SCA/5566/1999 1/55 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 5566 of 1999 For Approval and Signature: HONOURABLE MR.JUSTICE H.K.RATHOD ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= GUJARAT STATE FOREST DEVELOPMENT CORPORATION LTD. - Petitioner Versus BUDHABHAI KAMJIBHAI NIZAMA - Respondent ========================================================= Appearance : MR PRABHAV MEHTA for NANAVATI ASSOCIATES for Petitioner MR MUKUL SINHA for Respondent ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD Date : 31/08/2006 ORAL JUDGMENT 1. Heard the learned Advocate, Mr.Prabhav Mehta, for Nanavati Associates, on behalf of the SCA/5566/1999 2/55 JUDGMENT petitioner and learned Advocate, Mr.Mukul Sinha, appearing on behalf of the respondent. 2. In the present petition, the petitioner Corporation has challenged the award passed by Labour Court, Baroda in Reference No.669 of 1988 Exh.25 dated 15.4.1999, whereby, Labour Court, Baroda has directed the petitioner to reinstate the respondent workman in service with continuity of service and with 50% back wages of interim period, with cost of Rs.2000/-. 3. This Court has not granted any stay against the reinstatement but, stay has been granted against the amount of back wages. In pursuance to the order passed by this Court on 13.7.2001, the respondent workman has been reinstated by petitioner Corporation in service and at present, he is working with the petitioner Corporation. 4. The dispute referred for adjudication on 4.8.1988 by the appropriate Government. The award SCA/5566/1999 3/55 JUDGMENT was published on 31.5.1999. This Court has passed an order on 13.7.2001, which is quoted as under : “1. RULE. There shall be stay of the impugned award as far as the payment of back wages and costs are concerned on the condition that the respondent shall be reinstated within a period of one month from today. The order of reinstatement shall be subject to the order that may be passed at the time of final disposal of this petition. The record and proceedings of the original Reference (LCV) No.669/88 disposed by the impugned award dated 15.4.1999 shall be called for from the Labour Court, Vadodara so as to reach this Court within one month. The matter shall be listed for final hearing on 16.8.2001.” 5. Against the petition, affidavit in reply is filed by the respondent and against that, rejoinder is also filed by petitioner Corporation, which is at page-45. 6. Learned Advocate, Mr.Prabhav Mehta, submitted that it is admitted fact that respondent workman SCA/5566/1999 4/55 JUDGMENT was daily wager and, therefore, has no right to post. He also submitted that disengagement of the respondent workman is not covered by definition of retrenchment. He emphasized that while calculating 240 days, non-working days and holidays cannot be included for calculation of 240 days continuous service. He relied on Para.5 of the Apex Court's decision in case of Workmen of American Express International Banking Corporation Vs. Management of American Express International Banking Corporation, reported in (1985) 4 SCC 71. He also submitted that for holiday or non-working days, if the daily wager is not able to get any wages, then, that cannot be included in the calculation of 240 days. He also submitted that workman has not proved that by positive action from petitioner Corporation the service of respondent workman has been terminated. No contrary evidence was produced by the workman on record. Therefore, according to him, Labour Court has committed gross error in setting aside termination order and granted the SCA/5566/1999 5/55 JUDGMENT reinstatement with 50% back wages. He relied upon certain decisions of Apex Court as well as High Courts. He has prepared a short note of each decisions which have been relied by him, which is quoted as under : “2006(2) GLR Page 1014(SC) – Surendranagar District Panchayat V/s.Dahyabhai Amarsinh: The burden of proof lies on the workman to show that he had work continuously for 240 days in the preceding one year prior to his alleged retrenchment and it is for the workman to adduce evidence apart from examining himself to prove factum of his being in employment of the employer. (1996) 10 SCC Page 597 – Allahbad Bank V/s.Premsing. The instant case is not one where by passing any order the existing services of a workman were terminated. The respondent was given employment for one day at a time with the issuance of successive letters. The relationship between the parties being contractual, the term of contract was that the services stood terminated at the end SCA/5566/1999 6/55 JUDGMENT of the day. The Industrial Tribunal has not given any reason whatsoever as to what was the obligation on the appellant to employ the respondent. The status of the respondent was, at best, that of a daily wager. By virtue of his letters of employment he ceased to be employed at the end of each