Gujarat High Court
For Approval And Signature vs Adam Ibrahim Gadh on 19 October, 2016
Author: K.M.Thaker
Bench: K.M.Thaker
C/SCA/8186/2010 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 8186 of 2010
TO
SPECIAL CIVIL APPLICATION NO. 8195 of 2010
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE K.M.THAKER Sd/-
1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of No
the judgment ?
4 Whether this case involves a substantial question of No
law as to the interpretation of the Constitution of
India or any order made thereunder ?
EXECUTIVE ENGINEER (MECHANICAL) & 1....Petitioner(s)
Versus
ADAM IBRAHIM GADH....Respondent(s)
Appearance:
MS SEJAL K MANDAVIA, ADVOCATE for the Petitioner(s) No. 1 - 2
MR TR MISHRA, ADVOCATE for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 1
CORAM: HONOURABLE MR.JUSTICE K.M.THAKER
Date : 19/10/2016
COMMON ORAL JUDGMENT
Heard Ms.Mandavia, learned advocate for the petitioner and Mr.Mishra, learned advocate for the respondent.
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1.1 At the outset, it is relevant and appropriate to mention that the learned advocates for the petitioner and the respondents jointly submitted that the issue involved in the captioned 10 petitions is almost identical and similar and that the petitions have arisen from common order passed by the learned Labour Court in 10 recovery applications filed by present 10 respondents. The respective submissions by learned advocates for the petitioner board and the claimants are similar in respect of all petitions and according to the submissions by learned advocates for the petitioner board and the claimants, the factual background is also similar. In this view of the matter, the captioned 10 petitions are decided by this common judgment.
1.2 In this group of ten petitions, the petitioner - Gujarat Maritime Board has challenged common order dated 17.4.2010 passed by the learned Labour Court, Jamnagar in ten recovery application Nos.82 of 2006 to 91 of 2006 whereby the learned Labour Court directed the petitioner board to pay to each of the ten claimants Rs.1,01,885/-.
2. So far as factual background is concerned, it can be summarized thus:-
2.1 The ten claimants, i.e. the respondents, in Page 2 HC-NIC Page 2 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT present petitions had raised industrial dispute with the allegation that the opponent board illegally terminated their services on and from 18.3.1992 and that at the time when the opponent board discontinued their services, the board did not follow procedure prescribed by law and the board also did not grant any opportunity of hearing to the claimants and abruptly terminated their services by oral instructions / order on 18.3.1992.
2.2 The appropriate government referred the dispute for adjudication to the learned Labour Court, Jamnagar. The said dispute / reference by ten persons was registered as Reference (LCJ) No.413 of 1992 to 424 of 1992.
2.3 The learned Labour Court adjudicated the said reference cases and passed common award dated 16.7.1998 whereby the learned Labour Court set aside the termination of the services of the claimants and directed the opponent board to reinstate the claimants in service without backwages. The learned Labour Court, by a specific direction, denied backwages, however, the learned Labour Court did not pass specific order with regard to continuity of service i.e. either granting continuity of service or denying said benefit. The award dated 16.7.1998 is completely silent so far as the continuity of Page 3 HC-NIC Page 3 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT service is concerned.
2.4 The petitioner board felt aggrieved by the said award dated 16.7.1998 and that therefore, the petitioner board filed writ petitions, i.e. Special Civil Application Nos.8970 of 1998, 9470 of 1998 to 9480 of 1998 whereby the board challenged the said award dated 16.7.1998 in Reference (LCJ) No.413 of 1992 to 424 of 1992.
2.5 This Court considered the petitions and after hearing the parties, this Court rejected the petitions vide order dated 8.10.1999.
In the said decision dated 8.10.1999, this Court observed, inter alia, that:-
"3. The learned Labour Judge having tried the reference, under the impugned judgement and order, partly allowed the same in as much as the Learned Labour Judge has directed the reinstatement of workmen, however, has not awarded the back wages to the workmen. Feeling aggrieved, the petitioner has preferred the present petitions.
4. It is undisputed that the permission was granted for retrenchment of 15 chippers alone. However, before the Learned Labour Judge, the petitioner has failed to prove that all the concerned workmen were working as chippers and that they were junior most chippers on the establishment. Besides, it is also undisputed that though the notice of retrenchment was given on 18th March, 1992, inspite of three months' notice pay required to be paid under the Law, the petitioner has given notice pay for the period upto 9th April, 1992 i.e. for 40 days. Though the Learned Judge has held that the retrenchment is in consonance with Section 25 N of the Industrial Disputes Act, 1947, it is held that the petitioner had failed to prove that the retrenched workmen were the juniormost chippers.
5. The Ld. Advocate Ms.Mandavia, appearing for the petitioner has failed to dislodge the finding recorded by the Learned Labour Judge. In that view of the matter, the order of reinstatement of the concerned workmen made by the Learned Labour Judge does not call for interference. The petitions are, therefore, dismissed in limine."
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2.6 Even in the said decision dated 8.10.1999, this Court, as can be seen from the observations in paragraph No.3 of the order, did not observe anything with regard to continuity of service.
2.7 The petitioner board felt aggrieved by the said decision dated 8.10.1999 and that therefore, the petitioner board filed appeals against the said decision dated 8.10.1999. The appeals were registered as Letters Patent Appeal Nos.1665 of 1999, 1709 of 1999 to 1720 of 1999 and other connected appeals. The said appeals were heard and considered by Hon'ble Division Bench. By common oral judgment dated 30.4.2003, Hon'ble Division Bench rejected the said appeals. In the judgment dated 30.4.2003, Hon'ble Division Bench observed, inter alia, that:-
"7. .... In Para 4 of the order, the Learned Single Judge has clearly observed that before the Labour Court, the Board failed to prove that all the workmen were working as chippers and that they were junior most chippers on the establishment whose services were terminated. The notice of retrenchment was given on 18.3.1992. Inspite of three months' notice pay required to be paid under the Law, the Board had not given pay upto 9.4.1992 for a period of 40 days. Inspite of this, the Labour Court held that the retrenchment was in consonance with Section 25(n) of the Industrial Disputes Act. However, the Learned Single Judge held that the Board failed to prove that the retrenched workmen were junior most chippers. Therefore, there was a breach of provision of Section 25(g) and (h) of the Industrial Disputes Act.
8. Before the Learned Single Judge, Ms. Mandaviya appearing for the Board had an opportunity to disclose the findings of fact arrived at by the Labour Court whereby it was held that there was a clear breach of Section 25(g) and
(h) of the Industrial Disputes Act. But, it is clear from Para 5 of her order that she failed to disclose the findings recorded by the Labour Court.
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9. When the Board miserably failed before the Learned Single Judge of this Court to take different view of the matter then the view taken by the Labour Court, then certainly this Court would not take different view of the matter in its jurisdiction under the Letters Patent clause in appeals filed by the Board.
10. It is true that ordinarily, the order of backwages to follow when reinstatement is ordered by the Labour Court but it is the discretion of the Labour Court to award the backwages or not. On facts of this case, when the Labour Court has not thought it fit to award backwages, while passing an award of reinstatement in service of the workmen and when the Learned Single Judge of this Court also refused to interfere with such discretionary order passed by the Labour Court regarding backwages in a writ jurisdiction, then certainly this Court would not like to interfere with such order in Letters Patent Appeals.
11. Looking to the separate orders passed by the learned Single Judge of this Court, on the say day i.e. 8.10.1999 in writ petitions filed by the Board as well as writ petition filed by the workmen, it appears that on behalf of the workmen, no serious challenge was made regarding the order passed by the Labour Court of not paying backwages. Perhaps that is why the Learned Single Judge had dismissed the petition filed by the workmen with one sentence that no interference is warranted. Be that as it may. It seems that only after the Board filed Letters Patent Appeal against the order passed by the Learned Single Judge of this Court, the workmen had also filed Letters Patent Appeal claiming backwages. Whatever may be the reasons for it, we would not like to go into it. Suffice it to say, when the Labour Court, on appreciation of evidence led before it, comes to a conclusion that the termination of the workman was in clear violation of Section 25(h) and (j) and when it was set aside the termination of the workmen and passed an order of reinstatement without backwages then on peculiar facts of this case, we would not like to interfere with such orders and that too, in Letters Patent Appeal.
12. Before parting, we may submit that an attempt was made by Mr. Mandaviya to take us through the evidence led before the Labour Court for taking different view of the matter then the view taken by the Labour Court. To reappreciate the evidence and that too, at the stage of Letters Patent Appeal is not permissible where the petitions were filed mainly under Article 227 of the Constitution, therefore, we have refused to reappreciate the evidence in this case.
