BHUVNESH KUMAR DWIVEDI vs. M/S HINDALCO INDUSTRIES LTD.

C.A.@SLP(c)Nos.554-555 of 2012 - 1 - REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

BHUVNESH KUMAR DWIVEDI ………APPELLANT VS. M/S HINDALCO INDUSTRIES LTD. ……RESPONDENT J U D G M E N T V.GOPALA GOWDA, J. Leave granted. 2. These appeals are filed against the final judgment JUDGMENT and order dated 10.03.2011 passed by the High Court of Judicature at Allahabad in Civil Misc. Writ Petition No. 8784 of 2002 and also against judgment and order dated 12.10.2011 passed by the High Court of Allahabad in Civil Misc. Review/Recall Application No. 118006 of 2011 by allowing the writ petition filed by the respondent-employer and setting aside Page 1 C.A.@SLP(c)Nos.554-555 of 2012 - 2 - the award passed by the Labour Court which substituted the same by issuing direction to the

a sum of workman. The direction issued by the High Court in its judgment further states that the amount shall either be paid through draft to the workman or deposited before the Labour Court within three months for immediate payment to the workman. In case of default, 12% interest per annum shall be payable on 1,00,000/- after three months till actual payment/deposit/realisation. 3. However, the backdrop of industrial dispute JUDGMENT between the parties is briefly stated hereunder to find out whether the appellant is entitled for the relief as prayed in these appeals. It is the case of the appellant-workman that he was appointed as Labour Supervisor in the employer’s factory on 30.12.1992 and he worked Page 2 C.A.@SLP(c)Nos.554-555 of 2012 - 3 - continuously in terms of Section 25B of the Industrial Disputes Act, 1947 (for short “the

the case of the appellant-workman that he has worked for six calendar years from the date of his appointment till the termination of his service and he has rendered more than 240 days of continuous service in every calendar year before his termination. The respondent-employer terminated the services of appellant-workman on 27.7.1998 as per practice with the reason ‘sanction expired’. The respondent-employer JUDGMENT neither paid retrenchment compensation nor issued any notice or paid wages in lieu of the same to the appellant-workman as mandated under Section 6N of the U.P. Industrial Disputes Act (for short “the U.P. I.D. Act”). The respondent-employer engaged the appellant-workman for work against a post which was permanent in nature but his Page 3 C.A.@SLP(c)Nos.554-555 of 2012 - 4 - appointment was made only for a temporary period from 1992 to 1998 with oblique motive to deprive

‘relieved from work’ and after 4-6 days, he was again engaged for three or six months but without proper procedure and in this manner, he was continuously made to work for full one year and each time the annual increase in wages was shown in the fresh appointment letter. During the entire period of service of the appellant-workman with the respondent-employer, the management followed the process of annually terminating him JUDGMENT from service and again reappointing him in the same post by assigning the same Badge No., ID No. in the same department of Construction Division with the marginal increase of salary and dearness allowance per month. Page 4 C.A.@SLP(c)Nos.554-555 of 2012 - 5 - 4. It is the further case of the appellant- workman that during the course of his employment

permanent by the management and rest of the work force was deprived from the benefit of permanent post by being kept on temporary basis or emergency basis, on daily wage basis or on contract basis. Even though the Construction Division of the employer has been in existence ever since the beginning of its establishment and is necessary for continuous productions in factory, thousands of workmen are employed in the JUDGMENT said division in the above mentioned manner and very few of them are made permanent. It is the further case of the appellant-workman that in accordance with the regular orders passed in the practice of the Company, the concerned workman always fell in the category of workman but due to the improper and unfair labour practice as Page 5 C.A.@SLP(c)Nos.554-555 of 2012 - 6 - mentioned in Schedule V under s. 2(ra) of the I.D. Act it has kept the appellant as temporary

opposed to law. 5. It is the further case of the appellant- workman that he falls within the definition of workman under s. 2(s) of the I.D. Act and has been rendering service since the day of his appointment on 30.12.1992. Therefore, termination of his contract is a clear case of retrenchment as opposed to the provision in Section 6N of the U.P. I.D. Act. The employer on the other hand, did not comply with the mandatory provision of s. JUDGMENT 6-N of the U.P. I.D. Act which sets the conditions precedent to be fulfilled prior to retrenchment of workmen which is in pari materia with s. 25N of the I.D. Act. The respondent- employer neither complied with the aforesaid mandatory provisions nor did the respondent pay Page 6 C.A.@SLP(c)Nos.554-555 of 2012 - 7 - retrenchment compensation or issue three months notice or notice pay in lieu of the same.

