IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 3284 of 2000 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 Civil Judge? : NO @ EXECUTIVE ENGINEER Versus MAKWANA DHIRAJLAL DAHYALAL -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 3284 of 2000 MR RC JANI for Petitioner No. 1 MR CB DASTOOR for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE H.K.RATHOD Date of decision: 05/04/2002 ORAL JUDGEMENT Heard learned advocate Mr.R.C.Jani for the petitioner and Mr.C.B. Dastoor for the respondent workman. By way of this petition, the petitioner has challenged the award made by the labour court, Junagadh in Reference (LCJ) No. 241 of 1993 dated 22nd October, 1999 wherein the labour court has granted reinstatement in favour of the workman concerned while setting aside the order of termination and has granted full back wages for the intervening period with effect from 1st January, 1993. This petition was admitted by this court by issuing rule thereon on 26th July, 2000 and interim relief has been granted against the implementation of the award in question. During the course of hearing, learned advocate Mr.Jani has raised a contention that the petitioner is not an 'industry' as defined under section 2(j) of the Industrial Disputes Act, 1947. He has also submitted that the respondent has not completed 240 days continuous service within 12 months preceding the date of alleged termination as required under section 25-B of the Industrial Disputes Act,1947 and, therefore, the respondent workman was not entitled for the benefits under section 25-F of the Act. He has submitted that the petitioner is a public body and the reference has remained pending before the labour court for about seven years or so and therefore, the back wages ought not to have been granted for such a long period. According to the respondent, the date of termination is of December, 1988. Therefore, according to Mr. Jani, since the dispute was raised after about five years and as such, there was delay in raising the industrial dispute and, therefore, on that ground, the labour court ought to have rejected the reference. Learned advocate Mr.Jani has also submitted that the services of the respondent were not terminated by the petitioner and he had abandoned the service and has not reported at the place of transfer, at Veraval because he was not willing to join at Veraval and that is how, he abandoned the job at his own, however, this aspect has not been considered by the labour court while passing the award in question. He has also submitted that the respondent was appointed temporarily and was not appointed on permanent basis. In support of his submissions, he has relied upon the following decisions; (1) Negungadi Bank Ltd. v. K.P. Madhavankutty and others, reported in 2000 Lab. I.C. page 703 (2) Ambalal S. Kumbhare and Anr. v. Gujarat Coop. Marketing Federation Ltd., reported in 2000(1) GLH 69 (3) GSRTC v. MS Patel & Anr., reported in 1998 (1) GLH page 369 (4) Premibhai L. Gamit v. Executive Engineer, reported in 1998 (3) GLR page 2550. (5) Shankerji Chelaji Thakore versus State of Gujarat reported in 2000(1) GLH page 482. (6) Executive Engineer Una Irrigation Project versus Rajiben Parbatbhai reported in 1997 (1) GLH 750 On the other hand, learned advocate Mr. Dastoor has submitted that the dispute was belatedly raised and there was some delay in raising the dispute and the labour court has, while granting relief of reinstatement as well as back wages, taken into consideration this aspect of delay and has granted relief of backwages from the date of reference and not from the date of termination. He has further submitted that the petitioner has filed the written statement before the labour court and, thereafter, no oral evidence has been led by the petitioner before the labour court. According to him, the petitioner has produced list of documents at Exh.10 which documents were exhibited as Exh. 11 to 14 and oral evidence of the petitioner has been closed by the labour court and, thereafter, written arguments were made by the learned advocates before the labour court. He has further submitted that mere raising of contention in the written statement is not sufficient but it is necessary to press such contention into service before the labour court and to led proper evidence for substantiate such contention and if no evidence has been led in support of such contention and if such contention has not been proved before the labour court, then, the labour court is not duty bound to consider such averments raised in the written statement. He has submitted that the averments made in the written statement cannot be considered to be evidence of the petitioner and, therefore, if the petitioner has raised such contention that it is not an industry as defined under the Industrial Disputes Act, 1947, then, the petitioner is required to prove such contention by leading evidence to that effect for substantiating such contention. Mr. Dastoor has relied upon the decision in case of Bangalore Water Supply Sewerage Board versus A. Rajappa and others reported in AIR 1978 SC 548. Said decision was referred to by Hon'ble Ms. Justice Sujata Manohar and thereafter the matter was placed before the Chief Justice of India and ultimately the apex court has taken view in case reported in 2000 (1) SCC 224 between Coir Board Ernakulam Kerala State and others versus Indiradevi P.S. and others that the case does not require reconsideration on reference made by Two Judge Bench of the court in 1998 (3) SCC 259. It is necessary and important to be noted that here also, the petitioner is Gujarat Water Supply and Sewerage Board and before the apex court also, Sewerage Board was the party wherein the decision has been given