BHAVNAGAR MUNICIPAL CORPORATIONversusSALIMBHAI UMARBHAI MANSURI

                       [2013] 8 S.C.R. 90


A          BHAVNAGAR MUNICIPAL CORPORATION
                                v.
                SALIMBHAI UMARBHAI MANSURI
                 (Civil Appeal No. 5498 of 2013)
                          JULY 16, 2013
B
                 [K.S. RADHAKRISHNAN AND
                PINAKI CHANDRA GHOSE, JJ.]

       Industrial Disputes Act, 1947 - s.2(oo) rlw s.2(bb) and
C ss. 25G and H - Respondent appointed as a helper in
  appellant-Corporation for two fixed periods - On expiry of the
  second term, service of respondent terminated - Labour Court
  held that appellant-Corporation had violated the provisions
  of ss. 25G and H and directed it to reinstate the respondent
D with continuity in service with consequential benefits - Order
  upheld by High Court - On appeal, held: Labour Court as well
  as the High Court completely misunderstood the scope of
  s.2(oo), (bb}, as well as s.25G and H - Respondent had not
  worked continuously for 240 days in an year to claim the
E benefit of s.25F, G and H - He had worked only for 54 days
  in two fixed periods and on expiry of the second term, his
  service stood automatically terminated on the basis of the
  contract of appointment - Specific terms of the contract
  indicated that the employment was shortclived and liable to
F termination, on the fixed period mentioned in the contract -
   There was no retrenchment under s.2(oo) rlw s.2(bb),
  consequently, s.25H did not apply - Award passed by the
  Labour Court and confirmed by the High Court accordingly
  set aside.

G       The respondent was appointed on daily wages as a
    helper in the appellant Corporation for two fixed periods
    from 02.05.1988 to 30.06.1988 and 04.07 .1988 to
    15.07 .1988. The service of the respondent stood
    terminated on 15.07 .1988 after serving a total period of
H                               90
     BHAVNAGAR MUNICIPAL CORPORATION v. SALIMBHAI           91
                 UMARBHAI MANSURI
1
    54 days. The respondent raised an industrial dispute. The A
    Labour Court held that the appellant-Corporation had
    violated the provisions of Sections 25G and H of the
    Industrial Disputes Act, 1947 and directed it to reinstate
    the respondent with continuity in service with
    consequential benefits. The order was upheld by the High B
    Court, and therefore the present appeals.

        The question which arose for consideration was
    whether termination of services of the respondent on the
    expiry of the contract period amounted to retrenchment
    within the meaning of Section 2(oo) of the Industrial C
    Disputes Act, 1947.

        Allowing the appeals, the Court

        HELD: 1. The Labour Court as well as the High Court 0
    have completely misunderstood the scope of Section
    2(00), (bb), as well as Section 25G and H of the Industrial
    Disputes Act, 1947. The respondent had worked only for
    54 days in two fixed periods and on expiry of the second
    term, his service stood automatically terminated on the E
    basis of the contract of appointment. [Para 6] [94-F-H]

        2. The respondent had not worked continuously for
    240 days in an year to claim the benefit of Section 25F, G
    and H of the Act. [Para 7] [96-E]
                                                                  F
         3. Section 2(bb) of the Act says that if the termination
    of the service of workman is as a result of non-renewal
    of the contract between the employer and the workman
    on its expiry of such contract being terminated under a
    stipulation in that behalf contained therein, the same G
    would not constitute retrenchment. [Para 9] [97-C-D]

        4. The respondent's service was terminated on the
    expiry of the fixed periods mentioned in the office orders
    and that he had worked only for 54 days. The mere fact
    that the appointment orders used the expression "daily H
    92       SUPREME COURT REPORTS            [2013] 8 S.C.R.


A   wages" does not make the appointment "Casual"
    because it is the substance that matters, not the form.
    The contract of appointment consciously entered into by
    the employer and the employee, over and above the
    specific terms of the written agreement, indicates that the
B   employment is short-lived and the same is liable to
    termination, on the fixed period mentioned in the contract
    of appointment. [Para 10] [97-D-F]

         4. Section 25H will apply only if the respondent
    establishes that there had been retrenchment. There was
C   no retrenchment under Section 2(oo) read with Section
    2(bb) of the Act. Consequently, Section 25H would not
    apply to the facts of the case. [Para 12] [98-D]

         5. The Labour Court as well as the High Court have
D   not properly appreciated the factual and legal position in
    this case. The award passed by the Labour Court and
    confirmed by the High Court is set aside. [Para 13] [98-F]

        CIVIL APPEALLATE JURISDICTION : Civil Appeal No.
E   5498 of 2013.

        From the Judgment and Order dated 06.09.2011 of the
    High Court of Gujarat at Ahmadabad in Letters Patent Appeal
    No. 1308 of 2011.

F                                WITH

    C.A. No. 5510 of 2013.

         Jatin Zaveri for the Appellant.

G       O.P. Bhadani, Ashok Anand, Rakesh Kr. Singh for the
    Respondent.

