Supreme Court of India
BHUVNESH KUMAR DWIVEDIversusM/S HINDALCO INDUSTRIES LTD.
- Citation
- 2014 INSC 335
- Decided
- 25 April 2014
- Disposal
- Appeal(s) allowed
- Bench
- GYAN SUDHA MISRA
Holding
The termination was an illegal retrenchment; the Labour Court’s award of reinstatement with back wages is correct and the High Court’s interference exceeded its jurisdiction.
Summary
Bhuvnesh Kumar Dwivedi was employed by Hindalco Industries Ltd as a labour supervisor from 30‑12‑1992 to 27‑07‑1998. Although the employer periodically terminated his service on the pretext of "sanction expired" and re‑appointed him on short contracts, the workman rendered continuous service of nearly six years. The Labour Court held that the termination was a case of retrenchment and ordered reinstatement with back wages. The Allahabad High Court set aside that award, awarded Rs 1,00,000 as damages and held that the workman had resigned. The Supreme Court allowed the appeals, held that the termination was illegal retrenchment requiring compliance with Section 6‑N of the Uttar Pradesh Industrial Disputes Act, declared the High Court’s interference beyond its jurisdiction under Articles 226/227, restored the Labour Court’s award of reinstatement with full back wages and consequential benefits, and declared the order of retrenchment void ab initio.
Issues considered
- The scope of judicial review by a High Court under Articles 226 and 227 over an award of a Labour Court.
- Whether the termination of the appellant’s service amounts to retrenchment under Section 6‑N of the Uttar Pradesh Industrial Disputes Act.
- Whether Section 2(oo)(bb) of the Industrial Disputes Act applies to the termination.
- Whether the appellant is entitled to reinstatement with back wages and other consequential reliefs.
Legislation cited
- Constitution of Indias. 226, s. 227
- Contract Labour (Regulation and Abolition) Act, 1970
- Industrial Disputes Act, 1947s. 258, s. 25F, s. 25N, s. 25T, s. 25U, s. 2(oo)(bb)
- Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956
- Uttar Pradesh Industrial Disputes Act, 1947s. 25N, s. 6-N
Subjects
retrenchmentindustrial disputelabour courtjudicial reviewArticle 226Article 227unfair labour practicereinstatementback wagesUttar Pradesh Industrial Disputes ActIndustrial Disputes Act
Judgment
[2014] 12 S.C.R. 1080
A BHUVNESH KUMAR DWIVEDI
v.
M/S HINDALCO INDUSTRIES LTD.
(Civil Appeal Nos.4883-4884 of 2014)
APRIL 25, 2014
B
[GYAN SUDHA MISRA AND V. GOPALA GOWDA, JJ.]
Labour Laws - Interference with order of Labour Court I
Industrial tribunal - Jurisdiction of High Court - Held: High
C Court can interfere with an order of the Tribunal only on the
procedural level and in cases, where decision of the lower
courts was arrived at in gross violation of the legal principles
- High Court shall interfere with factual aspect placed before
the Labour Courts only when it is convinced that the Labour
D Court has made patent mistakes in admitting evidence
illegally or have made grave errors in law in coming to the
conclusion on facts - Constitution of India, 1950 - Arts. 226
and 227 - Judicial review.
Harjinder Singh v. Punjab State Warehousing
E Corporation (2010) 3 SCC 192: 2010 (1) SCR 591; Heinz
India (P) Ltd. v. Union of India (2012) 5 SCC 443: 2012 (3)
SCR 898 and Devinder Singh v. Municipal Council, Sanaur
(2011) 6 SCC 584: 2011 (4) SCR 867 - relied on.
F Labour Laws - Termination - Legality - Respondent-
employer terminated the services of appellant-workman as per
practice with the reason 'sanction expired' - Plea of appellant
that the termination was a clear case of retrenchment as
opposed to the provision in s.6N of the UPID Act which is in
G pari materia with s. 25N of the ID" Act - Held: Appellant
rendered continuous service for six continuous years (save
the artificially imposed break) as provided uls.258 of Act and
could therefore be subjected to retrenchment only through the
procedure mentioned in the ID Act or the UPID Act (the State
H 1080
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1081
INDUSTRIES LTD.
Act in pari materia) - Action of respondent was a clear case A
of retrenchment of appellant, which required compliance with
the mandatory requirement of s. 6-N of UPID Act - Since the
same was not complied with, therefore, order of retrenchment
was rendered void ab initio in Jaw - s.2(oo)(bb) of the l.D. Act
not attracted in the case herein - Industrial Disputes Act, 1947 B
- s.2(oo)(bb) and 25N - Uttar Pradesh Industrial Disputes Act,
1947 - s.6N and 25B.
Labour Laws - Termination - Entitlement for
reinstatement with full back wages and other consequential
reliefs - Held: Termination of appellant being found illegal C
and void ab initio, he was entitled to reinstatement - Burden
of proof that appellant was gainfully employed post
termination of his service was on respondent-employer -
However, claim of respondent that appellant was gainfully
employed somewhere was vague and could not be D
considered and accepted - Appellant accordingly entitled to
full back wages from the date of termination till the date of
reinstatement - High Court erred by exceeding its jurisdiction
u!Art.227 of the Constitution in holding that appellant in fact,
resigned by not joining his duty as a 'badly' worker and also E
awarding that retrenchment compensation to the tune of
1, 00, 0001- will do justice to appellant without assigning
reasons, which was wholly unsustainable in Jaw.
U. P. State Sugar Corporation Ltd. v. Om Prakash F
Upadhyay (2002) 10 SCC 89; State Bank of India v. Shri N.
Sundara Money AIR 1976 SC 1111: 1976 (3) SCR 160;
Anoop Sharma v. Executive Engineer, Public Health Division
No. 1 Panipat (2010) 5 SCC 497; Shiv Nandan Mah to v.
State of Bihar & Ors. (2013) 11 SCC 626; General Manager, G
Haryana Roadways v. Rudhan Singh (2005) 5 SCC 591:
2005 (1) Suppl. SCR 569 and Deepali Gundu Surwase v.
Kranti Junior Adhyapak Mahavidyalaya (2013) 10 SCC 324:
2013 (9) SCR 1 - relied on.
H
1082 SUPREME COURT REPORTS [2014] 12 S.C.R.
A Allowing the appeals, the Court
HELD:1.1. In the case at hand, the periods of service
of the appellant extended to close to 6 years save the
artificial breaks made by the respondent with an oblique
motive so as to retain the appellant as a temporary
8
worker and deprive the appellant of his statutory right of
permanent worker status. The aforesaid conduct of the
respondent perpetuates 'unfair labour practice as
defined under Section 2(ra) of the l.D. Act, which is not
permissible in view of Sections 25T and 25U of the l.D.
C. Act read with entry ~t Serial No. 10 in the Vth Schedule
to the l.D. Act regarding unfair labour practices. The
respondent, in order to mitigate its conduct towards the
appellant has claimed that the appellant was appointed
solely on contract basis, and his service has been
D terminated in the manner permissible under Section 2
(oo) (bb) of the l.D. Act. However, this contention of the
respondent cannot be accepted for the following
reasons:- (i) Firstly, the respondent has not produced any
material evidence on record before the Labour Court to
E prove that it meets all the required criteria under the
Contract Labour (Regulation and Abolition) Act, 1970, to
be eligible to employ employees on contractual basis
which includes license number etc.; (ii) Secondly, the
respondent could not produce any material evidence on
F record before the Labour Court to show that the appellant
was employed for any particular project(s) on the
completion of which his service has been terminated
through non-renewal of his contract of employment.
Therefore, it is deemed fit to construe that the appellant
G has rendered continuous service for six continuous
years (save the artificially imposed break) as provided
under Section 258 of the l.D. Act and can therefore be
subjected to retrenchment only through the procedure
mentioned in the l.D. Act or the state Act in pari materia.
H [Paras 23, 24 and 25] [1103-F, G; 1104-D-H; 1105-A]
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1083
INDUSTRIES LTD.
