SCA/27731/2007 1/35 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 27731 of 2007 With SPECIAL CIVIL APPLICATION No. 27732 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE H.K.RATHOD Sd/- ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2 To be referred to the Reporter or not ? YES 3 Whether their Lordships wish to see the fair copy of the judgment ? YES 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 ? NO 5 Whether it is to be circulated to the civil judge ? NO ========================================================= DEPUTY EXECUTIVE ENGINEER - Petitioner(s) Versus RAJ AMARSINH FULSINH - Respondent(s) ========================================================= Appearance : MS SEJAL K MANDAVIA for Petitioner(s) : 1, None for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD Date : 13/12/2007 ORAL JUDGMENT 1. Heard learned advocate Ms. Sejal K. Mandavia appearing on behalf of petitioner in both the matters. SCA/27731/2007 2/35 JUDGMENT 2. The draft amendment is placed on record in both the matters explaining the delay in filing both the petitions challenging the awards in question. 3. Accordingly, draft amendment is allowed with a direction to the petitioner to carry out the same within a period of two week from today. Accordingly, delay in filing both the petitions are condoned int the interest of justice. 4. It is necessary to note that in Special Civil Application No.27731 of 2007, the award passed by Labour Court, Bharuch in Reference (LCB) No.470 of 1990 dated 21st September 2003 is challenged by petitioner being a State Authority after a period of four years. In Special Civil Application No.27731 of 2007, the name of respondent - workman is Raj Amarsinh Fulsinh. In Special Civil Application No.27732 of 2007, the name of respondent - workman is Manilal Ratanji Vasava, where, Labour Court has decided the Reference (LCB) No.270 of 1994 dated 15th May 1994, where, State Authority has taken time to challenge the award after a period of three years. Therefore, just to give identity to both the matters so, confusion may not arise, I refer these both matters in the name of workmen. 5. The Labour Court, Bharuch in both the cases, Shri Raj and Shri Manilal granted reinstatement with continuity of service with 15% backwages of interim period. SCA/27731/2007 3/35 JUDGMENT 6. The contention raised by learned advocate Ms. Mandavia is that both the workmen were appointed periodically as a work-charge clerk and on each occasions, after completion of period, a separate application was given by workmen and on separate application, a fresh order was issued by petitioner for prescribing a specific period and on each occasions, such periodical orders have been issued by petitioner in favour of respondents giving a date of termination. At the end of termination of service in case of Shri Raj is 17th February 1987 and in case of Manilal is 20th July 1987. The contention raised by learned advocate Ms. Mandavia is that in both the occasions, no such application was given by both the respondents workmen to issue fresh order and therefore, their services come to end automatically. Therefore, compliance of Section 25F is not necessary, because such kind of appointment based on periodical duration is not covered by definition of 'retrenchment' of Section 2(oo) of the Industrial Disputes Act, 1947, but, such appointments are covered by exception of Section 2(oo)(bb) by the Industrial Disputes Act, 1947. In short, her submission is that such termination is not a retrenchment and therefore, Section 25F is not to be followed by petitioner. But, Labour Court has come to contrary decision from the records and granted the reinstatement in favour of respondents with 15% backwages of interim period. She read the relevant observations made by Labour Court and she also read SCA/27731/2007 4/35 JUDGMENT the certain decisions which have been considered by Labour Court. There is no dispute by petitioner that on each occasions, a periodical orders were issued. Only one or two days breaks were given in between and thereafter, another order on the same terms and conditions was issued by petitioner. Such contingency remained continue on each occasions till no fresh application is given by the workmen and therefore, their services come to end automatically. She also submitted that there was no artificial break in between two appointment orders. She also submitted that Labour Court has committed gross error in granting such relief by coming to conclusion that Section 25F is violated. She relied upon the following decisions : (i) 2000(2) GLR 1793 (Purshottambhai R. Kachhadia v. State of Gujarat and Ors) (ii) 2007(1) SCC 533 (Gangadhar Pillai v. Siemens