1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.443 OF 2010 Mr.Ramesh Vitthal Patil & Ors. ....Petitioners V/s. Kalyan Dombivali Municipal Corporation & Ors. ....Respondents Mr.Y.M. Pendse for the Petitioners. Mr.A.S. Rao for the Respondents. Mrs.Gayatri Singh for the Intervenor – Municipal Karmachari Kamgar Sena. WITH WRIT PETITION NO.565 of 2010 Kalyan Dombivli Municipal Corporation & Anr. ....Petitioners V/s. Shri Ramesh Vithal Patil & Ors. ....Respondents Mr.A.S. Rao for the Petitioners. Mr.Y.M. Pendse for the Respondents. Mrs.Gayatri Singh for the Intervenor – Municipal Karmachari Kamgar Sena. WITH WRIT PETITION NO. 901 OF 2010 2 Kalyan Dombivli Municipal Corporation & Anr. ....Petitioners V/s. Shri Maruti Shrirang Nikam & Ors. ....Respondents Mr.A.S. Rao for the Petitioner. Mr.Y.M. Pendse for the Respondents. CORAM : S.J. VAZIFDAR, J. DATE : 7TH JUNE, 2010. ORAL JUDGMENT :- 1. The first two matters are cross Writ Petitions. The 25 petitioners in Writ Petition No.443 of 2010 are the respondents in Writ Petition No. 565 of 2010. The petitioners in Writ Petition Nos. 565 of 2010 and 901 of 2010 viz. The Kalyan-Dombivali Municipal Corporation and its Commissioner respectively, are respondent Nos. 1 and 2 in Writ Petition No. 443 of 2010. I will for convenience refer to the petitioners in Writ Petition Nos. 443 of 2010 as the complainants and to respondent No.1 therein i.e. the petitioner in Writ Petition Nos. 565 of 2010 and 901 of 2010 as the Corporation. The counsel agree that the decision in Writ Petition No. 901 of 2010 will follow the decision in the other Writ Petitions. 3 2. The petitioners in all the writ petitions have challenged the order passed by the learned Member of the Industrial Court, Thane in the complaint filed by the complainants under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. The Corporation has challenged the order in so far as it allows the complaint filed by the workers granting them permanency and the benefits of permanency and all other consequential benefits arising therefrom. The complainants have challenged the said order in so far as the reliefs granted are only with effect from the date of the filing of the complaint. The Complaint : 3. The complainants filed the complaint under sections 28 and 30 read with items 5, 6, 9 and 10 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. They sought a declaration that the Corporation had engaged in and was engaging in unfair labour practices as defined under the said provisions and an order directing them to cease and desist from doing so and to confer upon them the status of permanency and benefits and privileges thereof. As consequential reliefs they sought a declaration that they are the permanent employees of the Corporation and an order directing the Corporation not to discontinue their 4 employment. 4. The complaint alleged that the complainants had been in the employment of the Corporation since 1997; that they had in response to an advertisement issued by the Corporation under the signature of the Commissioner applied for employment and that they were accordingly appointed pursuant to and in accordance with the advertisement. The complaint states that their service conditions are governed by various settlements under the provisions of the Industrial Disputes Act and the Model Standing Orders framed under the Industrial Employment (Standing Orders) Act, 1946 in its application to the State of Maharashtra. It is alleged that though the complainants are appointed on a temporary basis the nature of their work is permanent and perennial in nature and that they are entitled for permanency as the posts in which they are appointed are sanctioned posts. It is also averred that even assuming that the workmen are discharging the work which is of temporary nature they are entitled to permanency by virtue of Model Standing Order 4C. It is further alleged that the complainants had entered into a settlement with the union whereby an employee who is appointed on a temporary basis is entitled for permanency after completion of five years of employment. The complainants alleged that they had completed 240 days or more in any preceding 12 calendar 5 months. The Corporation not having granted them permanency despite these facts is, according to them, guilty of unfair labour practices as alleged. The workers have averred that all the posts on which they have been appointed have been sanctioned by the state government. Therefore, according to them their engagement on a temporary basis itself indicates that they were intentionally kept as temporary with the sole intention of depriving them the benefits, privileges and status of permanent employees. For that reason too it is alleged that the Corporation had engaged in unfair labour practices under item 6 of schedule IV of the MRTU and PULP Act. The Corporation’s written statement : 5. The Corporation in its Written Statement denied all the averments and submissions in the complaint. The Corporation challenged the jurisdiction of the industrial court constituted under the MRTU & PULP Act. It is contended that the the Corporation is established by the Government of Maharashtra under the Bombay Provincial Municipal Corporation Act, 1949 (hereinafter referred to as the BPMC Act); that they had to carry on their affairs within the framework laid down under this Act and as per the orders, guidelines or directives issued by the Government of Maharashtra from time to time; that as per the provisions of the BPMC Act every corporation may make rules prescribing qualifications 6 required for each post and the procedure for recruitment in respect thereof; that they had made draft rules and sent the same for approval to the State Government; that the State Government raised various queries and directed them to rectify the same and that the respondents withdrew those rules with an intention to resubmit fresh/modified rules. It is submitted that permanent appointments can be made only on the posts approved by the government; that they sent the establishment personnel schedule for sanction to the State Government on 30.5.1997 and the same was sanctioned on 9.12.1999. Thus the appointments of the said workmen were not based on the sanctioned establishment schedule and their appointments were made purely on temporary/ad hoc basis without following the due process as prescribed by the BPMC Act and the rules made thereunder as applicable to the Corporation. Moreover, it was submitted, that as per the report of the Jha Committee, personnel expenses of the Corporations are not to be more than 35% but that as of date this limit has been exceeded by the Corporations. It is submitted that as and when the Corporation finds that there is permanent increase in the work and/or posts are sanctioned by the government the same are filled up by recruitment and/or promotions as per the recruitment policy, reservation policy, roster, recruitment/selection procedure and merit-cum-seniority. 7 The corporation then publishes an advertisement giving details of the vacancies to be filled up for permanent positions setting out therein the requirements as per the recruitment policy. Eligible candidates are accordingly appointed after following the entire procedure. In the case of the present workmen it is alleged that the procedure was not followed and that they were recruited and appointed only on a temporary and an ad-hoc basis. It is averred that under the provisions of the BPMC Act the Commissioner does not have power to appoint a person for a period exceeding six months. The Commissioner has to prepare an establishment schedule from time to time which has to be submitted to the standing committee and the Corporation for approval. The establishment schedule has thereafter to be sanctioned by the State Government. The appointments for the various posts are also required to be approved by the Corporation. 6. It appears that the respondents noticed various irregularities and illegalities in the matter of appointments to various posts. The government accordingly issued an order dated 1.1.1998 directing that the appointments made in violation of the provisions of the BPMC Act should not continue in excess of six months. The respondents accordingly scrutinized the appointments made. According to the Corporation the employees have 8 been working as ad-hoc Kamgars (workers) with the Corporation purely on a temporary basis. Their last appointments from 18.7.2006 to 17.1.2007 were again for the fixed period of six months on a temporary ad-hoc basis as Kamgars. The same was renewed from 20.1.2007 to 19.7.2007. In the year 1997, the Corporation gave a notice affixed on the notice board which did not mention the post of Kamgar or garden worker (Bag kamgar). One post in this notice was mentioned as the post of workman (helper-cum-gardener) at serial No.35 with a specified pay scale. The notice did not mention the post of Kamgar. The notice mentioned the post of workman. It was therefore contended on behalf of the Corporation that the post was only for helper. A few of the workmen are stated to have been appointed as gardening workmen (Bagkam Kamgars) from 23.5.1997 purely on a temporary ad-hoc basis for the period of one month as stipulated in the appointment orders dated 23.5.1997. Thus the appointments of these particular workers have nothing to do with the said notice. Sixteen other complainants had been appointed since the beginning as Kamgars only i.e. to a post not mentioned in the said notice. It was contended therefore that the complainants had failed to show any connection between their appointments and the said notice. The appointments, therefore, it was further contended, were not in accordance with the statutory 9 provisions/procedure. 