Allahabad High Court
State Of U. P. vs Presiding Officer, Industrial ... on 27 July, 1999
Equivalent citations: 1999(3)AWC2606
Author: Yatindra Singh
Bench: Yatindra Singh
JUDGMENT FACTS Yatindra Singh, J.
1. Sri Bhim Singh, (the contesting respondent) was working as English Typist in the Irrigation Department of the State of Uttar Pradesh (the petitioner). He was not permitted to work after 29.2.1992 and he raised an industrial dispute, which was referred to the Labour Court under U. P. Industrial Disputes Act. 1947 (the State Act for short). According to the contesting respondent, he was appointed on 25.6.1986 and was continued in service and was Illegally not permitted to work from 29.2.1992. The petitioner says that : the contesting respondent was given a fixed term appointment : he was appointed till 29.2.1992 on ad hoc basis and after expiry of that period, his services came to an end ; it is not a retrenchment ; and there is no illegality in terminating the services. The Labour Court has held that :
1. the contesting respondent had started working from 25.6.1986 (though there were some breaks) ;
2. the contesting respondent has been retrenched without offering any compensation ;
3. there is work as persons junior than the contesting respondent have been permitted to work ; the action of the petitioner is discriminatory and
4. the contesting respondent ought to have been continued on the post.
The Labour Court has reinstated the contesting respondent in service with full back wages from the date of termination of his service, i.e.. 29.2.1992. The State of Uttar Pradesh (the petitioner) has filed present writ petition against this Award.
POINTS OF DETERMINATION
2. I have heard Sri K. M. Sanai learned standing counsel for the petitioner and Sri K. P. Agarwal senior counsel and Sushri Suman Sirohi. learned counsel for the respondents. The following points arise for determination :
(i) Is the Irrigation Department of the State an Industry within the meaning of the State Act?
(ii) Is the definition of retrenchment under the Industrial Disputes Act (the Central Act for short) apply under the State Act?
(iii) The contesting respondent was lastly appointed by the letter dated 19th June, 1991 for a specific period till 29.2.1992. Was this action mala fide? Was it a fixed term appointment? Does the non-renewal of contract or work amount to retrenchment under the State Act?
(iv) Was the action of the petitioner fair and reasonable?
(v) Is the petitioner entitled to any relief?
1st POINT--IS THE IRRIGATION DEPARTMENT AN INDUSTRY?
3. Industry has been defined under the State Act as well as under the Central Act. There is no difference between the two. This definition has been subject matter of the Interpretation in many decisions. It was exhaustively dealt with in the Bangalore Water Supply Case. Subsequently, the word 'industry' in the Central Act has been amended in 1984 but this amendment has not been enforced till today. The result is that the old definition of industry continues and the Bangalore Water Supply case still holds the field.
4. The sovereign or regal functions of the State are not within the definition of the industry. The Labour Court or the Industrial Tribunal has no jurisdiction to decide in that respect. The activities of the petitioner which are regal or sovereign are outside the scope of the word industry. This has been explained by Justice Krishna Iyer in paragraph 143 of the Bangalore Water Supply Case '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.' But this case did not spell out the activities of the Government, which could be called sovereign functions.
5. Is irrigation activity of the Government a sovereign function? Is this activity beyond the meaning of the word industry? Does it qualify for exemption as understood in the Bangalore Water Supply case? There have been conflicting decisions about it. A Full Bench of Punjab and Haryana High Court, held that Irrigation Department does not come within the ambit of industry. A contrary view has been taken by the Madhya Pradesh High Court. This matter was considered in detail by a bench of two Judges of the Supreme Court in the case of Deshraj v. State of Punjab, (the Deshraj case) and the Court in paragraph No. 13 held the main functioning of the irrigation department when subjected to the dominant nature test clearly come within the ambit of industry'. If this was the only case, it was end of the matter. There has been another case ; Executive Engineer State of Karnataka v. K. Somasetty (the Somasetty's case). It is also a decision by the two Judges of the Supreme Court. It was held in this case that it is now well settled legal position that the Irrigation Department and Telecommunication Department are not an "industry" within the meaning of definition under the Industrial Disputes Act as held in Union of India v. Jai Narain Singh and in State of H. P. v. Suresh Kumar Verma. The function of public welfare of the State Is sovereign function. It is the constitutional mandate under the Directive Principles that the Government should bring about Welfare State by executive and legislative actions. Under these circumstances, the State is not an "industry(tm) under the Industrial Disputes Act.
6. The Somasetty's case. Is in direct conflict with the Deshraj's case. Sri K. P. Agarwal learned counsel for the contesting respondents says that the Somasetty's case, is per incurium in view of the three Judges decision of the Supreme Court in Madhya Pradesh Karmachari Sangh's u. State. In this case in paragraph 2, it is mentioned that earlier Madhya Pradesh High Court had held that Irrigation Department is an industry and that was confirmed by the Supreme Court on 20th July. 1978. But this decision of 20th July, 1978 affirming the judgment of Madhya Pradesh High Court Is not available. It is not clear that as to how many Judges had decided it or only leave was refused without there being a speaking order. It cannot be said that two Judges decision in the Somasetty's case is per incurium on this ground.
7. The observations of the Somasetty's case, holding the Telecommunication Department not to be an industry has been specifically overruled by three Judges decision of the Supreme Court in General Manager Telecom v. A. Sri Niwas and others. But that part of Somasetty's case, holding that Irrigation Department is not an industry, has not been overruled. I am left with two conflicting decisions of equal strength. Should the latter one be followed or the one which I think is correct be followed?
