Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Reserved on: 16 April, 2024
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Pronounced on: 3 July, 2024
+ W.P.(C) 6926/2007
CEMENT CORP. OF INDIA LTD ..... Petitioner
Through: Mr.Ravi Sikri, Sr.Advocate with
Mr.Prakash Gautam, Mr.Deepank
Yadav, Ms.Kanak Grover &
Mr.Nachiket Chawla, Advocates
versus
PRAKASH VEER TOMAR & ORS ..... Respondents
Through: Mr.Sanjay, Advocate for R-1
+ W.P.(C) 6954/2007
CEMENT CORPORATION OF INDIA LTD ..... Petitioner
Through: Mr.Ravi Sikri, Sr.Advocate with
Mr.Prakash Gautam, Mr.Deepank
Yadav, Ms.Kanak Grover &
Mr.Nachiket Chawla, Advocates
versus
B.K.SHUKLA & ORS. ..... Respondents
Through: Mr.Sanjay, Advocate for R-1
CORAM:
HON'BLE MR. JUSTICE CHANDRA DHARI SINGH
J U D G M E N T
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CHANDRA DHARI SINGH, J
1. The instant batch of writ petitions has been filed on behalf of the
petitioner under Article 226 read with Article 227 of the Constitution of
India seeking the quashing of the impugned awards passed by Central
Government Labour Court cum Industrial Tribunal whilst adjudicating upon
the claim of regularisation of the respondent workmen. The learned Tribunal
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in the industrial award dated 18 October 2006 in I.D 56/ 2003 challenged
by way writ petition bearing W.P.(C) 6926/2007, directed the petitioner to
pay four years‟ wages as a retrenchment compensation and in the industrial
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award dated 1 December 2006 in I.D 52/ 2003 challenged by way writ
petition bearing W.P.(C) 6954/2007 directed re-instatement of employees
with 25% back-wages and gave the liberty to retrench the employees with
four years‟ wages as a retrenchment compensation.
2. The common issue which falls for adjudication in the instant batch of
petitions is whether the learned Tribunal can transgress beyond the terms of
reference which pertained to regularisation of the respondent workmen and
adjudicate upon issues relating to retrenchment of workmen.
3. Since, the facts as well as the legal issues involved in the present
batch of petitions are similar, therefore, this Court has culled out the facts
and submissions out of the writ petition bearing W.P.(C) 6926/2007 titled
„Cement Corp. of India Ltd vs. Prakash Veer Tomar & Ors‟ for the disposal
of the present batch of petitions.
FACTUAL MATRIX
4. The relevant facts necessary for the adjudication of the instant writ
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petition are reproduced below:
a) The petitioner/Cement Corporation of India Ltd is a government -
owned company engaged in the manufacturing and production of
Cement. The respondents are workmen who worked at the petitioner's
Delhi Cement Grinding (hereinafter “DGU”) unit on an ad -hoc basis.
b) The petitioner was declared as „Sick‟ unit under Section 16 of the Sick
Industrial Companies (Special Provisions) Act, 1985 (hereinafter
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“SICA‟) on 8 August 1996 by the Board for Industrial and Financial
Reconstruction (hereinafter “BIFR”) due to its the deteriorating financial
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condition and it became non-operational w.e.f. 9 February, 1999
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c) On 12 June 1998, BIFR imposed a ban on further employment at all
the sick units of the petitioner.
d) The respondents approached this Court by way of filing the writ
petition WP (C) No. 5026 of 1999 seeking regularisation wherein, the
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Coordinate Bench of this Court, vide an order dated 18 December 2001,
dismissed the petition as not maintainable and directed the respondents
to seek remedy under the Industrial Disputes Act, 1947 (hereinafter
“Act”).
e) Accordingly, the respondents approached the Appropriate
Government and the parties were referred to conciliation. Upon the
failure of the conciliation proceedings, the Appropriate Government,
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vide its reference order dated 1 April 2003, referred the dispute for
adjudication to Central Government Industrial Tribunal cum Labour
Court, New Delhi. The specific term of the reference was as follows:
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“Whether the demand of the CCI/DGU Workers Union in
relation to regularisation of the services of Ex-Temporary
Clerks, namely S/Sh. Prakash Veer Tomar, Raj Singh
Chaprana, Raj Kumar Tomar, Taj Kumar, Eknath Singh, S.N.
