Allahabad High Court
Nagar Palika Parishad vs Presiding Officer, Labour Court And ... on 8 August, 2016
Author: Ashwani Kumar Mishra
Bench: Ashwani Kumar Mishra
HIGH COURT OF JUDICATURE AT ALLAHABAD
AFR
Court No. - 58
Case :- WRIT - C No. - 25467 of 2013
Petitioner :- Nagar Palika Parishad
Respondent :- Presiding Officer, Labour Court And Another
Counsel for Petitioner :- Sahab Tiwari,Saurabh Tiwari
Counsel for Respondent :- A.K. Dixit,Jamal Khan,S.C.,Sunil Kumar Tripathi
Connected with
Case :- WRIT - C No. - 48995 of 2015
Petitioner :- Nagar Nigam Firozabad Thru' Its Upper Nagar Ayukt
Respondent :- Kamal Kumar & Another
Counsel for Petitioner :- Sahab Tiwari,Saurabh Tiwari,Smt. Sita Tiwari
Counsel for Respondent :- C.S.C.,Ranjeet Kumar Mishra,S.N. Dubey
And
Case :- WRIT - C No. - 31497 of 2016
Petitioner :- Kamal Kumar
Respondent :- State Of U.P. And 2 Others
Counsel for Petitioner :- Surendra Nath Dubey,Sachin Dubey
Counsel for Respondent :- C.S.C.
Hon'ble Ashwani Kumar Mishra,J.
1. Dispute between Nagar Palika Parishad, Firozabad and its workman Kamal Kumar has given rise to filing of these three writ petitions. These petitions have been heard together and are being disposed of by this common judgment.
2. Writ Petition No. 25467 of 2013 has been filed by Nagar Palika Parishad, Firozabad, challenging an award passed by Presiding Officer, Labour Court, U.P. Firozabad, dated 15.4.2013 in Adjudication Case No.35 of 2009. By the award, reference has been answered in favour of the workman, holding that his termination from service w.e.f. 22.7.2004 without complying with the requirement of Section 6-N of the U.P. Industrial Disputes Act, 1947 is bad in law, and relief of reinstatement alongwith continuity of service together with 50% back wages has been awarded. A sum of Rs.1500/- towards cost of litigation has also been awarded to the worker.
While entertaining the writ petition, following interim order was passed on 7.5.2013:-
"Sri A.K. Dixit, the learned counsel for the respondent no.2 will file a counter affidavit within three weeks.
List for admission thereafter.
In the meanwhile, the effect and operation of the award passed by the Labour Court shall remain stayed provided the petitioner reinstates the workman within three weeks from today and file an affidavit to that effect."
Parties are at issue regarding compliance of the aforesaid order.
3. Writ Petition No.48995 of 2015 is also filed by the Nagar Palika Parishad, Firozabad, challenging an order passed in Misc. Case No.16 of 2014, under Section 33-C(2) of the Industrial Disputes Act, awarding a sum of Rs.92,320/- towards salary payable from 1.6.2014 to 30th November, 2014 alongwith cost of litigation amounting to Rs.1,000/-. In this petition, an interim protection has been granted on 12.10.2015, staying the order upon the condition of deposit of 50% of the amount payable, which was permitted to be withdrawn by the workman.
4. Writ Petition No.31497 of 2016 has been filed by the worker Kamal Kumar for a direction upon Nagar Palika Parishad, Firozabad, to pay salary to him from month to month, and for deciding his application. Upon this writ petition, an order has been passed on 20th July, 2016 for the earlier writ petition to be connected, and that is how the matters have been placed before this Court.
5. The main writ petition for the present purposes is the Writ Petition No.25467 of 2013, wherein the award itself is under challenge, and the subsequent two writ petitions to a great extent are dependent upon the outcome of the first petition. In such circumstances, the Writ Petition No.25467 of 2013 is taken up first.
6. It transpires from the record that a writ petition no.41096 of 2004 was filed by the workman alongwith another person, seeking relief of regularization in the employment of Nagar Palika Parishad, Firozabad. This petition was disposed of on 8th February, 2007. Operative portion of the order dated 8.2.2007 is reproduced:-
"Considering the facts and circumstances of the case the petitioners may file a fresh representation before respondent no.2 and that will be considered in accordance with law within a period of two months from the date of production of certified copy of this order.
It is made clear that this order will not come in the way of the petitioner if the respondents are interested to take work any further.
With these observations, this petition is disposed of."
7. In compliance of the directions so issued on 8.2.2007, workman's representation was rejected vide order dated 27.4.2007, holding that respondent workman was never appointed, nor had worked as a regular employee. The order records that the workman was engaged on daily wage basis to collect house and water tax as a contract employee, and he failed to furnish account. Upon expiry of term, his engagement automatically came to an end. It is, therefore, stated that since workman was never appointed, question of his termination does not arise, nor regularization of his services is permissible. This order dated 27.4.2007 then came to be challenged before this Court by filing Writ Petition No.50561 of 2007, which was dismissed on the ground of alternative remedy. A special appeal no.1547 of 2007 filed thereafter also was dismissed on 12.1.2009. It is thereafter that conciliation proceedings were initiated in the matter, which failed, resulting in making of reference of dispute to the Labour Court under Section 4-K of the U.P. Industrial Disputes Act. Written statements were filed by the workman and the employer. Evidence in the form of statement of the parties/their witnesses and other documentary evidence were also adduced. Labour Court has ultimately returned a finding that workman remained in continuous employment of Nagar Palika Parishad from 6.11.2001 to 22.7.2004, on daily wages, as Tax Collector, and his services were illegally terminated w.e.f. 23.7.2004. Relief of reinstatement alongwith continuity of service with 50% back wages has been allowed.
