Holding

Termination of a contract meter reader’s engagement on non‑renewal is covered by Section 2(oo)(bb) of the Industrial Disputes Act, 1947 and does not constitute retrenchment; therefore, the respondents are not entitled to the remedies claimed under the retrenchment provisions.

Summary

The Punjab State Electricity Board (PSEB) engaged several individuals as private meter readers on a contract basis, paying them a fixed rate of Re.1 per meter reading. After the contract periods expired and regular meter readers were appointed, the engagements were terminated. The respondents claimed they were workmen under the Industrial Disputes Act, 1947, having worked more than 240 days in the preceding twelve months, and sought reinstatement and back wages, alleging that the Board had retrenched them without complying with Section 25‑F. The Labour Court and the Punjab and Haryana High Court held that the respondents were workmen and that the contracts were a camouflage to evade the Act. On appeal, the Supreme Court observed that the engagements were for a specific, conditional period and that termination due to non‑renewal falls under Section 2(oo)(bb) of the Act, meaning it is not retrenchment. Consequently, the lower courts' orders were set aside and the appeals were allowed.

Issues considered

Whether a private meter reader engaged on a contract basis qualifies as a 'workman' under the Industrial Disputes Act, 1947.
Whether termination of such a contract on non‑renewal amounts to retrenchment within the meaning of Section 2(oo)(bb) of the Act.
Whether the procedural requirements of Section 25‑F for retrenchment were applicable to the respondents.

Legislation cited

Industrial Disputes Act, 1947s. 10, s. 25-F, s. 2(oo)(bb)

Subjects

Industrial Disputes Actworkman definitioncontract labourretrenchmentmeter readertermination on non‑renewalcamouflage contractreinstatementback wages

Judgment

>
-~ PUNJAB STATE ELECTRICITY BOARD AND ANR. A
v.
SUDESH KUMAR PURI

FEBRUARY 9, 2007

[DR. ARIJIT PASAYAT AND TARUN CHATTERJEE, JJ.] B

-+ Industrial Disputes Act, /947-s.2(oo)(hb)-Applicability of-Person
--,.
engaged as private Meter Reader on contract basis-Payment made at fixed
rate on basis of number ofmeters read-On expiry ofcontract period, services
dispensed with-Held: Engagement being for specific period and conditional,
c
s.2(oo)(bb) was clearly· applicable.

Appellant-Board engaged Respondent as a private Meter' Reader on
contract basis. During the period of contract, Respondent was paid a sum of
Re. 1 for each meter reading. At the expiry of contract period, and in view of D
appointment of regular Meter Readers, services oHtespondent were dispensed

'
..... -1
with.

The Labour Court held that Respondent had worked in the capacity of a
Meter Reader for a considerably long period; that he had completed service
of more than 240 days within the preceding twelve months, and he having E
been retrenched without following the procedure provided under s.25-F of the
Industrial Disputes Act, 1947, was entitled to be re-instated. The High Court
upheld the order of re-instatement holding that the contract was a camouflage
by the Appellant-Board with a view to avoid the provisions of the Industrial
Disputes Act, 1947. Hence the present appeals.
-~
F
Allowing the appeals, the Court

HELD: There was an agreement gQ.verning engagement. The payment
was made per meter reading at a fixed rate and there was no regular
employment ever offered to any of the respondents. The material on record
clearly established that the engagement of the respondent was for specific G
''
period and conditional. I~ appears that on the appointment of regular meter
~-
readers, the engagement has been dispensed with. The contracts clearly
governed the terms of engagement. The provisions of Section 2(oo)(bb) of the
Act clearly applies to the facts of the present case. Above being the position,
409 H
>(

410 SUPREME COURT REPORTS [2007] 2 S.C.R.
...
A the orders passed by the Labour Court and the High Court are clearly ,J_ -
untenable and are quashed. (Paras 7, 9 & 10] (411-G-H; 412-D-E]

Steel Authority of India Ltd. And Ors. v. National Union Waterfront
Workers and Ors., (2001] 7 SCC 1, distinguished.

B CIVIL APPELLATE JURISDICTION : Civil Appeal No. 648 of2007.

From the final Judgment and Order dated 21.3.2005 of the High Court
of Punjab and Haryana at Chandigarh, in C.W.P. No. 18634/2003.
_.+...
-..
WITH
c C.A. Nos. 649, 650 and 651 of2007.

Jayshree Anand, Karunakar Mahalik and Ashwani Bhardwaj for the
!;..-
Appellants.

D R.K. Kapoor, M.K. Verma and Anis Ahmed Khan for the Respondent.