Pathak and Rajinder Kumar who worked in the Delhi Cement
grinding unit of Cement Corporation of India, Okhla Industrial
Area, New Delhi since July 1991 is just, fair and legal? If yes,
what relief workmen are entitled to and from what date?”
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f) During the pendency of industrial dispute, on 6 September 2003, the
respondents moved a memorandum before the petitioner seeking to
terminate their relationship with the petitioner and requesting for
compensation under Voluntary Retirement Scheme at par with the
regular employees.
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g) The learned Tribunal, vide the impugned award dated 18 October,
2006 held that the respondents cannot be regularised due to closure of
the unit and there was no work left with the petitioner, however, due to
the fact that the respondents were engaged for a long time period, the
respondents are entitled to four-year wages as retrenchment
compensation.
h) Aggrieved by the impugned award, the learned Tribunal filed the
instant petition.
PLEADINGS BEFORE THIS COURT
5. The petitioner has challenged the impugned award on the following
grounds:
“ GROUNDS
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( i) Because the impugned award is ultra vires the jurisdiction
of the Tribunal and thus the same 1s liable to be set aside.
(ii) Because a Tribunal established under Industrial Disputes
Act, 194 7 is a creature of the Statute and cannot act in excess
of the jurisdiction conferred by its parent statute.
(iii) Because under section IO of the Industrial Disputes Act,
194 7, the Tribunal has to confine its award to the issues
referred to it and cannot adjudicate controversy which is
wholly alien to the reference. In this case, the learned Tribunal
has proceeded to pass an award which has no connection with
thedispute referred to it namely regularization of the
respondents.
(iv) Because a bare perusal of the terms of reference would
show that dispute which had been referred to the learned
Tribunal was m respect to absorption/regularization of the
services of the claimants who were working as temporary
employees at DGU, a factory owned by the petitioner
management. No reference had been made about the
conditions, which require to be fulfilled for termination of
services of the respondent.
(v) Because the learned Tribunal in view of the law laid down
by the Constitution Bench of the Hon'ble Supreme Court in
Secretary of State Vs. Uma Devi (III) [2006 SSC (L&S) 753],
held that the question of regularization of the respondent
workmen would not arise but clearly erred and exceeded its
jurisdiction when it laid down as a precondition that the
respondents should be paid retrenchment compensation at the
time of retrenchment equivalentto four years wages calculated
at the rate of prorate wages of 2005. (
vi) Because even otherwise, a tribunal can have no jurisdiction
to lay down any such condition. Conditions precedent for
retrenchment of workmen is given in Section 25-F of the
Industrial Dispute Act, 194 7. the right of the workmen and the
correlative obligation of the management for retrenchment
compensation is limited to notice period of one month or salary
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in lieu thereof and in addition an amount equivalent to 15 days
pay for every completed year of service. As per the own
showing of the respondents, they had joined the petitioner
management between the years 1990- 1996. Thus even as per
their best case, they would be entitled to retrenchment
compensation equivalent to 6 to 8 months of salary at the time
of retrenchment by way of compensation if the retrenchment
was to take place at this stage. In order to get retrenchment
compensation equivalent to four years wages at the rate of last
drawn wages, each of the claimants is required to work for 96
years (ninety six years).
(vii) Because the learned Tribunal, which is a creature of a
statute, can have no jurisdiction to amend its parent statute.
The learned tribunal has not given any reason, justification or
precedent for laying down such a strange condition. It is
respectfully submitted that the direction of the learned Tribunal
on this aspect again ex-facie erroneous and is liable to be set
aside.
(viii) Because the petitioner management has no capability to
take any further financial burden and the condition would only
be a loss to the government exchequer without any
corresponding benefit to the public at large. Moreover, since
the petitioner is a sick company, the proceedings were liable to
be stayed till the claimants obtained requisite permission from
the BIFR.
(ix) Because the respondents do not fulfill the qualifications
requisite for the claimed posts. These qualifications have been
laid down by petitioners corporation in its Recruitment Policy
for uniformity of service condition etc. Some of these posts
require mm1mum job specifications like typing speed,
experience and educational qualifications, which the
respondents did not posses.
(x) Because the alleged CCI/DGU Workers Union i.e. Claimant
Union has moved a memorandum dated 6th September 2003
before the petitioner seeking severance of the alleged
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relationship with the management by getting compensation at
par with YRS in vogue with employees of CCI Ltd. Thereafter,
the alleged Union moved the Labour Department of the Central
Government for this purpose. In the said application, the
respondents stated that they are not interested in working with
the management. Once the respondents themselves were
seeking severance of the alleged relationship with the replying
management, no question of any relief arose.
