Holding

Delay in raising an industrial dispute is to be decided on the facts of each case, and back wages were limited to Rs 10,000 in view of the employer’s financial loss.

Summary

The employer, Haryana Land Reclamation and Development Corporation Ltd., retrenched Nirmal Kumar, a watchman‑cum‑peon, in 1991. The workman filed a claim petition alleging illegal retrenchment, and the Labour Court held that the dismissal violated Rule 77 of the Rajasthan Industrial Disputes Rules, 1958, ordering reinstatement with 50% back wages. The High Court upheld this award. On appeal, the employer argued that it suffered huge financial losses and that the workman’s claim was filed after an inordinate delay (about six years). The Supreme Court held that delay in referring a dispute under Section 10 of the Industrial Disputes Act must be assessed on the facts of each case and is not fatal per se, but it limited back wages to Rs 10,000 given the employer’s loss. The Court ordered payment of the limited back wages within two weeks and disposed of the appeal.

Issues considered

Whether the retrenchment of the workman violated Rule 77 of the Rajasthan Industrial Disputes Rules, 1958.
Whether the delay of several years in raising the industrial dispute bars the workman from relief under Section 10 of the Industrial Disputes Act, 1947.
Whether the employer’s financial losses justify a restriction on the quantum of back wages.
Whether the award of reinstatement with 50% back wages should be affirmed or modified.

Legislation cited

Industrial Disputes Act, 1947s. 10, s. 18

Subjects

retrenchmentindustrial disputedelayback wagesRajasthan Industrial Disputes RulesSection 10reinstatementfinancial losslabour law

Judgment

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HARYANA LAND RECLAMATION AND A
-)-
DEVELOPMENT CORPORATION LTD.
v.
NIRMAL KUMAR
DECEMBER 10, 2007
[DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.)

Rajasthan Industrial Disputes Rules, 1958 - r. 77 -
Retrenchment - Industrial dispute raised after about 6 years -
Labour court holding that retrenchment was in violation ofthe rule c
- Direction for reinstatement and 50% backwages - Award
confirmed by Single Judge as well as Division Bench ofHigh Court
- On appeal, held: In view ofthe fact that the employer was suffering
from huge losses, back wages restricted to Rs. I 0, 0001- -
Consideration ofdelay in seeking reference of Industrial Dispute, D
-f to depend on facts of each case - Industrial Disputes Act, 1947 -
~
s. l 0 - Delay.
'
Respondent- workman filed a claim petition alleging that
his services were retrenched illegally. Labour court held that the E
retrenchment was in violation of Rule 77 ofRajasthan Industrial
Disputes Rules, 1958. It directed reinstatement of the workman
with 50% backwages, from the date of reference. Writ Petition
against the Award was dismissed by Single Judge of High Court.
A Division Bench of High Court upheld the order of Single Judge. F
In appeal to this Court, appellant-management contended
that the retrenchment was effected due to financial losses and
that there was delay in raising the dispute.
Disposing of the :<vpeal, the Court G
HELD: 1. So far as delay in seeking the reference is
'f concerned, no formula of universal application can be laid down,
it would depend on facts of each individual case. [Para 6) [3-G]
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•
2 SUPREME COURT REPORTS [2007] 13 (Addl.) S.C.R.

A Nedungadi Bank Ltd. v. K.P Madhavankutty 2002 (2) SCC
_.,,.
455; S.M Nilajkar v. Telecom District Manager 2003 (4) SCC 27
and Asstt. Engineer, CAD v. Dhan Kunwar (2006) 5 SCC 481 -
referred to.
2. It is not in dispute that the appellant- management was
B
suffering from huge losses from 1990 onwards. In fact, this aspect
has been referred to by the Labour Court and has been accepted.
Considering the facts, back wages is restricted to Rs.10,000/-.
[Paras 10 and 11] (5-H, 6-A]
c CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3961
of2006
From the Judgment & Order dated 22. 7.2003 of the High Court
of Judicature for Rajasthan at Jodhpur in D.B. Civil Appeal No. 762 of
D 2000.
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Ravikesh K. Sinha, Varuna Bhandari Gugnani and T. Mahipal for
the Appellant. ·~

Satbir Singh Pillania, Dr. Sushi! Balwada, Dhananjaya KurnarTyagi
E and Anil Karnwal for the Respondent.
The Judgment of the Court was delivered by
Dr.ARIJIT PASAYAT, J. 1. Challenge in this appeal is to the
order passed by a Division Bench of the Rajasthan High Court at Jodhpur,
F dismissing the Special Appeal under Section 18 of the Rajasthan
Ordinance 1949. By the impugned judgment the Division Bench upheld
the order passed by the learned Single Judge.
2. Background facts in a nutshell are as follows:
G The respondent-workman filed a claim petition and sought a
reference of the dispute raised by him to the Labour Court. The
appropriate Government referred to the dispute for adjudication to the ,,,
Labour Court, Hanumangarh. In the claim petition the respondent-
workman alleged that he was employed by the appellant as watchman-
H cum-peon and his services were retrenched by the appellant illegally on
)'