8. I have heard Sri Sahab Tiwari, learned counsel for the Nagar Palika Parishad, Firozabad, and Sri S.N. Dubey, learned counsel appearing for the workman Kamal Kumar, and have perused the materials available on record.
9. The workman in his written statement has stated that he was engaged w.e.f. 6.11.2001 by the executive officer, pursuant to an order of Chairman. In the Municipalities Act, 1916, power exists for appointing permanent or temporary workman, but as per the workman, the order in his case contained no stipulation that appointment is temporary. As per the workman, work of tax collector is permanent in nature, and as such his appointment was permanent from the very beginning. Reference is also made in his statement to various work performed and the persons with whom he worked. It is then stated that although his work was permanent, but he was not given any permanent post, due to which he filed writ petitions. Continuous working from 6.11.2001 to 22.7.2004 is also claimed.
10. Petitioner employer, on the other hand disputed the claim by asserting that Chairman had no authority to appoint any person without advertising the post and obtaining approval of State. Appointment on the post of Tax Collector has been denied, and it is asserted that no appointment order was issued. As per employer, the workman was engaged through contractor for some time on daily wages, without there being any vacant post in existence, purely due to exigency of work. A specific plea is taken that ever since workman claims his appointment, no post remained vacant, and that is why workman approached the Writ Court. In the absence of post, claim of reinstatement has been denied. Petitioner asserts that Nagar Palika Parishad, Firozabad, is a local authority constituted under the Act of 1916, and is a 'State' within the meaning of Article 12 of the Constitution of India. It is stated that engagement of employee is regulated by statutory provisions. Appointment could be made only after due publication of vacancy, by the authority competent, against a post duly sanctioned by the State. It is stated that there was no vacant post of Tax Collector, nor any appointment order was ever issued to the respondent workman. In the written statement also, it was pleaded that no vacancy existed or was advertised, nor any appointment letter was issued to the workman, and that engagement of the workman was through a Contractor, and he was paid at the daily rate basis, and no employee employer relationship came into being, but all such objections have not been considered. Continuance of workman for three years is specifically denied, and it is alleged that no termination could be said to have been effected in the absence of any appointment itself.
11. On behalf of workman, it is stated that workman had been appointed by the Chairman, but admittedly no order of appointment has been brought on record. Reference has been made to engagement of workman by the Executive Officer w.e.f. 6.11.2001 on the basis of directions issued by the Chairman but such order is also not on record. However, it is stated that there was no complaint with regard to working of respondent workman.
12. Labour Court, on the basis of evidence brought before it, has disbelieved the case of employer about engagement of workman on contract basis, and it has been held that working of respondent from 6.11.2001 to 22.7.2004 was continuous. Labour Court, however, has not examined the question as to whether the engagement of workman was against any sanctioned vacant post, nor it has been considered as to whether the procedure for a valid recruitment by State agency had been followed or not. Although a specific issue was raised by the petitioner employer regarding appointment being bad due to non-following of procedure as well as non-availability of vacant post in the written statement but the workman failed to demonstrate that any valid appointment against a vacant post was made and the award is absolutely silent on such crucial aspects. A perusal of the award goes to show that Labour Court found engagement of respondent workman to be purely on daily wage basis. Labour Court has confined its award only to the aspect relating to non-payment of retrenchment compensation and consequent violation of Section 6-N of the U.P. Industrial Disputes Act.
13. It is undisputed that Nagar Palika Parishad, Firozabad is a local authority, and in matters relating to engagement of its employees, the statutory provisions as well as dictum of Article 16 of the Constitution of India was applicable. It is nowhere claimed that any recruitment proceeding in consonance with Article 16 of the Constitution of India was undertaken before engaging the respondent workman. No evidence has been led on behalf of the worker on this aspect, despite a specific objection taken in this regard before the Labour Court. On the aspect of existence of vacant post also no evidence was led by the workman. The engagement of respondent workman, therefore, was purely to meet exigency of work, on daily wage, and was apparently not against any post.
14. So far as challenge made by the employer to the award is concerned, it is to be noticed that though a case was set up by the employer about engagement being made on contract basis, but no evidence to support such a plea has been adduced before the Labour Court. The finding returned by the Labour Court about continuous working of workman is based upon appreciation of materials brought on record, which has not been shown to be erroneous or perverse. From the stand taken by the employer, engagement of workman on daily wage basis is not in dispute. It is further not in dispute that no retrenchment compensation was paid. In view of the finding returned by the Labour Court that the workman had continued for more than 240 days in a calender year, and had not been paid any retrenchment compensation before terminating his services, the finding returned by the Labour Court about violation of Section 6-N of the U.P. Industrial Disputes Act is clearly made out and requires no interference.
15. Once it is held that termination of respondent workman was in teeth of Section 6-N of the U.P. Industrial Disputes Act, it follows that termination is bad in law. The question which then arises is as to what is the relief, to which workman was entitled in law?