Ltd.) (iii)2006(2) SCC 794 (Haryana State Argicultural Marketing Board v. Subhash Chand and Another) (iv) (2005) 8 SCC 481 (Batala Coop. Sugar Mills Ltd. v. Sowaran Singh) (v) 2002(4) GLR 2940 (Balubhai G. Makwana v. State of Gujarat & Ors.) SCA/27731/2007 5/35 JUDGMENT 7. This Court has perused one sample of order issued by petitioner in favour of respondents. In the appointment order, the reason is given for appointment which was on administrative interest on work charge establishment in regular pay-scale and dearness allowance is also granted, where, the period is specified from the date to 29 days at beyond office appointment is given and after reporting by workmen, he should have to follow the condition which were incorporated in appointment order. 8. Learned advocate Ms. Mandavia placed the orders for perusal of this Court of both the workmen – Shri Raj and Shri Manilal, has made available the conditions incorporation in appointment order and I have read it and have considered the conditions as well as the wordings of the appointment order. Learned advocate Ms. Mandavia submitted that in both the cases, some appointments are of 89 days and some appointments are of 29 days. 9. I have considered the submissions made by learned advocate Ms. Mandavia. It is necessary to note the date of first appointment of both the workmen. In case of Shri Manilal, his appointment is dated 10th February 1982 and termination is 17th February 1987. Similarly, in case of Shri Raj, his appointment is also dated 10th February 1982 and termination is also dated 17th February 1987. 10. Learned advocate Ms. Mandavia submitted that SCA/27731/2007 6/35 JUDGMENT these two workmen were appointed without following the legal procedure of recruitment and not from employment exchange and not selected by way of selection procedure and they were appointed by back door entry and therefore, they are not entitled the benefit of Section 25F of the Industrial Disputes Act, 1947. 11. I have also considered the submissions made by learned advocate Ms. Mandavia and I have also considered the relevant decisions which have been relied upon by learned advocate Ms. Mandavia. The law decided by Apex Court in respective decisions, there is no dispute about ratio decided by Apex Court, but, each decision is applicable to the facts of each case. Ratio is to be applied after examining the facts of each case. If little facts are different, ratio will not apply to the facts of the present case. The main controversy in these two petitions is periodical appointment, artificial break of two or three days and their services come to end which covered by definition of exception of Section 2(oo) (bb) or not and therefore, it does not amount to retrenchment and non-compliance of Section 25F is not rendered the termination ab initio void or not. 12. Section 2(oo) of the Industrial Disputes Act, 1947 is quoted as under : “Section 2(oo) – “Retrenchment” means the termination by the employer of the service of SCA/27731/2007 7/35 JUDGMENT a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action but does not include - (a) xxx xxx xxx (b) xxx xxx xxx (bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or (c) xxx xxx xxx“ 13. Section 25-F of the Industrial Disputes Act, 1947 is also quoted as under : “Section 25F – Conditions precedent to retrenchment of workmen : No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until - (a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; (b) the workman has been paid, at the time of retrenchment, compensation which SCA/27731/2007 8/35 JUDGMENT shall be equivalent to fifteen days' average pay [for every completed year of continuous service] or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette.]“ 14. It is necessary to note that in Section 2(oo) - 'retrenchment', amendment in the Act came into force w.e.f. 18th August 1984. Before 18th August 1984, there was no birth taken place by Section 2(oo) (bb). Therefore, an appointment which was prior to the birth of Section 2(oo)(bb), naturally, Section 2(oo)(bb) will not apply, because, in both the cases, both the respondents workmen were appointed prior to 1984 and Section 2(oo)(bb) is not having retrospective effect, because, it is not a procedural amendment, but, it is a substantive amendment in the Act giving a right to the employer and other way loosing the right by the workman. This aspect has been considered by the Division Bench of this Court in case of Bharat Heavy Electricals Ltd. v. R.V. Krishnarao reported in 1989(2) GLH 1 and held in Head Note (A) which is quoted as under : “Head Note (A) : Industrial Disputes Act, 1947 – Clause (bb) of S.2(oo) – Provision is not retrospective in nature : In view of