BHAVNAGAR MUNICIPAL CORPORATION ETC.versusJADEJA GOVUBHA CHHANUBHA & ANR.

                     (2014] 14 S.C.R. 879


      BHAVNAGAR MUNICIPAL CORPORATION ETC.                          A .
                                v.
         JADEJAGOVUBHACHHANUBHA&ANR.
          (CivilAppeal Nos. 10690-10691 of2014)
                     DECEMBER 03, 2014                              B
         [T. S. THAKUR AND R. BANUMATHI, JJ.]
       Industrial Disputes Act, 1947 - s. 25F- Employment
 of respondent-workman with Transport Department of
 appellant-Corporation as 'conductor' - For a period of .18 C
 months - Termination of his services - Industrial dispute -
 Labour court's award holding the termination as illegal and
 directing reinstatement with 65% back wages- Single Judge
 of High Court partly allowed thf:! application of the Corporation'.·
 setting aside the award of back wages - Division Bench of
                                                                      0
 High Court affirmed the order of Single Judge - On appeal,
.held: The workman has proved that he was in the employment
 of the appellant-Corporation and had completed 240 days
 of continuous service - Therefore, non-payment of
 retrenchment compensation has rendered the termination
 illegal- However, such illegality does not necessarily result E
 in reinstatement- In view of the facts of the case, is would be
 just to award a compensation of Rs. 2, 50, 0001- in lieu of
 reinstatement - Denial of back wages is justified - Labour
 Laws.
                                                                     F
      Evidence:
      Rules of evidence - Scope of applicability- To /about
cases - Held: Strict rules of evidence are not applicable to
the proceedings before the labour court- Labour Laws.
    Burden of proof - Burden to prove· the fact that the G
workman was in actual and continuous service of the
employer for a particular period, is squarely on the
workman - Labour laws.

                                                                     H
                               879
880     · SUPREME COURT REPORTS               [2014] 14 S.C.R.


A,       Partly allowing the appeals, the Court
              HELD: 1.1 For an order of termination of the
     services ofa workman, to be held illegal on account of
     non-payment of retrenchment compensation, it is
     essential for theoworkman to establish that he was in
B: continuous service of the employer within the meaning
     of Section ?58 of.the lndustrial·Disputes Act, 1947. For
     the respondent to succeed in that attempt, he was
     required ~o show that he was ii'! service for 240 days in
     terms of Section 258(2)(a)(ii). The burden to prove that
c he was in actual and continuous service of the employer
     for the said   ,
                       period,
                         .
                                 lay squarely
                                           I
                                                on the workman.
     However, an adverse inference cannot be drawn against
     the employer in case he did not produce the .best
    ·evidence available with it. [Para 8][886-F-H; 887-B-C]
D·1             .
           . Range Forest Officer v. S. T. Hadimani .(2002) 3
            -SCC 25 : 2002 (1),SCR 108.0 ; Municipal
              Corporation, Faridabad v. Siri Niwas (2004) 8
            .sec 195 : 2004 (4) Suppl. SCR 145 ; M.P.
       -·, Electricity Board v. Hariram. (2004) 8 SCC 246 ;
E ·'      ,, Rajasthan State . Ganganagar S. Mills Ltd. v. State
          ·-.of Rajasthan &Anr. (2004) 8 SCC 161.: 2004 (4)
            . Suppl. -SCR 363 ; Surendra Nagar District
           . Panchayat anq Anr. v. Jethabhai Pitamberbhai
              (2005) 8 SCC 450 ; R.M. Yellatti v. Assistant
              Executive Engineer(2006) 1SCC106: 2005 (4)
              Suppl. SCR 1010 ; Manager, Reserve Bank of
              India, Bangalore v: S. Mani, (2005) 5 SCC 100 -
              relied on.
              1.2 The Labour Court has placed reliance upon a
G Xerox copy of a certificate in support of the fact that the
     respondent was in the employment of the appellant-
     torporation as a Conductor between 3rd October, 1987
     and 31st March, 1989. While it is true that the Xerox copy
 H
                         ,.