of the provisions of the U.P. I.D. Act and the legal principle laid down by this Court in catena of cases in this regard which will be adverted into the reasoning portion of the judgment. Therefore, the appellant-workman had raised an industrial dispute with a request to the state government to make reference for adjudication of existing industrial dispute regarding the termination of service of the appellant workman JUDGMENT from his service by the employer. The Assistant Labour Commissioner made Reference Order No. 1454 CP 15/98 dated 24.9.1999 to the Labour Court at Varanasi. The reference was registered in Case no. 59 of 1999 by the Labour Court, Varanasi, U.P. The Labour Court, after conducting enquiry has adjudicated the industrial dispute between Page 7 C.A.@SLP(c)Nos.554-555 of 2012 - 8 - the parties by answering the points of dispute and passed an award in favour of the appellant-

not produced any material evidence on record to justify the order of termination. Further, the Labour Court has held that the appellant is entitled to reinstatement with back wages and other consequential benefits as if his services were never terminated. 6. Aggrieved by the said award, the respondent- employer filed Civil Misc. Writ Petition No. 8784 of 2002 before the learned single Judge of the JUDGMENT High Court of Judicature at Allahabad questioning the correctness, legality and validity of the award passed by the Labour Court taking the following pleas: (i) It is pleaded by the respondent that the appellant was employed purely on temporary basis Page 8 C.A.@SLP(c)Nos.554-555 of 2012 - 9 - in the project jobs in the Construction Division of the Company for specific periods and finally

an end as per terms of the contract of employment in the appointment letter with effect from 28.7.1998 as a result of non renewal of his contract of employment with the respondent. (ii) It is further pleaded by the respondent that in the Construction Division of the Company, time bound specific project construction work was being undertaken from time to time and thus no regular work force could be maintained for such JUDGMENT project work. However, as a gesture of goodwill and to maintain harmonious industrial relations, the employees who worked in a project work were given preference for employment in other project work on their own request. In the instant case, the service of the appellant came to an end as Page 9 C.A.@SLP(c)Nos.554-555 of 2012 - 10 - per terms of his employment in the specific project job in the Construction Division and

clearance of his dues. (iii) It is further pleaded by the respondent that temporary workmen working in such specific projects are also given preference for employment in the main plant project subject to availability of vacancies and their suitability. After completion of the terms of contract of employment, the appellant was offered fresh employment as Badli worker against vacancies in JUDGMENT Potroom Department of the Company. He applied for the same on 22.10.1998 and after completion of necessary formalities he was selected against the said vacancy and was issued appointment letter dated 23.10.1998. He joined his duties in Potroom Plant-II Department as substitute workman but did Page 10 C.A.@SLP(c)Nos.554-555 of 2012 - 11 - not report to duty on his own and on the other hand he raised baseless industrial dispute for unlawful gain. (iv) It is further pleaded by the respondent that the service of the appellant has not been terminated by the Company but because the appellant did not report for duty on his own after joining duty as mentioned above. Therefore, there is no industrial dispute between the parties and the reference made by the appropriate authorities at the instance of the workman to the Labour Court is bad in law. However, the respondent craves leave of the Labour Court to JUDGMENT add, amend, alter and rescind its written statement and to produce evidence oral or documentary, if found expedient at the relevant stages of the hearing. However, no plea was made by the respondent in written form on the provision of Section 2(oo)(bb) of the I.D. Act Page 11 C.A.@SLP(c)Nos.554-555 of 2012 - 12 - that the termination of the appellant from his service falls within this provision. Nonetheless,

Court at the time of addressing its rights. The same has been addressed by the Labour Court rejecting the contention on the basis of recording its reasons which will be dealt with in the reasoning portion of this judgment. 7. On the other hand, the appellant, by filing a detailed counter statement before the High Court has sought to justify the finding and reasons recorded by the Labour Court contending that the JUDGMENT Labour Court, being a fact finding court, on appreciation of all pleadings and undisputed facts regarding the periodical years of service rendered by the appellant with the respondent, held that he had rendered continuous service of 240 days in 12 calendar months. Therefore, the Page 12 C.A.@SLP(c)Nos.554-555 of 2012 - 13 - Labour Court has held that the termination order was issued by the respondent without complying

pleaded that neither the compensation for retrenchment was given to him nor was he issued the three months notice nor notice pay in lieu of the same as mandated under Section 6-N of the U.P. I.D. Act. The appellant further sought to justify the finding of the Labour Court that periodical appointment of the appellant for the very same post in the Construction Division of the respondent’s Plant with the same Badge Number JUDGMENT and marginal increase of basic pay and D.A. is unfair labour practice in terms of Section 25-T of the I.D. which is punishable under section 25- U of the I.D. Act. The High Court concurred with the finding of the Labour Court wherein it has held that the respondent’s action is in Page 13 C.A.@SLP(c)Nos.554-555 of 2012 - 14 - contravention of Section 6-N of the U.P. I.D. Act.

