Devinder Singh vs Municipal Council,Sanaur

OF 2011

(Arising out of Special Leave Petition No. 12187 of 2009)

Devinder Singh ......Appellant

Versus

Municipal Council, Sanaur ......Respondent

J U D G M E N T

G.S. Singhvi, J.

1. Leave granted.

2. This appeal is directed against the order passed by the Division

Bench of the Punjab and Haryana High Court in the writ petition filed by

the respondent whereby the award passed by Labour Court, Patiala (for

short, "the Labour Court") for reinstatement of the appellant was set aside

and it was declared that he shall be entitled to wages in terms of Section

17-B of the Industrial Disputes Act, 1947 (for short, "the Act").

3. The appellant was engaged by the respondent with effect from

1.8.1994 for doing the work of clerical nature. He was paid consolidated

2

salary of Rs.1,000/- per month. He continued in the service of the

respondent till 29.09.1996. His service was discontinued with effect from

30.9.1996 without giving him notice and compensation as per the

requirement of Section 25-F of the Act.

4. The appellant challenged the termination of his service by raising

an industrial dispute, which was referred by the State Government to the

Labour Court. In the statement of claim filed by him, the appellant

pleaded that he had continuously worked in the employment of the

respondent from 1.8.1994 to 29.9.1996; that his service was terminated

without holding any enquiry and without giving him notice and

compensation and that persons junior to him were retained in service. In

the written statement filed on behalf of the respondent, it was pleaded that

the appellant was engaged on contract basis and his service was

terminated because the Director, Local Self Government did not give

approval to the resolution passed for his employment. According to the

respondent, the resolution passed for engaging the appellant was sent to

the Deputy Director for approval, but the same was returned with the

remark that the approval may be obtained from the Director, Local Self

Government. Thereafter, the resolution was sent to the Director, Local

Self Government but no response was received from the concerned

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authority and, therefore, it became necessary to discontinue the service of

the appellant.

5. After considering the pleadings of the parties and the evidence

produced by them, the Labour Court passed an award for reinstatement of

the appellant without back wages. The Labour Court held that the

appellant had worked for more than 240 days in a calendar year preceding

the termination of his service and that his service was terminated with

effect from 30.9.1996 without complying with the mandatory provisions

contained in Section 25F of the Act. The Labour Court rejected the plea

that the termination of the appellant's service is covered by Section

2(oo)(bb) of the Act by observing that no evidence was produced by the

respondent to prove that it was a case of termination of service in

accordance with the terms of the contract of employment.

6. The Division Bench of the High Court entertained and allowed the

writ petition filed by the respondent by relying upon the judgments of this

Court in Secy., State of Karnataka v. Umadevi (2006) 1 SCC 1;

State of M.P. v. Lalit Kumar Verma (2007) 1 SCC 575; Uttranchal

Forest Development Corporation v M.C. Joshi (2007(2) SCC (L&S)

813; M.P. Administration v. Tribhuban (2007) 9 SCC 748; Mahboob

4

Deepak v. Nagar Panchayat, Gajraula (2008) 1 SCC 575 and

Ghaziabad Development Authority v. Ashok Kumar (2008) 4 SCC

261. The Division Bench was of the view that the Labour Court should

not have ordered reinstatement of the appellant because his appointment

was contrary to the recruitment rules and Articles 14 and 16 of the

Constitution and it would not be in public interest to sustain the award of

reinstatement after long lapse of time. Simultaneously, the Division

Bench declared that the appellant shall be entitled to wages in terms of

Section 17-B of the Act.

7. Shri R.L.Batta, learned senior counsel for the appellant argued that

the impugned order is liable to be set aside because while interfering with

the award of the Labour Court, the Division Bench of the High Court

ignored the judicially recognised parameters for the exercise of power

under Article 226 of the Constitution. Learned senior counsel further

argued that the High Court was not justified in upsetting the award of

reinstatement simply because there was some time gap between reference

of the dispute by the State Government and adjudication thereof by the

Labour Court. Learned senior counsel then relied upon the judgments of

this Court in Harjinder Singh v. Punjab State Warehousing

Corporation (2010) 3 SCC 192 and Anoop Sharma v. Public Health

Division, Haryana (2010) 5 SCC 497 and argued that the Labour Court

5

did not commit any illegality by ordering reinstatement of the appellant

because his service was terminated in clear violation of Sections 25-F and

25-G of the Act.