(xi) Because a dispute which does not relate to termination of
services of workmen require espousal in order to become an
industrial disputes. Such espousal must be by a substantial
number of workmen working with that management or a trade
union having representative character qua that management.
Since in the present case, there was no such espousal of the
dispute referred to the Tribunal, the Tribunal erred in law in
adjudicating the reference.
(xii) Because in any event, the Tribunal was under an
obligation to adjudicate on these aspects.
(xiii) Because the learned Tribunal also erred in presuming that
the management had admitted that it had regularized the
services of four persons, namely, S/Shri A.K. Yadav, P.K. Jain,
D.K. Srivastawa and Arvind Singh in the year 2002. The
learned Tribunal also erred in presuming that these persons
were junior to the respondents. The management had submitted
that these persons were the graduates' sales trainee (GSTs)
candidates whohad joined the petitioners as trainees long
before 2002 and they were absorbed on completion of the
training. Moreover the respondent cannot seek any parity with
the respondents.
(xiv) Because Delhi Cement Grinding Unit is not doing any
production since 9th Feb. 1999 wherein the claimants were
working as adhoc employees.
(xv) Because as there had been no production or work at all at
the Delhi Cement Grinding Unit since 9th Feb. 1999, the
respondents and other employees of the contractor used to
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come to the premises of the factory but were sitting idle without
doing any work. Since there was no production, there were no
resources with the petitioner management for continuing to pay
the amount to the contractor for providing the services……”
6. The respondent workmen filed their counter affidavit opposing the
instant petition on following grounds:
“ 4. That the respondents / workmens had been continuously
working from their respective date of joining with artificial
break and they are being treated as daily wages, Adhoc/
temporary workers by the management with an intention to
deprive them of their rights to get the same scale of pay, wage
and other employment which are being to the regular and
permanent employees discharging the same and similar duties.
More over it is pertinent to mention here that all the above
respondents are being engage by the management /petitioner
from the last 10to18 year and have being continuously working
with the management and are permanently required by the
management/Petitioner but to deprive the various facilities and
benefit being paid to the regular employees the
management/Petitioner treat the answering respondents as
temporary workers.
5. That the answering respondents/workmen's join the service
of the management/Petitioner in the year
1990,1991,1992,&1996 as clears, courier, messenger etc in the
Delhi Grinding Unit of the management corporation. They were
to provide all the service to the management and were
transferred from one department to another on the basis of the
exigencies of work.
6. The workmen/ answering respondents are discharging the
work of a permanent and perennial nature which is primary
essential for the management to continue its activities. The
contribution to provided fund account etc and bonus are
directly made by the corporation.' The action of the
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management amount to Unfair Labour practice as has envishes
in the ID Act 1947, Schedule V enacted under section 2(r)(a) of
the ID Act 1947.the clause 10 of the schedule V read as under:-
" 10. to employ workmen as "Badlis " "Casuals" or
Temporary" and to continued them as such for years,
with, the object of depriving them of the status and
privileges of permanent workers."
7. That the workmen are being deprive of their legal right to get
the same scale of the pay and other benefit which have been
given to the regular employees employed by the management. 8.
That when inspite of lapse of substantial period the service of
the answering respondents were not regularised being
aggrieved of the same, the answering respondents filed a writ
petition in the High Court of Delhi vide no CWP No 5026 of
1999, the same was dismissed and answering respondents
preferred LP A vide no.24/2002 which was later withdrawn
with a liberty to prefer a review before the single judge, the
Hon'ble Court after hearing the parties the answering
respondents to approached the appropriate authority provided
under ID Act , 1947 . “
7. The respondent has filed an additional affidavit on the following
grounds:
2. That vide order dated 3rd May , 2006, the Board of
Industrial & Financial Reconstruction (BIFR) had approved
the rehabilitation scheme which inter-alia envisaged closure of
Delhi Grinding Unit, wherein the respondents were working as
contract employees. The appeal against the order of BIFR was
dismissed by the Appellate Authority of Industrial & Financial
Reconstruction (AAIFR) vide order dated 17.11.2006. The writ
petition against the order of AAIFR was dismissed by the
Division Bench of this Hon'ble Court vide judgment dated
11.01.2008 and the Special Leave Petition of the Division
Bench of this Hon'ble Court was dismissed by the Hon'ble
Supreme Court vide order dated 28.4.2008.
