SCA/7139/2005 1/48 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 7139 of 2005 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 ? ========================================================= POST MASTER - Petitioner(s) Versus J S SAIYED - Respondent(s) ========================================================= Appearance : MS SEJAL K MANDAVIA for Petitioner(s) : 1, MR PH PATHAK for Respondent(s) : 1, MR RC PATHAK for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD RESERVED ON 22.6.2007 Date of Pronouncement :28/06/2007 CAV JUDGMENT 1. Heard learned advocate Ms.S.K.Mandavia, appearing on behalf of petitioner and learned advocate Mr.P.H.Pathak for respondent. SCA/7139/2005 2/48 JUDGMENT 2. In the present petition, the petitioner has challenged the award passed by Central Government Industrial Tribunal cum Labour Court, Ahmedabad in Industrial Dispute No.38 of 2004 dated 22.9.2004. The Central Government Industrial Tribunal cum Labour Court, Ahmedabad has set aside the termination order with a direction to petitioner to reinstate the respondent workman to his original post with continuity of service and to pay 30% back wages to the workman from the date of termination till the date of order of reference – 9.6.1995. The Central Government Industrial Tribunal cum Labour Court, Ahmedabad further directed that if the workman is not reinstated within a period of 30 days of the publication of award, the petitioner shall pay full back wages prevailing at the time of award to the workman. A cost of Rs.1000 has also been award in favour of workman by the Tribunal cum Labour Court. 3. The petitioner has placed on record the statement of claim filed by workman at Annexure-B SCA/7139/2005 3/48 JUDGMENT and written statement filed by petitioner at Annexure-C along with statement of working of the respondent workman between 1.1.1985 to 31.12.1991 as per pay bills of Anand Post Office and Dakor Head Office at Annexure-D. By Annexure-E, service rules from Swami for the ED Staff has been placed on record. Except that, no other annexures are attached to the petition. 4. Initially, this matter has been placed before the Hon'ble Division Bench of this Court (Coram : G.S.Singhvi & Anand S. Dave,JJ.). The Division Bench has passed following order on 21.4.2005 : “Heard Smt.K.Mandavia for the petitioner and perused the record. We are prima facie of the view that the finding recorded by the learned Presiding Officer, Industrial Tribunal- cum-Labour Court, Ahmedabad that the respondent workman had worked for 240 days in 12 months preceding the termination of his service is a finding of fact, which is based on correct appreciation of evidence and does not call for interference under Article SCA/7139/2005 4/48 JUDGMENT 226 of the Constitution of India. However, we feel that the issue of back wages would require consideration by the court. Admit. The petitioner's prayer for staying the impugned award is rejected insofar as it relates to reinstatement of the respondent workman. However, in the peculiar facts of the case, we deem it proper to stay the award of back wages to the extent of 50%. This would necessarily mean that the petitioner shall have to take the workman back in service in accordance with the direction given in the impugned award and pay 50% of the awarded back wages. If the petitioner fails to reinstate the workman within next 15 days and pay the amount of 50% awarded back wages, then the partial interim order passed today shall stand vacated automatically and the workman shall then be entitled to avail the appropriate remedies including the one by filing an application under Section 29 of the Industrial Disputes Act, 1947 for prosecution of the officer concerned. SCA/7139/2005 5/48 JUDGMENT A copy of this order be served upon the workman along with notice of the writ application.” 5. The aforesaid order of the Hon'ble Division Bench was challenged by the petitioner before the Hon'ble Apex Court being Civil Appeal No.1261 of 2007 where the Hon'ble Apex Court has passed following order on 9.3.2007 : “The appeal above-mentioned being called on for hearing before this Court on the 9th day of March,2007, UPON perusing the record and hearing counsel for the parties herein, THIS COURT DOTH PASS the following ORDER : 'Having regard to the fact that the question as to whether the Department of Post Office is an Industry, is pending consideration before the High Court Gujarat, we are of the opinion that the impugned order cannot be sustained. It is set aside accordingly and the matter is remitted to the High Court for consideration thereof afresh. However, we would request the High Court to consider the desirability of disposing of the writ SCA/7139/2005 6/48 JUDGMENT petition filed by the respondent as expeditiously as possible, preferably within a period of four weeks from the date of communication of this order. The appellant shall pay a further sum of Rs.10,000/- to the respondent by way of litigation costs. The appeal is disposed of with the aforementioned direction.” 