Punjab-Haryana High Court
Baljit Singh vs State Of Haryana And Anr. on 13 February, 1995
Equivalent citations: (1996)ILLJ246P&H, (1995)110PLR591
ORDER G.S. Singhvi, J.
1. Termination of service of the petitioner brought about by a verbal order dated May 1, 1992 is the subject-matter of the challenge in this writ petition filed under Article 226 of the Constitution of India.
2. The case set up by the petitioner is that he was appointed on daily wages as Mali-cum-Chowkidar by the Executive Engineer, Public Works Department (Public Health) Division No. 2, Yamunanagar, with effect from October 3, 1991. He continuously worked upto May 1, 1992, he was not allowed to come on duty with effect from May 2, 1992 and in this manner his service was terminated. Petitioner's assertion is that there is standing practice in the respondent-department to appoint persons on daily wage basis without any appointment letter and terminate the service of such persons by verbal order. He has assailed that termination of service by alleging that respondent No. 2 did not want the petitioner to complete 240 days of service and for this reason he did not allow the petitioner to come on duty with effect from May 2, 1992. The petitioner has also alleged that large number of persons, named in paragraph 5 of the writ petition, who had been appointed after him and were junior to him in the category of daily waged employees, had been retained in service at the time of termination of his service. He has further alleged that some other persons were appointed after the termination of his service, but no notice as required under Section 25-H of the Industrial Disputed Act, 1947, was given to him.
3. The writ petition has been opposed by the respondents. In the first instance, the respondents have pleaded that the Public Health Department does not fall within the definition of term 'Industry' under Section 2(j) of the Act. It has been stated by the respondents that the activity of the department, namely, to provide facility of drinking water to the rural areas cannot be treated as an activity carried on with the cooperation of the employer and the employees so as to be treated as an industry. On the merits, of the allegations of the petitioner that his service has been terminated as a measure of retrenchment without compliance of the provisions of the Industrial Disputes Act, 1947, the respondents have pleaded that no record of causal labourers is maintained and as a matter of fact a person engaged on daily wages or muster-rolls does not have any locus standi to have his name included in the seniority list.
4. Argument of the learned counsel for the petitioner is that by retaining the services of the persons appointed after the petitioner, respondent No. 2 has committed a clear violation of Section 25-H of the Industrial Disputes Act, 1947 (for short, 'the Act'). Another argument of the learned counsel is that by engaging other persons for doing the job which was earlier performed by the petitioner and non-calling upon the petitioner for re-employment is a clear violation of mandate of Section 25-H of the Act and on that account also the petitioner is entitled to a writ of mandamus for his re-employment.
5. Shri Surindar Bishnoi, learned counsel appearing for the State of Haryana contended that the activities carried on by the Public Health Department cannot be treated as industrial activities and, therefore, the provisions of the Industrial Disputes Act, 1947, are not attracted in the case of the petitioner. Learned counsel further argued that daily-waged employees do not have any right of seniority and they are not entitled to invoke the provisions of Section 25-G or 25-H. Yet another objection of the learned counsel is that a casual worker cannot get benefit admissible to a workman under the provisions of the Industrial Disputes Act.