8. Shri Sanjay Jain, learned counsel for the respondent argued that the

High Court did not commit any error by setting aside the award of

reinstatement because initial appointment of the appellant was not

sanctioned by law. Learned counsel submitted that the action taken by

the respondent was legally correct and justified because the Director,

Local Self Government did not approve the resolution passed by the

respondent for engaging the appellant. Shri Jain further submitted that

service of the appellant was terminated in accordance with the conditions

stipulated in the contract of employment and, as such, it cannot be termed

as retrenchment within the meaning of Section 2(oo) of the Act.

9. We have considered the respective submissions and carefully

perused the record. Sections 2(oo), 2(s) and 25F of the Act which have

bearing on the decision of this appeal read as under:

"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 -

(a) voluntary retirement of the workman; or

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(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

(bb) termination of the service of the 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

(c) termination of the service of a workman on the ground of

continued ill-health;

2 (s) "workman" means any person (including an apprentice)

employed in any industry to do any manual, unskilled, skilled,

technical, operational, clerical or supervisory work for hire or

reward, whether the terms of employment be express or

implied, and for the purposes of any proceeding under this Act

in relation to an industrial dispute, includes any such person

who has been dismissed, discharged or retrenched in connection

with, or as a consequence of, that dispute, or whose dismissal,

discharge or retrenchment has led to that dispute, but does not

include any such person--

(i) who is subject to the Air Force Act, 1950 (45 of 1950), or

the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of

1957); or

(ii) who is employed in the police service or as an officer or

other employee of a prison; or

(iii) who is employed mainly in a managerial or

administrative capacity; or who, being employed in a

supervisory capacity, draws wages

exceeding ten thousand rupees per mensem or

exercises, either by the nature of the duties attached to the

office or by reason of the powers vested in him, functions

mainly of a managerial nature.

25F. Conditions 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

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paid in lieu of such notice, wages for the period of the

notice;

(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 continuous

service or any part thereof in excess of six months; and

(c) notice in the prescribed manner is served on the

appropriate Government or such authority as may be

specified by the appropriate Government by notification

in the Official Gazette."

10. The definition of the term "retrenchment" is quite comprehensive.

It covers every type of termination of the service of a workman by the

employer for any reason whatsoever, otherwise than as a punishment

inflicted by way of disciplinary action. The cases of voluntary retirement

of the workman, retirement on reaching the age of superannuation,

termination of service as a result of non-renewal of the contract of

employment or of such contract being terminated under a stipulation

contained therein or termination of the service of a workman on the

ground of continued ill health also do not fall within the ambit of

retrenchment.

11. In State Bank of India v. N. Sundara Money (1976) 1 SCC

822, a three Judge Bench of this Court analysed Section 2(oo) and held:

"......Termination ... for any reason whatsoever' are the key

words. Whatever the reason, every termination spells

retrenchment. So the sole question is, has the employee's

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service been terminated? Verbal apparel apart, the substance is

decisive. A termination takes place where a term expires either

by the active step of the master or the running out of the

stipulated term. To protect the weak against the strong this

policy of comprehensive definition has been effectuated.

Termination embraces not merely the act of termination by the

employer, but the fact of termination howsoever produced.

Maybe, the present may be a hard case, but we can visualise

abuses by employers, by suitable verbal devices, circumventing

the armour of Section 25-F and Section 2(oo). Without

speculating on possibilities, we may agree that "retrenchment"

is no longer terra incognita but area covered by an expansive

definition. It means "to end, conclude, cease"...................."

The ratio of the aforementioned judgement was approved by the

Constitution Bench in Punjab Land Development And Reclaimation

Corporation Ltd., Chandigarh v. Presiding Officer Labour Court,

Chandigarh (1990) 3 SCC 682.

12. Section 2(s) contains an exhaustive definition of the term

`workman'. The definition takes within its ambit any person including an

apprentice employed in any industry to do any manual, unskilled, skilled,

technical, operational, clerical or supervisory work for hire or reward and

it is immaterial that the terms of employment are not reduced into

writing. The definition also includes a person, who has been dismissed,

discharged or retrenched in connection with an industrial dispute or as a

consequence of such dispute or whose dismissal, discharge or

retrenchment has led to that dispute. The last segment of the definition

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specifies certain exclusions. A person to whom the Air Force Act, 1950,

or the Army Act, 1950, or the Navy Act, 1957, is applicable or who

is employed in the police service as an officer or other employee of

a prison or who is employed mainly in managerial or

administrative capacity or who is employed in a supervisory

capacity and is drawing specified wages per mensem or exercises

mainly managerial functions does not fall within the definition of

the term `workman'.

