 02.08.2016.
A W A R D :
1. Vide Order No. F.24(379)/06/Lab./330102 dated
12.11.07, issued by Government of NCT of Delhi, a reference was
sent to this Court with the following terms:
"Whether services of Sh. Ashok Kumar Chaturvedi
S/o Sh. Harish Chandra Chaturvedi were engaged
on retainership basis and were disengaged after full
and final settlement of all claims or his services
have been terminated illegally and or unjustifiably
by the management and if so, to what sum of money
as monetary relief along with other consequential
benefits in terms of existing Law / Govt.
Notifications and to what other relief is he entitled
ID No. 2082/16. 1/20
and what directions are necessary in this respect?"
2. Claimants' case is that he had joined the management as
Accountant in September, 1999 at the last drawn salary of
Rs.13,000/ per month comprising of basic salary of Rs.5,000/,
house rent allowance of Rs.8,000/ and exgratia of Rs.2,500/ per
month. He worked continuously without break and complaint but
suddenly his service was illegally terminated on 30.04.2003 without
notice, notice pay and without tendering retrenchment compensation.
He had filed a complaint before the Provident Fund Commissioner
against management for recovery of Rs.56,086/ along with interest.
That complaint has been decided in his favour holding him as
employee of the management. He is jobless since termination.
3. Written statement is to the effect that claimant was never
employee of the management and rather he used to visit it as
Consultant Accountant on reimbursement basis for which he used to
collect Rs.8,000/ per month in the form of rent for his consultancy
services. It has been denied that his last drawn salary was
Rs.13,000/ per month. He was not employee of the management
and that is why no appointment letter was issued to him. Being
visiting Consultant Accountant, he used to perform duties mainly of
managerial and administrative nature. He used to take decision on
behalf of management independently before tax authorities. He
ID No. 2082/16. 2/20
rendered his services till 30.04.03 when he expressed inability in
doing such arrangement and received full and final settlement of his
dues.
4. Following issues were framed on 28.04.2008:
1. Whether Sh. Ashok Kumar Chaturvedi is a workman as
per Section 2(s) of the I.D. Act? OPW.
2. As per terms of reference.
5. In order to substantiate the case, claimant tendered his
affidavit in evidence as Ex. WW1/A mentioning all the facts stated in
the statement of claim. In cross examination, he relied upon
documents from Ex. WW1/X1 to Ex. WW1/X11 and from Ex.
WW1/M1 to Ex. WW1/M14.
6. The Management examined its DGM Sh. Mukesh
Kakkar as MW1, who deposed that claimant used to render services
as a visiting consultant / accountant on requirement basis from
September, 1999 and continued upto 30.04.2003, when he expressed
inability in continuing the agreement any further and received full
and final payment. He used to collect salary of Rs.8,000/ from the
management in the form of rent for rendering consultancy services.
He further deposed that the order dated 18.10.2015 passed by
Regional Provident Fund Commissioner creating entitlement of
provident fund to him and holding him an employee of the
ID No. 2082/16. 3/20
management, has been set aside by the order of Provident Fund
Appellate Tribunal vide orders dated 21.12.15.
Issue No. 1.
7. Ld. ARM argued that claimant is not a workman
because he used to provide specialized services to the management.
He used to take independent decisions before the Tax Authorities on
behalf of the management. He was a highly qualified man and used
to provide consultancy service to the management. Such a person is
always more than a workman as defined under Section 2(s) of the
I.D. Act, 1947. In this regard, he relied upon (i). Divyash Pandit Vs.
The Management of National Council for Cement and Building
Materials, 2012 LLR 463, (ii). May and Baker (India) V. Their
Workman, AIR 1961 SC 678, (iii). Miss A. Sundarambal Vs.
