IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 107 of 1997 with SPECIAL CIVIL APPLICATION NO. 3595 of 1997 For Approval and Signature: Hon'ble MR.JUSTICE H.K.RATHOD ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : YES of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Labour Courts and Industrial Tribunals ? @ GUJARAT HOUSING BOARD Versus SANJAY B SHAH -------------------------------------------------------------- Appearance: MR HS MUNSHAW for Gujarat Housing Board MR SHAILESH C PARIKH for workman Sanjay B. Shah -------------------------------------------------------------- CORAM : MR.JUSTICE H.K.RATHOD Date of decision: 03/05/2002 ORAL JUDGEMENT While bearing injustice from each corner of the society, the mental process and situation of the poor person has been rightly discussed as under: Kismatka Hai Nam Magar Yeh Kam Hai Diniyawalon Ka; Fook Diya Hai Chaman Hamare Khwabon Aur Khayalon Ka; Jee Karta Hai Khudhi Ghot De Apne Armanon Ka Gala; Dekhke Duniyaki Diwali Dil Mera Chupchap Jala. In case of Balbir Kaur and Another and Steel Authority of India Ltd. and Others, reported in 2000-II-LLJ, page 1, the apex court has made the following observations in para 9 at page 6 of the report: "9. As a matter of fact, the Constitutional philosophy should be allowed to become a part of every man's life in this country and then only the Constitution can reach everyone and the ideals of the Constitution framers would be achieved since the people would be nearer the goal set by the Constitution an ideal situation but a far cry for presently." In case of Peerless General Finance and Investment Co. Ltd. versus Reserve Bank of India, reported in AIR 1992 SC 1033, the apex court has observed as under: "The court has to maintain delicate balance between the public interest envisaged in the impugned provision and the individual's right; taking into account, the nature of his right said to be infringed; the underlying purpose of the impugned restriction; the extent and urgency of the evil sought to be remedied thereby; the disproportion of the restriction imposed, the prevailing conditions at the time, the surrounding circumstances; the larger public interest which the law seeks to achieve and all other relevant factors germane for the purpose. All these factors should enter into the zone of consideration to find the reasonableness of the impugned restriction. The court weighs in each case which of the two conflicting public or private interest demands greater protection and if it finds that the restriction imposed is appropriate, fair and reasonable, it would uphold the restriction. The court would not uphold a restriction which is not germane to achieve the purpose of the statute or is arbitrary or out of its limits." Heard learned advocate Mr. Munshaw and Mr. Shailesh C. Parikh. Special Civil Application No. 107 of 1997 has been filed by the petitioner Gujarat Housing Board challenging award made by the labour court in Reference No. 190 of 1992 dated 7th March, 1996 wherein the labour court has ordered for reinstatement of the workman with continuity of service without back wages. Special Civil Application No. 3595 of 1997 has been filed by the workman Sanjay B. Shah challenging the very same award wherein the labour court has denied back wages while making the award of his reinstatement with continuity of service. Special Civil Application No. 107 of 1997 filed by the Board has been admitted by this Court by issuing rule thereon by order dated 16.1.1997 and by way of ad.interim relief, impugned order made by the labour court has been stayed. Said ad.interim order has been subsequently confirmed by this court by order dated 2.9.1997. Special Civil Application No. 3595 of 1997 filed by the workman has been admitted by this court by issuing rule thereon by order dated 2nd December, 1997. Learned advocate Mr. Munshaw for the Board has submitted that the labour court has committed gross error in making an award of reinstatement in favour of a workman who has worked only for a period of seven months with the Board and has not completed 240 days and therefore, no question of compliance of section 25-F of the Industrial Disputes Act, 1947. He has submitted that the labour court has also committed an error in coming to the conclusion that the Board has committed breach of provisions of section 25-G and H of the Industrial Disputes Act, 1947. According to his submission, as regards the contention that the new employees have been recruited after the retrenchment of the workman, no proof has been produced by the workman before the labour court and in view of that, the labour court ought not to have concluded that there was breach of section 25-H of the Act by the Board. He has submitted that the industrial dispute was raised on 4th September, 1991 and thereafter, the workman was earning while working in the Hipolin and, therefore, the labour court was right in refusing back wages. Mr. Munshaw has further submitted that the labour court has committed an error in relying upon the evidence of the workman wherein he has deposed and has given names of 6 to 7 persons as they were given work and were recruited as a clerk. He has submitted that the labour court ought to have appreciated the difference between the daily wager and regular employee. He has submitted that the provisions of section 25H would apply only in case of daily wager workman and not in case of regular employee. The substance of his submission is that the said persons were appointed and recruited by the Board in the year 1991 as a regular employees on the post of clerk after following regular selection procedure as per recruitment rules and, therefore, in such a situation, section 25-H would not apply. He has submitted that this aspect was narrated