day. His day's service stood automatically terminated. Therefore, the decision of the Tribunal that the respondent should be deemed to have continued in service with the right to usual pay and allowances is clearly untenable. The respondent could not insist on his being continued to be employed and the appellant was under no legal obligation to employ him. 1997(2) LLN Page 982 (SC)- Himanshu Kumar Vidyarthi V/s. State of Bihar and others: Section 25F-Retrenchment-Daily wage employees-Engaged on the basis of the needs of her-have no right to posts-the disengagement from service cannot be construed to be retrenchment under I.D.Act. 1998(2) GLR Page 1020 – Umeshkumar Manubhai Amin V/s.Dholka Nagarpalika. SCA/5566/1999 7/55 JUDGMENT Even if the services of daily wagers are being terminated in violation of provisions of Section 25F of the ID Act, still they do not acquire any right to hold the post. At the most they may be entitled for the notice pay or the retrenchment compensation, but their services will not be considered to be regular and permanent. (2004) 8 SCC Page 151 – Rajasthan State Ganganagar S. Mills Ltd. V/s.State of Rajasthan- Burden of proof as to completion of 240 days of continuous work in a year is on the workman. (1995) 5 SCC Page 653- Morinda Cooperative Sugar Mills Ltd. V/s.Ramkishan and Ors. Labour Law-Industrial Disputes Act, 1947- S.2(oo)(bb), 25-F and 25-H- workmen of sugar mills working during crushing seasons only (October/November to March/April in the following year)- Cessation of their work consequent to closure of the season, held, did not amount to retrenchment- Hence, High SCA/5566/1999 8/55 JUDGMENT Court's direction to reinstate them on account of non-compliance with S.25-F, held, illegal- However, in the next season such persons, if reporting for duty, directed to be engaged in accordance with seniority and exigency of work- Retrenchment. (2005) 1 SCC Page 639- Mahendra L.Jain & Ors. V/s. Indore Development Authority & Ors. Daily wagers hold no post- Regularization cannot be claimed as a right- Daily wager in the absence of the statutory provision in this behalf would not be entitled to regularization. (2006) 1 SCC Page 530- Regional Manager, SBI V/s. Rakeshkumar Tiwari. Held, if the plea in respect of section 25-G is not put forward , the opportunity for leading evidence thereon is denied, for no amount of evidence can be looked into unless a plea is raised. Respondent workman not having raised any plea in respect of violation of section 25-G or that termination of their services was illegal, if was not open to criminal to go SCA/5566/1999 9/55 JUDGMENT off on a tangent and conclude that termination of service of respondents was invalid. (1997) 11 SCC Page 521 – Escorts Limited V/s. Presiding Officer & Anr. Terms of appointment enabling the employer to terminate the service at any stage without assigning any reason- In such circumstances, termination of service under the said terms though effected before the expiry of the specified period, held did not amount to retrenchment. Beyond the scope of reference-(1972) 1 SCC Page 691- The Jaipur Udyog Limited V/s. The Cement Work Karmachari Sangh, Sahunagar. (1978) 1 SCC Page 235-Precision Bearings India Ltd. V/s. Baroda Mazdoor Sabha & Anr.“ Except that, no other submission is made and no other decision is relied by him. 7. Learned Advocate, Mr.Mukul Sinha, submitted SCA/5566/1999 10/55 JUDGMENT that matter can be looked into by two ways. He submitted that workman has satisfactorily proved Section 25B(1) and remained in service for a period without interruption and petitioner Corporation has not proved any kind of interruption in service of the workman by leading proper evidence before the Labour Court. Therefore, he submitted that respondent workman has satisfactorily proved continuous service as defined under Section 25(B)(1) of the I.D.Act,1947. He also submitted that statutory provisions entitles the workman to have weekly off as well as public holiday under the provisions of Rule 23 of Minimum Wages Act. Therefore, whatever the wages has been paid to the workman by the employer, it includes the wages of weekly off and public holiday. Therefore, according to him, even Section 25(B) (1) is satisfied by the workman if weekly off and other holidays are included in the calculation of 240 days continuous service. He also submitted that workman remained in service from SCA/5566/1999 11/55 JUDGMENT January,1983 to November,1986 working as a daily wager. During this service period, the service of respondent workman was not interrupted by any other reason by the Corporation. Therefore, he submitted that if the workman has satisfied the definition of continuous service as specifically mentioned in Section 25(B)(1) of I.D.Act,1947, then also, he is entitled the benefit of Section 25F of the I.D.Act,1947. He also submitted that workman has already been reinstated