The Management Of D.D.A vs The Presiding Officer Labour Court & ... on 10 September, 2015

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Delhi High Court

The Management Of D.D.A vs The Presiding Officer Labour Court & ... on 10 September, 2015

1. Challenge in this writ petition is to the ex-parte award dated 06.05.1998 passed by Labour Court-I , Tis Hazari Courts, Delhi in ID No. 237/93 holding the termination of the respondent workman to be illegal and unjustified and he was held entitled to reinstatement with full backwages and continuity of service.

2. Vide notification No.24(517)/93-Lab13181-86 dated 3.6.1993 Secretary (Labour), Delhi Admn. referred the dispute for adjudication to Labour Court under Section 10(I)(C) & 12(5) of the Industrial Dispute Act, 1947 (hereinafter referred as 'I.D. Act') with following terms of reference:

"Whether the services of Shri Vinod Kumar have been terminated illegally and/or unjustifiably and if so to what relief is he entitled and what directions are necessary in this respect?

3. After receipt of reference, notices were issued to the parties. On appearance, the claimant filed his statement of claim stating therein that he was in continuous service of W.P.(C) 5390/1998 Page 1 of 13 the management since October, 1983 as Chowkidar and was posted at village Ghitorni at the time of his illegal termination on 31.1.1990 when he was told that his services were no more required and he need not to report for duty. It is further alleged that some parts of the brick making machine which was not in order were stolen on 18.9.1986. At that time the workman was not on duty. All the six watchmen were kept in custody of the police. On report by the management regarding theft, no case was made out against them and therefore they were released. All the six watchmen were chargesheeted for theft, negligence of duty and misconduct. Out of six watchmen, three muster roll workers were chargesheeted and one left the service. Two of the watchmen were daily rated workers. The claimant was also daily rated employee although he was working against a permanent post. He was not given any chargesheet but was asked to attend the enquiry proceedings on 24.10.1986 and 28.10.1986. Thereafter he continued to attend the office for duties or for enquiry but the management lingered on the matter without conducting any enquiry and ultimately his services were terminated by the management on 31.01.1990. The termination of his services is stated to be illegal, unjust and against the principles of natural justice. He was not paid anything since August, 1986 to January, 1990. Demand notice dated 12.02.1990 and conciliation proceedings failed to yield any result, as such, the workman prayed for reinstatement with full backwages and continuity of service.

4. The claim of the workman was contested by the management on the ground that claimant was engaged as a casual labour i.e., on muster roll basis as Beldar on 01.11.1983 and was deployed on watch and ward of brick manufacturing machine at village Ghitorni. The claimant remained in services as casual labour with mandatory W.P.(C) 5390/1998 Page 2 of 13 break as provided in CPWD Manual Volume III. The machine was stated to be in good condition which was stolen on 19.09.1986 when the claimant was supposed to be on duty. Moreover, it was hardly material as to whether the claimant was on duty at the time of theft at that particular hour. Moreover, the casual labours on muster roll is employed for a particular job and can be disengaged after their job is completed. Since the machinery under the watch and ward of the claimant was stolen, as such, his services were no more required by the management. As such, the same were dispensed with. Four of the watchmen were work charged employees whose appointment is governed by rules and there is a procedure for departmental action for their negligence and misconduct. The claimant being casual labour was not a regular employee, as such, was not governed by any recruitment rule. So no enquiry for charge-sheeting the casual labour was required as per rules. The claimant might have been called once or twice to appear as a witness in the enquiry ordered for regular employees. The action of the management was alleged to be justified and legal and, as such, he was not entitled for any benefit.

5. After filing of the written statement, the management failed to appear before the Labour Court, as such, it was proceeded ex-parte. The workman/claimant led his evidence and proved the letter Ex.WW1/1, report lodged by the executive engineer regarding theft of the machine Ex.WW1/2, letters Ex.WW1/3 and 4 written to him by assistant engineer calling upon him to attend the enquiry proceedings, the demand notice Ex.WW1/5. On the basis of evidence led by the claimant, the learned Labour Court held that the disengagement of services of the workman was ab-initio illegal as it was made in violation of Section 25F of ID Act. The workman had served the management continuously for several years and the averments made in the written statement reflected W.P.(C) 5390/1998 Page 3 of 13 that the claimant was treated like a commodity and his services were dispensed with without any enquiry or chargesheet. Although there were allegations against the claimant that the theft takes place when he was supposed to be on duty but no enquiry was conducted against him. To punish the workman without affording an opportunity to defend himself against misconduct is certainly against the principles of natural justice and fairplay. His services were terminated otherwise then as punishment inflicted by way of disciplinary action and without notice to show cause. It was proved that the workman had served the management for more than a year when his services were terminated, as such, the services of the workman were retrenched without compliance of Section 25F of the ID Act. Therefore, the termination was illegal and accordingly, the relief of reinstatement with full backwages was awarded.