Sri S.N. Dubey has urged that once termination is held to be illegal, due to non-payment of retrenchment compensation, workman is entitled to reinstatement alongwith back wages, and the Labour Court is not required to go into other aspects like availability of post, manner of engagement etc. For such purposes, reliance has been placed upon decisions of the Apex Court in State of U.P. Vs. Charan Singh [2015 (8) SCC 150], Bhuvanesh Kumar Dwivedi Vs. M/s Hindalco Industries Ltd. [2014 (142) FLR 20], and K.V.S. Ram Vs. Bangalore Metropolitan Transport Corporation [2015 (144) FLR 994] to contend that payment of compensation in place of reinstatement has been disapproved. It is also urged that unless award is found to be illegal on account of some error of law, relief of reinstatement cannot be substituted with lump sum compensation. Reliance has also been placed upon a judgment of the Apex Court in Harjinder Singh Vs. Punjab State Warehousing Corporation, reported in 2010 (3) SCC 192. Consideration of initial illegality in making of appointment was disapproved in the matter, as no such plea was taken before the Labour Court. Krishan Singh Vs. Executive Engineer, reported in 2010 (125) FLR 187, is also to similar effect. These two judgments apparently have no applicability in the facts of the present case, as the employer had taken a specific ground about non-existence of post as well as non-observance of procedure contemplated for a valid appointment in its written statement.
16. On the other hand, judgments are relied upon, to contend that where employer is a 'State' or 'Agency or instrumentality of State' issues regarding existence of post, manner of recruitment, length of service etc. are relevant considerations. Learned counsel for the petitioner employer has relied upon a recent decision of the Apex Court reported in 2014 (7) SCC 177 (Bharat Sanchar Nigam Limited Vs. Bhurumal). Para 29 to 35 of the said decision dealt with a similar exigency, where a worker engaged on daily wage had been terminated without complying with the provisions of Section 25-F of the Industrial Disputes Act. Following proposition has been laid down by the Hon'ble Supreme Court in Paras 29 to 35, which is reproduced:-
"29. The learned counsel for the appellant referred to two judgments wherein this Court granted compensation instead of reinstatement. In the case of BSNL vs. Man Singh [(2012) 1 SCC 558], this Court has held that when the termination is set aside because of violation of Section 25-F of the Industrial Disputes Act, it is not necessary that relief of reinstatement be also given as a matter of right. In the case of Incharge Officer & Anr. vs. Shankar Shetty [(2010) 9 SCC 126], it was held that those cases where the workman had worked on daily wage basis, and worked merely for a period of 240 days or 2- 3 years and where the termination had taken place many years ago, the recent trend was to grant compensation in lieu of reinstatement.
30. In this judgment of Shankar Shetty (supra), this trend was reiterated by referring to various judgments, as is clear from the following discussion: (SCC pp 127-28, paras 2-4) "2. Should an order of reinstatement automatically follow in a case where the engagement of a daily wager has been brought to end in violation of Section 25-F of the Industrial Disputes Act, 1947 (for short "the ID Act")? The course of the decisions of this Court in recent years has been uniform on the above question.
3. In Jagbir Singh v. Haryana State Agriculture Mktg. Board5, delivering the judgment of this Court, one of us (R.M. Lodha,J.) noticed some of the recent decisions of this Court, namely, U.P. State Brassware Corpn. Ltd. V. Uday Narain Pandey6, Uttaranchal Forest Development Corpn. V. M.C. Joshi7, State of M.P. v. Lalit Kumar Verma8, M.P. Admn v.Tribhuban9, Sita Ram v.Moti Lal Nehru Farmers Training Institute10, Jaipur Development Authority v. Ramsahai11, GDA v. Ashok Kumar12 and Mahboob Deepak v.Nagar Panchyat, Gajraula13 and stated as follows: (Jagbir Singh case5, SCC pp.330 & 335 paras 7 & 14) '7. It is true that the earlier view of this Court articulated in many decision reflected the legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in a long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention of the prescribed procedure. Compensation instead of reinstatement has been held to meet the ends of justice.
* * *
14. It would be, thus, seen that by a catena of decisions in recent time, this Court has clearly laid down that an order of retrenchment passed in violation of Section 25-F although may be set aside but an award of reinstatement should not, however, automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wagers has not been found to be proper by this Court and instead compensation has been awarded. This Court has distinguished between a daily wager who does not hold a post and a permanent employee.'
4. Jagbir Singh5 has been applied very recently in Telegraph Deptt. V. Santosh Kumar Seal14, wherein this Court stated: (SCC p.777, para 11) '11. In view of the aforesaid legal position and the fact that the workmen were engaged as daily wagers about 25 years back and they worked hardly for 2 or 3 years, relief of reinstatement and back wages to them cannot be said to be justified and instead monetary compensation would subserve the ends of justice.'"
31. In the case of Telecom District Manager v. Keshab Deb15 the Court emphasized that automatic direction for reinstatement of the workman with full back wages is not contemplated. He was at best entitled to one months' pay in lieu of one month's notice and wages of 15 days of each completed year of service as envisaged under Section 25-F of the Industrial Disputes Act. He could not have been directed to be regularized in service or granted /given a temporary status. Such a scheme has been held to be unconstitutional by this Court in A.Umarani v. Registrar, Coop.Societies16 and Secy., State of Karnataka v. Umadevi(3)17.