this constant trend of decisions of the Supreme SCA/27731/2007 9/35 JUDGMENT Court, interpreting the then existing provisions of the term 'retrenchment' as found in S.2(oo) the legislature intervened by enacting further exclusion clause, in shape of clause (bb). It, therefore, becomes obvious that the legislature wanted to remedy the difficulty which was found in the then existing exclusion clauses (a), (b) and (c) in S.2(oo), and that is precisely the reason why a substantive provision excluding from the operation of term 'retrenchment', those actions which were covered by clause(bb) was enacted. It is obvious that the legislature while enacting the said provision has not expressly made it retrospective. (Para 6)“ 14.1 Therefore, if appointments were made prior to 18th August 1984, amended in Section 2(oo)(bb) is not applicable. The respondent was appointed prior to 18th August 1984 i.e. in the year of 1982 and remained in service upto 1987 by periodical orders, so, there was a continuation, in between, a right which has been already accrued in favour of workmen from the date of appointment, that cannot be curtailed at the end of services. Therefore, date of termination is not to be taken into account, but, date of appointment is relevant, when workman is appointed by periodical appointment, at that occasion, there was no such scope to consider such kind of appointment outside the scope of retrenchment. 15. Apart from that, if it is taken into account SCA/27731/2007 10/35 JUDGMENT that Section 2(oo)(bb) is applicable, then, there is an object behind it. The statutory provision is not amended without any purpose and without any necessity. The purpose behind the appointment is that if project appointment, requirement of the institution, necessity, a time schedule work, over load work or to meet the immediate contingency by the institution, such kind of appointment is necessary, and therefore, for short period, just to mitigate the hardship to the employer to complete the work of project or some activities is to be complete within some specific time, then, such kind of periodical order is necessary. Otherwise, method of giving a nature of regular appointment, merely specified 29 days in the order, regular scale is given, dearness allowance is given and all the conditions incorporated in the appointment order as if that he was a regular employee appointed by petitioner. So, the substance of the appointment order is a regular appointment order as a work charge employee, not merely a periodical order for specific duration. 16. Let us consider the submissions made by learned advocate Ms. Mandavia that periodical orders were there and accepted by the workmen without any dimmur, now, he cannot raise contention, but, I failed to understand the submissions made by learned advocate Ms. Mandavia that what was the justification for the petitioner being a statutory authority to issue such kind of order in favour of respondents. Merely, issuing periodical order is not enough for SCA/27731/2007 11/35 JUDGMENT the employer, but, they should have to justify such kind of periodical order before the Court and then, they are entitled the benefit of exception, otherwise not. Before the Labour Court, petitioner remained silent about justification for issuing such kind of orders to the respondents. What was the compelling circumstances to issue such kind of orders denying the legitimate and legal right to the workmen, for which, he is entitled at least for a minimum protection under Section 25F of the Industrial Disputes Act, 1947. So, before the Labour Court, both the workmen remained in service about more than five years continuously, except these two or three days, an artificial break and on each occasions, a fresh order on the same terms and conditions without any justification. Even in the order, no reason is given that particular appointment is given because to fulfill such kind of work. In the appointment order, the reason is due to administrative interest, such kind of order is issued by the petitioner. So, merely, giving artificial break and making a show that on each occasion, applications were given by workmen and therefore, order of appointment is issued in favour of workmen. Therefore, it is a renewal of contract and therefore, covered by exception. Such contention cannot be accepted by this Court, otherwise, it amounts to give a permission to the employer to abuse the provisions of Section 2(oo)(bb) by giving such kind of order without requirement and without necessity. Such order of appointment should not have to be used by unscrupulously by the SCA/27731/2007 12/35 JUDGMENT employer, so, they deny a legitimate legal right to the workmen. It is not