that the finding on the question of retrenchment is factual and legally not correct in view of the fact that the termination of the service of the appellant falls within the provision of Section 2(oo) (bb) of the I.D. Act. The High Court has exercised its judicial review power under Articles 226 and 227 of the Constitution of India and also referred to the facts that after termination of the service of the appellant from the post of Labour Supervisor, he JUDGMENT was offered with employment in the Potroom department w.e.f. 23.10.1998, which he joined and later resigned from that post. Therefore, though the Labour Court came to the conclusion on facts, evidence on record and law on this aspect that keeping the workman as Badli worker Page 14 C.A.@SLP(c)Nos.554-555 of 2012 - 15 - was unfair labour practice, the High Court has erroneously held that engagement of some

permissible under law. The High Court further came to erroneous conclusion that the appellant did resign and having stated so, the High Court further made observation that the least which was required from the respondent under such circumstance, was to pay retrenchment compensation to the appellant in terms of Section 6-N of the U.P. I.D. Act which was admittedly not done. It was further held by the JUDGMENT High Court that an employee engaged for a particular project cannot be directed to be retained after the completion of the project. However, since it was not stated by the respondent that for which particular project or projects the appellant was employed, despite the fact that he had been continuously working for Page 15 C.A.@SLP(c)Nos.554-555 of 2012 - 16 - six years on different projects, the appellant was conferred with some rights since he had been

9. The High Court also referred to the resignation of the appellant from the job of Badli worker and held that the same mitigates against his claim. If he wanted permanent job and had been assured the same, he should not have first applied to be selected as Badli worker and then resigned just after selection. Having said so, the High Court with reference to the facts and circumstances of the case, opined that it was not a case of reinstatement with full back wages. JUDGMENT However, by placing reliance upon the judgment of this Court in the case of Harjinder Singh v. 1 Punjab State Warehousing Corporation , the correctness of the said substituted award by the High Court is challenged in this appeal by the 1 (2010) 3 SCC 192 Page 16 C.A.@SLP(c)Nos.554-555 of 2012 - 17 - appellant urging various facts and legal contentions.

appearing on behalf of the appellant-workman submits that the finding and reasons recorded by the High Court in reversing and setting aside the award of reinstatement with back wages and other consequential benefits and substituting its award with award of 1,00,000/- as damages is erroneous in law since the action of the respondent in terminating the services of the appellant is in contravention of Section 6-N of the U.P. I.D. Act. While exercising judicial review power by JUDGMENT the High Court under Articles 226 and 227 of the Constitution of India, though it has concluded on the points of dispute in favour of the workman it has erroneously interfered with the award of reinstatement with back wages and consequential benefits which by the Labour Court. This finding Page 17 C.A.@SLP(c)Nos.554-555 of 2012 - 18 - by High Court is in violation of the decision of this Court in the case of Harjinder Singh (supra)

has examined the conferment of power upon the High Court and held that the Labour Court in exercise of its original jurisdiction is the final court of facts and grants of relief and the same cannot be interfered with in exercise of its supervisory jurisdiction unless the award is shown to be vitiated as erroneous in law. Therefore, the impugned judgment and order is vitiated in law and is liable to be set aside. JUDGMENT 11. Further, it is contended that the High Court has further failed to take into consideration the relevant aspect of the matter namely, that the Labour Court on appreciation of pleadings and evidence on record with reference to undisputed fact of non-payment on retrenchment compensation Page 18 C.A.@SLP(c)Nos.554-555 of 2012 - 19 - recorded that the Company neither obtained permission from the appropriate Government to

to him. The action of termination of the service of the appellant on the ground that it is an automatic termination for non-renewal of contract of the employment is in contravention to the statutory provisions of the U.P. I.D. Act and the law laid down by this Court in catena of cases, the relevant paragraphs of which will be adverted to in the reasoning portion of this judgment. On this ground also the impugned judgment is liable JUDGMENT to be set aside and the impugned award of the Labour Court is entitled to be restored. 12. It is further urged that the High Court has further failed to take into consideration the fact that the award of damages as against reinstatement without consequential benefits to Page 19 C.A.@SLP(c)Nos.554-555 of 2012 - 20 - the appellant while having concurred with the finding of fact recorded by Labour Court after

case of retrenchment and is done in non- compliance of the mandatory requirements as provided under the statute of U.P. I.D. Act is erroneous in law. Therefore, the impugned judgment of the High Court is liable to be set aside. 13. Mr. Chander Udai Singh, the learned senior Counsel for the respondent-employer sought to justify the award of damages and setting aside the JUDGMENT order of reinstatement with consequential benefits by the High Court by contending that the appellant is not a permanent workman. He was engaged on a temporary basis periodically and he had no permanent status as worker and his services could not be continued by the employer. His termination Page 20 C.A.@SLP(c)Nos.554-555 of 2012 - 21 - from service from the respondent Company was on account of the condition of automatic termination