     BHAVNAGAR MUNICIPAL CORPORATION ETC. v.                       ·. 881
          JADEJA GOVUBHA CHHANUBHA

  may not be evidence by itself, specially when the A
  respondent had stated that the original was with him,
  but had chosen not to produce the same. Yet the fact
  remains that the document was allowed to be marked at
  the trial, and signature of the officer issuing the· certificate
· by another officer who was examined by the appellant. B
  Strict ruies of evidence are not applicable' to the
  proceedings before the Labour Court. That being so,
  the admission of the Xerox copy of the certificate, without
  any objection from the appellant-Corporation, cannot be
  faulted at this belated· stage. When seen in .the light of c
  the assertion of the respondent, the certificate in question
  clearly supported the respondent's case. Therefore, the
  non-payment of retrenchment compensation was
  sufficient to render the termination illegal, [Para 9]
  [887-E-H; 888-A-B]                                    •          D
      2. The High Court was also justified in· directing
 deletion of the back wages from the award made by the
 Labour Court against which deletion, the respondent did
 not agitate either before the Division Bench by filing an
 appeal or before this Court. [Para 9][888-8-C]            'E
       3.1 The appellant claims to have worked for a period
 of just about 18 months that too nearly three decades
 ago. The respondent today may be past fifty if not more.
 The Transport Department where he'was working
 appears to have been wound up and tram;;port work out- · F
 sourced. The illegality in an order of termination on
 account of non-payment of retrenchment compensation
 does not necessarily result in the reinstatement of the
 workman in service. In cases where such termination is
 found to be illegal, the Court can direct compensation in G
 lieu of reinstatement. [Para 10][88S-0-F] ··        .· ·
       3.2 In the present case, in vie'!" of the totality of the
  circumstances, the reinstatement of the respondent in
· service does not appear to be an acceptable option.                H
882      SUPREME COURT REPORTS               [2014]14 S.C.R.


A Monetary compensation, keeping in view the length of
   service rendered by the respondent, the wages that he
   was receiving during that period which according to the
   evidence was around Rs.24. 75 per day should
  'sufficiently meet the ends of justice. Keeping in view all
B the facts and circumstances, award of a sum of
   Rs.2,50,000/- (Rupees Two Lacs Fifty Thousand only) as
   fun and final settlement of the claim of the workman
   should meetthe ends of justice. [Para 16][891-B-D]
          Mahboob Deepak v. Nagar Panchayat Gajraula ·
c         and Anr: (2008) 1 SCC 575 : 2007 (13) SCR 672 ;
          Sita Ram .and Ors. v. Moti Lal Nehru Farmers.
          Training Institute (2008) 5 SCC 75 : 2008 (4)
          SCR 471 ; Ghaziabad Development Authority
          and Anr. v. Ashok Kumar and Anr. (2008) 4 SCC
D       · 261 : 2008 (2) SCR 1069 ; Jagbir Singh v.
          Haryana State Agriculture Marketing Board and
          Anrc (2009) 15 sec 327 : 2009 (10) SCR 908 ;
        . Senior Superintendent Telegraph (Traffic) Bhopal·
          v. Santosh Kumar Seal and Ors. (2010) 6 SCC
E         773 ; lncharge Officer and Anr. v. Shankar Shetty
        (201 O) 9 sec 126 : 2010 (1 OJ SCR 773- relied
     BHAVNAGAR MUNICIPAL CORPORATION ETC. v.                      883
         . JADEJA GOVUBHA CHHANUBHA