1.2. The Labour Court was correct in holding that the A
action of the respondent/employer is a clear case of
retrenchment of the appellant, which action requires to
comply with the mandatory requirement of the provision
of Section 6-N of the U.P. 1.0. Act. Undisputedly, the same
has not been complied with and therefore, the order of B
retrenchment has rendered void ab initio·in law. [Para 26]
[1105-B, C]
Case Law Reference:
2010 (1) SCR 591 relied on Para 9 c
2012 (3) SCR 898 relied on Para 16
2011 (4) SCR 867 relied on Para 16
(2002) 1o sec 89 relied on Para 20
D
1976 (3) SCR 160 relied on Para 27
(201 O) s sec 497 relied on Para 28
(2013) 11 sec 626 relied on Para 30
E
2005 (1) Suppl. SCR 569 relied on Para 31
2013 (9) SCR 1 relied on Para 32
CIVIL AP PELLATE JURISDICTION : Civil Appeal Nos.
4883-4884 of 2014. F
From the Judgment and Order dated 10.03.2011 of the
High Court of Judicature at Allahabad in CMWP No. 8784 of
2002 dated 12.01.2011 in CMWP No. 8784 of 2002, CMRA
No. 118006 of 2011.
G
Bharat Sangal, RR. Kumar for the Appellant.
C.U. Singh, Syed Shahid Hussain Rizvi for the
Respondent.
The Judgment of the Court was delivered by H
1084 SUPREME COURT REPORTS [2014] 12 S.C.R.
A V.GOPALA GOWDA, J. 1. Leave granted.
2. These appeals are filed against the final judgment and
order dated 10.03.2011 passed by the High Court of
Judicature at Allahabad in Civil Misc. Writ Petition No. 8784
of 2002 and also against judgment and order dated 12.10.2011
8
passed by the High Court of Allahabad in Civil Misc. Review/
Recall Application No. 118006 of 2011 by allowing the writ
petition filed by the respondent-employer and setting aside the
award passed by the Labour Court which substituted the same
C by issuing direction to the respondent-employer (for short "the
employer") to pay a sum of 1,00,000/- as damages to the
appellant-workman. The direction issued by the High Court in
its judgment further states that the amount shall either be paid
through draft to the workman or deposited before the Labour
Court within three months for immediate payment to the
D workman. In case of default, 12% interest per annum shall be
payable on Rs. 1,00,000/- after three months till actual payment/
deposit/realisation.
3. However, the backdrop of industrial dispute between the
E parties is briefly stated hereunder to find out whether the
appellant is entitled for the relief as prayed in these appeals.
It is the case of the appellant-workman that he was
appointed as Labour Supervisor in the employer's factory on
30.12.1992 and he worked continuously in terms of Section
F 258 of the Industrial Disputes Act, 1947 (for short "the l.D. Act")
in the said post till 28. 7 .1998- the day on which his services
were terminated. It is the case of the appellant-workman that
he has worked for six calendar years from the date of his
appointment till the termination of his service and he has
G rendered more than 240 days of continuous service in every
calendar year before his termination. The respondent-employer
terminated the services of appellant-workman on 27.7.1998 as
per practice with the reason 'sanction expired'. The respondent-
employer neither paid retrenchment compensation nor issued
H any notice or paid wages in lieu of the same to the appellant-
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1085
INDUSTRIES LTD .. [V. GOPALA GOWDA, J.]
workman as mandated under Section 6N of the U.P. Industrial A
Disputes Act (for short "the U.P. l.D. Act"). The respondent-
employer engaged the appellant-workman for work against a
po.st which was permanent in nature but his appointment was
made only for a temporary period from 1992 to 1998 with
oblique motive to deprive his statutory rights. At the end of B
every working year, the workman was handed over a receipt
of 'relieved from ·work' and after 4-6 days, he was again
engaged for three or six months but without proper procedure
and in this manner, he was continuously made to work for full
one year and each time the annual increase in wages was c
shown in the fresh appointment letter. During the entire period
of service of the appellant-workman with the respondent-
employer, the management followed the process of annually
terminating him from service and again reappointing him in the
same post by assigning the same Badge No., ID No. in the D
same department of Construction Division with the marginal
increase of salary and dearness allowance per month.
4. It is the further case of the appellant-workman that during
the course of his employment with the respondent- employer,
he had noticed that very few workmen were actually made E
permanent by the management and rest of the work force was
deprived from the benefit of permanent post by being kept on
temporary basis or emergency basis, on da.ily wage basis or
on contract basis. Even though the Construction Division of the
employer has been in existence ever since the beginning of its F
establishment and is necessary for continuous productions in
factory, thousands of workmen are employed in the said division
in the above mentioned manner and very few of them are made
permanent. It is the further case of the appellant-workman that
in accordance with the regular orders passed in the practice G
of the Company, the concerned workman always fell in the
category of workman but due to the improper and unfair labour
practice as mentioned in Schedule V under s. 2(ra) of the l.D.
Act it has kept the appellant as temporary workman for the
period of employment, which is opposed to law. H
1086 SUPREME COURT REPORTS [2014] 12 S.C.R.
A 5. It is the further case of the appellant-workman that he
falls within the definition of workman under s. 2(s) of the l.D.
Act and has been rendering service since the day of his
appointment on 30.12.1992. Therefore, termination of his
contract is a clear case of retrenchment as opposed to the
B provision in Section 6N of the U.P. l.D. Act. The employer on
the other hand, did not comply with the mandatory provision of
s. 6-N of the U.P. l.D. Act which sets the conditions precedent
to be fulfilled prior to retrenchment of workmen which is in pari
materia with s. 25N of the l.D. Act. The respondent-employer
C neither complied with the aforesaid mandatory provisions nor
did the respondent pay retrenchment compensation or issue
three months notice or notice pay in lieu of the same. Therefore,
as per the appellant-workman, termination from his service is
in contravention of the provisions of the U.P. l.D. Act and the
legal principle laid down by this Court in catena of cases in this
0
regard which will be adverted into the reasoning portion of the
judgment. Therefore, the appellant-workman had raised an
industrial dispute with a request to the state government to
make reference for adjudication of existing industrial dispute
regarding the termination of service of the appellant workman
E from his service by the employer. The Assistant Labour
Commissioner made Reference Order No. 1454 CP 15/98
dated 24.9.1999 to the Labour Court at Varanasi. The reference
was registered in Case no. 59 of 1999 by the Labour Court,
Varanasi, U.P. The Labour Court, after conducting enquiry has
F adjudicated the industrial dispute between the parties by
answering the points of dispute and passed an award in favour
of the appellant-workman holding that the termination of his
service is not justified since the respondent has not produced
any material evidence on record to justify the order of
G termination. Further, the Labour Court has held that the
appellant is entitled to reinstatement with back wages and other
consequential benefits as if his services were never terminated.
6. Aggrieved by the said award, the respondent-employer
H filed Civil Misc. Writ Petition No. 8784 of 2002 before the
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1087
INDUSTRIES LTD. [V. GOPALA GOWDA, J:]
learned single Judge of the High Court of Judicature' at A
Allahabad questioning the correctness, legality and validity of
the award passed by the Labour Court taking the following
pleas: ·
(i) It is pleaded by the respondent that the appellant was 8
employed purely on temporary basis in the project jobs in the
Construction Divisio·n of the Company for specific periods and
finally he was employed with effect from 23.1.1998 for six
months and his services automatically came to an end as per
· terms of the contract of employment in the appointment letter C
with effect from 28.7.1998 as a result of non renewal of his
contract of employment with the respondent.
(ii) It is further pleaded by the respondent that in the
Construction Division of the Company, time bound specific
project construction work was being undertaken from time to D
time and thus no regular work force could be maintained for
such project work. However, as a gesture of goodwill and to
maintain harmonious industrial relations, the employees who
worked in a project work were given preference for employment
in other project work on their own request. In the instant case, E
the service of the appellant came to an end as per terms of
his employment in the specific project job in the Construction
Division and after completion of the term of aforesaid
employment, the appellant has also taken clearance of his dues.
F
(iii) It is further pleaded by the respondent that temporary
workmen working in such specific projects are also given
preference for employment in the main plant project subject to
availability of vacancies and their suitability. After completion
of the terms of contract of employment, the appellant was
offered fresh employment as Badli worker against vacancies G
in Potroom Department of the Company. He applied for the
same on 22.10.1998 and after completion of necessary
formalities he was selected against the said vacancy and was
issued appointment letter dated 23.10.1998. He joined his
H
1088 SUPREME COURT REPORTS [2014] 12 S.C.R.
A duties in Potroom Plant-II Department as substitute workman
but did not report to duty on his own and on the other hand he
raised baseless industrial dispute for unlawful gain.
