Supreme Court of India
HARI NANDAN PRASAD & ANR.versusEMPLOYER L/R TO MANGMT.OF FCI & ANR.
- Citation
- 2014 INSC 104
- Decided
- 17 February 2014
- Disposal
- Case Partly allowed
- Bench
- K S RADHAKRISHNAN
Holding
Termination without compliance of Section 25‑F is illegal; reinstatement is not a matter of right for daily‑wage workers unless equity demands it, and monetary compensation suffices, but where a worker was in service when a lawful regularisation scheme was promulgated, regularisation and reinstatement with back wages are warranted.
Summary
The appellants, Hari Nandan Prasad and Govind Kumar Chaudhary, were casual daily‑wage workers of the Food Corporation of India who were terminated after more than 240 days of continuous service without notice, pay in lieu of notice or retrenchment compensation, violating Section 25‑F of the Industrial Disputes Act, 1947. The Central Government‑cum‑Industrial Tribunal had held the terminations illegal, ordered reinstatement with 50% back wages and regularisation under a circular that regularised similarly situated workers. The Jharkhand High Court set aside the tribunal’s order, denying reinstatement and regularisation. The Supreme Court affirmed that the terminations were illegal, held that reinstatement is not automatic for daily wagers and monetary compensation is appropriate where the termination is decades old, but allowed reinstatement, back wages and regularisation for the second appellant who was in service when the regularisation scheme was issued, finding the High Court’s reversal erroneous. The Court partially allowed the appeals, dismissing the first appellant’s claim and restoring the tribunal’s award for the second appellant.
Issues considered
- Whether the termination of the appellants without notice, notice‑pay or retrenchment compensation violated Section 25‑F of the Industrial Disputes Act, 1947.
- Whether an illegal termination of a daily‑wage worker mandates reinstatement or monetary compensation in lieu of reinstatement.
- Whether the appellants are entitled to regularisation of service under the employer’s circular and the principles of Article 14 of the Constitution.
Legislation cited
- Industrial Disputes Act, 1947s. 17-B, s. 25-F, s. 30(1)(b), s. 32
- Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practice Act, 1971
Subjects
terminationre‑trenchmentSection 25‑Freinstatementregularisationdaily wage workersindustrial disputeunfair labour practiceArticle 14compensation
Judgment
[2014] 2 S.C.R. 955
HARi NANDAN PRASAD & ANR. A
v.
EMPLOYER l/R TO MANGMT.OF FCI & ANR.
(Civil Appeal Nos. 2417-2418 of 2014)
FEBRUARY 17, 2014
B
[K.S. RADHAKRISHNAN AND A.K. SIKRI, JJ.]
INDUSTRIAL DISPUTES ACT, 1947:
s:-25-F - Termination without any notice or pay in lieu of c
notice or retrenchment compensation - Termin~ted workers
worked for more than 240 days continuously preceding their
disengagement/termination - Held: Mandatory pre-condition
of retrenchment in paying the dues in accordance with s.25-
F having not been complied with, that is sufficient to render 0
the termination as illegal.
s.25-F - Reinstatement - Entitlement - Held: Relief of
reinstatement cannot be granted to the persons who were
engaged as daily wagers and whose services were terminated
in a distant past and where termination was held to be illegal E
only on a technical ground of not adhering to the provisions
of s.25-F of the Act.
Power of Labour Court/Industrial Adjudicator - Scope of
- Held: The powers of the industrial adjudicator under the F
Industrial Disputes Act are wide - By empowering the
adjudicator authorities under the Act, to give reliefs such as
a reinstatement of wrongfully dismissed or discharged
workmen, which may not be permissible in common law or
justified under the terms of the contract between the employer G
and such workmen, the legislature has attempted to frustrate
the unfair labour practices and secure the policy of collective
bargaining as a road to industrial peace - In order to achieve
the said objectives, the Labour Courts/Industrial Tribunals are
955 . H
956 SUPREME COURT REPORTS [2014] 2 S.C.R.
1 A given wide powers not only to enforce the rights but even to
create new rights, with the underlying objective to achieve
social justice - The said sweeping power conferred upon the
Tribunal is not unbridled - It is, thus, this fine balancing which
is required to be achieved while adjudicating a particular
s dispute, keeping in mind that the industrial disputes are settled
by industrial adjudication on principle of (air play and justice.
'
Regularization of daily wagers - Claim for - Held: When
there are posts available, in the absence of any unfair labour
practice the Labour Court would not give direction for
C regularization only because a worker has continued as daily
wage workerladhoc/temporary worker for number of years -
Further, if there are no posts available, such a direction for
regularization would be impermissible - In these
circumstances giving of direction to regularize such a person,
D only on the basis of number of years put in by such a worker
as daily wager etc. may amount to backdoor entry into the
service which is an anathema to Art. 14 of the Constitution -
Further, such a direction would not be given when the
concerned worker does not meet the eligibility requirement of
E the post in question as per the Recruitment Rules - However,
wherever it is found that similarly situated workmen are
regularized by the employer itself under some scheme or
otherwise and the workmen in question who have approached
Industrial/Labour Court are at par with them, direction of
F regularization in such cases may be legally justified,
otherwise, non-regularization of the left out workers itself would
amount to invidious discrimination qua them in such cases
and would be violative of Art. 14 of the Constitution -
Constitution of India, 1950 - Article 14.
G
Termination of daily wagers - Circular issued by the
employer whereby any temporary worker employed for more
than 90 days was entitled for regularization of his service and
following the said circular, the company had regularized the ·
H services of 70-75 similarly situated casual workers - Claim for
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 957
TO MANGMT.OF FCI & ANR.
regularization by appellants-daily wagers - Held: In the instant A
case, appellant no: 1 was not in service on the date when the
scheme was promulgated as his services were dispensed with,
4 years before that circular - Therefore, the relief of monetary
compensation in lieu of reinstatement would be more
appropriate in his case - However, in so far as appellant no. 2 B
was concerned, when the Circular was issued, he was in
service and within few months of the issuing of that Circular
he had completed 240 days of service - Non-regularization
of appellant No.2, while giving the benefit of that Circular to
other similar situated employees and regularizing them would, c
therefore, be clearly discriminatory.
Appellant no. 1 was engaged on daily wages as
. labourer in the exigency of the situation. He was
terminated from service after 3 years on the ground that
his services were no more required. No notice or notice D
of pay or retrenchment compensation was given to him.
Appellant no. 2 was engaged on daily wages as casual
t_ypist. He was terminated after 4 years Both the
appellants raised industrial dispute. The Industrial
Tribunal held in both the cases that the termination was E
in contravention of Section 25-F of the Industrial
Disputes· Act and ordered reinstatement and also
regularization of services from the date of termination and
50% back wages. The direction for regularization was
based on circular dated 6.5.1987 Issued by the F
respondent whereby any temporary worker employed for
more than 90 days was entitled for regularization of his
service and following the said circular, the company had
regularized the services of 70-75 similarly situated casual
workers. The single judge of the High Court dismissed G
the writ petitions filed by the respondent company. The
Division Bench of the High Court allowed the appeal of
the respondent holding that as both the appellants did
not render 10 or more years of service, their case did not
come even in the exception carved out in Uma Devi's H
958 SUPREME COURT REPORTS [2014] 2 S.C.R.
A case. The Division Bench accepted that there was
infraction of Section 25-F of the Industrial Disputes Act,
however it held that the appellants were not entitled to
reinstatement because of the reason that they were
employed strictly as temporary workers without any
B stipulation or promise that they would be made
permanent and, therefo~e, reinstatement of such workers
was not warranted and they were entitled to get ~onetary
compensation only. Regarding compensation, the High
Court held that since both the appellants were paid the
c money equivalent to wages last drawn for number of
years when the writ petitions were pending under section
17-8 of the Act, they were duly compensated and no
further amount was payable.