 2008 (4) SCR 471                 relied on.        Para 11        A
 2008 (2) SCR 1069                relied on.        Para 12
 2009 (10) SCR 908                relied on.         Para 13
 (201 o) s sec 773                retied on.         Para 14
 2010 (10) SCR 773                relied on.      ·. Para 15 ·     B
     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
 10690c10691 of2014.
      From the Judgment and Order dated 24-04-2012 arid
 20-07-2012 of the High Court of Gujarat atAhm.edabad in C
 Special Civil Application No. 11508 of 2012 and Letters Patent
 Appeal No. 878of2012 respec~ively.
      Jatin Zaveri, Neel Kamal Mishra, Advs. for the Appellant.
        · Mrs. Saroj Raichura, Haresh Raichura, Rajat Vats, Advs •
. for the Respondents.          ·          ·                       D
      The Judgment of the Court was delivered by
      T. S. THAKUR, J. 1. Leave granted.
        2. These appeals arise out of a judgement and orper
  dated 201h July, 2012 passed by the 'Hig)l Cc;>urt of Gujarat at E
  Ahmedabad whereby Letters Patent Appeal No.878 of2012
  filed by the appellant-Corporation has been dismissed and
  t)le order passed by the learned Single Judge of that Cpurt
.·partly modifying the award made in favour of the respondent_
  affirmed.                               . ·                     · F
       3, The respondent, it appears, was "employed as a
 Conductor in the Transport Department of the appellant-
 Corporation on daily-wage basis in Och;iber, 1987. He claims
 to have senied in that capacitytill 3.1•1 March, 1989 when his
 services were terminated. Aggrieved by the termination, the G
 respondent raised an industrial dispute before theAssistant            •
 Labour Commissioner, Bhavnagar who tried to resolve the
 same by way of conciliation but since the conciliation
 proceedings also failed, Reference No.459of1990 was made
 to the Labour Commissioner at Bhavnagar for adjudication of H



                       '!   ,..    I.
    884        SUPREME COURT REPORTS                · [2014] 14S.C.R.


    A the dispute between tlie parties. The Labour Court allowed
      the p,arties to adduce evidence in support of their respective
      versions and eventually came to the conclusion that the
      respondent had indeed worked as a Conductor with the
      appellant-Corporation between 3rd October, 1987 and 31st
    B March, 1989. The Labour Court in the process rejected the
      appellant's case that the respondent had worked only for 58
                                         '            .
      days as Badli Conductor and was not, therefore, enfitled to
      protection of Section 25F of the Industrial DisputesAct, 1947 ..
      The'Labour Court placed reliance upon a Xerox copy of a
    C certificate· allegedly iss·ued by 'an· officer of the appellant-
      Corporation certifying that the respondent had worked as a
      Conductor for the period mentioned above. The Labour Court
      drew an adverse inference against the appellant-Corporation
      for its omission to produce relevant record to prove that the
    D respondent-workman had worked only for 58 days hence not
      entitled to the benefit of any r~trenchment compensation. The·
      Labour Court on that basis held the termination of the
      respondent from service to be illegal and directed
      reinstatement with 65% back wages.
     E    : • · .4. Aggrieved by the awara made by the Labour Court
         the appellant-Corporation filed Special Civil Application
          No.11508 of 2002 which was h·eard and partly allowed by a
        · 1earned Single Judge of the High Court of Gujarat at
         Ahmedabad by his order date'd 24•h April, 2012: The High
      F Court referred to the evidence adduced by the parties before
          the Labour Court and came to the condusion that the appellant-
          Corporation had not been able to prove its assertion that the
         respondent had worked for 58 days only. The High Court held
        ·that the findings recorded by the Labour Court to the effect
    · G that the respondent had worked between 3rd October, 1987
•         and 31•' Mi:irch, 1989 were supported by sufficient evidence
          and material on record. Having said so, the High Court opined
          that the·award of back wages of 65% was not justified as the
         ·Labour Court had not given any cogent reasons while directing
    ,.H . such back wages nor hadthe Labour Court examined whether
    BHAVNAGAR MUNICIPAL CORPORATION ETC. v.                       885
   JADEJAGOVUBHACHHANUBHA[T. S. THAKUR, J.]