6. Assailing the findings of the learned Labour Court, learned counsel for the petitioner submits that the respondent was a daily wager hence provisions of Section 25F of ID Act are not applicable. Moreover, there was gross delay and latches in approaching the competent authority as the services of the respondent were terminated in the year 1986 but the demand letter was sent by him only in the year 1990. Furthermore, the appointment of the respondent was for a particular job and after the work came to an end his services were dispensed with. There was no need for holding any enquiry against him before dispensing his services. Reliance was placed on Himanshu Kumar Vidyarthi and Others vs. State of Bihar & Ors. (1997) 4 SCC 391 for submitting that dispensing with services of persons engaged on daily wages in a government department is not a retrenchment. Reliance was also placed on State of H.P vs. Suresh Kumar Verma & Anr. (1996) 7 SCC 562 in support of the submission that the termination of services of W.P.(C) 5390/1998 Page 4 of 13 daily wager after the completion of the project in which they had been engaged does not entitle them for regular appointment. Reference was also made to State of U.P & Ors. vs. Ajay Kumar (1997) 4 SCC 88 in support of the submission that the daily wager is not entitled for regularisation. It was further submitted that the relief of reinstatement with backwages is absolutely unwarranted as for last 29 years the respondent is not in service with the petitioner. Moreover, he has already been paid wages under Section 17B of ID Act.

7. Per contra, learned counsel for the respondent submitted that as per the prayer clause, the petitioner seeks setting aside the ex-parte award or in the alternative to remand the matter back to the Labour Court. However, there is no ground either for setting aside the ex-parte award or to remand the matter as before the Labour Court the petitioner management did appear and filed a written statement but thereafter absented. Thereafter application under Order IX Rule 7 CPC was moved which was allowed subject to payment of cost but again the petitioner disappear. It was further submitted that the termination of the services of the respondent workman was in violation of Section 25-F of ID Act. There is no mention in the letter Ex.WW1/1 that the respondent workman was kept on any specified job. He had worked for almost three years and as such, had completed 240 days preceding his termination and, therefore, he could not have been removed without complying with provisions of Section 25-F of ID Act. As such, it is submitted that there is no merit in the petition, same be dismissed.

8. It is not in dispute that the workman was appointed as a Beldar on 01.11.1983. According to the petitioner, he was deployed on watch and ward of brick manufacturing machine at village Ghitorni which machine was stolen. Since the workman was W.P.(C) 5390/1998 Page 5 of 13 employed/engaged for a particular job, therefore, after the machinery was stolen, his services were no more required by the management. That being so, his services were dispensed with.

9. The question for consideration, therefore, is whether the workman was employed for a specified/particular job. No appointment letter has been placed on record by the petitioner, however, the respondent workman had placed on record before the Labour Court an application Ex.WW1/1 sent by him to the Vice Chairman, DDA for giving him a chance to serve the department even on daily wages which was treated as appointment letter by the Court. There is a noting underneath his application which is to the following effect:

"Shri Vinod Kumar Sharma may be accommodated as a Khalasi or Chowkidar in some of our new projects temporarily on muster roll"

10. This noting does not fortify the version of the petitioner that the workman was kept on a particular job of keeping a watch and ward on the brick manufacturing machine at village Ghitorni or that after the machine was stolen his services were no more required by the management and, therefore, dispensed with. As against this letter, no evidence to the contrary was produced by the management before the Labour Court to prove the version of the department that he was employed for a particular job. Furthermore, the workman had proved that before his services were terminated he had worked for more than 240 days in the preceding year. That being so, before terminating the services of the workman, it was incumbent upon the management to have complied with the provisions of Section 25-F of ID Act, 1947. Indisputably the provisions of this Section were not complied with therefore it was rightly held by the Labour Court that the termination of the workman under the circumstances was illegal. Under the W.P.(C) 5390/1998 Page 6 of 13 circumstances, Himanshu Kumar Vidyarthi (supra) does not help the petitioner. For the same reason, Suresh Kumar Verma (supra) has no application in this case as petitioner has failed to prove that engagement of respondent was for a particular project. The workman is not seeking regularisation therefore, Ajay Kumar (supra) has no relevance in this case.

