Holding

The Supreme Court held that the employee’s successive ad‑hoc appointments were a sham to defeat the Act, Section 2(oo)(bb) does not apply, regularisation is unavailable, and compensation of Rs 25,000 is awarded instead of reinstatement.

Summary

The respondent was engaged on an ad‑hoc basis as a Junior Technician for successive 89‑day periods from 1990 to 1992, each appointment ending with a one‑ or two‑day gap before the next. She was terminated on 7 August 1992 and later raised an industrial dispute. The Labour Court ordered her reinstatement with back wages, holding that she had completed 240 days of work in the preceding twelve months and that the employer had not complied with Section 25F of the Industrial Disputes Act. The High Court dismissed the corporation’s writ petition, but the Supreme Court held that the pattern of repeated short‑term appointments was a device to defeat the purpose of Section 2(oo)(bb) and therefore did not attract regularisation provisions. Since her services had been terminated in 1992, regularisation was impossible, and the Court substituted the reinstatement order with a lump‑sum compensation of Rs 25,000. The appeal was allowed in favour of the corporation.

Issues considered

The repeated ad‑hoc appointments with brief gaps constitute employment covered by Section 2(oo)(bb) of the Industrial Disputes Act, making the employee eligible for regularisation.
Whether the employee is entitled to reinstatement with back wages under Section 25F when termination occurred many years earlier.
Whether a lump‑sum compensation is an appropriate remedy in place of reinstatement and back wages.

Legislation cited

Indian Evidence Act, 1872s. 106
Industrial Disputes Act, 1947s. 11-A, s. 25F, s. 2(oo)(bb)

Subjects

ad hoc appointmentregularisationIndustrial Disputes ActSection 2(oo)(bb)Section 25Freinstatementback wagescompensationunfair labour practice

Judgment

A HARYANA STATE ELECTRONICS DEVELOPMENT CORPORATION LTD.
v.
MAMN I

MAY2, 2006

B [S.B. SINHA AND P.K. BALASUBRAMANYAN, JJ.]

Industrial Disputes Act, 1947-Section 2(oo)(bb)-Regularization-
Adhoc employee appointed for specific period-On expiry of that period re-
C appointed after a gap of 1-2 days-Held, adoption of such course of action
by employer was with an object to defeat the purpose of Act-S.2(oo)(bb) is
not attracted-On facts, employee was terminated 14 years back, hence her
sen1ices cannot be regularized-Hence, compensation of Rs. 25000 awarded--
Labour Jaws-Compensation.

D Respondent was appointed on adhoc basis initially for a fixed period.
On expiry of the fixed period, she was reappointed each time for the same
period after leaving a gap of 1-2 days. She absented from work for few days
and her services were terminated. She raised industrial dispute. Meanwhile,
appellant-Corporation issued an advertisement for the said post but she did
not apply.
E
Labour Court found that the employer had not complied with the
condition laid down under Section 2SF oflndustrial Disputes Act, 1947, hence
she was entitled to reinstatement with back wages. Aggrieved appellant filed
writ petition before High Court which was dismissed.

F In appeal to this Court, appellant contended that appointment had"been
for a fixed period hence the services of respondent could not be regularized.

Modifying the impugned order by directing payment of compensation,
the Court

G HELD: 1.1. The services of the respondent had been terminated and she
had been re-appointed after a gap of one or two days. Such a course of action
was adopted by the Appellant with a view to defeat the object of the Act Section
2(oo)(bb) of the Industrial Disputes Act, 1947, therefore, is not attracted.
[642-CJ
H 638 •
HARYANASTATEELECTRONICSDEV.CORPN.v.MAMNI 639

1.2. The services of the respondent was terminated as far back in the A
year 1992. Even if she is reinstated in her service on an ad hoc basis, her
services cannot be regularized. [642-D-E)