(iv) It is further pleaded by the respondent that the service
of the appellant has not been terminated by the Company but
8
because the appellant did not report for duty on his own after
joining duty· as mentioned above. Therefore, there is no
industrial dispute between the parties and the reference made
by the appropriate authorities at the instance of the workman
C to the Labour Court is bad in law. However, the respondent
craves leave of the Labour Court to add, amend, alter and
rescind its written statement and to produce evidence oral or
documentary, if found expedient at the relevant stages of the
hearing. However, no plea was made by the respondent in
written form on the provision of Section 2(oo)(bb) of the l.D. Act
D that the termination of the appellant from his service falls within
this provision. Nonetheless, this legal ground without any factual
foundation was pressed into operation before the Labour Court
at the time of addressing its rights. The same has been
addressed by the Labour Court rejecting the contention on the
E basis of recording its reasons which will be dealt with in the
reasoning portion of this judgment.
7. On the other hand, the appellant, by filing a detailed
counter statement before the High Court has sought to justify
F the finding and reasons recorded by the Labour Court
contending that the Labour Court, being a fact finding court, on
appreciation of all pleadings and undisputed facts regarding
the periodical years of service rendered by the appellant with
the respondent, held that he had rendered continuous service
G of 240 days in 12 calendar months. Therefore, the Labou'r Court
has held that the termination order was issued by the
respondent without complying with the mandatory statutory
provisions of Section 6-N of U.P. l.D. Act. The appellant pleaded
that neither the compensation for retrenchment was given to him
H nor was he issued the three months notice nor notice pay in
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1089
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
lieu of the same as mandated under Section 6-N of the U.P. A
l.D. Act. The appellant further sought to justify the finding of the
Labour Court that periodical appointment of the appellant for
the very same post in the Construction Division of the
respondent's Plant with the same Badge Number and marginal
increase of basic pay and D.A. is unfair labour practice in terms B
of Section 25-T of the l.D. which is punishable under section
25-U of the l.D. Act. The High Court concurred with the finding
of the Labour Court wherein it has held that the respondent's
action is in contravention of Section 6-N of the U.P. l.D. Act.
8. The respondent, on the other hand, contends that the· C
.finding on the question of retrenchment is factual and legally not
correct in view of the fact that the termination of the service of
the appellant falls within the provision of Section 2(oo) (bb) of
the l.D. Act. The High Court has exercised its judicial review
power under Articles 226 and 227 of the Constitution of India D
and also referred to the facts that after termination of the service
of the appellant from the post of Labour Supervisor, he was
offered with employment in the Potroom department w.e.f.
23.10.1998, which he joined and later resigned from that post.
Therefore, though the Labour Court came to the conclusion on E
facts, evidence on record and law on this aspect that keeping
the workman as Badli worker was unfair labour practice, the
High Gourt has erroneously held that engagement of some
workers as Badli workers is a standard practice in several
establishments and is quiet permissible under law. The High F
Court further came to erroneous conclusion that the appellant
did resign and having stated so, the High Court further. made
observation that the least which was required from the
respondent under such circumstance, was to pay retrenchment
compensation to the appellant in terms of Section 6-N of the G
U.P. l.D. Act which was admittedly not done. It was further held
by the High Court that an employee engaged for a particular
project cannot be directed to be retained after the completion
of the project. However, since it was not stated by the
respondent that for which particular project or projects the H
1090 SUPREME COURT REPORTS [2014] 12 S.C.R.
A appellant was employed, despite the fact that he had been
continuously working for six years on different projects, the
appellant was conferred with some rights since he had been
rendering permanent nature of work.
9. The High Court also referred to the resignation of the
8
appellant from the job of Badli worker and held that the same
mitigates against his claim. If he wanted permanent job and had
been assured the same, he should not have first applied to be
selected as Badli worker and then resigned just after selection.
C .Having said so, the High Court with reference to the facts and
circumstances of the case, opined that it was not a case of
reinstatement with full back wages. However, by placing reliance
upon the judgment of this Court in the case of Harjinder Singh
v. Punjab State Warehousing Corporation1 , the correctness
of the said substituted award by the High Court is challenged
D in this appeal by the appellant urging various facts and legal
contentions.
10. The learned counsel Mr. Abdhesh Chaudhary
appearing on behalf of the appellant-workman submits that the
E finding and reasons recorded by the High Court in reversing
and setting aside the award of reinstatement with back wages
and other consequential benefits and substituting its award with
award of 1,00,000/- as damages is erroneous in law sinte the
action of the respondent in terminating the services of the
F appellant is in contravention of Section 6-N of the U.P. LO. Act.
While exercising judicial review power by the High Court under
Articles 226 and 227 of the Constitution of India, though it has
concluded on the points of dispute in favour of the workman it
has erroneously interfered with the award of reinstatement with
back wages and consequential benefits which by the Labour
G Court. This finding by High Court is in violation of the decision
of this Court in the case of Harjinder Singh (supra) in which this
Court after adverting to the entire case law on the question of
social justice has examined the conferment of power upon the
H 1. (2010) 3 sec 1s2.
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1091
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
High Court and held that the Labour Court in exercise of its A
original jurisdiction is the final court of facts and grants of relief
and the same cannot be interfered with in exercise of its
supervisory jurisdiction unless the award is shown to be vitiated
as erroneous in law. Therefore, the impugned judgment and
order is vitiated in law and is liable to be set aside. B
11. Further, it is contended that the High Court has further
failed to take into consideration the relevant aspect of the matter
namely, that the Labour Court on appreciation of pleadings and
evidence on record with reference to undisputed fact of non- C
payment o~ retrenchment compensation recorded that the
Company neither obtained permission from the appropriate
Government ~o retrench the appellant from his services nor did
it issue any notice or wages in lieu of the same to him. The
action of termination of the service of the appellant on the
ground that it is an automatic termination for non-renewal of D
contract of the employment is in contravention to the statutory
provisions of the U.P. l.D. Act and the law laid down by this
Court in catena of cases, the relevant paragraphs of which will
be adverted to in the reasoning portion of this judgment. On this
ground also the impugned judgment is liable to be set aside E
and the impugned award of the Labour Court is entitled to be
restored.
12. It is further urged that the High Court has further failed
to take into consideration the fact that the award of damages F
as against reinstatement without consequential benefits to the
appellant while having concurred with the finding of fact
recorded by Labour Court after adjudication of the dispute and
also the holding by the Labour Cthat the order of termination
is a case of retrenchment and is done in non-compliance of the G
mandatory requirements as provided under the statute of U.P.
l.D. Act is erroneous in law. Therefore, the impugned judgment
of the High Court is liable to be set aside.
13. Mr. Chander Udai Singh, the learned senior Counsel
H
1092 SUPREME COURT REPORTS [2014) 12 S.C.R.
A for the respondent-employer sought to justify the award of
damages and setting aside the order of reinstatement with
consequential benefits by the High Court by contending that the
appellant is not a permanent workman. He was engaged on a
. temporary basis periodically and he had no permanent status
B as worker and his services could not be continued by the
employer. His termination from service from the respondent
Company was on account of the condition of automatic
termination w.e.f. 28.7.1998, whereby the contract employment
has come to an end. Therefore, according to the learned senior
c counsel for the respondent, no order of termination was passed
by the respondent. On the other hand, the present case was a
situation of automatic termination due to non-renewal of contract
which is covered under Section 2(oo) (bb) of the l.D. Act and
the same is an exception to retrenchment. This legal aspect,
according to the learned senior counsel has not been
0
appropriately appreciated by the Labour Court. The same has
not been accepted by the Division Bench of High Court in
exercise of its jurisdiction under Articles 226 and 227 of the
Constitution of India. Therefore, the award of damages could
not have been awarded by the Labour Court. However, the
E same has been paid to the appellant and which is accepted
by him. Therefore, he would submit that the appellant is not
·entitled to the relief as prayed in this appeal for the reason that
if automatic termination of services on account of the operation
of the contract of employment Clause is contained in the
F appointment order, then the claim of the appellant is not a case
of retrenchment and compliance of the requirement under
Section 6-N of the U.P. Act does not arise. The same aspect
has not been taken into proper perspective both by the Labour
Court as well as the High Court. Though the appellant has not
G challenged separately by filing SLP the correctness of the
impugned judgment can be challenged by the respondent as it
has got the right under the provisions of Order 41 Rule 33 CPC
to question the correctness of the finding recorded on the
question of the termination by the Labour Court and the High
H Court which made concurrent finding holding that it is a case
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1093
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
of retrenchment and the same is in contravention of Section 6- A
N of the U.P. l.D. Act.