13. The source of employment, the method of recruitment, the

terms and conditions of employment/contract of service, the

quantum of wages/pay and the mode of payment are not at all

relevant for deciding whether or not a person is a workman within

the meaning of Section 2(s) of the Act.

14. It is apposite to observe that the definition of workman also

does not make any distinction between full time and part time

employee or a person appointed on contract basis. There is

nothing in the plain language of Section 2(s) from which it can be

10

inferred that only a person employed on regular basis or a person

employed for doing whole time job is a workman and the one

employed on temporary, part time or contract basis on fixed

wages or as a casual employee or for doing duty for fixed hours is

not a workman.

15. Whenever an employer challenges the maintainability of

industrial dispute on the ground that the employee is not a

workman within the meaning of Section 2(s) of the Act, what the

Labour Court/Industrial Tribunal is required to consider is

whether the person is employed in an industry for hire or reward

for doing manual, unskilled, skilled, operational, technical or

clerical work in an industry. Once the test of employment for hire

or reward for doing the specified type of work is satisfied, the

employee would fall within the definition of `workman'.

16. In Birdhichand Sharma v. First Civil Judge,Nagpur 1961

(3) SCR 161 this Court considered the question whether bidi

rollers were workmen within the meaning of the term used in the

11 Factories Act, 1948. The factual matrix of the case reveals that the

workers who used to roll the bidis had to work at the factory and

were not at liberty to work at their houses. Their attendance was

noted in the factory and they had to work within the factory,

though there was freedom of doing work for particular hours.

They could be removed from service on the ground of absence for

eight days. The wages were paid on piece-rate basis. After

considering these facts, the Court held that the bidi rollers were

workmen. The Court observed that when the operation was of a

simple nature and did not require supervision, the control could

be exercised at the end of the day by the method of rejecting bidis

which did not meet the required standard and such supervision

was sufficient to establish the employer employee relationship.

17. In Silver Jubilee Tailoring House v. Chief Inspector of

Shops and Establishments 1974 (3) SCC 498 the three Judge

Bench held that the tailors employed in a tailoring shop, who were

paid according to their skill and work and the quality of whose

work was regularly checked were employees covered by the

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Andhra Pradesh (Tilengana Area) Shops and Establishments Act,

1951.

18. In L. Robert D'souza v. Executive Engineer (1982) 1 SCC

645 the Court held that even a daily rated worker would be

entitled to protection of Section 25-F of the Act if he had

continuously worked for a period of one year or more.

19. Section 25 couched in negative form. It imposes a restriction on

the employer's right to retrench a workman and lays down that no

workman employed in any industry who has been in continuous service

for not less then one year under an employer shall be retrenched until he

has been given one month's notice in writing indicating the reasons for

retrenchment and the period of notice has expired or he has been paid

wages for the period of notice and he has also been paid, at the time of

retrenchment, compensation equivalent to fifteen days' average pay for

every completed year of continuous service or any part thereof in excess

of six months and notice in the prescribed manner has been served upon

the appropriate Government or the authority as may be specified by the

appropriate Government by notification in the Official Gazette.

13 20. This Court has repeatedly held that the provisions contained in

Section 25F (a) and (b) are mandatory and termination of the service of a

workman, which amounts to retrenchment within the meaning of Section

2(oo) without giving one month's notice or pay in lieu thereof and

retrenchment compensation is null and void/illegal/inoperative--State of

Bombay v. Hospital Mazdoor Sabha AIR 1960 SC 610, Bombay

Union of Journalists v. State of Bombay AIR 1964 SC 1617, State

Bank of India v. N. Sundara Money (supra), Santosh Gupta v. State

Bank of Patiala (1980) 3 SCC 340, Mohan Lal v. Bharat Electronics

Ltd.(1981) 3 SCC 225, L. Robert D'Souza v. Southern Railway

(supra), Surendra Kumar Verma v. Central Government Industrial

Tribunal-cum-Labour Court (1980) 4 SCC 443, Gammon India Ltd.

v. Niranjan Dass (1984) 1 SCC 509, Gurmail Singh v. State of Punjab

(1991) 1 SCC 189 and Pramod Jha v. State of Bihar (2003) 4 SCC 619.