Secretary, State ofKarna/aka and Ors. v. Uma Devi and Ors., (2006) 4
SCALE 197, relied on.
B
1.3. In the peculiar facts and circumstances of this case, interests of
justice would be sub-served if in the place of reinstatement with back wages,
a lump sum amount is directed to be paid by way of compensation.This order
is being passed keeping in view the fact that the respondent has not worked
since 1992. The post on which she may have been working must have also
been filled up. It is wholly unlikely that respondent in the meantime had not C
been wod<ing anywhere else, since the respondent had not placed any material
on record to show that she had not been working. [642-F-G)

2. The relief ofreinstatement with full back wages is not to be given
automatically. Each case must be considered on its own merit. [642-H) D
Haryana State Agricultural Marketing Board v. Subash Chand and
Anr., f2006J 2 SCC 794, relied on.

UP. State Brassware Corporation ltd and Anr. v. Udai Narain Pandey,
JT (2005) 10 SC 344 and Nagar Mahapalika (Now Municipal Corportation) E
v. State of UP. and Ors. Civil Appeal of(2006)@SLP (C) No. 23732 of 2004,
referred to.

3. Respondent shall be compensated by payment of a sum of Rs. 25,000/
- instead of the order for reinstatement with back wages. (645-BJ
F
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2410 of2006.

From the Judgment and Order dated 8.3.2004 of the High Court of
Punjab and Haryana at Chandigarh in C.W.P. No. 2464/2004.

Arvind Nayar and Kavita Wadia for the Appellant.
G
Ranbir Singh Yadav, L.D. Sharma and S. Anand Krishna Raj for the
Respondent.

The Judgment of the Court was delivered by
H
640 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A S.8. SINHA, J. Leave granted.

The respondent herein was appointed initially for a period of 89 days
in the post of Junior Technician (Electronics) on an ad hoc basis on or about
31.10.1990. In terms of an offer of appointment made to her, she was appointed
therein. The post was purely temporary and her services were liable to be
B terminated without assigning any reason or notice. It was categorically stated
that the respondent shall have no claim for regular appointment having
worked with the appellant-Corporation on ad hoc basis. Her services were
extended from time to time. In each of the offer of appointment, indisputably,
similar terms and conditions were laid down. The details of such appointments
c are as under :

"SI. No. Period Working days

I. 13.2.91 to 12.5.91 89

2 14.5.91 to 10.8.91 89
D
3. 13.8.91to9.11.91 89

4. 11.11.91to7.2.92 89"

It is not in dispute that she remained absent for 19 days during the
E period 20th January, 1992 and 7th February, 1992 as also for a period of 11
days during the period 17.3.1992 to 27.3.1992. Her services were terminated
on 7.8.1992. She raised an industrial dispute, whereupon the State of Punjab
in exercise of its power under Section IO(l)(c) of Industrial Disputes Act, 1947
referred the said dispute for adjudication of the Labour Court. In the meanwhile,
F the appellant Corporation has issued an advertisement for filling up some
posts on regular basis including the said post of Junior Technician. The
respondent, however, did not apply pursuant to the said advertisement.

Before the Labour Court, the appellant herein has raised a plea that the
appointment of the respondent being ad hoc in nature and furthermore on a
G contract basis as envisaged under Section 2( oo )(bb) of the Industrial Disputes
Act, her services were liable to be terminated in terms thereof. By reason of
the impugned Award dated 21.5.2003, the Labour Court directed reinstatement
of the respondent with back wages on the premise that she had completed
240 days of work during a period of twelve months immediately preceding the
date of termination of her services and in view of the fact that the conditions
H laid down under Section 25F of the Industrial Disputes Act had not been
HARYANA STATE ELECTRONICS DEV. CORPN. v. MAMNI [S.B. SINHA,J.] 641

complied with by the Appellant. A
The Appellant-Corporation herein, being aggrieved by the said Award,
filed a Writ Petition before the Punjab & Haryana High Court which was
numbered as W.P. (C) No. 2464 of2004. By reason of the impugned judgment,
the said Writ Petition has been dismissed.
B
Mr. Arvind Nayyar, the learned counsel appearing on behalf of the
appellant submitted that having regard to the fact that the services of the
respondent could not have been directed to be regularized in the light of the
judgments of this Court and furthermore in view of the fact that her appointment
had been for a fixed period of 89 days, the impugned judgment cannot be C
sustained.

