Gujarat High Court
Bantva Municipality vs Amritlal Harji Chauhan & on 31 March, 2014
Author: N.V.Anjaria
Bench: N.V.Anjaria
C/SCA/9135/2013 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 9135 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE N.V.ANJARIA
===========================================================
1 Whether Reporters of Local Papers may be allowed to see Yes
the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ? No
================================================================
BANTVA MUNICIPALITY....Petitioner(s)
Versus
AMRITLAL HARJI CHAUHAN & 1....Respondent(s)
================================================================
Appearance:
MR DEEPAK P SANCHELA, ADVOCATE for the Petitioner(s) No. 1
MR HITESH S PADHYA, ADVOCATE for the Respondent(s) No. 1
================================================================
CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 31/03/2014
CAV JUDGMENT
By filing this petition, the petitioner Bantva Municipality challenged judgment and award dated 31st December, 2012 passed by Labour Court, Junagadh in Reference (LCJ) No.215 of 2004, whereby the Labour Court held that the action on part of the Page 1 of 19 C/SCA/9135/2013 CAV JUDGMENT petitioner-first party employer in terminating the services of respondent-workman from 01st April, 2004 was illegal, and it was directed to reinstate the respondent-workman on his original post with continuity of service without backwages.
2. The facts of the case and the contentions available from the pleadings may be set-out usefully.
3. The facts were that as per the case of the respondent-workman, put-forth before the Labour Court, while invoking its jurisdiction for the relief of reinstatement and backwages, was that he was employed as Safai Kamdar under the petitioner-Municipality. In the statement of claim filed at Exhibit 3, the workman further stated that he joined services from 01st January, 2001 and was getting monthly pay of Rs.1,500/- and that from 01st April, 2004, his services came to be illegally dispensed with. It was contended that in termination of services, the employer had committed breach of Section 25-F, 25-G and 25-H of the Industrial Disputes Act, 1947 (hereinafter mentioned as 'the Act').
3.1 The defence of the first party employer-the petitioner herein in its written statement filed at Exhibit 8 was inter alia that the workman was employed not by the Municipality but by the contractor who was engaged by the Municipality. It was, therefore, contended that since the workman was working as Rojamdar under the private contractor, there was no question of the workman completing 240 Page 2 of 19 C/SCA/9135/2013 CAV JUDGMENT days of service under the Municipality and consequentially the question of breach of Section 25-F or any of the provisions of the Industrial Disputes Act, 1947 would not arise.
3.2 In the pleadings of the petition, raising various grounds against the judgment and award of the Labour Court, it was additionally contended that no post was available with the Municipality on which the workman could be reinstated pursuant to the impugned award. It was submitted that the Circulars issued by the government and higher municipal authorities barred appointment or absorption of daily-rated workmen, and the establishment expenditure was required to be maintained within permissible limits. It was contended that the order of reinstatement could not have been passed without having regard to the financial position of the Municipality. It was contended that the workmen when originally engaged were not as per the regular recruitment procedure and it was a backdoor entry. It was contended that the Municipality was governed under the provisions of the Gujarat Municipality Act and the staff pattern and set-up in the Municipality was determined and subject to higher Municipal authorities.
3.3 It was stated that the government had revised the set up of the municipality for the year 2010, a copy whereof dated 01st June, 2010 was produced on record of the petition. It was contended that de hors the sanctioned set up and without the approval of the Director of Municipalities, reinstating the Page 3 of 19 C/SCA/9135/2013 CAV JUDGMENT workman would amount to breach of legal requirements needed to be followed by the Municipality. It was further contended that all these aspects ought to have been appreciated by the Labour Court and the order of reinstatement was not justified.
3.4 The workman gave his evidence at Exhibit 13 and was cross-examined by the other side. The first party employer produced documents being registers of presence of Safai Kamdars from January, 2001 to December, 2002, who were employed as permanent employees. No details of daily-wagers were produced. Other documents produced by the employer were the circulars and resolutions of the Municipality, whereas the witness viz. Girishbhai Jasmatbhai Hedpara was examined on behalf of the Municipality at Exhibit 23. The workman cross-examined him.