6. Definition of term 'Industry' as it existed before its substitution by the Industrial Disputes (Amendment) Act No. 40 of 1982, has been interpreted by the apex Court in a large number of cases - the earliest one being D.N. Banerji v. R. Mukherjee and Ors., AIR 1953 SC 58 and latest being Bangalore Water Supply and Sewerage Board v. A. Rajappa, (1978-I-LLJ-349). In the last mentioned case decided by the seven-Judges Bench of the Supreme Court reference has been made to almost all previously decided cases. While some of the decisions, including those rendered in Management of Safdarjang Hospital v. Kuldip Singh Sethi, (1970-II-LLJ-266) and University of Delhi v. Ram Nath (1963-II-LLJ-335) have been overruled, other decisions like in D.N. Banerji v. P.R. Mukherjee (supra), State of Bombay v. Hospital Mazdoor Sabha and Ors., (1960-I-LLJ-251) and Bombay Panjrapole Bhuleshwear v. The Workmen and Anr., (1971-II-LLJ-393) have been affirmed. In that case the Supreme Court has unequivocally ruled that mere absence of profit motive does not take an activity out of the ambit of the term 'Industry' if it is otherwise covered by the said definition. The court has also held that except where the State carries on its sovereign functions, all other functions/activities of its various departments would fall within the definition of term 'Industry'. The tests indicated by the Supreme Court for making an adjudication of this issue are discernible from the following observations:
"'Industry' as defined in Section 2(j) and explained in Banerji AIR 1953 SC 58 has a wide import.
I. (a) Where (i) systematic activity, (ii) organised by co- operation between employer and employee (the direct and substantial element is chimerical), (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss i.e. making, on a large scale prasad or food) prima facie, there is an industry in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector.
(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer- employee relations.
(d) If the organisation is a trade of business it does not cease to be one because of philanthropy animating the undertaking.
II. Although Section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to over reach itself.
(a)'Undertaking' must suffer a contextual and associational shrinkage as explained in Banerji and in this judgment so also, service, call and the like. This yields the inference that all organised activity possessing the triple elements in I (supra), although not trade or business, may still be 'Industry' provided the nature of the activity, viz. the employer-employee basis, bears resemblance to what we find in trade or business. This takes into the fold 'industry', 'undertaking, callings and services, adventures analogous to the carrying on of trade or business.' All features, other than the methodology of carrying on the activity viz. in organising the co-operation between employer and employee may be dissimilar. It does not matter, if on the employment terms there is anology.
III. Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer sense of motivation for or resultant of the economic operations. The ideology of the Act being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach "of the statutory definition'. Nothing less, nothing more.
(a) The consequence are (i) professions, (ii) Clubs (iii) educational institutions, (iv) co-
operatives, (v) research institutes, (vi) chari table projects and (vii) other kindred adventures, if they fulfil the triple tests listed in I (supra), cannot be exempted from the scope of Section 2(j).
(b) a restricted category of professions, clubs, co-operatives and even gurukuls and little research labs, may qualify for exemption if, in simple ventures, substantially and, going by the dominant nature criterion, substantively, no employees are entertained but in minimal matters, marginal employees are hired without destroying the non-employee character of the unit.
(c) If, in a pious or altruistic mission many employ themselves, free or for small honoraria or like return, mainly drawn by sharing in the purpose or cause, such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or ashramites working the bidding of the holiness, divinity or like central personality, and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant relationship, then the institution is not an industry even if stray servants, manual or technical, are hired. Such eleemosynary or like undertakings alone are exempt not other generosity, compassion, developmental passion or project.
IV. The dominant nature test:
(a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking some of whom are not 'workmen' as in the University of Delhi case (supra) "or some departments are not productive of goods and services if isolated, even then the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur (supra) will be the true test. The whole undertaking will be 'industry' although those who are not 'workmen' by definition may not benefit by the status.
(b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies.
(c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially serv-able, then they can be considered to come within Section 2(j).
(d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby".
In Ramesh Pal v. State of Haryana 1992(2) SCT 636, a Division Bench of this Court held that functions of the Public Health Department, namely, the supply of water to the rural and urban areas being the Department under the definition "industry". Learned Counsel for the petitioner has pointed out that Special Leave Petition filed in the Supreme Court against the decision of this court in Ramesh Pal's case (supra) being SLP No. 12779 of 1992 was dismissed by the Supreme Court on March 15, 1993.
7. In view of the above discussion and particularly in view of the judgment in Ramesh Pal's case (supra), it must be held that the respondent-department falls within the definition of 'Industry'.