learned senior counsel for the respondent, no order of termination was passed by the respondent. On the other hand, the present case was a situation of automatic termination due to non-renewal of contract which is covered under Section 2(oo) (bb) of the I.D. Act and the same is an exception to retrenchment. This legal aspect, according to the learned senior counsel has not been appropriately appreciated by the Labour Court. The same has not JUDGMENT been accepted by the Division Bench of High Court in exercise of its jurisdiction under Articles 226 and 227 of the Constitution of India. Therefore, the award of damages could not have been awarded by the Labour Court. However, the same has been paid to the appellant and which is accepted by him. Therefore, he would submit that the appellant is Page 21 C.A.@SLP(c)Nos.554-555 of 2012 - 22 - not entitled to the relief as prayed in this appeal for the reason that if automatic termination of

appointment order, then the claim of the appellant is not a case of retrenchment and compliance of the requirement under Section 6-N of the U.P. Act does not arise. The same aspect has not been taken into proper perspective both by the Labour Court as well as the High Court. Though the appellant has not challenged separately by filing SLP the correctness of the impugned judgment can be challenged by the respondent as it has got the right under the JUDGMENT provisions of Order 41 Rule 33 CPC to question the correctness of the finding recorded on the question of the termination by the Labour Court and the High Court which made concurrent finding holding that it is a case of retrenchment and the same is in contravention of Section 6-N of the U.P. I.D. Act. Page 22 C.A.@SLP(c)Nos.554-555 of 2012 - 23 - The High Court while passing the judgment and order and substituting the award of the Labour Court has 1,00,000/- as

entitled to the relief as prayed for in this appeal for another reason namely, that he had accepted the damages awarded in the impugned judgment by the High Court. Therefore, this Court need not interfere with the impugned judgment. 14. Another legal contention urged by the learned senior counsel for the respondent is that the appellant is not entitled to back wages since he is not employed with the respondent-Company and has JUDGMENT not even filed application under Section 17B before the High Court when the award passed by the Labour Court was challenged by the respondent. Further, the appellant admitted that he did not claim wages under the Act which would clearly go on to show that the appellant was not employed and therefore, Page 23 C.A.@SLP(c)Nos.554-555 of 2012 - 24 - he is not entitled to back wages as awarded by the Labour Court. Hence, the award of the back wages by

the facts of the case which need not be interfered with by this Court in exercise of its power under Article 136 of the Constitution of India. 15. With reference to the above legal contentions the following points would arise for our consideration :- (1) Whether the exercise of power by the High Court under Articles 226 and 227 JUDGMENT of the Constitution and setting aside the award of reinstatement, back wages and other consequential reliefs and awarding 1,00,000/- towards damages is legal and valid? (2) Whether the concurrent finding recorded by the Labour Court and High Page 24 C.A.@SLP(c)Nos.554-555 of 2012 - 25 - Court on the question of termination of services of the workman holding

is void ab initio and not accepting the legal plea that the case falls under Section 2 (oo) (bb) of the Act is correct, legal and valid? (3) Whether the workman is entitled for reinstatement with full back wages and other consequential reliefs ? (4) What Award? Answer to point No. 1 JUDGMENT 16. The appellant has claimed that the High Court has modified the award passed by the Labour Court which has awarded reinstatement of the appellant with full back wages and other consequential benefits to simply awarding compensation to the tune of 1,00,000/- by the High Court in lieu of Page 25 C.A.@SLP(c)Nos.554-555 of 2012 - 26 - reinstatement with back wages and consequential benefits which order is bad in law in the light of

2 Ltd. v. Union of India , this Court, on the issue of the power of the High Court for judicial review under Article 226, held as under: “60. The power of judicial review is neither unqualified nor unlimited. It has its own limitations. The scope and extent of the power that is so very often invoked has been the subject-matter of several judicial pronouncements within and outside the country. When one talks of 'judicial review' one is instantly reminded of the classic and oft quoted passage from Council of Civil Service Unions (CCSU) v. Minister for the Civil Service [1984] 3 All ER 935, where Lord Diplock summed up the permissible grounds of judicial review thus: Judicial Review has I think developed to a stage today when, without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground I would call 'illegality', the second 'irrationality' and the third 'procedural impropriety'. JUDGMENT 2 (2012) 5 SCC 443 Page 26 C.A.@SLP(c)Nos.554-555 of 2012 - 27 -