Government of Goa, Daman and Diu and others AIR 1988 SC
1700, (iv). Jamia Hamdard Vs. Delhi Administration and others
44 (1992) DLT 210 (DB) and (v). Management of M/s. Sonepat
Coop. Sugar Mills Ltd. Vs. Ajit Singh Appeal (Civil) 845354 of
2002 decided by Apex Court on 14.02.2005.
On the other hand, ld. ARW argued that claimant used to
work as an Accountant with the management. He used to visit Tax
Authorities on behalf of management and he used to do those works
ID No. 2082/16. 4/20
which he was instructed by the management. His nature of duty was
to maintain accounts. Such a person is definitely a workman.
8. In Divyash Pandit (supra), the sole question before the
Hon'ble High Court of Delhi was whether the claimant was a
workman or not. In that case, the workman was an engineer
graduate. He used to carry out research work in process engineering
field related to cement industry claiming to have special knowledge
in research work. Considering the nature of work which the
workman was performing, the Hon'ble High Court held that it cannot
be said that he was doing any manual, unskilled, skilled, technical,
operational or clerical work within the meaning of Section 2(s) of the
I.D. Act, 1947.
In May and Baker (India) Ltd. (supra), the Apex Court
held that if the nature of duties is manual or clerical then the person
must be held to be workman. On the other hand, if manual or clerical
work is only a small part of the duties of the person concerned and
incidental to his main work which is not manual or clerical, then such
a person would not be a workman.
In Miss A. Sundarambal (supra), the question before the
Apex Court was whether a teacher was a workman or not. The Apex
Court held that imparting of education which the main function of
teachers cannot be considered as skilled or unskilled manual work or
supervisory work or technical work or clerical work. A teacher
ID No. 2082/16. 5/20
educates children, he moulds their character, builds up their
personality and makes them fit to become responsible citizens.
Children grow under the care of teachers. The Supreme Court
concluded that the clerical work, if any they may do, is only
incidental to their principal work of teaching. The Court held them
not workmen.
In Jamia Hamdard (supra), following was held by the
Apex Court :
"Research of course is usually for the benefit of
mankind but when it is successfully carried out it
primarily and essentially brings credit to the
researcher various Nobel Laureates have
achieved distinction in sciences through research
which was carried out by them in the very nature
of things research means bringing out a creative
work. It is difficult for us to comprehend as to
how a highly qualified post graduate research
fellow can possibly be regarded as a workman
within the meaning of Section 2(s) of the Act".
In Management of M/s. Sonepat Coop. Sugar Mills Ltd.
(supra), the claimant was working with the management on the post
of Legal Assistant. The nature of his duties was to prepare written
statements and notices, recording enquiry proceedings, giving
opinions to the management, drafting, filling the pleadings and
representing the management in all types of cases viz., civil, labour
and arbitration references independently. The Apex Court held that
the job of a clerk ordinarily implies stereotype work without power
ID No. 2082/16. 6/20
of control or dignity or initiative or creativeness. The Apex Court
held that the claimant's job involved creativity. He not only used to
render legal opinions on a subject but also used to draft pleadings on
behalf of the appellant as also represent it before various courts /
authorities. He would also discharge a quasijudicial functions as an
Enquiry Officer in departmental enquiries against the workmen. Such
a job, would not make him a workman.
9. In the case in hand, it is the case of the claimant that he
was working as an Accountant with the management. On the other
hand, the management's contention is that he used to provide it
consultancy services by taking independent decision on its behalf
before tax authorities. The claimant also admitted in cross
examination that he used to take independent decisions before the tax
authorities. He further admitted that he used to sign vouchers of
retrenched workers. But the real nature of his duty has been
described in various letters like Ex. WW1/M15, Ex. WW1/M18,
WW1/M20 and unexhibited and unmarked document dated
22.05.2002 written by management to the Sales Tax Office Ward No.