13. We must also state that the impugned award of reinstatement without backwages passed by the Labour Court is also not required to be disturbed by us in these appeals, because under the interim orders of the Court during the pendency of the appeals filed by the Board, the Board has complied with the award and already reinstated the respondents in service and since long the workmen are in service. Therefore, on this ground also, we would not like to interfere with the award passed by the Labour Court."
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2.8 The said common judgment by Hon'ble Division Bench put quietus to the litigation. The learned advocates have declared that neither side has carried the matter to Hon'ble Apex Court. Consequently, the award passed by learned Labour Court has attained finality.
2.9 During hearing of these petitions, it is given out by the learned advocates for the petitioner board and the claimants that after petitioner board failed in petitions pursuant to the decision dated 8.10.1999 and during pendency of the appeals before Hon'ble Division Bench, the petitioner Board reinstated the claimants in January 2000 and since then, the concerned claimants are in service with the petitioner board.
2.10In this factual background, the claimants raised dispute against the board on the ground that they are denied benefit of continuous service and their cases are discriminated in respect of implementation of the GR dated 7.10.1988 and also in respect of payment of other benefits by denying continuity of service. The claimants raised claim before the board that their services should be considered continuous from the date of their initial engagement and not from the date when they came to be reinstated in Page 7 HC-NIC Page 7 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT January 2000 and that all benefits which would otherwise be payable by considering their service continuous should be paid to them. The board declined to grant said demand. Therefore, the claimants invoked Section 33(C) of the Industrial Disputes Act and filed recovery applications demanding monetary benefits on the strength of the award dated 16.7.1998 passed by learned Labour Court in Reference (LCJ) Nos.413 of 1992 to 424 of 1992 on the ground that they have been employed by the board since June 1989, August 1989 and October 1989 and that therefore, their services should be considered continuous from 1989 and all benefits including benefit of seniority, increment, leave, etc. flowing from the GR dated 17.10.1988 should be granted to them by considering their service continuous from 1989 and that the decision and action of the petitioner of treating their appointments as fresh appointments from January 2000 is illegal.
2.11The opponent board opposed the said recovery applications. The board contended that the learned Labour Court has not passed any direction to treat the granting claimants' services continuous and that therefore, the claimants are not entitled to contend that their services should be treated continuous from the date of their initial engagement. The Board also Page 8 HC-NIC Page 8 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT contended that by the award, the learned Court had granted only reinstatement without backwages and the Court did not direct that the services of the claimants should be considered continuous. The board also contended that it has already extended benefits flowing from GR dated 7.10.1988 to the claimants from January 2000. However, the said decision of the board is just and legal and in consonance with the award passed by the learned Labour Court and the demand by the claimants is unreasonable.
2.12The learned Labour Court adjudicated the said recovery applications and accepted the case of the claimants and accordingly allowed the recovery applications by judgment dated 17.4.2010. The learned Labour Court directed that various benefits including benefits flowing from the GR dated 17.10.1988 should be granted to the claimants by considering their service continuous from the date of their initial engagement. Having reached such conclusion, the learned Labour Court directed the petitioner board to pay Rs.1,01,885/- to each claimants. The said order and directions are subject matter of present petitions.
3. Ms. Mandavia, learned advocate for the petitioner board, submitted that the impugned Page 9 HC-NIC Page 9 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT order by the learned Labour Court is erroneous and unjustified. The learned Labour Court has failed to appreciate that the claimants had no existing right to claim such payment and that therefore, the recovery applications were not maintainable. The learned Labour Court failed to appreciate that its jurisdiction under Section 33-C is akin to the jurisdiction of executing Court and that therefore, the learned Labour Court cannot adjudicate any dispute and cannot decide or create any substantive right. The learned advocate for the petitioner board submitted that even otherwise, the claim by the claimants is unjustified but the learned Labour Court failed to appreciate the said aspect. She submitted that when the learned Labour Court passed the award in Reference Nos.413 of 1992 to 424 of 1992, the learned Labour Court did not specifically grant continuity of service and that therefore, the claimants are not entitled for said relief or benefit. Under the circumstances, the board's action of considering effective date of their appointment from January 2000 (i.e. from the date when they came to be reinstated after the award) is justified. According to learned advocate for the petitioner board, the learned Labour Court failed to appreciate that since any direction to grant continuity of service is not passed in the award, the action of the board Page 10 HC-NIC Page 10 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT could not have been faulted and impugned directions in recovery applications could not have been passed. So as to support her submissions, learned advocate for the petitioner board relied on the decisions in case of A.P.State Road Transport Corporation & Others v. Abdul Kareem [(2005) 6 SCC 36] and Vasantika R. Jalia v. Baroda Municipal Corporation [1997 (2) GLH 4].
3.1 On the other hand, Mr. Mishra, learned advocate for the claimants, supported and defended the order passed by the learned Labour Court in recovery applications. He submitted that the order by the learned Labour Court does not suffer from any infirmity. According to Mr. Mishra, learned counsel for the claimants, when termination of service is set aside by the learned Labour Court and reinstatement in service is granted, the direction of reinstatement would mean that the claimants have to be restored to the same position and that therefore, their service should considered continuous. He submitted that in present case, the learned Labour Court has not specifically refused or disallowed continuity of service and so long as the said relief is not expressly denied, the direction to reinstate the workmen would include direction to consider the service continuous. To Page 11 HC-NIC Page 11 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT support his submissions, Mr. Mishra, learned counsel for the claimants, relied on the decisions in case of The Director General, I.C.M.R. v. D.K.Jain & Anr. [2007 AIR SCW 2408], and Gurpreet Singh v. State of Pubjab & Ors. [(2002) 9 SCC 492] and he also relied on the decision in case of Vasantika R. Jalia v. Baroda Municipal Corporation [1997 (2) GLH 4] and submitted that the said decision helps the case of the claimants as well, inasmuch as in the said decision, the Court has observed that continuity of service is inherent in the relief of reinstatement.
4. I have considered rival submissions as well as material on record and common order dated 17.4.2010 which is impugned in these petitions.
5. The order which is impugned in present petitions is passed by the learned Labour Court in group of identical recovery applications No.82 of 2006 to 91 of 2006.
6. In this group of petitions, it is relevant to note that somewhere in 1992, original claimants (present respondents) had raised industrial dispute against allegedly illegal termination of their services and they demanded that the employer - (petitioner Board) should reinstate Page 12 HC-NIC Page 12 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT them with consequential benefits. Appropriate government referred said dispute for adjudication vide its order of reference dated 20.6.1992. In the said reference cases, the board claimed that in view of reduction in quantity of work and considering financial position of the board, a policy decision was taken to retrench certain workmen and that therefore, permission from the competent authority was asked for. It was also claimed that permission to retrench 50 workmen was asked for however the authority granted permission for 15 workmen and that therefore, after the permission, 15 workmen were retrenched by following principle of seniority and by complying the procedure prescribed under Section 25F. The learned Labour Court adjudicated the reference and reached to the conclusion that the claimants were entitled for reinstatement. Having reached such conclusion, the learned Labour Court passed award dated 16.7.1998 and directed the board to reinstate the claimants in service without backwages.
6.1 The operative order in the award dated 16.7.1998 does not contain any specific direction to the board that the service of the claimants should be considered continuous. At the same time, the operative order in the award does not contain specific rejection of the claim for Page 13 HC-NIC Page 13 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT continuity of service. Differently put, the award is silent with regard to the aspect related to continuity of service.
7. In this view of the matter, after having unsuccessfully challenged the award, the board re-engaged present respondents in 2000, however, the Board did not consider the service of the claimants continuous.
7.1 It is claimed by the respondents (i.e. original claimants) that when the board reinstated them in compliance of the award the board did not issue appointment orders and that therefore they were not aware that the board had not treated their services continuous. According to the claimants, they realized that their service were not treated continuous only when the board did not grant the benefits available under G.R. dated 17.10.1988, which would be available to them on completion of 5 years of service and certain other benefits which would be available on completion of 10 years of service.