         The Judgment of the Court was delivered by

         K.S. RADHAKRISHNAN, J. Leave granted.
H
 BHAVNAGAR MUNICIPAL CORPORATION v. SALIMBHAI                   93
   UMARBHAI MANSUR! [K.S. RADHAKRISHNAN, J.]

      1. We are concerned in this case with the question              A
whether termination of services of the respondent on the expiry
of the contract period would amount to retrenchment within the
meaning of Section 2(oo) of the Industrial Disputes Act, 1947
(for short "the ID Act"). We may refer to the facts in Civil Appeal
arising out of SLP(C) No.5390 of 2012 for disposal of both the        B
appeals, since the question of law involved in both the appeals
is the same.

     2. The respondent in Civil Appeal @ SLP(C) No.5390 of
2012 was appointed on daily wages as a helper in the Water            C
Works Department in the appellant Corporation for two fixed
periods from 02.05.1988 to 30.06.1988 and 04.07.1988 to
15.07.1988, under two separate office orders dated
19.05.1988 and 01.07.1988. The service of the respondent
stood terminated on 15.07.1988 after serving a total period of
54 days. The respondent raised an industrial dispute on               D
07.12.1989 and the same was referred to Labour Court for
adjudication which was registered as Reference (LCB) No.606
of 1989.

     3. The Labour Court on 18.10.2003 passed an award                E
holding that the Corporation had violated Section 25G and H
of the ID Act by not calling the respondent for work before
appointing new workmen. The Labour Court then directed the
Corporation to reinstate the respondent with continuity in
service. Aggrieved by above-mentioned order the Corporation           F
preferred Writ Petition SCA No.3290 of 2004 before the Gujarat
High Court. The High Court vide its judgment dated 12.08.2010
set aside the award of the Labour Court and remanded the
matter to the Labour Court for fresh consideration. The Labour
Court on 15.11.2010 held that the Corporation had violated the        G
provisions of Sections 25G and H of the ID Act and directed
the Corporation to reinstate the respondent with continuity in
service with consequential benefits. The Corporation then
preferred Writ Petition SCA No. 7918 of 2011, which was
dismissed by the learned Single Judge vide judgment dated
                                                                      H
    94       SUPREME COURT REPORTS              [2013] 8 S.C.R.


A   29.06.2011 against which Corporation preferred LPA No.1275
    of 2011 which was also dismissed. Aggrieved by the same the
    Corporation has preferred this appeal.

       4. Shri Jatin Zaveri, learned counsel appearing for the
  Corporation submitted that the Labour Court as well as the High
8
  Court has failed to appreciate the various terms and conditions
  of appointment and committed a grave error in holding that the
  Corporation had violated the provisions of Section 25G and H
  of the ID Act. Learned counsel submitted that going by the
  terms and conditions of the appointment order would clearly
C indicate that the provisions of Section 2(oo) and (bb) would
  apply to the facts of the case, consequently, the respondent
  cannot be said to have been retrenched and hence the
  provisions of Section 25G and H of the ID Act would not be
  attracted.
D
       5. Mr. O.P. Bhadani, learned counsel appearing for the
  respondent, on the other hand, pointed out that there has been
  a clear violation of the provisions of Section 25G and H of the
  ID Act by not reinstating the respondent in service. Learned
E counsel submitted that the Labour Court has elaborately
  considered the rival contentions of the parties and rendered a
  reasoned award which has been affirmed by the learned Single
  Judge as well as the Division Bench of the High Court and,
  therefore, calls for no interference by this Court under Article
F 136 of the Constitution of India.

       6. We are of the view that the Labour Court as well as the
  High Court have completely misunderstood the scope of
  Section 2(00), (bb), as well as Section 25G and H of the ID
  Act. The contract of employment and the terms and conditions
G contained therein are crucial in the application of the above-
  mentioned provisions. Facts would clearly indicate that the
  respondent had worked only for 54 days in two fixed periods
  and on expiry of the second term his service stood automatically
  terminated on the basis of the contract of appointment. A
H reference to the contract would be useful to understand the
 BHAVNAGAR MUNICIPAL CORPORATION v. SALIMBHAI                 95
   UMARBHAI MANSUR! [K.S. RADHAKRISHNAN, J.]
nature of appointment of the respondent. Clause 1, 2 and 1 to       A
10 of the office order dated 19.05.1988 are relevant, which are
extracted herein below for ready reference:·

    "1. With reference to your application dated           . a
    meeting was held with us/the Commissioner and subject
                                                                    8
    to the following conditions arrived at with mutual consent
    you are being appointed as a Daily Wager Helper in the
    Water Works Department from 1.5.88 to 30.6.88 at a daily
    minimum wages of Rs.12/13 and dearness allowance,
    daily special allowance of Rs.10/20 aggregating to Rs.22/       C
    33 in accordance with the Approval No.Commi O/CPO/
    M.No.204 dated 16.5.88 and upon completion of last duty
    on 30.6.88, your service shall stand automatically
    terminated.

    2. Since a definite date of termination of your service has     D
    been specified, the Municipal Corporation shall not be
    liable and you shall not be entitled to any notice, wages in
    lieu of notice, retrenchment compensation etc.