7 Bikrikar Bhawan, New Delhi.
The letter Ex. WW1/M15 dated 14.10.2000 was written
on behalf of the management to the Head Office intimating that
appeal in the Sales Tax penalty case was fixed for 31.10.2000 at
Ludhiana and so the Head Office should send its representative to
ID No. 2082/16. 7/20
attend the case. The representative, it is further mentioned, shall have
to visit Amritsar and bring the under noted books of accounts :
I. Stock Register.
II. Despatch Register.
III.Excise Register.
It is further mentioned that matter was very urgent and
so the representative be sent to Amritsar within a day or two. Ex.
WW1/M16 is the notice by Director Enforcement, Patiala Division,
Patiala to the management intimating the next date in the appeal as
31.10.2000 which was to be heard at Ludhiana. In pursuance to this
notice, the letter Ex. WW1/M15 was written by the officers of the
management to its Head Office. Ex. WW1/M17 is of two pages. Its
second page shows that claimant had visited Amritsar after receipt of
letter Ex. WW1/M15 because vide that paper he had claimed
expenses from the management. So, as per letter Ex. WW1/M15, the
main job of the representative of the management was just to carry
the stock register, despatch register and excise register first to
Amritsar and then to Ludhiana. Any consultant doing a specialized
job, is not expected to carry such documents with him. Such
documents are carried only by a person who is of stature of a clerk.
The claimant himself had written a letter Ex. WW1/M20 to the
Director of the management to inform about the progress of its Sales
Tax cases in Delhi. In that letter, the name of the department of the
claimant is mentioned as Accounts. The management itself had
ID No. 2082/16. 8/20
written unexhibited and unmarked letter dated 22.05.2002 to the
Sales Tax Officer, Ward No. 7 Bikrikar Bhawan, New Delhi in which
it is mentioned that claimant, being the accountant of the company,
would represent the case before that authority on behalf of
management. So, it is mentioned by management itself in that letter
that claimant was working with it as an Accountant and not as
Consultant. The claimant also deposed in cross examination that he
used to sign vouchers of sacked workers. Signing of vouchers is the
prime / main job of an Accountant. That job is not of a Consultant.
Also, such signing does not mean that he was working in any
managerial / supervisory capacity. It becomes clear from above
discussion that claimant was working merely as an Accountant and
he used to visit Tax offices in Delhi, Ludhiana and Amritsar on
behalf of management with documents. Consultancy service requires
higher knowledge. In the cited cases, the claimants were law
graduates, engineering graduates or were providing specialized
services. In the case in hand, the management did not try to enquire
into the degrees held by the claimant. He was working as an
Accountant for which no specialized degree is required. So, it is held
that the claimant is definitely a workman under Section 2(s) of the
I.D. Act, 1947.
Issue No. 2.
10. This issue comprises of three parts - first part is whether
ID No. 2082/16. 9/20
the claimant was engaged on retainership, second part is whether he
was disengaged after full and final settlement and third is whether his
services have been terminated illegally.
11. Ld. ARM argued that claimant was not in the regular
employment of the management because he used to work as a
retainer and that is why he was getting a sum of Rs.8,000/ only
which he used to take in the name of house rent in order to avoid tax
liability. On the other hand, ld. ARW argued that the claimant was
not a retainer and rather he was a permanent employee of the
management.
The documents from Ex. WW1/X1 to Ex. WW1/X11
and Ex. WW1/M1 to Ex. WW1/M15 have been admitted by the
claimant in cross examination. In documents from Ex. WW1/M1 to
Ex. WW1/M15, it is mentioned that claimant was receiving a sum of
Rs.8,000/ for a particular month against rent. The claimant has also
relied upon document Ex. WW1/M10 that he used to receive ex
gratia payment of Rs.2500/ per month from the management. In
order to show that management used to pay him Rs.8,000/ as salary,
the claimant is heavily relying upon the order under Section 7A of
the Employees Provident Fund and Miscellaneous Act, 1953 passed
by Regional Provident Fund Commissioner Mr. Rakesh Sahrawat on
28.09.2015. In that order, the Ld. P.F. Commissioner had held that
claimant was employee of the management. It was further held that
ID No. 2082/16. 10/20
he used to draw a salary of Rs.8,000/ per month from the
management. It is the admitted case of both parties that operation of
that order has been stayed by Hon'ble High Court of Delhi. Due to
stay, it cannot be said that order is still prevailing. Any observation
or finding made in that order, due to stay, cannot be read in favour or
against any party. So, the claimant is wrong to rely upon that order
to say that he was permanent employee of the management.
