SCA/9106/2008 1/13 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 9106 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE K.M.THAKER ========================================================= 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 ? ========================================================= SHREE SWASRAYI LOK SWASTHYA SEWA SAHAKARI MANDLI LTD & 1 - Petitioner(s) Versus PARMAR RUDRABALA MADHUSUDAN - Respondent(s) ========================================================= Appearance : MR DS VASAVADA for Petitioner(s) : 1 - 2. NOTICE SERVED BY DS for Respondent(s) : 1, MR SHAILESH C SHARMA for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE K.M.THAKER Date : 25/08/2008 ORAL JUDGMENT In this petition, the petitioner, a Cooperative Society, has challenged an award dated 10th March, 2008 passed by the Labour Court, Ahmedabad SCA/9106/2008 2/13 JUDGMENT in Reference No. 52/1999 whereby the Labour Court has directed the petitioner society to reinstate the respondent and to pay him 20% backwages and any other benefit is not granted. 2. The relevant facts, in background of which present petition is preferred, which emerge from the record of petitioner are that the respondent herein was engaged, for the first time, as a Helper, with effect from 1st April 1994. The said appointment was on probation. During the probation period, several complaints regarding her performance were received and various acts of omission or commission amounting to misconduct were reported against the respondent. It is claimed that in this view of the matter the petitioner was not inclined to continue the respondent and wanted to relieve the respondent on completion of the probation period but upon certain understanding arrived at between the present petitioner and the respondent pursuant to her request-representation a fresh appointment letter dated 4.1.1997 came to be issued as per and in pursuance of the said understanding. From perusal of SCA/9106/2008 3/13 JUDGMENT the said appointment letter dated 4.1.1997, it appears that it was agreed between the parties that the date of appointment of the respondent would be 15.1.1997, meaning thereby it was a fresh appointment. It also appears that the parties had agreed that the past service will not be considered for any purpose including seniority etc., and that the respondent will be on probation for 1 year. Subsequently, by letter dated 4.1.1998 the probation of the respondent was extended for a period of another 12 months. 3. It is claimed by the petitioner that vide written acknowledgment dated 6th February 1997 executed/signed by the respondent the respondent accepted the terms and conditions mentioned in the letter dated 4th January 1997. The said letter dated 6.2.1997 forms part of the record before the Labour Court at Exh. 42. During the hearing of the petition, it was asserted by the petitioner that it was not disputed by the respondent that the said letter dated 6.2.1997 was in connection with SCA/9106/2008 4/13 JUDGMENT petitioner's letter dated 4.1.1997. 4. Some where in August 1998 it was reported that the respondent had indulged into misconduct of misappropriation of about Rs. 4600/- and that therefore the service of the respondent was terminated by communication dated 31.8.1998 during the probation period. Being aggrieved by the said order dated 31.8.1998, the respondent raised an industrial dispute which culminated into Reference (LCA) No. 52/1999. During the proceedings of the said Reference, the petitioner filed its reply wherein a preliminary objection regarding maintainability of the Reference was raised on the ground that the petitioner society cannot be considered “Industry” within the meaning of the said term defined under Section 2(j) of the Industrial Disputes Act, 1947 [“the Act” for short]. After examining the evidence available on record and upon hearing the submissions of both sides, the Labour Court passed the impugned award directing the petitioner to reinstate the respondent with 20% SCA/9106/2008 5/13 JUDGMENT backwages. The Labour Court arrived at a conclusion that the petitioner's action of terminating the respondent with effect from 31..8.1998 was illegal. Aggrieved by such findings and the directions by the Labour Court, the petitioner is before this Court. 5. Mr. DS Vasavada appears for the petitioner and Mr. SC Sharma appears for the respondent. Heard the advocates for the respective parties. 6. Considering the submissions of both sides and the statement made by Mr. Vasavada on 22.8.2008, it was directed by virtue of the order dated 22.8.2008 that the petition will be taken up for final hearing on 25.8.2008 since the question regarding direction for payment of backwages survived after the statement of Mr. Vasavada. In that view of the matter and with consent of both sides, Rule returnable today and the matter is taken up for final hearing today. 7. Mr. Vasavada submitted that the petitioner society is not an “Industry” within the meaning of SCA/9106/2008 6/13 JUDGMENT the said term under Sec. 2(j) of the Act. He further submitted that the Labour Court erred in not appreciating that at the relevant time the respondent was on probation and that therefore the petitioner was not required or obliged to hold departmental enquiry before terminating the probation of the respondent. He also submitted that the findings of the Labour Court that the respondent was working as a permanent employee since last 4 years are without support of any evidence and are contrary to the evidence on record. He also assailed the findings of the Labour Court holding that the action of the petitioner society amounted to unfair labour practice. He submitted that the impugned award deserves to be set aside. 