  the respondent was gainfully employed during the intervening    A
  period. The award. to the extent it directed payment of 65%
  back wages was, therefore, held to be perverse by the learned
  Single Judge of the High Court which part was accordingly set
. aside and the writ petition partly allowed.
      5. Dissatisfied with the order passed by the Single Judge B
the appellant-Corporation filed Letters Patent Appeal No.878
of2012 which, as noticed earlier, was dismissed by a Division
Bench of the High Court by its order dated 201h July, 2012. The
Division Bench was of the view that the findings recorded by
the Labour Court did not suffer from any infirmity to call for any C
interference specially when the other employees of the
appellant-Corporation appear to have been absorbed by the
Corporation upon closure of its Tran.sport Department.
       6. On behalf of the appellant-Corporation it was argued
that the findings recorded by the Labour Court to the effect D
that the respondent had worked as a Conducfor between 3rd
October, 1987 and 31'1 March, 1989 was not supported by
any evidence and was, therefore, perverse. It was contended
that the solitary piece of evidence which the respondent had
produced in support of his version was a Xerox copy of a E
certificate allegedly issued by an officer of the appellant-
Corporation who was never summoned as a witness. Apart
from the said document and the self-statement of the
respondent there was no other material to support the findings · ·
that the respondent had indeed worked for 240 days as alleged F
by him before his termination. On the contrary, it was proved
by the documents placed on record by the appellant that the
respondent was a Conductor who had worked for just about
58 days hence was not entitled to any protection under Section
25F of the Industrial DisputesAct, 1947. It was urged ttiatthe G
Labour Court had wro'ngly drawn an adverse inference against
the appellant-Corporation, overlooking the settled legal position
                                              to
that the burden of proof lay on the workman establish that
he was in continuous employment for a period of 240 days to
be entitled to question the termination of his employment H
886         SUPREME COURT REPORTS                  [2014] 14 S.C.R.


A     without retrenchment compensation. The Single Judge of the
      High Court and so also the Division Bench failed to appreciate
      the essence of the controversy and fell in error in upholding
      the award made by the Labour Court.                         ·
            7. On behalf of the respondent, it was contended that the
B     findings recorded by the Labour Court do not suffer from any
      perversity to call for our interference ..The Single Judge,
      according to the learned counsel, has examined the evidence
      on record and clearly held that there was sufficient material to
      support the findings that the responde_at had worked for more
C     than 240 days and was, therefore, entitled to the protection of
      Section 25-F and that since no retrenchment compensation
      had been paid at the time of the termination of his employment,
      the order of termination was illegal which ent_itled the
      respondent to reinstatement. It was also contended that
 P    although sufficient number of years had rolled back since the
      respondent last served with the appellant-Corporation, yet the ·.
      respondent was entitled to be reinstated no matter the Transport
      Department of the appellant-Corporation where the respondent
      was working had been wound up. The fact that the similarly
E     situated workmen in the department had been adjusted,
      according to the learned counsel, was a sufficient reason for
      the respondent to seek reinstatem.ent with or withou,t back
      wages.
         8, It is fairly well-settled that for an order of termination of ·
F the services of a workman to be held illegal ori account of non- ·
  payment of retrenchment compensation, it is essential for the . ·
                                                               of
  workman to establish that he was in continuous ser\iice the .• · ·
  employer within the meaning of Section 258 of the .Industrial.·
  Disputes Act, 1947. For the respondent to succeed in that .
G attempt he was required to show that, he was iri service for
  240 days in terms of Section 25B(2)(a)(ii}. The burdento prove ·
  that he was in actual and continuous service of the employer
  for the said period lay squarely on the Workman. The decisions
  of this Court in Range Forest Officerv. S. T. Hadimani (2002)
H
      BHAVNAGAR MUNICIPAL CORPORATION ETC. v.                            887
    ·JADEJAGOVUBHACHHANUBHA[T. S. THAKUR, J.]