In the instant appeals, the questions for
D consideration were: whether the termination of services
of appellants was illegal; if yes, whether in facts and
~ircumstances of the case, the appellants would be
entitled to reinstatement of service or whether the
monetary compensation in lieu of reinstatement would be
E justified; and whether the appellants were entitled to
regularization of their services.
Partly allowing the appeals, the Court
HELD: 1. Admitted facts are that both the appellant
F had worked for more than 240 days continuously
preceding their disengagement/termination. At the time of
their disengagement, ev_en when they had continuous
service for more than 240 days (in fact about 3 years)
they were not given any notice or pay in lieu of notice as
G well as retrenchment compensation. Thus, mandatory
pre-condition of retrenchment in paying the said dues in
accordance with Section 25-F of the l.D. Act was not
complied with. That is sufficient to render the termination
as illegal. Even the High Court in the impugned juagment
H rightly accepted this position. It is to be seen what relief
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 959
TO MANGMT.OF FCI & ANR.
should be granted in such cases. Admittedly, both the A
workmen were engagei':I on daily wages basis. Their
engagement was also in exigency of situation. Appellant
No.1 was disengaged way back in the year 1983. The
dispute in his case was referred for adjudication to
Industrial Tribunal in 1992 only. There was a time lag of B
9 years. Though no reasons were given for such an
abnormal delay, he seemed to have raised the industrial
dispute few years after his disengagement which can be ·
inferred from the reading of the award of the Industrial
Tribunal as that reveals that after his disengagement he c
kept on making representations only and he took
recou'rse to judicial proceedings only after Circular dated
6.5.1997 was issued as per which the respondent had
decided to regularize the services of all casual workmen
who had completed more than 90 days before 1996. 0
Appellant No.1 had worked on daily wages basis for
barely 3 years and· he was out of service for last 30 years.
Even when the Tribunal rendered his award in 1996, 13
years had elapsed since his termination. On these facts,
it would be difficult to give the relief of reinstatement to
E
the persons who were engaged.as daily wagers and
whose services were terminated in a distant past. And,
further where termination is held to be illegal only on a
technical ground of not adhering to the provisions of
Section 25-F_ of the Act (Paras 16 and 17] [971-G-H; 972- F
A-G]
BSNL vs. Bhurumal 2013 (15) SCALE 131 ·relied on.
2. A close scrutiny of U.P. Power Corporation and
Bhonde case revealed that the law laid down In those G
cases was not contradictory to each other. In U.P. Power
Corporation, the Court recognized the powers of the
Labour Court and at the same time emphasized that the
Labour Court is to keep in mind that the.re should not be
any direction· of regularization if this offends the H
. 960 SUPREME COURT REPORTS [2014] 2 S.C.R.
A provisions of Art.14 of the Constitution, on which
judgment in Umadevi Is primarily founded. On the other
hand, in Bhonde case, the Court has recognized the
principle that having regard to statutory powers conferred
upon the Labour Court/Industrial Court to grant certain
B reliefs to the workmen, which includes the relief of giving
the status of permanency to the contract employees,
such statutory power does not get denuded by the
judgment in Umadevi's case. It is clear from the reading
of this judgment that such a power is to be exercised
c when the employer has indulged in unfair labour practice
by not filling up the permanent post even when available
and continuing to engage workers on temporary/daily
wage basis and taking the same work from them which
were performed by the regular workers but paying them
0 much less wages. It is only when a particular practice is
found to be !Jnfair labour practice as enumerated in
Schedule IV of MRTP and PULP Act and it necessitates
giving direction under Section 30 of the said Act, that the
Court would give such a direction. [Para 29) [984-H; 985-
E A-E]
U.P. Power Corporation v. Bijli Mazdoor Sangh & Ors.
(2007) 5 SCC 755: 2007 (5) SCR 256; State of Maharashtra
v. R.S.Bhonde (2005) 6 SCC 751: 2005 (2) Suppl. SCR 763;
Secretary, State of Kamataka v. Uma Devi & Ors. {~006) 4
F SCC 1: 2006 (3) SCR 953; Maharashtra State Road
Transport Corporation & Anr. vs. Casteribe Rajya Parivahan
Karmchari Sanghatana (2009) 8 SCC 556 - relied on.
3. The judgment in Bhonde case was rendered under
MRTP and PULP Act and the specific provisions of that
G Act were considered to ascertain the powers conferred
upon the Industrial Tribunal/Labour Court by the said Act
At the same time, the powers of tne industrial adjudicator
un~er the Industrial Disputes Acf are equally wide. The
Act deals with .industrial disputes, provides for
H conciliation, adjudication and settlements, and regulates
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 961
TO MANGMT.OF FCI & ANR.
the rights of the parties and the enforcement of the A
awards and settlements. Thus, by empowering the
adjudieato·r authorities under the Act, to give reliefs such
as a reinstatement of wrongfully dismissed or discharged
workmen, which may not be permissible in common law
or justified under the terms of the contract between the B
employer and such workmen, the legislature has
attempted to frustrate the unfair labour practices and
secure the policy of collective bargaining as a road to
industrial peace. In order to achieve the said objectives,
the Labour Courts/Industrial Tribunals are given wide c
powers not only to enforce the rights but even to create
new rights, with the underlying objective to achieve social
justice. The aforesaid sweeping power conferred upon
the Tribunal is not unbridled. It is, thus, this fine balancing
which is required to be achieved while adjudicating a
0
particular dispute, keeping in mind that the industrial
disputes are settled by industrial adjudication on
principle of fair play and justice. Harmonious reading of
the said two judgments showed that when there are
posts available, in the absence of any unfair labour
practice the Labour Court would not give direction for E
regularization only because a worker has continued as
dailY. wage worker/adhoc/temporary worker for number
of years. Further, if there are no posts available, such a
direction for regularization would be impermissible. In
these circumstances giving of direction to regularize F
such a person, only on the basis of number of years put
in by such a worker as daily wager etc. may amoun' to
backdoor entry into the service which is an anathema to
Art.14 of the Constitution. Further, such a direction would
not be given when the concerned worker does not meet G
the eligibility requirement of the post in question as per
the Recruitment Rules. However, wherever it is found that
similarly situated workmen are regularized by the
employer itself under some scheme or othe'rwise and the
workmen in question who have approached Industrial/ H
962 SUPREME COURT REPORTS [2014) 2 S.C.R.
A Labour Court are at par with them, direction of
regularization in such cases may be legally justified,
otherwise, non-regularization of the left over workers
itself would amount to invidious discrimination qua them
in such cases and would be violative of Art.14 of the
B Constitution. Thus, the Industrial adjudicator would be
achieving the equality by upholding Art. 14, rather than
violating this constitutional provision. [Paras 30 to 34]
[985-F-H; 986-A, D-E; 987-A, D-H; 988-A-B]
Bharat Bank Ltd. V. Employees of Bharat Bank Ltd.