It has already been held in issue No. 1 that the claimant
used to represent management before Tax Authorities in Delhi,
Amritsar and Ludhiana. In a letter Ex. WW1/M20 dated 07.07.,2007
written by the claimant to the Director of the management, the name
of his department is mentioned as Accounts. The management itself
described him as an Accountant in letter dated 22.05.2002 written to
Sales Tax Office, New Delhi. Had claimant been only a retainer, he
would not have been described as an Accountant. It is also pertinent
to mention that in pursuance to letter Ex. WW1/M15 dated
14.10.2000, the claimant had attended the Tax Authorities in
Amritsar and Ludhiana by carrying stock register and excise register
all the way from Delhi. A retainer is not allowed even to touch such
sensitive documents. It is correct that claimant used to collect his
wages in the form of documents Ex. WW1/X1 to Ex. WW1/X20
mentioning that he was collecting the same in lieu of rent. He
admitted in cross examination that he had not rented out his any
building or premises to the management. The only plausible
ID No. 2082/16. 11/20
conclusion may be that claimant used to collect salary of Rs.8,000/
in the form of rent just to avoid tax liability. So, it is held that
claimant was a permanent employee of the management and not a
retainer.
12. Ld. ARM argued that management never terminated
services of the claimant and rather, it was claimant himself who
expressed inability to continue with the management and took full
and final amount on 30.04.03. On the other hand, ld. ARW argued
that such full and final receipt is not on the file and moreover, that
amount was collected by the claimant as full and final payment for
HRA only and not in respect of any other allowance.
During arguments, ld. ARM went through the whole file
and intimated the Court that there was no receipt dated 30.04.2003 on
file which may be termed as full and final settlement. But that fact
has been admitted by the claimant in cross examination with the
words that the last payment was received by him as full and final
payment. He volunteered that it was in respect of only HRA. Due to
nonfiling of the full and final receipt by the management, it has
failed to prove that claimant had himself left the job voluntarily.
13. It is the consistent stand of the claimant that
management has terminated his services verbally and illegally on
30.04.03. On the other hand, defence of the management was that
ID No. 2082/16. 12/20
he had voluntarily surrendered the job on that date. The management
has failed to prove its contention. Admittedly, no notice was given to
the claimant before terminating his service. No notice pay and
retrenchment compensation was tendered to him. There is no
allegation of any misconduct and hence there was no question of
chargesheet and domestic enquiry. Termination of service of
claimant without notice and without tendering notice pay and
retrenchment compensation is in violation to Section 25F of the I.D.
Act, 1947. It is not the case of any of the party that any chargesheet
was issued or that any domestic enquiry was conducted against the
claimant. So, this issue is decided in favour of the claimant and
against the management.
Relief.
14. Even if, service of a workman has been terminated
illegally, that would not automatically lead to reinstatement with
100% back wages. In Nehru Yuva Kendra Sangathan Vs. Union of
India & Ors. 2000 IV AD (Delhi) 709, Hon'ble Delhi High Court
dealt with the question of reinstatement and back wages and
observed in paragraphs 27 and 28 as under :
"27. We find from the decision of the
Supreme Court rendered in the 1970s and
1980s that reinstatement with back wages was
the norm in cases where the termination of the
services of the workman was held inoperative.