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3. That thereafter the application filed by the petitioner before
the Government of India, Ministry of Labour & Employment for
permission to close down the Delhi Grinding Unit under section
25-0 of the ID Act was granted by the Government vide order
dated 14th July, 2008. Thereafter the petitioner management
closed down the Delhi Grinding Unit w.e.f 31st October, 2008.
Thus, it is respectfully submitted that as on date, there is no
Delhi Grinding Unit in existence wherein the respondents were
working. The same has been closed after due permissions from
the Central Government under Section 25- O of the Industrial
Disputes Act. All workmen working at DGU are no longer in
the employment of CCI Ltd.
8. The petitioner and respondent have eventually filed their written
submissions.
SUBMISSIONS
( On behalf of the petitioner)
9. Learned senior counsel for the petitioner submitted that the learned
Industrial Tribunal has exceeded its jurisdiction in passing the impugned
award. It is submitted that the learned Industrial Tribunal has gone beyond
the terms of reference and adjudicated upon the issue which was not a part
of the reference since as per the terms of the reference, the only question
which was referred to the learned Industrial Tribunal was regarding the
regularisation of the respondents. However, it went beyond the terms of
reference and decided on the quantum of retrenchment compensation
payable to the respondents if they are eventually retrenched. This decision
on retrenchment compensation was not within the scope of the reference
made to the learned Industrial Tribunal and, is therefore, beyond its
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jurisdiction.
10. It is further submitted that the issue of retrenchment compensation is
not incidental to the issue of regularisation, hence, it could not have been
adjudicated in absence of a specific reference, and therefore, the learned
tribunal has acted in contravention of Section 10 of the Act.
11. It is contended that Section 10 of the Act, stipulates that it shall
confine its award to the issues referred to it and it shall not travel beyond the
terms of the reference, therefore, by adjudicating upon the issue of
retrenchment compensation, the learned Tribunal acted in violation of the
provision of the Act.
12. It is submitted that the learned Tribunal has acted contrary to Section
25-F of the Act by directing the petitioner to pay four-year wages as
compensation as a pre-condition to respondents‟ retrenchment.
13. It is further submitted that in terms of Section 25F(b) of the Act, a
workman is to be paid 15 days‟ average pay as retrenchment compensation
for every year of service completed in excess of 6 months. However, the
learned Tribunal has completely ignored the said provision and has awarded
retrenchment compensation in much excess to what the respondents are
actually entitled to under the Act.
14. It is submitted that the compensation awarded by the learned Tribunal
exceeds the limits prescribed under Section 25-F of the Act since as per the
aforesaid provision, there is a statutory framework for determining the
amount of compensation payable to workers in the event of retrenchment,
and the same is based on their duration of continuous service. However, the
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learned Tribunal‟s award goes beyond the aforesaid statutory limits by
awarding four years‟ wages as retrenchment compensation.
15. It is further submitted that the learned Tribunal failed to consider that
even as per their own case, respondents No. 1 and 5 were in service only
from 1990, therefore, even on the date of the award, they would have been
entitled to merely 8 months average pay in terms of Section 25-F of the Act.
16. It is contended that the learned Tribunal, being a creature of the
statute cannot award compensation in excess of its parent statute and the
learned tribunal did not provide any reasons for arriving at that particular
finding.
17. In light of the foregoing submissions, learned senior counsel for the
petitioner submitted that the impugned award is afflicted with several
illegalities and is liable to be set aside, and the instant petition should be
allowed.
( on behalf of the respondent)
18. Per Contra, the learned counsel appearing on behalf of respondents
submitted that the impugned award does not suffer from any illegality which
merits interference of this Court.
19. It is submitted that the learned Tribunal did not venture outside the
terms of reference and has rightly awarded retrenchment compensation to
the respondent.
20. It is contended that the respondents were working for the petitioner‟s
unit for a substantial period of time and were discharging work of permanent
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and perennial nature, therefore, they were entitled to regularization.
21. It is submitted that petitioner were wrongly denying regularization to
the respondents citing financial difficulties, whereas on the other hand, they
were directly recruiting other employees for the positions which were junior
to the respondents.
22. It is submitted that the petitioner adopted “unfair labour practice” as
defined under Schedule V (Clause 10) read with Section 2(r)(a) of the Act
by depriving the respondents of their right to seek regularization.