4. Learned advocate for the petitioner Mr.Dipak Sanchela elaborated his contentions with reference to above aspects of the case put-forth by the Municipality. According to his submission, provisions of Section 2(oo)(bb) would apply to the case of the workman who was a Rojamdar not employed on permanent basis. He submitted without prejudice to various contentions that looking to the nature of employment of the workman and the small period of service for which the workmen worked as Rojamdars, in any view, the Labour Court ought not to have granted reinstatement. He relied on decision of the Apex Court in Senior Superintendent Telegraph (traffic), Bhopal Vs Santosh Kumar Seal and others [(2010) 6 SCC 773]. 4.1 Respondent workman filed affidavit-in-reply Page 4 of 19 C/SCA/9135/2013 CAV JUDGMENT in which on various counts, defended the judgment and award of the Labour Court. It was contended that the case of the Municipality that he was employed by contractor and not by the Municipality was not believed by the Labour Court and it was asserted that they had completed 240 days in each year of service, which was a finding properly arrived at by the Labour Court.
4.2 As against the submissions on behalf of the petitioner Municipality, learned advocate for the workman on the other hand vehemently submitted that finding of breach of Section 25 would necessary entail the relief of reinstatement. It was submitted that the Labour Court had ordered only reinstatement on the original post without granting backwages. According to the submission, violation of mandatory provision of Section 25-F, the action of termination was rendered illegal and void. It was, therefore, submitted that it has to be remedied only by reinstating the workman. The Apex Court decision in Harjinder Singh Vs Punjab State Warehousing Corporation [AIR 2010 SC 1116] and another decision in Devinder Singh Vs Municipal Council, Sanaur [(2011)6 SCC 584] were pressed into service by learned advocate for the respondent in support of their contentions. It was submitted that in those cases, the Apex Court upheld the award of reinstatement.
5. Turning to the findings recorded by the Labour Court, the workman was a daily-wager, whose service details were under the control and custody of Page 5 of 19 C/SCA/9135/2013 CAV JUDGMENT the petitioner. Despite being called upon by the respondent by filing discovery application at Exhibit 10 before the Labour Court, the Municipality failed to produce relevant material in rebuttal of workman's case. Coupled with this, when the case of the petitioner Municipality was that the workman was engaged through a private contractor, the burden on that count was required to be discharged by the petitioner. In this regard also, it did not produce any material. Neither the name of the contractor nor any other details of contractor whatsoever was given and no material was produced on record in that regard. The case of the Municipality that the respondent was employed by the contractor remained a paper defence. In other words, the petitioner was unable to dislodged the foundation of the petitioner's case and on the oath did not discharge burden required to be discharged in law as regards the defence it put-up. Labour Court held that workman had proved his case and the termination was bad in law.
5.1 In Director, Fisheries Terminal Division Vs. Bhikubhai Meghajibhai Chavda [AIR 2010 SC 1236], the Apex Court stated;
"Applying the principles laid down in the above case by this court, the evidence produced by the appellants has not been consistent. The appellants claim that the respondent did not work for 240 days. The respondent was a workman hired on a daily wage basis. So it is obvious, as this court pointed out in the above case that he would have difficulty in having access to all the official documents, muster rolls etc. in connection with his service. He has Page 6 of 19 C/SCA/9135/2013 CAV JUDGMENT come forward and deposed, so in our opinion the burden of proof shifts to the employer/appellants to prove that he did not complete 240 days of service in the requisite period to constitute continuous service. It is the contention of the appellant that the services of the respondent were terminated in 1988.The witness produced by the appellant stated that the respondent stopped coming to work from February, 1988. The documentary evidence produced by the appellant is contradictory to this fact as it shows that the respondent was working during February, 1989 also. It has also been observed by the High Court that the muster roll for 1986-87 was not completely produced. The appellants have inexplicably failed to produce the complete records and muster rolls from 1985 to 1991, in spite of the direction issued by the Labour Court to produce the same. In fact there has been practically no challenge to the deposition of the respondent during cross-examination. In this regard, it would be pertinent to mention the observation of three-Judge Bench of this court in the case of Municipal Corporation, Faridabad v. Siri Niwas [(2004) 8 SCC 195]:
(2004 AIR SCW 5184), where it is observed:
"A Court of Law even in a case where provisions of the Indian Evidence Act apply, may presume or may not presume that if a party despite possession of the best evidence had not produced the same, it would have gone against this contentions. The matter, however, would be different where despite direction by a court the evidence is withheld." (Para 15) 5.2 In light of the above state of evidence and in the above circumstances, it booked no error on part of the Labour Court to record finding in favour of the workman. This Court saw no good ground, nor any valid ground could be pointed out by the petitioner to interfere with the said finding of the Labour Court, Page 7 of 19 C/SCA/9135/2013 CAV JUDGMENT in exercise of supervisory jurisdiction. Hence, the findings recorded by the Labour Court on the aforesaid counts in the impugned judgment and award are not required to be upset.