Mr. Ranvir Singh Yadav, learned counsel appearing for the respondent,
on the other hand, urged that the respondent having completed 240 days of
service within a period of twelve months preceding the date of her termination
and in view of the fact that no compensation had been paid as provided in D
Sectiori 25-F of the Industrial Disputes Act; the Labour Court and consequently
the High Court has rightly directed her reinstatement with full back wages.

Section 2 (oo) (bb) of the Industrial Disputes Act reads as under:-

"termination of the service of the workman as a result of the non- E
removal of the contract of employment between the employer and the
workman concerned on its expiry or of such contract being terminated
under a stipulation in that behalf contained therein."

The respondent was appointed from time to time. Her services used to
be terminated on the expiry of 89 days on regular basis. However, it is noticed F
that she used to be appointed after a gap of one or two days upon completion
of each term. Such an action on the part of the Appellant cannot be said to
be bona fide. The High Court rejected the contention raised on behalf of the
appellant herein stating :

" .. .It is not possible for us to accept the aforesaid plea raised at the G
hands of the management on account of the fact that the factual
position, which has not been disputed, reveals that the respondent-
workman was repeatedly engaged on 89 days basis. It is, therefore,
clear that the intention of the management was not to engage the
respoildent - workman for a specified period, as alleged, but was to
H
642 SUPREME COURT REPORTS (2006] SUPP. I S.C.R.

A defeat the rights available to him under Section 25-F of the Act. The
aforesaid practice at the hands of the petitioner - management to
employ the workman repeatedly after a notional break, clearly falls
within the ambit and scope of unfair labour practice ..."

A finding of fact was arrived at that her services were terminated on
B regular basis but she was re-appointed after a gap of one or two days. In that
view of the matter, the Labour Court or the High Court cannot be said to have
committed any illegality.

In this case the services of the respondent had been terminated on a
regular basis and she had been re-appointed after a gap of one or two days.
C Such a course of action was adopted by the Appellant with a view to defeat
the object of the Act. Section 2(oo )(bb) of the Industrial Disputes Act, 194 7,
therefore, is not attracted in the instant case.

However, indisputably, the respondent was appointed on an ad hoc
D basis. She, although qualified to hold the post of Junior Technician, when the
advertisement had been issued for filling up the said post, did not apply
therefor. The services of the respondent was terminated as far back as in the
year 1992. Even if she is reinstated in her service on an ad hoc basis, her
services cannot be regularized in view of a recent Constitution Bench decision
of this Court in Secretary, State of Karnataka & Ors. v. Uma Devi & Ors.,
E (2006) 4 SCALE 197. Furthermore, she had absented herself for a period of
19 days from 20. 1.1992 to 7.2 .1992 and for a period of 11 days from 17 .2 .1992
to 27.2.1992.

We, therefore, are of the view that in the peculiar facts and circumstances
of this case, interests of justice would be sub-served if in. the place of
F reinstatement with back wages, a lump sum amount is directed to be paid by
way of compensation. This order is being passed keeping in view the fact that
the respondent has not worked since 1992. The post on which she may have
been working must have also been filled up.

G It is wholly unlikely that respondent in the meantime had not been
working anywhere else, since the respondent had not placed any material on
record to show that she had not been working.

This Court in a number of decisions has categorically held that the relief
of reinstatement with full back wages is not to be given automatically. Each
H case must be considered on its own merit.
HARYANA STATE ELECTRONICS DEV. CORPN. v. MAMNI [S.B. SINHA,J] 643

In U.P. State Brassware Corporation ltd. & Anr.. v. Udai Narain A
Pandey, JT (2005). I 0 SC 344, it was observed:-

"Order Vll, Rule 7 of the Code of Civil Procedure confers power upon
the Court to mould relief in a given situation. The provisions of the
Code of Civil Procedure are applicable to the proceedings under the
Industrial Disputes Act. Section 11-A of the Industrial Disputes Act B
empowers the Labour Court, Tribunal and National Tribunal to give
appropriate relief in case of discharge or dismissal of workmen."