The High Court while passing the judgment and order and
substituting the award of the Labour Court has already granted
damages of Rs. 1,00,000/- as retrenchment compensation. The
8
appellant is not entitled to the relief as prayed for in this appeal
for another reason namely, that he had accepted the damages
awarded in the impugned judgment by the High Court.
Therefore, this Court need not interfere with the impugned
judgment.
c
14. Another legal contention urged by the learned senior
counsel for the respondent is that the appellant is not entitled
to back wages since he is not employed with the respondent-
Company and has not even filed application under Section 178
before the High Court when the award passed by the Labour D
Court was challenged by the respondent. Further, the appellant
admitted that he did not claim wages under the Act which would
clearly go on to show that the appellant was not employed and
therefore, he is not entitled to back wages as awarded by the
Labour Court. Hence, the award of the back wages by the E
Labour Court is bad in law and the· same has been modified
by the High Court having regard to the facts of the case which
need not be interfered with by this Court in exercise of its power
under Article 136 of the Constitution of India.
15. With reference to the above legal contentions the F
following points would arise for our consideration :-
(1) Whether the exercise of power by the High Court
under Articles 226 and 227 of the Constitution and
setting aside the award of reinstatement, back G
wages and other consequential reliefs and
awarding Rs. 1,00,000/- towards damages is legal
and valid?
(2) Whether the concurrent finding recorded by the H
1094 SUPREME COURT REPORTS [2014] 12 S.C.R.
A Labour Court and High Court on the question of
termination of services of the workman holding that
the case of retrenchment falls under Section 6-N of
the U.P. l.D. Act is void ab initio and not accepting
the legal plea that the case falls under Section 2 (oo)
B (bb) of the Act is correct, legal and valid?
(3) Whether the workman is entitled for reinstatement
with full back wages and other consequential reliefs
?
C (4) What Award?
Answer to point No. 1
16. The appellant has claimed that the High Court has
modified the award passed by the Labour Court which has
D awarded reinstatement of the appellant with full back wages and
other consequential benefits to simply awarding compensation
to the tune of Rs. ·1,00,000/- by the High Court in lieu of
reinstatement with back wages and consequential benefits
which order is bad in law in the light of the legal principles laid
E down by this Court in the .catena of cases. In the case of Heinz
India (P) Ltd. v. Union of lndia 2 , this Court, on the issue of the
power of the High Court for judicial review under Article 226,
held as under:
F "60. The power of judicial review is neither unqualified nor
unlimited. It has its own limitations. The scope and extent
of the power that is so very often invoked has been the
subject-matter of several judicial pronouncements within
and outside the country. When one talks of 'judicial review'
G
one is instantly reminded of the classic and oft quoted
passage from Council of Civil Service Unions (CCSU) v.
Minister for the Civil Service [1984] 3 All ER 935, where
Lord Diplock summed up the permissible grounds of
judicial review thus:
H 2. (2012) 5 sec 443.
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1095
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
Judicial Review has I think developed to a stage today A
when, without reiterating any analysis ofthe steps by which
the development has come about, one can conveniently
classify under three heads the grounds on which
administrative action is subject to control by judicial review.
The first ground I would call 'illegality', the second B
'irrationality' and the third 'procedural impropriety'.
By 'illegality' as a ground for judicial review I mean that the
decision-maker must understand correctly the law that
regulates his decision-making power and must give effect C
to it. Whether he has or not is par excellence a justiciable
question to be decided, in the event of dispute, by those
persons, the judges, by whom the judicial power of the
State is exercisable.
By 'irrationality' I mean what can by now be succinctly D
referred to as 'Wednesbury unreasonableness'. It applies
to a decision which is so outrageous in its defiance of logic
or of accepted moral standards that no sensible person
who had applied his mind to the question to be decided
could have arrived at it. Whether a decision falls within this E:
category is a question that judges by their training and
experience should be well equipped to answer or else
there would be something badly wrong with our judicial
system ......
F
I have described the third head as 'procedural impropriety'
rather than failure to observe basic rules of natural justice
or failure to act with procedural fairness towards the
person who will be affected by the decision. This is
because susceptibility to judicial review under this head
covers also failure by an administrative tribunal to observe G
procedural rules that are expressly laid down in the
legislative instrument by which its jurisdiction is conferred,
even where such failure does not involve any denial of
natural justice."
H
1096 SUPREME COURT REPORTS [2014] 12 S;C.R.
A Further, in the case of Devinder Singh v. Municipal
Council, Sanaufl, it was held that :
"22 ....... A careful analysis thereof reveals that the High
Court neither found any jurisdictional infirmity in the award
B of the Labour Court nor it came to the conclusion that the
same was vitiated by an error of law apparent on the face
of the record. Notwithstanding this, the High Court set
aside the direction given by the Labour Court for
reinstatement of the Appellant by assuming that his initial
appointment/engagement was contrary to law and that it
c would not be in public interest to approve the award of
reinstatement after long lapse of time. In our view, the
approach adopted by the High Court in dealing with the
award of the Labour Court was ex facie erroneous and
contrary to the law laid down in Syed Yakoob v. K.S.
D Radhakrishnan AIR (1964) SC 477, Swaran Singh v. State
of Punjab (1976) 2 SCC 868 P.G.I. of Medical Education
& Research, Chandigarh v. Raj Kumar (2001) 2 SCC 54,
Surya Dev Rai v. Ram Chander Rai (2003) 6 SCC 675
and Shalini Shyam v. Rajendra Shankar Path (2010) 8
E sec 329.
23. In Syed Yakoob v. K.S. Radhakrishnan (supra), this
Court identified the limitations of certiorari jurisdiction of
the High Court under Article 226 of the Constitution in the
F following words:
The question about the limits of the jurisdiction of High
Courts in issuing a writ of certiorari under Article 226 has
been frequently considered by this Court and the true legal
position in that behalf is no longer in dou~t. A writ of
G certiorari can be issued for correcting errors of jurisdiction
committed by inferior courts or tribunals: these are cases
where orders are passed by inferior courts or tribunals
without jurisdiction, or is in excess of it, or as a result of
H 3. c2011) e sec 584.
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1097
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
failure to exercise jurisdiction. A writ can similarly be A
issued where in exercise of jurisdiction conferred on it, the
court or tribunal acts illegally or improperly, as for instance,
it decides a question without giving an opportunity to .be
heard to the party affected by the order, or where the
procedure adopted in dealing with the dispute is opposed B
to principles of natura! justice. There is, however, no doubt
that the jurisdiction to issue a writ of certiorari is a
supervisory jurisdiction and the court exercising it is not
entitled to act as an appellate court. This limitation
necessarily means that findings of fact reached by the c
inferior court or tribunal as result of the appreciation of
evidence cannot be reopened or questioned in writ
proceedings. An error of law which is apparent on the face
of the record can be corrected by a writ, but not an error
of fact, however grave it may appear to be. In regard to a D
finding of fact recorded by the tribunal, a writ of certiorari
can be issued if it is shown that in recording the said ·
finding, the tribunal had erroneously refused to admit
admissible and material evidence, or had erroneously
admitted inadmissible evidence which has influenced the
E
impugned findiAg. Similarly, if a finding of fact is based on
no evidence, that would be regarded as an error of law
which can be corrected by a writ of certiorari. In dealing
with this category of cases, however, we must always bear
in mind that a finding of fact recorded by the tribunal
cannot be challenged in proceedings for a writ of certiorari F
on the ground that the relevant and material evidence
adduced before the tribunal was insufficient or inadequate
to sustain the impugned finding. The adequacy or
sufficiency of evidence led on a point and the inference of
fact to be drawn from the said finding are within the G
exclusive jurisdiction of the tribunal, and the said points
cannot be agitated before a writ court. It is within these
limits that the jurisdiction conferred on the High Courts
under Article 226 lo issue a writ of certiorari can be
legitimately exercised. H
1098 SUPREME COURT REPORTS [2014] 12 S.C.R.
A In the second judgment - Swaran Singh v. State of Punjab
(supra), this Court reiterated the limitations of certiorari
jurisdiction indicated in Syed Yakoob v. Radhakrishnan
(supra) and observed:
In regard to a finding of fact recorded by an inferior
B
tribunal, a writ of certiorari can be issued only if in
recording such a finding, the tribunal has acted on
evidence which is legally inadmissible, or has refused to
admit admissible evidence, or if the finding is not
supported by any evidence at all, because in such cases
c the error amounts to an error of law. The writ jurisdiction
extends only to cases where orders are passed by inferior
courts or tribunals in excess of their jurisdiction or as a
result of their refusal to exercise jurisdiction vested in them
or they act illegally or improperly in the exercise of their
D jurisdiction causing grave miscarriage of justice."