by the petitioner Corporation and he is working with the Corporation and juniors to respondent workman, have been regularized by petitioner Corporation. These facts have been mentioned in the affidavit filed by respondent workman. Learned Advocate, Mr.Prabhav Mehta, submitted that facts which are mentioned in the affidavit-in-reply by respondent workman, are categorically denied by the petitioner Corporation in Para.4 of the rejoinder. Learned Advocate, Mr.Mehta, submitted that name which has been suggested in affidavit-in-reply, a specific detail has been SCA/5566/1999 12/55 JUDGMENT given by Corporation that the workmen, whose names are mentioned, are not similarly situated to the respondent workman. Therefore, according to him, no junior to the respondent workman has been regularized by Corporation. Except this, learned Advocate, Mr.Mukul Sinha, has not made any other submission and relied upon any other decision. 8. I have considered the submissions made by both the learned Advocates and have also perused the award passed by Labour Court, Baroda in Reference No.669 of 1988. Before the Labour Court, workman had filed statement of claim vide Exh.3. According to respondent workman, he was working for more than 3 years as a Packing Helper and his work was found satisfactory, even though without giving any notice or warning the service of workman was terminated by oral order. Therefore, the demand was raised to reinstate the respondent workman with continuity of service with full back wages of interim period. The SCA/5566/1999 13/55 JUDGMENT petitioner Corporation has filed reply Exh.12/1 denying the averments made in the statement of claim by the respondent workman. According to petitioner Corporation, respondent workman was working in godown at Nandesari w.e.f. 1986. He completed 213 days in the year 1986 and in the year 1987 he completed 126 days continuous service and thereafter, workman has not reported for work w.e.f. 19.11.1987. According to Corporation, no positive action / termination order has been issued against the respondent but, workman has left the job. Therefore, according to Corporation, the reference is required to be dismissed. Before the Labour Court, the respondent workman was examined vide Exh.11. Thereafter, on behalf of petitioner, one list of documents was produced vide Exh.15 and vide Exh.16, certain documents were produced on record by petitioner. Thereafter, workman was cross- examined by petitioner Corporation vide Exh.17 and one witness Shrinivas was examined by petitioner vide Exh.20. Thereafter, the matter SCA/5566/1999 14/55 JUDGMENT was kept for arguments of both the learned Advocates. The Labour Court has framed the issue and decided the issue in Para.6. The Labour Court has considered the presence register produced by petitioner and come to the conclusion that workman remained in service, according to presence register, in the year of 1986 for 213 days and in the year 1987 working days are 126. The evidence of the workman vide Exh.11 specifically made it clear that his service was terminated by petitioner on 3.12.1987. According to presence register, the presence was marked upto 13.11.1987. Thereafter, no presence was marked in respect to respondent. According to workman, he was taken back in service after termination w.e.f. 3.5.1988 and thereafter, he was transferred to other place but, petitioner Corporation remained silent about this averment made by the respondent workman. The petitioner Corporation has not produced any muster from 3.5.1988 before the Labour Court. Therefore, the Labour Court has come to the conclusion that if SCA/5566/1999 15/55 JUDGMENT the workman was taken back in service from 13.11.1987 on 3.5.1988 and muster for that period was not produced by petitioner Corporation, therefore, Labour Court has come to conclusion that service of the workman was terminated by petitioner. The Labour Court has considered the decision of the Apex Court and also considered the decision in the case of Workmen of American Express International Banking Corporation (supra) and come to conclusion that considering the weekly off and public holidays, if it is included in total working days of 213 days which comes to 240 days. There is no dispute raised by petitioner before the Labour Court about the working days of 213 in the year 1986. Therefore, the Labour Court has come to conclusion that relying upon the decision of Apex Court in case of Workmen of American Express International Banking Corporation (supra) that workman had satisfied the condition of Section 25(B)(2) of the I.D.Act,1947. In respect to contention raised by petitioner Corporation that workman has left SCA/5566/1999 16/55 JUDGMENT the job and not reported for work after 13.11.1987, the Labour Court has considered that no letter has been written by the petitioner Corporation to the respondent about his absence from duty and no steps have been taken by petitioner Corporation if the workman had abandoned the job according to the case of the petitioner. Thereafter, the Labour Court has considered the question of back wages relying upon the evidence of workman and granted 50% back wages of interim period. 