32. It was further submitted by the learned counsel for the appellant that likewise, even when reinstatement was ordered, it does not automatically follow full back wages should be directed to be paid to the workman. He drew our attention of this Court in the case of Coal India Ltd. Vs. Ananta Saha18 and Metropolitan Transport Corporation v. V. Venkatesan19.
33. It is clear from the reading of the aforesaid judgments that the ordinary principle of grant of reinstatement with full back wages, when the termination is found to be illegal is not applied mechanically in all cases. While that may be a position where services of a regular/permanent workman are terminated illegally and/or malafide and/or by way of victimization, unfair labour practice etc. However, when it comes to the case of termination of a daily wage worker and where the termination is found illegal because of procedural defect, namely in violation of Section 25-F of the Industrial Disputes Act, this Court is consistent in taking the view in such cases reinstatement with back wages is not automatic and instead the workman should be given monetary compensation which will meet the ends of justice. Rationale for shifting in this direction is obvious.
34. The reasons for denying the relief of reinstatement in such cases are obvious. It is trite law that when the termination is found to be illegal because of non-payment of retrenchment compensation and notice pay as mandatorily required under Section 25-F of the Industrial Disputes Act, even after reinstatement, it is always open to the management to terminate the services of that employee by paying him the retrenchment compensation. Since such a workman was working on daily wage basis and even after he is reinstated, he has no right to seek regularization [See: State of Karnataka vs. Uma Devi(3)17]. Thus when he cannot claim regularization and he has no right to continue even as a daily wage worker, no useful purpose is going to be served in reinstating such a workman and he can be given monetary compensation by the Court itself inasmuch as if he is terminated again after reinstatement, he would receive monetary compensation only in the form of retrenchment compensation and notice pay. In such a situation, giving the relief of reinstatement, that too after a long gap, would not serve any purpose.
35. We would, however, like to add a caveat here. There may be cases where termination of a daily wage worker is found to be illegal on the ground it was resorted to as unfair labour practice or in violation of the principle of last come first go viz. while retrenching such a worker daily wage juniors to him were retained. There may also be a situation that persons junior to him wee regularized under some policy but the concerned workman terminated. In such circumstances, the terminated worker should not be denied reinstatement unless there are some other weighty reasons for adopting the course of grant of compensation instead of reinstatement. In such cases, reinstatement should be the rule and only in exceptional cases for the reasons stated to be in writing, such a relief can be denied."
Similar views are expressed by the Apex Court in Bhavnagar Municipal Corporation Vs. Jadeja Govubha Chhanubha AIR 2015 SC 609; Rajasthan State Agricultural Marketing Board Vs. Mohan Lal 2013 (14) SCC 543 and 2014 (16) SCC 440. Judgment in BSNL Vs. Bhurumal (supra) has been reiterated in Hari Nandan Prasad and another Vs. Employer I/R to Management of Food Corporation of India and another, 2014 (7) SCC 190. The question as to what relief is to be granted to a workman employed by State Authorities when termination is found to be bad on account of non-payment of retrenchment compensation has been dealt with extensively. Paragraphs 23 to 40 of the judgment is apposite and thus reproduced:-
"23. Before we advert to this question, it would be necessary to examine as to whether the Constitution Bench judgment in Uma Devi case have applicability in the matters concerning industrial adjudication. We have already pointed out above the contention of the counsel for the appellants in this behalf, relying upon Maharashtra State Road Transport case that the decision in Uma Devi would be binding the Industrial or Labour Courts. On the other hand, counsel for the FCI has referred to the judgment in U.P.Power Corporation for the submission that law laid down in Uma Devi equally applies to Industrial Tribunals/Labour Courts. It, thus, becomes imperative to examine the aforesaid two judgments at this juncture.
24. A perusal of the judgment in U.P. Power Corporation would demonstrate that quite a few disputes were raised and referred to the industrial tribunal qua the alleged termination of respondent Nos.2 and 3 in that case. Without giving the details of those cases, it would be sufficient to mention that in one of the cases the tribunal held that after three years of their joining in service both respondents 2 and 3 were deemed to have been regularized. The appellants filed the Writ Petition which was also dismissed. Challenging the order of the High Court, the appellants had approached this Court. It was argued that there could not have been any regularization order passed by the Industrial Court in view of the decision in Uma Devi. Counsel for the workmen had taken a specific plea that the powers of the industrial adjudicator were not under consideration in Uma Devi's case and that there was a difference between a claim raised in a civil suit or a Writ Petition on the one hand and one adjudicated by the industrial adjudicator. It was also argued that the labour court can create terms existing in the contract to maintain industrial peace and therefore it had the power to vary the terms of the contract.
25. While accepting the submission of the appellant therein viz. U.P. Power Corporation, the Court gave the following reasons: (U.P. Power Corpn. case, SCC pp.758, para 6-8) "6. It is true as contended by learned counsel for the respondent that the question as regards the effect of the industrial adjudicators' powers was not directly in issue in Umadevi case. But the foundation logic in Umadevi case is based on Article 14 of the Constitution of India. Though the industrial adjudicator can very the terms of the contract of the employment, it cannot do something which is violative of Article 14. If the case is one which is covered by the concept of regularization, the same cannot be viewed differently.
7. The plea of learned counsel for the respondent that at the time the High Court decided the matter, decision in Umadevi case was not rendered is really of no consequence. There cannot be a case of regularization without there being employee-employer relationship. As noted above the concept of regularization is clearly linked with Article 14 of the Constitution. However, if in a case the fact situation is covered by what is stated in para 45 of Umadevi case the industrial adjudicator can modify the relief, but that does not dilute the observations made by this Court in Umadevi case about the regularization.