It was further opined:

"Industrial Courts while adjudicating on disputes between the C
management and the workmen, therefore, must take such decisions
which would be in consonance with the purpose the law seeks to
achieve. When justice is the buzzword in the matter of adjudication
under the Industrial Disputes Act, it would be wholly improper on the
part of the superior courts to make them apply the cold letter of the
statutes to act mechanically. Rendition of justice would bring within D
its purview giving a person what is due to him and not what can be
given to him in law.

A person is not entitled to get something only because it would be
lawful to do so. If that principle is applied, the functions of an
industrial court shall lose much of its significance. E
The changes brought about by the subsequent decisions of this
Court probably having regard to the changes in the policy decisions
of the government in the wake of prevailing market economy,
globalization, privatization and outsourcing is evident.
F
In Hindustan Motors Ltd. v. Tapan Kumar Bhattacharya & Anr., this
Court noticed Raj Kumar (supra) and Hindustan Tin Works (supra)
but held:

"As already noted, there was no application of mind to the question
of back wages by the Labour Court. There was no pleading or evidence G
whatsoever on the aspect whether the respondent was employed
elsewhere during this long interregnum. Instead ofremitting the matter
to the Labour Court or the High Court for fresh consideration at this
distance of time, we feel that the issue relating to payment of back
wages should be settled finally. On consideration of the entire matter H
644 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A in the light of the observations referred to supra in the matter of
awarding back wages, we are of the view that in the context of the
facts of this particular case including the vicissitudes of long-drawn
litigation, it will serve the ends of justice ifthe respondent is paid 50%
of the back wages till the date of reinstatement..."

B This Court held:

"It is not in dispute that the respondent did not raise any plea in his
written statement that he was not gainfully employed during the said
period. It is now well-settled by various decisions of this Court that
although earlier this Court insisted that it was for the employer to
C raise the aforementioned plea but having regard to the provisions of
Section I 06 of the Indian Evidence Act or the provisions analogous
thereto, such a plea should be raised by the workman."

[See also Haryana State Agriculatura/ Marketing Board v. Subhash
Chand & Anr., (2006] 2 SCC 794].
D
In Nagar Mahapalika (Now Municipal Corporation) v. State of UP.
& Ors. [Civil Appeal of2006@ SLP (C) No. 23732 of2004], disposed of this
date, this Court held that :

"In Nilajkar (supra), this Court cannot be said to have laid down
E a law having universal application. In that case also backwages had
been denied by the learned Single Judge of the High Court which
order was held to be just and reasonable. Therein, the question which
arose was whether in fact the Appellants therein were appointed in
a project work.

F The said decision has been distinguished by this Court in various
decisions including Executive Engineer, ZP Engg. Divn. and Anr. v.
Digambara Rao and Ors., [2004] 8 SCC 262 which in tum has been
followed in a large number of decisions.

However, there cannot be any dispute that provisions of Section
G 6-N of the U.P. Industrial Disputes Act have not been complied with.
We are, however, of the opinion that in stead and in place of issuing
a direction for reinstatement of service, interests of justice shall be
sub-served if compensation of Rs.30,000/- per person is directed to be
paid.
H
HARYANA STA TE ELECTRONICS DEV. CORPN. v. MAMNI [S.B. SINH.A., J.] 645

It goes without saying that the Respondents would be entitled to A
wages and other remunerations in terms of the interim order passed
by the High Court so long they have actually worked. We, furthermore,
hope and trust that in all future appointments, the Appellant shall
strictly follow the provisions of the Adhiniyam and the Rules."

In view of the settled legal position, as noticed hereinbefore, we modify B
the impugned order by directing that the respondent shall be compensated
by payment of a sum of Rs.25,000/- in stead of the order for reinstatement with
back wages.

The appeal is allowed to the aforementioned extent. No costs.
c
D.G. Appeal allowed.