9. The arguments which have been advanced by petitioner before this Court relying upon the decision in respect to daily wager, continuous service, 240 days and legal right of daily wager. Looking to the award as it is, none of the contentions were raised by petitioner before the Labour Court. No such submissions were made before the Labour Court by petitioner Corporation. On the contrary, the working days of 213 days in the year 1986 and 126 days in the SCA/5566/1999 17/55 JUDGMENT year 1987 has been admitted by petitioner Corporation. The petitioner Corporation has not relied upon any of the decision which has been relied by him before this Court. This Court is examining the legality and validity of the award in question on the ground that whether any error has been committed by Labour Court while passing such award or not. The submission which was not made before the Labour Court by the petitioner, naturally, the Labour Court should not have to deal with such submissions and now to argue this question that Labour Court award is bad because daily wager has no right to the post, 240 days continuous service was not established, service of the workman was not terminated by positive action, no such submissions were mentioned or argued by the petitioner Corporation before the Labour Court. Therefore, considering these undisputed facts, whether the award passed by Labour Court is bad or not, is required to be examined by this Court. It is not the case of the petitioner Corporation before this Court that SCA/5566/1999 18/55 JUDGMENT these all submissions were made before the Labour Court and none of the submissions were considered by Labour Court, Baroda. However, apart from these facts, since the submissions raised before this Court, therefore, this Court is examining the same which have been raised by petitioner Corporation. The respondent workman is covered by definition of Section 2(s) of the I.D.Act,1947. The workman had completed continuous service of 213 days, as per the record produced by Corporation. It is necessary to note one important aspect that in cross-examination of the workman by learned Advocate appearing on behalf of Corporation, a specific question was asked to the workman that he had not completed 232 days continuous service in the year 1986 and 198 days in the year of 1987. In cross-examination, the workman has made it clear that his service was terminated on 3.12.1987 by petitioner Corporation. The evidence of Corporation is at Exh.20 wherein the Secretary of Corporation was examined. According to evidence of Corporation, SCA/5566/1999 19/55 JUDGMENT the workman was not working as a daily wager but, he was working as Hangami Kamdar but, payment has been made on the basis of daily wage. The workman was appointed in January,1986. He was not made permanent by Corporation and from November,1987, he abandoned the job. The witness of petitioner Corporation admitted that Minimum Wages Act is applicable to the petitioner Corporation and minimum wages were paid to the respondent workman and bonus is also paid to the respondent workman. No notice was given to the respondent workman by the petitioner Corporation. So, from the evidence of the petitioner Corporation, the fact was proved before the Labour Court that no written order of appointment was given to the workman and no termination order was given to the workman. Both the things have been done by oral order of the petitioner Corporation. 10. In view of these facts, the decision which has been relied by learned Advocate, Mr.Prabhav Mehta, that daily wager is not covered by SCA/5566/1999 20/55 JUDGMENT definition, not entitled to the post and it is day-to-day engagement of the workman by Corporation, from morning the service was engaged and in the evening, his service discontinued by Corporation. The termination cannot be considered to be retrenchment and when daily wager was not entitled to the post, therefore, question of reinstatement does not arise. Against this submission, the decision of Apex Court in case of Rattan Singh Vs. Union of India, reported in (1997) 11 SCC 396 wherein it is held that, “Section 25F of the Act is applicable to termination of even a daily-rated workman who had continuously served for the requisite statutory minimum period in a year. Hence, termination of service of such a workman without complying with Section 25F, is held illegal.” So, in view of the aforesaid decision, provision of Section 25F I.D.Act,1947 is applicable to the daily wager and non-compliance of Section 25F of the I.D.Act,1947 rendered the termination order ab initio void. Similar aspect has