C [1950] LLJ 921,948-49 (SC); New Maneckchowk Spinning &
Weaving Co.LtcJ..v. Textile Labour Association [1961] 1 LLJ
521,526 (SC) - relied on. ·
4. Appellant No.1 was not in service on the date when
D Scheme was promulgated i.e. as on 6.5.1987 as his
services were dispensed with 4 years before that Circular
saw the light of the day. Therefore, the relief of monetary
compensation in lieu of reinstatement would be more
appropriate in his case and the conclusion in the
impugned judgment qua him is unassailable, though for
E the different reasons. However, in so far as appellant No.2
was concerned, he was engaged on 5.9.1986 and
continued till 15.9.1990 when his services were
terminated. He even raised the Industrial dispute
immediately thereafter. Thus, when the Circular was
F issued, he was in service and within few months of the
issuing of that Circular he had completed 240 days of
service. Non-regularization of appellant No.2, while giving
the benefit of that Circular dated 6.5.1987 to other similar
situated employees and regularizing them would,
G therefore, be clearly discriminatory. On these facts, the
CGIT rightly held that he was entitled to the benefit of
scheme contained in Circular dated 6.5.1987. The Division
Bench in the impugned judgment has failed to notice this
pertinent and material fact which turns the scales in
H favour of appellant No.2. The High Court committed error
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 963
TO MANGMT.OF FCI & ANR.
in reversing the direction given by the CGIT, which was A
rightly affirmed by the single judge as well, to reinstate
appellant No.2 with 50% back wages and to regularize
him in service. He was entitled to get his case considered
in terms of that Circular. Had it been done, probably he
would have been regularized. Instead, his services were B
wrongly and illegally terminated in the year 1990. While
dismissing the appeal qua appellant No.1, the same is
accepted in so far as appellant No.2 is concerned. In his
case, the judgment of the Division Bench is set aside and
the award of the CGIT is restored. [Paras 37, 38] [988-E- c
H; 989-A-D]
Delhi Development Horticulture Employees Union vs.
Delhi Administration AIR 1992 SC 789 : 1992 (1) SCR 565;
Assistant Engineer, Rajasthan Development Corporation &
Anr. vs. Gitam Singh (2013) 5 SCC 136: 2013 (1) SCR 679; D
Mahatma Phule Agricultural University vs. Nasik Zilla Sheth
Kamgar Union (2001) 7 SCC 346: 2001 (3) SCR 1089 -
referred to.
Case Law Reference: E
1992 (1) SCR 565 Referred to Para 8
2006 (3) SCR 953 Relied on Para 8
2007 (5) SCR 256 Relied on Para 11
F
(2009) 8 sec 556 Relied on Para 13
2013 (1) SCR 679 Relied on Para 14
2013 (15) SCALE 13 Relied on Para 17
2001 (3) SCR 1089 Referred to Para 26
G
2005 (2) Suppl. SCR 763 Referred to Para 26
[1950] LLJ 921,948-49 (SC) Relied on Para 31
·[1961] 1 LLJ 521,526 (SC) Relied on Para 32
CIVIL APPELLATE JURISDICTION : Civil Appeal No. H
964 SUPREME COURT REPORTS [2014] 2 S.C.R.
A 2417-2418 of 2014.
From the Judgment and Order dated 27.06.2008 of the
High Court of Jharkhand at Ranchi in LPA in Nos. 482 and 483
of 2005.
B Lakshmi Raman Singh for the Appellants.
Ajit Pudussery, Joanne Pudussery for the Respondents.
The Judgment of the Court was delivered by
C A.K. SIKRI, J. 1. Leave granted.
2. The two appellants have filed one combined Special
Leave Petition, which arises out of a common judgment dated
27.6.2008 passed by the Division Bench of the Jharkhand High
D Court in two LPAs which had been filed ·by the respondent
herein viz. Food Corporation of India (FCI). The two appellants
were working on casual basis with the FCI. After certain time,
their services were dispensed with. Both of them raised
industrial dispute alleging wrongful termination which was
E referred to the Central Government-cum- Industrial Tribunal
(CGIT). These proceedings culminated in two awards dated
12.12.1996 and 18.12.1996 respectively passed by the CGIT.
In both these awards, termination of both the appellants was
held to be illegal and they were directed to be reinstated with
50% back wages. The CGIT also ordered their regularization
F in service. FCI filed Writ Petitions in both the cases challenging
these awards which were initially admitted sometime in the year
1988 and the operation of the awards was stayed. However,
orders were passed under Section 17-B of the Industrial
Disputes Act (ID Act) directing payment of full wages as last
G wages drawn to the appellants from the date of the award in
each case. These Writ Petitions were ultimately dismissed by
the learned Single Judge vide common judgment and order
dated 19.5.2005. As pointed out above, this judgment of the
learned Single Judge was challenged by the FCI by filing LPAs.
H
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 965
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
These LPAs have been allowed by the Division Bench, thereby A
setting aside the orders of the learned Single Judge as well
as awards passed by the CGIT. This is how two appellants are
before us in this appeal.
3. Before we proceed further, we deem it appropriate to
B
give the details of nature of employment of each of the
appellants with the FCI and tenure etc. as well as the gist of
the tribunal's awards.
Hari Nandan.
c
4. He was engaged on daily wages basis as Labourer-
cum-Workman, in the exigency of the situation, at Food Storage
Depot, Jasidih by the Depot In-charge, FCI, Jasidih on 1st June
1980. On the ground that services of appellant No.1 were no
more required, he was disengaged w.e.f. 1.3.1983. While 0
doing so, no notice or notice pay or retrenchment
compensation was given to him. Appellant No.1 raised
industrial dispute which was referred to the CGIT by the Central
Government vide reference order dated 1.10.1992, with the
following terms of reference:
E
"Whether the action of the management of Food
Corporation of India, in retrenching Shri Hari Nandan
Prasad, Ex-Casual Workman, in contravention of Section
25-F of the LO.Act, 1947 and denying reinstatement with
full back wages and regularization of his service is legal F
and justified? If not to what relief the concerned workman
is entitled to?"
5. The CGIT gave its award dated 12.12.1996 holding that
the termination was in contravention of Section 25-F of the G
Industrial Disputes Act. The CGIT also, while ordering
reinstatement of appellant No.1, held that he was also entitled
to regularization of his services from the date of his stoppage
from service dated 1.3.1983. Back wages to the extent of 50%
were awarded. As far as direction for r'egularizatiorT-is
H
966 . SUPREME COURT REPORTS [2014] 2 S.C.R.
A concerned, it was based on Circular issued by the FCI whereby
any temporary worker employed for more than 90 days was
entitled for regularization of his service. It was noted that as per
the said Circular the Management had regularized the services
of 70-75 similarly situated casual workers and therefore
B denying the same benefit to appellant No.1 amounted to
discrimination.
Gobind Kumar Choudhary.
6. Appellant No.2 was engaged on daily wages as casual
C Typist .at the District Office, FCI, Darbhanga against a vacancy
of Class-Ill post on 5.9.1986. He worked in the capacity till
15.9.1990 when his name was struck off the rolls. He also
raised industrial dispute which was referred to CGIT with
following terms of reference: ·
D
"Whether the action of the Management of Food
Corporation of India, Laaherisarai, Darbhanga is legal and
justified in retrenching Shri Govind Kumar Chaudhary, who
was working as Casual Typist, arbitrarily and in violation
of Section 25-F of the l.D.Act, and denying reinstatement
E
with full back wages and regularization of service is legal
and justified? If not to what relief the concerned workman
is entitled to?"
In his case, the award dated 18.12.1996 was made by the
F CGIT on almost identical premise, as in the case of appellant
No.1, supported by similar reasons.
7. The learned Single Judge while dismissing both the Writ
Petitions filed by the FCI concurred with the findings and
G reasons given by the CGIT.