6. After the order passed by the Hon'ble Division Bench, as referred above, the petitioner herein has preferred Civil Application No.4050 of 2005 before the Hon'ble Division Bench wherein two months' time was sought for implementation of Division Bench's order dated 21.4.2005 and on 10.5.2005, the Hon'ble Division Bench had granted the same. 7. After the direction issued by the Hon'ble Apex Court as referred above, the Registry of this Court has placed this matter before the Hon'ble Division Bench of this Court (Coram : M.S.Shah & H.B.Antani,JJ.) for final hearing. Before the Hon'ble Division Bench, learned SCA/7139/2005 7/48 JUDGMENT advocate Mr.Pathak appearing for respondent has raised objection that as per the roster, this matter is required to be placed before the learned Single Judge. Therefore, on 23.4.2007, the Hon'ble Division Bench has passed following order : “Mr.Pathak for the respondent states that the matter, as per roster, is required to be placed before the learned Single Judge. Office to examine this issue and thereafter, place the matter before appropriate Bench.” 8. Thereafter, the matter was placed before this Court on 14.6.2007. On that day, learned advocate Ms.Mandavia has filed sick note. Therefore, the matter was adjourned to 15.6.2007, considering the direction issued by the Hon'ble Apex Court. Thereafter, on 15.6.2007, learned advocate Ms.Mandavia, asked for some time as other side has no objection. Therefore, matter was adjourned to 19.6.2007. On 20.6.2007, this Court was not able to take up the matter because of the heavy SCA/7139/2005 8/48 JUDGMENT board and the matter was adjourned to 21.6.2007. On 21.6.2007, learned advocate Ms.Mandavia has completed her submissions and the matter was adjourned to 22.6.2007. On 22.6.2007, learned advocate, Mr.Pathak has completed his submissions. Therefore, the matter was reserved for judgment. 9. Learned advocate Ms.Mandavia appearing on behalf of petitioner has submitted that Tribunal cum Labour Court has no jurisdiction to entertain the reference because the postal department is not an 'industry' within a meaning of Section 2(j) of the I.D.Act,1947. She further submitted that the respondent was not appointed on clear vacant post and he has not completed 240 days service. The respondent workman had worked on different posts and different categories at different places as substitute service provided by the regular incumbents was proceeding on leave for limited period. Therefore, according to her submissions, respondent workman was not employed by the petitioner and he was offered SCA/7139/2005 9/48 JUDGMENT work on ad-hoc basis and as such, he has no right to post. 10. Learned advocate Ms.Mandavia relied upon the decision of the Apex Court in case of Sub- Divisional Inspector of Post, Vaikam and Others v. Theyyam Joseph and others, reported in (1996) 8 SCC 489, particularly Head Note 'C' & 'D'. The Apex Court in aforesaid decision held that, “postal department is not an 'industry' and extra departmental agents in postal department are held to be civil servants and not the workmen attracting the provisions of I.D.Act.”. She relying upon Head Note 'D' submitted that ad- hoc extra departmental agent (ED Packer in this case) appointed de-hors the rules as a substitute to the regular ED Packer where service was terminated before completion of three years' service, the person concerned, held, entitled under rule 6 of Conduct Rules to one month allowance plus DA and not to reinstatement but where the period of service exceeded three years, CAT's order of reinstatement left undisturbed. SCA/7139/2005 10/48 JUDGMENT 11. Learned advocate Ms.Mandavia also relied upon another decision of the Apex Court in case of Union of India & Anr. v. Kamlesh Kumar Bharti, reported in (1998) 9 SCC 727. In the aforesaid decision, the Apex Court has held that post office is not an 'industry' and in case of termination of service of an extra departmental delivery agent, provision of Section 25-F is not applicable since post office is not an 'industry'. Said decision has been given by Apex Court relying upon earlier decision of Apex Court in case of Sub-Divisional Inspector of Post, Vaikam and Others v. Theyyam Joseph and others, reported in (1996) 8 SCC 489. 