HARYANALANDRECLAMATION &DEV. CORP. LTD. 3
v. NIRMALKUMAR [PASAYAT, J.]
18. 7.1991. The Labour Court after giving an opportunity to the appellant A
to discuss his claim and on consideration of evidence led by the parties
came to the conclusion that the services of the respondent-workman
was retrenched in violation of Rule 77 ofthe Rajasthan Industrial Disputes
Rules, 1958 (in short the 'Rules'). The Labour Court also found that the
reason for retrenchment as advanced by the appellant, that some amount B
was embezzled by the respondent-workman. was not established by the
appellant. The appellant being aggrieved by the order passed by the
Labour Court, filed a writ petition. The writ petition was dismissed by
the learned Single Judge on 21.7.2000 as the learned Single Judge did
not find any reason to interfere with the order passed by the Labour C
Court.
3. Learned counsel for the appellant submitted that the respondent
was appointed on a daily-wage basis on 15.8.1988 and was retrenched
on 18. 7.1991 due to financial losses. This position is accepted. D
Respondent raised a highly belated claim in the year 1997 and reference
was made to the Labour Court on 20.2.1997 under Section 10 of the
Industrial Disputes Act, 1947 (in short 'the Act'). The learned Single
Judge by a practical non-reasoned order dismissed the writ petition and
as noted above, the writ appeal was dismissed. E
4. The award in the case was made on 6.11.1997 and reinstatement
was directed with back wages limited to 50% from the date of reference.
5. As noted above, the stand of the appellant is that there was a
belated dispute raised by the respondent and on that score alone the F
reference has been dismissed. Learned counsel for the respondent
supported the order. It is noted that while issuing notice on the scope of
adjudication was limited to quantum of back wages.
6. It may be noted that so far as delay in seeking the reference is
concerned, no formula of universal application can be laid down. It G
would depend on facts of each individual case.
7. However, certain observations made by this Court need to be
noted. In Nedungadi Bank Ltd. v. KP Madhavankutty (2002 (2)
H
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4 SUPREME COURT REPORTS [2007] 13 (Addi.) S.C.R.

A . SCC 455), it was noted at para 6 as follows: (SCC pp. 459-60) ,J.,-

"6. Law does not prescribe any time-limit for the appropriate
Government to exercise its powers under Section 10 of the Act.
It is not that this power can be exercised at any point of time and
B to revive matters which had since been settled. Power is to be
exercised reasonably and in a rational manner. There appears to
us to be no rational basis on which the Central Government has
exercised powers in this case after a lapse of about seven years
of the order dismissing the respondent from service. At the time
c reference was made no industrial dispute existed or could be even
said to have been apprehended. A dispute which is stale could not
be the subject-matter of reference under Section 10 of the Act. As
to when a dispute can be said to be stale would depend on the
facts and circumstances of each case. When the matter has become
D final, it appears to us to be rather incongruous that the reference
be made under Section 10 of the Act in the circumstances like the
present one. In fact it could be said that th ere was no dispute
pending at the time when the reference in question was made. The
only ground advanced by the respondent was that two other
E employees who were dismissed from service were reinstated.
Under what circumstances they were dismissed and subsequently
reinstated is nowhere mentioned. Demand raised by the respondent
for raising an industrial dispute was ex facie bad and incompetent."
8. In S.M Nilajkar v. Telecom District ~Manager [2003 (4)
F sec 27), the position was reiterated as follows (at sec pp. 39-40,
para 17):
"17. It was submitted on behalf of the respondent that on account
of delay in raising the dispute by the appellants the High Court was
G justified in denying relief to the appellants. We cannot agree. It is
true, as held in Shalimar Weirks Ltd v. Workmen {(1960) 1 SCR
150} that merely because the Industrial Disputes Act does not ..'
provide for a limitation for raising the dispute, it does not mean that
the dispute can be raised at any time and without regard to the
H
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HARYANA LAND RECLAMATION & DEV. CORP. LTD. 5
v. NIRMALKUMAR [PASAYAT, J.]
delay and reasons therefor. There is no limitation prescribed for A
reference of disputes to an Industrial Tribunal; even so it is only
reasonable that the disputes should be referred as soon as possible
after they have arisen and after conciliation proceedings have failed,
particularly so when disputes relate to discharge of workmen
wholesale. A delay of 4 years in raising the dispute after even re- B
employment of most of the old workmen was held to be fatal in
Shalimar Works Ltd. v. Workmen (supra) . In Nedungadi Bank
Ltd. v. KP Madhavankutty (supra) 1 a delay of 7 years was
held to be fatal and disentitled the workmen to any relief. In Ratan
Chandra Sammanta v. Union of India [1993 Supp.(4) SCC C
67] it was held that a casual labourer retrenched by the employer
deprives himself of remedy available in law by delay itself; lapse
of time results in losing the remedy and the right as well. The delay
would certainly be fatal if it has resulted in material evidence relevant
to adjudication being lost and rendered not available. However, D
we do not think that the delay in the case at hand has been so
culpable as to disentitle the appellants to any relief. Although the
High Court has opined that there was a delay of7 to 9 years in
raising the dispute before the Tribunal but we find the High Court
factually not correct. The employment of the appellants was E
terminated some time in 1985-86 or 1986-87. Pursuant to the
judgment in Daily Rated Casual Labour v. Union ofIndia [1988
(I) SCC 67 the Department was formulating a scheme to
accommodate casual labourers and the appellants were justified
in awaiting the outcome thereof On 16-1-1990 they were refused F
to be accommodated in the Scheme. On 28-12-1990 they initiated
the proceedings under the Industrial Disputes Act followed by
conciliation proceedings and then the dispute was referred to the
Industrial Tribunal-cum-Labour Court. We do not think that the
appellants deserve to be non-suited on the ground of delay." G

9. The above position was highlighted inAsstt. Engineer, CAD v.
Dhan Kunwar, (2006) 5 SCC 481.
1O. lt is not in dispute that the appellant was suffering from huge
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6 SUPREMECOURTREPORTS [2007) 13(Addl.)S.C.R.

A losses from 1990 onwards. In fact, this aspect has been referred to by .
the Labour Court and has been accepted.
11. Considering the facts, we restrict the back wages to Rs. l 0,000/
-to be paid within a period of two weeks from today, if not already paid.
B 12. The appeal is accordingly disposed of with no order as to
costs.
KKT Appeal disposed of.

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