also been considered by Apex SCA/5566/1999 21/55 JUDGMENT Court in case of Mohan Lal Vs. The Management of M/s. Bharat Electronics Ltd. reported in AIR 1981 SC 1253 wherein the Apex Court has considered that in case termination amounts to retrenchment without complying the provisions of Section 25F of the I.D.Act,1947, then, such termination order is ab initio void. Relevant observations are in Para.16 and 17, which are quoted as under : “16. Appellant has thus satisfied both the eligibility qualifications prescribed in Section 25F for claiming retrenchment compensation. He has satisfactorily established that his case is not covered by any of the excepted or excluded categories and he has rendered continuous service for one year. Therefore, termination of his service would constitute retrenchment. As precondition for a valid retrenchment has not been satisfied the termination of service is ab initio void, invalid and inoperative. He must, therefore, be deemed to be in continuous service. 17. The last submission was that looking SCA/5566/1999 22/55 JUDGMENT to the record of the appellant this Court should not grant reinstatement but award compensation. If the termination of service is ab initio void and inoperative, there is no question of granting reinstatement because there is no cessation of service and a mere declaration follows that he continues to be in service with all consequential benefits. Undoubtedly, in some decisions of this Court such as Ruby General Insurance Co. Ltd. v. P. P. Chopra. (1970) 1 Lab LJ 63 and Hindustan Steel Ltd., Rourkela v. A. K. Roy, (1970) 3 SCR 343 : (AIR 1970 SC 1401) it was held that the Court before granting reinstatement must weigh all the facts and exercise discretion property whether to grant reinstatement or to award compensation. But there is a catena of decisions which rule that where the termination is illegal especially where there is an ineffective order of retrenchment, there is neither termination nor cessation of service and a declaration follows that the workman concerned continues to be in service with all consequential benefits. No case is made out for departure from this normally accepted approach of the Courts in the SCA/5566/1999 23/55 JUDGMENT field of social justice and we do not propose to depart in this case.” 11. It is not the case of the petitioner Corporation that such kind of termination is covered by exception of Section 2(oo) of the I.D.Act,1947. Therefore, such kind of termination is satisfied the requirement of Section 2(oo) of the I.D.Act,1947 and, therefore, it amounts to retrenchment. If workman day-to-day engaged and each day appointment and termination, then, Corporation has to pay daily payment to workman. But in this case payment was not made. The monthly payment made to the workman. So the defence of Corporation about day-to-day engagement is false and afterthought as well as contrary to record. The provision of Section 25(B)(1) of the I.D.Act,1947 has been considered by this Court in case of Moti Ceramics Industries V/s. Jivuben Rupabhai, 2000 II CLR 156, wherein it is held that the cessation of work cannot be considered to be termination as decided SCA/5566/1999 24/55 JUDGMENT by this Court in case of D.S.Vasavada v. Regional P.F. Commissioner, Gujarat reported in 1985 (1) GLR 499. The decision of Single Judge in S. R. Bharai V/s.Union of India reported in 2006 II CLR 167. Section 25B (1) of the I.D.Act,1947 is satisfied by the workman remaining in service from January,1986 to 3.12.1987. It is not the case of petitioner Corporation that during this period from January,1986 to December,1987, for even a single day, the service of workman was terminated by the corporation or interrupted being an unauthorized absence or any other reason. If the cessation of work during this entire period is not due to fault on the part of workman, then, it amounts to continuous service as defined under Section 25B (1) of the I.D.Act,1947. The period of one year continuous service has been completed by the workman while remaining in service from January,1986 to 3.12.1987. Therefore, Section 25F of the I.D.Act,1947 requires that if the workman is remained in continuous service not less than one SCA/5566/1999 25/55 JUDGMENT year, then, his service cannot be terminated without complying with the provisions of Section 25F of the I.D.Act,1947. The provision of Section 25F I.D.Act,1947 has not made clear that 240 days continuous service is necessary. Section 25F where no workman employed in any industry who has been in continuous service for not less than on year under employer, shall be retrenched by that employer unless and until Clause (a), (b) and (c) is required to be complied with by Corporation. From the perusal of record produced by petitioner Corporation, the respondent workman was employed by petitioner Corporation, who has been in continuous service from January,1986