8. In the LPAs before the Division Bench, the primary
contention of the FCI was that there could not have been any
direction of regularization of services even on the admitted
case of both the workmen, viz. merely on the ground that they
H
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 967
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
had worked for more than 240 days in a calendar year as A
casual employees. It was also submitted that though the Disttict
Manager of the FCI was authorized to employ persons as
temporary workers, such an authority was given for employing
them for 7 days only and no more, and in case of violation of
this strict stipulation contained in the Circular issued by the FCI, B
the concerned officer could be proceeded against
departmentally. It was further argued that even if such temporary
employment was to continue beyond stipulated period of 7
days, since these two workmen had worked on daily wages
basis, that too for a period of 3 years or so, there could not c .
have been any regularization of these workmen in view of the
judgments of this Court in the case of Delhi Development
Horticulture Employees Union vs. Delhi Administration AIR
1992 SC 789 and Constitution Bench judgment in the. case of
Secretary, State of Kamataka vs. Uma Devi & Ors. (2006) 4 0
SCC 1. These contentions have impressed the Division Bench
of the High Court, and accepted by it, giving the following
reasons:
"The Tribunal has apparently misconceived the principles
of law laid down in this context. In the case of Delhi E
Development Horticulture Employees Union vs. Delhi
Administration (AIR 1992) SC 789) the Supreme Court
has categorically laid down that temporary employees,
even if they have worked for more than 240 days, cannot
claim any right or benefit for automatic regularization of F
their services. Similar view has been taken in the case of
Post Master General, Kolkata & Ors vs. Tutu Das (Dutta),
reported in 2007 (5) SCC 317. More so, where no posts
are created or no vacancies to sanctioned posts exists,
only on the ground of working for more than 240 days, G
regularization cannot be directed. Even in cases where
there are regular posts and vacancies, the procedure laid
down for appointment has to be followed.".
9. In so far as contention of the appellant predicated on
H
968 SUPREME COURT REPORTS (2014] 2 S.C.R.
A Circular dated 6.5.1997 is concerned, on the basis of which
they claimed that 70-75 persons had been regularized and
discriminatory treatment could not be meted to them, this
contention has been brushed aside by the High Court in the
impugned judgment in the following manner:
B
"The, contention of Mrs.Pal that there has been
discrimination as several persons were regularized on the
basis of the Circular of the Management dated 6.5.1987,
cannot be accepted. Reliance for this purpose on the case
of U.P. State Electricity Board vs. Pooran Chandra
c Pandey reported in (2007) 11 SCC 92, is also of no help
to her. Firstly, there were several conditions and criteria
in the said Circular for regularization, but there is no finding
that the respondents workmen in these appeals fulfilled
such criteria. Secondly, in the case of U.P.State Electricity
n Board matter (supra) the employees of the Co-operative
Society who were taken over by the Electricity Board
claimed that the decision of the Electricity Board dated
28.11.1996 permitting regularization of the employees
working from before 4.5.1990, will also apply to them as
E they were also appointed prior to 4.5.1990 in the Society.
It was held that since the taken over employees were
appointed in the Society before 4.5.1990, they could not
be denied the benefit of the said decision of the Electricity
Board. There is nothing to show that the appointment of
F the taken over employees was made by the Society without
following the procedure in that behalf, whereas in the
present case, the respondents workmen were not
appointed against vacant and sanctioned posts after
following the procedure of appointment.
G
Furthermore, in paragraph 6 of the judgment of the
Constitution Bench in the case of Secretary, State of
Kamataka vs. Uma Devi (2006) 4 SCC 1, it was held that
no Government order, notification or circular can be
substituted for the statutory rules framed under the authority
H
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 969
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
of law. In para 16 of the judgment in the case of R. S. Garg A
vs. State of U.P. (2006 (6) SCC 430), it has been held
that even the Government cannot make rules or issue any
executive instructions by way of regularization. Similar view
has been taken in the case of the Post Master General
(supra). Therefore, the respondent workmen cannot claim B
regularization on the basis of the said Circular of the
Management dated 6.5.1987, nor the said judgment of the
U.P. Electricity Board (supra) is _of any help to them."
10. Heavily relying upon the judgment in the case of Uma
Devi (supra), the High Court has held that as both the C
appellants did not render 10 or more years of service, their
cases po not come even in the exception carved out by the
Constitution Bench in Uma Devi's case.
11. Another contention raised by the appellants before the o
High Court was that the ratio of Uma Devi's case had no
relevance in the cases of industrial adjudication by the Labour
Courts/Industrial Tribunals. However, even this submission was
found to be meritless by the High Court taking support of the
judgment of this Court in U.P. Power Corporation Vs. Bij/i E
Mazdoor Sangh & Ors. (2007) 5 SCC 755.
12. We may record here that the Division Bench accepted
that there was infraction of Section 25-F of the LO.Act in both
the cases. However, they were held not entitled to reinstatement
because of the reason that they were employed strictly as F
temporary workers, without any stipulation or promise that they
would be made permanent and therefore reinstatement of such
workers was not warranted and they were entitled to get
monetary compensation only. As far as· compensation is
concerned, since both the appellants were paid the money. G
equivalent to wages last drawn, for number of years when the
Writ Petitions were pending, under Section 17 -B of the l.D. Act,
the High Court felt that the appellants were duly compensated
and no further amount was payable ..
970 SUPREME COURT REPORTS [2014] 2 S.C.R.
A 13. Challenging the validity of the approach of the High
Court, the learned counsel for the appellants submitted that the
entire thrust of the judgment of the High Court rests on the
decision of this Court in Uma Devi's case which was
impermissible as the said judgment is clarified by this Court
8 subsequently in the case of Maharashtra State Road
Transport Corporation & Anr. vs. Casteribe Rajya Parivahan
Karmchari Sanghatana (2009) 8 SCC 556, wherein it is held,
in categorical terms, that in so far as Industrial and Labour
Courts are concerned, they enjoy wide powers under Section
C 30(1)(b) of the Industrial Disputes Act to take affirmative action
in case of unfair labour practice and these powers include
power to order regularization/permanency. The Court has,
further, clarified that decision in Uma Devi limits the scope of
powers of Supreme Court under Article 32 and High Courts
under Article 226 of the Constitution to issue directions for
D regularization in the matter of public employment, but power to
take affirmative action under section 30(1)(b) of the l.D.Act
which rests with the Industrial/Labour Courts, remains intact. It
was, thus, argued that entire edifice of the impugned judgment
of the High Court erected on the foundation of Uma Devi
E (supra) crumbles.
14. The learned counsel for the FCI, on the other hand,
referred to the judgment in U.P. Power Corporation (supra) ·
wherein this Court has taken unambiguous view that the law laid
F down in Uma Devi is applicable to Industrial Tribunals/Labour
Courts as well. It was submitted that the judgment in U.P. Power
Corporation (supra) was not taken note of in the subsequent
judgment in Maharashtra State Road Transport Corporation
(supra) and this Court should follow the earlier judgment
G rendered in U.P.Power Corporation's case. The learned
counsel also relied upon the recent judgment of this Court in
the case of Assistant Engineer, Rajasthan Development .
Corporation & Anr. vs. Gitam Singh (2013) 5 SCC 136 to
contend that even when there is a wrongful termination of
H services of a daily wager because of non-compliance of the
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 971
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
provisions of Section 25-F of the LO.Act, such an employee is A
not entitled to reinstatement but only monetary compensation.
On the aforesaid basis, the learned counsel pleaded for
dismissal of the appeal.
15. We have given considerable thoughts to the 8
submissions made by the learned counsel for the parties on
either side. It is clear from the aforesaid narratives that this case
has two facets, which are reflected even in the terms of
references as well on which the disputes were referred to the
CGIT. First refers to the validity of the termination and the other
one pertains to the regularization. Twin issues, which have, thus, C
to be gone into, are: (1) whether termination of service of the
appellants was illegal?
Related issue here would be that if it is illegal, then whether
in the facts and circumstances of this case, the appellants would D
be entitled to. reinstatement in service or monetary
compensation in lieu of reinstatement would be justified?
(2) whether the appellants are entitled to regularization of
their services?