 3 SCC 25, Municipal Corporation, Faridabad v. Siri Niwas                A
 (2004) 8SCC195, M.P. Electricity Board v. Hariram (2004)
 8 SCC 246, Rajasthan State Ganganagar S. Mills Ltd. v.
 State of Rajasthan & Anr. (2004) 8 SCC 161, Surendra
 Nagar District Panchayat and Anr. v. Jethabhai
 Pitamberbhai (2005) 8 SCC 450, R.M. Yellatti v. Assistant               B
 Executive Engineer (2006) 1 SCC 106 uneq·uivocally
 recognise the principle that the burden to prove that the
 workman had worked for 240 days is entirely upon him. So
 also the question whether an adverse inference could be .drawn
 against the employer in case he did not produce the best                C
 evidence available with it, has been the subject-matter of
 pronouncements of this Court in Municipal Corporation,
 Faridabad v. Siri Niwas (supra) and M.P. Electricity Board
 v. Hariram (supra), reiterated in Manager, Reserve Bank of
 India, Bangalorey. S. Mani (2005) 5 SCC 100. This Court                 D
 has held that only because some documents have not been
 produced by the management, an adverse inference cannot
 be drawn against it.
         9. The Labour Court has, in the case at hand, placed
   reliance upon a Xerox copy of a certificate allegedly issued by       E
 · an officer of the appellant-Corporation stating that the
   respondent was in the employment offhe appellant-
   Corporation as a Conductor between 3.'d October, 1987 and
   31st March, 1989. While it is true that the Xerox copy may not
   be evidence by itself specially when the respondent had stated        F
· that the original was with him, but had chosen not to produce
   the same yet the fact remains that the document was allowed
 · to be marked at the trial and signature of the officer issuing
   the certificate by another officer who.was examined by the
   appellant. Strict rules of ~vidence, it is fairly well-settled, are   G
   not applicable to the proceedings before the Labour Court.
   That being so the admission of the Xerox copy of the certificate,
   without any objection from the appellant-Corporation, cannot
    be faulted at this belated stage. When seen in the light of the
   assertion of the respondent, the certificate in question clearly      H
888        SUPREME COURT REPORTS                  [2014] 14 S.C.R.


 A   supported the respondent's case that he was in the employment
     of the appellant-c·orporation for the period mentioned above
     and had completed 240 days of continuous service. That being
     so, non-payment of retrenchment compensation was sufficient
   · to render the termination illegal. Inasmuch as the Labour Court
  B declared that to be so it committed no mistake nor was there
     any room for the High Court to interfere with the said finding
     especially when the findings could not be described as
     perverse or without any evidence. Jhe High Gourt was also
     justified in directing deletion of the back wages from the award
- C made by the Labour Court against which deletion, the
     respondent did not agitate either before the Division Bench
     by filing an 'appeal or before us.
         · 10. The only question that remains to be examined in the
   above backdrop is whether reinstatement of the respondent
 D as a Conductor is imperative at this late stage. We say so
   because the appellant claims to have worked for a period of
   just about 18 months that too nearly three decades ago. The
   respondent today may be past fifty if not more. The Transport
   Department where he was working- appears to have been
 E wound up and transport work out._soi.Jrced. That apart, this
   Court has in!'!. series of decisions held that the illegality in an
   order of termination on account of non-payment of retrenchment
   compensation does not necessarily result in the reinstatement
   of the workman in service. This Court has, in cases where
 F such termination is found to be illegal, directed compensation
   in lieu of reinstatement. We may at this stage refer to some of
   those decisions:
         11. In Mahboob Deepak v. Nagar Panchayat Gajraula
    and Anr. (2008) 1 SCC 575, this Court held that since the
                                    a
. G appellant had worked only for short period, interest of justice
    would be sub-served if the direction for reinstatement was
    modified and compensatory payment of Rs.50,000/- in lieu
    thereof directed to be.substituted. Similarly in Sita Ram and
    Ors. v. Moti Lal Nehru Farmers Training Institute (2008)
  H 5 SCC 75, this Court took into consideration the period during
   BHAVNAGAR MUNICIPAL CORPORATION ETC. v.                        889
  JADEJAGOVUBHACHHANUBHA[T. S. THAKUR, J.)

which the services were rendered by the workman and instead A
of reinstatement directed a lump sum payment of Rs.1,00,000/
- in lieu thereof.
     12. In GhaziabadDeve/opmentAuthorityandAnr. v.
Ashok Kumar and Anr. (2008) 4 sec 261, this Court made
a similar order as is evident from the following passage: B
     "10. We are. therefore. of the opinion that the appellant·
     should be directed to pay compensation to the first
     respondent instead and in place of the relief of
     reinstatement in service. Keeping in view the fact that C
     the respondent worked for about six years as a/so the
     amount of daily wages which he had been getting, we
     are of the opinion that the interest ofiustice would be
     subserved if the appellant is directed to pay a sum of
     Rs. 50. 0001- to the first respondent."
                                                             D
                                         [emphasis supplied]
     13. To the same effect is decision of this Court in Jagbir
.Singh v. Haryana State Agriculture Marketing Board and
Anr. (2009) 15  sec  327 where this Court held that while
awarding compensation in lieu of reinstatement host of factors    E
should be kept in mind. The Court said:
     16. While awarding compensation. the host of factors.
     inter-a/ia. manner and method of appointment. nature
     of employment and length of service are relevant. Of
     course. each case will depend upon its own facts and F
     circumstances. In a case such as this where the total
     length of service rendered by the appellant was short
     and intermittent from September 1. 1995 to July 18.
     1996 and that he was engaged as a daily wager, in our
     considered view. a compensation of Rs. 50. 0001- to the G ·
     Appel/ant by Respondent No. 1 shall meet the ends of
     justice."
                                        [emphasis supplied]