7.2 The respondents have alleged that when they did not receive the benefits on completion of 5 years of service they started demanding the benefits and since the board refused to grant such benefits, they, on the strength of the award Page 14 HC-NIC Page 14 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT dated 16.7.1998 passed by learned Labour Court, Jamnagar in Reference (LCJ) No.413 of 1992 to 424 of 1992 and on the strength of the G.R. dated 17.10.1988, filed above mentioned group of recovery applications and requested the labour Court to direct the employer to pay benefits in terms of money by complying the directions under common award dated 16.7.1998. The board opposed the said claim in the recovery applications on the premise that since continuity of service is not specifically granted it amounts to rejection of the said demand/relief and that therefore, the claimants are not justified in assuming and demanding that their service should be treated continuous. The Board contended that the claimants do not have existing or crystallized right and that therefore, the applications are not maintainable and they should be rejected. The learned Labour Court rejected the defence and contentions raised by the Board and learned executing Court proceeded on its own assumption and considered their service continuous from the date of their initial appointment.
8. In this background, the issue which arises for consideration is, as to whether, in absence of specific direction expressly granting continuity of service, it can be inferred that the direction to reinstate the workman without Page 15 HC-NIC Page 15 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT backwages would include the direction to consider the workmen's service continuous from the date of termination until the date of award or whether continuity of service can be denied to the workman if such direction is expressly not passed by the learned Labour Court.
9. At this stage, it is also relevant to mention and clarify that according to certain conditions in the said GR dated 17.10.1988 (on which the claimants relied for their claim), daily wagers, work charge employees, temporary employees employed in the departments mentioned in the GR dated 17.10.1988 are considered eligible for specified benefits on completion of 5 years of service and certain other / additional benefits would be available on completion of 10 years of service.
9.1 The applicability of the GR dated 17.10.1988 to the board is not in dispute. Actually, the board has adopted said resolution and granted benefits flowing from the said GR even to these claimants but by computing period of 5 years from the date of reinstatement and not from date of appointment and that therefore, the dispute is only with regard to limited period.
10. In this background, the labour Court while Page 16 HC-NIC Page 16 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT exercising limited jurisdiction conferred under Section 33(C)(2) of I.D.Act (i) whether the learned labour Court can, in absence of direction with regard to "continuity of service", draw inference and merely on the strength of its own assumption hold that while directing the employer to reinstate workman the reference Court has impliedly granted the relief and direction with regard to continuity of service is implied in the direction to reinstate the workman; and (ii) whether such inference can be drawn in respect of the workman who was engaged on daily wage basis prior to termination of his service; and (iii) whether the Court can exercise such power under Section 33(C-2) even in absence of any indication and/or without even inquiring as to whether there is any indication in the award which would satisfactorily clarify and demonstrate - in absence of specific direction - that the learned reference court has merely installed the claimants in service sans continuity of service or the Court has passed direction to treat their service continuous. Differently put, the Court should address the issue as to whether the labour Court, while acting under Section 33(C)(2) can merely interpret the award or it can draw inference and fill-up the gaps in the award with its own assumption. Unfortunately, in present case, learned tribunal failed to address and deal Page 17 HC-NIC Page 17 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT with the said issues.
11. In this context, it would be profitable to take help and guidance from the observations and pronouncement from the decision by Apex Court and High Court.
[a] In 1997, learned Single Judge of this Court considered the case of stenographer whose service was terminated by employer Municipal Corporation in January - February 1997 without following condition prescribed under Section 25F of the Act. The aggrieved stenographer raised industrial dispute against the termination and the learned Labour Court, after adjudicating the reference, allowed the claim with direction to reinstate the claimant, without any backwages. In the said decision, the learned Labour Court had directed the employer to reinstate the claimants without backwages and without specific direction to the employer to treat claimants' services continuous. The Court, however, had not expressly denied the relief of continuity of service. Having noticed that any specific direction with regard to continuity of service is not expressly passed in the award, this Court considered the issue whether the continuity of service should be treated as inherent and implied or it should be deemed to have been rejected, this Court observed Page 18 HC-NIC Page 18 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT that:-
"2. ...By this award the relief of reinstatement has been granted but the relief of backwages has been denied specifically and the relief of continuity of service has not been denied in any terms except that along with the relief of reinstatement the word 'continuity' has not been mentioned. It may be straight way observed that once the relief of reinstatement is granted, the continuity of service is the direct consequence rather inherent in the relief of this nature, more particularly when the Division Bench has already held that the termination was void. If the termination order was void the meaning is that in the eye of law the relief of reinstatement has to be granted as if the impugned award had never been passed. The question of backwages is therefore dependent on variable factors of gainful employment during the period of enforced idleness and therefore in a given case the relief of backwages may not be granted depending upon the finding on the question of gainful employment or otherwise during the period of enforced idleness. When the relief of reinstatement is granted and the continuity of service is not specifically denied the party has to be relegated to the same position as was held by it at the time of termination. When the order of termination has been found to be void the petitioner holds the relief of reinstatement with no mention of specific denial of continuity of service the concerned workman has to be relegated to the position which was obtaining at the time of termination of her services and there is no question of denying the continuity of services for the period for which the services have been interrupted on account of an unlawful and void order."
So far as the said decision is concerned, it is relevant to note that the claimant stenographer in the cited decision was permanent employee of the municipal corporation and she was not engaged in violation of prescribed procedure for selection and recruitment and/or on daily wage basis.
[b] In the decision in case of Gurpreet Singh v. State of Punjab & Ors. [(2002) 9 SCC 492], Hon'ble Apex Court observed, inter alia, that:-
"2. The plaintiff is in appeal against the impugned judgment of the High Court of Punjab and Haryana in a second appeal. The plaintiff's services stood terminated and he filed the suit for declaring the order of termination null Page 19 HC-NIC Page 19 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT and void. The suit was dismissed. The lower appellate court, however, on reappreciation of the materials on record, came to the conclusion that the order passed by the DIG must be held to be illegal and consequently directed that the plaintiff should be reinstated in service. Having directed so, the first appellate court categorically held that the plaintiff will not be entitled to any arrears of salary for the period for which he has not served. The plaintiff assailed the appellate decree by filing a second appeal claiming that he would assailed the appellate decree by filing a second appeal claiming that he would be entitled to the arrears of salary. The High Court by the impugned order not only confirmed the decree of the lower appellate court that the plaintiff will not be entitled to any arrears of salary, but also further added that the plaintiff will not get his continuity of service. The plaintiff, therefore, is in appeal before this Court.
3. Having heard the learned counsel for the parties and on examining the materials on record, we fail to understand how the continuity of service could be denied once the plaintiff is directed to be reinstated in service on setting aside the order of termination. It is not a case of fresh appointment, but it is a case of reinstatement. That being the position, direction of the High Court that the plaintiff will not get continuity of service cannot be sustained and we set aside that part of the impugned order. So far as the arrears of salary is concerned, we see no infirmity with the direction which was given by the lower appellate court taking into account the facts and circumstances including the fact that the suit was filed after a considerable length of time. That part of the decree denying the arrears of salary stands affirmed and this appeal stands allowed in part to the extent indicated above."
From the above quoted observations, it comes out clearly that in the said case, Hon'ble Apex Court observed that when the order of termination is set aside and the plaintiff is directed to be reinstated in service, it would not be a case for fresh appointment and it would be a case for reinstatement.
From the said decision, it does not come out that the concerned employee was engaged by following prescribed procedure and whether he was permanent employee or he was engaged on daily wage basis and without following prescribed procedure for selection and recruitment. The said Page 20 HC-NIC Page 20 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT observations came to be made in backdrop of the fact that the Court, on appreciation of evidence, came to the conclusion that the termination order was illegal. Consequently, the Court directed the employer to reinstate the workman in service. In that background and particularly in light of the decision by High Court hat the plaintiff will not be entitled for continuity of service Apex Court recorded above quoted observations.
[c] In the decision in case of Sanatkumar Dwivedi v. Dhar Jila Sahakari Bhoomi Vikas Bank Maryadit & Ors. [2001 AIR SCW 2430], Hon'ble Apex Court observed, inter alia that:-
"2. The admitted facts are that the appellant was reinstated in service by order dated 12.5.1978 with a condition that he will not get any back wages. Obviously, earlier on 8.3.1976, his services were terminated but by the aforesaid order, he was reinstated without back wages. He accepted such reinstatement without back wages by his joining report, Annexure-R-4 at page 106 of the paper book that he had joined his duty on 13.5.1978. By his own conduct, the appellant has accepted the correctness of the order of reinstatement without back wages. Under these circumstances, subsequent dispute raised by him regarding back wages was clearly not maintainable as held by this Court in State of Pubjab and Ors. v. Krishan Niwas. In view of the settled legal position, no interference is called for. The appeal is therefore, dismissed.
