Rajendra Prasad Singh @APPELLANT@Hash State of Bihar

Mukesh R. Shah, CJ

At the outset it is required to be noted that having not agreed with the decision of the Division Bench of this Court in the case of Sanjay Kumar

Tiwary & Ors. Vs. The State of Bihar & Ors, reported in 2008 (2) PLJR 265 vide order passed by the Division Bench of this Court in present Letters

Patent Appeal No. 676 of 2010 and L.P.A. No. 332 of 2010 dated 11.05.2010 both these appeals are referred to the Full Bench.

1.1. At the outset it is required to be noted that in the case of Sanjay Kumar Tiwary & Ors. (supra) the Division Bench of this Court has observed and

held that in a case of termination of a casual worker on daily wage, in view of Section 2(oo) of Clause (bb) of the Industrial Disputes Act, 1947

(hereinafter referred to as “the I.D. Actâ€), the provisions of Section 25F of the I.D. Act shall not be attracted and an employer terminating the

employment of such worker is not required to serve notice, pay compensation etc. In the case of Sanjay Kumar Tiwary & Ors. (supra) after referring

the decisions of the Hon’ble Supreme Court in the case of Secretary, State of Karnataka and others Vs. Umadevi (3) and others, reported in

(2006) 4 SCC 1, State of M.P. and others Vs. Lalit Kumar Verma, reported in (2007) 1 SCC 575 and another decision of the Karnataka High Court in

the case of Shankariah Vs. K.S.R.T.C., reported in 1986 (1) LLJ 195 and thereafter relying upon the decision of the Hon’ble Supreme Court in

the case of Allahabad Bank Vs. Prem Singh, reported in (1996) 10 SCC 597 the Division Bench has observed and held as above.

1.2. Having not agreed with the decision of the Division Bench in the case of Sanjay Kumar Tiwary & Ors. (supra) by further observing that the

factual matrix in the case of Prem Singh (supra) was different and, therefore, it may not be a precedent for the proposition that Section 25F of the

I.D. Act would not be applicable under any circumstance, qua a daily-wager, the matter is referred to the Larger Bench/Full Bench. That is how the

present appeals are placed before the Full Bench. In C.W.J.C. No. 21 of 2010 and other allied writ petitions the issue involved is the same and,

therefore, they are ordered to be heard/listed with L.P.A. No. 332 of 2010 and 676 of 2010.

Heard learned counsel appearing on behalf of the respective parties at length.

2.1. Basically the issue referred to the Full Bench is that in case of a daily-wager, provisions of Section 25F of the I.D. Act would be applicable or

not?

Learned counsel appearing on behalf of the respective employer have supported the view taken by the Division Bench of this Court in the case of

Sanjay Kumar Tiwary & Ors. (supra). It is submitted that in the case of a casual worker/daily-wager every day could be a fresh appointment and the

contract ends on every day and, therefore, the provisions of Section 2(oo)(bb) of the I.D. Act shall be applicable and, therefore, the termination of

such casual labourer/daily-wager cannot be termed as “retrenchment’ and, therefore, the provisions of Section 25F of the I.D. Act shall not be

applicable.

3.1. In support of the above submissions learned counsel appearing on behalf of the respective employers have relied upon the following decisions:-

(i). Secretary, State of Karnataka and others Vs. Umadevi (3) and others, reported in (2006) 4 SCC 1

(ii). State of M.P. and others Vs. Lalit Kumar Verma, reported in (2007) 1 SCC 575

(iii). Shankariah Vs. K.S.R.T.C., reported in 1986 (1) LLJ 195

(iv). Allahabad Bank Vs. Prem Singh, reported in (1996) 10 SCC 597

(v). Municipal Council, Samrala Vs. Raj Kumar, reported in (2006) 3 SCC 81

Per contra, learned counsel appearing on behalf of the respective workmen have vehemently submitted that there cannot be any absolute

proposition of law that in the case of termination of every daily-wager/casual worker provisions of Section 25F of the I.D. Act could not be applicable.

It is vehemently submitted that there is no absolute proposition of law that Section 25F of the I.D. Act would not be applicable under any

circumstance, qua a daily-wager. It is vehemently submitted by learned counsel appearing on behalf of the respective workmen that it depends upon

the facts and circumstances of the case, more particularly the nature of employment, period for which the concerned daily-wager had worked,

whether such a daily-wager has been continued in service for number of years without any break in service etc. It is submitted that, therefore, to say

that Section 25F of the I.D. Act would not be applicable under any circumstance, qua a daily-wager may not be accepted.