8. On facts, it is submitted by learned counsel for the appellants that Respondent No.2 himself admitted that he never worked as a pump operator, but was engaged as daily wage basis. He also did not possess the requisite qualification. Looked at from any angle, the direction for regularization, as given, could not have been given in view of what has been stated in Umadevi case."
It is clear from the above that the Court emphasized the underline message contained in Umadevi's case to the effect that regularization of a daily wager, which has not been appointed after undergoing the proper selection procedure etc. is impermissible as it was violative of Art.14 of the Constitution of India and this principle predicated on Art.14 would apply to the industrial tribunal as well inasmuch as there cannot be any direction to regularize the services of a workman in violation of Art.14 of the Constitution. As we would explain hereinafter, this would mean that the industrial court would not issue a direction for regularizing the service of a daily wage worker in those cases where such regularization would tantamount to infringing the provisions of Art.14 of the Constitution. But for that, it would not deter the Industrial Tribunals/Labour Courts from issuing such direction, which the industrial adjudicators otherwise possess, having regard to the provisions of Industrial Disputes Act specifically conferring such powers. This is recognized by the Court even in the aforesaid judgment.
26. For a detailed discussion on this aspect, we proceed to discuss the ratio in the case of Maharashtra State Road Transport Corporation (supra). In that case the respondent Karamchari Union had filed two complaints before the Industrial Court, Bombay alleging that the appellant-Corporation had indulged in unfair labour practice qua certain employees who were engaged by the appellant as casual labourers for cleaning the buses between the years 1980-1985. It was stated in the complaints that these employees were made to work every day at least for 8 hours at the depot concerned of the Corporation; the work done by them was of permanent nature but they were being paid a paltry amount; and even when the post of sweepers/cleaners were available in the Corporation, these employees had been kept on casual and temporary basis for years together denying them the benefit of permanency:
26.1. After adjudication, the Industrial Court held that the Corporation had committed unfair labour practice under items 5 and 9 of Schedule IV to the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practice Act, 1971 (MRTU and PULP Act). As a consequence, it directed the Corporation to pay equal wages to the employees concerned which was being paid to Swachhaks and also pay arrears of wages to them.
26.2. In the second complaint, the Industrial Court returned the finding that the Corporation was indulging in unfair labour practice under Item 6 of Schedule IV, by continuing these employees on temporary/casual/daily wage basis for years together and thereby depriving them the benefits of permanency. The direction in this complaint was to cease and desist from the unfair labour practice by giving them the status, wages and all other benefits of permanency applicable to the post of cleaners, w.e.f. 3.8.1982.
27. The Corporation challenged these two orders of the Industrial Court before the High Court of Judicature at Bombay in five separate Writ Petitions. These were disposed of by the learned Single Judge vide common judgment dated 2.8.2001 holding that complaints were maintainable and the finding of the Industrial Court that the Corporation had indulged in unfair labour practice was also correct.
28. The Corporation challenged the decision of the learned Single Judge by filing LPAs which were dismissed by the Division Bench on 6.5.2005. This is how the matter came before the Supreme Court. One of the contentions raised by the appellants before this Court was that there could not have been a direction by the Industrial Court to give these employees status, wages and other benefits of permanency applicable to the post of cleaners as this direction was contrary to the ratio laid down by the Constitution Bench of this Court in Umadevi (supra). The Court while considering this argument went into the scheme of the MRTU and PULP Act. It was, inter-alia, noticed that complaints relating to unfair labour practice could be filed before the Industrial Court. The Court noted that Section 28 of that Act provides for the procedure for dealing with such complaints and Section 30 enumerates the powers given to the Industrial and Labour Courts to decide the matters before it including those relating to unfair labour practice. On the reading of this section, the Court held that it gives specific power to the Industrial/Labour Courts to declare that an unfair labour practice has been engaged and to direct those persons not only to cease and desist from such unfair labour practice but also to take affirmative action. Section 30(1) conferring such powers is reproduced below:
"30. Powers of Industrial and Labour Courts.- (1)Where a court decides that any person named in the complaint has engaged in, or is engaging in, any unfair labour practice, it may in its order-
(a)declare that an unfair labour practice has been engaged in or is being engaged in by that person, and specify any other person who has engaged in, or is engaging in the unfair labour practice;
(b) direct all such persons to cease and desist from such unfair labour practice, and take such affirmative action (including payment of reasonable compensation to the employee or employees affected by the unfair labour practice, or reinstatement of the employee or employees with or without back wages, or the payment of reasonable compensation), as may in the opinion of the Court be necessary to effectuate the policy of the Act;
(c) where a recognized union has engaged in or is engaging in, any unfair labour practice, direct that its recognition shall be cancelled or that all or any of its rights under sub-section(1) of Section 20 or its right under Section 23 shall be suspended."
29. It was further noticed that Section 32 of the Act provides that the Court shall have the power to decide all connected matters arising out of any application or a complaint referred to it for decision under any of the provisions of this Act. The Court then extensively quoted from the judgment in Uma Devi in order to demonstrate the exact ratio laid down in the said judgment and thereafter proceeded to formulate the following question and answer thereto:
"The question that arises for consideration is: have the provisions of the MRTU and PULP Act been denuded of the statutory status by the Constitution Bench decision in Umadevi? In our judgment, it is not."