23. It is submitted that there is no infirmity in the impugned award as it
awarded four-year wages as compensation since the petitioner had also
formulated a Voluntarily Retirement Scheme, wherein it was offering 60
months‟ wages to its regular employees.
24. In view of the foregoing submissions, it is submitted that there is no
error in the impugned award, therefore, the instant petition is liable to be
dismissed.
ANALYSIS AND FINDINGS
25. Heard the learned counsel for the parties at length and perused the
records relied upon by the counsel to substantiate their respective
submissions.
26. It is the case of the petitioner that the impugned award is bad in law
since the learned Tribunal went beyond the reference in deciding the issue
which was never submitted to it and awarded retrenchment compensation
over and above what is payable under Section 25-F of the Act. Therefore, it
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is contended that the issue of „retrenchment compensation‟ is not incidental
to the issue of „regularization‟, therefore, the learned tribunal could not have
adjudicated upon it.
27. In rival submission, the learned counsel for the respondent workmen
have vehemently opposed the contentions advanced by the petitioner
submitting to the effect that the learned Tribunal rightly awarded
retrenchment compensation after as the respondents were engaged by the
petitioner for a substantial period and discharged work of permanent nature.
28. The issue which falls for adjudication before this Court is whether the
learned Tribunal went beyond the terms of reference in adjudicating upon
retrenchment compensation or not.
29. At this juncture, this Court deems it appropriate to refer to the
jurisprudential aspect pertaining to limited powers of the Industrial Tribunal
in adjudicating within the ambit of the terms of reference and it cannot
transgress beyond the same in granting relief.
30. Industrial Tribunal is a creation of a statute and the basis of its
jurisdictions is the reference made to it by the Appropriate Government. The
Tribunal has the limited role to adjudicate upon the issues or issues which
are incidental to terms of reference. It shall confine itself to the issues
specifically referred to it and not venture outside the terms of the reference.
The Industrial Tribunal are quasi-judicial in nature and does not have any
inherent power to adjudicate on any of the disputes raised by the parties. It is
bound to adjudicate upon disputes within the limits imposed upon it by the
Act and has to act according to its provisions.
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31. As stipulated under Section 10 (1) of the Act, the 'appropriate
government' has specified the issues for adjudication by the Tribunal. The
Industrial Tribunal is bound to confine the adjudication to those points and
matters incidental thereto.
32. Moreover as per Section 10(4) of the Act casts an obligation on the
Industrial Tribunal to confine its adjudication to the terms of the reference or
to any matter incidental thereto. The relevant portion of the Act has been
reproduced herein under:
“[(4) Where in an order referring an industrial dispute to [a
Labour Court, Tribunal or National Tribunal] under this
section or in a subsequent order, the appropriate Government
has specified the points of dispute for adjudication, [the
Labour Court or the Tribunal or the National Tribunal, as the
case may be], shall confine its adjudication to those points
and matters incidental thereto. ”
33. After analyzing the statutory framework, this Court deems it
imperative to analyze the reference order and the findings of the impugned
award and ascertain the reasoning afforded by the learned Tribunal.
34. At this stage, this Court finds it imperative to refer to the decision of
the Supreme Court in Pottery Mazdoor Panchayat v. Perfect Pottery Co.
1
Ltd. wherein it held that an Industrial Tribunal derives its jurisdiction from
the terms of reference and it cannot go beyond those terms. The Hon‟ble
Court held that when the terms of reference were confined to adjudication on
the validity of the closure of the industrial unit, the tribunal could not
1
(1979) 3 SCC 762
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adjudicate on the issue whether there was any closure at all. The relevant
extract of the judgment is reproduced herein below:
“11. Having heard a closely thought-out argument made by Mr
Gupta on behalf of the appellant, we are of the opinion that the
High Court is right in its view on the first question. The very
terms of the references show that the point of dispute between
the parties was not the fact of the closure of its business by the
respondent but the propriety and justification of the
respondent's decision to close down the business. That is why
the references were expressed to say whether the proposed
closure of the business was proper and justified. In other
words, by the references, the Tribunals were not called upon by
the Government to adjudicate upon the question as to whether
there was in fact a closure of business or whether under the
pretence of closing the business the workers were locked out by
the management. The references being limited to the narrow
question as to whether the closure was proper and justified,
the Tribunals by the very terms of the references, had no
jurisdiction to go behind the fact of closure and inquire into
the question whether the business was in fact closed down by
the management.”