The Judgment of the Court was delivered by j

DR. ARIJIT PASAYA T, J. 1. Leave granted. j-.....

2. Challenge in these appeals is to the consolidated orders passed by
E the Division Bench of the Punjab and Haryana High Court dismissing the four
writ petitions filed by the appellant No. I-Punjab State Electricity Board (in
short the 'Board'). The respondent in each case was engaged as Meter
Reader on contract basis by the appellant-Board. After disengagement he
made a claim stating that he had worked for a considerably long continuous
F period, his services have been terminated by the Board without following any
procedure and without payment of retrenchment compensation. Claim for
reinstatement with back wages was made. On failure of the conciliation
proceedings, matter was referred by the concerned State Government to the
Presiding Officer, Labour Court, Ludhiana (hereinafter referred to as the 'Labour
Court') under Section 10 of the Industrial Disputes Act, 1947 (in short the
G 'Act'). Stand of the appellant before the Labour Court was that the applicant
'.
was engaged as private Meter Reader on contract basis which was renewed
on two occasions and at the expiry of the contract period, the services have
+<
been dispensed with. It was specifically averred that the applicant concerned
had never been employed by the Board and was not a workman under the
;
H provisions of the Act. During the concerned period a sum of Re. I/- for
PUNJAB STATE ELECTRICITY BOARD v. SUDESH KUMAR PURI [PASAYA T, J.] 411
reading was paid as per the contract. There was neither any month_ly salary A
nor the claimant could be treated as a person appointed by the Board.

3. The Labour Court held that the claimant had been engaged as a Meter
Reader and had worked in that capacity for a considerably long period, his
services have been terminated without notice or payment of compensation.
It was concluded that the claimant had completed service for more than 240 B
days within the preceding twelve months, and he had been retrenched without
following the procedure provided under Section 25-F of the Act, and as such
was entitled to be reinstated. However, the back wages were restricted to 25%.
-~
The Board filed writ petitions questioning the award in each case. The claimants
also filed writ petitions questioning quantum of back wages.
c
4. The High Court referred to a decision of this Court in Steel Authority
ofIndia Ltd And Ors. v. National Union Waterfront Workers and Ors., [2001]
7 SCC I in which it was held that the contract was a camouflage by the Board
with a view to avoid the provisions of the Act. Accordingly, the writ petitions
filed by the appellant - Board were dismissed by the impugned judgment in D
each case. The writ petitions filed by the respondents were also dismissed
. on the ground that they were not engaged on any fixed salary.
+
~. 5. Learned counsel for the appellants submitted that without any material,
the Labour Court held that the contract was a camouflage. Absolutely no
material was placed on record to justify such a stand and/or conclusion. It E
is not in dispute that there was a contract providing for payment of Re.1/-
for each meter reading. The contract was renewed more than once. Merely
because the meter reading work has not decreased, that cannot be a basis to

- hold that there was a camouflage adopted.

F
- " 6. Learned counsel for the respondents on the other hand submitted
that both the Labour Court and the High Court have recorded finding about
the camouflage.

7. At the outset, it has to be noted that the decision in Steel Authority's
case (supra) has absolutely no relevance so far as the present dispute is
concerned. That relates to a case of contract labour. Present dispute is not
G
a case of that nature. On the contrary, it appears from the materials placed
>·t on record that there was an agreement governing engagement. The payment
was made per meter reading at a fixed rate and there \\-as no regular employment
ever offered to any of the respondents. The provisions of Section 2(oo)(bb)
; of the Act clearly applies to the facts of the present case. H
412 SUPREME COURT REPORTS [2007] 2 S.C.R.

A 8. Section 2(oo)(bb) reads as follows:

"2(oo) retrenchment means the termination by the employer of the
service of a workman for any reason whatsoever, otherwise th~n as
a punishment inflicted by way of disciplinary action, but does not
include-
B
(a) ... .

(b) ... .

(bb) termination of the service of the workman as a result of the non-
renewal of the contract of employment between the employer and the
c workman concerned on its expiry or of such contract being tenninated
under a stipulation in that b~half contained therein; or"

9. The material on record clearly established that the engagement of the
respondent was for specific period and conditional. It appears that on the
D appointment of regular meter readers, the engagement has been dispensed
with. The contracts clearly governed the terms of engagement.

I 0. Above being the position, the orders passed by the Labour Court t'
and the High Court are clearly untenable and are quashed. In two cases the
concerned respondents have been engaged again on contractual basis. It
E shall not be construed that we have expressed any opinion on such subsequent
contractual engagement.

I I. Appeals are allowed without any order as to costs.

B.B.B. Appeals allowed.

..