11. The next question which requires consideration is as to whether reinstatement with back wages is an automatic relief in cases where the termination is held illegal on account of violation of provisions under Section 25F of the Act or otherwise. This point is also no more res integra. In Senior Superintendent Telegraph (Traffic), Bhopal vs. Santosh Kumar Seal and Others, (2010) 6 SCC 773, Apex Court held thus:

"In the last few years it has been consistently held by the Supreme Court that relief by way of reinstatement with back wages is not automatic even if termination of an employee is found to be illegal or is in contravention of the prescribed procedure and that monetary compensation in lieu of reinstatement and back wages in cases of such nature may be appropriate."

12. In Jagbir Singh vs. Haryana State Agriculture Marketing Board and Anr. AIR 2009 SC 3004, Supreme Court discussed this issue at length and observed as follows:

It is now well settled by reason of a catena of decisions of this Court that the relief of reinstatement with full back wages would not be granted automatically only because it would be lawful to do so. For the said purpose, several factors are required to be taken into consideration, one of them being as to whether such an appointment had been made in terms of the statutory rules. Delay in raising an industrial dispute is also a relevant fact.

In the case of State of M.P. and Ors. v. Lalit Kumar Verma AIR2007SC528 , this Court substituted the award of reinstatement by compensation.

11. In yet another decision in the case of M.P. Administration v. Tribhuwan (2007) 9 SCC 748, this Court reversed the High Court's order directing reinstatement with full back wages and instead awarded compensation. It was opined:

12. In this case, the Industrial Court exercised its discretionary jurisdiction under Section 11A of the Industrial Disputes Act. It merely directed the amount W.P.(C) 5390/1998 Page 7 of 13 of compensation to which the respondent was entitled had the provisions of Section 25F been complied with should be sufficient to meet the ends of justice.

We are not suggesting that the High Court could not interfere with the said order, but the discretionary jurisdiction exercised by the Industrial Court, in our opinion, should have been taken into consideration for determination of the question as to what relief should be granted in the peculiar facts and circumstances of this case. Each case is required to be dealt with in the fact situation obtaining therein.

13. We, therefore, are of the opinion that keeping in view the peculiar facts and circumstances of this case and particularly in view of the fact that the High Court had directed reinstatement with full back wages, we are of the opinion that interest of justice would be subserved if the appellant herein be directed to pay a sum of Rs. 75,000 by way of compensation to the respondent. This appeal is allowed to the aforementioned extent.

12. In the case of Sita Ram v Moti Lal Nehru Farmers Training Institute (2008)IILLJ688SC , this Court considered the question as to whether the Labour Court was justified in awarding reinstatement of the appellants therein:

21. The question, which, however, falls for our consideration is as to whether the Labour Court was justified in awarding reinstatement of the appellants in service.

22. Keeping in view the period during which the services were rendered by the respondent (sic appellants); the fact that the respondent had stopped its operation of bee farming, and the services of the appellants were terminated in December 1996, we are of the opinion that it is not a fit case where the appellants could have been directed to be reinstated in service.

23. Indisputably, the Industrial Court, exercises a discretionary jurisdiction, but such discretion is required to be exercised judiciously. Relevant factors therefore were required to be taken into consideration; the nature of appointment, the period of appointment, the availability of the job, etc. should weigh with the court for determination of such an issue.

24. This Court in a large number of decisions opined that payment of adequate amount of compensation in place of a direction to be reinstated in service in cases of this nature would subserve the ends of justice. (See Jaipur Development Authority v.

Ramsahai (2006)11SCC684 , M.P. Admn. v. Tribhuwan (2007) 9 SCC 748 and Uttaranchal Forest Development Corporation v. M.C. Joshi (2007)2LLJ390SC )

25. Having regard to the facts and circumstances of this case, we are of the opinion that payment of a sum of Rs. 1,00,000 to each of the appellants, would meet the ends of justice. This appeal is allowed to the aforementioned extent. In the facts and circumstances of this case, there shall be no order as to costs.

