Muzaffarpur Regional Development Authority and Others vs Jagarnath Jha and Others

Rajesh Balia, C.J. and V.N. Sinha, J.—Heard learned Counsel for the parties who have brought to our notice that during pendency of this appeal the appellant, Muzaffarpur Regional Development Authority (hereinafter referred to as "the Authority") has merged into the Corporation as the Act under which the authority was constituted was repealed and, therefore, all its rights, liabilities and obligations in pending litigation lies on the Municipal Corporation and that is why the Municipal Corporation is substituted as appellant in place of the Authority.

The facts which have not been disputed before us as noticed by the learned single Judge are that the respondents, petitioners 9 in number, had all been appointed on daily wages between November 1, 1980 and October 1, 1985 on different dates to perform the work of Road Roller Driver in the Authority. While they were continuing in service the Establishment Committee of the Authority resolved that those who were working before December 31, 19851 will continue on their posts and services of persons appointed thereafter shall be terminated which resolution of the Establishment Committee was approved by the Authority on January 17,1987 and consequently order to that effect was issued on December 17, 1988. Thereafter the petitioners filed C.W.J.C. No. 3957/1992 raising grievance about non-payment of even minimum wages. While the matter was pending against that claim the services of the petitioners were terminated by notice dated October 8, 1993. Against the proposed termination with effect from November 10, 1993 and after considering the representation submitted against that, by order dated November 6, 1993 the services of the petitioners-respondents were terminated with effect from November 10, 1993 directing them to collect the retrenchment compensation from the office of the Authority. The learned single Judge found the retrenchment of the petitioners to be in violation of Section 25-F(b) of the Industrial Disputes Act, 1947 (hereinafter referred to as "the Act") on the aforesaid undisputed facts being not in accordance with Section 25-F(b) of the Act and quashed the termination order leaving it open for the respondent, appellants herein, to terminate the services of the petitioners in case it is necessary in accordance with law.

Learned Counsel appearing for the appellants have not challenged the findings on the merit but had raised the issue that the Authority is not an Industry within the meaning 4! of Section 2(j) of the Act so as to invite application of Section 25-F(b) of the Act.

The aforesaid contention is noticed to be rejected in view of the decision rendered by the Supreme Court by a Bench of seven Judges in the case of Bangalore Water Supply and Sewerage Board Vs. A. Rajappa and Others, analogous cases. It is too late in the day to contend that the activity of town development carried out by the Authority is not an industry within the meaning of Section 2(j) of the Act in which the Court after giving wide import to the expression ''Industry'' in. Section 2(j) of the Act said that at p. 404 of LLJ:

Where there is (i) systematic activity, (ii) organized by co-operation between employer and employee (the direct and substantial element is chimerical), (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss e.g. making, on a large scale, Prasad or food), prima facie, there is an "industry" in that enterprise.

Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector.

The focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.

With this premise the Court went on to observe-"Sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies."

Therefore, we do not find that a Town Development Authority which cannot but be a welfare activity of the State towards planned development of urban areas and is not excluded from the very wide amplitude of the definition of Industry u/s 2(j) of the Act as explained by the Hon''ble Supreme Court.

So far the validity of retrenchment is concerned, two things are very clear that though the first notice dated October 8,1993 speaks of terminating services of the petitioners-respondents herein with effect from November 10, 1993 but in totality of facts and circumstances it can only be considered as; a show-cause notice against proposed termination of the services of the petitioners respondents inasmuch as by letter dated October 8, 1993, objections to the proposed-termination were invited and then after considering the representation submitted by the workmen the termination order was issued on November 6, 1993 which was to be effective from November 10, 1993 itself.

It is nobody''s case that any amount/remuneration in alternative of one month''s notice was paid or offered to the workmen before retrenchment became effective. Moreover, there is no evidence that the workmen were paid or offered retrenchment compensation simultaneously with the termination of services. Merely requiring the workmen to collect retrenchment compensation without specifying the time when the retrenchment compensation is to be collected and from where, it cannot be said in compliance of Section 25-F (b) of the Act.

In the facts and circumstances of the case, in our opinion, there is no infirmity in the judgment of the learned single Judge, dated March 30, 1995 passed in C.W.J.C. No. 3957/1992 which requires any interference.

Accordingly, the Letters Patent Appeal fails and is hereby dismissed. No. costs.