7. The Corporation and the Complainants examined one witness each. Complainant’s witness : On behalf of the Complainants, one Dinesh Dharya, a Complainant himself was examined by filing his affidavit in lieu of examination-in-chief dated …......11.2008. He stated that the employees had applied for the post of workers in response to an advertisement published in a local newspaper on 28.5.1997. It is pertinent to note at this stage that the appointment of these workers was prior thereto on 23.5.1997. It was contended on behalf of the complainants that there were in fact advertisements even prior thereto. It is further stated by the witness that the workers had applied for the post in the manner prescribed by the advertisement and that the employment of each of the complainants was continued by passing various orders and giving a one day artificial break each time. He stated that as per the advertisements, the posts were sanctioned on 9.12.1999; that they were appointed on permanent sanctioned posts; that each of the workers had completed 240 days continuous service and were therefore entitled to the benefit of the provisions of the M.S.O. 4-C by which the Corporation is governed. It is alleged that certain employees even junior to these workmen had been made 10 permanent with consequential benefits. In the further examination-in-chief, the witness produced the advertisement dated 28.5.1997 as well as other documents. 8. In cross-examination, the witness stated that the said workers' initial appointment was on the post of labour/Kamgar and that some of the employees were initially employed as labourers in the garden (Bagkam). He admitted that the roster and reservation policy is applicable to the Corporation and that their employment can be regularized only upon the availability of sanctioned posts and not merely upon completion of 240 days. Pausing here, this however would depend upon the interpretation of law by the Court and would not be established merely by the evidence/cross-examination of a witness. The witness upon perusing the newspaper advertisement dated 28.5.1997 and the notice, admitted that the same did not mention the post of Bagkam Kamgar but that it mentioned at serial No.35 “helper gardner”. He further stated that as per the appointment order dated 23.5.1997, some of the workmen were appointed as helper gardner, whereas each of the others were appointed as a workman/labour. He denied that the appointment to the post of the workman/labour is not related to the said advertisement. In his cross-examination, the witness denied that prior 11 to their appointment, the workers had not filed any application for employment and were not interviewed and did not go through the selection process. He agreed that the initial appointment was for a temporary period of only six months (in fact it was only for one month). He denied the suggestion that the advertisement was published in the year 1997 and that the workmen had been appointed by the Corporation in the year 1999. Corporation’s witness : 9. On behalf of the Corporation, one Dhanaji Kalu Parmar was examined by filing his affidavit in lieu of examination-in-chief. He stated that the Corporation had been established with effect from 1.10.1993 and was bound to carry on its affairs within the frame laid down in the B.P.M.C. Act and as per the orders, guidelines and the directives issued by the Government of Maharashtra from time to time. He reiterated all other averments and submissions in the Written Statement filed on behalf of the Corporation. It would be convenient to set out a part of the cross- examination of this witness relied upon by Mr.Pendse, for reasons I shall indicate later, which reads as under :- “11. …................................... It is correct to say that in the sanctioned post, there is also a post of Labourer. I know all the complainants in the present complaint. It is correct to say that all the complainants are working on sanctioned posts. It 12 is correct to say that whenever advertisement for recruitment used to be published in the daily newspaper, the said recruitment process used to be carried out and completed by following due procedure, which is required to be followed and the said procedure and process was adopted while recruitment as per advertisement dated 28th May 97. It is correct to say that all the complainants are in the employment of the resp corpn since 1997 till date. It is also correct to say that there are also other workers, like the present complainants who are getting the wages, as per wage scale. It is also correct to say that and there is a difference in the benefits awarded to the said employee and the present complainants and there is difference in the respective benefits. The resp corpn is not maintaining the seniority list of casual or temporary employees. It is correct to say