The decisions rendered in the 1990s, including
ID No. 2082/16. 13/20
the decision of the Constitution Bench in the
Punjab Land Development and Reclamation
Corporation Ltd., Chandigarh seem to suggest
that compensation in lieu of reinstatement and
back wages is now the norm. In any case,
since we are bound to follow the decision of
the Constitution Bench, we, therefore,
conclude that reinstatement is not the
inevitable consequence of quashing an order
of termination; compensation can be awarded
in lieu of reinstatement and back wages.
28. Considering the facts of this case, we
are persuaded to award compensation in lieu
of reinstatement and back wages to the
workman"
15. In Municipal Council, Sujanpur Vs. Surinder Kumar
2006 LLR 662, Hon'ble Supreme Court observed that the relief of
reinstatement is not automatic but is in the discretion of the court. In
paragraph 16, it was observed as under :
"Apart from the aforementioned error of law,
in our considered opinion, the Labour Court
and consequently the High Court completely
misdirected themselves insofar as they failed
to take into consideration that relief to be
granted in terms of section 11A of the said Act
being discretionary in nature, a Labour Court
was required to consider the facts of each
case therefor. Only because relief by way of
reinstatement with full back wages would be
lawful, it would not mean that the same would
ID No. 2082/16. 14/20
be granted automatically".
16. In Vinod Kumar & others vs Salwan Public School &
others WP(c)5820/2011 dt.17.11.2014 Hon,ble Justice V.
Kameshwar Rao has held as under:
11.Having considered the rival submissions of
the counsels for the parties, I do not find any
infirmity in the order of the Labour Court. It is
a settled position of law that even if
termination has been held to be illegal,
reinstatement with full back wages is not to be
granted automatically. The Labour Court is
within its right to mould the relief by granting
a lumpsum compensation. In fact, I note that
the Labour Court has relied upon three
judgments propounding the law that the
Labour Court can mould a relief by granting
lump sum compensation; the Labour Court is
entitled to grant relief having regard to facts
and circumstances of each case.
12. Further, the Supreme Court in the
following judgments held as under:
(a) In the matter reported as Jaipur
Development Authority v. Ramsahai, (2006)
11 SCC 684, the court has stated:
"However, even assuming that there had been
a violation of Sections 25G and 25H of the
Act, but, the same by itself, in our opinion,
would not mean that the Labour Court should
have passed an award of reinstatement with
entire back wages. This Court time and again
has held that the jurisdiction under Section
11A must be exercised judiciously. The
ID No. 2082/16. 15/20
workman must be employed by State within the
meaning of Article 12 of the Constitution of
India, having regard to the doctrine of public
employment. It is also required to recruit
employees in terms of the provisions of the
rules for recruitment framed by it. The
respondent had not regularly served the
appellant. The job was not of perennial nature. There was nothing to show that he, when his services were terminated any person who was junior to him in the same category, had been retained. His services were dispensed with as early as in 1987. It would not be proper to direct his reinstatement with back wages. We, therefore, are of the opinion that interest of justice would be subserved if instead and in place of reinstatement of his services, a sum of Rs 75,000 is awarded to the respondent by way of compensation as has been done by this Court in a number of its judgments."
(b) In the matter reported as Nagar Mahapalika v. State of U.P., (2006) 5 SCC 127, the court has stated:
"23. Noncompliance with the provisions of Section 6N of the U.P. Industrial Disputes Act, although, may lead to the grant of a relief of reinstatement with full back wages and continuity of service in favour of the retrenched workmen, the same would not mean that such a relief is to be granted automatically or as a matter of course. 25 .....The appellant herein has clearly stated that the appointments of the respondents have been made in violation of the provisions of the ID No. 2082/16. 16/20 Adhiniyam. An appointment made in violation of the provisions of the Adhiniyam is void. The same, however, although would not mean that the provisions of the Industrial Disputes Act are not required to be taken into consideration for the purpose of determination of the question as to whether the termination of workmen from services is legal or not but the same should have to be considered to be an important factor in the matter of grant of relief. The Municipal Corporation deals with public money. Appointments of the respondents were made for carrying out the work of assessment. Such assessments are done periodically. Their services, thus, should not have been directed to be continued despite the requirements therefor having come to an end. It, therefore, in our considered view, is not a case where the relief of reinstatement should have been granted."
