National Institute of Ayurveda vs Central Government Industrial Tribunal cum Labour Court and Others

Veerender Singh Siradhana, J.—The instant batch of three writ applications, projects a challenge to the impugned award passed by the Central Government Industrial Tribunal cum Labour Court, Jaipur (hereinafter referred to as the ''Tribunal'', for short), whereby the Tribunal answered the reference in favour of the respondent-workmen holding termination of their employment on 24th May, 1997; as illegal and unjustified with a direction for reinstatement in service with it''s continuity along with 50% back wages.

Briefly, the material facts necessary for appreciation of the controversy raised herein needs to be first noticed. The respondent-workmen were appointed on 22nd May, 1996, by the petitioner-employer on daily wages basis, in response to notice inviting applications from eligible candidates. The appointment of the respondent-workmen was initially for 90 days and thereafter, it was extended from time to time, and they worked upto 23rd May, 1997. The respondent-workmen raised an industrial dispute for termination of their employment with effect from 24th May, 1997, was in violation of Section 25-F, 25-G and 25-H of the Industrial Disputes Act, 1947 (hereinafter referred to as the ''Act of 1947''). On a reference made by the Central Government under Section 10 of the Act of 1947, the respondent-workmen submitted their statement of claim, which was responded by the petitioner-employer. Taking into consideration the pleaded facts, evidence adduced by the parties, and after hearing their representatives, the Tribunal passed the impugned award dated 30th November, 2004.

The learned counsel for the petitioner-employer reiterating the pleaded facts and grounds of the writ application while the assailment of the impugned award asserted mainly on two counts. Firstly, for the Tribunal having taken in consideration the various opinions of the High Courts as well as the Hon''ble Supreme Court, concluded the findings by observing that in view of the principle propounded in the decisions, the objection to the claim, on behalf of the petitioner-employer, on the anvil of Section 2(oo)(bb) of the Act of 1947, could not acceded to. Secondly, the observations made by the Tribunal while answering the reference to the effect that the termination order dated 24th May, 1997, is illegal and unjustified, is an illegality for there was no order as such terminating the employment of the respondent-workmen. Reliance has been placed on the opinion of the Hon''ble Supreme Court in the case of Municipal Council, Samrala versus Raj Kumar: (2006) 3 SCC 81.

Per contra; Mr. Dharmendra Jain, learned counsel, appearing on behalf of the respondent-workmen, supporting the impugned award passed by the Tribunal and reiterating the stand in the statement of claim as pleaded before the Tribunal, strenuously argued that the Tribunal has extensively dealt with the law cited by both the sides. Further the Tribunal made a threadbare analysis of the evidence and the pleadings of the parties, as would be reflected from the discussions made in the impugned award.

The Tribunal specifically dealt with the submissions made on behalf of the petitioner-employer referring to the text of Section 2 (oo)(bb) of the Act of 1947. The Tribunal considered, in detail, the submissions in the back drop of the law declared by the Division Bench of this Court in the case of Jagdish Prasad Sharma versus Jaipur Development Authority, Jaipur: 1996 (2) WLC 562; wherein the Division Bench while considering the text of clause (bb) of Section 2 of the Act of 1947, observed that the nature of clause (bb) is an exception to the main clause defining the term ''retrenchment'', and therefore, it has to be construed strictly.

The condition incorporated in the order of appointment to the effect that services could be terminated at any time without any notice, could not be construed as a contract of employment for a fixed period, and therefore, in such circumstances, the mandate of Section 2(oo)(bb) of the Act of 1947, is not attracted.

Moreover, the Court in the writ jurisdiction, while examining the legality and validity of an award passed by the Industrial Tribunal/ Labour Court, can interfere only in the event there being any perverse finding(s). The learned counsel to buttress his submissions while placing reliance on the opinion rendered in the case of Jagdish Prasad Sharma (supra), also referred to the opinion of the Hon''ble Supreme Court in the case of S.M. Nilajkar and Others Vs. Telecom, District Manager, Karnataka, AIR 2003 SC 3553 : (2003) 97 FLR 608 : (2003) 3 JT 436 : (2003) 2 LLJ 359 : (2003) 3 SCALE 533 : (2003) 4 SCC 27 : (2003) SCC(L&S) 380 : (2003) 3 SCR 156 : (2003) AIRSCW 2196 : (2003) 3 Supreme 53 .

I have heard the learned counsel for the parties and with their assistance perused the materials available on record.