17. The judgments mentioned above can be read with the
judgment of this court in Harjinder Singh's case (supra), the
relevant paragraph of which reads as under:
E
"21. Before concluding, we consider it necessary to
observe that while exercising jurisdiction under Articles
226 and/or 227 of the Constitution in matters like the
present one, the High Courts are duty-bound to keep in
mind that the Industrial Disputes Act and other similar
F legislative instruments are social welfare legislations and
the same are required to be interpreted keeping in view
the goals set out in the Preamble of the Constitution and
the provisions contained in Part IV thereof in general and
Articles 38, 39(a) to (e), 43 and 43-A in particular, which
G mandate that the State should secure a social order for
the promotion of welfare of the people, ensure equality
between men and women and equitable distribution of
material resources of the community to subserve the
common good and also ensure that the workers get their
H
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1099
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
dues. More than 41 years ago, Gajendragadkar, J. opined A
that:
"10 .... The concept of social and economic justice is a
living concept of revolutionary import; it gives sustenance
to the rule of law and meaning and significance to the ideal 8
of welfare State."
(State of Mysore v. Workers of Gold Mines 13 , AIR p. 928,
para 10.)
18. A careful reading of the judgments reveals that the High C
Court can interfere with an Order of the Tribunal only on the
procedural level and in cases, where the decision of the lower
courts has been arrived at in gross violation of the legal
principles. The High Court shall interfere with factual aspect
placed before the Labour Courts only when it is convinced that o
the Labour Court has made patent mistakes in admitting
evidence illegally or have made grave errors in law in coming
to the conclusion on facts. The High Court granting contrary
relief under Articles 226 and 227 of the Constitution amounts
to exceeding its jurisdiction conferred upon it. Therefore, we E
accordingly answer the point No. 1 in favour of the appellant.
Answer to point No. 2
19. No plea was made by the respondent in its written
statement filed before the Labour Court with regard to the F
provision of Section 2(oo)(bb) of the l.D. Act. Nonetheless, this
legal ground without any factual foundation was pressed into
operation before the Labour Court by the learned counsel for
the respondent. The same has been addressed by the Labour
Court by rejecting the said contention by assigning its own G
reasons. Before we record our finding on this contention, it is
pertinent to mention the provision of Section 2 (oo) (bb) of the
l.D. Act, which reads thus:
"2 (oo) "retrenchment" means the termination by the
H
1100 SUPREME COURT REPORTS [2014] 12 S.C.R.
A 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 include-
[(bb) termination of the service of the workman as a result
of the non-renewal of the contract of employment between
B
the employer and the workman concerned on its expiry or
of such contract being terminated under the stipulation in
that behalf contained therein; or]"
20. It is argued by the learned counsel for the appellant that
C there is no provision in pari materia to this provision in the U.P.
l.D. Act. Therefore, even if the service of the appellant is
terminated on expiry of the contract period of service, it would
fall within the definition of retrenchment under the U.P. l.D. Act
for non compliance of the mandatory requirement under Section
D 6-N of the U.P. l.D. Act. The order of termination against the
appellant is rendered void ab initio in law, therefore, the
appellant is entitled to be reinstated with back wages and
consequential benefits. In support of this contention, the learned
counsel has aptly relied upon the decision of this Court in U.P.
E State Sugar Corporation Ltd. v. Om Prakash Upadhyay4, with
regard to the applicability of the provision of Section 2(oo) (bb)
of the l.D. Act which was amended provision after the U.P. l.D.
Act, the relevant paragraphs of which read as under:
"3. On the application of the State Act or the Central
F Act to the case on hand, the High Court followed the
Division Bench ruling in Jai Kishun v. U.P. Coop. Bank Ltd.
and made it plain that the provision of Section 2 (oo)(bb)
of the Central Industrial Dispuutes Act would not apply in
respect of proceedings arising under the U.P. Industrial
G Disputes Act. The High Court also noticed the contrary view
in this regard in the case of Pushpa Agarwal v. Regional
lnspectress of Girls Schools, Meerut but held that in Jai
Kishun case the relevant provisions had been duly
H 4. c2002) 10 sec 89.
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1101
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
considered which are not taken note of in Pushpa Agarwal A
case and on that basis, it followed the decision in Jai
Kishun case. It is this judgment that is brought in appeal
before us in these proceedings.
B
5. The law is settled that under the Central Act every case
of retrenchment would not include a case of contractual
termination which came to be introduced under the Central
Act by amending Act 49 of 1984 which purports to exclude
from the ambit of definition "retrenchment" inter alia: (i) C
termination of service of a workman as a result of the non-
renewal of contract of employment between the employer
and the workman concerned on its expiry, or (ii) termination
of the contract of employment in terms of a stipulation
contained in the contract of employment in that behalf. D
Such a case is not available under the U.P. Industrial
Disputes Act. If the U.P. Industrial Disputes Act covers the
present case then termination of the services of the
respondent would certainly result in retrenchment while it
is not so under the Central Industrial Disputes Act in view E
of the exceptional clauses referred to above. While the
former situation results in retrenchment, the latter situation
does not amount to retrenchment if the same case would
arise under the State Industrial Disputes Act. Thus
operation of the two enactments would bring to the F
forefront the obvious repugnancy between them. In such a
case as to how the question is to be resolved needs to
be considered in the present case.
6. Inasmuch as the enactments, both by the State and the
Centre, are under the Concurrent List, we are urged to look G
to Article 254(2) of the Constitution of India. If we view from
that angle, the U.P. Industrial Disputes Act also covers the
same field as the Central Industrial Disputes Act. However,
Section 2 (oo) (bb) is obviously a special provision
H
1102 SUPREME COURT REPORTS (2014] 12 S.C.R.
A enacted under in order to understand the meaning of
"retrenchment" and that is the law made by Parliament
subsequent to State enactment and naturally falls within the
proviso to Article 254(2). If that is so, the Central Industrial
Disputes Act. Therefore, we would have taken that view
B but for the special provisions in the Central Act which we
will advert to hereinafter.
7. Section 1(2) of the Central Act provides that the Act
'extends to the whole of India' and this sub-section was
substituted for the original sub- section (2) by the Industrial
c Disputes (Amendment and Miscellaneous Provisions) Act,
1956 (36 of 1956) with effect from 29-8-1956. Under ~hat
Act, Section 31 (which came into force from 7-10-1956)
has been introduced which reads as follows:
D '31.Act not to override State laws.- (1) If, immediately
before the commencement of this Act, there is in force in
any State any Provincial Act or State Act relating to the
settlement or adjudication of disputes, the operation of such
an Act in that State in relation to matters covered by that
E Act shall not be affected by the Industrial Disputes Act,
1947 as amended by this Act'.
Sub- section (1) of the said section makes it clear that the
operation of the State Act will not be affected by the
Central Act. .. "
F
21. The learned counsel for the appellant therefore, rightly
submitted that Section 2 (oo) (bb) of the l.D. Act will not be
attracted in the present case and on the other hand, the
provision of Section 6-N of the U.P. l.D. Act is required to be
G fulfilled mandatorily by the respondent to retrench the appellant
· from his service.
22. The learned senior counsel for the respondent has not
brought in his argument to counter the above legal contention
H except contending that the provision of Section 2(oo) (bb) of
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1103
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
the l.D. Act would be applicable to the fact situation of the case A
as the appellant has been in contract employment in the project.