35. Similarly, in State Bank of Bikaner & Jaipur v. Om Prakash
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Sharma , the Hon‟ble Supreme held that in cases where the Labour Court
exceeds the terms of reference, the award is deem to suffer from lack of
jurisdiction. Specifically, the Court held that when the scope of reference is
limited to determining whether there was a violation of Section 25H or not,
and the tribunal concludes that there was no such violation, it cannot then
proceed to set aside the order of termination. The relevant paragraph is
2
(2006) 5 SCC 123
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reproduced hereunder:
“14. In the instant case, the award of the Labour Court suffers
from an illegality, which appears on the face of the record . The
jurisdiction of the Labour Court emanated from the order of
the reference. It could not have passed an order going beyond
the terms of the reference. While passing the award, if the
Labour Court exceeds its jurisdiction, the award must be held
to be suffering from a jurisdictional error. It was capable of
being corrected by the High Court in exercise of its power of
judicial review. The High Court, therefore, clearly fell in error
in refusing to exercise its jurisdiction. The award and the
judgment of the High Court, therefore, cannot be sustained.
Consequently, the appeal is allowed and the judgment of the
High Court is set aside. The award is set aside to the extent of
the order of reinstatement with back wages. The writ petition
filed by the appellant in the High Court is, thus, allowed.
12. The specific issue which was, therefore, referred for
determination by the Labour Court, related to the dispute as
regards violation of Section 25-H of the Act. If the said
provisions had not been found to be violated, the question of
setting aside the order of termination by the Labour Court did
not and could not arise. The learned Single Judge proceeded
on the premise that the High Court, in exercise of its writ
jurisdiction, cannot sit in appeal over the award of the Labour
Court. The learned Single Judge was right, but then, only
because the jurisdiction of the High Court, while exercising of
its power of judicial review was limited, it would not mean that
even a jurisdictional error could not have been corrected. The
provisions of Articles 226 and 227 of the Constitution of India
would be attracted if the inferior Tribunal has, inter alia,
committed a jurisdictional error. What would be the ground for
judicial review, in regard to the orders passed by an inferior
Tribunal is no longer res integra.”
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3
36. In N.D.M.C v. Jai Ram , the Coordinate Bench of this Court held that
issues of „regularization‟ and „termination‟ are not incidental to each other.
The Court held that if the tribunal could not have decided and awarded the
relief of „regularization‟ when the scope of reference as well the prayer of a
party was limited to the relief of „reinstatement‟. The findings of the Court
reads as under:
“8. After giving my due consideration to the rival submissions,
I have come to the conclusion that as far as the relief of re-
instatement in service granted to the workman by the Labour
Court with 50% back wages is concerned, same does not call
for any interference by this Court since there is no challenge
made by the petitioner in that regard and it has been the
petitioner's own case that it never wanted to discontinue the
services of the respondent - workman as a muster roll
employee. However, I am in full agreement with the
submission of the learned counsel for the management that
the Labour Court was not at all justified in giving the relief of
regularization to the respondent - workman since that was not
the dispute referred to it by the appropriate Government and,
in fact, in the claim statement even the workman himself had
not made any prayer for grant of relief of regularization to
him . It is now well settled that the Industrial Tribunal or the
Labour Court cannot travel beyond the terms of reference and
give any relief to the workman. It has to confine the
adjudication to the point(s) referred to it for adjudication or
any matter incidental thereto. In the present case, as per the
respondent's own case his services had been terminated and so
he was entitled to be reinstated in service. Therefore, unless he
was in service there was no occasion for any authority to
direct his regularization and that matter cannot be said to be
3
2012 SCC OnLine Del 148
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in any way incidental to the dispute raised by the respondent -
workman regarding termination of his services by the
petitioner – management …”
37. In view of aforesaid judgments, it is a settled principle of law that an
Industrial Tribunal is strictly governed by the terms of its reference and can
only adjudicate on matters explicitly referred to it or incidental to the
reference. Any decision or adjudication that goes beyond the scope of the
reference would be considered a jurisdictional error in the award passed by
the Industrial Tribunal.
38. Now adverting to the merits of the instant petition, the relevant
paragraph of the reference order is reproduced herein below:
“Whether the demand of the CCI/DGU Workers Union in
relation to regularisation of the services of Ex-Temporary
Clerks, namely S/Sh. Prakash Veer Tomar, Raj Singh
Chaprana, Raj Kumar Tomar, Taj Kumar, Eknath Singh, S.N.