Indisputably, the petitioner-employer invited applications from eligible candidates for appointment, on daily wages basis @ Rs. 32/-per day for 90 days. The eligibility conditions were also specifically detailed out in the notice dated 15th May, 1996. The Selection Committee recommended the case of the respondent-workmen for appointment and consequently, they were offered with the order of appointment on 22nd May, 1996, on daily wages basis uptil 23rd May, 1997, for a period of three months. The appointment order further incorporated a condition, which reads as under:--

The Division Bench of this Court in the case of Jagdish Prasad Sharma (supra), while considering somewhat similar controversy in the backdrop of the fact wherein the appellant (Jagdish Prasad Sharma), was appointed as Lower Division Clerk vide order dated 29th February, 1998, which was extended from time to time, contained somewhat similar condition, which reads thus:--

The Division bench of this Court analyzing the definition of ''retrenchment'' as contained under Section 2(oo) of the Act of 1947, examined the controversy in the light of clause (bb). At this juncture, it will be relevant to consider the paragraph 3 and 4 of the judgment in the case of Jagdish Prasad Sharma (supra), which reads thus:--

"3. The definition of ''retrenchment'' is contained in Section 2(oo) of the Industrial Disputes Act. It reads as follows:--

"''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-

(a) voluntary retirement of the workman; or

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or

(c) termination of the service of a workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or]

(d) termination of the service of a workman on the ground of continued ill-health;]"

Reliance was placed on behalf of the respondent Jaipur Development Authority on the clause (bb) of the definition. On this basis the employment of workman was by virtue of contract which was not renewed. The contention cannot be accepted. We have referred to the order of appointment dated February 29, 1988 and order of extension dated September 8, 1988 (Annexures I and II of the writ petition). Stipulation in the order of appointment is that the services of workman were purely temporary and could be terminated even without notice. In the order of appointment it is nowhere stated that on the expiry of the period of six months the employment would automatically come to an end. In fact second order, dated September 8, 1988, was passed wherein also it has been stated that services were purely temporary and could be terminated at any time without notice. It may be noted that the clause (bb) of the definition of the term ''retrenchment'' has been added by way of Amendment Act, 1984. It is in the nature of exception to the main clause defining the term ''retrenchment''. Therefore, it has to be construed strictly. In view of the specific condition in the order of appointment that services could be terminated at any time without notice, it cannot be construed as contract of employment for fixed period. Therefore, in facts of the case, clause (bb) of Section 2(oo) of the Industrial Disputes Act is not attracted.

It is an undisputed position that the provisions of Section 25-F of the Industrial Disputes Act have not been complied with before terminating the services of the workman. Once there is violation of the provisions of Section 25-F of the Industrial Disputes Act, the termination of services of workman has got to be held to be illegal and void and the workman is to be reinstated in service with full back wages. It is nowhere indicated that during the interregnum the workman was gainfully employed anywhere. In view of this position, reinstatement is required to be ordered with full back wages."

In the case of Municipal Council, Samrala (supra), the Hon''ble Supreme Court dealt with the controversy in the singular facts of that case wherein the respondent-workman by way of an affidavit affirmed for his engagement as Clerk on contract basis on the agreed amount of Rs. 1,000/-, and further, filed an affidavit for he would have no objection, if the Municipal Council, would have dispensed his services. Paragraph 4 of the judgment reads thus:--

"4. The respondent affirmed an affidavit inter alia stating:

(1) That I am engaged as clerk on contract basis by the Municipal Council, Samrala @ Rs. 1000 p.m. from 24.6.1994.

(2) That I am ready to do whatsoever job or department assigned to me by the Municipal Council, Samrala.

(3) That I have no objection if the Municipal Council, Samrala would have dispensed with my services as they have a right to do this.

His services were dispensed with by an order dated 22.5.1997."

Their Lordships also considered the decision in the case of S.M. Nilajkar (supra), and distinguished the case holding that in the case of S.M. Nilajkar (supra), a Scheme for absorption of employees, who were appointed for digging, laying cables, erecting poles, draw lines and other connected works, was made, which came into force with effect from 1st October, 1989, and only those whose names were not included for regularization under the said Scheme, raised dispute before the Assistant Labour Commissioner. The Hon''ble Apex Court of the land specifically observed that the appellant therein was engaged in a particular type of work and specifically referred to paragraph 13 of the case of S.M. Nilajkar (supra), wherein termination of service of a workmen engaged in a Scheme or Project may not amount to ''retrenchment'' within the meaning of sub-clause (bb), subject to the condition, which provided that the employment was in a Project or Scheme of temporary duration; the employment was a contract and not as a daily wager simplicitor; the employment come to an end simultaneously with termination of the Scheme or Project or consistently with the terms of the contract and the workman ought to be apprised of the aforesaid terms by the employer at the commencement of the employment. At this juncture, it will be relevant to consider the text of paragraph 13 of the aforesaid case, which reads thus:--