12. She further submitted that aforesaid contentions were raised by the petitioner before the Tribunal cum Labour Court by filing the written statement but the Tribunal cum Labour Court has not considered the contentions raised in written statement and ignored the same and passed an award and, therefore, the Tribunal cum SCA/7139/2005 11/48 JUDGMENT Labour Court has committed gross error in deciding such reference. She also submitted that details of working with the respondent also narrated in written statement. The contention of industry also raised before the Tribunal cum Labour Court in the written statement. Therefore, the Tribunal cum Labour Court has committed gross error in passing such award. She also submitted that decisions of the Apex Court, as referred above, as well as relevant service rules were cited before the Tribunal cum Labour Court, even though same were not considered by the Tribunal cum Labour Court. Therefore, the Tribunal cum Labour Court has committed gross error in passing such award. She relied upon Swamy's Service Rules for ED Staff, Instruction No.(1) of Director General's Instruction which suggests that such workmen were appointed with the approval of appointing authority in place of regular employee when permitted to go on leave. Therefore, this workman was similarly appointed and not entitled the benefit as a regular employee and also not entitled reinstatement and SCA/7139/2005 12/48 JUDGMENT regularization. She also submitted that the Tribunal cum Labour Court has committed an error in granting back wages in favour of workman. The statement produced by the petitioner was not taken into account as respondent workman has not completed 240 days and, therefore, it does not amount to retrenchment. The respondent workman was gainfully employed and was earning Rs.500/- to Rs.600/- per month during the interim period. The decisions given by CAT of similar cases were also produced by the petitioner before the Tribunal cum Labour Court which have also been ignored by the Tribunal cum Labour Court. Therefore, according to her submissions, the respondent workman offered the work on ad-hoc basis and as such, he has no right to post. Except the aforesaid submissions, no other submissions made by learned advocate Ms.Mandavia and no other decision relied by her in support of her submissions. 13. Learned advocate, Mr.Pathak appearing on behalf of respondent submitted that petitioner SCA/7139/2005 13/48 JUDGMENT has filed written statement before the Tribunal cum Labour Court and except that, petitioner has not led any oral evidence before the Tribunal cum Labour Court. Vide Exh.18, respondent workman has submitted that a list of documents which was marked as Exh.18/1 to Exh.18/11. Since there was no objection by the petitioner for the said exhibition, The said documents were exhibited as Exh.19 to Exh.27. The petitioner has produced documentary list vide Exh.6 marked as Exh.6/1 to Exh.6/7. Out of aforesaid documents, only one document Mark 6/1 has been proved in evidence which was exhibited as Exh.11. Rest of the documents not proved by the petitioner. The workman was examined vide Exh.10 and vide Exh.12, evidence of workman was closed. No oral evidence led by petitioner and vide Exh.14 the evidence of the petitioner was closed by filing pursis before the Court. The written arguments were submitted by both the parties which were taken on record by the Tribunal cum Labour Court. Therefore, learned advocate Mr.Pathak submitted that contention of industry, though raised, not proved SCA/7139/2005 14/48 JUDGMENT by petitioner by leading proper oral and documentary evidence. He also submitted that merely raising contention in written statement without proving the same by leading proper evidence, the Tribunal cum Labour Court is not duty bound to consider such contention as raised in written statement. He also submitted that before the Tribunal cum Labour Court, no specific contention was pressed into service by the petitioner. He also submitted that no evidence was led by petitioner to prove contention of substitute. He also submitted that the Tribunal cum Labour Court has examined the record and come to the conclusion on the basis of the record produced by petitioner vide Exh.6/1 a letter and statement showing the working of the workman which was clear from aforesaid records that at the time of termination of the workman had worked for more than 240 days in 12 calender months preceding the date of termination. He also submitted that not only that but workman had worked for 341 days in the year 1990. Exh.21 relied by Tribunal cum Labour Court also proved SCA/7139/2005 15/48 JUDGMENT the said fact which was not rebutted by the petitioner. He also submitted that though documentary evidence were in possession of the petitioner but not produced before the Tribunal cum Labour