3. It is clarified that this order will not be treated to be resulting in any break in service of the appellant. He will be deprived of only the back wages. The continuity of service and all other notional benefits on that basis will be available to him. It appears that when the order of reinstatement was granted, except depriving him of back wages, it necessarily meant that the continuity of service was implicit in the reinstatement. Even condition Nos. 1 and 2 of the order of reinstatement clearly indicate that he is reinstated in service with continuity as pay scales and other benefits were also directed to be given."
So far as the said decision is concerned, Hon'ble Apex Court observed that the employee Page 21 HC-NIC Page 21 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT will be deprived of all backwages whereas continuity of service and other benefits will be available to him. Hon'ble Apex Court observed that when the order of reinstatement is granted, except depriving the employee of all backwages, it means that continuity of service is implicit in the reinstatement.
From the said decision also, it does not come out that the appointment of the concerned employee was irregular or illegal appointment or that he was not a permanent workman and that he was a daily wager and was not regular and permanent employee. The observation in the decision give out that Hon'ble Apex Court was considering case of permanent / regular employee.
[d] In the decision in case of Andhra Pradesh State Road Transport Corporation v. Abdul Karim [(2005) 6 SCC 36], the claimant was working as retainer conductor with the corporation and he was removed from service in 1971. Somewhere in June 1972, he was again appointed as a conductor. When the corporation noticed that he had secured appointment without disclosing that earlier he was removed from service, the corporation terminated his service. The labour Court passed award directing the employer to reinstate the claimant without backwages. In the said decision, Hon'ble Apex Court addressed the question whether Page 22 HC-NIC Page 22 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT the learned Labour Court's award of reinstatement without backwages would imply continuity of service and whether notional increments are to be given to the employee for the period for which he was not in service, in absence of any specific direction in that regard. In the said decision, Hon'ble Apex Court observed, inter alia, that:-
"9. In our considered opinion, the argument advanced by the counsel is not tenable in law in the view taken by this Court in the recent decision. In the case of A.P. S.R.T.C. and Anr. - Appellants v. S. Narsagoud-Respondent (2003) 2 SCC 212, this Court had occasion to deal with the identical controversy and succinctly crystallized the point of law. In that case the respondent was a Conductor in the employment of appellant - A.P.S.R.T.C. He remained absent from duty between 05-06-1982 and 08-08-1982 and again between 13-10- 1992 and 01-11-1992. A departmental inquiry was initiated against him on the charges of unauthorized absence which ended in the punishment of removal from service and a dispute was raised before the Labour Court. The Labour Court upheld the departmental enquiry and the findings arrived thereat, but the respondent was directed to be reinstated with continuity of service but without back-wages. The learned single Judge, on being approached by the respondent, directed the appellant to fix the wages payable to him on his reinstatement by taking into account the increments that he would have earned had he been in service during the period of absence from duty. This finding of the learned single Judge was affirmed in an appeal by the Division Bench. This Court allowed the appeal preferred by the A.P.S.R.T.C.
10. The principle of law on point are no more res integra . This Court in S. Narsagoud (supra) succinctly crystallized principle of law in Paragraph 9 of the judgment on Page SCC 215:
"We find merit in the submission so made. There is a difference between an order of reinstatement accompanied by a simple direction for continuity of service and a direction where reinstatement is accompanied by a specific direction that the employee shall be entitled to all the consequential benefits, which necessarily flow from reinstatement or accompanied by a specific direction that the employee shall be entitled to the benefit of the increments earned during the period of absence. In our opinion, the employee after having been held guilty of unauthorized absence from duty cannot claim the benefit of increments notionally earned during the period of unauthorized absence in the absence of a specific direction in that regard and merely because he has been directed to be reinstated with the benefit of continuity in service."
11. Reverting to the facts of the case at hand, as already noticed, the Labour Court specifically directed that the reinstatement would be without back- wages. There is no Page 23 HC-NIC Page 23 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT specific direction that the employee would be entitled to all the consequential benefits. Therefore, in the absence of specific direction in that regard, merely because an employee has been directed to be reinstated without back- wages, he could not claim a benefit of increments notionally earned during the period when he was not on duty or during the period when he was out of service. It would be incongruous to suggest that an employee, having been held guilty and remained absent from duty for a long time, continues to earn increments though there is no payment of wages for the period of absence." (emphasis supplied) In the said decision, the dispute or subject was not related to continuity of service. The dispute and issue under consideration was about entitlement for increments when court denied backwages for intervening period. In that background, Hon'ble Apex Court emphasized that when there is no specific direction that the employee would be entitled to consequential benefits, then, merely because an employee is directed to be reinstated without backwages, it would be incongruous to suggest that he should earn increment notionally though there is no payment of wages for the period of absence. With said observations, the Court rejected the demand for notional increments during interregnum.
[e] In the decision in case of the Director General, I.C.M.R. v. D.K.Jain & Anr. [2007 AIR SCW 2408], Hon'ble Apex Court observed that:-
"10. In a case of this nature, in our opinion, the question as to whether respondent No. 1 continued to be in service despite temporary break during the said period, will have to be determined having regard to the fact situation involved herein. The services of Respondent No. 1 althoughh were terminated on 10/4/1974, he immediately questioned the legality and validity thereof by filing a writ petition. The Director of the appellant organisation himself made an offer Page 24 HC-NIC Page 24 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT that respondent No.1 would be reinstated in service subject to the terms and conditions mentioned in his letter dated 29.4.1983, as noticed hereinbefore. It was that offer of the appellant which was unconditionally accepted by the respondent. Not only this, certain other observations had also been made by the High Court while passing the order dated 27.4.1983. The High Court directed that he be reinstated in service.
13. Having regard to the conduct of the parties which, in our opinion, is significant, for the purpose of determining the issue involved, we have no doubt in our mind that for all intent and purport. Respondent No.1 has to be treated to be continuing in service despite small disruption during the aforementioned period. The very fact that the offer made in favour of the respondent by the appellant was for reinstatement in service, it is beyond any civil of doubt the same would amount to continuity of his service. Moreover, the respondent has been given his due seniority from the date of his initial appointment. Had it been a case of fresh appointment, as sought to be argued by Mr. Raju Ramachandran learned senior counsel appearing on behalf of the appellant, the question of respondent No. 1's getting his seniority from the date of his original appointment would not have arisen.
14. What was, therefore, denied to him was only the back- wages for the period he was in service in some other organisation, which in our opinion cannot be construed to mean that an employee although being validly appointed and continued in service shall be deprived of the pensionary benefits during the period in question thereby."
The said decision also was not in respect of a daily wager or irregular/ illegal appointment where the claimant was appointed as statistical officer and he had successfully completed his probation. Thereafter, his service was terminated. The employee challenged order of his termination in High Court. During pendency of the petition employer offered to reinstate the employee. Then question arose about break in service / continuity in service. After considering the facts of the case, Hon'ble Apex Court decided the case with said observations. Above quoted expression give out that effect of Page 25 HC-NIC Page 25 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT reinstatement, has to be treated as continuity in service.
[f] In the case of I Laxma Reddy v. A.P.S.R.T.C. [2007 (13) SCC 415], in the dispute raised by the workman, the learned Labour Court had passed an award directing reinstatement. After the award was implemented, his pay was fixed without taking into consideration notional increments. Therefore, writ petition was filed with the claim that upon reinstatement, salary should be fixed after taking into consideration notional increments. The learned Single Judge granted the petition. The Division Bench, after considering the decision in case of P. Nageswara Rao [2003 (2) SCC 212], allowed the writ appeal. Before Hon'ble Apex Court it was claimed that when order of reinstatement was passed, then, for all practical purposes, there will be continuity of service and when reinstatement is effected, the salary must be fixed after considering notional increments. In the said decision, Hon'ble apex Court considered observations in case of S. Narsagoud and also observations in case of Abdul Kareem [(2005) 6 SCC 36] and Hon'ble Apex Court observed that:-
"6. The principles of law on the point are no more res integra . This Court in S. Narsagoud's case (supra) succinctly crystallized principle of law in para 9 of the judgment :
"9. We find merit in the submission so made. There is a difference between an order of reinstatement Page 26 HC-NIC Page 26 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT accompanied by a simple direction for continuity of service and a direction where reinstatement is accompanied by a specific direction that the employee shall be entitled to all the consequential benefits, which necessarily flow from reinstatement or accompanied by a specific direction that the employee shall be entitled to the benefit of the increments earned during the period of absence. In our opinion, the employee after having been held guilty of unauthorized absence from duty cannot claim the benefit of increments notionally earned during the period of unauthorized absence in the absence of a specific direction in that regard and merely because he has been directed to be reinstated with the benefit of continuity in service.