6. Having travelled thus far, even if and even as the finding about breach of Section 25-F of the Industrial Disputes Act, 1947 is recorded, whether that would automatically entail relief of reinstatement for the workman, is an aspect to be independently addressed. It is settled by now that reinstatement may not necessarily follow in all cases of illegal retrenchment especially when it comes to the case of daily-waged workman.
6.1 Adverting to evolvement of law by the Apex Court on this, in Jagbir Singh Vs. Haryana State Agriculture Mktg. Board, [(2009) 15 SCC 327], the Apex Court observed and held, "It is true that the earlier view of this Court articulated in many decisions 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." (para 7) "It would be, thus, seen that by a catena of Page 8 of 19 C/SCA/9135/2013 CAV JUDGMENT 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, be automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wagers has not been found to be proper by this Court and instead compensation has been awarded. This Court has distinguished between a daily wager who does not hold a post and a permanent employee." (para 14) 6.1.1 It then stated that while awarding compensation, a host of factors, inter alia, manner and method of appointment, nature of employment and length of service are relevant. Of course, each case will depend upon its own facts and circumstances.
6.2 Jasbir Sing (supra) was relied on in Santosh Kumar Seal (supra), where the Supreme Court again noted, "In the last few years it has been consistently held by this Court that relief by way of reinstatement with back wages is not automatic even if termination of an employee is found to be illegal or is in contravention of the prescribed procedure and that monetary compensation in lieu of reinstatement and back wages in cases of such nature may be appropriate. (See U.P. State Brassware Corpn. Ltd. v. Uday Narain Pandey [2006 (1) SCC 479], Uttaranchal Forest Development Corpn. v. M.C. Joshi [2007 (9) SCC 353], State of M.P. v. Lalit Kumar Verma [2007 (1) SCC 575], M.P. Admn. v. Tribhuban [2007 (9) SCC 748], Sita Ram v. Moti Lal Nehru Farmers Training Institute [2008 (5) SCC 75], Jaipur Development Authority v. Ramsahai [2006 (11) SCC 684], GDA v. Ashok Page 9 of 19 C/SCA/9135/2013 CAV JUDGMENT Kumar [2008 (4) SCC 261] and Mahboob Deepak v. Nagar Panchayat, Gajraula [2008 (1) SCC 575].)"
(para 9) 6.3 In subsequent decision in Rajasthan Development Corpn. v. Gitam Singh [(2013) 5 SCC 136], the above position was highlighted with elaboration, and it was held, "From the long line of cases indicated above, it can be said without any fear of contradiction that this Court has not held as an absolute proposition that in cases of wrongful dismissal, the dismissed employee is entitled to reinstatement in all situations. It has always been the view of this Court that there could be circumstance(s) in a case which may make it inexpedient to order reinstatement. Therefore, the normal rule that the dismissed employee is entitled to reinstatement in cases of wrongful dismissal has been held to be not without exception. Insofar as wrongful termination of daily-rated workers is concerned, this Court has laid down that consequential relief would depend on host of factors, namely, manner and method of appointment, nature of employment and length of service. Where the length of engagement as daily wager has not been long, award of reinstatement should not follow and rather compensation should be directed to be paid. A distinction has been drawn between a daily wager and an employee holding the regular post for the purposes of consequential relief."