21 In Anoop Sharma v. Executive Engineer, Public Health

Division, Haryana (supra), the Court considered the effect of violation

of Section 25F, referred to various precedents on the subject and held the

termination of service of a workman without complying with the

mandatory provisions contained in Section 25-F (a) and (b) should

ordinarily result in his reinstatement.

14 22. We may now advert to the impugned order. 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)

6SCC 675 and Shalini Shyam v. Rajendra Shankar Path (2010) 8

SCC 329.

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:

"The question about the limits of the jurisdiction of High

Courts in issuing a writ of certiorari under Article 226 has been

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frequently considered by this Court and the true legal position

in that behalf is no longer in doubt. A writ of certiorari can be

issued for correcting errors of jurisdiction committed by

inferior courts or tribunals: these are cases where orders are

passed by inferior courts or tribunals without jurisdiction, or is

in excess of it, or as a result of failure to exercise jurisdiction. A

writ can similarly be issued where in exercise of jurisdiction

conferred on it, the court or tribunal acts illegally or

improperly, as for instance, it decides a question without giving

an opportunity to be heard to the party affected by the order, or

where the procedure adopted in dealing with the dispute is

opposed to principles of natural justice. There is, however, no

doubt that the jurisdiction to issue a writ of certiorari is a

supervisory jurisdiction and the court exercising it is not

entitled to act as an appellate court. This limitation necessarily

means that findings of fact reached by the inferior court or

tribunal as result of the appreciation of evidence cannot be

reopened or questioned in writ proceedings. An error of law

which is apparent on the face of the record can be corrected by

a writ, but not an error of fact, however grave it may appear to

be. In regard to a finding of fact recorded by the tribunal, a writ

of certiorari can be issued if it is shown that in recording the

said finding, the tribunal had erroneously refused to admit

admissible and material evidence, or had erroneously admitted

inadmissible evidence which has influenced the impugned

finding. Similarly, if a finding of fact is based on no evidence,

that would be regarded as an error of law which can be

corrected by a writ of certiorari. In dealing with this category of

cases, however, we must always bear in mind that a finding of

fact recorded by the tribunal cannot be challenged in

proceedings for a writ of certiorari on the ground that the

relevant and material evidence adduced before the tribunal was

insufficient or inadequate to sustain the impugned finding. The

adequacy or sufficiency of evidence led on a point and the

inference of fact to be drawn from the said finding are within

the exclusive jurisdiction of the tribunal, and the said points

cannot be agitated before a writ court. It is within these limits

that the jurisdiction conferred on the High Courts under Article

226 to issue a writ of certiorari can be legitimately exercised."

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In the second judgment - Swaran Singh v. State of Punjab

(supra), this Court reiterated the limitations of certiorari jurisdiction

indicated in Syed Yakoob v. Radhakrishnan (supra) and observed:

"In regard to a finding of fact recorded by an inferior tribunal, a

writ of certiorari can be issued only if in recording such a

finding, the tribunal has acted on evidence which is legally

inadmissible, or has refused to admit admissible evidence, or if

the finding is not supported by any 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."

In Surya Dev Rai v. Ram Chander Rai (supra), the two-Judge

Bench noticed the distinction between the scope of Articles 226 and 227

of the Constitution and culled out several propositions including the

following:

"(3) Certiorari, under Article 226 of the Constitution, is issued

for correcting gross errors of jurisdiction i.e. when a

subordinate court is found to have acted (i) without jurisdiction

--by assuming jurisdiction where there exists none, or (ii) in

excess of its jurisdiction--by overstepping or crossing the

limits of jurisdiction, or (iii) acting in flagrant disregard of law

or the rules of procedure or acting in violation of principles of

natural justice where there is no procedure specified, and

thereby occasioning failure of justice."