7. The position was re-iterated in A.P. State Road Transport Corporation and Ors. v. Abdul Kareem (2005 (6) SCC 36). In view of what has been stated by this Court in S. Narsagoud and Abdul Kareem cases (supra), there is no merit in this appeal which is accordingly dismissed. There will be no order as to costs."
[g] In the decision in case of A.P.SRTC & Ors. v. S. Narsagoud [(2003) 2 SCC 212], the concerned workman was employed as conductor. He was removed from service on ground of misconduct (unauthorized absence). The the learned Labour Court directed the employer to reinstate the petitioner in service with continuity of service, but without backwages. The workman felt aggrieved by the award. Therefore, the dispute was taken before High Court where grievance was raised that although workman was reinstated, but while fixing the wages on his reinstatement, periodical increments which would have been earned by him were not taken into account. The High Court directed the employer to compute periodical increments. In the said case, Hon'ble Apex Court observed, inter alia, that:-
"9. We find merit in the submission so made. There is a difference between an order of reinstatement accompanied by a simple direction for continuity of service and a direction where reinstatement is accompanied by a specific direction that the employee shall be entitled to all the consequential benefits, which necessarily flow frem reinstatement or Page 27 HC-NIC Page 27 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT accompanied by a specific direction that the employee shall be entitled to the benefit of the increments earned during the period of absence. In our opinion, the employee after having been held guilty of unauthorised absence from duty cannot claim the benefit of increments notionally earned during the period of unauthorised absence in the absence of a specific direction in that regard and merely because he has been directed to be reinstated with benefit of continuity in service.
10. The Regulations referred to hereinabove clearly spell out that the period spent on the extraordinary leave or leave without pay or a period of over- stayal after the expiry of leave or joining time cannot count towards increments; unless the order of the competent authority sanctioning the extraordinary leave or leave without pay or the order commuting the period of over-stayal into extraordinary leave or leave without pay is accompanied by a specific order to count the period for increments. A period of unauthorised absence from duty treated as a misconduct and held liable to be punished by way of penalty cannot be placed on a footing better than the period of extraordinary leave or leave without pay or a period of over- stayal. Ordinarily, the increments are earned on account of the period actually spent on duty or during the period spent on leave the entitlement to which has been earned on account of the period actually spent on duty. The direction of the High Court entitling the respondent to earn increments during the period of unauthorised absence from duty though held liable to be punished in departmental inquiry proceedings would amount to putting a premium on the misconduct of the employee.
12. From above quoted observations in decided cases it comes out clearly that the concept viz. continuity of service is natural and automatic consequence or consequential benefits of the direction to reinstate a workman; cannot be applied mechanically. Even otherwise said concept is ordinarily employed in case of permanent workman. However, that very concept cannot, in similar manner, be employed for a daily wager and/or a workman who was engaged, prior to termination of his service, on casual or temporary basis.
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12.1 It is pertinent that in none of the said cases the concerned workman, prior to termination of his service, was a daily wager or engaged for casual work or for temporary period. Moreover, it is also pertinent that in light of the decision in case of S. Nagaradu, Hon'ble Apex Court, even in case of permanent workman observed that in cases where the award is silent with regard to continuity of service or even in cases where such benefit is granted, periodical increments cannot be claimed in absence of specific direction. In this view of the matter, assumption about continuity of service - that too with reference to daily wager - is unjustified when award is conspicuously silent. Such direction cannot be inferred when award is silent, more particularly in respect of daily wager.
12.2The cases where the learned Labour Court either expressly directs that the service of the workmen should be considered continuous or the cases where the learned Labour Court specifically denies continuity of service, do not cause any problem either for the executing Court or for the employer.
12.3However, in the cases where learned Labour Court directs the employer to reinstate the workman but does not expressly pass specific Page 29 HC-NIC Page 29 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT direction that service of the concerned workman should be considered continuous and the award by the learned Labour Court remains silent on that count, difficulty for the executing Court [under Section 33-C(2) of the Industrial Disputes Act] in executing the award and for the employer in implementation of the award may arise.
13. The moot question which would arise is that when the award is silent with regard to continuity of service, whether the labour Court - with limited jurisdiction and authority under Section 33-C(2) of I.D.Act - can fill-up the gap in the award passed by Reference Court by drawing an inference that (a) the continuity of service is deemed to have been granted and it is impliedly attached to the direction granting reinstatement; or (b) absence of the direction amounts to denial of continuity of service.
14. In view of this Court, when the award is silent, the said issue should be examined, subject to the limitation as regards the Court's jurisdiction and authority and power under Section 33-C(2), in light of the nature of appointment of the concerned workman and his status (i.e. whether he was engaged and working as permanent workman or he was engaged as and working on daily wage or casual or temporary Page 30 HC-NIC Page 30 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT basis) at the time of termination of service.
14.1The case of the workman; who, prior to termination or dismissal from service, was employed and working as permanent employee would stand on a different footing vis-a-vis the workmen; who, prior to termination of his service, was appointed without following procedure prescribed by rules and/or those who were working on daily wage basis or as temporary or casual workmen.
14.2The decided cases have not laid down inflexible rule or principle that once the learned reference court grants reinstatement, then, even without having regard to the nature of appointment and/or without having regard to the status of the concerned workman (prior to the termination of his service) continuity of service should be deemed to have been granted alongwith the direction to reinstate the workman or that such direction should be deemed to be part of direction to reinstate the workman even in case where the concerned workman is daily wager. The decided cases have also not laid down the inflexible principle or rule that though the award is silent and such benefit is not expressly granted, pre-termination status of workmen should not be considered. The decided cases have also Page 31 HC-NIC Page 31 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT not laid down inflexible rule that inference with regard to continuity of service can be drawn even in case where the direction is passed to reinstate a daily wager but the award is silent with regard to continuity of service.
15. In view of this Court, the cases where concerned workmen, before termination of his service, was engaged as and working as a daily wager or on casual or temporary basis must be distinguished from and cannot be equated with the cases where the concerned workman was a permanent workman.
15.1 The relief or the direction which would be automatically applicable or impliedly available. The inference which may be drawn upon rendition of award directing reinstatement of a permanent workmen would not be readily or automatically available or would not be implied in case of non- permanent workman, more particularly in case of the workman who, prior to termination of his service was engaged and working on daily wage or casual or temporary basis.
15.2 In this context, it is pertinent that permanent workman has lien on the post and consequently he has right to continue in service except when the service is terminated in Page 32 HC-NIC Page 32 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT accordance with law or he attains age of superannuation.
15.3 However, the position in respect of the workman who was engaged on daily wage or temporary or casual basis would be different. The appointments of the persons on daily wage basis have very peculiar and specific characteristics. Such workman (i) does not hold lien on the post and (ii) he is not bound by disciplinary and/or service regulations of the establishment and
(iii) he does not have to bear or discharge the obligations or to observe the Rules and limitations which the permanent workman has to, and (iv) he, at the same time does not have and he does not enjoy the rights, benefits and privileges as well as the protection which permanent / regular workman does. In most cases, the concerned persons are free from all obligations which would be applicable to permanent and regular employees by virtue of service regulations or standing orders.
16. It is hazardous to assume that the direction granting continuity of service is always implied when the labour Court directs reinstatement and that such direction (i.e. continuity in service) has to be read into the award even if it is not specifically granted and/or that "continuity of Page 33 HC-NIC Page 33 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT service" is natural consequence or consequential benefit in all cases of reinstatement.
Such assumption would lead to drastic anomalies. Actually, "continuity of service"
cannot be automatically and mechanically treated
- or even granted - as "consequential benefit" in all cases.
16.1 It is pertinent that even the reference Court would be, ordinarily, slow and careful while passing direction with regard to backwages as well as continuity of service when the Court directs reinstatement of the workman.
16.2 The issue with regard to backwages should be decided in light of facts and circumstances of each cases wherein the Court should take into account the nature and type of appointment, total tenure of service prior to termination, reason for termination, grounds on which the termination is found to be illegal and whether the workman was gainfully employed in the interregnum or not, etc. The said directions are not passed - and should not be passed - mechanically and without taking into account relevant factors.
17. In this context, it is pertinent that in more than one cases e.g. (i) in case of General Manager, Haryana Roadways v. Rudhan Singh [(2005) Page 34 HC-NIC Page 34 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT 5 SCC 591]; and (ii) in the case of J.K.Synthetics Ltd. v. K.P.Agrawal & Anr. [(2007) 2 SCC 433], Hon'ble Apex Court has observed that direction to pay backwages cannot be mechanically and automatically granted alongwith direction to reinstate the workman.