by the apex court and it has been held that the Board is an industry within the meaning of section 2(j) of the Act and, therefore, in view of that, there is no necessity to go any further into this aspect. and the activities of the petitioner must be held as an industry as has been held by the apex court. Mr. Dastoor has further submitted that the respondents have completed 240 days and in absence of evidence, the view taken by the labour court is quite just, proper and valid and the same does not require any interference by this court. Considering the contention raised by Mr. Jani that the petitioner Board is not covered by the definition under section 2(j) of the Industrial Disputes Act, 1947, this Court has examined the award in question. In respect of the said contention, the petitioner board has filed reply before the labour court vide Exh. 8 raising such contention and thereafter, vide Exh. 4, four documents were produced by the petitioner before the labour court. Then, vide Exh. 15, the workman concerned was examined before the labour court. Thereafter, the petitioner board has not led any oral evidence before the labour court to substantiate the contention that the petitioner board is not an industry as defined under section 2(j) of the Act. Mere contention raised in its written statement is not enough. Same is required to be proved by producing and leading proper evidence before the labour court. Here, it is not in dispute that the petitioner has not led any oral evidence for substantiating such contention that it is not an industry as defined under section 2(j) of the I.D> Act, 1947. In view of this factual position, it cannot be said that the labour court has committed any error in coming to the conclusion that the petitioner board is an industry within the meaning of section 2(j) of the I.D. Act, 1947. Apart from that, it is also necessary to note that the petitioner is the Gujarat Water Supply and Sewerage Board. Larger Bench of the Apex Court has examined the very same contention as to whether the Sewerage Board is an industry within the meaning of section 2(j) of the I.D. Act or not and has answered that the Board is an industry within the meaning of section 2(j) of the I.D. Act. Mere contention raised in its written statement cannot be considered to be legal evidence. Each and every contention raised in the written statement are required to be proved by producing or by leading proper evidence which has not been done by the petitioner board before the labour court and therefore, the labour court has rightly decided that the petitioner board is covered by the definition of industry under section 2(j) of the I.D. Act, 1947. At this stage, relevant observations made in para 18 by the apex court in case of Bangalore Water Supply and Sewerage Board v. A. Rajappa and Others, reported in AIR 1978 SC 548 are reproduced as under: "18. I would also like to make a few observations about the so called 'sovereign' functions which have been placed out side the field of industry. I do not feel happy about the use of the term 'sovereign' here. I think that the term 'sovereign' should be reversed technically and more correctly, for the sphere of ultimate decisions. Sovereignty operates on a sovereign plane of its own as I suggested in Karnataka Bharati's case, AIR 1973 SC 1461, supported by a quotation from Ernest Barker's "Social and Political Theory". Again, the term "Regal" from which the term "sovereign" functions appears to be deprived, seems to be a misfit in a Republic where the citizen shares the political sovereignty in which he has even a legal share however small in as much as he exercises the right to vote. What is meant by the use of the term 'sovereign' , in relation to the activities of the State, is more accurately brought out by using the term 'governmental' functions although there are difficulties here also in as much as the Government has entered largely now fields of industry. Therefore, only those services which are governed by separate rules and constitutional provisions, such as Article 310 and 311 should, strictly speaking, be excluded from the sphere of industry by necessary implication. " In para 74 of the said decision, the apex court has observed as under: "74. Although we are not concerned in this case with those categories of employees who particularly come under departments charged with the responsibility for essential constitutional functions of government, it is appropriate to state that if there are industrial units severable from the essential functions and possess an entity of their own it may be plausible to hold that the employees of those units are workmen and those undertakings are industries. A blanket exclusion of every one of the host of employees engaged by government in departments falling under the general rubrics like justice, defence, taxation, legislature may not necessarily be thrown out of the umbrella of the Act. We say no more except to observe that closer exploration, and summary rejection is necessary." Subsequently, the apex court has again considered the case of Bangalore Water Supply in connection with what is the sovereign function of the State. This aspect has been examined by the apex court in case of Chief Conservator of Forests versus J.M. Kondhare, reported in AIR 1996 SC 2898. Relevant observations made in para 7 are reproduced as under: "7. As per the Bangalore Water Supply case (AIR 1978 SC 548), sovereign functions' strictly understood' alone qualify for exemption and not the welfare activities or economic adventures under taken by the Government. This is not all. A rider has been added that even in the departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then, they can be considered to