the case of petitioner that work is not available after terminating the services of respondents. If workmen remained in service about 5 years, then, all of sudden, their period was not extended without any reasons and justification. The work was available even though service was not extended then it amounts to unfair labour practice and arbitrary. No where in pleadings or in evidence, petitioner has raised contentions that period of appointment order not extended as work is over, no work is available. This Court has gone through the decisions which have been relied upon by learned advocate Ms. Mandavia and this Court has perused the same. But, on each decision, a periodical appointment is meant for either in project, either for particular work, either casual labour or either for particular kind of requirement, but, in none of the decision, such kind of appointment orders were discussed by the Apex Court as well as this Court. The Apex Court has specifically made clear that a workman engaged on casual basis on daily wages for specific work and for specific period, then, termination is not retrenchment. Here, specific period is there, but, specific work is not mentioned which is necessary to be established by petitioner before the Labour Court. 17. Therefore, according to my opinion, the petitioner shall have to justify such kind of appointment or they should have to point out the compelling circumstances require such kind of SCA/27731/2007 13/35 JUDGMENT appointment, otherwise, such kind of appointment is nothing else just to deny the legal rights of the workmen concerned or to frustrate the object of definition of retrenchment. 18. This Court has recently examined this issue in Special Civil Application No.21037 of 2006 dated 28th November 2007 in case of Gujarat Agro Industries Corporation Limited v. Pravinsinh Babubhai Chauhan (Coram : H.K. Rathod, J.). The whole issue has been examined by this Court at length and therefore, same issue may not be repeated again here. 19. In the aforesaid decision, the period of service from 1991 to 1994 is considered. The case which I have decided where similar type of orders were issued by petitioner Gujarat Agro Industries Corporation Limited (Supra) and same question has been examined by this Court in detail even considering the recent decision on the subject i.e. Section 2(oo)(bb) of Apex Court. Therefore, the relevant observations made by this Court in Para 9 to 13 are quoted as under : 9. Findings given by the labour court are based on legal evidence and labour court has given cogent reasons in support of its conclusions. Looking to the appointment order, why such type of appointment orders were issued periodically and on temporary basis, for that, there is no justification SCA/27731/2007 14/35 JUDGMENT coming forward from the side of the petitioner. If the requirement is continuing from the date of appointment till the date of termination, then, why management is issuing such orders on periodical basis, on temporary basis. Reason is apparent that this is done only with a view to get rid of the mandatory provisions of section 25F of the ID Act, 1947 and to deprive the workman from claiming protection of the said mandatory provisions. Such type of efforts on the part of the petitioner are arbitrary and same amounts to unfair labour practice adopted by the petitioner. Looking to all the orders of appointment periodically given to the petitioner from time to time on temporary basis, there is no reason or justification given by the petitioner for issuance of such orders. Last order is dated 15th July, 1994. Why service period was extended and for that, no appointment order has been issued which suggests periodical or temporary. Looking to the last order dated 15th July, 1994, services of the respondent workman came to an end on 20th July, 1994. For that, periodical order was not given to the respondent by the petitioner. This being an undisputed position, upto 30th September, 1993, periodical appointment orders were there but beyond that from 1st October, 1993 to 20th July, 1994, no such periodical appointment SCA/27731/2007 15/35 JUDGMENT orders have been given by the petitioner to the respondent and, therefore, considering the entire period of services including the order dated 15.7.1994, services of the respondent workman were terminated by the petitioner without complying with the provisions of section 25F of the ID Act, 1947. In light of this situation, whether the provisions of section 2(oo)(bb) of the ID Act, 1947 would be applicable or not. Considering the submission of Ms. Desai that such contention was not raised by petitioner before the labour court which is not disputed by learned Advocate