(Para 22) 6.4 In Gitam Sing (supra), the Supreme Court distinguished the decisions in Hajinder Singh (supra) and in Devinder Singh (supra), which were relied on by the learned advocate for the respondent workman appearing here. It was on the ground that in case of daily-wager worked for short period, the law was that Page 10 of 19 C/SCA/9135/2013 CAV JUDGMENT award of compensation and not the reinstatement could be said to be proper relief. The Supreme Court stated as under, "In our view, Harjinder Singh[2010 (3) SCC 192] and Devinder Singh [2011 (6) SCC 584] do not lay down the proposition that in all cases of wrongful termination, reinstatement must follow. This Court found in those cases that judicial discretion exercised by the Labour Court was disturbed by the High Court on wrong assumption that the initial employment of the employee was illegal. As noted above, with regard to the wrongful termination of a daily wager, who had worked for a short period, this Court in long line of cases has held that the award of reinstatement cannot be said to be proper relief and rather award of compensation in such cases would be in consonance with the demand of justice. Before exercising its judicial discretion, the Labour Court has to keep in view all relevant factors, including the mode and manner of appointment, nature of employment, length of service, the ground on which the termination has been set aside and the delay in raising the industrial dispute before grant of relief in an industrial dispute." (para 27) 6.5 The contention of learned advocate for the petitioner Municipality to assail reinstatement award, that the workman was a daily-wager not appointed after regular procedure of recruitment, that his engagement was in the nature of backdoor entry and further that there was no sanctioned post available, claimed merit and could not be discarded. In Uttaranchal Forest Development Corporation Vs. M.C. Joshi [(2007)9 SCC 353], the Supreme Court inter alia stated that on the question of grant of compensation instead of reinstatement, one of the relevant factor was whether Page 11 of 19 C/SCA/9135/2013 CAV JUDGMENT appointment in question was made in terms of statutory rules. Again decision in Ghaziabad Development Authority Vs. Ashok Kumar [(2008)4 SCC 261] deserves a reference.
"The first respondent was admittedly appointed on a daily wage of Rs 17 per day. He worked for a bit more than two years. It has not been disputed before us that sanction of the State of U.P. was necessary for creation of posts. The contention of the appellant before the Labour Court that the post was not sanctioned after 31-3-1990 by the State was not denied or disputed. If there did not exist any post, in our opinion, the Labour Court should not have directed reinstatement of the first respondent in service." (para 18) 6.5.1 The Court proceeded to state, "A statutory authority is obligated to make recruitments only upon compliance with the equality clause contained in Articles 14 and 16 of the Constitution of India. Any appointment in violation of the said constitutional scheme as also the statutory recruitment rules, if any, would be void. These facts were required to be kept in mind by the Labour Court before passing an award of reinstatement."
(para 19) 6.5.2 It was thus stated also, "Furthermore, public interest would not be subserved if after such a long lapse of time, the first respondent is directed to be reinstated in service." (para 20) 6.5.3 The Supreme Court finally expressed, "We are, therefore, of the opinion that the appellant should be directed to pay compensation to the first respondent in stead and in place of the relief of reinstatement in service." (para 21) Page 12 of 19 C/SCA/9135/2013 CAV JUDGMENT 6.6 B.S.N.L. Vs Bhurumal being Civil Appeal No.10957 of 2013 decided on 11th December, 2013, is a more recent decision, in which the Supreme Court surveyed the various decisions and enunciated to re- emphasise the principles in the following words.
"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." (para 23) 6.6.1 Reiterating that a daily-waged workman cannot claim reinstatement as of right, the Court said, "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 Page 13 of 19 C/SCA/9135/2013 CAV JUDGMENT on daily wage basis and even after he is reinstated, he has no right to seek regularization (See: State of Karnataka vs. Uma Devi (2006) 4 SCC 1). 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."
(para 24) 6.6.2 There was, however a rider mentioned, "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." (para 25)
7. Now, the aspect as to what could be just quantum of lumpsum compensation in a given case may be focused. In Sita Ram and others Vs Motilal Nehru Farmers Training Institute [(2008)5 SCC 75], the workman was a daily-wager and was found to have worked Page 14 of 19 C/SCA/9135/2013 CAV JUDGMENT intermittently for seven years upto his retrenchment which was before several years. In such circumstances, it was held that the High Court's order directing reinstatement was not proper and instead, compensation of Rs.01,00,000/- was awarded, holding that it would meet the ends of justice.
7.1 In Incharge officer and another vs. Shankar Shetty[(2010) 9 SCC 126], respondent was engaged as daily-wager in 1978 and worked intermittently for seven years upto his retrenchment. Looking to those years and long gap in between, he was awarded amount of Rs.01,00,000/- as compensation. In Santosh Kumar Seal (supra), the daily-wager had worked for 2 to 3 years who was awarded Rs.40,000/- by way of monetary compensation in lieu of relief of reinstatement and backwages.