13. In Ghaziabad Development Authority and Anr. v. Ashok Kumar and Anr. (2008)ILLJ1013SC , this Court again considered the question whether the Labour Court was W.P.(C) 5390/1998 Page 8 of 13 justified in awarding the relief of reinstatement with full back wages in favour of the workman and held:

18. The first respondent was admittedly appointed on a daily wage of Rs. 17 per day.

He worked for a bit more than two years. It has not been disputed before us that sanction of the State of U.P. was necessary for creation of posts. The contention of the appellant before the Labour Court that the post was not sanctioned after 31-3- 1990 by the State was not denied or disputed. If there did not exist any post, in our opinion, the Labour Court should not have directed reinstatement of the first respondent in service.

19. A statutory authority is obligated to make recruitments only upon compliance with the equality clause contained in Articles 14 and 16 of the Constitution of India. Any appointment in violation of the said constitutional scheme as also the statutory recruitment rules, if any, would be void. These facts were required to be kept in mind by the Labour Court before passing an award of reinstatement.

20. Furthermore, public interest would not be subserved if after such a long lapse of time, the first respondent is directed to be reinstated in service.

21. We are, therefore, of the opinion that the appellant should be directed to pay compensation to the first respondent instead and in place of the relief of reinstatement in service.

22. Keeping in view the fact that the respondent worked for about six years as also the amount of daily wages which he had been getting, we are of the opinion that the interest of justice would be subserved if the appellant is directed to pay a sum of Rs 50,000 to the first respondent. The said sum should be paid to the respondent within eight weeks from date, failing which the same shall carry interest at the rate of 12% per annum. The appeal is allowed to the aforesaid extent. However, in the facts and circumstances of this case, there shall be no order as to costs.

14. In Mahboob Deepak v. Nagar Panchayat, Gajraula (2008)ILLJ855SC , it was observed:

6. Such termination of service, having regard to the fact that he had completed 240 days of work during a period of 12 months preceding the said date, required compliance with the provisions of Section 6N of the U.P. Industrial Disputes Act. An order of retrenchment passed in violation of the said provision although can be set aside but as has been noticed by this Court in a large number of decisions, an award of reinstatement should not, however, be automatically passed.

7. The factors which are relevant for determining the same, inter alia, are:

(i) whether in making the appointment, the statutory rules, if any, had been complied with;

(ii) the period he had worked;

(iii) whether there existed any vacancy; and W.P.(C) 5390/1998 Page 9 of 13

(iv) whether he obtained some other employment on the date of termination or passing of the award.

8. The respondent is a local authority. The terms and conditions of employment of the employees are governed by a statute and statutory rules. No appointment can be made by a local authority without following the provisions of the recruitment rules. Any appointment made in violation of the said rules as also the constitutional scheme of equality as contained in Articles 14 and 16 of the Constitution of India would be a nullity.

9. Due to some exigency of work, although recruitment on daily wages or on an ad hoc basis was permissible, but by reason thereof an employee cannot claim any right to be permanently absorbed in service or made permanent in absence of any statute or statutory rules. Merely because an employee has completed 240 days of work in a year preceding the date of retrenchment, the same would not mean that his services were liable to be regularised.

10. Applying the legal principles, as noticed hereinbefore, the relief granted in favour of the appellant by the Labour Court is wholly unsustainable. The same also appears to be somewhat unintelligible.

11. The High Court, on the other hand, did not consider the effect of non-compliance with the provisions of Section 6N of the U.P. Industrial Disputes Act, 1947. The appellant was entitled to compensation, notice and notice pay.

12. It is now well settled by a catena of decisions of this Court that in a situation of this nature instead and in place of directing reinstatement with full back wages, the workmen should be granted adequate monetary compensation. (See M.P. Admn. v. Tribhuban (2007) 9 SCC 748.

13. In this view of the matter, we are of the opinion that as the appellant had worked only for a short period, the interest of justice will be subserved if the High Court's judgment is modified by directing payment of a sum of Rs 50,000 (Rupees fifty thousand only) by way of damages to the appellant by the respondent. Such payment should be made within eight weeks from this date, failing which the same will carry interest at the rate of 9% per annum.