(c) In the matter reported as Talwara Coop. Credit and Service Society Ltd. v. Sushil Kumar, (2008) 9 SCC 486, the court has stated:
"8. Grant of a relief of reinstatement, it is trite, is not automatic. Grant of back wages is also not automatic. The Industrial Courts while exercising their power under Section 11A of the Industrial Disputes Act, 1947 are required to strike a balance in a situation of this nature. For the said purpose, certain relevant factors, as for example, nature of service, the mode and manner of recruitment viz. whether the appointment had been made in accordance with the statutory rules so far as a public sector undertaking is concerned, ID No. 2082/16. 17/20 etc., should be taken into consideration."
(d) In the matter reported as Jagbir Singh v. Haryana State Agriculture Mktg. Board, (2009) 15 SCC 327, the court has stated :
"7. It is true that the earlier view of this Court articulated in many decisions reflected the legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in a long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention of the prescribed procedure. ...
14. An order of retrenchment passed in violation of Section 25F although may be set aside but an award of reinstatement should not, however, be automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wagers has not been found to be proper by this Court and instead compensation has been awarded. This Court has distinguished between a daily wager who does not hold a post and a permanent employee."
17. The claimant deposed in cross examination that he had completed 58 years on 29.01.11. So, he has already crossed the age of superannuation. Due to that reason, the relief of reinstatement cannot be granted at all.
ID No. 2082/16. 18/20The claimant further admitted in cross examination that he had no document to prove that he had applied for job in any other company after termination. His statement of bank account from 21.08.11 to 06.02.14 is Ex. WW1/M24 (03 pages) He admitted in cross examination that he had deposited a sum of Rs.25,000/ in his account on 19.01.2008. He tried to justify that deposit on the ground that the same was his income from agricultural land in village Holipura, District Agra, U.P. from which his annual income was Rs.1,00,000/. This explanation has been demolished by his further cross examination when he admitted that he had deposited amount of Rs.40,000/ and Rs.50,000/ in cash on 12.04.07 & 18.04.07. He further admitted that he had deposited a sum of Rs.1,50,000/ by cheque in his account on 24.08.2007. He further admitted that amount of Rs.6,00,000/ was deposited in his account on 31.05.2008. He tried to justify that amount on the ground that the same was sale proceed of his agricultural land which he had sold in Rs.9,00,000/. He did not place on record any document to prove that he had sold any land. Such heavy entries in his account are compelling this Court to reach to the conclusion that after termination of service, he is employed somewhere else.
He admitted in cross examination that he had moved an application Ex. WW1/M25 in Barclays Finance Company for taking loan for marriage of his daughter. In that application, it is mentioned by claimant himself that his gross annual income was Rs.1,20,000/ ID No. 2082/16. 19/20 and that he was running family business and also he was self employed.
18. The claimant had worked with the management from September, 1999 to 30.04.2003 i.e. for 3 and ½ years at the rate of Rs.8,000/ per month. He is self employed as well as running a family business. He has already crossed the age of superannuation. Taking into account all these facts, a lumpsum compensation of Rs.1,00,000/ (Rupees One Lac Only) is granted to him. The management is directed to pay the said amount to him within one month from the date of publication of the award, failing which it shall be liable to pay interest on it @ 9% per annum from today till its realization. Parties to bear their own costs. Reference is answered accordingly. Award is passed accordingly.
19. The requisite number of copies of the award be sent to the Govt. of NCT of Delhi for its publication. File be consigned to Record Room.
Dictated to the Steno & announced (UMED SINGH GREWAL) in the open Court on 02.08.2016. POLCXVII/KKD, DELHI.
ID No. 2082/16. 20/20