E
We would also record that both the issues, in the facts of
this case, are somewhat overlapping which would become
apparent, with the progression of our discussion on these
issues.
F
Reg.: Validity of termination.
16. This issue hardly poses any problem. Admitted facts
are that both the appellant had worked for more than 240 days
continuously preceding their disengagement/termination. At the G
time of their disengagement, even when they had continuous
service for more than 240 days (in fact about 3 years} they were
not given any notice or pay in lieu of notice as well as
retrenchment compensation. Thus, mandatory pre-condition of
retrenchment in paying the aforesaid dues in accordance with
H
972 SUPREME COURT REPORTS [2014) 2 S.C.R.
A Section 25-F of the l.D. Act was not complied with. That is
sufficient to render the termination as illegal. Even the High
Court in the impugned judgment has accepted this position and
there was no quarrel on this aspect before us as well. With this,
we advert to the issue of relief which should be granted in such
B cases, as that was the topic of hot debate before us as well.
17. Admittedly, both the workmen were engaged on daily
wages basis. Their engagement was also in exigency of
situation. In so far as appellant No.1 is concerned, he was
disengaged way back in the year 1983. The dispute in his case
C was referred for adjudication to CGIT in 1992 only. There is a
time lag of 9 years. Though no reasons are appearing on
record for such an abnormal delay, it seems that he had raised
the industrial dispute few years after his disengagement which
can be inferred from the reading of the award of the CGIT as
D that reveals that after his disengagement he kept on making
representations only and he took recourse to judicial
proceedings only after Circular dated 6.5.1997 was issued as
per which the FCI had decided to regularize the services of all
casual workmen who had completed more than 90 days before
E 1996. Be that as it may, at this juncture what we are highlighting
is that appellant No.1 had worked on daily wages basis for·
barely 3 years and he is out of service for last 30 years. Even
when the Tribunal rendered his award in 1996, 13 years had
elapsed since his termination. On these facts, it would be
F difficult to give the relief of reinstatement to the persons who
were engaged as daily wagers and whose services were
terminated in a distant past. And, further where termination is
held to be illegal only on a technical ground of not adhering to
the provisions of Section 25-F of the Act. Law on this aspect,
G as developed over a period of time by series of judgments
makes the aforesaid legal position very eloquent. It is not
necessary to traverse through all these judgments. Our purpose
would be served by referring to a recent judgment rendered by
this very Bench in the case of BSNL vs. Bhuruma/ 2013 (15)
H SCALE 131 which has taken note of the earlier case law
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 973
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
relevant to the issue. Following passage from the said judgment A
would reflect the earlier decisions of this Court on the question
of reinstatement:
"The learned counsel for the appellant referred to two
judgments wherein this Court granted compensation 8
instead of reinstatement. In the case of BSNL vs. Man
Singh (2012) 1 SCC 558, this Court has held that when
the termination is set aside because of violation of Section
25-F of the Industrial Disputes Act, it is not necessary that
relief of reinstatement be also given as a matter of right. C
In the case of lncharge Officer & Anr. vs. Shankar Sheffy
(2010) 9 sec 126, it was held that those cases where the
workman had worked on daily wage basis, and worked
merely for a period of 240 days or 2-3 years and where
the termination had taken place many years ago, the
recent trend was to grant compensation in lieu of D
reinstatement. In this judgment of Shankar Shetty, this
trend was reiterated by referring to various judgments, as
is clear from the following discussion.
Should an order of reinstatement automatically follow E
in a case where the engagement of a daily wager has
been brought to end in violation of Section 25-F of the
Industrial Disputes Act, 1947 (for short "the ID Act")? The
course of the decisions of this Court in recent years has
been uniform on the above question. F
In Jagbir Singh vs. Haryana State Agriculture Mktd.
Board (2009) 15 SCC 327 delivering the judgment of this
Court, one of us (R.M.Lodha,J.) noticed some of the recent
decisions of this Court, namely, U.P.State Brassware
Corpn. Ltd. Vs. Uday Narain Pandey (2006) 1 SCC 479, G
Uttaranchal Forest Department Corpn. Vs. M. C.Joshi
(2007) 9 SCC 353, State of M.P. vs. La/it Kumar Verma
(2007) 1 SCC 575, M.P.Admn. vs. Tribhuban (2007) 9
SCC 748, Sita Ram vs. Moti Lal Nehru Farmers Training
Institute (2008) 5 SCC 75, Jaipur Development Authority H
974 SUPREME COURT REPORTS [2014) 2 S.C.R.
A vs. Ramsahai (2006) 11 SCC 684, GOA vs. Ashok Kumar
(2008) 4 SCC 261 ahd Mahboob Oeepak vs. Nagar
Panchayat, Gajraula (2008) 1 SCC 575 and stated as
follows: (Jagbir Singh case, SCC pp.330 & 335 paras 7
& 14).
B
It is true that the earlier view of this Court articulated
in many decision reflected the legal position that if the
termination of an employee was found to be illegal, the
relief of reinstatement with full back wages would ordinarily
follow. However, in recent past, there has been a shift in
c the legal position and in a long line of cases, this Court
has consistently taken the view that relief by way of
reinstatement with back wages is not automatic and may
be wholly inappropriate in a given fact situation even
though the termination of an employee is in contravention
D of the prescribed procedure. Compensation instead of
reinstatement has been held to meet the ends of justice.
It would be, thus, seen that by a catena of decisions
rn recent time, this Court has clearly laid down that an order
E of retrenchment passed in violation of Section 25-F
although may be set aside but an award of reinstatement
should not, however, automatically passed. The award of
reinstatement with full back wages in a case where the
workman has completed 240 days of work in a year
F preceding the date of termination, particularly, daily wagers
has not been found to be proper by this Court and instead
compensation has been awarded. This Court has
distinguished between a daily wager who does not hold a
post and a permanent employee.
G Jagbir Singh has been applied very recently in
Telegraph Deptt. Vs. Santosh Kumar Seal (2010) 6 SCC
773, wherein this Court stated: (SCC p. 777, para 11)
In view of the aforesaid legal position and the fact
H that the workmen were engaged as daily wagers about 25
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 975
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
years back and they worked hardly for 2 or 3 years, relief A
of reinstatement and back wages to them cannot be said
to be justified and instead monetary compensation would
subserve the ends of justice.
Taking note of the judgments referred to in the aforesaid 8
paragraphs and also few more cases in other portion of the said
judgment, the legal position was summed up in the following
manner:
"It is clear from the reading of the aforesaid
judgments that the ordinary principle of grant of C
reinstatement with full back wages, when the termination
is found to be illegal is not applied mechanically in all
cases. While that may be a position where services of a
regular/permanent workman are terminated illegally and/
or malafide and/or by way of victimization, unfair labour D
practice etc. However, when it comes to the case of
termination of a daiJy wage worker and where the
termination is found illegal because of procedural defect,
namely in violation of Section 25-F of the Industrial
Disputes Act, this Court is consistent in taking the view in E
such cases reinstatement with back wages is not
automatic and instead the workman should be given
monetary compensation which will meet the ends of
justice. Rationale for shifting in this direction is obvious.
Reasons for denying the relief of reinstatement in such F
cases are obvious. It is trite law that when the termination
is found to be illegal because of non-payment of
retrenchment compensation and notice pay as mandatorily
required under Section 25-F of the Industrial Disputes Act,
even after reinstatement, it is always open to the G
management to terminate the services of that employee
by paying him the retrenchment compensation. Since such
a workman was working on daily wage basis and even
after he is reinstated, he has no right to seek regularization
(See: State of Karnataka vs. Uma Devi (2006) 4 SCC 1). H
976 SUPREME COURT REPORTS [2014] 2 S.C.R.
A Thus when he cannot claim regularization and he has no
right to continue even as a daily wage worker, no useful
purpose is going to be served in reinstating such a
workman and he can be given monetary compensation by
the Court itself inasmuch as if he is terminated again after
B reinstatement, he would receive monetary compensation
only in the form of retrenchment compensation and notice
pay. In such a situation, giving the relief of reinstatement,
that too after a long gap, would not serve any purpose.