that in the year 2006, some temporary employees, were regularized by the resp. corpn. It is not correct to say that the said employees are not regularized as per seniority list. It is not correct to say that I have no personal knowledge regarding which I have stated above. It is correct to say that when the temporary employees regularized in the year 2006, cases of the present complainants, were not considered for regularization. It is correct to say that the respondents use to issue, the orders of appointment, to all the said complainants every year by giving one day break. It is correct to say that I have filed the present affidavit in lieu of examination in chief i.e. exh. C-12 as directed by the resp. corpn. It is not correct to say that I have filed a false affidavit.” 10. The following questions arise for consideration :- (I) Whether the Industrial Employment (Standing Orders) Act, 1946 applies to the Corporation. (II) Whether the complainants were appointed in accordance with the provisions of the B.P.M.C. Act. 13 (III) Whether the appointments were made against sanctioned posts. (IV) Whether the complainants are entitled to the benefits of permanency even if they were not appointed in accordance with the provisions of the B.P.M.C. Act. (V). Whether the Corporation, having continued to appoint the complainants over the years, can be said to have indulged in unfair labour practices under the provisions of the MRTU & PULP Act. I have answered the first question in the affirmative, against the Corporation and the remaining questions in the negative, in favour of the Corporation. Questions IV and V have been answered purely on precedent and not on principle as I find myself bound by the judgments of the Supreme Court and of this Court. 11. Mr.Rao submitted that the Industrial Employment (Standing Orders) Act, 1946 (“I.E. Act”) is not applicable to the Corporation. 12. The submission is not well founded for at least two reasons. (A). Section 2(e)(i) of the I.E. Act reads as under :- “2. Interpretation.—In this Act, unless there is anything repugnant in the subject or context— 14 (e) “industrial establishment” means— (i) an industrial establishment as defined in clause (ii) of Section 2 of the Payment of Wages Act, 1936, or” Section 2 (ii) (g) of the Payment of Wages Act, 1936, reads as under :- 2. Definitions.—In this Act, unless there is anything repugnant in the subject or context,— (ii) “industrial or other establishment” means] any— (g) establishment in which any work relating to the construction, development or maintenance of buildings, roads, bridges or canals, or relating to operations connected with navigation, irrigation, or the supply of water, or relating to the generation, transmission and distribution of electricity or any other form or power is being carried on;” The Corporation is an industrial or other establishment, within the meaning of that expression in Section 2(ii)(g) of the Payment of Wages Act, as it admittedly does the work relating inter-alia to supply of water and the maintenance of roads. It is accordingly also an industrial establishment within the meaning of Section 2(e)(i) of the I.E. Act. (B). Further there is no dispute that the Bombay Shops and Establishments Act, 1948 (“B.S.E. Act.”) applies to the Corporation. Section 38-B of the B.S.E. Act reads as under :- 15 “38-B. Application of Industrial Employment (Standing Orders) Act to establishment. – The provisions of the Industrial Employment (Standing Orders) Act, 1946, in its application to the State of Maharashtra (hereinafter in this section referred to as “the said Act”), and the rules and standing orders (including model standing orders) made thereunder from time to time, shall, mutatis mutandis, apply to (all establishments wherein fifty or more employees are employed and) to which this Act applies, as if they were industrial establishment within the meaning of the said Act.” 13. There are more than fifty employees of the Corporation. Thus in view of Section 38-B of the B.S.E. Act also the I.E. Act applies to the Corporation. Whether the complainants were appointed in accordance with the provisions of the B.P.M.C. Act. 14. Mr.Rao submitted that the employment with the Corporation is a public employment. The appointments are, therefore, governed by the provisions of the B.P.M.C. Act. Mr.Rao submitted that the appointments were not made in accordance with the B.P.M.C. Act and in particular Sections 51 to 54 thereof as well as Schedule-D, Chapter-III thereto. Mr.Pendse denied that the appointments were not in accordance with the provisions of the B.P.M.C.Act. He further submitted that even if the appointments were not in accordance with the provisions of the B.P.M.C. Act, the complainants are entitled to the benefit of permanency in view of MSO 4-C. 16 15. The first question that arises, therefore, is whether the complainants were appointed in accordance with the provisions of the B.P.M.C. Act. If they are found not to have been appointed in accordance with the provisions of the B.P.M.C. Act, Mr.Pendse's submissions on behalf of the workmen would require consideration. I find Mr.Rao's submission that the complainants were not employed in accordance with the provisions of the B.P.M.C. Act is well founded. 