30. Detailed reasons are given in support of the conclusion stating that the MRTU and PULP Act provides for and empowers the Industrial/Labour Courts to decide about the unfair labour practice committed/being committed by any person and to declare a particular practice to be unfair labour practice if it so found and also to direct such person ceased and desist from unfair labour practice. The provisions contained in Section 30 giving such a power to the Industrial and Labour Courts vis-à-vis the ratio of Uma Devi are explained by the Court in the following terms: (Maharashtra SRTC case, SCC pp. 573-74, paras 32-33 & 36) "32. The power given to the Industrial and Labour Courts under Section 30 is very wide and the affirmative action mentioned therein is inclusive and not exhaustive. Employing badlis, casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent employees is an unfair labour practice on the part of the employer under Item 6 of Schedule IV. Once such unfair labour practice on the part of the employer is established in the complaint, the Industrial and Labour Courts are empowered to issue preventive as well as positive direction to an erring employer.
33. The provisions of the MRTU and PULP Act and the powers of the Industrial and Labour Courts provided therein were not at all under consideration in Umadevi. As a matter of fact, the issue like the present one pertaining to unfair labour practice was not at all referred to, considered or decided in Umadevi. Unfair labour practice on the part of the employer in engaging employees as badlis, casuals or temporaries and to continue them as such for years with the object of depriving them of the status and privileges of permanent employees as provided in Item 6 of Schedule IV and the power of the Industrial and Labour Courts under Section 30 of the Act did not fall for adjudication or consideration before the Constitution Bench.
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36. Umadevi does not denude the Industrial and Labour Courts of their statutory power under Section 30 read with Section 32 of the MRTU and PULP Act to order permanency of the workers who have been victims of unfair labour practice on the part of the employer under Item 6 of Schedule IV where the posts on which they have been working exist. Umadevi cannot be held to have overridden the powers of the Industrial and Labour Courts in passing appropriate order under Section 30 of the MRTU and PULP Act, once unfair labour practice on the part of the employer under Item 6 of Schedule IV is established."
(emphasis in original)
31. The Court also accepted the legal proposition that Courts cannot direct creation of posts, as held in Mahatma Phule Agricultural University vs. Nasik Zilla Sheth Kamgar Union (2001) 7 SCC 346. Referring to this judgment, the Court made it clear that inaction on the part of the State Government to create posts would not mean an unfair labour practice had been committed by the employer (University in that case) and as there were no posts, the direction of the High Court to accord the status of permanency was set aside. The Court also noticed that this legal position had been affirmed in State of Maharashtra vs. R.S.Bhonde (2005) 6 SCC 751. The Court also reiterated that creation and abolition of post and regularization are purely Executive functions, as held in number of judgments and it was not for the Court to arrogate the power of the Executive or the Legislature by directing creation of post and absorbing the workers or continue them in service or pay salary of regular employees. This legal position is summed up in para 41 which reads as under: (Maharashtra SRTC case, SCC p.576) "41. Thus, there is no doubt that creation of posts is not within the domain of judicial functions which obviously pertains to the executive. It is also true that the status of permanency cannot be granted by the Court where no such posts exist and that executive functions and powers with regard to the creation of posts cannot be arrogated by the courts."
32. However, the Court found that factual position was different in the case before it. Here the post of cleaners in the establishment were in existence. Further, there was a finding of fact recorded that the Corporation had indulged in unfair labour practice by engaging these workers on temporary/causal/daily wage basis and paying them paltry amount even when they were discharging duties of eight hours a day and performing the same duties as that of regular employees.
33. In this backdrop, the Court was of the opinion that direction of the Industrial Court to accord permanency to these employees against the posts which were available, was clearly permissible and with the powers, statutorily conferred upon the Industrial/Labour Courts under Section 30 (1)(b) of the said Act which enables the Industrial adjudicator to take affirmative action against the erring employees and as those powers are of wide amplitude abrogating within its fold a direction to accord permanency.
34. A close scrutiny of the two cases, thus, would reveal that the law laid down in those cases is not contradictory to each other. In U.P. Power Corporation, this Court has recognized the powers of the Labour Court and at the same time emphasized that the Labour Court is to keep in mind that there should not be any direction of regularization if this offends the provisions of Art.14 of the Constitution, on which judgment in Umadevi is primarily founded. On the other hand, in Bhonde case, the Court has recognized the principle that having regard to statutory powers conferred upon the Labour Court/Industrial Court to grant certain reliefs to the workmen, which includes the relief of giving the status of permanency to the contract employees, such statutory power does not get denuded by the judgment in Umadevi's case. It is clear from the reading of this judgment that such a power is to be exercised when the employer has indulged in unfair labour practice by not filling up the permanent post even when available and continuing to workers on temporary/daily wage basis and taking the same work from them and making them some purpose which were performed by the regular workers but paying them much less wages. It is only when a particular practice is found to be unfair labour practice as enumerated in Schedule IV of MRTP and PULP Act and it necessitates giving direction under Section 30 of the said Act, that the Court would give such a direction.