We would, however, like to add a caveat here. There
c may be cases where termination of a daily wage worker
is found to be illegal on the ground it was resorted to as
unfair labour pra~tice or in violation of the principle of last
come first go viz. while retrenching such a worker daily
wage juniors to him were retained. There may also be a
D situation that persons junior to him wee regularized under
some policy but the concerned workman terminated. In
such circumstances, the terminated worker should not be
denied reinstatement unless there are some other weighty
reasons for adopting the course of grant of compensation
E instead of reinstatement. In such cases, reinstatement
should be the rule and only in exceptional cases for the
reasons stated to be in writing, such a relief can be
denied".
F 18. We make it clear that reference to Uma Devi, in the
aforesaid discussion is in a situation where the dispute referred
pertained to termination alone. Going by the principles carved
out above, had it been a case where the issue is limited only
to the validity of termination, appellant No.1 would not be
G entitled to reinstatement. This could be the position in respect
of appellant No.2 as well. Though the factual matrix in his case
is slightly different, that by itself would not have made much of
a difference. However, the matter does not end here. In the
· present case, the reference of dispute to the CGIT was not
limited to the validity of termination. The terms of reference also
H
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 977
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
contained the claim made by the appellants for their A
regularization of service:
19. We have already pointed out that the two aspects viz.
that of reinstatement and regularization are intermixed and
overlapping in the present case. If the appellants were entitled
B
to get their services regularized, in that case it would have
been axiomatic to grant the relief of reinstatement as a natural
corollary. Therefore, it becomes necessary, at this stage, to
examine as to whether the order of CGIT, as affirmed by the
learned Single Judge of the High Court directing regularization C
of their service, was justified or the approach of the Division
Bench of the High Court in denying that relief is correct.
Re: Relief of Regularization
20. Before we advert to this question, it would be necessary D
to examine as to whether the Constitution Bench judgment in
Uma Devi case have applicability in the matters concerning
industrial adjudication. We have already pointed out above the
contention of the counsel for the appellants in this behalf, relying
upon Maharashtra State Road Transport case that the decision
E
in Uma Devi would be binding the Industrial or Labour Courts.
On the other hand, counsel for the FCI has referred to the
judgrf)ent in U.P.Power Corporation for the submission that law
laid down in Uma Devi equally a_pplies to Industrial Tribunals/
Labour Courts. It, thus, becomes imperative to examine the
aforesaid two judgments at this juncture. F
21. A perusal of the judgment in U.P. Power Corporation
would demonstrate that quite a few disputes were raised and
referred to the industrial tribunal qua the alleged termination of
respondent Nos.2 and 3 in that case. Without giving the details G
of those cases, it would be sufficient to mention that in one of
the cases the tribunal held that after three years of their joining
in service both respondents 2 and 3 were deemed to have
been regularized. The appellants filed the Writ Petition which
was also dismissed. Challenging the order of the High Court, H
978 SUPREME COURT REPORTS [2014] 2 S.C.R.
A the appellants had approached this Court. It was argued that
there could not have been any regularization order passed by
the Industrial Court in view of the decision in Uma Devi. Counsel
for the workmen had taken a specific plea that the powers of
the industrial adjudicator were not under consideration in Uma
B Devi's case and that there was a difference between a claim
raised in a civil suit or a Writ Petition on the one hand and one
adjudicated by the industrial adjudicator. It was also argued that
the labour court can create terms existing in the contract to
maintain industrial peace and therefore it had the power to vary
C the terms of the contract. While acce.pting the submission of
the appellant therein viz. U.P. Power Corporation, the Court
gave the following reasons:
"It is true as contended by learned counsel for the
respondent that the question as regards the effect of the
D industrial adjudicators' powers was not directly in issue in
Umadevi case. But the foundation logic in Umadevi case
is based on Article 14 of the Constitution of India. Though
the industrial adjudicator can very the terms of the contract
of the employment, it cannot do something which is
E violative of Article 14. If the case is one which is covered
by the concept of regularization, the same cannot be
viewed differently.
The plea of learned counsel for the respondent that
at the time the High Court decided the matter, decision in
F
Umadevi case was not rendered is really of no
consequence. There cannot be a case of regularization
without there being employee-employer relationship. As
noted above the concept of regularization is clearly linked
with Article 14 of the Constitution. However, if in a case
G
the fact situation is covered by what is stated in para 45
of Umadevi case the industrial adjudicator can modify the
relief, but that does not dilute the observations made by
this Gourt in Umadevi case about the regularization.
H
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 979
TO MANGMT.OF FCI & ANR. [AK. SIKRI, J.]
On facts, it is submitted by learned counsel for the A
appellants that Respondent No.2 himself admitted that he
never worked as a pump operator, but was engaged as
daily wage basis. He also did not possess the requisite
qualification. Looked at from any angle, the direction for
regularization, as given, could not have been given in view B
of what has been stated in Umadevi case."
22. It is clear from the above that the Court emphasized
the underline message contained in Umadevi's case to the
effect that regularization of a daily wager, which has not been C
appointed after undergoing the proper selection procedure etc.
is impermissible as it was violative of Art.14 of the Constitution
of India and this principle predicated on Art.14 would apply to
the industrial tribunal as well inasmuch as there cannot be any
direction to regularize the services of a workman in violation
of Art.14 of the Constitution. As we would explain hereinafter, D
this would mean· that the industrial court would not issue a,
direction for regularizing the service of a daily wage worker in
those cases where such regularization would tantamount to
- infringing the provislons of Art.14 of the Constitution. But for that,
it would not deter the Industrial Tribunals/Labour Courts from E
issuing such direction, which the industrial adjudicators
otherwise possess, having regard to the provisions of Industrial
Disputes Act specifically conferring such powers. This is
recognized by the Court even in the aforesaid judgment.
F
23. For detailed discussion on this aspect, we proceed to
discuss the ratio in the case of Maharashtra State Road
Transport Corporation (supra). In that case the respondent
Karamchari Union had filed two complaints before the Industrial
Court, Bombay alleging that the appellant-Corporation had G
indulged in unfair labour practice qua certain employees who
were engaged by the appellant as casual labourers for cleaning
the buses between the years 1980-1985. It was stated in the
complaints that these employees were made to work every day
at least for 8 hours at the depot concerned of the Corporation;
H
''980 SUPREME COURT REPORTS [2014] 2 S.C.R.