4.1. It is further submitted by learned counsel appearing on behalf of the respective workmen that in fact the decision of the Hon’ble Supreme

Court in the case of Prem Singh (supra) would not have been relied upon by the Division Bench in the case of Sanjay Kumar Tiwary & Ors. (supra)

as on facts the same was distinguishable and as such it cannot be said that by the said decision absolute proposition of law is laid down that Section

25F of the I.D. Act shall not be applicable under any circumstance, qua a daily-wager. It is submitted that the decision of the Hon’ble Supreme

Court in the case of Prem Singh (supra) was on facts and as such does not lay down any absolute proposition of law that Section 25F of the I.D. Act

would not be applicable under any circumstance, qua a daily-wager.

4.2. It is further submitted by the learned counsel appearing on behalf of the respective workmen that even the decisions of the Hon’ble Supreme

Court in the case of Umadevi(3) (supra) and Lalit Kumar Verma (supra) also shall not be applicable in the case on hand and as such in the aforesaid

decisions no absolute proposition of law is laid down that Section 25F of the I.D. Act would not be applicable under any circumstance, qua a daily-

wager. Relying upon the decision of the Division Bench of this Court in the case of Rastriya Uchh Path Anchal, Muzaffarpur Vs. P.W.D.

Workers’ Union, reported in 1995 (1) PLJR 303 it is submitted that as held by the Division Bench in the aforesaid decision a daily-wager as much

the workman and any other employee draws the monthly salary in a time-scale of pay and, therefore, Section 25F of the I.D. Act shall be applicable in

the case of termination of even a daily-wager.

4.3. Learned counsel appearing on behalf of the respective workmen has also relied upon the decision of the Hon’ble Supreme Court in the case

of Rattan Singh Vs. Union of India and another, reported in (1997) 11 SCC 396 and submitted that as held by the Hon’ble Supreme Court in the

said decision, Section 25F of the I.D. Act shall be applicable in case of termination of even a daily-rated workman who has continuously served for

requisite statutory minimum period in a year.

4.4. Learned counsel appearing on behalf of the respective workmen have submitted that Section 2(oo)(bb) of the I.D. Act shall be applicable only in

a case where it is found that the workman is engaged on casual basis or daily-wage for specific work and for specific period.

4.5. Learned counsel appearing on behalf of the respective employees have also relied upon the following decisions of the Hon’ble Supreme Court

in support of their submission that even in the case of termination of a daily-wager/casual labourer provisions of Section 25F of the I.D. Act shall be

applicable:

(i). New India Assurance Co. Ltd. V. A. Sankaralingam, reported in (2008) 10 SCC 698

(ii). S.M. Nilajkar and others Vs. Telecom District Manager, Karnataka, reported in (2003) 4 SCC 27

Shri S.D. Sanjay, learned counsel appearing on behalf of the Bank in C.W.J.C. No. 21 of 2010 and other allied writ petitions submitted that

assuming that there may not be an absolute proposition of law that the provisions of Section 25F of the I.D. Act shall not be applicable under any

circumstance, qua a daily-wager, even in that case also in view of catena of decisions of the Hon’ble Supreme Court in every case of termination

in breach of Section 25F of the I.D. Act in case of a daily-wager the relief by way of reinstatement with back wages is not automatic and may be

wholly inappropriate in a given fact situation and only a reasonable compensation looking to the period of employment as a daily-wage can be

awarded. In support of his above submission Shri Sanjay, learned counsel appearing on behalf of the Bank has relied upon the following decisions of

the Hon’ble Supreme Court:-

(i). Batala Coop. Sugar Mills Ltd. Vs. Sowaran Singh, reported in (2005) 8 SCC 481

(ii). Hari Nandan Prasad Vs. Food Corporation of India, reported in (2014) 7 SCC 190

(iii) BSNL Vs. Bhurumal, reported in (2014) 7 SCC 177

(iv) State of M.P. Vs. Vinod Kumar Tiwari, reported in (2016) 16 SCC 610

(v) BSNL Vs. Man Singh, reported in (2012) 1 SCC 558

Heard learned counsel appearing on behalf of the respective parties at length.

6.1. At the outset, it is required to be noted that the issue/question which is referred to the Full Bench by the Division Bench having doubted the

correctness of the decision of the Division Bench in the case of Sanjay Kumar Tiwary & Ors. (supra) is whether Section 25F of the I.D. Act would

not be applicable under any circumstance, qua a daily-wager? The question which is required to be considered is whether can there be any absolute

proposition of law that Section 25F of the I.D. Act would not be applicable under any circumstance, qua a daily-wager?

