Holding

The Supreme Court held that the Authority, not being an industry, is not bound by sections 25F and 25G; temporary daily‑wage workers are not entitled to regularisation or parity, but must receive the minimum or prevailing local wages, with seniority and a last‑come‑first‑go principle governing termination and re‑employment.

Summary

The Ghaziabad Development Authority (GDA) engaged several workers on daily‑wage contracts for its development projects. The workers filed a writ petition seeking regularisation of their services and parity in pay with regular employees. The Allahabad High Court single judge denied regularisation but directed the GDA to follow sections 25F and 25G of the Industrial Disputes Act. GDA appealed, contending that it is not an industry and that those provisions do not apply, and that only minimum or prevailing local wages should be payable. The Supreme Court held that the High Court was correct in applying natural‑justice principles: the GDA is not bound by sections 25F/25G, the temporary daily‑wage workers are not entitled to regular posts or parity, but must be paid the statutory minimum or prevailing local wages, with seniority observed and a “last‑come‑first‑go” rule for termination and re‑employment. Consequently, the appeal was dismissed and the order of the High Court upheld.

Issues considered

Whether sections 25F and 25G of the Industrial Disputes Act apply to the Ghaziabad Development Authority, which is not an industry.
Whether daily‑wage workers engaged by the Authority are entitled to regularisation and parity of pay with regular employees.
What wage obligations the Authority has towards temporary daily‑wage workers in the absence of regular posts.

Legislation cited

Industrial Disputes Act, 1947s. 25F, s. 25G
U.P. Urban Planning and Development Act, 1973

Subjects

regularisationdaily wage workersparity of payIndustrial Disputes Actsenioritylast‑come‑first‑gominimum wagesnatural justiceUttar Pradeshurban development authority

Judgment

GHAZIABAD DEVELOPMENT AUTHORITY AND ORS. A
v.
SRI VIKRAM CHAUDHARY AND ORS.

JULY 14, 1995

[K. RAMASWAMY AND B.L. HANSARIA, JJ.) B

SelVice Law:

Regularisation and parity in pay-Persons engaged in projects of daily
wages-In the absence of regular posts parity in wages does not arise-Ter- C
mination of selVices-Last come first go principle followed-Held, jus-
tified-Directions issued for payment of minimum wages prescribed under the
statute or prevailing wages as available in the Locality.

The appellants engaged the respondents on daily wages in its
projects on hand. Respondents filed a writ petition claiming parity in D
appointment and pay with regular employees and for regularisation of
their services. The single judge of the High Court before whom the matter
came up negatived the relief of regularisation and directed that principles
in Ss. 25F and 25G or the Industrial Disputes Act be followed.
E
In this appeal it was contended that Ss.25F and 25G have no applica-
tion; that in view of the local Industrial Disputes Act in U.P., the provisions
of which would be applicable, and that the appellant not being an industry,
even those provisions would not be applicable.

Disposing of the appeal, this Court F
HELD : 1. The Single judge did not intend to lay down that the
appellant is an industry and that the principles contained in the Industrial
Disputes Act, Central or the State Act stands attracted. He laid down that
so long as the appellant has work on hand, it has no power to terminate
the contingent employees engaged on daily wages and that in the event the G
appellant needs to terminate their services the principle of last come first
go should be followed and in the event of there being need for re-employ-
ment, preference be given to the displaced respondents. The observation
made by the Judge is consistent with the well-established principles of
natural justice and equity, justice and good conscience. (173-D-E] H
171
172 SUPREME COURT REPORTS (1995] SUPP. 2 S.C.R.