7.2 In Mahboob Deepak Vs. Nagar Panchayat, Gajraula [(2008) 1 SCC 575], the appellant who was a daily-wager, who worked for one year and found to have completed 240 days of service and his serviced were terminated on the ground of financial irregularities was awarded Rs.50,000/- as lumpsum compensation in lieu of reinstatement. In Ghaziabad Development Authority (supra), the workman was awarded Rs.50,000/- as lumpsum compensation. 7.3 Similarly in Gitam Singh (supra), the Supreme Court stated that in respect of wrongful termination of the workman who had worked for a short period, the reinstatement could not be said to be a proper relief, rather proper relief, but award of Page 15 of 19 C/SCA/9135/2013 CAV JUDGMENT compensation would be appropriate. In that case, the workman had worked from 01st March, 1991 to 30th October, 1991. He was engaged as technician (mistri) and worked for short period from 01st March, 1991 to 31st October, 1991. The Court in Gitam Singh (supra) held as under:
"In light of the above legal position and having regard to the facts of the present case, namely, the workman was engaged as daily wager on 1-3-1991 and he worked hardly for eight months from 1-3-1991 to 31-10-1991, in our view, the Labour Court failed to exercise its judicial discretion appropriately. The judicial discretion exercised by the Labour Court suffers from serious infirmity. The Single Judge25 as well as the Division Bench26 of the High Court also erred in not considering the above aspect at all. The award dated 28-6-2001 directing reinstatement of the respondent with continuity of service and 25% back wages in the facts and circumstances of the case cannot be sustained and has to be set aside and is set aside. In our view, compensation of Rs 50,000 by the appellant to the respondent shall meet the ends of justice. We order accordingly. Such payment shall be made to the respondent within six weeks from today failing which the same will carry interest @ 9% per annum."
(para 29) 7.4 This Court in Amreli Municipality Vs Timaniya Maganbhai Gordhanbhai being Special Civil Application No.10712 of 2012 decided by order dated 12th October, 2010 awarded Rs.40,000/- to a workman substituting the award of reinstatement and 50% backwages passed by the Labour Court, by awarding Rs.40,000/- as lumpsum compensation. The workman had worked as daily-wager from 1997 to 2003.
Page 16 of 19 C/SCA/9135/2013 CAV JUDGMENT8. The tracing of above position of law makes it trite that relief of reinstatement for the daily- rated workman may not invariably follow the finding of breach of Section 25-F. Granting of reinstatement is not indispensible in all cases of illegal retrenchment of daily-wager. Reinstatement is not to be granted merely because it is otherwise lawful. Justice could be accorded by awarding compensation.
8.1 The considerations, factors, aspects and principles emanating from the above discussion, which may weigh and guide the discretion for awarding lumpsum compensation in lieu of reinstatement, may be outlined, without being exhaustive, as under:
(i) The fact that the workman is daily-rated workmen, not permanently employed;
(ii) He is not holding a permanent post;
(iii) Nature of his employment;
(iv) Span of service, viz. The period during
which he worked upto the date of termination of services;
(v) Manner and method of appointment. Whether it was a backdoor entry;
(vi) The time gap from the date of
termination;
(vii) Delay in raising the Reference is also
considered to be a germane factor;
Page 17 of 19
C/SCA/9135/2013 CAV JUDGMENT
(viii) Any special feature peculiar to the
facts of the particular case. For instance, in Bhurumal (supra), the Supreme Court noticed that post which the workman held was of Lineman in the Telephone Department, and that the work of Lineman was drastically reduced in view of advancement of the technology.
9. Reverting to the facts of the present case, informed by the above principles, workman was Safai Kamdar claiming to be getting monthly pay of Rs.01,500/-. Termination of his service occurred in the year 2004. Long 10 years have intervened. In the facts and circumstances, therefore, it would be proper if instead of relief of reinstatement, he is awarded lumpsum amount of Rs.50,000/- (Rupees Fifty Thousand Only) by way of compensation.
10. Accordingly it is held that petitioner shall not be required to reinstate the respondent workman. It is, however, directed that petitioner shall pay Rs.50,000/- as compensation in lieu of reinstatement to the respondent-workman within eight weeks from today, failing which the amount shall carry interest at the rate of 9% from the date of this judgment.
10.1 Petition is allowed in part. Rule is made absolute in the aforesaid terms.
11. As a footnote, it may be stated that this petition was heard along with other petitions being Special Civil Application Nos.9134 of 2013, 9136 of Page 18 of 19 C/SCA/9135/2013 CAV JUDGMENT 2013, 9137 of 2013, 9138 of 2013, 9139 of 2013 and 9140 of 2013 in which facts were similar. In different cases, different amount of compensation depending upon the facts and circumstances of each case has been awarded modifying the judgment and award of the Labour Court.
(N.V.ANJARIA, J.) Anup Page 19 of 19