So far as the decision of the Division Bench of this Court in the case of Sanjay Kumar Tiwary & Ors. (supra) taking the view that in case of a

daily-wager provisions of Section 25F of the I.D. Act shall not be applicable at all is concerned, we are not in agreement with the view taken by the

Division Bench of this Court in the case of Sanjay Kumar Tiwary & Ors. (supra). It is required to be noted that even before the Division Bench that

was not the question/issue. As such in the case before the Division Bench the writ-petitioners (appellants before the Division Bench) were appointed

as a Basic Health Worker or Peon on daily-wage basis in 1991, and continued for about one year or so. Their services were terminated by order

dated 10.10.1992, leading to C.W.J.C. No. 11289 of 1992. The said writ petition came to be withdrawn with a liberty to seek remedy before the

appropriate court under the I.D. Act which was followed by Reference Case No. 8 of 1994. The same was answered in favour of the workmen. The

order of termination was held to be unreasonable and illegal and they were entitled to reinstatement with the arrears of salary. That thereafter the

authorities issued order dated 30th December, 1995, whereby they were reinstated in service and were regularized as Basic Health Workers or

Peons, and even were given appropriate pay-scales. Despite the above, subsequently their services were dispensed with which was the subject matter

before the learned Single Judge. The learned Single Judge allowed the petition and directed that the original writ-petitioners be reinstated on daily-

wage basis.

The aforesaid order was challenged. However, as the original writ-petitioners were directed to be reinstated on daily-wage basis and it was observed

that it did not confer on the writ-petitioners the status of regular employees and their services as daily-wage will be liable to be terminated for good

reasons and in accordance with law, the original writ-petitioners challenged the same before the Division Bench and with great respect, though not

permissible and though the Award declared by Labour Court, Chapra quashing and setting aside the termination (initial termination) was not under

challenge and even the same was not challenged by the State, the Division Bench set aside the original Award passed by the Labour Court by holding

that as the original writ-petitioners were daily-wagers, Section 25F of the I.D. Act shall not be applicable and, therefore, the original Award, though it

was not under challenge, was held to be void ab initio and the Division Bench quashed and set aside the same relying upon the decision of the

Hon’ble Supreme Court in the case of Secretary, State of Karnataka and others Vs. Umadevi (3) and others, reported in (2006) 4 SCC 1, State of

M.P. and others Vs. Lalit Kumar Verma, reported in (2007) 1 SCC 575, Shankariah Vs. K.S.R.T.C., reported in 1986 (1) LLJ 195, Allahabad Bank

Vs. Prem Singh, reported in (1996) 10 SCC 597 and Municipal Council, Samrala Vs. Raj Kumar, reported in (2006) 3 SCC 81. Therefore, as such

there was no direct issue before the Division Bench whether in case of daily-wager provisions of Section 25F of the I.D. Act shall be applicable or

not; inasmuch as the original Award declaring the termination illegal/unreasonable was never challenged by the State. In the said decision, it is

observed and held that termination of employment of a daily-wage employee cannot give rise to an industrial dispute, an employer terminating the

employment of daily-wager is not required to follow the provisions of Section 25F of the I.D. Act and is, therefore, not required to serve notice, pay

compensation etc. It is further observed and held that indeed such a person is not within the sweep of the Act.

7.1. As observed hereinabove, while observing and holding as above, the Division Bench has considered and relied upon the decisions in the case of

Secretary, State of Karnataka and others Vs. Umadevi (3) and others, reported in (2006) 4 SCC 1, State of M.P. and others Vs. Lalit Kumar Verma,

reported in (2007) 1 SCC 575 and another decision of the Karnataka High Court in the case of Shankariah Vs. K.S.R.T.C., reported in 1986 (1) LLJ

195 and thereafter relying upon the decision of the Hon’ble Supreme Court in the case of Allahabad Bank Vs. Prem Singh, reported in (1996) 10

SCC 597, which shall not be applicable at all. In the aforesaid decisions as such there is no absolute proposition of law laid down that the termination

of employment of daily-wage employee cannot give rise to an Industrial dispute and that an employer terminating the employment of a daily-wager is

not required to follow the provisions of Section 25F of the I.D. Act. In the aforesaid decision, there is no absolute proposition of law laid down that

under no circumstance in case of termination of a daily-wager provisions of Section 25F of the I.D. Act shall not be applicable.