Page 27 C.A.@SLP(c)Nos.554-555 of 2012 - 28 - Further, in the case of Devinder Singh v. Municipal 3 Council, Sanaur , it was held that : “22. ……A careful analysis thereof reveals that the High Court neither found any jurisdictional infirmity in the award of the Labour Court nor it came to the conclusion that the same was vitiated by an error of law apparent on the face of the record. Notwithstanding this, the High Court set aside the direction given by the Labour Court for reinstatement of the Appellant by assuming that his initial appointment/engagement was contrary to law and that it would not be in public interest to approve the award of reinstatement after long lapse of time. In our view, the approach adopted by the High Court in dealing with the award of the Labour Court was ex facie erroneous and contrary to the law laid down in Syed Yakoob v. K.S. Radhakrishnan AIR (1964) SC 477, Swaran Singh v. State of Punjab (1976) 2 SCC 868 P.G.I. of Medical Education & Research, Chandigarh v. Raj Kumar (2001) 2 SCC 54, Surya Dev Rai v. Ram Chander Rai (2003) 6 SCC 675 and Shalini Shyam v. Rajendra Shankar Path (2010) 8 SCC 329. JUDGMENT 23. In Syed Yakoob v. K.S. Radhakrishnan (supra), this Court identified the limitations of certiorari jurisdiction of the High Court under Article 226 of the Constitution in the following words: 3 (2011) 6 SCC 584 Page 28 C.A.@SLP(c)Nos.554-555 of 2012 - 29 -

Page 29 C.A.@SLP(c)Nos.554-555 of 2012 - 30 -

Page 30 C.A.@SLP(c)Nos.554-555 of 2012 - 31 - evidence at all, because in such cases the error amounts to an error of law. The writ jurisdiction extends only to cases where orders are passed by inferior courts or tribunals in excess of their jurisdiction or as a result of their refusal to exercise jurisdiction vested in them or they act illegally or improperly in the exercise of their jurisdiction causing grave miscarriage of justice.” 17. The judgments mentioned above can be read with the judgment of this court in Harjinder Singh’s case (supra), the relevant paragraph of which reads as under: “ 21. Before concluding, we consider it necessary to observe that while exercising jurisdiction under Articles 226 and/or 227 of the Constitution in matters like the present one, the High Courts are duty-bound to keep in mind that the Industrial Disputes Act and other similar legislative instruments are social welfare legislations and the same are required to be interpreted keeping in view the goals set out in the Preamble of the Constitution and the provisions contained in Part IV thereof in general and Articles 38, 39( a ) to ( e ), 43 and 43-A in particular, which mandate that the State should secure a social order for the promotion of welfare of the people, ensure equality between men and women and equitable distribution of material resources of the community to subserve the common good and also ensure that JUDGMENT Page 31 C.A.@SLP(c)Nos.554-555 of 2012 - 32 - the workers get their dues. More than 41 years ago, Gajendragadkar, J. opined that:

18. A careful reading of the judgments reveals that the High Court can interfere with an Order of the Tribunal only on the procedural level and in cases, where the decision of the lower courts has been arrived at in gross violation of the legal principles. The High Court shall interfere with JUDGMENT factual aspect placed before the Labour Courts only when it is convinced that the Labour Court has made patent mistakes in admitting evidence illegally or have made grave errors in law in coming to the conclusion on facts. The High Court granting contrary relief under Articles 226 and 227 of the Constitution amounts to exceeding its jurisdiction Page 32 C.A.@SLP(c)Nos.554-555 of 2012 - 33 - conferred upon it. Therefore, we accordingly answer the point No. 1 in favour of the appellant. Answer to point No. 2 19. No plea was made by the respondent in its written statement filed before the Labour Court with regard to the provision of Section 2(oo)(bb) of the I.D. Act. Nonetheless, this legal ground without any factual foundation was pressed into operation before the Labour Court by the learned counsel for the respondent. The same has been addressed by the Labour Court by rejecting the said contention by assigning its own reasons. Before we record our JUDGMENT finding on this contention, it is pertinent to mention the provision of Section 2 (oo) (bb) of the I.D. Act, which reads thus: “2 (oo) “retrenchment” means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include- Page 33 C.A.@SLP(c)Nos.554-555 of 2012 - 34 -

20. It is argued by the learned counsel for the appellant that there is no provision in pari materia to this provision in the U.P. I.D. Act. Therefore, even if the service of the appellant is terminated on expiry of the contract period of service, it would fall within the definition of retrenchment under the U.P. I.D. Act for non compliance of the mandatory requirement under Section 6-N of the U.P. I.D. Act. The order of termination against the JUDGMENT appellant is rendered void ab initio in law, therefore, the appellant is entitled to be reinstated with back wages and consequential benefits. In support of this contention, the learned counsel has aptly relied upon the decision of this Court in U.P. State Sugar Corporation Ltd. v. Om Page 34 C.A.@SLP(c)Nos.554-555 of 2012 - 35 - 4 Prakash Upadhyay , with regard to the applicability of the provision of Section 2(oo) (bb) of the I.D.