But, we are inclined to hold thats. 2 (oo) (bb) of the l.D. Act is
not attracted in the present case on two grounds:
Firstly, in the light of the legal principle laid down by this 8
Court in the case of U.P. State Sugar Corporation Ltd. (supra),
the provisions of the U.P. l.D. Act remain unaffected by the
provision of the l.D. Act because of the provision in s. 31 of
the Industrial Disputes (Amendment and Miscellaneous
Provisions) Act, 1956. Hence, s. 2 (oo) (bb) is not attracted in C
the present case.
Secondly, the claim of the respondent that the appellant
was a temporary worker is not acceptable to us. On perusal of
facts, it is revealed that his service has been terminated several
times and he was subsequently employed again till his service D
was finally terminated on 27.7.1998. His brief periods of
contracts with the respondent have been from 28. 12. 1992 to
28.12. 1993 for the first time, from 3.4.1994 to 29.12.1994 for
the second time, from 10.1.1995 to 5.1.1996 for the third time,
from 16.1.1996 to 11.1.1997 for the fourth time, from 20.1.1997 E
to 21.1.1998 for the fifth time and from 27.1.1998 to 27.7.1998
for a final time at the end of which his service was terminated.
23. Very interestingly, the periods of service extends to
close to 6 years save the artificial breaks made by the
respondent with an oblique motive so as to retain the appellant F
as a temporary worker and deprive the appellant of his statutory
right of permanent worker status. The aforesaid conduct of the
respondent perpetuates 'unfair lab<.. .. r practice as defined
under Section 2(ra) of the l.D. Act, which is not permissible in
view of Sections 25T and 25U of the l.D. Act read with entry at G
Serial No. 10 in the Vth Schedule to-the l.D. Act regarding unfair
labour practices.
Section 2 (ra) reads thus:
H
1104 SUPREME COURT REPORTS [2014] 12 S.C.R.
A "unfair labour practice" means any of the practices
mentioned in the Vth Schedule.
Further, Entry 10 of Vth Schedule reads as under:
"5. To discharge or dismiss workmen-
B
(10). To employ workmen as 'badlis', casuals or
temporaries and to continue them as such for years, with
the object of depriving them of the status and privileges
c of permanent workmen."
24. The respondent, in order to mitigate its conduct
towards .the appellant has claimed that the appellant was
appointed solely on contract basis, and his service has been
0 terminated in the manner permissible under Section 2 (oo) (bb)
of the 1.0. Act. However, we shall not accept this contention of
the respondent for the following reasons:-
(i) Firstly, the respondent has not produced any material
E evidence on record before the Labour Court to prove that
it meets all the required criteria under the Contract Labour
(Regulation and Abolition) Act, 1970, to be eligible to
employ employees on contractual basis which includes
license number etc.
F (ii) Secondly, the respondent could not produce any
material evidence on record before the Labour Court to
show that the appellant was employed for any particular
project(s) on the completion of which his service has been
terminated through non-renewal of his contract of
G employment.
25. Therefore, we deem it fit to construe that the appellant
has rendered continuous service for six continuous years (save
the artificially imposed break) as provided under Section 258
H of the 1.0. Act and can therefore be subjected to retrenchment
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1105
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
only through the procedure mentioned in the l.D. Act or the state A
Act in pari materia:
26. Therefore, we answer the point No. 2 in favour of the
appellant holding that the Labour Court was correct in holding
that the action of the respondent/employer is a clear case of
8
retrenchment of the appellant, which action requires to comply
with the mandatory requirement of the provision of Section 6-
u.
N of the P. l.D. Act. Undisputedly, the same has not been
complied with and therefore, the order of retrenchment has
rendered void ab initio in law.
c
Answer to Point No.3
27. Having answered point No. 2 in favour of the appellant,
we also answer the point No. 3 in his favour since we construe
that the appellant is a worker of the respondent Company D
providing continuous service for 6 years except for the artificial
breaks imposed upon him with an oblique motive by the
respondent Company. We hold that the termination of service
of the appellant amounts to "retrenchment" in the light of the
principle laid down by three judge bench decision of this Court E
in State Bank of India v. Shri N. Sundara Money5 and attracts
the provision of S. 6-N of the U.P. l.D. Act. The case mentioned
above illustrates the elements which constitute retrenchment.
The relevant paragraphs read as under:
"9. A break-down of Section 2(oo) unmistakably expands F
the semantics of retrenchment. 'Termination ...for any reason
whatsoever' are the keywords. Whatever the reason, every
termination spells retrenchment. So the sole question is
has the employee's service been terminated? Verbal
apparel apart, the substance is decisive. A termination G
takes place where a term expires either by the active step
of the master or the running out of the stipulated term. To
protect the weak against the strong this policy of
5. AIR 1976 SC 1111. H
1106 SUPREME COURT REPORTS [2014] 12 S.C.R.
A comprehensive definition has been effectuated.
Termination embraces not merely the act of termination by
the employer, but the fact of termination howsoever
produced. May be, the present may be a hard case, but
we can visualise abuses by employers, by suitable verbal
B devices, circumventing the armour of Section 25F and
Section 2(00). Without speculating on possibilities, we
may agree that 'retrenchment' is no longer terra incognita
but area covered by an expansive definition. It meats 'to
end, conclude, cease'. In the present case the employment
c ceased, concluded, ended on the expiration of nine days
automatically maybe, but cessation all the same. That to
write into the order of appointment the date of termination
confers no moksha from Section 25F(b) is inferable from
the proviso to Section 25F(1). True, the section speaks of
retrenchment by the employer and it is urged that some
D
act of volition by the employer to bring about the
termination is essential to attract Section 25F and
automatic extinguishment of service by effluxion of time
cannot be sufficient. An English case R.V. Secretary of
State (1973) 2 ALL E.R. 103; was relied on, where Lord
E Denning, MR observed:
I think the word 'terminate' or 'termination' is by itself
ambiguous. It can refer to either of two things-either to
termination by notice or termination by effluxion of time It
F is often used in that dual sense in landlord and tenant and
in master and servant cases. But there are several
indications in this paragraph to show that it refers here
only to termination by notice.
Buckley L. J, concurred and said:
G
In my judgment the words are not capable of bearing that
meaning. As counsel for the Secretary of State has pointed
out, the verb 'terminate' can be used either transitively or
intransitively. A contract may be said to terminate when it
H
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1107
INDUSTRIES LTD. [V. GOPALA GOWDA, J.)
comes to an end by effluxion of time, or it may be said to A
be terminated when it is determined at notice or otherwise
by some act of one of the parties. Here in my judgment
the word 'terminated' is used in this passage in para 190
in the transitive sense, and it postulates some act by
somebody which is to bring the appointment to an end, and B
is not applicable to a case in which the appointment
comes to an end merely by effluxion of time
Words of multiple import have to be winnowed judicially
to suit the social philosophy of the statute. So screened, C
we hold that the transitive and intransitive senses are
covered in the current context. Moreover, an employer
terminates employment not merely by passing an order as
the service runs. He can do so by writing a composite order
one giving employment and the other ending or limiting it.
A separate, subsequent determination is not the sole D
magnetic pull of the provision. A preemptive provision to
terminate is struck by the same vice as the post-
appointment termination. Dexterity of diction cannot defeat
the articulated conscience of the provision."
E
28. Section 6N of the U.P. l.D. Act which is in pari materia
to s. 25N of the l.D. Act reads thus:
"[6-N. Condition 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
F
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 G
paid in lieu of such notice wages for the period of the
notice;
Provided that no such notice shall be necessary if the
retrenchment is under an agreement which specifies the H
1108 SUPREME COURT REPORTS [2014] 12 S.C.R.
A date of termination of service;
(b} the workman has been paid, at the time of
retrenchment, compensation which shall be equivalent to
fifteen days' average pay for every completed year of
service or any part thereof in excess of six months; and
B
(c} notice in the prescribed manner is served on the State
Government]"
Evidently, the above said mandatory procedure has not
c been followed in the present case. Further, it has been held by
this Court in the case of Anoop Sharma v. Executive Engineer,
Public Health Division No. 1 Panipat6 as under:
"13 ..... no workman employed in any industry who has
been in continuous service for not less than one year under
D an employer can be retrenched by that employer until the
conditions enumerated in Clauses (a} and (b) of Section
25F of the Act are satisfied. In terms of Clause (a), the
employer is required to give to the workman one month's
notice in writing indicating the reasons for retrenchment or
E pay him wages in lieu of the notice. Clause (b} casts a duty
upon the employer to pay to the workman at the time of
retrenchment, compensation equivalent to fifteen days'
average pay for every completed year of continuous
service or any part thereof in excess of six months. This
F Court has repeatedly held that Section 25F(a} and (b} of
the Act is mandatory and non-compliance thereof renders
the retrenchment of an employee nullity - State of Bombay
v. Hospital Mazdoor Sabha AIR 1960 SC 610, Bombay
Union of Journalists v. State of Bombay (1964) 6 SCR 22,
G State Bank of India v. N. Sundara Money (1976) 1 SCC
822, Santosh Gupta v. State Bank of Patiala (1980) 3
SCC 340, Mohan Lal v. Management of M/s. Bharat
Electronics Ltd. (1981} 3 SCC 225, L. Robert D'Souza v.