A 2. The appellant needs· to take the services of the persons according to
the requirement in the projects on hand. On completion of the existing
projects in which the respondents are working, if the appellant undertakes
any fresh project, instead of taking the services of fresh hands at the place
of the new project, the appellant needs to take the services of the existing
temporary daily wage respondents. In the event of the appellant not having
any project on hand, the obligation to pay daily wages to the respondents
does not arise. However, the appellant shall maintain the order of seniority
of the daily wage employees and shall take the services of the senior most
persons in the order of seniority according to the requirement of work.
[173-G-H, 174-A]
c 3. ~ince the respondents are temporary daily wage employees, so long
as there is no regular posts available for appointment, the question of
making pay on par with the regular employees does not arise. But the
appellant should necessarily and by implication; pay the minimum wages
prescribed under the statute, if any, or the prevailing wages as available
I) in the locality. [174-B]

.qVIL APPELLATE JURISDICTION: Civil Appeal No. 6481 of
1995. .
.)•,'

From tl:ie 'Judgment and Order dated 28.2.94 of the Allahabad High
E Court in C. Misc. W.P. No. 11535 of 1991.
"
0.P. Rana, R.B. Misra and Nalin Tripathi for the Appellants.

Pramod Swarup for the Respondent.

F The following Order of the. Court was delivered :

Delay condoned.

Shri Pramod Swarup, Advocate takes notic~ for the respondents.

G Leave granted:

We have lieared the counsel on either side. The appeal arises from
the order of single Judge of Allahabad High Court dated 28.2.1994 made
.in Civil Misc. Writ Petition No. 11535 of 1991. The appellant in its planned
development of urban areas, pursuant ~o U.P. Urban Planning and
:H · Development· Act, 1973, .had engaged the respondents on daily wages in
GHAZIABAD DEVELOPMENT AUTHORITY v. V. CHAUDHARY 173
.....
the project on hand. They filed a writ petition claiming parity in appoint- A
ment and pay with the regular employees and also for regularisation of
their services. The single judge, while negating the relief of regularisation,
given directions to follow the principles in ss.25F and 25G of the Industrial
Disputes Act.

Objection taken by the appellants is that ss.25F and 25G have no·
B
application. It is stated that as regards the State of U.P. there is a local
Industrial Disputes Act and the provisions therein would be attracted, if
Industrial Disputes Act is at all applicable to the appellant. It is contended
that the appellant is not an industry and that, therefore, the principles
contained in pari materia provisions in the local Act have no application. c
We have gone through the judgment of the High Court. The learned
judge did not intend to lay down that the appellant is an industry and that
the principles contained in the Industrial Disputes Act, Central or the State
Act stands attracted. What the learned Judge appears to have intended to
D
lay down is that so long as the appellant has work on hand, if appellant has
no power to terminate the contingent employees engaged on daily wages
and that in the event the appellant needs to terminate their services the
principle of last come first go should be followed and in the event of there
being need for re-employment, preference be given to the displaced
respondents. The observation made by the learned Judge is consistent with E
the well-established principles of natural justi-.::e and equity, justice and
good conscience. Therefore, the learned judge had rightly extended those
principles with regard to the persons employed by the appellant on daily
wages.
F
It is stated that by implication of the order there is need for the
appellant to keep engaging the respondents even though there are no
projects on hand. That apprehension also does not appear to be correct.
;
The appellant needs to take the services of the persons according to the
requirement in the projects on hand. On completion of the exisiting
projects in which the respondents are working, if the appellant undertakes G
any fresh project, instead of taking the services of fresh hands at the place
of the new project, the appellant needs to take the services of the ·existing
temporary daily wage respondents. In the event of the appellant not having
any project on hand, the obligation to pay daily wages to the respondents
does not arise. However, the appellant shall maintain the order of seniority H
174 SUPREME COURT REPORTS [1995) SUPP. 2S.C.R.

A of the daily wage employees and shall take the services of the senior most
....
persons in the order of seniority according to the requirement of work.

Since they are temporary daily wage employees, so long as there is
no regular posts available for appointment, the question of making pay on
par with the regular employees does not arise. But the appellant should
B necessarily and by implication, pay the minimum w.ages prescribed under
the statute, if any, or the prevailing wages as available in the locality.

The appeal is accordingly disposed of. No costs.

G.N. Appeal disposed of

,_
f

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