Court. Therefore, learned advocate Mr.Pathak submitted that once the workman had proved before the Tribunal cum Labour Court by documentary evidence that he had completed continuous service within a meaning of Section 25B of the I.D.Act,1947, then, Section 25F of the I.D.Act,1947 must have to be followed being a condition precedent which was not followed by the petitioner and therefore, the Tribunal cum Labour Court has rightly set aside the termination order. He also submitted that the Tribunal cum Labour Court has relied upon the decision of Apex Court in case of Sundar Mani v. State Bank of India, 1976 3 SCR 160 and Robert D'Souza v. Executive Engineer Southern Railway. He also submitted that in the year 1988, 1989 and 1990, the workman had completed continuous service of 240 days which was proved before the Tribunal cum Labour Court and the Tribunal cum SCA/7139/2005 16/48 JUDGMENT Labour Court has rightly granted 30% back wages from the date of termination till the date of award. He also submitted that the decision relied by learned advocate Ms.Mandavia, was subsequently considered by Larger Bench in case of General Manager, Telecom v. S. Srinivasan Rao & Ors. 1997 (2) GLH 990. Learned advocate Mr.Pathak submitted that the Apex Court has held that decision rendered in case of Theyyam Joseph, as referred above, cannot be treated as laying down the correct law. Meaning thereby that the decision which has been relied by learned advocate Ms.Mandavia wherein it is held that post department is not an industry, subsequently considered by Larger Bench and said decision has been overruled by Larger Bench, therefore, decision relied by learned advocate Ms.Mandavia cannot be considered. He also submitted that subsequent decision in case of Union of India & Anr. v. Kamlesh Kumar Bharti, reported in (1998) 9 SCC 727 which also relied upon earlier decision of Theyyam Joseph as referred above is also impliedly overruled by Larger Bench as referred SCA/7139/2005 17/48 JUDGMENT above. Therefore, learned advocate Mr.Pathak submitted that postal department is held to be an industry by Larger Bench including Telecom department. He also submitted that once the postal department held to be an industry, then, I.D.Act is applicable and if the mandatory provisions were not followed before terminating the service of respondent, then, the Tribunal cum Labour Court has not committed any error which required interference by this Court while exercising the power under Article 227 of the Constitution of India. 14. I have considered the submissions made by both the learned advocates and have also perused the award passed by the Tribunal cum Labour Court. 15. In respect to contention raised by learned advocate Ms.Mandavia that postal department is not an industry relying upon aforesaid two decisions in support of her submissions, the Larger Bench decision referred above in case of General Manager, Telecom reported in 1997 (2) GLH SCA/7139/2005 18/48 JUDGMENT 990 and relevant observations made by Apex Court while referring and relying upon 7 Judges Bench decision of Apex Court in case of Bangalore Water Supply & Sewerage Board v. A. Rajappa & Ors., reported in (1978) 2 SCC 213. The observations made by Apex Court in Para.5, 6 and 7 in case of General Manager, Telecom v. S. Srinivasan, reported in 1997 (2) GLH 990 are relevant and, therefore, quoted as under : “5. The above point arises for consideration out of a Reference made under Section 10-A of the Industrial Disputes Act, 1947, which matter is now pending in the High Court. The contention of the appellant throughout has been that the Reference was incompetent since the Telecommunication Department of the Union of India is not an 'industry' within the meaning of its definition contained in the existing unamended Section 2(j) of the Industrial Disputes Act, 1947. Admittedly, this question has to be answered according to the decision of this Court in Bangalore Water Supply (AIR 1978 SC 548) (supra) which is a binding precedent. The dominant nature test for deciding whether the SCA/7139/2005 19/48 JUDGMENT establishment is an 'industry' or not is summarised in para 143 of the judgment of Justice Krishna Iyer in Bangalore Water Supply case (AIR 1978 SC 548) (supra) which is as under (Para 161 of AIR) : 143. The dominant nature test : (a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not 'workmen' as in the University of Delhi case (AIR 1963 SC 1873) (supra) or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur (AIR 1960 SC 675) (supra), will be the true test. The whole undertaking will be 'industry' although those who are not 'workmen' by definition may not benefit by the status. (b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies. SCA/7139/2005 20/48 JUDGMENT (c) Even in departments dischaging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within Section 2(j). (d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby. 6. It is rightly not disputed by the learned counsel for the appellant that according to this test the Telecommunication Department of the Union of India is an 'industry' within that definition because it is engaged in a commercial activity and the Department is not engaged in discharging any of the sovereign functions of the State. 