7.2. In view of the above and for the reasons stated hereinbelow, we are of the firm opinion that the decision in the case of Sanjay Kumar Tiwary &

Ors. (supra) does not lay down a good law and we are not in agreement with the view taken by the Division Bench in the case of Sanjay Kumar

Tiwary & Ors (supra) that;

(i) termination of employment of a daily-wage employee cannot give rise to an Industrial dispute;

(ii). an employer terminating the employment of a daily-wager is not required to follow the provisions of Section 25F of the I.D. Act and is not,

therefore, required to serve notice, pay compensation etc.

7.3. We are not in agreement with the view taken by the Division Bench of the said decision that under no circumstance in case of termination of

daily-wager provisions of Section 25F of the I.D. Act shall be applicable.

In the case of S.M. Nilajkar and others Vs. Telecom District Manager, Karnataka, reported in (2003) 4 SCC 27 the Hon’ble Supreme Court

had the occasion to consider the provisions of Section 2(oo)(bb) of the I.D. Act and in the aforesaid decision after considering the provisions of

Section 2(oo)(bb) and Section 25F of the I.D. Act in Paragraphs 11 to 14 the Hon’ble Supreme Court has observed and held as under:-

“11. It is common knowledge that the Government as a welfare State floats several schemes and projects generating employment opportunities,

though they are shot-lived. The objective is to meet the need of the moment. The benefit of such schemes and projects is that for the duration they

exist, they provide employment and livelihood to such persons as would not have been able to secure the same but for such schemes or projects. If the

workmen employed for fulfilling the need of such passing-phase projects or schemes were to become a liability on the employer State by too liberally

interpreting the labour laws in favour of the workmen, then the same may well act as a disincentive to the State for floating such schemes and the

State may opt to keep away from initiating such schemes and projects even in times of dire need, because it may feel that by opening the gates of

welfare it would be letting in onerous obligations entailed upon it by extended application of the labour laws. Sub-clause (bb) in the definition of

retrenchment was introduced to take care of such like situations by the Industrial Disputes (Amendment) Act, 1984 with effect from 18-8-1984.

“Retrenchmentâ€​ in its ordinary connotation is discharge of labour as surplus though the business or work itself is continued. It is well settled by

a catena of decisions that labour laws being beneficial pieces of legislation are to be interpreted in favour of the beneficiaries in case of doubt or

where it is possible to take two views of a provision. It is also well settled that Parliament has employed the expression “the termination by the

employer of the service of a workman for any reason whatsoever†while defining the term “retrenchmentâ€, which is suggestive of the legislative

intent to assign the term “retrenchment†a meaning wider than what it is understood to have in common parlance. There are four exceptions

carved out of the artificially extended meaning of the term “retrenchmentâ€, and therefore, termination of service of a workman so long as it is

attributable to the act of the employer would fall within the meaning of “retrenchment†dehors the reason for termination. To be excepted from

within the meaning of “retrenchment†the termination of service must fall within one of the four excepted categories. A termination of service

which does not fall within categories (a), (b), (bb) and (c) would fall within the meaning of “retrenchmentâ€​.

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 simpliciter, which provided inter alia that the employment shall come to an end on the

expiry of the scheme or project;

(iii) the employment came to an end simultaneously with the termination of the scheme or project and consistently with the terms of the contract; and

(iv) the workman ought to have been apprised or made aware of the abovesaid terms by the employer at the commencement of employment.

The engagement of a workman as a daily-wager does not by itself amount to putting the workman on notice that he was being engaged in a

scheme or project which was to last only for a particular length of time or up to the occurrence of some event, and, therefore, the workman ought to

know that his employment was short-lived. The contract of employment consciously entered into by the workman with the employer would result in a

notice to the workman on the date of the commencement of the employment itself that his employment was short-lived and as per the terms of the

contract the same was liable to termination on the expiry of the contract and the scheme or project coming to an end. The workman may not therefore

complain that by the act of the employer his employment was coming to an abrupt termination. To exclude the termination of a scheme or project

employee from the definition of retrenchment it is for the employer to prove the abovesaid ingredients so as to attract the applicability of sub-clause

(bb) abovesaid. In the case at hand, the respondent employer has failed in alleging and proving the ingredients of sub-clause (bb), as stated

hereinabove. All that has been proved is that the appellants were engaged as casual workers or daily-wagers in a project. For want of proof attracting

applicability of sub-clause (bb), it has to be held that the termination of the services of the appellants amounted to retrenchment.â€​

Even considering the decision of the Hon’ble Supreme Court in the case of BSNL Vs. Man Singh (supra) it can safely be said that even in case

of termination of a daily-wager provisions of Section 25F of the I.D. Act would be applicable. However, as observed and held by the Hon’ble

Supreme Court, only said decision that an order of retrenchment passed in violation of Section 25F of the I.D. Act may be set aside but an Award of

retrenchment should not be passed, in case of a daily-wager/temporary employee/casual labourer.