16. Sections 51 to 54 and Schedule D, Chapter III of the B.P.M.C. Act are as under :- “51. No., designations, grades etc. of other municipal officers and servants. - (1) Subject to the provisions of sub- section (4), the Standing Committee shall from time to time determine the No., designations, grades, salaries, fees and allowances of auditors, assistant auditors', officers, clerks and servants to be immediately subordinate to the Municipal Chief Auditor and the Municipal Secretary respectively. (2) The Commissioner shall, from time to time, prepare and bring before the Standing Committee a statement setting forth the No., designations and grades of the other officers and servants who should in his opinion be maintained, and the amount and nature of the salaries, fees and allowances which he proposes should be paid to each. (3) The Standing Committee shall, subject to the provisions of sub-section (4), sanction such statement either as it stands or subject to such modifications as it deems expedient. 17 (4) No new permanent office with a minimum monthly salary, exclusive of allowances, of one hundred rupees or more shall be created without the sanction of the Corporation and no new office with a minimum monthly salary exclusive of allowances, of five hundred rupees or more or with a maximum monthly salary exclusive of allowances, of eight hundred rupees or more shall be created without the sanction of the (State) Government. (5) Nothing in this section shall be construed as affecting the right of the Corporation or of the Commissioner to make any temporary appointment which it or he is empowered to make under section 53. Explanation.- An increase in the salary of any permanent office shall be deemed, for the purpose of sub-section (4), to be the creation of a new office, if by reason of such increase, the minimum monthly salary, exclusive of allowances, amounts to one hundred rupees or more or five hundred rupees or more, as the case may be or the maximum monthly salary, exclusive of allowances, amounts to eight hundred rupees or more. 52. Restriction on employment of permanent officers and servants .- No permanent officer or servant shall be entertained in any department of the municipal administration unless he has been appointed under section 40 or 45, or his office and emoluments are covered by sub-section (1) of section 51 or are included in the statement sanctioned under sub-section (3) of section 51 and for the time being in force. 53. Power of appointment in whom to vest.- (1) The power of appointing, municipal officers, whether temporary or permanent, whose minimum monthly salary exclusive of allowances is or exceeds four hundred rupees shall vest in 18 the Corporation ; Provided that, temporary, appointments for loan works carrying a monthly salary of rupees four hundred or more, exclusive of allowances, may be made for a period of not more than six months by the Commissioner with the previous sanction of the Standing Committee on condition that every such appointment shall forthwith be reported by the Commissioner to the Corporation and no such appointment shall be renewed on the expiry of the said period of six months without the previous sanction of the Corporation. (2) Save as otherwise provided in sub- section (1), the power of appointing Municipal Officers and servants, whether temporary or permanent, under the immediate control of the Municipal Chief Auditor and the Municipal Secretary shall vest in the Municipal Chief Auditor or the Municipal Secretary, as the case may be, subject, in either case, to the approval of the Standing Committee unless the said Committee in any particular case or class of cases dispenses with the requirement. (3) Save as otherwise provided in this Act, the power of appointing Municipal officers and servants whether permanent or temporary vests in the Commissioner : Provided that, such power in respect of permanent appointments shall be subject to the statement for the time being in force prepared and sanctioned under section 51 : Provided further that, no temporary appointment shall be made by the Commissioner for any period exceeding six months and so such appointment carrying a monthly salary of more than one hundred rupees exclusive of allowances shall be renewed by the Commissioner on the expiry of the said period of six months without the previous sanction of the Standing Committee. 19 54. Manner of making appointments. - (1) There shall be a Staff Selection Committee