Executive Engineer, Southern Railway (1982) 1 SCC 645,
H 6. c2010) s sec 497
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1109
INDU_STRIES LTD. [V. GOPALA GOWDA, J.]
Surendra Kumar Verma v. Industrial Tribunal (1980) 4 SCC A
443, Gammon India Ltd. v. Niranjan Das (1984) 1 SCC
509, Gurmail Singh v. State of Punjab (1991) 1 SCC 189
and Pramod Jha v. State of Bihar (2003) 4 SCC 619. This
Court has used different expressions for describing the
consequence of terminating a workman's service/ B
employment/ engagement by way of retrenchment without
complying with the mandate of Section 25F of the Act.
Sometimes it has been termed as ab initio void,
sometimes as illegal per se, sometimes as nullity and
sometimes as non est. Leaving aside the legal semantics, c
we have no hesitation to hold that termination of service
of an employee by way of retrenchment without complying
with the requirement of giving one month's notice or pay
in lieu thereof and compensation in terms of Section
25F(a) and (b) has the effect of rendering the action of the
0
employer as nullity and the employee is entitled to continue
in employment as if his service was not terminated.
(Emphasis laid by this Court)
Therefore, in the light of the law provided in the l.D. Act E
and its state counterpart through the U.P. l.D. Act and also on
the basis of the legal principle laid down by this Court, we hold
that the termination of service of the appeltant was illegal and
void ab initio.
29. Therefore, the Labour Court was correct on factual F·
evidence on record and legal principles laid down by this Court
in catena of cases in holding that the appellant is .entitled to
reinstatement with all consequential benefits. Therefore, we set
aside the Order of the High Court and uphold the order of the
Labour Court by holding that the appellant is entitled to G
reinstatement in the respondent-Company.
30. On the issue of back wages to be awarded in favour
of the appellant, it has been held by this Court in the case of
H
1110 SUPREME COURT REPORTS [2014] 12 S.C.R.
A Shiv Nandan Mahto v. State of Bihar & Ors7 • that if a workman
is kept out of service due to the fault or mistake of the
establishment/ company he was working in, then the workman
is entitled to full back wages for the period he was illegally kept
out of service. The relevant paragraph of the judgment reads
B as under:
"5 ..... In fact, a perusal of the aforesaid short order passed
by the Division Bench would clearly show that the High
Court had not even acquainted itself with the fact that the
Appellant was kept out of service due to a mistake. He was
c not kept out of service on account of suspension, as
wrongly recorded by the High Court. The conclusion is,
therefore, obvious that the Appellant could not have been
denied the benefit of backwages on the ground that he had
not worked for the period when he was illegally kept out
D of service. In our opinion, the Appellant was entitled to be
paid full backwages for the period he was kept out of
service."
31. Further, in General Manager, Haryana Roadways v.
E Rudhan Singh 8 , the three Judge Bench of this Court considered
the question whether back wages should be awarded to the
workman in each and every case of illegal retrenchment. The
relevant paragraph reads as under:
"There is no rule of thumb that in every case where the
F Industrial Tribunal gives a finding that the termination of
service was in violation of Section 25-F of the Act, entire
bac~ 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
G inviting applications from the employment exchange, nature
of appointment, namely, whether ad hoc, short term, daily
wage, temporary or permanent in character, any special
7. (2013) 11 sec 626.
H a. (2005) 5 sec 591.
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1111
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
qualification required for the job and the like should be A
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 B
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 c
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 D
consideration is the nature of employment. A regular
service of permanent character cannot be compared to
short or intermittent daily-wage employment though it may
be for 240 days in a calendar year."
E
32. Subsequently, in the case of Deepali Gundu Surwase
v. Kranti Junior Adhyapak Mahavidya/aya9 it was held by this
Court as under:
"The propositions which can be culled out from the
F
aforementioned judgments are:
i) In cases of wrongful termination of service, reinstatement
with continuity of service and back wages is the normal
rule. ·
G
iii) Ordinarily, an employee or workman whose services are
terminated and who is desirous of getting back wages is
required to either plead or at least make a statement
before the adjudicating authority or the Court of first
e. c2013) 10 sec 324. H
1112 SUPREME COURT REPORTS (2014] 12 S.C.R.
A instance that he/she was not gainfully employed or was
employed on lesser wages. If the employer wants to avoid
payment of full back wages, then it has to plead and also
lead cogent evidence to prove that the employee/workman
was gainfully employed and was getting wages equal to
B the wages he/she was drawing prior to the termination of
service. This is so because it is settled law that the burden
of proof of the existence of a particular fact lies on the
person who makes a positive averments about its
existence. It is always easier to prove a positive fact than
c to prove a negative fact. Therefore, once the employee
shows that he was not employed, the onus lies on the
employer to specifically plead and prove that the employee
was gainfully employed and was getting the same or
substantially similar emoluments.
D
vi) In a number of cases, the superior Courts have interfered
with the award of the primary adjudicatory authorityon the
premise that finalization of litigation has taken long time
E ignoring that in majority of cases the parties are not
responsible for such delays. Lack of infrastructure and
manpower is the principal cause for delay in the disposal
of cases. For this the litigants cannot be E>lamed or
penalised.
F It would amount to grave injustice to an employee or
workman if he is denied back wages simply because there is
long lapse of time between the termination of his service and
finality given to the order of reinstatement. The Courts should
bear in mind that in most of these cases, the employer is in an
G advantageous position vis-a-vis the employee or workman. He
can avail the services of best legal brain for prolonging the
agony of the sufferer, i.e., the employee or workman, w~o can
ill afford the luxury of spending money on a lawyer with certain
amount of fame. Therefore, in such cases it would be prudent
H
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1113
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
to adopt the course suggested in Hindustan Tin Works Private A
Limited v. Employees of Hindustan Tin Works Private Limited
(supra) ..... "
(Emphasis laid by this Court)
33. In the present case, the respondent has made a vague 8
submission to the extent that:
"the conduct of the workman throughout the proceedings
before the High Court during 2002 to 2011 shows that he
is continuously gainfully employed somewhere. Admittedly C
even in the counter affidavit in the said Writ Petition, it has
not been stated that the workman was not employed"
Therefore, on the basis of the legal principle laid down by
this Court in the Deepali Gundu Surwase case (supra), the D
submission of the respondent that the appellant did not aver in
his plaint of not being employed, does not hold since the burden
of proof that the appellant is gainfully employed post termination
of his service is on the respondent. The claim of the respondent
that the appellant is gainfully employed somewhere is vague
and cannot be considered and accepted. Therefore, we hold E
that the appellant is entitled to full back wages from the date of
termination of his service till the date of his reinstatement.