Mr. Nanavati for petitioner, therefore, since the labour court was not given an opportunity to examine this contention and to give finding thereon, this court cannot permit the petitioner to raise such contention for the first time before this court as it is a mixed question of law and facts required to be pleaded and proved by the petitioner before the labour court. However, without entering into that aspect, this court has examined the contention. Looking to the facts of this case as emerging from the record, section 2(oo)(bb) of the ID Act, 1947 would not be applicable in this case because there is no fixed term order of appointment issued by the petitioner in favour of the respondent. There is some purpose behind bringing this provisions in SCA/27731/2007 16/35 JUDGMENT the Statute with effect from 18.8.1984. In Executive Engineer, District Panchayat, Bharuch versus Shankarbhai Jivabhai Patel reported in 2006 Lab IC page 2180, this aspect has been considered by this court in detail. Relevant observations made by the Madras High Court in case of Manager (P&A) Oil and Natural Gas Corporation Ltd. Chennai v. G. Radhakrishnan (200) Lab IC 2570 have also been considered by this court in the said decision by referring to para 22 of the said decision. Scope of sec.2(oo)(bb) has been considered and it has also been considered how the employer is abusing such provision unscrupulously while employing the workman and in such circumstances, court should see the real position so as to rule out the injustice to workman. Decision of the Division Bench of Madras High Court has been considered by this court in the above referred decision of this court in case of Executive Engineer, District Panchayat, Bharuch versus Shankarbhai Jivabhai Patel reported in 2006 Lab IC page 2180. Therefore, relevant observations made by this court in case of Executive Engineer, District Panchayat,Bharuch (supra) in para 8,9,10,and 11 are reproduced as under: “8. Relying upon the decision of Apex Court in General Manager, Haryana Roadways (supra) it is submitted that in case termination is found to be bad or illegal, SCA/27731/2007 17/35 JUDGMENT workman is not entitled automatically for full backwages or any wages, but before granting wages, certain relevant factors are to be taken into account by the Labour Court about the length of service, age, family circumstances and condition of establishment. He submitted that as per the decisions of Apex Court, periodical appointments are outside the scope of Section 2(oo) of the Act, means, it is not retrenchment. However, the facts in each case are different in comparison to the facts of the present case. Recently, the Division Bench of Madras High Court in The Manager (P&A), Oil and Natural Gas Corporation Ltd., Chennai v. G.Radhakrishnan (2005 Lab.I.C. 2570) has considered the scope of Section 2(oo)(bb) and also considered that how unscrupulous employer abuse such provision while employing the workmen, and that in such circumstances, the court should see the real position so as to rule out injustice to the workmen. The Division Bench of Madras High Court in above decision considered certain decisions of Apex Court and various High Courts and thereafter held in paragraph-22 that: “22. The above referred to decisions on interpretation of Section 2(oo)(bb) explain the legal position to the effect that a claim of an employer on a term based employee providing for automatic termination whether within the terms fixed or on expiry of the said term, cannot be taken for granted to sustain the order of termination. On a plain reading of Section 2(oo)(bb), it is quite clear that such term based employment would fall outside the scope of `retrenchment' so long as the requirement of such fixed period of employment was bona fide required by the employer. It was therefore, repeatedly pointed SCA/27731/2007 18/35 JUDGMENT out that such excepted categories required a rigorous test rather than accepting the plea of employer on its face value or otherwise it would cause serious prejudice to an employee, who can be taken for a ride by unscrupulous employers by contending that the term of employment was for specific period though as a matter of fact such period of employment lasted quite for a long spell. In other words even though the requirement of employment was perennial by adopting the methodology of employing a person for a specific period as many a times, an unscrupulous employer can always resort to abusing the provision contained in Section 2(oo)(bb) to thwart the other statutory protection available to an employee under Section 2(oo), namely, in the case of a `retrenchment' vis­a­vis the consequential benefits contained under Section 25­F