    3. x xxx
                                                                    E
    4. xx xx

    5. xx xx
    6. xx xx
                                                                    F
    7. If you are transferred as provided in Clause 6 above and
    if you fail to perform you duty at the appointed time then it
    would tantamount to that you are not willing to work and
    this contract of service shall automatically come to an end
    and as such your services shall stand terminated.               G

    8. As per the aforesaid para no.1 of the Office Order you
    are being appointed as, a daily wager from 2.5.88 to
    30.6.66 subject to the condition that you have to come for
    work as and when required by the Municipal Corporation,         H
    96       SUPREME COURT REPORTS                [2013] 8 S.C.R.


A        that is, if the Municipal Corporation does not require your
         service during the aforesaid period, then the Municipal
         Corporation is not bound to give you the work and you shall
         not be entitled to demand work for that day, of which you
         may take a special note.
B
         9. Upon termination of your contract on the date specified
         above, you are not entitled to claim any right of seniority
         for the period for which you work nor are you entitled to
         be reinstated or make such a claim on account of the new
         appointment of daily wagers.
c
         10. the Corporation shall be entitled to relieve you before
         the prescribed period if it no longer requires your
         services."

D      7. The above order was signed by the respondent and,
  therefore, bound by the terms and conditions of the office order.
  The question is, termination of the service of the respondent
  on the expiry of the periods mentioned above would amount to
  retrenchment? Facts in this case clearly show, so found by the
E Labour Court itself that the respondent had not worked
  continuously for 240 days in an year to claim the benefit of
  Section 25F, G and Hof the ID Act. Therefore, the only question
  to be considered is whether termination of service of the
  respondent on the basis of the contract of appointment would
F amount to retrenchment within the meaning of Section 25H of
  the ID Act so as to claim reinstatement.

        8. A reference to Section 2(oo) and (bb) of the Act would
    be apposite.

G        "2 Definitions:-

          (oo) "retrenchment" means the termination by the
               employer of the service of a workman for any reason
               whatsoever, otherwise than as a punishment
               inflicted by way of disciplinary action, but does not
H              include-
 BHAVNAGAR MUNICIPAL CORPORATION v. SALIMBHAI                  97
   UMARBHAI MANSURI [K.S. RADHAKRISHNAN, J.]

            xxx             xxx                              xxx     A

            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             B
                 workman concerned on its expiry or of such
                 contract being terminated under a stipulation
                 in that behalf contained therein."

     9. Section 2(bb) says that if the termination of the service    C
of workman is as a result of non-renewal of the contract between
the employer and the workman on its expiry of such contract
being terminated under a stipulation in that behalf contained
therein, the same would not constitute retrenchment.

     10. Facts would clearly indicate that the respondent's          D
service was terminated on the expiry of the fixed periods
mentioned in the office orders and that he had worked only for
54 days. The mere fact that the appointment orders used the
expression "daily wages" does not make the appointment
"Casual" because it is the substance that matters, not the form.     E
The contract of appointment consciously entered into by the
employer and the employee would, over and above the specific
terms of the written agreement, indicates that the employment
is short-lived and the same is liable to termination, on the fixed
period mentioned in the contract of appointment.                     F

     11. Learned counsel appearing for the respondent
submitted that the respondent is entitled to the benefit of
Section 25G & H, the same are extracted herein below:

     "25G. Procedure for retrenchment.- Where any                    G
     workman in an industrial establishment, who is a citizen
     of India, is to be retrenched and he belongs to a particular
     category of workmen in that establishment, in the absence
     of any agreement between the employer and the workman
                                                                     H
    98       SUPREME COURT REPORTS               [2013] 8 S.C.R.


A        in this behalf, the employer shall ordinarily retrench the
         workman who was the last person to be employed in that
         category, unless for reasons to be recorded the employer
         retrenches any other workman.

8        25H. Re- employment of retrenched workmen.- Where
         any workmen are retrenched, and the employer proposes
         to take into his employ any persons, he shall, in such
         manner as may be prescribed, give an opportunity 2[ to
         the retrenched workmen who are citizens of India to offer
         themselves for re- employment and such retrenched
c        workman] who offer themselves for re- employment shall
         have preference over other persons."

        12. Section 25H will apply only if the respondent
  establishes that there had been retrenchment. Facts will clearly
D indicate that there was no retrenchment under Section 2(oo)
  read with Section 2(bb) of the ID Act. Consequently, Section
  25H would not apply to the facts of the case. Similar is the
  factual and legal situation in the civil appeal arising out of
  SLP(C) No.5387 of 2012 as well.
E
        13. We are sorry to note that the Labour Court, learned
  Single Judge and the Division Bench have not properly
  appreciated the factual and legal position in this case. When
  rights of parties are being adjudicated, needless to say,
F serious thoughts have to be bestowed by the Labour Court as
  well as the High Court. For the above-mentioned reasons we
  allow both the appeals, set aside the award passed by the
  Labour Court and confirmed by the High Court. However, there
  will be no order as to costs.

    8.8.8.                                       Appeals allowed.