"13. The termination of service of a workman engaged in a scheme or project may not amount to retrenchment within the meaning of Sub-clause (bb) subject to the following conditions being satisfied:--

(i) that the workman was employed in a project or scheme of temporary duration;

(ii) the employment was on a contract, and not as a daily-wager simplicitor, which provided inter alia that the employment shall come to an end on the expiry of the scheme or project; and

(iii) the employment came to an end simultaneously with the termination of the scheme or project and consistently with the terms of the contract. (iv) the workman ought to have been apprised or made aware of the abovesaid terms by the employer at the commencement of employment."

In the instant case at hand, the Tribunal on an analysis of the pleaded facts, evidence adduced by the parties and materials available on record, after a detailed discussion, arrived at the conclusion that the case of the respondent-workmen was not within the ambit of exception clause, as carved out under Section 2(oo)(bb) of the Act of 1947.

Facts of the case of Municipal Council, Samrala (supra), wherein the respondent-workman had entered into an agreement with an affidavit affirmed with the conditions reduced to writing, as is evident from the paragraph 4, leads to unmistakable inference that the facts of the instant case at hand, are entirely different and distinguishable from that of the case referred to and relied upon by the learned counsel for the petitioner-employer.

Be that as it may, in the case of Municipal Council, Samrala (supra), the Hon''ble Supreme Court, taking note of the earlier opinion in the case of S.M. Nilajkar (supra) wherein the four conditions, which are pre-requisite for bringing the termination of service of a workman, engaged in a Scheme or Project, may not amount to retrenchment, have been specifically detailed out.

In the case of Hindustan Tin Works Pvt. Ltd. Vs. The Employees of Hindustan Tin Works Pvt. Ltd. and Others, AIR 1979 SC 75 : (1978) 37 FLR 240 : (1978) 2 LLJ 474 : (1979) 2 SCC 80 : (1979) 1 SCR 563 : (1978) 10 UJ 712 ; a three-Judge Bench of the Hon''ble Supreme Court while dealing with the termination of the employment of 56 employees by way of retrenchment allegedly for non-availability of the raw-material necessary for utilization of full installed capacity by the establishment and the industrial dispute raised by the employees resulted into award of reinstatement with full back wages, observed thus:--

"It is no more open to debate that in the field of industrial jurisprudence a declaration can be given that the termination of service is bad and the workman continues to be in service. The spectre of common law doctrine that contract of personal service cannot be specifically enforced or the doctrine of mitigation of damages does not haunt in this branch of law. The relief of reinstatement with continuity of service can be granted where termination of service is found to be invalid. It would mean that the employer has taken away illegally the right to work of the workman contrary to the relevant law or in breach of contract and simultaneously deprived the workman of his earnings. If thus the employer is found to be in the wrong as a result of which the workman is directed to be reinstated, the employer could not shirk his responsibility of paying the wages which the workman has been deprived of by the illegal or invalid action of the employer. Speaking realistically, where termination of service is questioned as invalid or illegal and the workman has to go through the gamut of litigation, his capacity to sustain himself throughout the protracted litigation is itself such an awesome factor that he may not survive to see the day when relief is granted. More so in our system where the law''s proverbial delay has become stupefying. If after such a protracted time and energy consuming litigation during which period the workman just sustains himself, ultimately he is to be told that though he will be reinstated, he will be denied the back wages which would be due to him, the workman would be subjected to a sort of penalty for no fault of his and it is wholly undeserved. Ordinarily, therefore, a workman whose service has been illegally terminated would be entitled to full back wages except to the extent he was gainfully employed during the enforced idleness. That is the normal rule. Any other view would be a premium on the unwarranted litigative activity of the employer. If the employer terminates the service illegally and the termination is motivated as in this case viz. to resist the workmen''s demand for revision of wages, the termination may well amount to unfair labour practice. In such circumstances reinstatement being the normal rule, it should be followed with full back wages. Articles 41 and 43 of the Constitution would assist us in reaching a just conclusion in this respect. By a suitable legislation, to wit, the U.P. Industrial Disputes Act, 1947, the State has endeavoured to secure work to the workmen. In breach of the statutory obligation the services were terminated and the termination is found to be invalid; the workmen though willing to do the assigned work and earn their livelihood, were kept away therefrom. On top of it they were forced to litigation up to the Apex Court now they are being told that something less than full back wages should be awarded to them. If the services were not terminated the workmen ordinarily would have continued to work and would have earned their wages. When it was held that the termination of services was neither proper nor justified, it would not only show that the workmen were always willing to serve but if they rendered service they would legitimately be entitled to the wages for the same. If the workmen were always ready to work but they were kept away therefrom on account of an invalid act of the employer, there is no justification for not awarding them full back wages which were very legitimately due to them.