9.1. Therefore, it depends upon the facts and circumstances of the case and the nature of employment, period of employment etc. and as observed

and held by the Hon’ble Supreme Court in the case of S.M. Nilajkar and others (supra), burden to prove the ingredients of sub-clause (bb) of

Section 2 (oo) would be on the employer and the employment must be shown to be under a contract which stipulates that it would come to an end with

the expiry of the project or scheme and the workers must be shown to have been made aware of such stipulation at the commencement of their

employment. It is also observed and held by the Hon’ble Supreme Court that mere proof of employment of casual labourers or daily-wagers in a

project or scheme and termination of their services on the project or the scheme coming to an end not enough to attract the exception sub-clause (bb)

and in such a situation sub-clause (bb) being inapplicable, such a termination would amount to retrenchment.

Now, so far as the reliance placed upon the decision of the Hon’ble Supreme Court referred to hereinabove, relied upon by Shri Sanjay, learned

counsel appearing on behalf of the Bank that assuming that there is no absolute proposition of law laid down that under no circumstance in case of

termination of a daily-wager provision of Section 25F of the I.D. Act will be applicable and in case of termination of said daily-wager found to be in

violation of Section 25 of the I.D. Act, there cannot be any automatic reinstatement and back-wages is concerned, we are of the opinion that as such

grant of relief having found the termination in violation of Section 25F of the I.D. Act would depend upon the facts and circumstances of each case,

more particularly the nature of employment, the period for which such a daily-wager has worked etc. The aforesaid question is to be considered by

the Labour Court having regard to the facts and circumstances of the case and the law laid down by the Hon’ble Supreme Court in the aforesaid

decisions. The only question which is referred to the Full Bench is whether in case of the termination of a daily-wager Section 25F of the I.D. Act

would not be applicable under any circumstance?

9.2. In view of the above and for the reasons stated above, it is observed and held that the decision of the Division Bench of this Court in the case of

Sanjay Kumar Tiwary & Ors. (supra) taking the view that;

(i). all the casual worker appointed on daily-wage basis are covered by clause (bb) of Section 2(oo) of the I.D. Act;

(ii) termination of employment of such person does not attract Section 25F of the I.D. Act;

(iii) the termination of employment of a daily-wage employee cannot give rise to an Industrial dispute;

(iv) that an employer terminating the employment of a daily-wager is not required to follow the provisions of Section 25F of the I.D. Act and is,

therefore, not required to serve notice, pay compensation etc. and such a person is not within the sweep of the I.D. Act, is not a good law. There

cannot be any absolute proposition of law that in case of termination of every daily-wager provisions of Section 25F of the I.D. Act shall not be

applicable. It is observed and held that to bring the case within the provisions of Section 2(oo)(bb) of the I.D. Act the employer has to satisfy on

leading the evidence and to bring the case within the ambit of Section 2(oo)(bb) of the I.D. Act that;

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

(ii) the employment was on a contract, and not as a daily-wager simpliciter, which provided inter alia that the employment shall come to an end on the

expiry of the scheme or project;

(iii) the employment came to an end simultaneously with the termination of the scheme or project and consistently with the terms of the contract; and

(iv) the workman ought to have been apprised or made aware of the aforesaid terms of the employer at the commencement of the employment, as

observed by the Hon’ble Supreme Court in the case of S.M. Nilajkar (supra). It is further observed and held that even in case termination of a

daily-wager is found to be in violation of the provisions of Section 25F of the I.D. Act in that case also as observed by the Hon’ble Supreme Court

in catena of decisions referred to herein above there may not be automatic reinstatement and back-wages and in a given case the Labour Court may

award compensation in lieu of the reinstatement and back-wages which depends on the facts and circumstances of each case, more particularly

considering the nature of employment, duration of employment etc. as observed by the Hon’ble Supreme Court in the aforesaid decisions.

The reference is answered accordingly. Now, the matters to be placed before the appropriate Court taking up such matters.