(a) In the decision in case of General Manager, Haryana Roadways (supra), Hon'ble Apex Court has observed, inter alia, that:-
"8. There is no rule of thumb that in every case where the Industrial Tribunal gives a finding that the termination of service was in violation of Section 25-F of the Act, entire back wages should be awarded. A host of factors like the manner and method of selection and appointment, i.e., whether after proper advertisement of the vacancy or inviting applications from the employment exchange, nature of appointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service, which the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is very small, the award of back wages for the complete period, i.e., from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent daily wage employment though it may be for 240 days in a calendar year." (emphasis supplied)
(b) In the decision in case of J.K.Synthetics Ltd. (supra), Hon'ble Apex Court has observed, inter alia, that:-
"15. But the manner in which 'back-wages' is viewed, has undergone a significant change in the last two decades. They are no longer considered to be an automatic or natural Page 35 HC-NIC Page 35 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT consequence of reinstatement. We may refer to the latest of a series of decisions on this question. In U.P. State Brassware Corpn. Ltd. vs Udai Narain Pandey [2006 (1) SCC 479], this Court following Allahabad Jal Sansthan vs. Daya Shankar Rai [2005 (5) SCC 124], and Kendriya Vidyalaya Sangathan vs. S. C. Sharma [2005 (2) SCC 363] held as follows : "A person is not entitled to get something only because it would be lawful to do so. If that principle is applied, the functions of an Industrial Court shall lose much of their significance."
"although direction to pay full back wages on a declaration that the order of termination was invalid used to be the usual result, but now, with the passage of time, a pragmatic view of the matter is being taken by the courts realizing that an industry may not be compelled to pay to the workman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched... The changes (were) brought about by the subsequent decisions of the Supreme Court, probably having regard to the changes in the policy decisions of the Government in the wake of prevailing market economy, globalization, privatization and outsourcing, is evident.
No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends upon the facts and circumstances of each case. It would, however, not be correct to contend that it is automatic. It should not be granted mechanically only because on technical grounds or otherwise an order of termination is found to be in contravention of the provisions of section 6- N of the U.P. Industrial Disputes Act.. While granting relief, application of mind on the part of the Industrial Court is imperative. Payment of full back wages cannot therefore be the natural consequence.
In General Manager, Haryana Roadways vs. Rudhan Singh [2005 (5) SCC 591], this Court observed : ... ... ...
16. There has also been a noticeable shift in placing the burden of proof in regard to back wages. In Kendriya Vidyalaya Sangathan (supra), this Court held :
"..When the question of determining the entitlement of a person to back wages is concerned, the employee has to show that he was not gainfully employed. The initial burden is on him. After and if he places materials in that regard, the employer can bring on record materials to rebut the claim. In the instant case, the respondent had neither pleaded nor placed any material in that regard."
In U.P. State Brassware Corpn. Ltd. (supra), this Court observed :
"It is not in dispute that the respondent did not raise any plea in his written statement that he was not gainfully employed during the said period. It is now well settled by various decisions of this Court that although earlier this Court insisted that it was for the employer to raise the aforementioned plea but having regard to the Page 36 HC-NIC Page 36 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT provisions of section 106 of the Evidence Act or the provisions analogous thereto, such a plea should be raised by the workman."
17. There is also a misconception that whenever reinstatement is directed, 'continuity of service' and 'consequential benefits' should follow, as a matter of course. The disastrous effect of granting several promotions as a 'consequential benefit' to a person who has not worked for 10 to 15 years and who does not have the benefit of necessary experience for discharging the higher duties and functions of promotional posts, is seldom visualized while granting consequential benefits automatically. Whenever courts or Tribunals direct reinstatement, they should apply their judicial mind to the facts and circumstances to decide whether 'continuity of service' and/or 'consequential benefits' should also be directed. We may in this behalf refer to the decisions of this Court in A.P.S.R.T.C. v. S. Narasa Goud [2003 (2) SCC 212], A.P.S.R.T.C. v. Abdul Kareem [2005 (6) SCC 36] and R.S.R.T.C. v. Shyam Bihari Lal Gupta [2005 (7) SCC 406]." (emphasis supplied) 17.1 On this count, more important aspect is that in the cases where award is silent with regard to backwages and labour Court has not specifically and expressly refused backwages, the Court would not be right or justified in assuming and drawing inference that the relief is implied in the direction to reinstate workman and said direction is normal and natural consequence in all cases where direction to reinstate the workman is passed.
17.2 Likewise, while passing award with the direction to the employer to reinstate a workman, the learned Reference Court would also be obliged to decide as to whether in particular case, reinstatement should be coupled with continuity of service or the period from the date of termination until the date of award should be treated as hiatus or break in service or the said Page 37 HC-NIC Page 37 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT period also should be considered continuous.
In all cases, the principle of "implied direction" cannot be applied mechanically.
17.3 Actually, while deciding the reference case, the learned Labour Court would be obliged to apply mind specifically to this issue and pass express order only after taking into account host of relevant circumstances. Some of the circumstances would be same as they would be taken into account while deciding the issue with regard to backwages, however, concentration would be on the nature of appointment.
17.4 The reference Court should not pass incomplete or vague award without addressing and without dealing with the matter related to or connected with the (a) continuity of service and
(b) backwages. The Court should expressly pass specific direction after taking into account relevant factors and after applying relevant principles. The Court should also record sufficient and cogent reasons for granting or refusing said relief.
18. In the cases where the learned labour (Reference) Court does not pass specific direction and the award is silent on this count then such award cannot be improved upon by the Page 38 HC-NIC Page 38 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT Court while acting under very limited jurisdiction and authority granted by the Court under Section 33(C)(2) and the learned Court cannot fill-up the gap with its own assumption, more particularly in respect of workman engaged on daily wage or casual or temporary basis.
18.1 Unless the learned labour (reference) Court, after proper application of mind to relevant factors, finds that a strong case to also grant continuity of service is made out and thereupon the learned Reference Court expressly passes such direction, presumption about continuity of service can not be readily and mechanically drawn or inferred - more particularly in the cases where the concerned workman is a daily wager or casual / temporary workman - while deciding application under Section 33(C)(2) of I.D.Act
19. In this view of the matter, the learned labour (executing) Court, while adjudicating application for money claim (recovery application) under Section 33(C)(2), should, (a) in first instance, keep in focus the limitations of the Court's power under Section 33(C)(2) where it has to decide only "money claim"; (b) thereafter, the learned Court should examine the award to determine (1) as to whether it is in respect of permanent workman or with reference to Page 39 HC-NIC Page 39 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT a workman who was engaged on daily wage or casual or temporary basis; and (2) in case where the award is passed in respect of daily wager (or casual or temporary worker), the learned Court would trade carefully and would not mechanically draw any inference in absence of any specific direction - expressly granting or denying the relief - and may pass appropriate order in terms of and in light of the direction in the award, while keeping in focus the limitation in respect of its jurisdiction and power under Section 33- C(2) of I.D.Act.
19.1 In this context, it would be profitable to consider observations in the decisions where Court considered scope of labour Court's jurisdiction under Section 33(C)(2) of the I.D.Act.
(a) In the case of Municipal Corporation of Delhi v. Ganesh Razak & Anr. [(1995) 1 SCC 235] wherein Hon'ble Apex Court observed and held that:-
9. Another decision on the point is Bombay Gas Co. Ltd. v.
Gopal Bhiva2 wherein also Gajendragadkar, J., (as he then was) speaking for the Bench, referring to the above Constitution Bench decision, stated that the proceedings contemplated by Section 33-C(2) are analogous to execution proceedings and the Labour Court, like the Executing Court in the execution proceedings governed by the Code of Civil Procedure, would be competent to interpret the award on which the claim is based. It is obvious that the power of the Executing Court is only to implement the adjudication already made by a decree and not to adjudicate a disputed claim which requires adjudication for its enforcement in the form of decree. The Executing Court, after the decree has been passed, is however competent to interpret the decree for the purpose of its implementation. This position was settled by the above Constitution Bench decision and has been the consistent view of this Court ever since then.
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8. Since proceedings under Section 33-C(2) are analogous to execution proceedings and the Labour Court called upon to compute in terms of money the benefit claimed by a workman is in such cases in the position of an Executing Court, the Labour Court like the Executing Court in execution proceedings governed by the Code of Civil Procedure, is competent under Section 33-C(2) to interpret the award or settlement where the benefit is claimed under such award or settlement and it would be open to it to consider the plea of nullity where the award is made without,jurisdiction." After stating the propositions, the decision proceeds to state as under: (SCR p. 144) "It is clear that the right to the benefit which is sought to be computed must be an existing one, that is to say, already adjudicated upon or provided for and must arise in the course of and in relation to the relationship between an industrial workman and his employer."