35. We are conscious of the fact that the aforesaid judgment is rendered under MRTP and PULP Act and the specific provisions of that Act were considered to ascertain the powers conferred upon the Industrial Tribunal/Labour Court by the said Act. At the same time, it also hardly needs to be emphasized the powers of the industrial adjudicator under the Industrial Disputes Act are equally wide. The Act deals with industrial disputes, provides for conciliation, adjudication and settlements, and regulates the rights of the parties and the enforcement of the awards and settlements. Thus, by empowering the adjudicator authorities under the Act, to give reliefs such as a reinstatement of wrongfully dismissed or discharged workmen, which may not be permissible in common law or justified under the terms of the contract between the employer and such workmen, the legislature has attempted to frustrate the unfair labour practices and secure the policy of collective bargaining as a road to industrial peace.
36. In the language of Krishna Iyer, J:
"22. The Industrial Disputes Act is a benign measure, which seeks to pre-empt industrial tensions, provide for the mechanics of dispute- resolutions and set up the necessary infrastructure, so that the energies of the partners in production may not be dissipated in counter-productive battles and the assurance of industrial justice may create a climate of goodwill." (Life Insurance Corpn. Of India v. D.J.Bahadur 1980 Lab IC 1218, 1226(SC), per Krishna Iyer,J.).
In order to achieve the aforesaid objectives, the Labour Courts/Industrial Tribunals are given wide powers not only to enforce the rights but even to create new rights, with the underlying objective to achieve social justice. Way back in the year 1950 i.e. immediately after the enactment of Industrial Disputes Act, in one of its first and celebrated judgment in the case of Bharat Bank Ltd. V. Employees of Bharat Bank Ltd. [1950] LLJ 921,948-49 (SC) this aspect was highlighted by the Court observing as under: (Bharat Bank case, AIR p.209, para 61) "61. In settling the disputes between the employers and the workmen, the function of the tribunal is not confined to administration of justice in accordance with law. It can confer rights and privileges on either party which it considers reasonable and proper, though they may not be within the terms of any existing agreement. It has not merely to interpret or give effect to the contractual rights and obligations of the parties. It can create new rights and obligations between them which it considers essential for keeping industrial peace."
37. At the same time, the aforesaid sweeping power conferred upon the Tribunal is not unbridled and is circumscribed by this Court in the case of New Maneckchowk Spinning & Weaving Co.Ltd.v. Textile Labour Association [1961] 1 LLJ 521,526 (SC) in the following words: (AIR p.870, para 6) "6. ..... This, however, does not mean that an industrial court can do anything and everything when dealing with an industrial dispute. This power is conditioned by the subject matter with which it is dealing and also by the existing industrial law and it would not be open to it while dealing with a particular matter before it to overlook the industrial law relating to the matter as laid down by the legislature or by this Court."
38. It is, thus, this fine balancing which is required to be achieved while adjudicating a particular dispute, keeping in mind that the industrial disputes are settled by industrial adjudication on principle of fair play and justice.
39. On harmonious reading of the two judgments discussed in detail above, we are of the opinion that when there are posts available, in the absence of any unfair labour practice the Labour Court would not give direction for regularization only because a worker has continued as daily wage worker/adhoc/temporary worker for number of years. Further, if there are no posts available, such a direction for regularization would be impermissible. In the aforesaid circumstances giving of direction to regularize such a person, only on the basis of number of years put in by such a worker as daily wager etc. may amount to backdoor entry into the service which is an anathema to Art.14 of the Constitution. Further, such a direction would not be given when the concerned worker does not meet the eligibility requirement of the post in question as per the Recruitment Rules. However, wherever it is found that similarly situated workmen are regularized by the employer itself under some scheme or otherwise and the workmen in question who have approached Industrial/Labour Court are at par with them, direction of regularization in such cases may be legally justified, otherwise, non-regularization of the left over workers itself would amount to invidious discrimination qua them in such cases and would be violative of Art.14 of the Constitution. Thus, the Industrial adjudicator would be achieving the equality by upholding Art. 14, rather than violating this constitutional provision.
40. The aforesaid examples are only illustrated. It would depend on the facts of each case as to whether order of regularization is necessitated to advance justice or it has to be denied if giving of such a direction infringes upon the employer's rights."
17. Learned counsel for the petitioner Nagar Palika Parishad has also relied upon the decision of this Court reported in 2011 (5) ALJ 249 (State of U.P. And another Vs. Hind Majdoor Sabha and others), and also decision of the Apex Court reported in 2013 (2) SCC 751 (Raj Kumar Vs. Jalagaon Municipal Corporation), 2010 (6) SCC 773 (Senior Superintendent Telegraph (Traffic), Bhopal Vs. Santosh Kumar Seal and others), 2005(107) FLR 122 (M/s Kesarwani Zarda Bhandar Vs. Additional Labour Commissioner, Allahabad and others), and AIR 2006 SC 2427 (Haryana State Electronics Development Corporation Ltd. Vs. Mamni).