by the Board in its written statement filed before the labour court in para 7 wherein it has been denied that the Board has recruited new persons on the post of clerk in December, 1989 and May, 1990 as alleged or otherwise and has submitted that the board has not violated sec. 25G and F of the ID Act and has further clarified as per the averments made on page 9 ground (xii) of the petition that the last recruitment in the cadre of junior clerk made by the petitioner was in the year 1991 and thereafter, no recruitment has been made pursuant to the Government Resolution dated 28th December, 1991 and has further submitted that in fact, in all, six persons referred to by the workman are employed by the Board after following due process of recruitment rules and regulations of the Board and, as such, there was no breach of the provisions of section 25-G or H of the Industrial Disputes Act and in view of this, the labour court ought not to have come to the conclusion that there was breach of section 25G and H of the Industrial Disputes Act, 1947. Mr. Munshaw has, thus, made an attempt to draw distinction between the appointment of a person as daily wager clerk and appointment of a clerk on regular basis and submits that said persons were appointed as a clerk on regular basis, there was no breach of section 25-H of the Act and, therefore, the labour court has erred in recording finding that there was breach of section 25H of the Act. On the other hand, learned advocate Mr. Parikh appearing for the workman concerned has submitted that in view of the apparent breach of section 25-G and H of the Industrial Disputes Act, the labour court was right in making the award of reinstatement in favour of the workman. Therefore, according to him, that part of the award does not require any interference by this Court in exercise of the powers under Article 226 and/or 227 of the Constitution of India. He has further submitted that the labour court has committed an error in not granting back wages while making award of reinstatement. According to him, in view of the delay in raising an industrial dispute, the labour court ought to have denied back wages for that part and ought to have considered the aspect of back wages from the date of raising an industrial dispute and ought to have granted back wages in favour of the workman. He as further submitted that before the labour court, it was admitted by the workman during the course of recording of his oral evidence that he has been employed in Hipolin and has been earning something. He has submitted that in view of that, the labour court ought to have awarded some back wages by directing to make adjustment of the earning out of the wages received by him by working in Hipolin or ought to have granted 50 per cent of the back wages for the interim period. I have considered the submissions made by both the learned advocates. I have also perused the award in question made by the labour court. Before entering into the merits of the matter, it is required to be noted that the workman has worked with the board for a period from 14th May, 1984 to 10th August, 1984 and from 1st November, 1985 to 28th February, 1986. This is the period during which he has worked for a period of about seven months and has not completed 240 days continuous service with the Board. The respondent workman has deposed before the labour court at Exh. 13 and has produced documentary evidence vide list Exh. 9 and in his oral evidence on oath before the labour court, the workman has deposed that after his appointment, other workmen namely Shri Jatin Barot, Jagruti Dalal, P.U.Parmar, M.J. Jadav, L.D. Mishra, V.B. Solanki, Mayur Vaghela etc. were recruited and the workman was retrenched on 28.2.86 and in December, 1989 and in May, 1990, recruitments were made but at the time of new recruitment, job was not offered to the second party. In his cross examination, the workman has deposed that the persons whose names were given by him have been engaged by the board on permanent basis. The labour court has observed that the board has not produced any evidence in rebuttal of such contention. Before the labour court, on behalf of the first party Board, witness Shri Mohamad Sharif Shaikh has been examined on oath at Exh. 17 wherein also, the names of the workmen given by the workman second party have not been challenged nor has he produced the muster roll before the court and has further deposed that the seven workmen whose names were given by the second party workman have been retained in service and have not been retrenched on 28.2.1986. In view of this evidence of the witness for the first party board, the labour court has come to the conclusion that in this manner, the first party board has not followed the rule of last come first go and in view of that, the labour court has come to the conclusion that there is breach of the provisions of section 25-G of the I.D. Act, 1947 and as a result of it, the second party workman is entitled for being reinstated in service. The labour court has also come to the conclusion that after retrenchment of the second party workman, new workmen were recruited and, therefore, there was breach of section 25-H of the Industrial Disputes Act and in view of that also, the workman is entitled for being reinstated in service. Therefore, based upon these two conclusions, the labour court has made the award of reinstatement in service with continuity. As regards the attempt made by Mr. Munshaw to draw distinction between the appointment of a person as daily wager clerk and appointment of a clerk on regular basis and submits that said persons were appointed as a clerk on regular basis, there was no breach of section 25-H of the Act and, therefore, the labour court has erred in recording finding that