8. Argument of the learned counsel appearing for the respondents that the provisions of the Industrial Disputes Act, 1947, are not applicable to the case of the person appointed on daily wages or a casual worker deserves summary rejection in view of the judgment of the Supreme Court in L Robert D' Souza v. The Executive Engineer, Southern Railways (1982-I-LLJ-330). That was a case in which casual labourers engaged in the railways had made a claim that their services had been terminated in violation of provision of Section 25-F of the Act. An argument raised by the employer that the provisions of the Industrial Disputes Act are not applicable in the cases of casual labourers was unequivocally repelled by the Supreme Court.
9. Even otherwise a look at the definition of term 'workman ' under Section 2(s) as also the provisions of Sections 25-G and 25-H of the Act makes it clear that the legislature has in its wisdom not made any distinction between the different types of employees in so far as the provisions of the Industrial Disputes Act, 1947, are concerned. Neither of these provisions; makes a reference to the status of a workman, the source of his recruitment and the mode of payment. An employer may decide to engage a person for a fixed term and on a fixed remuneration. Another employer may decide to engage an employee on casual basis and third one may decide to engage an employee on daily wages. In yet another case the engagement may be on monthly salary. Therefore, the mode of payment or the manner of recruitment or appointment are wholly irrelevant for deciding as to whether an employee falls within the definition of term 'workman' and is, therefore, entitled to the benefits of various provisions contained in the Industrial Disputes Act. ;
10. Having rejected the objections raised by the respondents to the entertain ability of the petition and the applicability of the provisions of the Industrial Disputes Act, 1947, now it has to be seen as to whether the respondents have not followed the provisions of Sections 25-G and 25-H of the Act and on that account the petitioner is entitled to any relief. While the petitioner has made a specific averment in paragraph 5 of the writ petition that Shiv Charan, son of Phaggu, Ram, Om Prakash, Dharamvir son of Banarsi Dass, Balwan, Ramesh Chand, Yadvinder, Joginder, Amar singh and Santhosh Kumar, who were junior to him in service from the point of view of length of service, were retained at the time of termination of his service, the respondents have made a vague and bald assertion that no record of casual labourers is maintained to determine the seniority. There is no denial of the averment made in the petition that persons who were appointed later than the petitioner had been retained in service at the time of termination of his service. In the absence of any denial by the respondents, there is no reason but to accept the statement made by the petitioner. This being the position, it has to be held that respondent No. 2 has violated the rule of "last come first go" incorporated in Section 25-G. This rule is reflection of the 'equality clause' enshrined in the Constitution and, therefore, breach of the rule of ''Last Come First Go" embodied in Section 25-G has the effect of violating the 'equality clause': In civil Writ Petition No. 11860 of 1994, decided on August 31, 1994 (Administrator/Chairman, Market Committee v. Presiding Officer Industrial Trihimal-cum-Labour Court, Hissar), this Court has examined the issue of applicability of Section 25-G even in a case where the employee has not completed 240 days and it has been held that employer is required to comply with the provisions of Section 25-G of the Act even though the employee may not have completed 240 days so as to claim benefit of provisions of Section 25-F of the Act.
11. In view of the above, the writ petition is allowed. Termination of service of the petitioner with effect from May 2, 1992 is declared illegal. Respondent No. 2 is directed to reinstate the petitioner in service. However, so far as back wages are concerned, the petitioner is left free to avail remedy under Section 33-C(2) of the Industrial Disputes Act, 1947. This direction is being given keeping in view the law laid down by the Supreme Court in Managing Director, U.P. Warehousing Corporation v. Vijay Narayan Vajpayee', AIR 1980 SC 840. If the petitioner made an application under Section 33-C(2) of the Industrial Disputes Act, 1947, it shall be open to the respondents to plead and prove that the petitioner was gainfully employed during the intervening period and for that reason he is not entitled to whole or part of the back wages. The petitioner shall get all other benefits.
12. Parties are left to bear their own costs.