7.1. Mr. Vasavada submitted that considering the fact that the petitioner society is active in social field and is engaged in carrying on social work including spreading awareness about AIDS, it has considered it appropriate to not to contest or oppose the direction regarding reinstatement and that therefore without prejudice to the contention that SCA/9106/2008 7/13 JUDGMENT the petitioner society is not an 'Industry', it has agreed to reinstate the respondent despite the fact that the medical shop where the respondent was originally working has been, due to unavoidable and compelling circumstances, closed down. He submitted that the petitioner is restricting the petition to challenge the direction of backwages and continuity of service. On perusal of the copy of the award at Annexure 'Q', it is noticed that the Labour Court has not granted the said relief and the award is silent on that issue. Mr. Vasavada therefore did not carry the point further. 8. Mr. Vasavada submitted that so far as the contention on the ground that the petitioner society is not an “Industry” within the meaning of Section 2(j) is concerned, the said question may be kept open and the petitioner does not propose to go into the contention at this stage since it has decided to reinstate the respondent but should the need to agitate the said issue arise, in a given case in future, it may not be construed that this issue is contested in this case and decided against SCA/9106/2008 8/13 JUDGMENT petitioner. 9. Mr. Sharma, on the other hand, vehemently supported the impugned award and submitted that the service of the respondent was terminated illegally and without following any procedure prescribed by law. He submitted that the Labour Court has rightly concluded that the service was terminated illegally and the respondent is entitled for reinstatement. Mr. Sharma further submitted that during the proceedings before the Labour Court, the respondent was without employment and she comes from a very poor family and that therefore the direction by the Labour Court regarding backwages is fully justified more so when the Labour Court has granted only 20% backwages. He submitted that the petitioner's request to set aside the award is unjustified. 10. At the outset, it is required to be mentioned that on 22nd August, 2008 the petitioner declared that it is ready and willing to reinstate the respondent and restricts the challenge against the award only so far as the direction regarding SCA/9106/2008 9/13 JUDGMENT backwages is concerned. It is clarified by the petitioner's advocate that the medical shop in which the respondent was working has been closed down and therefore the petitioner would offer reinstatement/posting to the respondent in other office/unit where she can be accommodated, however such reinstatement would be in Ahmedabad. In view of the said statement by Mr. Vasavada, advocate for the petitioner, the petitioner's grievance against reinstatement is not required to be examined and hence the said aspect is not further examined or discussed. The petitioner is, nevertheless, directed to reinstate the petitioner as per the statement made on 22.8.2008. 11. Mr. Vasavada in his submissions relied upon the decisions of the Hon'ble Apex Court in matter between Sitaram & Others v. Motilal Nehru Farmers Training Institute, reported in 2008-II-LLJ 688; and in the case between Telephone District Manager & Others v. Keshab Deb, reported in 2008 AIR SCW 4106. Mr. Vasavada also placed reliance on the judgments- orders of this Court dated 5.8.2005 in the matters between Gujarat Cancer & Research Institute vs. AA SCA/9106/2008 10/13 JUDGMENT Paulson in Special Civil Application No. 8220 of 1999 as well as the judgment dated 2.12.2005 in the matter between Lodba Dudh Utpadak Sahakari Mandali Ltd. vs. Patel Kanaiyalal Keshavlal, on Special Civil Application No. 1470 of 2001 and also judgment dated 27.6.2005 in the case of State of Gujarat Range Forest Officer, Vs. Ganpatrai Rajkaranji Barot, on Special Civil Application No. 2434 of 2000. 12. On perusal of the award, it comes out that the Labour Court has based the direction for backwages and continuity only on the ground that the termination has been found to be illegal. The Hon'ble Supreme Court has in the judgment in General Manager, Haryana Roadways v. Rudhan Singh, reported in JT 2005 (6) SC Page 137 at paragraph 8 held that, “8. There is no rule of thumb that in every case where the Industrial Tribunal gives a finding that the termination of service was in violation of Section 25F of the Act, entire back wages should be awarded. A host of factors like the manner and method of selection and appointment, i.e., whether after proper advertisement of the vacancy or inviting applications from the employment exchange, nature of SCA/9106/2008 11/13 JUDGMENT appointment, namely whether ad hoc, short term, daily wage, temporary or permanent in character, any special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back wages. One of the important factors, which has to be taken into consideration, is the length of service, which the workman had rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is very small, the award of back wages for the complete period, i.e. from the date of termination till the date of the award, which our experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent daily wage employment though it SCA/9106/2008 12/13 JUDGMENT may be for 240 days in a calender year.” 13. Considering the fact that even the period of past employment of the respondent is tainted with acts of omission or commission in the nature of misconduct for which the respondent has tendered written apologies, and considering the fact that the shop in which the respondent was engaged prior to termination is closed, and also considering the fact that at the time of termination the respondent was on probation, this Court is of the view that the direction regarding backwages granted by the Labour Court is not justified. Hence, the direction regarding backwages is concerned, the same is set aside. The direction regarding reinstatement is not disturbed. 14. With the aforesaid clarifications and directions, the petition is partly allowed. Rule made absolute to the aforesaid extent. No order as to cost. [ K.M. Thaker, J. ] SCA/9106/2008 13/13 JUDGMENT rmr.