Answer to point No.4
F
34. The present case is a clear case of violation of the
constitutional principles expressly mentioned in the text. Before
we make our concluding findings and reasons, we wish to
revisit the Harjinder Singh case (supra) which made some
pertinent points as under:
G
"22. In Y.A. Mamarde v. Authority under the Minimum
Wages Act, this Court, while interpreting the provisions of
the Minimum Wages Act, 1948, observed: (SCC pp. 109-
10)
H
1114 SUPREME COURT REPORTS (2014) 12 S.C.R.
A "The anxiety on the part of the society for improving the
general economic condition of some of its less favoured
members appears to be in supersession of the old
principle of absolute freedom of contract and the doctrine
of laissez faire and in recognition of the new principles of
B social welfare and common good. Prior to our Constitution
this principle was advocated by the movement for liberal
employment in civilised countries and the Act which is a
pre-Constitution measure was the offspring of that
movement. Under our present Constitution the State is now
c expressly directed to endeavour to secure to all workers
(whether agricultural, industrial or otherwise) not only bare
physical subsistence but a living wage and conditions of
work ensuring a decent standard of life and full enjoyment
of leisure. This directive principle of State policy being
conducive to the general interest of the nation as a whole,
D
merely lays down the foundation for appropriate social
structure in which the labour will find its place of dignity,
legitimately due to it in lieu of its contribution to the
progress of national economic prosperity."
E 27. In 70s, 80s and early 90s, the courts repeatedly
negated the doctrine of laissez faire and the theory of hire
and fire. In his treatise: Democracy, Equality and Freedom,
Justice Mathew wrote:
F "The original concept of employment was that of master
and servant. It was therefore held that a court will not
specifically enforce a contract of employment. The law has
adhered to the age-old rule that an employer may dismiss
the employee at will. Certainly, an employee can never
expect to be completely free to do what he likes to do. He
G
must face the prospect of discharge for failing or refusing
to do his work in accordance with his employer's
directions. Such control by the employer over the employee
is fundamental to the employment relationship. But there
are innumerable facets of the employee's life that have little
H
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1115
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
or no relevance to the employment relationship and over A
· which the employer should not be allowed to exercise
control. It is no doubt difficult to draw a line between
reasonable demands of an employer and those which are
unreasonable as having no relation to the employment
itself. The rule that an employer can arbitrarily discharge B
an employee with or without regard to the actuating motive
is a rule settled beyond doubt. But the rule became settled
at a time when the words 'master' and 'servant' were taken
more literally than they are now and when, as in early
Roman Law, the rights of the. servant, like the rights of any c
other member of the household, were not his own, but
those of his paterfamilias. The overtones of this ancient
doctrine are discernible in the judicial opinion which
rationalised the employer's absolute right to discharge the
employee. Such a philosophy of the employer's dominion D
over his employee may have been in tune with the rustic
simplicity of bygone days. But that philosophy is
incompatible with these days of large, impersonal,
corporate employers. The conditions have now vastly
changed and it is difficult to regard the contract of
employment with large-scale industries and government E
enterprises conducted by bodies which are created under
special statutes as mere contract of personal service.
Where large number of people are unemployed and it is
extremely difficult to find employment, an employee who
is discharged from service might have to remain without F
means of subsistence for a considerably long time and
damages in the shape of wages for a certain period may
not be an adequate compensation to the employee for non-
employment. In other words, damages would be a poor
substitute for reinstatement. The traditional ·rule has G
survived because of the sustenance it received from the
law of contracts. From the contractual principle of mutuality
of obligation, it was reasoned that if the employee can quit
his job at will, then so too must the employer have the right .
H
1116 SUPREME COURT REPORTS [2014) 12 S.C.R.
A to terminate the relationship for any or no reason. And
there are a number of cases in which even contracts for
permanent employment i.e. for indefinite terms, have been
held unenforceable on the ground that they lack mutuality
of obligation. But these cases demonstrate that mutuality
B is a high-sounding phrase of little use as an analytical tool
and it would seem clear that mutuality of obligation is not
an inexorable requirement and that lack of mutuality is
simply, as many courts have come to recognise, an
imperfect way of referring to the real obstacle to enforcing
c any kind of contractual limitation on the employer's right of
discharge i.e. lack of consideration. If there is anything in
contract law which seems likely to advance the present
inquiry, it is the growing tendency to protect individuals from
contracts of adhesion from overreaching terms often found
D in standard forms of contract used by large commercial
establishments. Judicial disfavour of contracts of adhesion
has been said to reflect the assumed need to protect the
weaker contracting part against the harshness of the
common law and the abuses of freedom of contract. The
same philosophy seems to provide an appropriate answer
E
to the argument, which still seems to have some vitality,
that the servant cannot complain, as he takes the
employment on the terms which are offered to him."
(emphasis added)
F
v.
28. In Govt. Branch Press D.B. Belliappa, the employer
invoked the theory of hire and fire by contending that the
respondent's appointment was purely temporary and his
service could be terminated at any time in accordance with
G
the te_rms and conditions of appointment which he had
voluntarily accepted. While rejecting this plea as wholly
misconceived, the Court observed: (SCC p. 486, para 25)
"25. ... It is borrowed from the archaic common law
concept that employment was a matter between the
H
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1117
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
master and servant only. In the first place, this rule in its A
original absolute form is not applicable to government
servants. Secondly, even with regard to private
employment, much of it has passed into the fossils of time.
'This rule held the field at the time when the master and
servant were taken more literally than they are now and B
when, as in early Roman law, the rights of the servant, like
the rights of any other member of the household, were not
his own, but those of his paterfamilias.' The overtones of
this ancient doctrine are discernible in the Anglo-American
jurisprudence of the 18th century and the first half of the c
20th century, which rationalised the employer's absolute
right to discharge the employee. 'Such a philosophy', as
pointed out by K.K. Mathew, J. (vide his treatise:
Democracy, Equality and Freedom, p. 326), 'of the
employer's dominion over his employee may have been D
in tune with the rustic simplicity of bygone days. But that
philosophy is incompatible with these days of large,
impersonal, corporate employers.' To bring it in tune with
vastly changed and changing socio-economic conditions
and mores of the day, much of this old, antiquated and E
unjust doctrine has been eroded by judicial decisions and
legislation, particularly in its application to persons in public
employment, to whotn the constitutional protection of
Articles 14, 15, 16 and 311 is available. The argument is
therefore overruled."
F
29. The doctrine of laissez faire was again rejected in
Glaxo Laboratories (I) Ltd. v. Presiding Officer, in the
following words:
"12. In the days of laissez faire when industrial relation was G
governed by the harsh weighted law of hire and fire the
management was the supreme master, the relationship
being referable to contract between unequals and the
action of the management treated almost sacrosanct. The
developing notions of social justice and the expanding H
1118 SUPREME COURT REPORTS [2014] 12 S.C.R.
A horizon of socio-economic justice necessitated statutory
protection to the unequal partner in the industry, namely,
those who invest blood and flesh against those who bring
in capital. Moving from the days when whim of the
employer was suprema lex, the Act took a modest step to
B compel by statute the employer to prescribe minimum
conditions of service subject to which employment is given.
The Act was enacted as its long title shows to require
employers in industrial establishments to define with
sufficient precision the conditions of employment under
c them and to make the said conditions known to workmen
employed by them. The movement was from status to
contract, the contract being not left to be negotiated by two
unequal persons but statutorily imposed. If this socially
· beneficial Act was enacted for ameliorating the conditions
of the weaker partner, conditions of service prescribed
D
thereunder must receive such interpretation as to advance
the intendment underlying the Act and defeat the mischief."
35. We therefore conclude and hold that the Labour Court
was correct on legal and factual principles in reinstating the
E appellant along with full back wages after setting aside the
order of termination. The High Court on the other hand, has
erred by exceeding its jurisdiction_ under Article 227 of the
Constitution of India in holding that the appellant has in fact,
resigned by not joining his duty as a Badly yvorker and also
F awarding that retrenchment compensation to the tune of
1,00,000/- will do justice to the appellant without assigning
reasons which is wholly unsustainable in law.
36. The learned counsel for the respondent had mentioned
G before this Court about a settlement between the parties in this ·
matter after the judgment was reserved. Therefore, we have not
taken into consideration such plea from the learned counsel of
the respondent since it was taken up after the hearing was over.
Also the documentary evidence on record produced by the
parties required us to reject the subsequent plea made by the
H
BHUVNESH KUMAR DWIVEDI v. HINDALCO 1119
INDUSTRIES LTD. [V. GOPALA GOWDA, J.]
respondent in thjs case. We therefore set aside the finding of A
the High Court in the impugned judgment and hold that the
appellant is entitled to reinstatement with full back wages from
the date of the termination of his service till the date of his
reinstatement and other consequential benefits which accrue
to him by virtue of his employment with the respondent B
company. The appeals are allowed, with no order as to costs.
Bibhuti Bhushan Bose Appeals allowed.
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