Pathak and Rajinder Kumar who worked in the Delhi Cement
grinding unit of Cement Corporation of India, Okhla Industrial
Area, New Delhi since July 1991 is just, fair and legal? If yes,
what relief workmen are entitled to and from what date?”
39. Upon perusal of the terms of reference, it is crystal clear that terms of
reference pertained to adjudicating upon the issue of regularisation of the
petitioner‟s employees i.e., the respondent from July 1991. The order did not
encompass any reference for adjudication on the issue of retrenchment
compensation. This limitation underscores the narrow purview within which
the Industrial Tribunal was expected to operate.
40. Now this Court will advert to the impugned award and the relevant
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extract of the said award is reproduced herein below:
“The workmen have not been taken through regular
recruitment procedure. They are purely ad-hoc and temporary
and they have been continued after artificial breaks. Their work
is continuous as artificial breaks are due to no fault of the
workmen.
The work is no longer of continuous and regular nature. There
is ban for further recruitment but these workmen are not
precluded from engagement on the basis of further ban. The
DGU is in precarious financial position. The management has
applied for permission to close down the industry before the
competent authority. The management is facing financial
burden due to resource crunch. It is admitted that there is no
production of Cement after 1999. It is also admitted that these
workmen have been continued in view of the orders of the
Courts from 1999 till date.
In Uma Devi's case the Constitution Bench has categorically
laid down that in case workmen have been working
continuously for 10 years and not on the basis of orders of
Courts, their cases may be considered for regularization. In the
instant case the unit was declared sick in 1999. These workmen
have been continued in view of stay orders. The workmen
themselves have moved application for getting compensation at
par with VRS invoked with employees of CCI Limited. So the
claimants are seeking severance of relationship for getting
VRS. There is indeed no work for the claimants.
The present proceedings are not without jurisdiction. The
claimants have been taken on adhoc basis but they have been
continued for a long period. They have become over age. Their
services cannot be regularized in view of the Uma Devi's case.
They have rendered services for a substantial period and they
have become over age. They cannot be given pay at par with
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regular employees as there is no accountability and
responsibility on adhoc and temporary employees. So they
cannot be given status of regular employees. They are not
entitled to get equal pay for equal work.
The management has continued them for long 6 years period of
time. They are entitled to get compensation of four years wages
in view of their long tenure of service in case the management
finds their retrenchment necessary. The wages are to be
calculated prorata wages of 2005
The workmen themselves have admitted that there is no work in
Delhi Unit. They have been engaged for only Delhi Unit on
adhoc basis So they cannot be transferred to the other units as
regular employees.
In view of the facts and circumstances of the case all the
workmen are entitled for compensation equal to fours years
wages in case of retrenchment compensation
The management is directed to make payment of four years
wages by way of compensation at the time of retrenchment of
these employees ”
41. Upon meticulous examination of the impugned award, it can be
ascertained that the learned Tribunal held that since the respondents have
been working for a substantial period of time due to the stay orders of the
Court, therefore, the case of the respondent workmen could not be
considered for regularization and the workman cannot be paid at par with the
regular employees in the petitioner entity.
42. It further held that since the respondent workmen have worked for a
period of 6 years‟, they are entitled for compensation of 4 years‟ wages in
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case the petitioner deems it fit to retrench the respondent workmen.
43. The learned Tribunal further observed that since it is an admitted
position on facts that the respondent workmen were engaged to work in the
petitioner‟s Delhi unit on ad-hoc basis and there is no work in the Delhi unit.
Therefore, the respondent workmen are entitled to compensation equal to
four years wages in case of retrenchment compensation and, accordingly, the
petitioner management directed to make payment for the same to the
respondent workmen .
44. In the impugned award, it is evident that the Industrial Tribunal
exceeded the bounds of its jurisdiction by awarding retrenchment
compensation. The learned Tribunal's mandate was specifically limited to
adjudicating the demand for regularization made by the Respondents.
However, it ventured into deciding retrenchment compensation also, a
matter that was beyond the scope of the reference. This overreach by the
Tribunal represents a clear violation of its prescribed jurisdiction.
45. This Court is of the view that the issues of regularisation and
retrenchment compensation are distinct and not inter-twined or incidental to
each other. The right of a workman to seek regularisation pertains to the
duration of their employment, allowing them to transition from a temporary
or contractual role to a permanent position based on specific criteria or
conditions. Conversely, retrenchment compensation comes into effect when
an employer terminates a workman's services. It serves as a form of financial
assistance to mitigate the economic impact of abrupt job loss.