“3. On the application of the State Act or the Central Act to the case on hand, the High Court followed the Division Bench ruling in Jai Kishun v. U.P. Coop. Bank Ltd . and made it plain that the provision of Section 2 (oo)(bb) of the Central Industrial Dispuutes Act would not apply in respect of proceedings arising under the U.P. Industrial Disputes Act. The High Court also noticed the contrary view in this regard in the case of Pushpa Agarwal v. Regional Inspectress of Girls Schools, Meerut but held that in Jai Kishun case the relevant provisions had been duly considered which are not taken note of in Pushpa Agarwal case and on that basis, it followed the decision in Jai Kishun case . It is this judgment that is brought in appeal before us in these proceedings. …….. 5. The law is settled that under the Central Act every case of retrenchment would not include a case of contractual termination which came to be introduced under the Central Act by amending Act 49 of 1984 which purports to exclude from the ambit of definition “retrenchment” inter alia: (i) termination of service of a workman as a result of the non- renewal of contract of employment between the JUDGMENT 4 (2002) 10 SCC 89 Page 35 C.A.@SLP(c)Nos.554-555 of 2012 - 36 -

JUDGMENT Page 36 C.A.@SLP(c)Nos.554-555 of 2012 - 37 -

’31.Act not to override State laws.- (1) If, immediately before the commencement of this Act, there is in force in any State any Provincial Act or State Act relating to the settlement or adjudication of disputes, the operation of such an Act in that State in relation to matters covered by that Act shall not be affected by the Industrial Disputes Act, 1947 as amended by this Act’. Sub- section (1) of the said section makes it clear that the operation of the State Act will not be affected by the Central Act…” JUDGMENT 21. The learned counsel for the appellant therefore, rightly submitted that Section 2 (oo) (bb) of the I.D. Act will not be attracted in the present case and on the other hand, the provision of Section 6-N Page 37 C.A.@SLP(c)Nos.554-555 of 2012 - 38 - of the U.P. I.D. Act is required to be fulfilled mandatorily by the respondent to retrench the

has not brought in his argument to counter the above legal contention except contending that the provision of Section 2(oo) (bb) of the I.D. Act would be applicable to the fact situation of the case as the appellant has been in contract employment in the project. But, we are inclined to hold that s. 2 (oo) (bb) of the I.D. Act is not attracted in the present case on two grounds: JUDGMENT Firstly, in the light of the legal principle laid down by this Court in the case of U.P. State Sugar Corporation Ltd. (supra), the provisions of the U.P. I.D. Act remain unaffected by the provision of the I.D. Act because of the provision in s. 31 of the Industrial Disputes (Amendment and Miscellaneous Page 38 C.A.@SLP(c)Nos.554-555 of 2012 - 39 - Provisions) Act, 1956. Hence, s. 2 (oo) (bb) is not attracted in the present case.

to us. On perusal of facts, it is revealed that his service has been terminated several times and he was subsequently employed again till his service was finally terminated on 27.7.1998. His brief periods of contracts with the respondent have been from 28.12.1992 to 28.12. 1993 for the first time, from 3.4.1994 to 29.12.1994 for the second time, from 10.1.1995 to 5.1.1996 for the third time, from 16.1.1996 to 11.1.1997 for the fourth time, from JUDGMENT 20.1.1997 to 21.1.1998 for the fifth time and from 27.1.1998 to 27.7.1998 for a final time at the end of which his service was terminated. 23. Very interestingly, the periods of service extends to close to 6 years save the artificial breaks made by the respondent with an oblique motive Page 39 C.A.@SLP(c)Nos.554-555 of 2012 - 40 - so as to retain the appellant as a temporary worker and deprive the appellant of his statutory right of

as defined under Section 2(ra) of the I.D. Act, which is not permissible in view of Sections 25T and 25U of the I.D. Act read with entry at Serial No. 10 in the Vth Schedule to the I.D. Act regarding unfair labour practices. Section 2 (ra) reads thus: “unfair labour practice” means any of the practices mentioned in the Vth Schedule. Further, Entry 10 of Vth Schedule reads as under: JUDGMENT “5. To discharge or dismiss workmen- …. (10). To employ workmen 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 workmen.” 24. The respondent, in order to mitigate its conduct towards the appellant has claimed that the appellant Page 40 C.A.@SLP(c)Nos.554-555 of 2012 - 41 - was appointed solely on contract basis, and his service has been terminated in the manner

the respondent for the following reasons:- (i) Firstly, the respondent has not produced any material evidence on record before the Labour Court to prove that it meets all the required criteria under the Contract Labour (Regulation and Abolition) Act, 1970, to be eligible to employ employees on contractual basis which includes license number etc. (ii) Secondly, the respondent could not produce JUDGMENT any material evidence on record before the Labour Court to show that the appellant was employed for any particular project(s) on the completion of which his service has been terminated through non-renewal of his contract of employment. Page 41 C.A.@SLP(c)Nos.554-555 of 2012 - 42 - 25. Therefore, we deem it fit to construe that the appellant has rendered continuous service for six