11. In Central Inland Water Transport Corpn. Ltd. v. Workmen4 it was held with reference to the earlier decisions that a proceeding under Section 33-C(2) being in the nature of an execution proceeding, it would appear that an investigation of the alleged right of re-employment is outside its scope and the Labour Court exercising power under Section 33-C(2) of the Act cannot arrogate to itself the functions of adjudication of the dispute relating to the claim of re-employment. Distinction between proceedings in a suit and execution proceedings thereafter was pointed out. It was indicated that the plaintiff's right to relief against the defendant involves an investigation which can be done only in a suit and once the defendant's liability had been adjudicated in the suit, the working out of such liability with a view to give 4 (1974) 4 SCC 696: 1974 SCC (L&S) 421 :(1975) 1 SCR 153 241 relief is the function of an execution proceeding. This distinction is clearly brought out in that decision as under: (SCR p. 159 : SCC pp. 701-02) "In a suit, a claim for relief made by the plaintiff against the defendant involves an investigation directed to the determination of
(i) the plaintiff's right to relief; (ii) the corresponding liability of the defendant, including, whether the defendant is, at all, liable or not; and (iii) the extent of the defendant's liability, if any. The working out of such liability with a view to give relief is generally regarded as the function of an execution proceeding. Determination No.
(iii) referred to above, that is to say, the extent of the defendant's liability may sometimes be left over for determination in execution proceedings. But that is not the case with the determinations under heads (i) and (ii). They are normally regarded as the functions of a suit and not an execution proceeding. Since a proceeding under Section 33- C(2) is in the nature of an execution proceeding it should follow that an investigation of the nature of determinations
(i) and (ii) above is, normally, outside its scope. It is true that in a proceeding under Section 33-C(2), as in an execution proceeding, it may be necessary to determine the identity of the person by whom or against whom the claim is made if there is a challenge on that score. But that is merely 'Incidental'. To call determinations (i) and ii.'Incidental' to an execution proceeding would be a Page 41 HC-NIC Page 41 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT perversion, because execution proceedings in which the extent of liability is worked out are just consequential upon the determinations (i) and (ii) and represent the last stage in a process leading to final relief. Therefore, when a claim is made before the Labour Court under Section 33-C(2) that court must clearly understand the limitations under which it is to function. It cannot arrogate to itself the functions-say of an Industrial Tribunal which alone is entitled to make adjudications in the nature of determinations (i) and (ii) referred to above, or proceed to compute the benefit by dubbing the former as 'Incidental' to its main business of computation. In such cases, determinations (i) and (ii) are not 'Incidental' to the computation....The Labour Court has no jurisdiction to first decide the workmen's entitlement and then proceed to compute the benefit so adjudicated on that basis in exercise of its power under Section 33-C(2) of the Act. It is only when the entitlement has been earlier adjudicated or recognised by tile employer and thereafter for the purpose of implementation or enforcement thereof some ambiguity requires interpretation that the interpretation is treated as incidental to the Labour Court's power under Section 33- C(2) like that of the Executing Court's power to interpret the decree for the purpose of its execution."
(emphasis supplied)
(b) In the decision in case of State of U.P. & Anr. v. Brijpal Singh [(2005) 8 SCC 58], Hon'ble Apex Court observed, inter alia, that:-
"10. It is well settled that the workman can proceed under Section 33C(2) only after the Tribunal has adjudicated on a complaint under Section 33A or on a reference under Section 10 that the order of discharge or dismissal was not justified and has set aside that order and reinstated the workman. This Court in the case of Punjab Beverages Pvt. Ltd. Vs. Suresh Chand , (1978) 2 SCC 144 held that a proceeding under Section 33C(2) is a proceeding in the nature of execution proceeding in which the Labour Court calculates the amount of money due to a workman from the employer, or, if the workman is entitled to any benefit which is capable of being computed in terms of money, proceeds to compute the benefit in terms of money. Proceeding further, this Court held that the right to the money which is sought to be calculated or to the benefit which is sought to be computed must be an existing one, that is to say, already adjudicated upon or provided for and must arise in the course of and in relation to the relationship between the industrial workman, and his employer. ...."It is not competent to the Labour Court exercising jurisdiction under Section 33C(2) to arrogate to itself the functions of an industrial tribunal and entertain a claim which is not based on an existing right but which may appropriately be made the subject matter of an industrial dispute in a reference under Section 10 of the Act."
11. In the case of State Bank of India vs. Ram Chandra Dubey & Ors., (2001) 1 SCC 73, this Court held as under:
"8. The principles enunciated in the decisions referred by either side can be summed up as follows:
Page 42 HC-NIC Page 42 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT Whenever a workman is entitled to receive from his employer any money or any benefit which is capable of being computed in terms of money and which he is entitled to receive from his employer and is denied of such benefit can approach Labour Court under Section 33- C(2) of the Act. The benefit sought to be enforced under Section 33- C(2) of the Act is necessarily a pre-existing benefit or one flowing from a pre-existing right. The difference between a pre-existing right or benefit on one hand and the right or benefit, which is considered just and fair on the other hand is vital. The former falls within jurisdiction of Labour Court exercising powers under Section 33C(2) of the Act while the latter does not. It cannot be spelt out from the award in the present case that such a right or benefit has accrued to the workman as the specific question of the relief granted is confined only to the reinstatement without stating anything more as to the back wages. Hence that relief must be deemed to have been denied, for what is claimed but not granted necessarily gets denied in judicial or quasi- judicial proceeding. Further when a question arises as to the adjudication of a claim for back wages all relevant circumstances which will have to be gone into, are to be considered in a judicious manner. Therefore, the appropriate forum wherein such question of back wages could be decided is only in a proceeding to whom a reference under Section 10 of the Act is made.......
13......Thereafter, the Labour Court, in the instant case, cannot arrogate to itself the functions of an Industrial Tribunal and entertain the claim made by the respondent herein which is not based on an existing right but which may appropriately be made the subject matter of an industrial dispute in a reference under Section 10 of the I.D. Act.
Therefore, the Labour Court has no jurisdiction to adjudicate the claim made by the respondent herein under Section 33C(2) of the I.D. Act in an undetermined claim and until such adjudication is made by the appropriate forum, the respondent-workman cannot ask the Labour Court in an application under Section 33C(2) of the I.D. Act to disregard his dismissal as wrongful and on that basis to compute his wages. It is, therefore, impossible for us to accept the arguments of Mrs. Shymala Pappu that the respondent-workman can file application under Section 33C(2) for determination and payment of wages on the basis that he continues to be in service pursuant to the said order passed by the High Court in Writ Petition No. 15172 of 1987 dated 28.10.1987......"
(emphasis supplied) 19.2 From above quoted observations, it comes out that, (a) the learned Labour Court can consider claim which can be computed in terms of money but the right must be crystallized and should arise from and in the course of employer-and-employee relationship. The right should exist as Page 43 HC-NIC Page 43 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT crystallized right. (b) While acting under Section 33(C-2), the labour court cannot entertain and adjudicate a claim which is not based on existing right i.e. a claim which is required to be adjudicated upon and converted into right. (c) While entertaining and deciding an application under Section 33(C-2), the labour court cannot act as, or cannot exercise jurisdiction of, a labour Court or an industrial tribunal under Section 10 of the Act and it cannot usurp the jurisdiction of and function of the labour Court or industrial tribunal acting under Section 10 of the Act. (d) There is substantive and material difference between money had and might have and that therefore, it is not permissible to labour court acting under Section 33(C-2) to receive a claim and adjudicate the claimant's entitlement or to determine the base of the claim. (e) The labour court acting under Section 33(C-2) cannot first undertake the process to decide claimant's entitlement or base of the claim and, then set down the matter for computing and quantifying the amount payable towards such claim. The jurisdiction and function to decide entitlement and base for the claim is of labour court or industrial tribunal under Section 10 of the Act. (f) When the entitlement for the claim and base of the claim are adjudicated, then, for the purpose of Page 44 HC-NIC Page 44 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT implementation of such claim or for deciding and removing any ambiguity and/or for quantifying the money value of the adjudicated right, the Court can entertain the application under said section and in that process, the learned Labour Court can decide incidental issues. (g) The power of the labour court acting under Section 33(C-2) is akin to the power of executing court i.e. to interpret the decree for the purpose of execution.