46. Therefore, the issue of regularisation concerns the status of
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employment and can be pursued during the tenure of employment, whereas
retrenchment compensation is a consequence of termination and is relevant
only after the termination has occurred. These issues operate distinctly and
at different stages of a workman's employment.
47. As per the terms of the reference, the learned Tribunal was bound to
restrict itself to adjudication on the validity of the claim for regularization. It
can assess on the aspect- whether the workman meets the criteria for
regularization as per the applicable laws, employment contract, or any
relevant agreements or policies.
48. The Tribunal's mandate in such cases does not extend to deciding on
the issue of retrenchment compensation. Retrenchment compensation is a
separate matter that falls within the jurisdiction of the tribunal only when the
termination of services has occurred, and a claim for retrenchment
compensation is made by the workman. A tribunal deciding an issue not
referred to it would be exceeding its jurisdiction and such an action would be
in teeth of Section 10(4) of the Act which mandates the tribunal to confine
its adjudication to the issues referred to it.
49. The petitioner's contention that the reference concluded when the
Tribunal determined that the Respondents could not be regularized is well-
founded. Once the Tribunal made its decision regarding regularization,
which was the primary issue referred to it, there was no further requirement
for adjudication on retrenchment compensation.
50. The Tribunal's jurisdiction was tied to the scope of the reference, and
its authority ceased once it reached a determination on the regularization
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issue. Any additional adjudication beyond this point would be superfluous
and contrary to the established principles governing Industrial Tribunal
proceedings.
51. This Court further observes that the learned Tribunal has awarded
compensation equivalent to four years' wages to the workman and the same
is in contrast to the provisions outlined in Section 25-F of the Act, which
stipulates that a compensation amount equivalent to 15 days' wages for
every year of completed service shall be awarded as retrenchment
compensation. In the impugned award, the learned Tribunal awarded wages
of four years' which exceeds the amount of retrenchment compensation as
prescribed under Section 25-F, hence, there is a deviation from the statutory
guidelines.
52. Furthermore, the Tribunal's award lacks transparency and
justification, as it fails to provide any reasoning or calculations to support
the decision to award four years' wages as compensation. The absence of
such details raises questions about the basis on which the learned Tribunal
arrived at the quantum of retrenchment compensation.
53. In view of the aforesaid discussion, it is held that the learned Tribunal
exceeded its jurisdiction by adjudicating on the issue of retrenchment
compensation, which was beyond the scope of the reference and the learned
Tribunal erred in awarding compensation in excess of what is prescribed
under Section 25-F of the Act.
CONCLUSION
54. Industrial Tribunal is a creation of a statute and it gets jurisdiction on
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the basis of reference. It cannot go into the question on validity of the
reference. The Tribunal's role is to adjudicate upon the matters specifically
referred to it and does not possess the authority to decide on issues outside
the scope of the reference. It must confine its adjudication to the terms of the
reference and cannot expand or alter the scope of the dispute referred to it.
55. It is observed by this Court that the learned Tribunal has itself held
that the Tribunal is transgressed the terms of the reference as per which the
learned Tribunal had to adjudicate upon the issue of regularization of the
respondent workmen while the learned Tribunal passed an award in favour
of the workmen by awarding them retrenchment compensation. In the instant
petition the learned Tribunal has wrongly transgressed the terms of reference
and regularized the services of the respondent workmen.
56. Taking into account the limited scope of this Court‟s power under
Article 226 of the Constitution of India, this Court is of the considered view
that the impugned Award suffers from patent illegality since the learned
Tribunal went beyond the scope of the terms of reference and the same is an
error apparent on the face of the record which is in contravention to the law
settled by the Hon‟ble Supreme Court as well as by this Court with regard to
the jurisprudence of Labour Laws.
th
57. In view of the aforesaid observations, the impugned award dated 18
October 2006 passed by Central Government Labour Court cum Industrial
Tribunal-II in ID No. 56/2003 is set aside.
58. Accordingly, the impugned awards in the batch of petition are set
aside and the instant batch of petition is allowed along with the pending
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applications, if any.
59. In view of the aforesaid discussion, the instant batch of petition stands
disposed of.
60. The judgment to be uploaded on the website forthwith.
(CHANDRA DHARI SINGH)
JUDGE
JULY 3, 2024
dy/db/av
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