7. A two-Judge Bench of this Court in Theyyam Joseph's case (1996) 8 SCC 489 : (1996 AIR SCW 1365) (supra) held that the functions of the Postal Department are part of the sovereign functions of the State and it is, therefore, not an 'industry' within the definition of Section 2(j) of the Industrial Disputes Act, 1947. Incidently, this decision was SCA/7139/2005 21/48 JUDGMENT rendered without any reference to the seven-Judge Bench decision in Bangalore Water Supply (AIR 1978 SC 548) (supra). In a later two-Judge Bench decision in Bombay Telephone Canteen Employees' Association case, AIR 1997 SC 2817, this decision was followed for taking the view that the Telephone Nigam is not an 'industry'. Reliance was placed in Theyyam Joseph's case (1996) 8 SCC 489 : (1996 AIR SCW 1365) (supra) for that view. However, in Bombay Telephone Canteen Employees' Association case (i.e. the latter decision), we find a reference to the Bangalore Water Supply case. After referring to the decision in Bangalore Water Supply, it was observed that if the doctrine enunciated in Bangalore Water Supply is strictly applied, the consequences is 'catastrophic'. With respect, we are unable to subscribe to this view for the obvious reason that it is in direct conflict with the seven-Judge Bench decision in Bangalore Water Supply case (supra) by which we are bound. It is needless to add that it is not permissible for us, or for that matter any Bench of lesser strength, to take a view contrary to that in Bangalore Water Supply (supra) or to by-pass that decision so long as it SCA/7139/2005 22/48 JUDGMENT holds the field. Moreover, that decision was rendered long back - nearly two decades earlier and we find no reason to think otherwise. Judicial discipline requires us to follow the decision in Bangalore Water Supply case (1978) 2 SCC 213 : (AIR 1978 SC 548). We must, therefore, add that the decision in Theyyam Joseph, (1996) 8 SCC 489 : (1996 AIR SCW 1365) and Bombay Telephone Canteen Employees' Association, AIR 1997 SC 2817, cannot be treated as laying down the correct law. This being the only point for decision in this appeal, it must fail.” 16. This question of industry again examined by Apex Court in case of All India Radio v. Santosh Kumar & Anr. Etc. 1998 I CLR 684, while considering the 7 Judges decision of Apex Court in case of Bangalore Water Supply (supra). In the aforesaid decision it has been held by Apex Court that All India Radio as well as Doordarshan are industries within the meaning of Section 2(j) of the I.D.Act,1947 and the said decision of Bangalore Water Supply (supra) is operative being applicable at present and as existing on the statute book as on day. The relevant observations SCA/7139/2005 23/48 JUDGMENT made by Apex Court in Para.4 and 5 are quoted as under : “4. The solitary contention canvassed before us by the learned senior counsel for the appellants is to the effect that All India Radio and Doordarshan Kendra discharge sovereign functions of the State and they are not industries within the meaning of S. 2(j) of the Act. Now, it has to be kept in view that as held by a Constitution Bench of this Court consisting of seven learned Judges in the case of Bangalore Water Supply and Sewerage Board v. A. Rajappa, reported in (1978) 2 SCC 213 : (AIR 1978 SC 548), save and except the sovereign functions, all other activities of employers would be covered within the sweep of term 'industry' as defined under S. 2(j) of the Act. The functions which are carried on by All India Radio and Doordarshan cannot be said to be confined to sovereign functions as they carry on commercial activity for profit by getting commercial advertisements telecast or broadcast through their various kendras and stations by charging fees. Looking to the functions of Doordarshan and its set up, as seen from Annexure-1 (annexed to S.L.P. (C) No. 7722-7722-A of 1993), being the SCA/7139/2005 24/48 JUDGMENT extracts from Doordarshan Manual Vol. I, it cannot be said that the functions carried on by them are of purely sovereign nature. Day in and day out advertisements are being telecast and even serials are being telecast on payment of appropriate charges and on