18. Having considered the aforesaid submission, this Court finds that law for guidance of the courts with regard to grant of relief, in such circumstances, has been clearly laid down by the Apex Court. Relief of reinstatement and back wages, in a case of violation of Section 6-N or Section 25-F, is the normal rule. Industrial jurisprudence and service jurisprudence operated in distinct fields. However, after the exhaustive definition assigned to industry in Banglore Water Supply case, this distinction has got blurred. Many of governmental activities upon which provisions of Articles 14 and 16 apply have come within the definition of industry. Applicability of constitutional provisions, which regulates governmental activity, cannot be excluded from consideration merely because it is an industry. In view of the law laid down by the Apex Court in Hari Nandan Prasad (supra), considerations like existence of post, manner of recruitment, length of working, entitlement of regularization in case of daily wager etc. are relevant in case of a State instrumentality notwithstanding it being an industry. Grant of relief of reinstatement to a daily wager is not automatic, when no post itself is available. The nature of engagement is relevant, inasmuch as if it is found that initial engagement was contrary to Article 16 of the Constitution of India, the Court may not be justified in granting relief of reinstatement, as it may not subserve the larger cause sought to be addressed by Article 16 of the Constitution of India. Although, as a result of non-compliance of Section 6-N, workman is entitled to be reinstated, but in the absence of existence of any vacant post of Tax Collector, it would not be possible to award relief of reinstatement against a non-existent post. This is particularly so as the employer herein is a State Authority and in the matter of recruitment thereunder is governed by the statutory service regulations, and dictum of Articles 14 and 16 would clearly be attracted.
19. Even otherwise, reinstatement is permissible on the same status as was held by the workman at the time of his termination. The Labour Court has held that workman was engaged on daily wage basis, and his reinstatement would have to be as a daily wage earner. The workman's plea of regularization has not been granted. No such relief can otherwise be granted in the matter of employment by State/Agency of State, against a non-existent post without following the procedure for recruitment. In the facts of the present case, engagement of respondent was apparently a back-door entry, courtesy the then Chairman, without any advertisement or existence of post. Despite a specific plea taken in the written statement, the workman has not adduced any evidence to show that he was appointed against a vacant post, after procedure was followed. Relief of non-compliance of the provisions of Section 6-N of the U.P. Industrial Disputes Act can not be granted, which has the effect of violating mandate laid under Articles 14 and 16 of the Constitution of India. Consequence flowing from the non-compliance of Section 6-N, therefore, has to be restricted in a manner such that constitutional protection guaranteed under Article 14 and 16 of the Constitution of India itself is not violated.
20. Labour Court has not found the case of workman to be covered under the Rules for regularization. Regularization can otherwise be granted only in accordance with the Rules framed for the purpose (See: Secretary, State of Karnataka vs. Uma Devi & Ors. (2006) 4 SCC 1). In case reinstatement is allowed as a daily wager, the continuance of worker would be dependent upon exigency of work, and it would be open for the employer to terminate the employee upon payment of retrenchment compensation. The judgment relied upon on behalf of the respondents in State of U.P. Vs. Charan Singh, reported in 2015 (8) SCC 150 also will have no applicability, inasmuch as the Labour Court in the said case had returned a finding on the basis of evidence that work of tube-well operator were taken over by other workman, some of whom were junior. Finding was returned that post of tube-well operator was not abolished, but was merely changed. The judgment in Bhuvnesh Kumar Dwivedi (supra) since related to a private company, as such, considerations mandated by Articles 14 and 16 of the Constitution of India did not arise for consideration.
21. In the opinion of the Court, it was not proper for the Labour Court to have allowed relief of reinstatement when there existed no post and procedure for appointment was not followed. On this aspect, award suffers from a serious error of law, which is liable to be corrected by this Court, exercising its jurisdiction under Article 226 of the Constitution of India. In such circumstances, workman was at best entitled to a definite sum towards compensation instead of relief of reinstatement.
22. Considering the facts and circumstances that respondent had worked for a little over two years more than a decade back, and his engagement was on daily wage basis against a non-existent post without following any procedure for recruitment contemplated in law, it would have been appropriate that a sum of Rs.2 lacs was quantified and awarded, as monetary compensation to the worker on account of non-payment of retrenchment compensation, under Section 6-N of the Act. However, admittedly, a sum of Rs.3,00,000/- and odd has already been realized in execution proceedings, and paid to the respondent workman. This amount was disbursed to the workman in the year 2015. It would be harsh on part of this Court to direct any recovery now from the respondent workman. In order to balance equity, it would be appropriate to hold that no further amount would be payable to the workman concerned, and no recovery would be made from the respondent workman of the amount, which had already been paid. The amount already paid would be treated to be the settlement amount, which would take care of all claims of the respondent workman concerned on account of disobedience of Section 6-N of the U.P. Industrial Disputes Act.
23. In view of the conclusions drawn in Writ Petition No.25467 of 2013, the order passed by the Labour Court under Section 33-C(2) granting regular scale of pay for the post of Tax Collector, without there being any post and valid recruitment cannot be sustained. Since it has already been held that the grant of relief vide award is illegal, for the reasons already stated above, the order passed by the Labour Court in Misc. Case No.16 of 2014 cannot be sustained and is set aside, and Writ Petition No.48995 of 2015 is allowed. No direction for payment of salary can thus be issued, as prayed for in the Writ Petition No.31497 of 2016. The Writ Petition No.31497 of 2016 is, accordingly, dismissed.
24. Accordingly, Writ Petition Nos.25467 of 2013 succeeds and is allowed in part, and the award of the Labour Court dated 22.3.2013 in Adjudication Case No.35 of 2009 is modified to the extent that respondent workman is held entitled to monetary compensation of Rs.2,00,000/- alone. However, in view of the facts narrated above, it is provided that no further amount is held payable under the award to the workman Kamal Kumar, nor any recovery is to be made by the employer from the workman concerned.
25. Parties shall bear their own cost.
Order Date :- 8.8.2016 Anil (Ashwani Kumar Mishra, J.)