A the work done by them was of permanent nature but they were
being paid a paltry amount; and even when the post of
sweepers/cleaners were available in the Corporation, these
employees had been kept on casual and temporary basis for
years together denying them the benefit of permanency. After
B adjudication, the Industrial Court held that the Corporation had
committed unfair labour practice under items 5 and 9 of
Schedule IV to the Maharashtra Recognition of Trade Unions
and Prevention of Unfair Labour Practice Act, 1971 (MRTU and
PULP Act). As a consequence, it directed the Corporation to
c pay equal wages to the employees concerned which was being
paid to Swachhaks and also pay arrears of wages to them. In
the second complaint, the Industrial Court returned the finding
that the Corporation was indulging in unfair labour practice
under Item 6 of Schedule IV, by continuing these employees
0 on temporary/casual/daily wage basis for years together and
thereby depriving them the benefits of permanency. The
direction in this complaint was to cease and desist from the
unfair labour practice by giving them the status, wages and all
other benefits of permanency applicable to the post of cleaners,
E w.e.f. 3.8.1982. The Corporation challenged these two orders
of the Industrial Court before the High Court of Judicature at
Bombay in five separate Writ Petitions. These were disposed
of by the learned Single Judge vide common judgment dated
2.8.2001 holding that complaints were maintainable and the
finding of the Industrial Court that the Corporation had indulged
F in unfair labour practice was also correct. The Corporation
challenged the decision of the learned Single Judge by filing
LPAs which were dismissed by the Division Bench on
6.5.2005. This is how the matter came before the Supreme
Court. One of the contentions raised by the appellants before
G this Court was that there could not have been a direction by
the Industrial Court to give these employees status, wages and
other benefits of permanency applicable to the post of cleaners
as this direction was contrary to the ratio laid down by the
Constitution Bench of this Court in Umadevi (supra). The Court
H while considering this argument went into the scheme of the
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 981
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
MRTU and PULP Act. It was, inter-alia, noticed that complaints A
relating to unfair labour practice could be filed before the
Industrial Court. The Court noted that Section 28 of that Act
provides for the procedure for dealing with such complaints a.nd
Section 30 enumerates the powers given to the Industrial and
Labour Courts to decide the matters before it including those B
relating to unfair labour practice. On the reading of this section,
the Court held that it gives specific power to the Industrial/
Labour Courts to declare that an unfair labour practice has been
engaged and to direct those persons not only to cease and
desist from such unfair labour practice but also to take c
affirmative action. Section 30(1) conferring such powers is
reproduced below:
"30. Powers of Industrial and Labour Courts.-
(1)Where a court decides that any person named in the
complaint has engaged in, or is engaging in, any unfair D
labour practice, it may in its order-
(a)declare that an unfair labour practice has been
engaged in or is being engaged in by that person, and
specify any other petson who has engaged in, or is E
engaging in the unfair labour practice;
(b) direct all such persons to cease and desist from
such unfair labour practice, and take such affirmative
action (including payment of reasonable compensation to
F
the employee or employees affected by the unfair labour
practice, or reinstatement of the employee or employees
with or without back wages, or the payment of reasonable
compensation), as may in the opinion of the Court be
necessary to effectuate the policy of the Act;
G
(c) where a recognized union has engaged in or is
engaging in, any unfair labour practice, direct that its
recognition shall be cancelled or that all or any of its rights
under sub-section(1) of Section 20 or its right under
Section 23 shall be suspended." H
982 SUPREME COURT REPORTS [2014] 2 S.C.R.
A 24. It was further noticed that Section 32 of the Act provides
that the Court shall have the power to decide all connected
matters arising out of any application or a complaint referred
to it for decision under any of the provisions of this Act. The
Court then extensively quoted from the judgment in Uma Devi
B in order to demonstrate the exact ratio laid down in the said
judgment and thereafter proceeded to formulate the following
question and answer thereto:
'The question that arises for consideration is: have
the provisions of the MRTU and PULP Act been denuded
c of the statutory status by the Constitution Bench decision
in Umadevi? In our judgment, it is not."
25. Detailed reasons are given in support of the conclusion
stating that the MRTU and PULP Act provides for and
D empowers the Industrial/Labour Courts to decide about the
unfair labour practice committed/being committed by any
person and to declare a particular practice to be unfair labour
practice if it so found and also to direct such person ceased
and desist from unfair labour practice. The provisions contained
E in Section 30 giving such a power to the Industrial and Labour
Courts vis-a-vis the ratio of Uma Devi are explained by the
Court in the following terms:
'The power given to the Industrial and Labour Courts under
Section 30 is very wide and the affirmative action
F
mentioned therein is inclusive and not exhaustive.
Employing badlis, casuals or temporaries and to continue
them as such for years, with the object of depriving them
of the status and privileges of permanent employees is an
unfair labour practice on the part of the employer under
G Item 6 of Schedule IV. Once such unfair labour practice on
the part of the employer is established in the complaint,
the Industrial and Labour Courts are empowered to issue
preventive as well as positive direction to an erring
employer.
H
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 983
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
The provisions of the MRTU and PULP Act and the powers A
of the Industrial and Labour Courts provided therein were
not at all under consideration in Umadevi. As a matter of
fact, the issue like the present one pertaining to unfair
labour practice was not at all referred to, considered or
decided in Umadevi. Unfair labour practice on the part of B
the employer in engaging employees as badlis, casuals
or temporaries and to continue them as such for years with
the object of depriving them of the status and privileges
of permanent employees as provided in Item 6 of
Schedule IV and the power of the Industrial and Labour c
Courts under Section 30 of the Act did not fall for
adjudication or consideration before the Constitution
Bench.
Umadevi does not denude the Industrial and Labour
Courts of their statutory power under Section 30 read with D
Section 32 of the MRTU and PULP Act to order
permanency of the workers who have been victims of
unfair labour practice on the part of the employer unoer
Item 6 of Schedule IV where the posts on which they have
been working exist. Umadevi cannot be held tci ,have E
overridden the powers of the Industrial and Labour Courts
in passing appropriate order under Section 30 of the
MRTU and PULP Act, once unfair labour practice on the
part of the employer under Item 6 of Schedule IV is
established." F
26. The Court also accepted the legal proposition that
Courts cannot direct creation of posts, as held in Mahatma
Phule Agricultural University vs. Nasik Zilla Sheth Kamgar
Union (2001) 7 SCC 346. Referring to this judgment, the Court G
made it clear that inaction on the part of the State Government
to create posts would not mean an unfair labour practice had
been committed by the employer (University in that case) and
as there were no posts, the direction of the High Court to accord
the status of permanency was set aside. The Court also noticed
H
984 SUPREME COURT REPORTS [2014] 2 S.C.R.
A that this legal position had been affirmed in State of
Maharashtra vs. R.S.Bhonde (2005) 6 SCC 751. The Court
also reiterated that creation and abolition of post and
regularization are purely Executive functions, as held in number
of judgments and it was not for the Court to arrogate the power
s ·of the Executive or the Legislature by directing creation of post
and absorbing the workers or continue them in service or pay
salary of regular employees. This legal position is summed up
in para 41 which reads as under:
"Thus, there is no doubt that creation of posts is not
c within the domain of judicial functions which obviously
pertains to the executive. It is also true that the status of
permanency cannot be granted by the Court where no such
posts exist and that executive functions and powers with
regard to the creation of posts cannot be arrogated by the
D courts."
27. However, the Court found that factual position was
different in the case before it. Here the post of cleaners in the
establishment were in existence. Further, there was a finding
E of fact recorded that the Corporation had indulged in unfair
labour practice by engaging_these workers on temporary/ I
causal/daily wage basis and paying them paltry amount even
when they were discharging duties of eight hours a day and
performing the same duties as that of regular employees.
F 28. In this backdrop, the Court was of the opinion that
direction of the Industrial Court to accord permanency to these
employees against the posts which were available, was clearly
permissible and with the powers, statutorily conferred upon the
Industrial/Labour Courts under Section 30 (1 )(b) of the said Act
G which enables the Industrial adjudicator to take affirmative action
against the erring employees and as those powers are of wide
amplitude abrogating within its fold a direction to accord
permanency.