be an industry. As to which activities of the Government could be called sovereign functions strictly understood has not been spelt out in the aforesaid case. " In para 12 and 13 of the said decision, it has been observed by the apex court as under: "12. We may not go by the labels, Let us reach the hub. And the same is that the dichotomy of sovereign and non-soverign functions does not really exist, it would all depend on the nature of power and manner of its exercise, as observed in para 23 of NAGENDRA RAO'S CASE [ 1994 AIR SCW 3753 ]. As per the decision in this case, one of the tests to determine whether the executive function is sovereign in nature is to find out whether the State is answerable for such action in Courts of law. It was stated by Sahai, J. that acts like defence of the country, raising armed forces and maintaining it, making peace or war, foreign, affairs, power to acquire and retain territory, are functions which are indicative or external sovereignty and are political in nature. They are, therefore, not amenable to the jurisdiction of ordinary civil court inasmuch as the State if immune from being used in such matters. But then, according to this decision the immunity ends there. It was then observed that in a welfare State, functions of the State are not only the defence of the country or administration of justice or maintaining law and order but extends to regulating and controlling the activities of people in almost every sphere, educational, commercial, social, economic, political and even marital. Because of this the demarcating line between sovereign and non sovereign powers has largely disappeared. 13. The aforesaid shows that if we were to extend the concept of sovereign function to include all welfare activities as contemplated on behalf of the appellants, the ratio in Bangalore Water Supply case (AIR 1978 SC 548) would get eroded, and substantially. We would demur to do so on the face what was stated in the aforesaid case according to which except the strictly understood sovereign function, welfare activities of the State would come within the purview of the definition of industry, and, not only this, even within the wider circle of sovereign function, there may be an inner circle encompassing some units which could be considered as industry if substantially severable. " Recently, this question has again been examined by the Patna High Court whether the Water Resources Department is an industry or not. In case of State of Bihar and others versus Presiding Officer and others reported in 2002 II LLJ 233, the Patna High court has observed as under in para 3 of the said decision: "3. The State has come to this Court inter alia pleading that the Water Resources Department concerned was not an industry under the provisions of the Industrial Disputes Act,1947 and as the Division Bench judgment of this Court has clearly observed that the said department of the State is not an industry, the labour court was not justified in making an Award in favour of the workmen. The second plank of the argument is that the workmen were in fact not workmen and their initial appointments were illegal, therefore also, the Labour Court was not justified in making the award in favour of the workmen." In para 6 of the said judgment, the Patna High Court has observed as under while rejecting the submission made by the learned counsel for the State: "6. The Supreme Court in the matter of Coir Board, Ernakulam Kerala State and another v. Indira Devi P.S. and others, 2000 (1) SCC 224 : 1999-I-LLJ-1109 has held that the Judgment in the matter of Bangalore Water Supply and Sewerage Board, v. A. Rajappa AIR 1978 SC 969 : 1978 (1) SCC 213 : 1978 I LLJ 349, was holding the field and further observed that the Judgment in the matter of Bangalore Water Supply did not need any reconsideration. The order was passed by the Supreme Court on a reference made by a seven Judge Bench of the Supreme Court. In the said matter of Bangalore Water Supply, the Supreme Court observed that the person employed with the Board was a workman. Applying the ratio of Bangalore Water Supply & Sewerage Board, I have no hesitation in holding that the Department in question in fact is an industry. The first submission made by the learned counsel for the State deserves to and is accordingly rejected." Therefore, in view of the two decisions of the apex court and one of the Patna High Court, and also keeping in mind that such contention raised by the petitioner board before this court that it is not an industry has not been proved by the petitioner board before the labour court by producing material and evidence before the labour court, it cannot be said that the labour court has committed any error in coming to the conclusion that the petitioner board is covered by the definition under section 2(j) of the Industrial Disputes Act,1947 and it also cannot be said that the labour court has committed an error in holding that the petitioner is an industry within the meaning of section 2(j) of the I.D. Act. Therefore, the contention raised by Mr. Jani in that regard is rejected. I have considered the submissions made by both the learned advocates and I have also considered the authorities cited by the learned advocates before this Court. Statement of claim was filed before the labour court by the workman at Exh.3 and it was pointed out that he joined in 1986 and continuously worked as such with the petitioner and his services were terminated in the month of December, 1988. Reply was submitted before the Labour Court at Exh. 8 and the respondent produced list Exh. 9 and produced four documents. Exh. 16 is the certificate issued by the Deputy Executive Engineer, Keshod in favour of the respondent. Petitioner