there was breach of section 25H of the Act, it is necessary to refer to the provisions of section 25-H of the Industrial Disputes Act,1947. Section 25-H of the Industrial Disputes Act,1947 is reproduced as under: "25-H. Re-employment of retrenched workmen. Where any workmen are retrenched and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed, give an opportunity [to the retrenched workmen who are citizens of India to offer themselves for re-employment and such retrenched workmen] who offer themselves for re-employment shall have preference over other persons. " Considering the provisions made under section 25-H of the ID Act, 1947, from the bare reading of section 25-H of the Act, it would appear that after retrenchment, if the employer wants to employ any person in the employment, then, he shall have to give an opportunity to the retrenched workman for re-employment and such retrenched workman shall have preference over the other persons by following section 25-H of the Industrial Disputes Act. In this case, admittedly, six persons were recruited subsequent to the appointment of the respondent on the post of clerk and admittedly when the services of the respondent were terminated, said six persons were continued in service whose services were subsequently confirmed and therefore, considering these facts, the Board has committed breach of section 25G of the Act. The scheme of the Industrial Disputes Act, 1947 is that there must be an industry within the meaning of section 2(j) of the Act. There must be a workman as defined under section 2(s) and industrial dispute under section 2(k) between the employer and the employee. These are the compulsory elements which are required to be satisfied for the application of the Industrial Disputes Act, 1947. Each sections of the I.D. Act, 1947 are applicable to the workman as defined under the I.D. Act,1947. Therefore, section 2 (oo) of the I.D. Act, 1947 where the term 'retrenchment' has been defined means termination by an employer of services of the workman for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action and it does not include the voluntary retirement, superannuation, periodical appointments and the termination on the ground of continued ill health. Therefore, if the service of the workman has been terminated by the employer for any reason whatsoever and not included in any exception, then, such termination would amount to retrenchment. Now, in this case, if it is believed that the services of the respondent workman has been terminated by the petitioner by way of retrenchment within the meaning of section 2(oo) of the I.D.Act, 1947, then, section 25-G would apply. This section is also applicable to a workman as defined under the I.D. Act, 1947. According to the evidence of the respondent workman, when he was appointed as a daily wager clerk, other six persons whose names have been given in his deposition, they were recruited subsequent to the appointment of the respondent but they were continued in service at the time when the services of the respondent were terminated. Thus, while terminating the services of the respondent workman, the petitioner board has not followed the principle of last come first go which is violative of Article 14 of the Constitution of India. There was no agreement between the petitioner and the respondent workman and there is also no special reasons given by the petitioner for deviation from the ordinarily retrenching the workman who has come last in that category and special reasons have not been recorded for retrenching any other workman. For retaining six junior workmen and for terminating the services of the respondent workman, the petitioner has not given any special reasons and, therefore, there has been violation of section 25-G of the I.D. Act. Considering the provisions of section 25H and 25G, both are violated by the petitioner. Mr. Munshaw has raised contention before this Court that the provisions of section 25H are not applicable to this case because the subsequent recruitment was made in the year 1991 after following the recruitment rules on regular basis and, therefore, the respondent workman is not entitled to have preference in the matter of regular appointment, under sec.25H of the I.D. Act. From the record, it is clear that such contention has not been raised by the petitioner before the labour court. This aspect has been initially considered and examined by this Court while passing the order dated 2nd September, 1997 while confirming the ad.interim relief. The order dated 2nd September, 1997 is reproduced as under: "Mr. Munshaw has argued that only time bound appointments were given to the respondent and he had not completed a period of 240 days in any of the two years during which he worked. It has also been argued that a dispute was raised in 1992 whereas the termination order was passed in 1986. So far as the grievance with regard to violation of sections 25G and 25H of the Industrial Disputes Act are concerned, it has been argued that the persons against whom such grievance is raised were not similarly situated persons because they had been appointed after following the procedure prescribed under the rules whereas the appointments of the respondent were not made in accordance with the recruitment rules. It is of course noticed that this plea was not raised before the labour court that six persons about whom the respondent is complaining is of violation of sections 25 G and 25 H have been appointed after following procedure prescribed under the Recruitment Rules. It is not disputed by Mr. Parikh that the respondent workman is gainfully employed of course he is getting less salary than what he would have drawn had he not been terminated. However, the fact remains that the respondent continues