24. We are also convinced that the reasons assigned by the High Court

for setting aside the award of reinstatement are legally untenable. In the

first, it deserves to be noticed that the respondent had engaged the

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appellant in the back drop of the ban imposed by the State Government

on the filling up of the vacant posts. The respondent had started a water

supply scheme and for ensuring timely issue of the bills and collection of

water charges, it needed the service of a clerk. However, on account of

the restriction imposed by the State Government, regular recruitment was

not possible. Therefore, resolution dated 27.04.1995 was passed for

engaging the appellant on contract basis. The relevant portions of the

resolution are extracted below:

"MUNICIPAL COUNCIL,SANAUR,(PATIALA).

COPY OF RESOLUTION NO.30 DATED 27.04.1995

It has been informed by the office to the

house that one vacancy of Clerk in the

office of Municipal Council, Sanaur is

being vacant to the water supply branch.

Due to ban imposed by the Punjab

Government vacancy cannot be filed in at

present. Municipal Council is operating

two tubewells and is directly supplying

water to the- general public. At present

Municipal Council is operating two

tubewells and is directly supplying water

to the general public. Municipal Council

has given about 1500 water connections. In

respect of issuance of water bills and

their respective deposit there is need of

one Clerk. This vacancy can be filled in

after receiving sanction from the

government. Therefore at present for the

working of the office business as per the

instruction of the Government, sanction

may kindly be accorded for employing a

person as Clerk on contract basis on the

consolidated salary of Rs. One thousand

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per month. This matter was discussed

seriously by the house because to provide

water to the general public in the summer

season is very essential. Therefore, to

run smoothly - the work of water supplying

Shri Devinder Singh son of .Shjri Hazura

Singh of Mohalla kanian, Sanaur is hereby

engaged for a period of six months on

contract basis on a consolidated

salary of Rs. One thousand with

effect from 02.05.1995. Resolution was

unanimously passed.

Sd/- President

Minicipal Council, Sanaur

Patiala

25. In furtherance of the aforesaid resolution, the respondent engaged

the appellant, who was already in its employment, as a Clerk for a period

of six months on contract basis on consolidated salary of Rs. 1,000/- per

month. At the end of six months, the respondent passed another

resolution dated 30.11.1995 and again employed the appellant for a

period of six months from 1.11.1995 to 20.4.1996. This exercise was

repeated in 1996 and the appellant's term was extended for six months

from 1.5.1996. However, his engagement was discontinued w.e.f.

30.9.1996 without giving any notice or pay in lieu thereof and

compensation as per the requirement of clauses (a) and (b) of Section 25-

F of the Act. It is true that the engagement of the appellant was not

preceded by an advertisement and consideration of the competing claims

of other eligible persons but that exercise could not be undertaken by the

19

respondent because of the ban imposed by the State Government. It is

surprising that the Division Bench of the High Court did not notice this

important facet of the employment of the appellant and decided the writ

petition by assuming that his appointment/engagement was contrary to

the recruitment rules and Articles 14 and 16 of the Constitution. We may

also add that failure of the Director, Local Self Government, Punjab to

convey his approval to the resolution of the respondent could not be

made a ground for bringing an end to the engagement of the appellant

and that too without complying with the mandate of Section 25-F(a) and

(b).

26. The other reason given by the High Court is equally untenable.

The appellant could hardly be blamed for the delay, if any, in the

adjudication of the dispute by the Labour Court or the writ petition filed

by the respondent. The delay of four to five years in the adjudication of

disputes by the Labour Court/Industrial Tribunal is a normal phenomena.

If what the High Court has done is held to be justified, gross illegalities

committed by the employer in terminating the services of workman will

acquire legitimacy in majority of cases. Therefore, we have no hesitation

to disapprove the approach adopted by the High Court in dealing with the

appellant's case.

20 27. The plea of the respondent that the action taken by it is covered by

Section 2(oo)(bb) was clearly misconceived and was rightly not

entertained by the Labour Court because no material was produced by the

respondent to show that the engagement of the appellant was

discontinued by relying upon the terms and conditions of the

employment.

28. In the result, the appeal is allowed. The impugned order is set

aside and the award passed by the Labour Court for reinstatement of the

appellant is restored. If the respondent shall reinstate the appellant

within a period of four weeks from today, the appellant shall also be

entitled to wages for the period between the date of award and the date of

actual reinstatement. The respondent shall pay the arrears to the

appellant within a period of three months from the date of

receipt/production of the copy of this order.

...............................J.

(G.S. Singhvi)

...............................J.

(Asok Kumar Ganguly)

New Delhi,

April 11, 2011.