has not been disputing that such certificate has been issued by the Deputy Executive Engineer of the Petitioner Board. Thereafter, the petitioner has produced documentary evidence vide list Exh. 10 which documents have been exhibited as Exh. 11 to 14. Before the Labour Court, the respondent was examined at Exh. 15 and his oral evidence was cross examined by the petitioner and it is important to be noted that thereafter, no oral evidence has been led by the petitioner to substantiate its averments raised in the written statement and to rebut the contentions raised by the workman in its statement of claim and the oral evidence. Then, the Labour Court has examined the evidence on record produced by both the parties. The Labour Court first of all examined whether the respondent is a workman within the meaning of section 2(s) and petitioner is an industry within the meaning of section 2(j) of the I.D. Act,1947 or not and has then come to the conclusion that the respondent is a workman and the petitioner is an industry respectively within the meaning of section 2(s) and 2(j) of the Act. For coming to such conclusion, the labour court has appreciated the deposition of the workman at Exh. 15 wherein it was pointed out by the workman that he was appointed in the year 1986 and his services were terminated in 1988 and the certificate at Exh. 16 was issued by the petitioner and was produced on record by the petitioner which was not disputed and no evidence has been led against the said certificate and, therefore, the Labour Court has relied upon the said certificate. Then, the Labour Court has examined the question whether the respondent has completed 240 days or not. For appreciating this aspect, the labour court has considered the reply filed by the petitioner before it wherein the petitioner has nowhere stated as to for how many days the respondent has worked with the petitioner and no explanation has been given by the petitioner but considering the certificate Exh. 16, the labour court has specified the period of working days from 16th December, 1985 to 29th January, 1987 and the workman has in his deposition deposed for the period from 16th December, 1985 to December, 1988 but against that, no oral evidence has been led by the petitioner and, therefore, the labour court has come to the conclusion that the workman has completed 240 days' continuous service as required under section 25-B and 25-F of the Industrial Disputes Act, 1947 and the termination has been considered as retrenchment without following the mandate given under section 25-F of the I.D. Act, 1947 and in view of the noncompliance of mandate under section 25-F of the I.D. Act, 1947, order of termination against the workman was set aside by the labour court. Thereafter, the labour court has appreciated the contention raised by the petitioner that the respondent workman has left the job at his own and has, thus, abandoned the work when the project has been transferred at Veraval and has considered the contention that the workman has not reported for duty at Veraval and for appreciating such contention, the labour court has examined whether the petitioner has issued any communication for such alleged misconduct of not reporting at Veraval or seeking his explanation for not reporting at Veraval and for want of evidence to that effect on record produced by the petitioner, the labour court has come to the conclusion that the petitioner has not proved that the respondent has left the job at his own volition when the project has been transferred at Veraval by observing that if the respondent was remaining absent and was not reporting at Veraval after the transfer of the project, then, for his remaining absent, no charge sheet has been issued and nothing has been produced on record to that effect and, therefore, the labour court has held that the contention has not been proved by the petitioner. The labour court has come to the conclusion that in view of the facts on record, the petitioner has not followed the provisions of section 25-F of the I.D. Act, 1947 and, therefore, the termination of service is bad and illegal and, therefore, the workman is entitled for reinstatement in service. Thereafter, the labour court has considered the question of back wages. For considering this question, the labour court has considered the evidence produced by the respondent on record has remained unchallenged and uncontroverted and has observed that in absence of evidence in respect of gainful employment, the workman is entitled for full back wages for the intervening period from the date of reference 28th January, 1993 and not from the date of termination. Thus, while considering the question of back wages, the labour court, taking into consideration delay in raising dispute and filing reference, has refrained itself from granting back wages from the date of termination but has granted such relief only from the date of filing of the reference. During the course of hearing, learned advocate Mr.Jani appearing for the petitioner has raised the contention about delay in raising industrial dispute and has submitted that in view of the delay in raising industrial dispute, the labour court ought not to have adjudicated the dispute on merits and it ought to have rejected the reference on the ground of delay alone. For appreciating this contention, it is necessary to be considered that if the petitioner is having objection about delay in raising dispute, then, the petitioner ought to have challenged the order of reference itself on the ground of delay which was made by the Assistant Commissioner of Labour before it. The second aspect is that mere contention about delay has been raised in its written statement before the labour court