H 29. A close scrutiny of the two cases, thus, would reveal
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 985
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
that the law laid down in those cases is not contradictory to A
each other. In U.P. Power Corporation, this Court has
recognized the powers of the Labour Court and at the same
time emphasized that the Labour Court is to keep in mind that
there should not be any direction of regularization if this offends
the provisions of Art.14 of the Constitution, on which judgment B
in Umadevi is primarily founded. On the other hand, in Bhonde
case, the Court has recognized the principle that having regard
to statutory powers conferred upon the Labour Court/Industrial
Court to grant certain reliefs to the workmen, which includes the
relief of giving the status of permanency to the contract c
employees, such statutory power does not get denuded by the
judgment in Umadevi's case. It is clear from the reading of this
judgment that such a power is to be exercised when the
employer has indulged in unfair labour practice by not filling up
the permanent post even when available and continuing to 0
workers on temporary/daily wage basis and taking the same
work from them and making them some purpose which were
performed by the regular workers but paying them much less
wages. It is only when a particular practice is found to be unfair
labour practice as enumerated in Schedule IV of MRTP and
E
PULP Act and it necessitates giving direction under Section
30 of the said Act, that the Court would give such a direction.
30. We are conscious of the fact that the aforesaid
judgment is rendered under MRTP and PULP Act and the
specific provisions of that Act were considered to ascertain the F
powers conferred upon the Industrial Tribunal/Labour Court by
the said Act. At the same time, it also hardly needs to be
emphasized the powers of the industrial adjudicator under the
Industrial Disputes Act are equally wide. The Act deals with
industrial disputes, provides for conciliation, adjudication and G
settlements, and regulates the rights of the parties and the
enforcement of the awards and settlements. Thus, by
empowering the adjudicator authorities under the Act, to give
reliefs such as a reinstatement of wrongfully dismissed or
discharged workmen, which may not be permissible in common H
986 SUPREME COURT REPORTS [2014] 2 S.C.R.
A law or justified under the terms of the contract between the
employer and such workmen, the legislature has attempted to
frustrate the unfair labour practices and secure the policy of
collective bargaining as a road to industrial peace.
31. In the language of Krishna Iyer, J:
B
The Industrial Disputes Act is a benign measure,
which seeks to pre-empt industrial tensions, provide for the
mechanics of dispute-resolutions and set up the necessary
infrastructure, so that the energies of the partners in
c production may not be dissipated in counter-productive
battles and the assurance of industrial justice may create
a climate of goodwill." (Life Insurance Corpn. Of India v.
D.J.Bahadur 1980 Lab IC 1218, 1226(SC), per Krishna
lyer,J.).
D
In order to achieve the aforesaid objectives, the Labour
Courts/Industrial Tribunals are given wide powers not only to
enforce the rights but even to create new rights, with the
underlying objective to achieve social justice. Way back in the
E year 1950 i.e. immediately after the enactment of Industrial
Disputes Act, in one of its first and celebrated judgment in the
case of Bharat Bank Ltd. V. Employees of Bharat Bank Ltd.
[1950] LLJ 921,948-49 (SC) this aspect was highlighted by the
Court observing as under:
F "In settling the disputes between the employers and
the workmen, the function of the tribunal is not confined to
administration of justice in accordance with law. It can
confer rights and privileges on either party which it
considers reasonable and proper, though they may not be
G within the terms of any existing agreement. It has not merely
to interpret or give effect to the contractual rights and
obligations of the parties. It can create new rights and
obligations between them which it considers essential for
keeping industrial peace."
.H I
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 987
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
32. At the same time, the aforesaid sweeping power A
conferred upon the Tribunal is not unbridled and is
circumscribed by this Court in the case of New Maneckchowk
Spinning & Weaving Co.Ltd. v. Textile Labour Association
[1961] 1 LLJ 521,526 (SC) in the following words:
B
"This, however, does not mean that an industrial court can
do anything and everything when dealing with an industrial
dispute. This power is ,conditioned by the subject matter
with which it is dealing· and also by the existing industrial
law and it would not be open to it while dealing with a C
particular matter before it to overlook the industrial law
relating to the matter as laid down by the legislature or by
this Court."
33. It is, thus, this fine balancing which is required to be
achieved while adjudicating a particular dispute, keeping in D
mind that the industrial disputes are settled by industrial
adjudication on principle of fair play and justice.
34. On harmonious reading of the two judgments
discussed in detail above, we are of the opinion that when there E
are posts available, in the absence of any unfair labour practice
the Labour Court would not give direction for regularization only
because a worker has continued as daily wage worker/adhoc/
temporary worker for number of years. Further, if there are no
posts available, such a direction for regularization would be F
impermissible. In the aforesaid circumstances,giving of
direction to regularize such a person, only on the basis of
number of years put in by such a worker as daily wager etc.
may amount to backdoor entry into the service which is an
anathema to Art.14 of the Constitution. Further, such a direction
would not be given when the concerned worker does not meet G
the eligibility requirement of the post in question as per the
tRecruitment Rules. However, wherever it is found that similarly
situated workmen are regularized by the employer itself under
some scheme or otherwise and the workmen in question who
have approached Industrial/Labour Court are at par with them, H
988 SUPREME COURT REPORTS [2014) 2 S.C.R.
A direction of regularization in such cases may be legally justified,
otherwise, non-regularization of the left over workers itself would
amount to invidious discrimination qua them in such cases and
would be violative of Art.14 of the Constitution. Thus, the
Industrial adjudicator would be achieving the equality by
B upholding Art. 14, rather than violating this constitutional
provision.
35. The aforesaid examples are only illustrated. It would
depend on the facts of each case as to whether order of
C regularization is necessitated to advance justice or it has to be
denied if giving of such a direction infringes upon the
employer's rights
36. In the aforesaid backdrop, we revert the facts of the
present case. The grievance of the appellants was that under
D the Scheme contained in Circular dated 6.5.1997 many
similarly placed workmen have been regularized and, therefore,
they were also entitled to this benefit. It is argued that those who
had rendered 240 days service were regularized as per the
provision in that Scheme/Circular dated 6.5.1987
E
37. On consideration of the cases before us we find that
appellant No.1 was not in service on the date when Scheme
was promulgated i.e. as on 6.5.19S7 as his services were
dispensed with 4 years before that Circular saw the light of the
F day. Therefore, in our view, the relief of monetary compensation
in lieu of reinstatement would be more appropriate in his case
and the conclusion in the impugned judgment qua him is
unassailable, though for the difficult reasons (as recorded by
us above) than those advanced by the High Court. However,
in so far as appellant No.2 is concerned, he was engaged on
G 5.9.1986 and continued till 15.9.1990 when his services were
terminated. He even raised the Industrial dispute immediately
thereafter. Thus, when the Circular dated 5.9.1987 was issued,
he was in service and within few months of the issuing of that
Circular he had completed 240 days of service.
H
HARi NANDAN PRASAD & ANR. v. EMPLOYER l/R 989
TO MANGMT.OF FCI & ANR. [A.K. SIKRI, J.]
38. Non-regularization of appellant No.2, while giving the A
benefit of that Circular dated 6.5.1987 to other similar situated
employees and regularizing them would, therefore, be clearly
discriminatory. On these facts, the CGIT rightly held that he was
entitled to the benefit of scheme contained in Circular dated
6.5.1987. The Division Bench in the impugned judgment has B
failed to notice this pertinent and material fact which turns the
scales in favour of appellant No.2. High Court committed error
in reversing the direction given by the CGIT, which was rightly
affirmed by the learned Single Judge as well, to reinstate
appellantNo.2 with 50% back wages and to regularize him in c
service. He was entitled to get his case considered in terms
of that Circular. Had it been done, probably he would have been
regularized. Instead, his services were wrongly and illegally
terminated in the year 1990. As an upshot of the aforesaid
discussion, we allow these appeals partly. While dismissing the 0
appeal qua appellant No.1, the same is accepted in so far as
appellant No.2 is concerned. In his case, the judgment of the
Division Bench is set aside and the award of the CGIT is
restored. There shall, however, be no order as to costs.
D.G. Appeals partly allowed. E
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