* * * In the very nature of things there cannot be a straitjacket formula for awarding relief of back wages. All relevant considerations will enter the verdict. More or less, it would be a motion addressed to the discretion of the Tribunal. Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances. But the discretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent and convincing and must appear on the face of the record. When it is said that something is to be done within the discretion of the authority, that something is to be done according to the rules of reason and justice, according to law and not humour. It is not to be arbitrary, vague and fanciful but legal and regular." (emphasis supplied) After enunciating the abovenoted principles, this Court took cognizance of the appellant''s plea that the company is suffering loss and, therefore, the workmen should make some sacrifice and modified the award of full back wages by directing that the workmen shall be entitled to 75% of the back wages."

Dealing with the identical issue in the case of Surendra Kumar Verma and Others Vs. Central Government Industrial Tribunal-Cum-Labour Court, New Delhi and Another, AIR 1981 SC 422 : (1980) LabIC 1292 : (1981) 1 LLJ 386 : (1980) 4 SCC 443 : (1981) 1 SCR 789 : (1981) 1 SLJ 107 ; another three-Judge Bench of the Hon''ble Supreme Court observed thus:--

"... Plain common sense dictates that the removal of an order terminating the services of workmen must ordinarily lead to the reinstatement of the services of the workmen. It is as if the order has never been, and so it must ordinarily lead to back wages too. But there may be exceptional circumstances which make it impossible or wholly inequitable vis-�-vis the employer and workmen to direct reinstatement with full back wages. For instance, the industry might have closed down or might be in severe financial doldrums; the workmen concerned might have secured better or other employment elsewhere and so on. In such situations, there is a vestige of discretion left in the court to make appropriate consequential orders. The court may deny the relief of reinstatement where reinstatement is impossible because the industry has closed down. The court may deny the relief of award of full back wages where that would place an impossible burden on the employer. In such and other exceptional cases the court may mould the relief, but, ordinarily the relief to be awarded must be reinstatement with full back wages. That relief must be awarded where no special impediment in the way of awarding the relief is clearly shown. True, occasional hardship may be caused to an employer but we must remember that, more often than not, comparatively far greater hardship is certain to be caused to the workmen if the relief is denied than to the employer if the relief is granted."

It is no doubt true that occasional hardship may be caused to the employer but more often than not, comparatively far greater hardship is caused to the workmen, if the relief is denied. A Division Bench of this Court in the case of Mukut Behari v. Executive Director, Hotel Clarks Amer and Ors., decided on 13th January, 2015, while restoring the award, which was interfered with by the learned Single Judge by grant of compensation in lieu of reinstatement held thus:--

"35. We may observe here that the employer gets a chance at the time of conciliation proceedings before the reference is made to the Labour Court, to settle his dispute. He also gets a chance during the proceedings of the case before the Labour Court to avail the remedies of Lak Adalats, which are frequently organized. The employer also gets an opportunity before learned Single Judge to offer a reasonable settlement with the workman. With all these opportunities, he cannot, at the stage of intra-court Special Appeal, urge that since the workman has survived for long, he must have been gainfully employed without leading evidence in the Labour Court or even before learned Single Judge and thus, he is not entitled to back wages. Once the findings have been returned that the termination was illegal and improper, the workman is ordinarily entitled to reinstatement."

In the instant case at hand, from the pleadings of the parties, evidence adduced and materials available on record, it is not reflected that the respondent-workmen were employed in a Project or Scheme of temporary duration. The office order engaging the respondent-workmen specifically indicated their employment on daily wages basis. There was no clause contemplating termination of their engagement simultaneously with termination of the Scheme or Project.

For the reasons and discussions herein above, I find no illegality or error in the impugned award passed by the Tribunal warranting any interference by this Court exercising writ jurisdiction under Article 227 of the Constitution.

The writ applications are devoid of any substance and lack in merits, and therefore, deserve to be dismissed.

Ordered accordingly.

In view of the final adjudication on the writ applications, stay applications stand closed.

However, in the facts and circumstances of the case, there shall be no order as to costs.