                                                                  H
890         SUPREME COURT REPORTS                 [2014] 14 S.C.R.


·A           14. Reference may also be made to the decision of this
      Court in Senior Superintendent Telegraph (Traffic) Bhopal ·
      v. Santosh Kumar Seal and Ors. (2010) 6 SCC 773, where
      this Court referred to the previous.decisions on the subject to
      declare that even when a retrenchment order passed in
B     violation of Section 25(F) may be set aside,. reinstatement need
      not necessarily follow as a matter of Court. The following
      passage from the decision is apposite:
            14. It would be, thus. seen that by a catena of decisions.
            in recent time. this Court has clearly laid down that an
C           order of retrenchment passed in violation of Section
            25F although may be set aside but an award of
            reinstatement should not. however. be automatically
          · passed. The award of reinstatement with full back wages
            ina case where the workman has completed 240 days
D           of work in a year preceding the date of termination.
            particuiarlv. daily wagers has not been found to be
            proper by this Court and instead compensation has
            been awarded. This Court has distinguished between
            a daily wager who does not hold.a post and a pennanent
E           employee."
                                               {emphasis supplied]
           15. To the same effect is the decision of this Court in
  lncharge Officer and Anr. II. Shankar Shetty (2010) 9 SCC
F 126, where this court said:       '       .
       "5. We think that if the principles stated in Jagbir Singh
       and the decisions of this Court referred to therein are
       kept in mind, it will be found that the High Court erred in
       granting relief of reinstatement to the respondent. The
       respondent was engaged as daily wager in 1978 and
       his engagement continued for about 7 years
       intermittently upto Septem6er 6, 1985 i.e. about
       25years back. In a case such as the present one. it
       appears to us that relief of reinstatement cannot be
H      justified and instead monetarv compensation would
    BHAVNAGAR MUNICIPAL CORPORATION ETC. v.                           891
   JADEJAGOVUBHACHHANUBHA[T. S. THAKUR, J.)

       meet the ends of justice. In our considered opinion, the A··
       compensation of Rs. 1.00.0001- (Rupees One lac) in
       lieu of reinstatement shall be appropriate. just and
     . equitable."
                                        [emphasis supplied]
                                                                 B
      16. The case at hand, in our opinion, is one such case
where reinstatement must give way to award of compensation.
We say so because looking to the totality of the circumstances,
the reinstatement of the respondent in service does not appear
to be an acceptable option. Monetary compensation, keeping
in view the length of service rendered by the respondent, the .. C
wages that he was receiving during that period which
according to the evidence was around Rs.24. 75 per day should ·
sufficiently meet the ends of justice. Keeping in view all the
facts and Circumstances, we are of.the view that award of a
sum of Rs.2,50,000/- (Rupees Two Lacs Fifty Thousand only) D
should meet the ends of justice.
      17. In the result, we allow these appeals but only in part
and to the extent that the award made by the Labour Court
and the orders of the High Court shall stand modified to the E .
extent that the respondent shall be paid monetary·
compensation of Rs.2,50,000/- (Rupees Two Lacs Fifty
Thousand only) in full and final settlemen~of his claim. The
amount shall be paid by the appellant-Corporation within a
period of two months from today failing which the said amount F
shall start earning interest @ 12% p.a. from the date of this
order till actual payment of the amount is made to the
respondent. ·

Kalpana K. Tripathy                        Appeals partly allowed.'