to be in gainful employment even today. In the facts and circumstances of the case, ad.interim order dated 16.1.1997 is hereby confirmed to last till the disposal of this petition. The matter may be listed for final hearing in the month of November, 1997. " Thus, upon perusal of the entire award made by the labour court and also considering the order dated 2nd September, 1997 quotted hereinabove, it is clear that no such contention has been raised by the petitioner before the labour court in the written statement filed before the labour court and, therefore, this court can ignore the contention which has been raised now before this court for the first time. However, according to my opinion, once when the contention has been raised by the petitioner before this Court, then, this court must examine such question in accordance with law. It is not in dispute that the respondent has not completed 240 days continuous service but he has rendered in all, service of seven months with the petitioner and, therefore, section 25F is not applicable and in view of these admitted facts, Mr. Munshaw has submitted that since section 25F is not applicable to the facts, of this case, section 25G also would not apply. This aspect has been examined by Apex Court in case of Central Bank of India versus S. Satyam and others reported in JT 1996 (7) SC 181. Relevant head notes of the said decision are reproduced as under: ".... it is no doubt true that persons who have been retrenched after a longer period of service which places them higher in the seniority list are entitled to be considered for re-employment earlier than those placed lower because of a lesser period of service. In this manner a workman falling in the lower category because of not being covered by Section 25-F can claim consideration for re-employment only if an eligible workman above him in the seniority list is not available. Application of section 25-H to the other retrenched workmen not covered by section 25F does not in any manner prejudice those covered by section 25F because the question of consideration of any retrenched workman not covered by section 25F would arise only if and when no retrenched workman covered by section 25F is available for re-employment. The plain language of section 25-H speaks only of re-employment of retrenched workmen. The ordinary meaning of the expression 'retrenched workmen' must relate to the wide meaning of retrenchment given in section 2(oo). Section 25-F also uses the word 'retrenchment' but qualifies it by use of the further words 'workmen............. who has been in continuous service for not less than one year. This section 25F does not restrict the meaning of retrenchment but qualifies the category of retrenched workmen covered therein by use of further words 'workmen..... who has been in continuous service for not less than one year'. It is clear that section 25-F applies to the retrenchment of a workman who has been in continuous service for not less than one year and not to any workman who has been in continuous service for less than one year and it does not restrict or curtail the meaning of retrenchment merely because the provisions therein is made only for the retrenchment of a workman who has been in continuous service for not less than one year. Chapter V-A deals with all retrenchments while section 25-F is confined only to the mode of retrenchment of workmen in continuous service for not less than one year. Section 25-G prescribes the principles for retrenchment and applies ordinarily the principles of 'last come first go' which is not confined only to workman who have been in continuous service for not less than one year, covered by section 25-F. The next provision is section 25-H which is couched in wide language and is capable of application to all retrenched workmen, not merely those covered by Section 25-F.It does not require curtailment of the ordinary meaning of the word 'retrenchment' used therein. The provision for reemployment of retrenched workmen merely gives preference to a retrenched workman in the matter of re-employment over other persons. It is enacted for the benefit of the retrenched workmen and there is no reason to restrict its ordinary meaning which promotes the object of the enactment without causing any prejudice to the better placed retrenched workman. Chapter V-A providing for retrenchment is not enacted only for the benefit of the workmen to whom section 25-F applies but for all cases of retrenchment and, therefore, there is no reason to restrict application of section 25 H therein only to one category of retrenched workmen We are, therefore, unable to accept the contention of Shri Pai that a restricted meaning should be given to the word retrenchment in section 25-H. This contention is, therefore, rejected. The other submission of Shri Pai, however, merits acceptance. All the retrenched workmen involved in the present case were employed for short periods between 1974 to 1976. It was only in 1982 that a writ petition was filed by them to claim this benefit. The other persons employed in the industry during the intervening period of several years have not been impleaded. Third party interests have arisen during the interregnum These third parties are also workmen employed in the industry during the intervening period of several years. Grant of relief to the writ petitioners (respondents herein) may result in displacement of those other workmen who have not been impleaded in these proceedings, if the respondents have any claim for re-employment The laches leading to the long delay after which the writ petition was filed in 1982 is sufficient to disentitle them to the grant of any relief in the writ petition. Moreover, there is not even a suggestion made or any material produced