and can therefore be subjected to retrenchment only through the procedure mentioned in the I.D. Act or the state Act in pari materia. 26. Therefore, we answer the point No. 2 in favour of the appellant holding that the Labour Court was correct in holding that the action of the respondent/employer is a clear case of retrenchment of the appellant, which action requires to comply JUDGMENT with the mandatory requirement of the provision of Section 6-N of the U.P. I.D. Act. Undisputedly, the same has not been complied with and therefore, the order of retrenchment has rendered void ab initio in law. Page 42 C.A.@SLP(c)Nos.554-555 of 2012 - 43 - Answer to Point No.3 27. Having answered point No. 2 in favour of the

worker of the respondent Company providing continuous service for 6 years except for the artificial breaks imposed upon him with an oblique motive by the respondent Company. We hold that the termination of service of the appellant amounts to “retrenchment” in the light of the principle laid down by three judge bench decision of this Court in 5 State Bank of India v. Shri N. Sundara Money and attracts the provision of S. 6-N of the U.P. I.D. JUDGMENT Act. The case mentioned above illustrates the elements which constitute retrenchment. The relevant paragraphs read as under: “9. A break-down of Section 2(oo) unmistakably expands the semantics of retrenchment. 'Termination...for any reason whatsoever' are the keywords. Whatever the reason, every termination spells retrenchment. So 5 AIR 1976 SC 1111 Page 43 C.A.@SLP(c)Nos.554-555 of 2012 - 44 -

Page 44 C.A.@SLP(c)Nos.554-555 of 2012 - 45 -

Page 45 C.A.@SLP(c)Nos.554-555 of 2012 - 46 - determination is not the sole magnetic pull of the provision. A preemptive provision to terminate is struck by the same vice as the post-appointment termination. Dexterity of diction cannot defeat the articulated conscience of the provision.” 28. Section 6N of the U.P. I.D. Act which is in pari materia to s. 25N of the I.D. Act reads thus: “[6-N. Condition precedent to retrenchment of workmen.- No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until,- (a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired or the workman has been paid in lieu of such notice wages for the period of the notice; JUDGMENT Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies the date of termination of service; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay for every completed year of service or any part thereof in excess of six months; and Page 46 C.A.@SLP(c)Nos.554-555 of 2012 - 47 - (c) notice in the prescribed manner is served on the State Government]”

6 (2010) 5 SCC 497 Page 47 C.A.@SLP(c)Nos.554-555 of 2012 - 48 -

(Emphasis laid by this Court) Therefore, in the light of the law provided in the I.D. Act and its state counterpart through the Page 48 C.A.@SLP(c)Nos.554-555 of 2012 - 49 - U.P. I.D. Act and also on the basis of the legal principle laid down by this Court, we hold that the

29. Therefore, the Labour Court was correct on factual evidence on record and legal principles laid down by this Court in catena of cases in holding that the appellant is entitled to reinstatement with all consequential benefits. Therefore, we set aside the Order of the High Court and uphold the order of the Labour Court by holding that the appellant is entitled to reinstatement in the respondent-Company. JUDGMENT 30. On the issue of back wages to be awarded in favour of the appellant, it has been held by this Court in the case of Shiv Nandan Mahto v. State of 7 Bihar & Ors. that if a workman is kept out of service due to the fault or mistake of the establishment/ company he was working in, then the 7 (2013) 11 SCC 626 Page 49 C.A.@SLP(c)Nos.554-555 of 2012 - 50 - workman is entitled to full back wages for the period he was illegally kept out of service. The relevant paragraph of the judgment reads as under:

31. Further, in General Manager, Haryana Roadways v. JUDGMENT 8 Rudhan Singh , the three Judge Bench of this Court considered the question whether back wages should be awarded to the workman in each and every case of illegal retrenchment. The relevant paragraph reads as under: 8 (2005) 5 SCC 591 Page 50 C.A.@SLP(c)Nos.554-555 of 2012 - 51 -

JUDGMENT Page 51 C.A.@SLP(c)Nos.554-555 of 2012 - 52 - 32. Subsequently, in the case of Deepali Gundu 9 Surwase v. Kranti Junior Adhyapak Mahavidyalaya it

JUDGMENT

Page 52 C.A.@SLP(c)Nos.554-555 of 2012 - 53 -

JUDGMENT 33. In the present case, the respondent has made a vague submission to the extent that: “the conduct of the workman throughout the proceedings before the High Court during 2002 to 2011 shows that he is continuously gainfully employed Page 53 C.A.@SLP(c)Nos.554-555 of 2012 - 54 - somewhere. Admittedly even in the counter affidavit in the said Writ Petition, it has not been stated that the workman was not employed”

down by this Court in the Deepali Gundu Surwase case (supra), the submission of the respondent that the appellant did not aver in his plaint of not being employed, does not hold since the burden of proof that the appellant is gainfully employed post termination of his service is on the respondent. The claim of the respondent that the appellant is gainfully employed somewhere is vague and cannot be considered and accepted. Therefore, we hold that the JUDGMENT appellant is entitled to full back wages from the date of termination of his service till the date of his reinstatement. Answer to point No.4 34. The present case is a clear case of violation of the constitutional principles expressly Page 54 C.A.@SLP(c)Nos.554-555 of 2012 - 55 - mentioned in the text. Before we make our concluding findings and reasons, we wish to revisit