19.3 In light of above discussed position with regard to application under Section 33(C)(2) and the scope of Court's jurisdiction and authority under said provision, the labour Court would not be competent or justified in mechanically drawing any inference about continuity of service and in filling-up the gaps in the award with its own assumption and then passing order in recovery application under Section 33(C)(2) of the Act.
20. In present case, the applicants before the learned Labour Court filed applications under Section 33(C-2) on strength of an award which is silent with regard to continuity of service. Despite this position, learned Court, while deciding recovery application under Section 33(C) (2), referred to said award dated 16.7.1998 and took into account the final direction passed in the said award dated 16.7.1998 and then, without Page 45 HC-NIC Page 45 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT examining relevant aspects, which should have been taken into account, the learned Court assumed that while passing the award dated 16.7.1998 the Reference Court is deemed to have granted continuity of service. In the said recovery applications, the Court proceeded on such assumption and inference and passed the common order merely on such inference and assumption.
20.1 In this factual backdrop, it was necessary for the learned Labour Court, while entertaining and deciding the applications under Section 33(C-
2), to decide whether the applicants had any existing and crystallized right in respect of which monetary value can be computed and quantified.
20.2 The applicants also relied on government resolution dated 17.10.1988 which postulates and demands continuous service of not less than 5 years by daily wagers for certain benefits and continuous of service of not less than 10 years for certain benefits.
20.3Therefore, the applicants (who were, undisputedly, daily wagers) were obliged to satisfy the learned executing Court that they had Page 46 HC-NIC Page 46 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT completed continuous service of not less than 5 years. To establish said aspect, the applicants, in turn, relied on the award which contained and passed only one direction viz. that the workmen should be reinstated. The reference Court had refused to grant backwages and the reference Court remained silent with regard to the continuity of service.
21. On this count it is relevant to note that the applicants demanded monetary benefits in accordance with the government resolution dated 17.10.1988 from a particular date.
21.1According to the case set up by the Board the period should be calculated from the date they came to be re-engaged pursuant to the award and not from the date of their initial / first appointment prior to termination.
21.2The applicants demanded otherwise and claimed that period of termination should be considered break in service and/or their appointment pursuant to award should not be considered fresh appointment and their services should be considered continuous from the first date of appointment.
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21.3 For justifying and substantiating the said demand, the applicants would be obliged to establish continuity of service from first day of their appointments including the period from date of termination of their service till the date of award.
21.4 However, since learned reference Court undisputedly did not pass such direction in the award, the said demand by the claimants (who, prior to termination of their service, were daily wagers) could be considered or it could fructify only if the Court while deciding application under Section 33(C)(2) would read something into the award which is not specifically granted by reference Court. Differently put, that would be possible only if the executing Court assumed that the reference Court had granted reinstatement with further direction to treat the services of the claimants continuous and thereby the Court filled up the gap in the award by its assumption.
22. The award passed by the reference Court and the demand by the applicants (in the recovery applications under Section 33(C)(2) of the Act) created a situation before the Court wherein there was no room for the learned Court, unless the hiatus in the service from the date of termination till the date of award was ignored or Page 48 HC-NIC Page 48 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT unless it was assumed by the learned executing Court that in view of the direction to reinstate the workmen, the hiatus does not survive, to hold that the applicants had completed continuous service of 5 years.
22.1On this count, it is pertinent to note that if the length or total tenure of claimants' service were to be calculated from the date they came to be re-engaged or even from the award then undisputedly they had not completed service of 5 years as on the date from which they claimed the benefits flowing from the GR dated 17.10.1988.
22.2Thus, in the event such assumption was not made then the undisputed position would be that the learned Court would be neither able to hold nor justified in holding that the service of the claimants should be considered continuous from the date of their initial appointment and the benefits flowing from the GR dated 17.10.1988 should be paid on completion of service of 5 years / 10 years from the date of their initial appointment.
23. Therefore, the question before the learned Labour Court was as to whether it can draw such inference and make such assumption and whether it can, thereby, fill up the gap in the award while Page 49 HC-NIC Page 49 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT adjudicating applications under Section 33(C-2) of the Act. Further question before the Court was as to whether it could read into the award some direction which is not expressly granted by the reference Court and whether it can mechanically assume - in absence of specific order - that the direction to treat their services continuous was granted by the reference Court or that such direction was implied in the direction to reinstate the workman who were daily wagers. It was necessary for the learned executing Court to address the issue and decide as to whether it would be just and proper and legally permissible to assume, while deciding recovery application under Section 33(c)(2), that the direction to reinstate the workman impliedly grants continuity of service even in respect of daily wager.
24. On reading the impugned orders passed by the executing Court in the applications filed by present applications under Section 33(C-2), it comes out that the learned Labour Court has not addressed and has not dealt with any of above discussed issues and without applying mind to the said aspects and without addressing above mentioned aspects and without focusing on the issue as to whether such assumption with reference to daily wagers is legally permissible for executing Court or not and whether in absence Page 50 HC-NIC Page 50 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT of specific direction by reference Court such assumption by executing Court would be justified or not, the learned executing Court mechanically assumed that the reference Court is deemed to have granted continuity of service, though the award is conspicuously silent on this count and the said silence is coupled with the fact that the learned reference Court has expressly denied benefit of backwages, the learned Court assumed that the direction for continuity of service is implied in the award. The learned Court did not pause to consider as to whether there are any indication in the award or whether there are any observation in the award or whether there is any discussion in the award with regard to continuity of service.
24.1The learned executing Court made the said assumption without application of mind to, rather by ignoring, the fact that before termination of their services, the claimants were, undisputedly, engaged and working as daily wager and that, therefore, the award granting reinstatement had earned, for the claimants, mere reinstatement as daily wager and by virtue of the award, their status did not change or was not transformed from daily wager to permanent workman. Such assumption without dealing with above mentioned aspects is unjustified and cannot be sustained.
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24.2In present case, above discussed aspects are not taken into account and are ignored by the learned Labour Court. Above mentioned aspects deserves reconsideration by learned tribunal. The impugned order is, therefore, defective and erroneous and unsustainable.
25. Besides this, there is another aspect involved in present case. It is noticed, on reading the memo of recovery application along with its annexures, that in the recovery application the claimants quantified the amount of their demand @ Rs.1,01,885/-. It is also noticed that to justify the said quantification, the claimants annexed a statement purportedly reflecting the details of the calculation.
25.1The learned Tribunal has, without inviting evidence with regard to the quantification and without considering the evidence, mechanically accepted the quantification.
25.2On this count, it is pertinent to note that the claimants raised demand in the recovery application on the basis of an award (about which the relevant aspects are discussed hereinabove) and on the basis of Government Resolution dated 17.10.1988.
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25.3In that view of the matter, the learned
Labour Court was obliged to take into account the terms and conditions of the said recommendation / report and to verify and ascertain as to whether the claimants fulfilled all terms and conditions and whether they are eligible and entitled for such benefits under said GR or not. These and such other aspects also ought to have been undertaken by the learned Labour Court.
25.4From the order, it comes out that the learned Labour Court mechanically assumed that the workmen fulfilled all conditions prescribed in the Government Resolution dated 17.10.1988 and the amounts mentioned by the workmen are correct.
26. Foregoing discussion and the reasons mentioned above have established that the common order passed by learned labour Court in recovery applications is not sustainable and deserves to be set aside. The aspects discussed and mentioned above, deserve to be re-considered by learned Tribunal. In this context, it is also appropriate to mention that relevant and sufficient material which may enable this Court to decide said issues is not available on record of present petitions. The details about total length of service of the respondents or their salary or other details with Page 53 HC-NIC Page 53 of 54 Created On Thu Aug 17 02:18:58 IST 2017 C/SCA/8186/2010 JUDGMENT regard to the benefits which may be available under the G.R. dated 17.10.1988 are not available on record. Besides this, the record(s) of reference cases where present respondents were concerned workmen is / are not available on record and that therefore, there is no option for this Court but to remand the proceedings to learned Tribunal for fresh decision after taking into account the aspects discussed above.
27. Therefore, following order is passed:-
[a] For the reasons mentioned above, impugned common award is set aside.
[b] The recovery applications are remanded to learned labour Court for reconsideration and fresh decision - order after considering the aspects discussed above and in accordance with law.
With aforesaid observations, present petitions are partly allowed and accordingly stand disposed off. Rule is made absolute to the aforesaid extent.
Sd/-
(K.M.THAKER, J.) kdc/Suresh/Bharat Page 54 HC-NIC Page 54 of 54 Created On Thu Aug 17 02:18:58 IST 2017