8. The question, if there are two conflicting decisions then which one should be followed, has been subject-matter of some debate in this Court. In the two Full Bench decisions of this Court, it has been held that in such a situation, it is latter one which should be followed. But the third and the last Full Bench decision. holds that in such a situation, the correct orie, in place of latter one, should be followed. The third Full Bench decision differs from the first two. If the third Full Bench decision is to be followed, then correct decision which according to me is Deshraj's decision, namely the Irrigation Department is an industry should be followed. If the first two full benches is to be followed, then the latter decision of the Somasetty 's case, should be followed. These three Full Benches are of equal strength of three Judges and the third Full Bench decision does not refer to the earlier two. In case I was of the opinion that Irrigation Department is not an industry. It was easy for me to follow the latter decision of the Somasetty's case. That would have been consistent with three Full Bench decisions of this Court. But as I am of the view that the decision in the Deshraj's case, holding the Irrigation Department to be an industry is the correct one, I cannot do so unless the three Full Bench decisions are reconciled by a larger bench of five or more Judges. I would have referred the matter to a larger bench but for the fact that the case can be decided without deciding this issue.
2nd POINT--DEFINITION OF RETRENCHMENT
9. The word 'retrenchment' has been defined under the State Act as well as under the Central Act. Initially, the definition in the two Acts was substantially the same. Thereafter the Central Act has been amended in 1984 and a clause has been added in the definition of retrenchment. According to this new sub-clause (bb), the termination of the service of a workman as a result of non-renewal of contract on its expiry or termination under stipulation contained in the contract IS not a retrenchment. This clause is not in the State Act. Will this definition of retrenchment apply to retrenchment under the State Act? This was also subject-matter of some debate. In view of Article 254 of the Constitution, it has been held, that the definition of retrenchment in the Central Act will prevail over the definition of retrenchment under the State Act. I also hold accordingly.
3rd POINT--LEGALITY OF RETRENCHMENT Was the letter dated 19th June, 1991 mala fide?
10. It is correct that the Labour Court has given a finding that the petitioner started working with effect from 25.6.1986. . He worked for different periods from 1986 to 1991. This was intermittent, there were breaks. He was lastly appointed by letter dated 19.6.1991 for a fixed term. i.e.. till 29.2.1992. Though there is a finding that the non-renewal is mala fide but there is no finding that the letter dated 19th June, 1991 was mala jide or colourable exercise of power. In absence of the same, it cannot be said that the termination of work from 29.2.1992 is a retrenchment as the services of the contesting respondent had been terminated on expiry of his term as stipulated in the appointment letter. Such action now cannot be termed as retrenchment unless there was a finding that this appointment letter was mala fide or this was done purposely to avoid the benefits to a workman under the Labour Laws. This has been so held by the Supreme Court. The Court in the case of State of Rajasthan v. Rameshwar Lal Gahlot, held Once an appointment is for fixed period, Section 25F does not apply as it is covered by clause (bb) of Section 2 (oo) of the Act.....It must be established that in each case, power was misused by the management or the appointment for a fixed period was a colourable exercise of power'.
Is termination Illegal as no retrenchment compensation was offered?
11. The appointment of the contesting respondent was a fixed term appointment. Its termination did not amount to retrenchment and the contesting respondent cannot be reinstated simply because no retrenchment compensation was given or the provisions under Section 6N were not complied with. The award of the Labour Court is illegal on this score. But should it be set aside? What relief is to be granted will depend on the consideration of the next point.
4th POINT--WAS ACTION DISCRIMINATORY?
12. The Irrigation Department may or may not be an industry within the meaning of the State Act but it is a limb of the State Government. It is a State within the meaning of Article 12 of the Constitution. Its action cannot but be fair and reasonable. It cannot discriminate. This is prohibited by Articles 14 and 16 of the Constitution. It is admitted case that two persons, namely, Deo Pal Tyagi and Sangeeta who are juniors than the contesting respondent are working. There is no reason for not giving similar treatment to the contesting respondent. He should have been continued like others. The petitioner in paragraph 5 of the writ petition has stated that Deo Pal Tyagi and Sangeeta are given employment on muster roll and the contesting respondent was similarly offered employment, which he refused. This paragraph of the writ petition is not specifically denied in the counter-affidavit ; probably as the Labour Court had also held that there was discrimination. The fact remains that the petitioner is discriminating. This cannot be done. The contesting respondent should have been given the same treatment as has been given to Deo Pal Tyagi and Sangeeta.
5th POINT--TO WHAT RELIEF PETITIONER IS ENTITLED?
13. I have already held that the services of the contesting respondent were terminated on the expiry of the contract in pursuance of the terms stipulated in the contract and this does not amount to retrenchment. But I have also held that action of the petitioner was discriminatory. The contesting respondent should have been re-employed. In these circumstances, it would be best if the award is modified to the extent that the contesting respondent will be reinstated on a post which is at par with the job held by Deo Pal Tyagi and Sangeeta, if they are still working : in case they are no longer working then on the same post on which the contesting respondent was working prior to 29.2.1992. This may be done within two months from today. The contesting respondent shall be entitled to his salary and emoluments from the date of his reinstatement or from 1st September, 1999 whichever is earlier. But so far as his seniority is concerned, he will be treated senior than Deo Pal Tyagi and Sangeeta or any one else engaged after them.
With these directions, the writ petition is disposed of.