“ 22. In Y.A. Mamarde v. Authority under the Minimum Wages Act , this Court, while interpreting the provisions of the Minimum Wages Act, 1948, observed: (SCC pp. 109-10) “The anxiety on the part of the society for improving the general economic condition of some of its less favoured members appears to be in supersession of the old principle of absolute freedom of contract and the doctrine of laissez faire and in recognition of the new principles of social welfare and common good. Prior to our Constitution this principle was advocated by the movement for liberal employment in civilised countries and the Act which is a pre-Constitution measure was the offspring of that movement. Under our present Constitution the State is now expressly directed to endeavour to secure to all workers (whether agricultural, industrial or otherwise) not only bare physical subsistence but a living wage and conditions of work ensuring a decent standard of life and full enjoyment of leisure. This directive principle of State policy being conducive to the general interest of the nation as a whole, merely lays down the foundation for appropriate JUDGMENT Page 55 C.A.@SLP(c)Nos.554-555 of 2012 - 56 -

“The original concept of employment was that of master and servant. It was therefore held that a court will not specifically enforce a contract of employment. The law has adhered to the age-old rule that an employer may dismiss the employee at will. Certainly, an employee can never expect to be completely free to do what he likes to do. He must face the prospect of discharge for failing or refusing to do his work in accordance with his employer’s directions. Such control by the employer over the employee is fundamental to the employment relationship. But there are innumerable facets of the employee’s life that have little or no relevance to the employment relationship and over which the employer should not be allowed to exercise control. It is no doubt difficult to draw a line between reasonable demands of an employer and those which are unreasonable as having no relation to the employment itself. The rule that an employer can arbitrarily discharge an employee with or without regard to the JUDGMENT Page 56 C.A.@SLP(c)Nos.554-555 of 2012 - 57 -

JUDGMENT Page 57 C.A.@SLP(c)Nos.554-555 of 2012 - 58 -

JUDGMENT Page 58 C.A.@SLP(c)Nos.554-555 of 2012 - 59 - takes the employment on the terms which are offered to him .” (emphasis added)

“ 25 . … It is borrowed from the archaic common law concept that employment was a matter between the master and servant only. In the first place, this rule in its original absolute form is not applicable to government servants. Secondly, even with regard to private employment, much of it has passed into the fossils of time. ‘This rule held the field at the time when the master and servant were taken more literally than they are now and when, as in early Roman law, the rights of the servant, like the rights of any other member of the household, were not his own, but those of his paterfamilias .’ The overtones of this ancient doctrine are discernible in the Anglo- American jurisprudence of the 18th century and the first half of the 20th century, which rationalised the JUDGMENT Page 59 C.A.@SLP(c)Nos.554-555 of 2012 - 60 -

29. The doctrine of laissez faire was again rejected in Glaxo Laboratories (I) Ltd. v. Presiding Officer , in the following words: JUDGMENT “ 12 . In the days of laissez faire when industrial relation was governed by the harsh weighted law of hire and fire the management was the supreme master, the relationship being referable to contract between unequals and the action of the management treated almost sacrosanct. The developing notions Page 60 C.A.@SLP(c)Nos.554-555 of 2012 - 61 -

JUDGMENT 35. We therefore conclude and hold that the Labour Court was correct on legal and factual principles in reinstating the appellant along with full back wages after setting aside the order of termination. Page 61 C.A.@SLP(c)Nos.554-555 of 2012 - 62 - The High Court on the other hand, has erred by exceeding its jurisdiction under Article 227 of the

Badly worker and also awarding that retrenchment compensation to the tune of 1,00,000/- will do justice to the appellant without assigning reasons which is wholly unsustainable in law. 36. The learned counsel for the respondent had mentioned before this Court about a settlement between the parties in this matter after the judgment was reserved. Therefore, we have not taken JUDGMENT into consideration such plea from the learned counsel of the respondent since it was taken up after the hearing was over. Also the documentary evidence on record produced by the parties required us to reject the subsequent plea made by the respondent in this case. We therefore set aside the finding of the High Court in the impugned Page 62 C.A.@SLP(c)Nos.554-555 of 2012 - 63 - judgment and hold that the appellant is entitled to reinstatement with full back wages from the date of

which accrue to him by virtue of his employment with the respondent company. The appeals are allowed, with no order as to costs. ………………………………………………………………J. [GYAN SUDHA MISRA] ………………………………………………………………J. [V. GOPALA GOWDA] JUDGMENT New Delhi, April 25, 2014. Page 63