15. It would be, thus, seen that by catena of decisions in recent time, this Court has clearly laid down that 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. therefore, the view of the High Court that the Labour Court erred in granting reinstatement and back wages in the facts and circumstances of the present case cannot be said to suffer from any legal flaw. However, in our view, the High Court erred in not awarding compensation to the appellant while upsetting the award of reinstatement and back wages. As a matter of fact, in all the judgments of this Court referred to and relied upon by the High Court W.P.(C) 5390/1998 Page 10 of 13 while upsetting the award of reinstatement and back wages, this Court has awarded compensation.

16. While awarding compensation, the host of factors, inter- alia, manner and method of appointment, nature of employment and length of service are relevant. Of course, each case will depend upon its own facts and circumstances. In a case such as this where the total length of service rendered by the appellant was short and intermittent from September 1, 1995 to July 18, 1996 and that he was engaged as a daily wager, in our considered view, a compensation of Rs. 50,000/- to the Appellant by Respondent No. 1 shall meet the ends of justice. We order accordingly. Such payment should be made within six weeks from today failing which the same will carry interest @ 9% per annum."

13. Again in Hari Nandan Prasad & Anr vs Employer I/R to Management of FCI & Anr (2014)7SCC190 the Supreme Court held as under:

"17 .

.

...... In the case of BSNL v. Man Singh (2012) 1 SCC 558, this Court has held that when the termination is set aside because of violation of Section 25-F of the Industrial Disputes Act, it is not necessary that relief of reinstatement be also given as a matter of right. In the case of Incharge Officer and Anr. v. Shankar Shetty (2010) 9 SCC 126, it was held that those cases where the workman had worked on daily wage basis, and worked merely for a period of 240 days or 2-3 years and where the termination had taken place many years ago, the recent trend was to grant compensation in lieu of reinstatement....."

14. In Santosh Kumar Seal (supra), Supreme Court held that keeping in mind that workmen were engaged as daily wagers about 25 years back and they worked hardly for two or three years, relief of reinstatement with back wages was not found justifiable and instead monetary compensation for Rs. 40,000/- (Rupees Forty Thousand Only) was considered sufficient to meet the ends of justice.

15. In Assistant Engineer, Rajasthan Dev. Corporation and Anr. Vs. Gitam Singh, (2013) II LLJ 141 SC, Supreme Court has taken the similar view and held that reinstatement of workman with continuity of service and 25% of back wages was not proper in the facts and circumstances of the case and the compensation of Rs. 50,000/- W.P.(C) 5390/1998 Page 11 of 13 (Rupees Fifty Thousand Only) shall meet the ends of justice. In the said case, workman had worked for about eight months. The Supreme Court referred to several judgments for taking a view that reinstatement and back wages were not automatic, merely because the termination was found to be illegal or in contravention of Section 25-F of the Act.

16. In Sub Divisional Officer vs. Babu Lal & Ors. 2014(4)SCT769(Delhi), it was held that reinstatement of workman with 25% of back wages who had worked for three years was not justified and awarded compensation of Rs. 1 lac in lieu of reinstatement and back wages.

17. In the backdrop of the above settled legal position, it is clear that reinstatement with back wages or for that matter with partial wages cannot be ordered as a matter of rule wherever retrenchment is found illegal or in contravention of Section 25-F of the Industrial Disputes Act, 1947 . Each case has to be viewed in its own facts.

18. Coming back to the facts of this case, respondent no. 2 had worked with the petitioner for a short span. From the evidence on record, it is clear that respondent worked as a Chowkidar on casual basis for a very short span of time i.e for less than 3 years from 28.10.1983 till 18.09.1986. As per his own version he was not paid wages since August, 1986 but he sent the demand notice only on 12.02.1990 i.e., after a lapse of approximately 3½ years. Award has been passed in the year 1998, that is, after a lapse of 12 years. Termination has taken place about 29 years ago. After the filing of the writ petition, respondent is getting wages as ordered under Section 17B of ID Act. Thus, keeping in mind all these factors, relief of reinstatement with back wages cannot be said to be appropriate, justifiable and equitable. Instead, monetary compensation of W.P.(C) 5390/1998 Page 12 of 13 Rs.2 lacs will meet the ends of justice which is ordered accordingly. Such payment be made within six weeks from today failing which, the same will carry interest @ 9% per annum. The writ petition is allowed to the aforesaid extent. However, in the facts and circumstances of this case, there shall be no order as to costs.

(SUNITA GUPTA) JUDGE SEPTEMBER 10, 2015 mb W.P.(C) 5390/1998 Page 13 of 13

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